Voice For Liberty

Tag: Government spending

  • Brownback, Moran wrong on wind tax credits

    In the following commentary, Kansas Governor Sam Brownback and U.S. Senator Jerry Moran of Kansas make the case for extending the production tax credit (PTC) for the production of electrical power by wind.

    The PTC pays generators of wind power 2.2 cents per kilowatt-hour produced. To place that in context, a typical Westar customer in Kansas that uses 1,000 kilowatt-hours in the summer pays $95.22 (before local sales tax), for a rate of 9.5 cents per kilowatt-hour. (This is the total cost including energy charge, fuel charge, transmission charge, environment cost recovery rider, property tax surcharge, and franchise fee, according to a March 2010 illustration provided by Westar.) So 2.2 cents is a high rate of subsidy for a product that sells for 9.5 cents.

    The authors contend that the PTC is necessary to let the wind power industry “complete its transformation from being a high tech startup to becoming cost competitive in the energy marketplace.” The problem with this line of argument is that wind is not an industry in its infancy. The PTC has been in place since 1992, a period of twenty years. If an industry can’t get established in that period, when will it be ready to stand in its own?

    The authors also contend that canceling the PTC is, in effect, a “tax hike on wind energy companies.” To some extent this is true — but only because the industry has enjoyed preferential tax treatment that it should never have received, coupled with a misunderstanding of the tax credit mechanism.

    The proper way to view the PTC is as a government spending program. That’s the true economic effect of tax credits. Only recently are Americans coming to realize this, and as a result, the term “tax expenditures” is coming into use to accurately characterize the mechanism of tax credits.

    Amazingly, Brownback and Moran do not realize this, at least if we take them at their written word when they write: “But the wind PTC is a winning solution because it allows companies to keep more of their own dollars in exchange for the production of energy. These are not cash handouts; they are reductions in taxes that help cover the cost of doing business.” (Emphasis added.)

    It is the mixing of spending programs with taxation that leads these politicians to wrongly claim that tax credits are not cash handouts. Fortunately, not everyone falls for this seductive trap. In an excellent article on the topic that appeared in Cato Institute’s Regulation magazine, Edward D. Kleinbard explains:

    Specialists term these synthetic government spending programs “tax expenditures.” Tax expenditures are really spending programs, not tax rollbacks, because the missing tax revenues must be financed by more taxes on somebody else. Like any other form of deficit spending, a targeted tax break without a revenue offset simply means more deficits (and ultimately more taxes); a targeted tax break coupled with a specific revenue “payfor” means that one group of Americans is required to pay (in the form of higher taxes) for a subsidy to be delivered to others through the mechanism of the tax system. … Tax expenditures dissolve the boundaries between government revenues and government spending. They reduce both the coherence of the tax law and our ability to conceptualize the very size and activities of our government. (The Hidden Hand of Government Spending, Fall 2010)

    U.S. Representative Mike Pompeo of Wichita recognized the cost of paying for tax credit expenditures when he recently wrote: “Moreover, what about the jobs lost because everyone else’s taxes went up to pay for the subsidy and to pay for the high utility bills from wind-powered energy? There will be no ribbon-cuttings for those out-of-work families.” See Mike Pompeo: We need capitalism, not cronyism.

    So when Brownback and Moran write of the loss of income to those who profit from wind power, we should remember that these profits do not arise from transactions between willing partners. Instead, they result from politicians like these who are willing to override the judgment of free people and free markets with their own political preferences — along with looking out for the parochial interests of the home state. We need less of this type of wind power.

    Strengthening our Nation’s Domestic Energy Supply

    By Kansas Governor Sam Brownback and U.S. Senator Jerry Moran of Kansas.

    The increasing cost of conducting business in the United States threatens innovation and investment in new technologies. In today’s unstable business environment, American industries are understandably reluctant to invest the time and resources necessary to grow their businesses. This is especially true for domestic energy production.

    Energy production is one of the most highly regulated markets in the United States today. Government policies are hurting our country’s ability to compete within the global economy, limiting our domestic energy supply and driving up the cost of energy for consumers. To ensure Kansans have access to a reliable and affordable supply of energy, we must develop more of our nation’s natural resources.

