Death Is No Relief
link Short-run tax hikes being used to fill gaps – USATODAY.com.
This is like short term herpes. As if there’s a precedence in history for a short term tax. As one of my friends said recently, as likely as a venus fly trap in a hospital. Not many may know this, but the whole notion of income tax in the U.S. was first broached as a temporary measure in the early 1800’s. According to the website About.com:
“…In the War of 1812, the U.S. first considered enacting an income tax, but the war ended before the tax was officially created. Yet, during the American Civil War, the first U.S. income tax was created, but this one was meant only as a temporary measure to help pay for the war. It was repealed in 1872. By the 1890s, the U.S. government was hoping to find a way to more evenly distribute the federal tax burden and thus looked at creating a permanent income tax. However, until the 16th Amendment to the Constitution was ratified n 1913, the federal government was forced to collect taxes based on state population. Once the 16th Amendment was passed, the U.S. government passed its first, permanent income tax law in October 1913…”
And the rest is history as they say. Speaking of history, this website also speaks of ancient tablets found from the ancient Egyptians where not only was there written evidence of taxes, there also were writings complaining of high taxation. So, as we can see, nothing has changed throughout history.
If the naive folk in the places listed in the article think that temporary taxes will fix whatever shortfall they have to fix, then I’m going into the bridge selling business. What has been true for eons is that people would rather not cut back but rather borrow into the future. Instead of taking the correct measures by cutting spending on programs, on salaries or benefits, it is always easier to gouge the taxpayer. Costs never go down and inflation expectations are permanently wired into the system.
Instead of many numerous corrections in spending like the regular tacking of a sailboat to keep it on a steady course, the imbalances in a government system build until one day they collapse of their own weight, as per the analogy of the boat crashing on shore because a sudden drastic action is needed. We saw this happen with GM, essentially a government run entity where entitlements were not curbed even as income was collapsing. In the case of GM, government bailed them out…sort of. In the case of governments, they just keep gouging taxpayers, until that crash on shore happens.
California will be the state to watch in the next year or so. Misguided wants by the residents are grossly mismatched by taxation revenue. California is arguably the most important economy in the U.S., home to many of the nation’s vanguard industries. When Arnold Schwarzenegger came to office, the budget deficit was over $16 billion dollars and now, almost 7 years after being given the mandate of trying to fix that gap, the deficit is an even larger portion of total state funds from 20% then, to 25% now. Like adolescents, the citizens want their programs, the raises for civil servants, the entitlements, but would not allow tax increases to pay for them. Looks like the idea of temporary tax is going to be introduced there. It’s temporary, only in effect until you die.