Tax cuts for the right sort of people

You might have assumed, after reading fellow blogger Joshua Gross’ op-ed in Tuesday’s paper, that the Ways and Means budget he praised as one that "actually resembles a responsible document" (that’s high praise, coming from him) devoted a lot more money to tax cuts than the current year’s budget.

An excerpt:

When the budget was debated last year the appropriators, flush withGrossjoshua $1.1 billion in new
revenues, decided to spend the vast bulk of the money, much of it on pet projects, while reserving a small fraction of the new funds for a property tax reduction that had a negligible impact on job creation in our state. The final budget was a monstrosity so bad the governor chose to veto it in its entirety, knowing full well that the Legislature would still override his veto and spend the money.

Those nasty, monstrous Republican legislative leaders! What were they thinking? But wait! The facts get in the way of Joshua’s interpretation.

  • This year’s Ways and Means proposal, which the House is debating this week, devotes $81 million to an income tax cut.
  • Last year’s budget, so horrible, so monstrous that the governor had to veto it, devoted $92 million to a sales tax cut on groceries and a second sales tax holiday.

That’s right, the bordering-on-responsible budget devotes $11 million less in new revenue to tax cuts than the toss-it-in-the-rubbish, big-government’s-gonna-eat-your-children current budget.

Granted, $14 million of last year’s tax-cut money was a one-time tax reduction, for the silly after-Thanksgiving sales tax holiday that we will not have again this year. But even if you discount that, last year’s budget still included a permanent tax cut of $77 million.

Now I understand that supply-siders don’t like to cut the taxes that ordinary people pay. But let’s at least give a nod to reality here.

The budget they’re debating over there this week is $600 million bigger than the one we’re operating under now (or maybe $1 billion more if you use Sanford math). This money thing is not my forte, but that seems to suggest that even if you ignore the $14 million sales tax holiday, the wild-and-crazy budget from last year actually devoted a nearly identical portion (not to mention amount) of money to new tax cuts as the almost-responsible one on the table right now.

But give my buddy Joshua a break; his piece is accurate in one respect: It’s an accurate representation of the Club for Growth world view.

21 thoughts on “Tax cuts for the right sort of people

  1. Chris

    Your editorial page rants continuously about mini vans and the 7 state cars and a single security detail…why do you expect to be taken seriously about the “big picture” issues.
    I had lunch with 10 very special and prestigious people today, and not one of them had read your editorial. When you take the editorial page back from that petulant Scoppe person, mature and reasonable people will start reading your editorials again, and perhaps you will not be whistling in the wind.
    This state is in dire need of leadership…and she ain’t it.

  2. Lee

    Chris is right: The State paper focuses on insignificant minute spending items, probably as an mechanism to avoid discussing the grotesque waste and fraud in the big picture.
    SC State Gov Co did not fold up when it had $1.1 BILLION less the year before. When revenues picked up, due to the general prosperity brought about by a tiny rollback in federal taxes, the state could have afforded to freeze spending and cut rates enough to let the taxpayers keep that entire $1.1 BILLION.
    That is just the NEW WASTE and corruption, on top of the previous pork.
    Real reform would be:
    1. abolishing the income tax (one of the highest in the nation relative to household incomes) dismantling the collection machinery so it cannot be reconstituted by a future corrupt legislature.
    2. abolishing all property taxes and destroying all the records.
    3. getting rid of all casual sales taxes on private sales. Just collect sales taxes on real retail businesses.
    4. No garnishments, liens or seizures for taxes allegedly owed without due process in a real court of law, and real juries. Right now, bureaucrats just make up phony numbers to fit the Accounts Receivable figures needed to phony up the books for the bond ratings.

  3. Brad Warthen

    So basically, y’all decided it wasn’t worth trying to defend what Joshua wrote, so you changed the subject.
    I need to remember to use that line, “I had lunch with 10 very special and prestigious people today.” Maybe it will impress somebody. But not that petulant Scoppe person, I’m sure. She’s hard to impress.

  4. Lee

    So basically, you cannot discuss big issues of taxes, so you formulate a game where we have to defend some excerpts you selected from another blog…. the bigger picture is off limits.
    Try to play with us, Brad. It will stretch your mind a lot more than the love fest with Scoppe and the usual corrupt gang down at the SC Senate.

