Monday, May 23, 2005

Position - Tax and Spend

As reported in the WSJ, tax revenues at the federal level are booming. Individual revenues are up 15% and corporate revenues are up 48%. After a series of tax reducing measures, federal revenues are rebounding sharply.

For over 15 years I have promoted (when someone would listen and NOT roll their eyes) a federal spending freeze. There have been several different variations on it: freeze spending for two years; freeze spending for two years with allowances for emergency appropriations; base spending on the previous fiscal year's revenues - my current preference.

The problem with any federal spending is the habit of Congress to off load expenditures onto states, forcing them to raise tax rates...the net result being increased taxes on consumers. I have supported the idea of a flat tax, and a mandated sales tax (the rate only changeable by popular vote - every 4 years). But any change has to be done at the state level also. My current property tax rate is 24 a state with +10% income tax, a one-two punch that effectively doubles my federal tax rate.

As WSJ pointed out, the problem is not how much the government raises, that has almost NEVER been the is how much the government spends and right now that is 2.5 times as much as 15 years ago.

Position - freeze federal and state funding at previous years revenue levels - allow borrowing for emergencies

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