February, 2007

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Taxing Reality

Wednesday, February 28th, 2007

Wisconsin’s governor wants to outlaw reality.

And by golly, if reality doesn’t cooperate, he’s going to fine the oil companies! Maybe imprison some oil executives! That’s how determined Governor Jim Doyle is about this.

Along with all the other new taxes he’s rooting for, Governor Doyle wants a fat new tax on oil companies. Well, that’s not original. But he not only wants that new tax, he wants to ban oil companies from “passing on” the tax to consumers. Huh?

No business can directly “pass on” each new cost it must bear. It’s competing with other firms, for one thing. Maybe a more efficient oil company will be able to sell barrels of oil a little cheaper than a competitor, though they have similar costs. Prices don’t just show up on the ticker tape. Nor do companies determine prices unilaterally. Prices are determined by supply and demand, with costs of production as only one major factor.

On the other hand, if a company doesn’t earn more than it spends, it eventually goes out of business. Firms do have to cover the cost of doing business, and in this sense costs are invariably “passed on” to customers. The alternative is operating as a charity. Or, I guess, begging the government for a subsidy to cover taxes the business is not allowed to regard as a cost. Even though they are a cost.

This reality stuff is hard. You can outlaw it, but it just won’t go away.

This is Common Sense. I’m Paul Jacob.

Some Cold, Hard Facts

Tuesday, February 27th, 2007

We hear a lot about “homeland security” these days.

But hey, hasn’t “homeland security” been Job One for the federal government since Day One?

It’s pretty clear that while our politicians seek to solve every problem, they sometimes no they often forget about protecting us.Yoo hoo, federal government! Over here in America! You know us, we pay all those taxes.Even now, when we face threats, I think most politicians don’t get it.Years ago, New Jersey Governor Jim McGreevey admitted having an extra-marital affair with a male employee. I said at the time that while that is certainly wrong, McGreevey was actually engaged in an elaborate dodge of a more serious public disgrace: giving that same man a job with do you remember? yep, Homeland Security! Nice place to stash a lover, eh? Pad the Homeland Security staff. Sure, it might allow terrorists to kill thousands, but let the good times roll.Well, at least McGreevey’s gone. Resigned. Wrote a book to share his tremendous wisdom. I haven’t read it.But I just read in the paper that Speaker Nancy Pelosi is putting Mr. Freeze, Louisiana Congressman William Jefferson, on the you guessed it Homeland Security Committee. (The FBI found $90,000 in Jefferson’s freezer.)Committee members are privy to intelligence. Intelligence terrorists could use. If al-Qaeda wants a weak link, here he is. That’s not security. This is Common Sense. I’m Paul Jacob.

Toughened Term Limits?

Monday, February 26th, 2007

There you go again.” Ronald Reagan said that to Jimmy Carter in that famous debate. But he could have been talking about California politicians and special interests and their obsession with term limits.

They’re back, once again trying to gut the state’s voter-approved and re-approved term limits law. Get this: They’ve launched a new initiative, which they’re pretending will toughen the law.

Currently, a legislator can serve three terms in the Assembly, six years; and two in the Senate, that’s eight years. The new tougher term limits would allow politicians to stay double that in the Assembly, 12 years, or 50 percent longer in the Senate, again up to 12 years.

Did you miss the toughening part? Well, the proposition does decrease the current 14 years allowed in both houses down to 12. It’s 12 years overall. Few legislators serve in both chambers and leaders are more than willing to trade a decrease in both for a big increase in one, the better to bottleneck power longer.

That’s why it’s being pushed by Assembly Speaker Fabian Nunez and Senate President Pro Tem Don Perata. In fact, the measure had to be re-written and re-filed to make certain it would fully grandfather Perata. You see, he’s already managed to maneuver, with a judge’s help, into his ninth year in a senate limited to eight years. Now, if his initiative scheme works, too, he’ll hang around 14 years.

Oh, such mighty term limits . . .

This is Common Sense. I’m Paul Jacob.

Common Sense from Iowa

Friday, February 23rd, 2007

Bill” is a man after my own heart.

That’s all I can call him…because that’s how his letter to the editor is signed, “Bill.” He’s pushing for term limits, though not explicitly.

Bill is responding to a scandal involving a state agency called the Central Iowa Employment and Training Consortium. The Consortium is supposed to be devoted to job training. But instead, shocker, big chunks of funding were recently diverted to a few agency officials. According to the Des Moines Register, $1.6 million in taxpayer money intended for job training went instead to bonuses and salaries.

Scooped up mostly by just three executives.

Anyway, in response to all this, which included the resignation of a Des Moines city councilman who approved the inflated salaries, our friend Bill says he agrees with the perception that “politics in general corrupts all levels of government. But don’t you think we’ve reached a point in this city where the bums simply have to go? At least new leadership will be held to a higher standard and be under tighter scrutiny.”

Then Bill floats his most radical notion: Get rid of them all. Why? As Bill says, “[S]imply to clear the air and put this back on firm footing.” Bill astutely points out that there are plenty of smart business people in the city to step up. And he makes the old Jeffersonian point that politics needs a good purging now and then.

You’re right, Bill. It’s just Common Sense, really.

I’m Paul Jacob.


Higher-Than-Sky Taxes

Thursday, February 22nd, 2007

As taxes go, I prefer lower to higher, fewer to many, one to a few, and . . . none to any. But if I had to choose just one to pay, would I want it to be a consumer sales tax, a property tax, or an income tax?

There are plusses for each, minuses for all. No matter what tax you talk about, there’s always somebody taking money from you. But I guess the income tax can be the most maddening.

I bet Brian Emmett, no matter his politics, would likely agree.

You see, for a moment last year, Mr. Emmett thought his knowledge had paid off. He took an online quiz on Java computer code, and won. A free trip into outer space! Courtesy of Oracle, the database company.

Space tourism has really taken off. My goodness, some people now get into space by winning prizes.

But not Mr. Emmett. He figured that, between the state of California and the IRS, government wanted over 40 percent of the value of his prize. He would have to go $25,000 into debt to shoot into space. He wasn’t willing to do that. So he forfeited his prize.

He had dreamed of going into space all his life. But he didn’t want to have his taxes go out of this world with him.

What a pity! What a crime! Mr. Emmett’s short never-taken space trip? Something worth thinking about the next time politicians talk about spending more money or raising taxes.

This is Common Sense. I’m Paul Jacob.