    One resource that is plentiful in Kansas is wind. Our state has the second highest wind resource potential in our country and leads the nation in wind production capacity currently under construction. If we expect the wind energy industry to provide for our country’s future energy needs and make long-term investments in their businesses, Congress must reauthorize the wind production tax credit (PTC) that expires this year. By extending the wind PTC, Congress will allow the wind industry to complete its transformation from being a high tech startup to becoming cost competitive in the energy marketplace. Failure to do so will result in a tax hike on wind energy companies and will only further delay this industry’s ability to compete.

    There are those who view government intervention in the energy sector as picking winners and losers. But the wind PTC is a winning solution because it allows companies to keep more of their own dollars in exchange for the production of energy. These are not cash handouts; they are reductions in taxes that help cover the cost of doing business. Unlike President Obama’s failed stimulus plan that rewards individual, unproven companies like Solyndra with cash handouts, the wind PTC is an industry tax credit that has led to $20 billion in annual private investment in our energy infrastructure.

    Today, the American wind industry includes more than 400 manufacturing facilities in 43 states. In 2005, just 25 percent of the value of a wind turbine was produced in the United States compared to more than 60 percent today. Because of their close proximity to wind farms, American workers can produce the critical components at a lower cost than their European and Asian counterparts. As more components are manufactured in the United States and not overseas, the cost to produce electricity from wind farms will be further driven down.

    If the wind PTC is allowed to expire, local economies across our state will suffer. Kansas counties will lose $3.7 million in annual payments from wind companies. Kansas landowners will lose nearly $4 million annually in additional income they earn from leasing or selling their land for wind farms. And every Kansan will ultimately be affected because the power generated by these wind facilities contributes to our supply of electricity. By eliminating additional sources of electricity, utility rates will climb.

    To meet our country’s energy needs and remain competitive in the global market, Congress must develop a national energy policy. Recent events in the Middle East have demonstrated once again the importance of having access to an ample domestic energy supply so we are less dependent on foreign sources. If Congress fails, Kansans will soon be paying much higher energy prices — for the gas to fill up our cars, for the fuel to power our farm equipment, and for the electricity to turn on our lights.

    Temporarily extending the wind PTC is not about picking winners and losers — it is about preparing our country to meet our growing energy demand. Rather than make it more difficult for the private sector to develop energy sources, we should lower taxes, reduce regulations, and allow the private sector to succeed in the free market. In turn, the wind industry will grow and become fully competitive — no longer needing the wind PTC. By strengthening American energy production, our country’s future will be stronger and more secure.

  • Does government spending create economic growth?

    Does government have the ability to create jobs?

    In the following video presentation, Professor Antony Davies of Duquesne University says yes, government spending creates some jobs, but taxation destroys other jobs. “At the end of the day, the government isn’t creating jobs, it’s moving jobs.”

    In his presentation, Davies presents charts comparing government spending and economic growth. The only relationship that emerges is that as government spending grows, the economy contracts. Meaning: government spending is a negative factor for economic growth.

    Davies says that the fallacy of stimulus spending is that we look at only half the picture, and ignore the taxation that raises the money that is spent.

    The private sector — that is, free people making decisions in their own best interest — is the best way to generate economic growth, wealth, and importantly, jobs. The best way for government to foster this process is to get out of the way, Davies says.

  • Wind energy split in Kansas

    Despite the promise as a temporary subsidy when it started twenty years ago, wind energy is reliant on government handouts. Today’s Wall Street Journal brings this into focus, writing: “The truth is that those giant wind turbines from Maine to California won’t turn without burning through billions upon billions of taxpayer dollars. In 2010 the industry received some $5 billion in subsidies for nearly every stage of wind production.” (See Republicans Blow With the Wind: Another industry wants to keep its taxpayer subsidies..)

