An unsigned editorial in today’s Projo explains how high-tax advocacy is often driven more by ideology than by considerations of what makes good policy…
Some folks say that taxes should always go up and/or stay up to pay for new or expanded public programs. After all, human needs and/or wants are infinite. And many people consider the very existence of rich people a moral and aesthetic affront, and would like to do away with them — to make everything perfectly “fair,” at least economically. Better to have everyone poor. That was tried in communist states. The effect, besides the deaths of millions, was economic paralysis, which wasn’t very fair even to poor people, and the creation of the new sole class of rich and privileged people: the ones running the government.One group that states their ideological approach to taxation is the Institute for Taxation and Economic Policy, cited yesterday in the Projo by the Rhode Island Poverty Institute‘s Ellen Frank in a letter to the editor arguing that high taxes are not stopping people from settling in Rhode Island. The ITEP’s introduction to “Tax Fairness Fundamentals” declares that fair taxation is based on one simple principle…
A fair tax system asks citizens to contribute to the cost of government services based on their ability to pay.Is ITEP saying that the ideal government operates on the principle of “From each according to their ability, to each according to their need”? I won’t go there just yet, but I will point out that, under the ITEP definition, the following system would be considered “fair”…
Everyone gets to keep $1,000 of their own income to spend.Do the supporters of strongly progressive taxation agree that this system meets the definition of fair? Or would they like to offer a few qualifiers and concede that “fair” taxation cannot be defined without also taking into consideration the size and scope of government, and what it is exactly that tax-money is being used to paid for? [Open full post]
Citizens making $20,000 per annum must pay $19,000 to the government each year.
And citizens making $200,000 per annum must pay $199,000 to the government each year.
Republican Bill Harsch officially kicks off his campaign for Rhode Island Attorney General at noon today, at the Garden Room at the Biltmore in Providence.
[Open full post]While Senator Chafee toyed with the idea of censuring the President–based on the alleged illegality of the NSA wire-tapping program–he has since stated he’s against the idea. Nonetheless, he’s still convinced that the program is illegal…even though the Senate hearings on it have not yet concluded:
When Chafee was interviewed in January about the wiretaps program, he criticized it but said he would draw no conclusions about its legality or constitutionality until the Senate Judiciary Committee completed its inquiry.
Why, Chafee was asked Tuesday, has he come to the conclusion that the program is illegal, with the committee’s inquiry still under way?
Chafee answered by reiterating his initial criticism of the program. “From what I’ve seen,” he said, the wiretap program “is outside the parameters” of the Constitution’s ban on unreasonable searches and existing law governing such programs.
I recall that also back in January, Senator Chafee refrained from making another decision until he “heard all the facts” and considered them carefully. In that case, it was whether or not he was going to support now-Justice Alito and he stated that he wanted to wait until after the Senate Judiciary hearings were finished before making a (finger in the wind) decision. Apparently, he doesn’t feel the need apply the same careful consideration here, does he? Maybe it was a January thing?
(Cross-posted at OSB).
In today’s Projo, Senator Marc Cote (D-Woonsocket/North Smithfield), the primary sponsor of Rhode Island’s voter initiative legislation in the Senate, responds to Representative John Shanley�s (D-South Kingstown) anti-voter initiative op-ed from earlier in the week…
Voter initiative threatens only those legislators who wield disproportionate power in shaping public policy, and the lobbyists and special interests that effectively advance their agendas at the expense of the taxpayers. Shifting any amount of political power from the powerful to the people is commonly resisted.As part of his article, Senator Cote reviews the many checks and balances built into the RI voter initiative proposal. Both the Secretary of State and the courts have opportunities to prevent an issue from being put on the ballot on civil rights/civil liberties grounds…
Before petition papers are issued, all initiatives must be submitted to the secretary of state for a legal review, to ensure that the civil rights and liberties of individuals and groups will be protected. Not only are these safeguards in place, but should any person or group believe that a proposed initiative will violate their civil rights, after review and determination by the secretary of state’s office, our legislation provides for appeal and an expedited Superior Court review and disposition,And the legislature has the power to undo the results of any initiative…
Representative Shanley states in his article that “initiatives are virtually impossible to change once passed.” That is true only in California. In our legislation, if a mistake has been made with an initiative (even legislators make mistakes with some of the bills they pass), the General Assembly can override or amend any initiative approved by the voters with a three-fourths vote during the first four years following the vote. After four years, a simple majority of legislators can override or amend an initiative.This provision highlights that the value that initiative brings to the lawmaking process — it prevents bills from being hidden in the committee system. Laws passed via the initiative process can still be killed, they just cannot be killed by a single committee. To repeal a passed initative, every legislator will have to make his or her position known.
