No Tax Increase
The Tribune editorialized against my effort to balance the State budget without raising taxes. They write, "Sen. Steve Urquhart is trying to round up a majority of his Utah Senate colleagues to promise to oppose any tax increases in next year's general session of the Legislature. . . . To say that the St. George Republican's tax pledge effort is a bit premature is like saying that Custer slightly underestimated the Sioux at the Little Big Horn." That's good writing. (As I've written before, I love editorials that make a crisp point).
However, the editorial continues, "We have discussed all kinds of possible tax increases on this page." To be more precise, the Trib has editorialized in favor of raising taxes. So, the Trib believes that it is premature to oppose tax increases, but that the time to push for tax increases is now. Clearly, as has been alleged, ideology does factors into this discussion. Some people believe that government's size and reach should be increased; others, including by my estimation a majority of my constituents, don't.
KSL previously editorialized against opposing tax increases. Sen. Wayne Niederhauser emailed me this reply (and agreed that I could post it here):
The KSL editorial has one major flaw . . .. It is economics 101. Taxing does not create increased economic activity. It takes money from the private sector, funnels it through government at a cost and distributes it back into the economy. It is a shift, not an increase. The only way to increase the flow of money and economic activity is by deficit spending or spending savings. Long-term deficit spending has huge problems. One day the debt has to be repaid, which takes money out of the economy and hurts economic activity. Deficit spending is a false economy, and one day a sad reality must be faced. Therefore, the idea that tax increases will save jobs is flawed. It might save government jobs, but it deeply hurts private sector jobs. In the end, there is most likely a net loss of jobs in the economy as a whole. The idea that we are going to take money out of the private sector and the hands of our citizens, who distribute it at their will, and give it to government to distribute at its will seems repulsive to me.
Clearly, people differ on what will be best for Utah and Utahns. I think that balancing the budget to existing revenues leaves the State in much better position to spring out of the downturn; but, we'll have robust debates, and, in the end, we'll deal responsibly with the State's budget.
Let your voice be heard!
UPDATE (12/11): One other point I meant to make is that we don't know where the bottom is on this downturn. Just as we did last year, it makes sense to keep taxing options available, instead of using them to putty a hole that just might get bigger.
However, the editorial continues, "We have discussed all kinds of possible tax increases on this page." To be more precise, the Trib has editorialized in favor of raising taxes. So, the Trib believes that it is premature to oppose tax increases, but that the time to push for tax increases is now. Clearly, as has been alleged, ideology does factors into this discussion. Some people believe that government's size and reach should be increased; others, including by my estimation a majority of my constituents, don't.
KSL previously editorialized against opposing tax increases. Sen. Wayne Niederhauser emailed me this reply (and agreed that I could post it here):
The KSL editorial has one major flaw . . .. It is economics 101. Taxing does not create increased economic activity. It takes money from the private sector, funnels it through government at a cost and distributes it back into the economy. It is a shift, not an increase. The only way to increase the flow of money and economic activity is by deficit spending or spending savings. Long-term deficit spending has huge problems. One day the debt has to be repaid, which takes money out of the economy and hurts economic activity. Deficit spending is a false economy, and one day a sad reality must be faced. Therefore, the idea that tax increases will save jobs is flawed. It might save government jobs, but it deeply hurts private sector jobs. In the end, there is most likely a net loss of jobs in the economy as a whole. The idea that we are going to take money out of the private sector and the hands of our citizens, who distribute it at their will, and give it to government to distribute at its will seems repulsive to me.
Clearly, people differ on what will be best for Utah and Utahns. I think that balancing the budget to existing revenues leaves the State in much better position to spring out of the downturn; but, we'll have robust debates, and, in the end, we'll deal responsibly with the State's budget.
Let your voice be heard!
UPDATE (12/11): One other point I meant to make is that we don't know where the bottom is on this downturn. Just as we did last year, it makes sense to keep taxing options available, instead of using them to putty a hole that just might get bigger.
posted by steve u. at 12/10/2009
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11 Comments:
That's not always true. Clearly as shown by CBO studies of the ARRA government spending can have a greater effect then tax cuts.
In fact I hear their is talk of extending the state aid/bailout package in the upcoming jobs bill using the remainder and returns/payback from tarp.
And we can't just talk about government growth from the perspective of CPI+population growth, Their is also the increase in ESL students, disproportionate Medical inflation rate as well effecting not just Medicaid but state employee insurance costs as well. Infrastructure costs have risen above inflation as well with steel prices raising quickly from growing global demand.
"including by my estimation a majority of my constituents, don't. "
Which I completely understand, But how long can we put off reality? Year maybe 2 tops if the States get more aid in the coming jobs bill. Once the real short fall from the State pension fund is added to the budget their is going to be a lot of very shocked people.