    The piece also properly refutes the argument that oil and gas receives the same type of tax credits as does wind and other renewable energy forms. “The most dishonest claim is that wind and solar deserve to be wards of the state because the oil and gas industry has also received federal support. That’s the $4 billion a year in tax breaks for oil and gas (which all manufacturers receive), but the oil and gas industry still pays tens of billions in federal taxes every year.” There’s a difference between tax deductions, which reduce taxable income, and tax credits, which are government spending programs in disguise.

    Despite this: Senator Jerry Moran of Kansas has joined with five other senators in urging the Senate to pass an extension of the subsidy program for wind power. Kansas, it should be noted, has a lot of wind. Our former governors Sebelius and Parkinson bought into the green energy fantasy, and current governor Kansas Governor Sam Brownback agrees, having penned op-eds in support of wind energy subsidy programs and usage mandates. Wichita Mayor Carl Brewer has been busy promoting Wichita as a site for wind energy-related industry, despite its failing economics based on government handouts.

    (By the way, it’s not only wind that is receiving subsidy on Kansas. Recently the Department of Energy announced the award of a $132.4 million loan guarantee to a cellulosic ethanol plant in southwest Kansas. At the time of the award, no commercial cellulosic ethanol had been produced in America. See Kansas and its own Solyndra.)

    Contrast this with U.S. Representative Mike Pompeo of Wichita, who has introduced legislation to end all tax credits related to energy production. Writes the Journal: “Here’s a better idea. Kill all energy subsidies– renewable and nonrenewable, starting with the wind tax credit, and use the savings to shave two or three percentage points off America’s corporate income tax. Kansas Congressman Mike Pompeo has a bill to do so. This would do more to create jobs than attempting to pick energy winners and losers. Mandating that American families and businesses use expensive electricity doesn’t create jobs. It destroys them.”

    Republicans Blow With the Wind

    Another industry wants to keep its taxpayer subsidies.

    Congress finally ended decades of tax credits for ethanol in December, a small triumph for taxpayers. Now comes another test as the wind-power industry lobbies for a $7 billion renewal of its production tax credit.

    The renewable energy tax credit — mostly for wind and solar power — started in 1992 as a “temporary” benefit for an infant industry. Twenty years later, the industry wants another four years on the dole, and Senator Jeff Bingaman of New Mexico has introduced a national renewable-energy mandate so consumers will be required to buy wind and solar power no matter how high the cost.

    The truth is that those giant wind turbines from Maine to California won’t turn without burning through billions upon billions of taxpayer dollars. In 2010 the industry received some $5 billon in subsidies for nearly every stage of wind production.

    Continue reading at the Wall Street Journal (subscription required)

  • Mike Pompeo: We need capitalism, not cronyism

    In a guest column written for Americans for Prosperity, Kansas, U.S. Representative Mike Pompeo of Wichita explains why political cronyism, sometimes called crony capitalism, is wrong for our country. Pompeo coins a useful new term: “photo-op economics” to describe why some politicians support wasteful federal spending projects — as long as the spending is wasted in their districts. Then logrolling — the trading of legislative favors — applies, and those legislators who received votes from others to support wasteful spending must now reciprocate and support other wasteful spending.

    Pompeo touches on an important aspect of public policy that is not often mentioned: “Moreover, what about the jobs lost because everyone else’s taxes went up to pay for the subsidy and to pay for the high utility bills from wind-powered energy? There will be no ribbon-cuttings for those out-of-work families.” This describes the problem of the seen and unseen, as explained by Frederic Bastiat and Henry Hazlitt in the famous parable of the broken window.

    We Need Capitalism, not Cronyism

    By U.S. Representative Mike Pompeo

    The word “conservative” brings to mind family values, lower taxes, fiscal responsibility — and limited government. Limited government means a government limited in size, in its claim on national wealth, and — importantly — limited in the ends to which government’s power is used. It also means federal elected officials must act in the nation’s best interest and not allow their own parochial concerns to dominate their decision making. A big obstacle on the path to restoring limited government in America is cronyism.