  5. LexWolf

    There is no need to defend a strawman, something that you purposely distorted and took out of context. Instead why don’t you defend your claim thst Gross is wrong, in a big-picture way.
    Brad, you seem to have some reading comprehension problems. Eevn a cursory glance at that op-ed makes it clear that when Gross talks about a “more disciplined state budget” he is mainly talking about less spending growth, about a very significant $500 million less even by your own numbers above. He’s not talking about some insignificant $13 million difference in the tax cut or whatever. Clearly $600 million growth is far more disciplined than $1.1 billion growth and far better for the taxpayers. Unless you’re a big-government ideologue, of course — then it’s a calamity. If you want to have any credibilityt on the matter, though, you should really refrain from such extreme black-is-white, up-is-down spin!

  6. Lee

    The newspaper claims that a 7% income tax, 6% sales tax, huge property taxes have no ill effects. Yet they argue than even a 1% sales tax has a “chilling effect” on the sales of their newspaper and is a threat to free speech.
    Which is true?

  7. chris

    PS…I was the drag along guest…not one on the elites. I filled my chair…and that was it.
    But the point remains…serious people have stopped reading the ed page, as they know what it will say before they read it.
    They also know the election is over, something that Scoppe person does not know. So instead of working together in a meaningful way to forge change…she is still fighting partisan battles.
    We need leadership.

  8. Chris

    PSS…Brad…I agree with you on many of your ideas on tax policy. I did not mean to say otherwise.
    But the partisan sniping from that Scoppe person (for no good reason) discourages debate. it excludes people and groups from the debate. It keeps some elected officials from embracing ideas…simply because it is easier NOT to become targets of such screeching. It is the classic case of a dime holding up a dollar.
    Criticism from large and supposedly important newspapers must be mature and meaningful…or it is worthless. I want the State to have an influence on policy…goodness knows we need it. But when will it come?

  9. Joshua Gross

    Brad,
    First off, thanks for the ink. I’m always grateful when the MSM allows us to have our day in the paper.
    Second, look a little more closely at what I wrote. Look, I know from our past discussions that you view yourself as a communitarian, someone who values the whole as more important than the individual, while I look to individual rights and responsibilities as the fuel in the economic engine. The simple fact of the matter is that income tax cuts do create additional jobs. Call it “supply-side”, call it “trickle-down”, call it whatever you like, the point of the matter is that when governments get out of the way of individuals’ ability to create wealth and innovation, the result is virtually always going to be higher levels of employment. So we call for a lowering of the income tax that will help get us out of the 6.4% unemployment mess our state suffers from. I’m not sure I can go so far as to agree with Lee’s solution of no income tax and no property tax (government does still need to legitimately derive revenues from somewhere), there is no question that our current income tax structure serves as a disincentive to business development here. And businesses are what create jobs, especially the jobs of the future – not governments.
    As to government growth, am I happy with this budget? No. I’d still like to see greater restraint, less pork, more actual infrastructure being built. But, as someone has already posted on this thread, $600M in spending growth (less than ten percent) is still better than the 25% growth we’ve seen over the past two years. We still have a sustainability problem over time, but it’s less of one than in prior years. Hence my phrase “resembles a responsible document” – we’re still not quite there, but let’s celebrate the improvement while we can.
    B-)

  10. bud

    Brad whether you like it or not you’ve become type-cast as a big government ideologue. Ouch. You can enhance your credibility significantly if you just find one issue, just one, where you think the government is overly involved and should cut back. Otherwise I’m afraid no one can take your “I hate ideologues” rant seriously.

  11. bud

    One more thing. Many people proudly accept the political position that government should be heavily involved in all issues. They are called populists. Brad, maybe you’re a populist.

  12. Lee

    The state retirement system is bankrupt, just like Social Security. It needs to be dismantled immediately, and the actual funds disbursed in an apportioned manner.
    Current retirees are would not get nearly what they are promised.
    Those close to retirement will have to accept a small lump sum settlement, which is still more than most taxpayers have, and try to find a post-retirement job in the private sector.
    Those under 45 will get nothing.
    The alternative is for politicians to stall and lie until the system goes truly broke an d not one gets a check, or raise taxes so high that the productive class migrates to Tennessee, Georgia or NC, and the whole state revenue system collapses.

