Tuesday, February 03, 2004

Mandates, pledges and honesty in government

Mark Dorroh

Prince George County District 2 Supervisor Henry Parker wants localities to consider just saying "no" to partially-funded federal and state mandates. "Just tell them we're not going to fund them," he said recently. "Look at all the good things our minority citizens have achieved that way."

Parker's right. Nonviolent resistance has a proud and successful history in the American civil rights struggle. Could it be used to put an end to this sorry game of Pin-The-Costs-On-The-Locality?

Of course, as Parker is well aware, unless nearly every city and county in the country participated, it wouldn't work. Those that did would lose their share of state/federal funding, money their own taxpayers have sent in and wouldn't get back. That would provide a powerful incentive for other localities, especially less affluent ones, to not join the resistance.

But even if that idea wouldn't work, Parker's got another one that would. Unlike nonviolent mandate resistance, it wouldn't rely on any level of governmental participation. It would be done at the ballot box by individual voters.

Want more honest government? Then begin demanding of legislators a pledge to raise taxes as much as necessary to fully pay for any program implemented by subordinate levels of government.

Honoring such a pledge would force state and federal lawmakers to start being brutally honest about what new programs and services really cost. No longer would they reap the glory for supporting bills to authorize popular measures while passing the buck (or, more accurately, the lack of bucks) down the line.

Any candidate who won't take the no-unfunded-mandates pledge should be rejected by voters on grounds of essential dishonesty. Those who take the pledge then don't honor it should be recalled.

And as long as we're on the subject of honesty in government, here's an idea of my own; isn't it time to end the blatant dishonesty about who pays corporate and business taxes? I think it would be very refreshing, not to mention truthful, to quit pretending taxes on corporations and small businesses come from some magical pool of money. That seems to be the primary assumption of those who say, "tax the businesses, not the people."

Taxing businesses is a sneaky, fundamentally dishonest way of taxing individuals and families while telling them you're getting the money from someone else. That's because tax bills paid by businesses and corporations can come from only three sources; customer product/service prices, worker wages and benefits and/or investors' interest and dividends. Last time I checked, customers, workers and investors were all "people." "Aha," I hear you cry, "why not take the money from fat-cat investors?"

There are a several excellent reasons to not take more money from investors. First, American investors already pay a higher capital gains tax rate than investors in most other industrialized nations. Also, it has yet to be demonstrated that government is any better at spending money than businesses. Putting aside the minority of high-profile exceptions like Enron, the opposite seems to be true. Businesses are constrained by market competition to reduce waste and deliver quality. Government is under no such strictures. Sure, most government employees are conscientious and competent. But the bad ones (bureaucrats who spend most of their work time fighting internecine turf wars, rude and careless public service types, etc.) are nearly impossible to fire. In the business world, unless you treat your good workers well and get rid of your bad workers, you'll lose market share to those competitors who do.

Another good reason to not take even more investors' money through taxes has been illustrated by the woes of investment markets over the past few years. Have you noticed how many pension funds and 401 (k) accounts have been hurt? That's because pension funds, retirement accounts and lots of other financial instruments used by working-class Americans are dependent on investment markets.

Ironically, it is American capitalists who have made the Marxist ends (workers owning their means of production) achievable. Meanwhile, corporate money managers who invest our insurance premiums and loan payments give us all an interest in (and benefits from) capital investment markets.

The tax-the-businesses crowd has used a classic Marxist means (getting people to believe mammoth, counterintuitive lies) to achieve their ends (redistribution of wealth based on subjectively-defined "social justice"). It's the same game state and federal leaders have been playing for decades, pretending, through semi-funded mandates passed down the levels of government that tax-supported programs and services cost less than they really do.

It's time to stop the serial lying. Send this column to your state and federal legislators. Tell them the game's up; they can be honest about who pays corporate taxes, take the no-unfunded-mandates pledge, or pack it in.

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