    We all know the story. A flawed system has created incentives that make it easier for some companies to succeed by hiring a lobbyist rather than improving productivity or satisfying customers. Lobbyists for these businesses and the politicians who support them want the federal government picking winners and losers across our economy — so long as they are selected as “winners.” In my first term in Congress, we have eliminated earmarks that rewarded politically connected, rent-seeking advocates for federal largesse by tucking provisions into bills without adequate vetting or thorough review. But ever clever politicians have another tool — the tax code — to accomplish much the same outcome. This form of cronyism must stop too.

    “Tax earmarks” — be they deductions or credits — provide certain industries and businesses a means to gain financial advantage. Tax earmarks distort our free choices, waste tax dollars, and raise prices to provide goods and services that free markets provide more abundantly and more cheaply. They also force federal tax rates up, penalizing those who don’t receive them, because higher rates are required to capture the same revenue given all of the special interest tax earmarks now in effect. And, unlike standard earmarks, tax earmarks tend to be renewed year after year after year.

    One current fight against the insidious political tool of tax earmarks involves the energy sector. I am leading the charge to eliminate over two dozen energy tax credits tucked into the Internal Revenue Code. My proposed legislation would get rid of every single tax credit related to energy — ending tax favoritism that today goes to wind and solar, algae and electric vehicles and tax credits that go to the oil and gas industry as well. Tax subsidies miscast the role of the federal government. Energy sources are either viable without subsidies or else they do not make economic sense for taxpayers.

    Subsidies and giveaways redistribute wealth from productive, self-sustaining enterprises to unproductive, less efficient, albeit politically connected, ones. Although subsidies may have positive local effects, they penalize successful businesses — leading to less innovation, decreased productivity, fewer jobs, and higher prices for consumers. Cronyism also mistreats unsubsidized competitors, who wind up subsidizing their own competition to the detriment of their employees, consumers, and free-market competition.

    Together with tried-and-true conservative leaders like House Budget Committee Chairman Paul Ryan (WI), and Tea Party leaders like Sen. Jim DeMint (SC), and Sen. Mike Lee (UT), I am fighting to end this form of cronyism. Conservative groups including Americans for Prosperity, Americans for Tax Reform, Club for Growth, Council for Citizens Against Government Waste, Freedom Action, Heritage Action, National Taxpayers Union, and Taxpayers for Common Sense have all rallied to the side of limited government on this issue. They understand that picking winners and losers in the energy marketplace does not create long-term economic growth, and it harms our economic and political systems.

    One example of a tax earmark that should be eliminated is the Production Tax Credit (PTC) that goes to the wind industry. Yet, some Republican and Democrat members of Congress, not surprisingly from “wind states,” are pushing for yet another multi-year extension of the PTC, a multi-billion dollar handout to Big Wind. The PTC manipulates the energy market, drives up electricity bills for consumers and businesses, and creates a dangerous economic bubble. The PTC is a huge subsidy. Applied to oil companies, it would be the equivalent of giving $30 for every barrel of oil produced, according to the Heritage Foundation. The PTC has existed for the past 20 years, but it has not succeeded yet in making unsubsidized wind competitive. Politicians who pretend that a few more years of the PTC will make wind competitive could be right, but that is not a responsible bet to make with taxpayer dollars.

    Supporters of Big Wind, like President Obama, defend these enormous, multi-decade subsidies by saying they are fighting for jobs, but the facts tell a different story. Can you say “stimulus”? The PTC’s logic is almost identical to the President’s failed stimulus spending of $750 billion — redistribute wealth from hard-working taxpayers to politically favored industries and then visit the site and tell the employees that “without me as your elected leader funneling taxpayer dollars to your company, you’d be out of work.” I call this “photo-op economics.” We know better. If the industry is viable, those jobs would likely be there even without the handout. Moreover, what about the jobs lost because everyone else’s taxes went up to pay for the subsidy and to pay for the high utility bills from wind-powered energy? There will be no ribbon-cuttings for those out-of-work families.