This is a healthy thing in a representative democracy. [Open full post]
The Providence Business News article by Marion Davis on healthcare pricing also discusses legislation introduced at the behest of Governor Carcieri…
Gov. Donald L. Carcieri this year is pushing for legislation to require health plans to disclose to patients the negotiated amounts they pay to providers for services, procedures, tests, drugs or supplies that are subject to a deductible or coinsurance.The disclosure provisions are included as part of Senate bill 2614, introduced by Senator Leo Blais (R-Coventry/Foster/Scituate), scheduled for a hearing tomorrow.
Prices for the most common items would have to be posted on the Internet, while the rest would have to be disclosed over the phone upon request.
Both hospitals and insurers seem to think that disclosing the price of hospital costs is a bad idea…
Stephen J. Farrell, CEO of UnitedHealthcare of New England, has already expressed concerns about the legislation (Blue Cross & Blue Shield of Rhode Island did not reply to a request for comment for this story). Hospital executives aren’t keen on it, either.A concern about people making healthcare decisions based purely on costs is understandable. However, the executives quoted above seem to be taking this to an extreme.
For starters, they say, the information is proprietary, part of their business dealings. Secondly, they say posting prices alone to guide consumers could be disastrous, because price is only one of many important factors they should consider.
“I happen to be a fan of consumer-driven health care,” [Lifespan network senior vice president John] Gillespie said, but “it is utopia to say we’re going to have a totally transparent system” with prices on the Internet.
[Women & Infants CEO Constance] Howes and [South County Hospital CEO Louis] Giancola noted that prices alone can be deceiving, too, because consumers won’t know if a higher fee reflects higher-end equipment or expertise. Hospitals also have to keep their equipment available 24 hours a day, Howes said, and that increases their costs.
People are able to realize that price is not the only factor in decision making. An appropriate analogy here is higher education. The tuition at Brown University is very much higher than the tuition at Rhode Island College, yet the difference doesn’t create a shortage of students wanting to attend Brown. People are willing to pay extra for the advantages — that could accurately be described as advantages in “higher-end equipment and expertise” — that Brown provides.
In an emergency situation, of course, you go to the nearest hospital available. But in non-emergency situations, is there really an argument against giving people information that can help them more easily match their needs with their means? [Open full post]
Marion Davis has an interesting article in this week’s Providence Business News that discusses the maze of factors involved in healthcare pricing. One section of the article discusses how hospitals seem not to like the health-savings account/high deductible insurance combination because they don’t want to deal with some basic record-keeping that would be involved…
Hospital officials tend to loathe high-deductible plans, because it forces their institutions to collect large amounts of money from their patients — a task they neither like, nor are particularly successful with.I have a hard time seeing how this is a real issue and not mostly inertia on the part of hospitals. Why should keeping track of usage information and collecting under-deductible payments be any more difficult for health insurance than it is for something like auto insurance? [Open full post]
There are complications, too: Constance A. Howes, president and CEO of Women & Infants Hospital, said it’s common for the hospital not to be able to figure out how much a patient actually needs to pay, because there’s no up-to-date information on how much of the deductible has already been met.
Andrew’s two posts (here, here) about Senator Jack Reed’s recent foreign policy speech made me recall former U. S. Ambassador to the United Nations Jean Kirkpatrick’s speech at the 1984 Republican Convention:
This is the first Republican Convention I have ever attended.
