TANSTAAFL

Jun. 17th, 2009 12:38 pm
pecunium: (Default)
That's one of the favorite shibboleths of the "Libertarian" wing of the reactionary caucus. They use it in odd ways, mostly to say they ought to be allowed to pay for what they want/use. It's true enough, but not as they tend to try to make it mean.

Which is why, with reservations, I like this: Fee on cars to pay for parks.

The fact of the matter is, we have to pay for things. Until, and unless, we change the 2/3rds rule on tax changes/50 percent on bonds, fees are the only way to raise money. This is, tolerably, even handed, and so I think it's the best of a bad lot; under the present system.

If I had my druthers, the kickbacks (in the form of "tax breaks) given to businesses to beg them to stay someplace (which they can then take, and run; see Boeing the the 7E7), ought to stop, and business properties ought to be reassessed every 5-10 years. I'd like to see this as more than just personal vehicles (because businesses make a lot of money on tourists coming to see our parks; the ought to pay some of the freight)

People like to complain of, "ruinous" taxes, then complain of the ruinous effect of not being taxed. This is the result.

TAANSTAAFL people, It doesn't mean no taxes, it means you get what you pay for.

(comment at Better than salt money)
pecunium: (Default)
Mostly, not much. It's got wonderful people; is large enough that those who want to get away, can. The majority are tolerant enough that really crazy people can stay, and the really conservative types aren't chased out.

But it's got problems. Big problems. Money problems. Most of them stem from one cause, and the ways in which a couple of sets of politically motivated people have managed to exploit them.

The prime cause of our woes isn't a lack of money in the state, but rather a lack of money in the government. We have about 10 percent of the US population, and produce about 13 percent of the US GDP.

The problem goes back to 1978, and Prop. 13. Prop. 13 was a reaction to a couple of problems. There was a big increase in the value of housing prices. The county assessors would reassess properties every couple of years and the tax would jump (when a house goes from 12,000 to 40,000, the tax bite is pretty dramatic). The worst part was the reassessments weren't on a schedule. The increase was usually a surprise.

So Prop. 13 capped the amount which a property could be assessed (one percent of total value), and limited the increases when the property was reassesed. Reassessement could only be done when the property sold, or when certain types of remodelling was done.

That's not the most pernicious aspect of Prop. 13. That's later in the bill.

Section 3. From and after the effective date of this article, any
changes in state taxes enacted for the purpose of increasing revenues
collected pursuant thereto whether by increased rates or changes in
methods of computation must be imposed by an Act passed by not less
than two-thirds of all members elected to each of the two houses of
the Legislature


The same is true of referenda.

Which makes it hard to get new taxes passed. Historically California has met special needs by passing limited sales tax increases. They are usually well built; with a sunset clause, a sort of bridge fund, while other things level out. In the early '80s the LA Rapid Transit District was raising prices like mad. In two years the fare went from 50 cents (and a dime transfer) to a $1.25, with a quarter transfer. The transfers went from being good for a couple of hours (in effect $.60 was one way to your destination), to being good once, with an extra $.25 letting you use it once more. If you need four busses, it was going to cost $3.00 to go one way.

So we passed a .05 percent increase to our sales tax (in the areas served by the RTD), and fares went back to the previous level. That lasted for five years, and the fare (when the tax went away) rose to $.85/.25. Today it's $1.25.

But with a 2/3rds requirement, it's almost impossible to get such things passed. It takes something as dramatic as the RTD problem to get one, at a local level, and something just this side of the end of the world to get it at the state level. The politcians are afraid of losing their seats, and the folks in the parts not so affected don't see the point.

But bonds... bonds only require a simple majority to pass. They are touted as not costing the taxpayer anything ("no increase in taxes"). But that's only half true. Yes, there is no increase in taxes. That doesn't mean the taxpayer pays nothing. It means the money comes out of the general fund.

And come out of the general fund it does, because the cost of a bond is usually twice what the bond generates. That's before the loss in tax revenue is factored in. State and municipal bonds are tax free, which means it's has a secondary loss to state revenue.

The worst part, of course, is all that money is removed from the general fund; it can't be used for other things. Since taxes can't, effectively, be raised to cover those things which they othewise might. Which leads to someone getting the idea to use a bond issue to cover it, and the postive feedback loop builds.

The easist fix would be to change the way in which those two things are done. Most bonds pass with between 51-54 percent of the vote. Most taxes fail with between 56-60 percent of the vote.

If we could make it 55 percent for both, the tide would shift, which would solve a lot of our problems, becuase, when all is said and done, tax and spend makes a lot more sense than borrow and spend.

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