Archive for the ‘taxes’ Category

Raising the Gas Tax?

January 2, 2009

Today, the National Commission on Surface Transportation Infrastructure Financing suggested to Congress to raise our taxes on gas and diesel by roughly 50%.  Currently, we pay about 18 cents a gallon on gasoline and 25 cents a gallon for diesel.  Read about it here.

According to the commission, the current taxes leave a shortfall of about $100 billion a year, which means road and bridge projects can’t get funded.

My main problem is that this panel was created by Congress.  They are not an independent party to analyze the entire infrastructure system and budget.  The easy way out is to just raise taxes.  What they really need to do is look at all the bureaucracy that exists and look at how much they can save if they streamlined their operations.  Nothing in this article suggests the government faced such an audit.

Also, I have a big problem with the taxes I pay going to Washington for them to dole out.  How do I know that my taxes will help build or repair roads in my neighborhood?  My money might go to build a bridge in Alaska or some high-ranking Senator’s home state.  This is one of the main reasons for the American Revolution and our Constitution in the first place.  They were fed up paying taxes to the British government, and then never seeing any returns on those dollars.

They should lower, or even abolish, the Federal tax and replace it with State or local ones.  That way, we would all see returns for our tax dollars.  If we did this, we would probably see lower taxes because there would be more efficient use of the dollars, resulting in less of a need for the tax.

The Federal government does fund some of the major Interstate highways, so they could either give the power to the states or they could use a portion of the tax dollars the states or local governments receive.

The entire system is backwards right now, where our money goes into a black hole, and we have no idea if we will ever see it.  We need to start at the local level, not at the Federal level.

Also, we should not be fooled into thinking this is for environmental reasons.  They say in the article that they need to “sell” it to us.  If they really had the environment in mind, they need to explore different fuel sources, electric cars and plug-in hybrids.  Raising the tax on gas does nothing to promote alternative forms of transportation.  Taxes to deter the use of something rarely work, if ever.

And finally, check out this paragraph from the article:

According to a draft of the financing commission’s recommendations, the nation needs to move to a new system that taxes motorists according to how much they use roads. While details have not been worked out, such a system would mean equipping every car and truck with a device that uses global positioning satellites and transponders to record how many miles the vehicle has been driven, and perhaps the type of roads and time of day.

Are you kidding me?  Talk about Big Brother!  The government has no right to monitor where or when you are driving.  Why is that their business?  Rather than tracking your every move, they should just set up toll booths on certain roads.  I know that their ideas are well meaning, but the last thing we need is the government monitoring our every move.

We need less Federal intervention in our road and infrastructure system, in order to really fix and address the problem.  The more power that is handed to local, state, or even private companies the better.  We have no way to hold Washington accountable for how they spend our tax dollars.  Locally, we can see the results of our taxes and can hold our politicians and policy makers accountable.

In This Case, the States Have it Wrong

November 1, 2008

The basic premise of the Constitution of the United States and the founding fathers was a small central government.

If you think about the conditions at the time, this becomes very obvious.  They were being ruled by an all powerful monarchy that was located thousands of miles away.  The colonies were sending taxes back to Britain, but they had no voice in how they were ruled.  The founding fathers wanted a weak central government and strong states.

The opposite of their vision is true now.  Again, we have a strong central government, that in my case on the West Coast, rules from thousands of miles away.  The politicians are so out of touch anyway, that even if you live in Washington DC, you probably feel they are thousands of miles away too.  We pay up to a third of our earnings to a central government that then distributes it as they see fit.  How do they know what’s best for your state?  Or for the city or town you live in?

The problem is that the states and our representatives in Congress keep ceding more and more power to the exectutive branch.  Many of these powers were supposed to be temporary, but “temporary” and “government” are pretty much an oxymoron.

In recent years, we have given the President the power to use the military without Congressional approval, we have accepted the No Child Left Behind Act that dictates to every school in the nation what to teach, we allow the CIA to spy on us by searching our internet and phone records without a warrant, and with the bailout, we now let the government give out mortgages, insure us, and nationalize banks.

So, after all that background, we now we get to the point of my post:  Many states are talking about abolishing their state income taxes.  Massachusetts has an initiative on the ballot, Rhode Island’s governor is talking about it, and if there is any momentum, California won’t be far behind.

Many, “small government” citizens are embracing the elimination of their state’s income tax.  They argue that it will make their governments more efficient.  If these states can function without a penny of Federal tax dollars, then eliminating the state income tax would be fine.  However, I doubt the states can do this.

To me, the idea of less taxes is the right one, however, the execution of this idea is wrong.  What we should be trying to abolish is the FEDERAL income tax.  We need to stop sending the fruits of our labor to a strong central government.  How do you know that your tax money is going to fund projects in your state or neighborhood?

Sure, taxes are basically “legalized plunder” according to Bastiat, but we should accept paying local and state taxes and abhor our taxes going to the central government.

The states need to be organizing against the Federal Government and the Federal income tax.  Only after that tax has been eliminated, should states start eliminating their own income taxes.

If we eliminated the Federal income tax, we would each have between 15-25% more of our paychecks.  Who knows how much of our tax dollars are wasted anyway, going through all the bureaucracies in Washington.  Then, we could actually increase our state or local taxes by 2-5%, which are more efficient and have better oversight.  We would still have almost 20% more of our income.

This would return more power back to the states, and weaken the control of the Federal government.  If states act hastily and eliminate their major source of income, then they will rely more on funds from the Federal government.  This will create even weaker states and a stronger Washington.  We are playing right into their hands.

So, while eliminating taxes and allowing us to keep more of our earnings is a great concept of liberty and freedom, we need to direct it how the founding fathers would want.  We need to first eliminate the Federal income tax and take our powers back from Washington.  Only after the central government has been weakened, can we start to examine the policies of the states.