[speedgibson] Speed Gibson: Ebb and Flow Taxation

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Posted by Speed Gibson:
Ebb and Flow Taxation
http://speedgibson.powerblogs.com/posts/1228788577.shtml


   Looking at our latest State budget deficit numbers and the current
   economy, I have this prediction, possibly just another iteration of
   what's happened several times before.
   When times are good, like the Y2K / dot com bubble, State spending
   rises significantly. Yes, there were the Jesse rebates, much
   appreciated, but most of that windfall was spent. Then comes 9/11 on
   the tail of the bursting bubble, and soon we have the Mega-Honking
   Deficit I. Spending growth all but stops, but that burden is
   redistributed to those with jobs or otherwise doing OK.
   Then there is recovery, State spending resumes its well over inflation
   growth, fueled by the new taxes from falling unemployment. That is,
   the new income does not now bring down the burden from those who
   shouldered it during the recession.
   Now comes another recession, a real recession this time, and now we
   have Mega-Honking Deficit II. More tax increases on fewer taxpayers
   are all but certain. If we're 14% overdrawn and 40% is K-12 that will
   politically have to be held flat and at least 10% is truly essential,
   that means the remaining 50% will have to be cut 28%. I can't see that
   happening.
   The ensuing recovery, unlikely to arrive before the start of the next
   State Fiscal Year on July 1, will put more of us back to work and the
   stores, and revenues will again go up and the whole cycle repeats.
   The mathematics to me indicate that the State government will swallow
   the entire State economy well before the end of this century. At some
   point, this has to stop.
   A good place to start is to better insure our most productive citizens
   from further cyclical abuse like I described. It might take the form
   of a Constitutional limit on spending, but history suggests that there
   are many creative ways to circumvent that it seems.
   Isn't there someway to set an individual limit, say 10 percent of your
   total income going to State and local taxes? If you can present tax
   receipts totaling more than 10 percent of your income, you get the
   excess refunded. Further, you should get credit for the indirect
   taxation, like corporate taxes that we pay via higher prices, lower
   wages, and lower investment returns. Or, maybe there is a limit on how
   much one's tax load can go up year to year.
   I know the devil would be in these details as well, but given that
   "group politics" isn't working, I think we need an individual answer,
   a taxpayer answer.