Thursday, February 02, 2017

Left and Right Agree on Governor's Tax Shell Game

When the Arkansas Times makes more sense to conservatives than a Republican Governor, its news. This article breaks down the shell game that is the Governor's "tax break for veterans", pushed by Lt. Governor Tim Griffin among others. The bill actually includes a completely separate tax break for wholesale syrup distributors, to be paid for by taxing digital downloads and unemployment benefits (so give it to them with one hand and take it with the other- sounds efficient right?).

Dave Ramsey points out that the tax break for veteran's retirement benefits will cost $13.4 million while the tax increase on candy and soda pop will by itself raise $13.8 million. So just looking at that, the bill is not revenue neutral. It is not a tax cut, it is not paid for by any reduction in spending. It is a shuffling of taxes which results in a slight overall tax increase. Only retired veterans, a sliver of the population, will see a tax decrease.

For some people on the right the military is held in a near-divine reverence. There would be almost no special benefit one could suggest for them that they would be against. There is a militaristic national security element of the right, but that is not the "right" I am talking about here. I am talking about the limited-government right that is suspicious of all government attempts to divide us against each other by handing out or with-holding special privileges to various groups.

Look, I think it is disgraceful the way FEDGOV is not keeping its promises to the veterans, but we never promised them that they would get a state income tax break. People with military retirement incomes, with the exception of those seriously wounded on duty, are already better off than most of the rest of us. I too am a veteran, though I did not stay in until retirement. Some of the people I served with were patriots and others were not. No, its not fair, and its not patriotic for them to get an exemption from taxes on their military retirement income when the rest of us have to pay taxes on our income. With the exception of those badly wounded in service of the nation, I don't see why they should even want an exemption.

In the long run, retired veterans will be even more respected if they shoulder their share of the load of the cost of running state government than if they become just another special interest group with their hands out. They will also be more motivated to help us watch the politicians and reduce the load on us all if they share in the burden, instead of only being interested in preserving special privileges at everyone else's expense.

If you were a patriot when you served, continue to be one when you retire. I don't want to make the ex-military an us vs. them situation.Society is better off if retired military and the rest of us are in the same boat, rowing together. This is preferable to rolling around on the deck fighting each other for special benefits from the politicians, who are the real ones that win when we start treating each other differently.

That brings us to the "other bill" which is hidden in the bill. They are hiding behind veterans to also do the following with this bill....

* Removing the income tax exemption on unemployment compensation: approximately $3.1 million

* Imposing tax on digital downloads (this replaced the earlier idea of removing the sales tax exemption on mobile homes, which turned out to be politically untenable): $2.4 million

* Cutting the wholesale-level tax on soft drink syrup by 40 percent: $5.9 million

So the two taxes at the top, plus the overage on the first tax increase, equals just the amount of the tax cut for wholesale soft drink syrup sellers. Conclusion: they are hiding behind veterans in a complicated shell game to pay for a tax cut to a special interest group. One wonders what donations were driving that chicanery. Both left and right should vote "no" on this bill.


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