My job lucky is safe, (I work for Center for automotive science and technology at Weber university, school makes money off me so I am safe). But on the 9k-11k per year I make it won't be long before I am priced out of college. I can make the coming tuition increase at least.
True, we may not be at the bottom. If you really don't want a tax increase and it has to be all cuts, let's start with your new Blackberry and laptop computer. I understand these tools increase efficiency, but in a dwindling budget, I would guess the majority of your constituents would consider them luxuries.
I agree, Steve. It is irresponsible economic analysis to suggest that the government can create permanent economic growth. Markets are not perfect. They lead to cycles of growth and contraction. But they are better than any alternative we have seen.
I support your opposition to tax hikes. Increasing taxes is a non-starter that will not benefit the state.
RD,
The jury is decidedly out on the effect of the ARRA spending. Though I forget the exact number, the jobs purportedly created or saved by ARRA each had a really high cost, suggesting a better policy would have been to simply hand a bunch of people a bunch of money. As for economic growth, it seems that the ARRA money "grew" the economy mostly by forcing a lot of government spending and advancing future sales, meaning little more than future debt, likely inflation, and a possible double-dip recession.
Anon.,
Good points. Expenditures like these do draw attention and deserve an explanation. I will look into the particulars and post something on that. In the meanwhile, I will point out that the Legislature and Legislators have taken budget and pay cuts like other areas of government. I think our actions largely have shown that we believe cutting starts at home.
That a tax increase "deeply hurts private sector jobs" is an irrational exaggeration. It is this type of rhetoric those on the right love to use to support their ideology that often bears no relationship to the reality of people's lives.
To dig in one's heels on an issue before all the facts and data become available is an irresponsible position for any public official to take regardless of which side of the aisle they are on.
JBT,
I've been hearing things like your comment: "To dig in one's heels on an issue before all the facts and data become available is an irresponsible position for any public official to take regardless of which side of the aisle they are on."
What does that mean?
Ok Steve, since you asked.
Keeping all options on the table and listening to all sides on an issue until all the latest available data on projected state income and needs of state funded agencies becomes available is a more responsible approach than closing one's mind even before the legislative budget process and discussion begins.
Being ideologically rigid and inflexible may play well to your political base in Washington county, but in my opinion it is not in the best interest of the people in the state of Utah.
I find it interesting that a lawyer would even have to ask such a foolish question. My statement means exactly what it says. Another way to say it is "Don't confuse me with the facts, my mind is already made up". If the shoe fits . . .
"Keeping all options on the table and listening to all sides on an issue until all the latest available data on projected state income and needs of state funded agencies becomes available is a more responsible approach than closing one's mind even before the legislative budget process and discussion begins."
Though we are a part-time Legislature, with a 45-day session that begins in January, we work throughout the year. The agencies and programs are well known. We are constantly tracking tax revenues. I try to read of my constituents daily.
If people don't like the no tax position, I can understand that. But, just as the Governor arrived at the no-tax position several weeks ago, the Legislature has the necessary information to adopt that position.
Sen. Urquhart. That is your opinion which thankfully is not shared by most of your colleagues in the legislature.
Perhaps a trip to an overcrowded classroom or to visit with some of Utah's neediest citizens whose services are being cut would give your ideology the dose of reality it sorely needs.
Defending your "no tax increase" hard line stance by saying Gary Herbert also did it is not a compelling argument by any stretch of the imagination.
The Salt Lake Tribune made some very reasonable suggestions on ways to enhance the state's revenues to avoid deeper and deeper cuts until the economy recovers. It is too bad that those ideas fall on deaf ears and closed minds before the legislative decision making process has even begun.
"The Salt Lake Tribune made some very reasonable suggestions on ways to enhance the state's revenues to avoid deeper and deeper cuts until the economy recovers. It is too bad that those ideas fall on deaf ears and closed minds before the legislative decision making process has even begun."
So, the time to consider enhancing the state's revenues is now. The time to consider no enhancing the state's revenues is not now. Leave out all your personal jabs, JBT, and you and I simply disagree on tax policy. That's okay. You're not bad. I'm not bad. But, my constituents think I'm pretty good on this one, and that's what counts in a representative democracy.
You have a choice senator. You can either make deeper cuts to state services and programs which hurts real people in our state OR you can look for ways in which to temporarily increase the state's available funds to maintain these programs at a reasonable level until such time as the economy recovers. You have closed your mind to any solution except the one that plays well to your constituents as part of your political grandstanding in my view.
That is not a jab, it is simply a statement of the way you are perceived by those of us who do not buy into your inflexible conservative agenda that automatically puts the needs of people second behind your rigid and close minded political ideology.
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