Government vs. the Taxpayers
Congress continues blatant disregard for fiscal concerns

The recent shutdown of New Jersey state government because of the governor vs. legislature budget impasse is a distinct warning sign for taxpayers. The governor, who solemnly promised before his election not to raise taxes, wanted to increase the state sales tax. The legislature preferred to cut spending. After nine days of government shutdown, the two sides compromised and raised the sales tax rather than live within the state’s income.

Scorecard: Government - 1, Taxpayers - 0.

Federal revenue has increased dramatically following President Bush’s tax cuts. However, Congress promptly embarked on a spending binge that would embarrass drunken sailors. Members loaded the budget with earmarks for hundreds of pet projects. These pork barrel projects, for the most part, could not stand on their own in the light of day. Instead, they were furtively inserted into appropriations for vital services. This practice is likely a salient reason for extremely low approval ratings for Congress, including Kentucky’s representatives. These ratings have dipped significantly since last year, and only the media registers greater public disapproval than Congress.

Since 2001, federal expenditures have increased nearly 50 percent. The Congress refuses to live within its windfall income.

Columnist Robert Novak uncovered tax shenanigans by Sen. Chuck Grassley (R-Iowa), chairman of the powerful Senate Finance Committee, who inserted amendment language unconstitutionally allowing a substantial tax increase on Americans living abroad. But what’s a little constitutional violation here and there?

Score card: Government - 2, Taxpayers - 0.

The Heritage Foundation’s examination of recent federal spending concludes that even moderate spending restraints, coupled with the revenue growth, could have resulted in a surplus rather than a deficit. The deficit continues and taxes remain high, even after the Bush cuts.

Scorecard: Government - 3, Taxpayers - 0.

Kentucky’s recent special legislative session corrected an unintended tax penalty on small business that was contained in the 2005 Tax Reform Law. With the ink barely dry, a legislative task force issued a recommendation to expand local governments’ power to tax. It supports a constitutional amendment so local governments can have more tax options.

Local governments are already permitted a vast array of taxes and fees, including taxes on water, sewer, gas, electric and telephone bills; transportation taxes; library taxes; health taxes; real estate taxes, which can be considerable sources of revenue in the face of rapidly increasing property values; additional taxes on new property entering the tax base annually; and the insurance tax, a major source of revenue collected by local governments on citizens’ insurance policies. This insurance tax has no statutory cap and is quite high in many municipalities. When your next insurance premium comes due, check out the tax bite for local government shown on the notice.

In addition, local governments across the nation are now rushing to condemn private property by eminent domain in order to transfer such properties to other private owners who will pay more taxes. This rash of condemnation attempts could have been predicted following a recent Supreme Court ruling.

A major Kentucky newspaper has already endorsed giving more taxing power to local governments, and lobbyists for local governments are already at work. Such callous disregard for taxpayers by the media and many public officials is cause for dismay indeed. The only major tax not permitted at the local level is a local sales tax. Are we about to be assaulted with an additional sales tax for local governments?

Inflation is low. Revenues are healthy. Why cannot governments live within their income? Our constitutions were written to provide individual rights, but also to limit the powers of government. It’s the third quarter, and government’s power of taxation is way ahead and gaining momentum. Can taxpayers possibly catch up?

Scorecard: Government - 4, Taxpaying citizens - 0.

Pat Freibert is a former Kentucky state representative from Lexington.
editorial@lanereport.com

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