I am grateful that you should invite me, a lifelong Democrat…
I want to begin tonight by quoting the speech of the president whom I very greatly admire, Harry Truman, who once said to the Congress:The United States has become great because we, as a people, have been able to work together for great objectives even while differing about details.
He continued:
The elements of our strength are many. They include our democratic government, our economic system, our great natural resources. But, the basic source of our strength is spiritual. We believe in the dignity of man.
That’s the way Democratic presidents and presidential candidates used to talk about America.
These were the men who developed NATO, who developed the Marshall Plan, who devised the Alliance for Progress.
They were not afraid to be resolute nor ashamed to speak of America as a great nation. They didn’t doubt that we must be strong enough to protect ourselves and to help others.
They didn’t imagine that America should depend for its very survival on the promises of its adversaries.
They happily assumed the responsibilities of freedom.
I am not alone in noticing that the San Francisco Democrats took a very different approach.
A recent article in The New York Times noted that “the foreign policy line that emerged from the Democratic National Convention in San Francisco is a distinct shift from the policies of such [Democratic] presidents as Harry S Truman, John F. Kennedy and Lyndon B. Johnson.”
I agree…
When the San Francisco Democrats treat foreign affairs as an afterthought, as they did, they behaved less like a dove or a hawk than like an ostrich – convinced it would shut out the world by hiding its head in the sand.
Today, foreign policy is central to the security, to the freedom, to the prosperity, even to the survival of the United States.
And our strength, for which we make many sacrifices, is essential to the independence and freedom of our allies and our friends…
The United States cannot remain an open, democratic society if we are left alone – a garrison state in a hostile world.
We need independent nations with whom to trade, to consult and cooperate.
We need friends and allies with whom to share the pleasures and the protection of our civilization.
We cannot, therefore, be indifferent to the subversion of others’ independence or to the development of new weapons by our adversaries or of new vulnerabilities by our friends…
The inauguration of President Reagan signaled a reaffirmation of historic American ideals.
Ronald Reagan brought to the presidency confidence in the American experience.
Confidence in the legitimacy and success of American institutions.
Confidence in the decency of the American people.
And confidence in the relevance of our experience to the rest of the world.
That confidence has proved contagious.
Our nation’s subsequent recovery in domestic and foreign affairs, the restoration of military and economic strength has silenced the talk of inevitable American decline and reminded the world of the advantages of freedom.
President Reagan faced a stunning challenge and he met it.
In the 3 1/2 years since his inauguration, the United States has grown stronger, safer, more confident, and we are at peace…
And at each step of the way, the same people who were responsible for America’s decline have insisted that the president’s policies would fail…
They said that saving Grenada from terror and totalitarianism was the wrong thing to do – they didn’t blame Cuba or the communists for threatening American students and murdering Grenadians – they blamed the United States instead.
But then, somehow, they always blame America first.
When our Marines, sent to Lebanon on a multinational peacekeeping mission with the consent of the United States Congress, were murdered in their sleep, the “blame America first crowd” didn’t blame the terrorists who murdered the Marines, they blamed the United States.
But then, they always blame America first.
When the Soviet Union walked out of arms control negotiations, and refused even to discuss the issues, the San Francisco Democrats didn’t blame Soviet intransigence. They blamed the United States.
But then, they always blame America first.
When Marxist dictators shoot their way to power in Central America, the San Francisco Democrats don’t blame the guerrillas and their Soviet allies, they blame United States policies of 100 years ago.
But then, they always blame America first.
The American people know better.
They know that Ronald Reagan and the United States didn’t cause Marxist dictatorship in Nicaragua, or the repression in Poland, or the brutal new offensives in Afghanistan, or the destruction of the Korean airliner, or the new attacks on religious and ethnic groups in the Soviet Union, or the jamming of western broadcasts, or the denial of Jewish emigration, or the brutal imprisonment of Anatoly Shcharansky and Ida Nudel, or the obscene treatment of Andrei Sakharov and Yelena Bonner, or the re-Stalinization of the Soviet Union.