  13. Lee

    Joshua –
    We don’t know if we can cut out all the taxes that I think we can, but you have to begin with that mentality of every budget at zero in order to have a real budget and control spending.
    We KNOW that the entire $1.1 BILLION in new revenue was not needed, and could have been left with the taxpayers by reducing rates and abolishing some taxes altogether.

  14. Brad Warthen

    bud, I wrote an extensive answer to your question about government involvement late one night recently, and was going to click on another tab to check a point I was making, and hit "back" on my browser. Lost the whole thing. I threw my hands up and went to bed.

    Now I can’t remember what I said, because I can’t remember what you said, and I was keying directly off of that. It’s hell getting old.

    Remind me — I think you said something about video poker, and several other examples where you saw us as advocating greater government involvement. I think I took off on the video poker thing, gave the history of that position for several paragraphs (in a nutshell, we weren’t against it until it was taking over the legislature), and used that to segue to a form of government involvement that we are famously against — the state lottery.

    Basically — and correct me if I’m wrong — because we decided in the end that video poker was essentially buying the State House and had to be reined in, you were saying that was proof we were authoritarian and statist (and I apologize if I’m remembering wrong).

    But for me, the lottery is worse than video poker, because it’s the state that’s exploiting people’s foolishness rather than sleazy private operators — whom I would normally leave alone if they don’t cause too much harm, which they did.

    No one can deny that we fought the lottery every bit as hard as we did video poker, and in the case of the lottery, we fought it from the very beginning.

    But we lost on that one. And the state of South Carolina lost. There is no way in the world that our government should be involved in anything like that.

    Anyway, if I’m not properly answering your question, let me know. If you can help me remember which post your original comment appeared on, I’ll go back and look at it again, and amend this response to fit it better — perhaps as a separate post.

    I’ll do that even though you called me a nasty name — "populist."

    Speaking of which, did anybody see the new film version of "All the King’s Men?" I saw it, over the weekend. Fairly entertaining, but bizarre. I don’t think there was a single Southerner in it, much less a Louisianan, and the accents were all over the place. Why couldn’t they have gotten James Carville to play Sugarboy? Of course, Stark’s boys wouldn’t have been Cajun. He could have been Tiny Duffy, then, instead of Tony Soprano filling that part…

  15. Brad Warthen

    And Joshua — glad to give you another bite at the apple. That’s what the blog is about — dialogue.

    And Lee — I wasn’t asking you to "defend some excerpts you selected from another blog." I was calling your attention to an entire op-ed piece by Joshua than ran in our paper. He made an argument, I was making a counterargument, and that’s what this post was about.

  16. Lee

    I just tend to think about taxes in a comprehensive manner, not fiddling with little stuff, unlike the legislature and those who follow the juggling balls.
    The Sunday editorial was simply ludicrous, making every argument on some patent falsehood presented as if it were indisputable common knowledge. I hope it was not a group effort, and that only one editor is that ignorant about taxes in SC.

  17. bud

    Lee, elaborate on your last comment. The lottery and Social Security seem to have little in common other than they’re both sanctioned by a government entity.

  18. Lee

    Social Security is a welfare program.
    Every wage earner is forced to contribute.
    Those earning higher salaries are forced to contribute far more than they will ever collect.
    These wage earners are hoping and betting that they will live long enough to recoup some of their FICA taxes.
    Recent immigrants and low-wage workers are betting they will be able to rip off more they they were taxed. They will still be poor, but have the perverse satisfaction of knowing they are mooching off the Productive Minority.
    The government is betting they will all die before collecting what they paid in.
    Politicians are betting the that they will be out of office and living off their multi-million dollar pensions when the next set of politicians will have to raise FICA taxes yet again to postpone bankruptcy.
    Politicians are betting they will be forgotten before the entire SSI system goes bankrupt and millions of sucker taxpayers are taken down with it.
    Smart Americans recognize that they are unlikely to ever collect a dime of benefits from this corrupt game which they are forced to play, and hope / bet that it will collapse in time for them to save some money in a real retirement plan for themselves.

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