Responsibility #83

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=110 BGCOLOR="#666699" TEXT="#080000" bgproperties="fixed" background="04900840erlcjm.png"> <div> <FONT SIZE="5" COLOR="#FFFFFF" FACE="Arial" ><B>NATIONAL SECURITY--Structural,Moral,Economic,Domestic,International</B></FONT><B>     |     </B><A HREF="index.htm" TARGET="_top" TITLE="NATIONAL SECURITYStructural,Moral,Econom"><U><B>home</B></U></A></div> <div> <A HREF="id33.htm" TARGET="_top" TITLE="Responsibility Contents"><U>Responsibility Contents</U></A>   |   <A HREF="id34.htm" TARGET="_top" TITLE="Responsibility 1"><U>Responsibility #1</U></A>   |   <A HREF="id35.htm" TARGET="_top" TITLE="Responsibility 2"><U>Responsibility #2</U></A>   |   <A HREF="id36.htm" TARGET="_top" TITLE="Responsibility 3"><U>Responsibility #3</U></A>   |   <A HREF="id37.htm" TARGET="_top" TITLE="Responsibility 4"><U>Responsibility #4</U></A>   |   <A HREF="id38.htm" 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President, et al,"><U>Health Care Letters to President, et al, 8/24/94</U></A>   |   <A HREF="id123.htm" TARGET="_top" TITLE="Arguments for Delay in Enactment of a He"><U>Arguments for Delay in Enactment of a Health Care Bill</U></A>   |   <A HREF="id124.htm" TARGET="_top" TITLE="Post WORLD WAR IIPost COLD WAR Deja Vu"><U>Post WORLD WAR II--Post COLD WAR Deja Vu</U></A>   |   <A HREF="id125.htm" TARGET="_top" TITLE="Responsibility 89"><U>Responsibility #89</U></A>   |   <A HREF="id126.htm" TARGET="_top" TITLE="Responsibility 90"><U>Responsibility #90</U></A>   |   <A HREF="id127.htm" TARGET="_top" TITLE="Responsibility 91"><U>Responsibility #91</U></A>   |   <A HREF="id128.htm" TARGET="_top" TITLE="Responsibility 92"><U>Responsibility #92</U></A>   |   <A HREF="id129.htm" TARGET="_top" TITLE="Responsibility 93"><U>Responsibility #93</U></A>   |   <A HREF="id130.htm" TARGET="_top" TITLE="Responsibility 94"><U>Responsibility #94</U></A>   |   <A HREF="id131.htm" TARGET="_top" TITLE="Responsibility 95"><U>Responsibility #95</U></A>   |   <A HREF="id132.htm" TARGET="_top" TITLE="Responsibility 96"><U>Responsibility #96</U></A>   |   <A HREF="id133.htm" TARGET="_top" TITLE="Responsibility 97"><U>Responsibility #97</U></A>   |   <A HREF="id134.htm" TARGET="_top" TITLE="Responsibility 98"><U>Responsibility #98</U></A>   |   <A HREF="id135.htm" TARGET="_top" TITLE="The Structure of Our Nation is Unsound"><U>The Structure of Our Nation is Unsound</U></A>   |   <A HREF="id136.htm" TARGET="_top" TITLE="Ltr. to Editor, 3/19/96, Property Taxes "><U>Ltr. to Editor, 3/19/96, Property Taxes and Education Funding</U></A></div> <div> </div> </td> </tr><tr> <td valign="top" width=190 BGCOLOR="#CCCCFF" TEXT="#080000" background="04311c00egdysm.png"> <bR> </td> <td valign="top" height=370 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> Responsibility #83</div> <div> To the People of the United States of America:</div> <bR> <div>      <U>6th postscript, April 1994</U>.  As promised, we will start this 11th essay, on <U>Taxes/Appropriations/Organizational Reforms</U> during the terms of President Clinton, and the 103rd Congress, with the state taxation views of a former financial adviser to the Arizona Senate.</div> <div>   </div> <div> 14. In a letter to the editor, this gentleman urged: "If the governor wants to cut taxes in order to benefit the state, the best way to do that is to cut sales taxes, not either income or property taxes, which can be used to offset federal taxes." [Are you listening Governor of Michigan? You blew it!]  "A reduction in sales taxes does not affect the federal income tax because there is no longer a deduction for sales taxes."  "Arizona tax policy should take maximum advantage of the shelters provided by the federal tax laws in order to maximize the wealth and jobs within our state."</div> <div> This mind-set has been a bane of our tax systems for decades, especially since the legitimatizing of income taxes.  Financial planners, securities salespersons, insurance agents, real estate agents, bank savings & investments advisers, attorneys, accountants, tax preparers, and the vultures on Wall Street, base much of their businesses on convincing clients to buy the products and services that they offer, which will give them a tax exemption, deduction, deferment, or other shelter.  With or without professional help, in preparing their tax returns, taxpayers ask themselves "Can I get away with ignoring or stretching the tax laws (or IRS elaborations thereof) to my advantage?"  Little or no mind is made of the fact, that such actions result in other taxpayers picking up the slack.</div> <div> These professionals perform a legitimate (and even necessary) service, in view of the <U>unprincipled and unbridled enactment of tax laws and appropriations</U> by our governing bodies.  We can only cure this blight on democracy, by establishing and enforcing <U>inviolable principles for the generation of revenues and the expenditure of appropriations,</U> as discussed in earlier RESPONSIBILITY treatises.  </div> <div> It might also be noted that many times, the actions of the professionals and their investors backfire.  They let the tail (avoidance of taxes) wag the dog (safety and total yield of the investment).  Changes in the economy, the market place, and in tax laws or administration, may catch them with their pants down. The most searing example is the real estate, and Savings & Loans debacles of the 1980s and 1990s.</div> <bR> <div> 15. Examination of a news clipping of April 4, 1994, returns us to cases.  It was headed "Utilities' tax break raises some eyebrows--Assessor, regulator jeer bill that will aid customers outside state".  Excerpts: "Arizona's utilities can look forward to steady cuts in property taxes in the next several years, thanks to the Arizona Legislature.  In the name of fairness, legislators are reducing the assessed valuations of utilities and mines statewide.  About 90 percent of the cut is going to utilities, which eventually might be reflected in lower bills for customers."</div> <bR> <div> "That will bring mines and utilities in line with other businesses."  "... an equitable tax system ..."  "Republicans in the Legislature think this is a great idea.  But not everyone agrees."</div> <div> "Fifty-three percent of the Palo Verde Nuclear Generating Station is owned by out-of-state utilities and their customers in California, New Mexico and Texas pay taxes to Arizona.  Giving those people a tax cut is stupid, some say.  California isn't letting them build nuclear plants.  We end up with their spent rods, and they get tax breaks."  There are other pro and con arguments cited in the article, but these extracts lead to the crux of the matter without further reinforcement.</div> <div> Those, who debated and enacted the utilities property tax break, missed the boat; as did the Valley Mayors on the freeway funding; as did the Legislature on the Super Bowl sales tax exemption; as did the Board of Supervisors for the ball park sales tax; as did the state of Michigan for its education funding.  In actuality, most tax enactments (at federal, state, and local levels) fail to board the right boats. </div> <div> These aspects of <U>the inviolable principles for taxes and appropriations,</U> prescribed in prior RESPONSIBILITY papers, could be likened to the application of cost accounting practices, and the recognition of profit or cost centers.  Hence, after probing whether the government should be involved in authorizing and funding an endeavor, the determination must be made as to who benefits from (or who causes) the appropriation required, and in what proportions.  Second, on what parameter(s) would the cost sharing be properly based.  Third, from these what type revenue most nearly meets these criteria (direct fees, income taxes, sales taxes, property taxes, energy taxes, value added taxes, et al).  Fourth, at what level or levels of government should each particular type revenue be collected, and then appropriately distributed among government levels.</div> <div> For elementary and high school funding, we made the case for dual funding sources.  Instead of business property taxes, a direct fee should be imposed on businesses in proportion to the total of their annual salaries and benefits paid to or for their employees.  In place of residential property taxes, the income tax for individuals and families should include (within the overall percent of income) a percent for education funding.  Note that the individual income tax, on which this is predicated, is recommended to be on all individual or family income and benefits, a single individual or family exemption, at a flat single rate, with no (deductions, deferments, other) shelters.  </div> <div> As for the spent rods of a nuclear powerplant, surely all customers should bear the costs associated with safety and disposal, within the rate structure as in any other factor of production.  In like manner if a third party (e.g., a state whose residents do not draw power from the utility company in another state) were to bear an indirect cost due to the operation of the powerplant (e.g., the effects of acid rain from a coal powered utility), that state should be able to recoup its expenditures from the utility company.  The utility company would in turn pass that cost along in the rate structure to in and out of state customers without differentiation.</div> <div>      We will explore further the ramifications, of taxes and appropriations among states, or between the federal government and individual or groups of states, in the next essay.</div> <div>                     Publius IV</div> <bR> <div> <A HREF="id117.htm" TARGET="_top" TITLE="Responsibility 84"><U>Responsibility #84</U></A></div> <div> Back to: <A HREF="id33.htm" TARGET="_top" TITLE="Responsibility Contents"><U>Responsibility Contents</U></A></div> </td> </tr></table></body>