The American people know that it’s dangerous to blame ourselves for terrible problems that we did not cause.
They understand just as the distinguished French writer, Jean Francois Revel, understands the dangers of endless self- criticism and self-denigration.
He wrote: “Clearly, a civilization that feels guilty for everything it is and does will lack the energy and conviction to defend itself.”…
Jean Kirkpatrick reminds us of the days when Democrats stood for something noble and strong on foreign policy. Our country would be so much better off if today’s Democratic party offered a viable and vigorous alternative to the policies of President Bush. Instead, we get speeches that trigger memories of this 22-year-old speech – a speech that shows both how weak-kneed Democratic policies have become and how nothing has changed for the better in that party over the last 30+ years. With many empirical history lessons to the contrary in recent years, Democrats should know better.
[Open full post]Cafe Hayek has a very good posting entitled Government Ain’t Us, which says:
The idea is prevalent that little or nothing beneficial happens for people generally unless it is done by government. Things people do individually — for their own purposes, using their own gumption, own wits, and own resources, neither incited by nor directed by government — too often are not counted as things that “we” do. The assumption seems to be that unless certain things are done by government, they aren’t done — even if they are done!
…I first encountered this comment in this Business Week Online article by Michael Mandel:I’m not an economist, but it seems to me that one problem with Mandel’s argument is that we’re not investing in human capital. Government spending on universities has been slashed, leading to huge increases in tuition and much greater burdens on individuals and families. –Rebecca Allen, commenting on delong.typepad.com
“We’re not investing in human capital” laments Ms. Allen — who then immediately says that tuition is rising and that “individuals and families” apparently are paying this higher tuition despite the fact that doing so is a great burden. So, individuals and families are investing in human capital. But in Ms. Allen’s view, we’re not investing.
Why not?
Why reserve the “we” for actions taken by government? As a shorthand, it’s perfectly appropriate to say about ourselves as Americans that, for example, “we drive a lot” or “we like NFL football.” Not everyone drives, and some Americans can’t tell a football from a foosball. Nevertheless, these statements make sense, we (!) know what they mean, and I dare say that they’re correct.
No one would reply “Oh no Boudreaux, you’re mistaken!” and then explain that, because most driving is done privately and because football fans buy their tickets to NFL games with their own resources, we don’t drive a lot or like NFL football.
So why say say that “we’re not investing in human capital” simply because (assuming that it’s true) “government spending on universities has been slashed”?
It’s just not true that government’r’us — or that us’r’government.
Should government be the driver of these so-called investment ideas? If it were the driver, would the investments be successful?
An earlier posting on this site, entitled A Call to Action: Responding to Government Being Neither Well-Meaning Nor Focused on the Public Interest, brings clarity to the core issue about the proper role of our government, given the frequently misguided incentives that exist within the public sector which are rarely discussed publicly:
…the question arises regarding whether American citizens should continue to assume the actions of government are well-meaning and focused primarily on the public interest. The answer is no.
Why this claim? Just think about it. Most American citizens have personal stories about how various public sector players (politicians, bureaucrats, lobbyists, and other parties with an economic stake in government actions like corporations and unions) act in their own self interest and not in the public interest. In fact, the bottom of this posting contains numerous previous postings which provide examples of such behavior.
The balance of this posting will elaborate on public choice theory, which explains why we cannot assume government is either well-meaning or focused primarily on the public interest. The posting then concludes with specific recommendations in a Call to Action.
Read the entire posting for further information.
[Open full post]In an article entitled Research group finds state’s business-tax climate dismal: Rhode Island gets poor marks for its high unemployment -insurance tax, high property taxes and high personal-income taxes, we have yet another example of how the economic policies of Rhode Island are miserably ineffective:
Rhode Island has one of the most unfriendly business-tax climates in the nation, according to a study by a nonprofit think tank in Washington, D.C.
The Tax Foundation, a tax research organization, released its third annual state-by-state ranking of business-tax climates earlier this week. Rhode came in 48th in this year’s study.