    Here’s the data. The “green energy” 1603 grant program has given away $4.3 billion to 36 wind farms just since 2008. All together, these farms now employ 300 people. That’s $14 million per job. This is an unconscionable return on investment, especially for your tax dollars. Given that consumers also pay higher energy prices for electricity generated from wind, one has to wonder why some in Washington continue to push for Big Wind subsidies. Often the answer is that politicians care more about making good political investments than they do about making bad financial investments.

    In this respect, the PTC handout is virtually indistinguishable from the program that led to the Solyndra debacle. The Obama Administration gave 500 million taxpayer dollars to a private solar panel company to prop up a failed business model. As soon as government money ran out, the company folded. Solyndra could not attract sufficient private capital for financing because its solar panels could not compete in the consumer market. So it turned to its lobbyists in Washington and friends in the Obama Administration for its financing. The result was a skewed consumer marketplace and the waste of taxpayer dollars. Like the earmark for the Bridge to Nowhere, political allocation of your taxpayer dollars is failed policy.

    I get the game. Elected officials in Michigan want your money for electric cars. Those from California want your money for solar panels. And those from the Midwest want your money for wind turbines. In a country that has a $15 trillion national debt, annual deficits of over $1 trillion as far as the eye can see, and a $100 trillion unfunded liability in entitlement programs, this must stop.

    I believe that American ingenuity will eventually bring new energy sources to market successfully. It may be wind or algae, it may be biomass or solar. It may be the enormous natural gas and oil reservoirs that can now be reached affordably right here in North America. I also believe that American families making good choices for themselves will lead the way in deciding which new energy source or technology succeeds. Trying to pick that next great source from Washington, D.C. — and with your money — just leads to more cronyism, more debt, more bad decisions, more dependence on the Middle East and a much less limited federal government — outcomes that none of us can afford.

    Congressman Mike Pompeo represents Kansas’ 4th Congressional District.

  • Wichita HOME program has negative consequences

    Tomorrow the Wichita City Council will consider a program designed to boost the sale of newly-constructed homes. While this program was undoubtedly developed with good intentions, government intervention almost always has many other effects other than the desired effect. Unfortunately, many of these unintended consequences have a negative impact, often far exceeding the good that the program might create.

    In this case, the City of Wichita has developed a program called New HOME (New Home Ownership Made Easy). The crux of the program is to rebate Wichita city property taxes for five years to those who buy newly-built homes.

    The program would run from March 1, 2012 through December 31, 2013, and would be limited to the first 1,000 new home buyers. There are some qualifications, most notable being the requirement that special assessment and general taxes must be current. On a new home valued at $200,000, with the city mill levy at approximately 32, the city property taxes — and therefore the rebate — would be about $736 per year. City documents estimate the value of the rebate to a homeowner, over five years on a $200,000 home, to be $3,873.

    Unintended consequences

    This program has several negative consequences that should lead the Wichita City Council to reject this program.

    First, by making qualifying newly-built homes more attractive, existing homes are devalued, and will be more difficult to sell. This is an unfair burden placed on existing homeowners who may want to — or need to, in the case of many Boeing employees — sell their houses.

    Second, there is the “Cash for Clunkers” effect. That program, in which the federal government offered incentives to buyers of new cars, is widely recognized as a failure. There were very few new sales. All people did was time their already-planned purchases of new cars to fall within the time frame of the government program. It is likely that a similar effect will happen in Wichita.

    Related to this is the question as to how much new activity this program will induce. Often government takes credit for all economic activity that takes place. This ignores the economic activity that was going to take place naturally — in this case, new homes that are going to be built even without this subsidy program. According to data compiled by Wichita Area Builders Association and the WSU Center for Economic Development and Business Research, in 2011 462 new homes were started in the City of Wichita. The HOME program contemplates subsidizing 1,000 homes in a period of 22 months. That’s a rate of 545 homes per year — not much more than the present rate of 462 per year. But, the city has to give up collecting property tax on all these homes — even the ones that would be built anyway.

    What we’re talking about is possibly inducing a very small amount of additional activity over what would happen naturally and organically. But we have to subsidize a very large number of houses in order to achieve that. We need to recognize the costs of this program based on the marginal activity it may induce, not all activity.

    Third, government intervention into the housing market is widely recognized as one of the major factors leading to the present financial crisis and recession. While the proposed program in Wichita is not on the same scale, it still presents the same hazards: People induced to buy a more expensive home than they can really afford. Eventually, reality catches up, with disastrous effects.

    Also, this program has a very real cost. City documents say the program will not have a “direct cost” to the city, but recognizes an opportunity cost in the form of lost future tax receipts. I welcome the city’s use of the term “opportunity cost,” as it is an important concept in economics. This is the first time I recall the city explicitly recognizing this concept.

    In this case, consider the new homes that will be built but not contribute property tax to the city: Will these homes ever require police or fire protection? Will they ever ask for any other city services? Providing these services is indeed a direct cost, and one for which the city is not collecting property taxes as payment.

    If you want to argue that this program is in fact without direct cost to the city, why not offer this benefit to anyone who buys a home in Wichita, new or existing? If the city were to consider reducing its spending specifically in response to the costs of this program, that would be a positive factor. But government spending almost always rises, despite claims by city officials that budgets have been cut. Wichita city government spending will undoubtedly rise during the period of this property tax rebate program.

    Finally, a principle of taxation is that everyone pays equally. Tax policy should be applied uniformly to all citizens. But this program creates a special class of homeowners who do not have to bear their full share of the cost of city government.

    The negative consequences of this program, when balanced against the likely very small positive effect, should lead the Wichita City Council to reject this program.

  • The effect of government grants

    Trackside is a column written occasionally by John D’Aloia Jr. He lives in St. Marys, Kansas.

    TRACKSIDE © by John D’Aloia Jr.
    February 5, 2012 AD

    How do you view government grants? Are they “free” money handed out by a caring and beneficent government? My view is that government grants are funded by a forced redistribution of the resources from many people for the benefit of a few. Such grants are a means by which the grantor achieves control over the grantee. Such grants are morally and politically unacceptable.

    “The Eighth Commandment does not say ‘Thou shalt not steal … except by a majority vote or unless it’s for a park swing set.’” (A paraphrase of a line from Mark Hendrickson’s article “Our National Blind Spot,” American Thinker, 6 February 2010.) Those who accept government grants for projects that they cannot fund from local tax sources are stealing resources from others, and in so-doing, are no better than the Occupy Wall Street gang which wants government to extract dollars from everyone else to give them what they want. (I am conflicted on grants that fund what would otherwise be an unfunded federal mandate — if the feds mandate X, then the feds should provide the dollars and take the budget hit, not the government unit needing the dollars to comply — but what if only some governments get a grant to pay for X, setting up an environment for favoritism? or the feds give a grant only to the governments that accept all the attached strings? As I said, conflicted.)

    The only real beneficiaries of this government-forced redistribution of resources are the politicians who buy “good” press by making the grants available (look what we are doing for you), crowing that they have “brought-home-the-bacon” for their constituents, the Clerks in the myriad agencies who administer the grants, and those companies to which some of the dollars ultimately trickle down.

    The willing accomplices in the grant process ignore Frederic Bastiat’s concern for the unforeseen consequences, particularly the impact of grants on the national fiscal mess, the inability of the citizens whose resources have been taken (higher taxes, inflation) to use those resources for their own benefit, and the impact of grants on future tax demands. Grants do put a long term tax burden on communities. In their report titled “Do Intergovernmental Grants Create Ratchets in State and Local Taxes — Testing the Friedman-Sanford Hypothesis,” Russell Sobel and George Crowley wrote: “Our findings confirm that grants indeed result in future state and local tax increases of roughly 40 cents for every dollar in grant money received in prior years.” The report is cited as Mercatus Center Working Paper No. 10-51, West Virginia University, August 2010.

    For immediate satisfaction, grantees are placing the financial burden on others and on future generations. Grant dollars come from three sources: taxpayers at large, deficit spending (insane, obscene borrowing), and the Fed’s printing presses creating phony money out of thin air (inflation). All three sources extract resources in one way or the other from citizens who cannot, will not, benefit from the grant, nor even ever receive a thank-you note.