With a high unemployment-insurance tax, high property taxes and high personal-income taxes, Rhode Island’s climate is one of the most unattractive in the nation for businesses, according to the study.
This is not the first time the state has fared poorly in a ranking study. Rhode Island came in 37th in a competitiveness report released in December by the Beacon Hill Institute, a think tank at Suffolk University in Boston. And in prior Tax Foundation studies, the state also landed near the bottom.
While state legislators questioned Beacon Hill’s results, the Tax Foundation’s study does have some merit, said Gary Sasse, executive director of the Rhode Island Public Expenditures Council, a business-backed research group.
Property taxes in Rhode Island communities and the state’s decision to “levy several wealth-based taxes” are deterrents to business, according to the study. In addition, the state’s temporary-disability insurance, its double-digit unemployment-insurance tax rate, and its top income-tax rate all contributed to its low performance in the rankings.
“My concern is that we do have a punitive tax environment for company builders,” said Michael McMahon, executive director of the Rhode Island Economic Development Corporation.
RIPEC research has generated similar results, said Sasse. For example, during a recent property-tax study, RIPEC found that Providence’s commercial property tax is 70 percent higher than the national average, and 72 percent higher than the New England average.
“There’s nothing that’s unexpected in the work of the Tax Foundation. In terms of benchmark and direction, I think it’s an accurate description of our relative situation,” said Sasse.
Rhode Island was ranked lowest of the six New England states. New Hampshire, with no sales tax, was ranked highest in the region and was the sixth-most business-friendly state in the nation. All of the states in the top 10 reached that status because they did not have one of the three major taxes — business, income or sales, according to the study. Massachusetts, known in prior decades as “Taxachusetts,” came in 27th…
Some state officials either get it or are beginning to get it:
Although Governor Carcieri said earlier this year that broad-based tax relief is not an option in the fiscal 2007 budget due to a $222-million deficit, he would like to eventually lower the state’s sales tax to match Massachusetts’.
House Democratic leaders took a more aggressive stance this year on addressing the state’s tax climate by proposing last month a tax-cutting package that includes a two-day sales-tax holiday in August; an income-tax credit for low-income, disabled or elderly people; an increase in the tax credit for low-wage workers; and a flat-rate income tax for Rhode Islanders making more than $250,000 a year.
And some people will never get it:
There are some people, however, who disagree with studies that contend Rhode Island’s tax climate is unfriendly to business. The Poverty Institute at the Rhode Island College School of Social Work, has spoken out about the proposed tax cuts and the notion that the state’s tax structure is unattractive. The income tax Rhode Islanders pay is not that high when deductions and tax credits are factored in, said Ellen Frank, senior economist for the institute.
“It’s an anti-tax foundation that counts all taxes as bad,” said Frank, adding that the Tax Foundation hasn’t proven that the tax issues it measures in its index actually affect business decisions.
Delusional thinking by ignorant fools. Go read the Executive Summary on pages 2-3 of the RIPEC report entitled Rhode Island 2010: Charting a New Course and try to tell us again there are no major problems building in this state.
Then go read Tom Coyne’s testimony before the Rhode Island Senate and try to tell us again there are no problems with the cost and performance of social services in this state.
High taxes, lousy public schools combined with ineffective and costly social services. What a formula for success!
As a corporate CEO who has worked in venture-financed healthcare companies for 21 years and lived in Silicon Valley for 17 years, I can state emphatically that I would never bring a business to Rhode Island until there are serious changes for the better in the business taxes, personal income taxes, and public schools. And, since there are many of us who feel that way, think about the cumulative opportunity cost of lost jobs and the many lost societal and financial benefits that those jobs would have brought to this state.
We are not competitive in our region, in our country or in the global economy and this report is another wake-up call.
There is no rational reason to live long-term in Rhode Island. And once the intangible reasons that hold some of us here are gone, the cost of continuing to live here will become even more expensive.
It doesn’t have to be that way. Let’s put real pressure on our state and local officials to change the status quo for the better.