    Bastiat said that “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” In The Law, published in 1850, (which should be mandatory reading for all legislators and voters), Bastiat used the term “plunder” to describe the “legal” appropriation of the fruits of one person’s labor for the benefit of another. If he were alive today, he would be applying it to grants, recognizing that specific organizations and local governments are using the grant process to obtain the resources of others for their specific benefit and enjoyment.

    Grants are not an economic development plus — at best neutral (dollars not spent by X are spent by Y) — but most likely they have a negative economic impact, directly because the grantor government agencies extract a “shipping and handling fee” out of the economy to keep themselves employed, and indirectly because grants provide an impetus for a sprawling, out-of-control Leviathan.

    Accepting grants also place the grantee under the thumb of the grantor, as grants impose requirements that detract from the authority and sovereignty of the grantee. People look in glee at the line in the grant contract that has a dollar sign and a bunch of numbers after it but neglect to read the fine print that requires them to do this and that for eternity. The federal government uses grants to bribe states to pass laws that the feds want but don’t have the authority to impose. In all too many situations, federal grants are unconstitutional in that they are for purposes that are not within the enumerated powers given to Congress by the Constitution.

    The ends (accomplishment of a project that local groups want but will not fund locally) do not justify the means (stealing now, and in the future, from all citizens).

    See you Trackside.

  • Wichita Ambassador Hotel information sheet

    Tax Fairness for All Wichitans has an information sheet available to help Wichitans learn more about the February 28th election regarding the Ambassador Hotel guest tax rebate.

    You can download a printable pdf version of the information sheet by clicking on Tax Fairness for All Wichitans Information Sheet. Or, view the document below. (Hint: Click on “Fullscreen” at the bottom of the document for a larger view.)

    Tax Fairness for All Wichitans Information Sheet

  • Modern-day students and attitudes towards government

    Recently Economics Professor Jack Chambless of Valencia College in Orlando asked his college students to write an essay “explaining their definition of the American Dream and what they expected the federal government to do to help them achieve their version of this dream.”

    The results are shocking, to say the least. Here’s what Chambless explained during an appearance on Fox New Channel (video here or below).

    “About 10% of the students said they wanted the government to leave them alone and not tax them too much and let them regulate their own lives. But over 80% of the students said that the American dream to them meant a house, and a job, and plenty of money for retirement and vacations and things like this. When it came to the part about the federal government, eight out of ten students said they wanted free health care, they wanted the government to pay for their tuition, they wanted the government to pay for the down payment on their house, they expected the government to ‘give them a job.’ Many of them said they wanted the government to tax wealthier individuals so that they would have an opportunity to have a better life.”

    On his website, Chambless wrote: “One student who thought her American Dream could be best achieved with more government regulations went so far as to say, ‘We all know that there are many bad side effects when regulations take place, but as human beings, we are not really responsible for our own acts, and so we need government to control those who don’t care about others. It makes sense that our freedom is reduced every day with the new regulations.’”

    Chambless blames the public schools, in large part, for failing to teach principles of the right to “life, liberty, and property,” but also that the government doesn’t have the responsibility for providing that.

    Chambless also said that 44 percent of Americans are receiving some form of government benefit, as compared to 29 percent in the early 1980s.

  • Kansas and Wichita quick takes: Monday January 30, 2012

    Kansas school forum. Tomorrow (January 31st) Dave Trabert of Kansas Policy Institute and Mark Tallman of Kansas Association of School Boards will participate in a town hall meeting with the subject being Kansas schools. The meeting is at 7:00 pm at the Central Branch Wichita Public Library at 223 S. Main.

    Ambassador Hotel to be subject of discussion. This Friday (February 3rd) the Wichita Pachyderm Club will host a forum or discussion on the February 28th election, which lets voters decide whether the Ambassador Hotel gets to keep 75 percent of its guest tax collections. I (Bob Weeks) will present for the “Vote No” side. Many invitations have been extended, but so far no one is willing to represent the “Vote Yes” side. If you know of anyone who would participate for the “Vote Yes” side, please contact John Todd at john@johntodd.net. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. Upcoming speakers: On February 10th: Debra Ary, P.E., Superintendent Production and Pumping, Wichita Water Utilities, speaking on “An overview of Wichita’s water plan for the future.” Then from 2:30 pm to 3:30 pm interested Pachyderm Club members and guests are invited to take a guided tour of the City of Wichita ASR (Aquifer Storage and Recovery) site. The address of the ASR plant is 11511 N. 119th St. W., Sedgwick, KS. Click here for a Google map. … On February 17th: Richard Ranzau, Sedgwick County Commissioner, 4th District, speaking on “The $1.5 million Regional Economic Area Partnership (REAP) HUD Sustainable Development Planning Grant. Economic Development or Economic Destruction?” … On February 24th: A Face-to-Face Forum with Kansas Congressional delegation staff members: Melvin “Mel” Thompson, State Agriculture Representative, Senator Pat Roberts; Mike Zamrzla, Deputy State Director, Senator Jerry Moran; Lea Stueve, District Director, Congressman Mike Pompeo. Topic: “Learn what is happening and likely to happen in the nation’s capitol.”

    Capital gains tax rate. e21 has written an excellent explanation as to why the 15 percent tax on capital gains does not tell the entire story. Considering that capital gains are taxed twice, the true rate of taxation is 44.75 percent, which is much higher than the top income tax rate, and higher than the corporate tax rate. The full explanation is at Capital Gains Tax Rates Are Higher Than You Think, and Getting Higher.

    Kan-ed audit. Kan-ed is a state-run network designed “to provide broadband Internet access and distance learning capabilities for schools, hospitals, and libraries.” Kansas Legislative Division of Post Audit has just released an audit of this program. Among the audit’s findings: “Although the Kan-ed network is connected to the Internet, it is a very slow and expensive way of providing Internet access. … Most connected members need commercial Internet access or no Internet connection at all. … Kan-ed could save up to $2 million a year by switching slightly more than half of members to commercial Internet and disconnecting others.” And finally, a conclusion that reminds us of why government spending is almost always wasteful: “Kan-ed has done a poor job of monitoring network connections to ensure members actually need them and has rarely disconnected unneeded connections.” The audit highlights are at Kansas Board of Regents: Evaluating the Effects of Eliminating the Kan-ed Program, and the full audit report is here.

    Huelskamp and Sharpton. Last week U.S. Representative Tim Huelskamp, who is in his first term representing the Kansas first district, appeared on the MSNBC television program PoliticsNation. Huelskamp’s office writes: “Congressman Huelskamp engaged the Rev. Al Sharpton over the issue of current tax rates and whether or not it’s ‘fair’ that millionaires and billionaires are allegedly taxed at a lower rate than others. The Congressman argued that the top 1% pay the plurality of all taxes in America, and that the real issue is promoting opportunity and not class envy, citing that his constituents tend to care more about having the ability to find a job and make it on their own rather than what their neighbors’ incomes may or may not be.” I would say that Sharpton has a peculiar — and harmful — idea of what constitutes fairness. Video is at Promoting Opportunity, Not Class Envy.

    Education reform blog started. The Friedman Foundation for Educational Choice has started a blog focusing on education reform, a subject the foundation has great experience in. A pres release announces: “As efforts to reform education and improve learning spring up across the nation, the Friedman Foundation for Educational Choice announced a new on-line information hub for advocates, parents and concerned citizens: the Friedman Flyer. The Friedman Flyer, FriedmanFlyer.com, will advance Milton and Rose Friedman’s vision of school choice for all with daily updates on news and lively discussion centering on education reform and school choice.”

    Super PACs. Are the new Super PACs a problem? No, write Nick Gillespie and Meredith Bragg of Reason. Here’s why: “Billionaires don’t need them to influence elections, Super PACS go negative — and that’s a good thing!, and Super PACS take power away from the parties.” More at 3 Reasons Not To Get Worked Up Over Super PACs.