E!! The True Conservative Story™

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Nevada’s most incorrigible tax hater, Chuck Muth, penned a pretty good one today.  Read it for yourself, but here’s a sum-up with a little E!! on the side:

The Silver State’s usual tax-and-spend suspects are crying a river over what amounts to a 10% budget cut (not 15%, not 22%, and not 34%, as has been reported by various hysterical persons who shall go unnamed).

Yes indeedy, 10% is the official figure that Andrew Clinger, the state’s official Budget Director, is officially using in his official correspondence with people.  According to Clinger, Gov. Gibbons’ proposed general fund budget this year “is $632.9 million smaller than last biennium,” a reduction of 9.3 percent. 

So why all the discrepancies, disparities, and dispepsia over huge budget cuts?  Let’s have a little history (and MATH) lesson and see:

2003:  The Legislature increased taxes by more than 3/4 of a billion dollars.  And there were no spending cuts.  Then-REPRESENTATIVE Jim Gibbons criticized then-Governor Kenny Guinn for not cutting 3/4 of a billion dollars from the budget rather than raising taxes. 

2005:  Wonder of wonders, Nevada had a budget surplus of about 3/4 of a billion dollars.  Gov. Guinn put some of the surplus into the Rainy Day Fund and rebated $300 million back to the taxpayers.  The general fund budget was around $6 billion.

2007:  Gov. Guinn is out; Gov. Gibbons is IN.  Gibbons SHOULD HAVE proposed a budget which included the 3/4 of a billion in cuts he’d suggested to Guinn back in 2003, which is to say he should have proposed a budget of around $5.5 billion (allowing for inflation and giving a little leeway and such).  But instead Gibbons suffered from sudden budget amnesia (SBA) and proposed about a billion dollars MORE in state spending.  So the Gibbons budget was nearly $7 billion.

2008:  Astonishingly enough, The Economic Forum projects actual revenues coming into the state coffers at around $5.5 billion.

SO, here we are, 2009:  Looking at the insufficient funds left over from 2007’s budget and faced with having to roll back spending to 2005 levels based on current state revenues.

AND the big-government gurus want the 2009 Legislature to spend NOT ONLY the $7 billion the government already can’t afford, but ANOTHER $1 billion on top of that!   Yes, it’s true:  the spendy spenders are demanding $8 billion in government spending while the state is only taking in $5.5 billion.

AND – here’s the big finish, folks! – the Spenders are calling any talk like the Talk I just talked (i.e. only spending what we are actually taking in), an “irresponsible $2.5 BILLION BUDGET CUT.”

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Any questions?!

As an alternative to drinking yourself into a stupor and sobbing dejectedly as the D.C. Democrats embark on a major spendfest, how about this:

The Republican Study Committee has introduced the Economic Recovery and Middle-Class Relief Act of 2009 as an alternative to the Democrats’ big-spending stimulus plan.  Click through for either the full text or highlights as well as letters of support from Americans for Tax Reform and the National Taxpayers Union.  It includes:

- A 5% across the board income tax cut (all six federal rates would be cut)

- An increase in the child tax credit from $1,000 to $5,000

- Permanently lowering capital gains tax to 15% (the rate cuts from 2003 expire in 2010)

- Repeal of the Alternate Minimium Tax on individuals

- Permanently repeal required distributions on retirement accounts (suspended for 2009, but goes back into effect in 2010)

- Making all withdrawals from IRAs tax and penalty free in 2009

- Increasing by 50% the tax deduction on student loans and qualified higher education costs

- Full, immediate expensing for businesses all costs of assets (uncaps and accelerates exepensing which will encourage capital spending)

- Reduction of the corporate tax rate from 35% to 25% (for all you contintental types, that would align our rate with the average rate in the EU)

- End capital gains tax on inflation and simplify the capital gains rate structure

- Make the R&D tax credit permanent (originally enacted as part of Reagan’s Economic Recovery Tax Act of 1981)

- Extend the carryback period for net operating losses to seven years

This bill contains NO NEW SPENDING, unlike the “stimulus” bill the Dems are pushing which will put us at an unprecedented peacetime deficit (about 8.3% of the GDP).  The bill also contains a one percent reduction to Fiscal Year 2009 discretionary spending, excepting Defense and Military Construction, which is a step toward further spending restraint.

All fiscal conservatives should contact their congressman and support this bill.  It is a no-brainer.

The sky’s been falling on Wall Street, and now hell is officially freezing over: Harry Reid is defending the same tax cuts that he once opposed and blasted as being “for the rich.”

So says Susan Jones of CNS News, who is reporting on the Senate debates of the “rescue bill” (still an Obama-ism, still smacks of false victimology, still hate it).

In an attempt to grease the Senate wheels on this bill, Reid now says he supports an Alternative Minimum Tax relief: $8 billion for natural disaster victims, and $78 billion in renewable energy incentives and extended tax breaks.

Reid’s commentary included statements like “we’ve got to get this done” and “it would be a blight on this Congress not to pass these tax extenders” and “tens of thousands of jobs will be created.”

How wonderful that liberal Democrat Harry Reid has finally admitted that tax cuts help businesses and create middle class jobs.

Pigs, commence flight.

Update:  George reminds us that Obama had a revelation on taxation also:  when he said that as president he would delay rolling back the Bush tax cuts if the economy was weak…essentially acknowledging that tax hikes hurt the economy.

If there’s one thing I’ve learned from blogging and receiving tons of email, we all have our “pet” electoral issues and hot buttons – and they vary widely from person to person.  For me, it’s national security first; the economy (and tax policy) second; and energy policy (a closely related) third.

On the subject of the economy, Jack Kemp has a good op-ed on the presidential candidates and their proposed tax plans (thanks to Mike Davis at the NV RLC for bringing it to my attention).  I strongly encourage voters to read the whole thing, but here are some key points (summarized in my own words):

Barack Obama says he supports a tax cut in the form of a $500 refundable income tax credit for all workers (except those in the top 5 percent of income earners, who will pay more taxes) “unless the economy remains weak.”  So…Obama does recognize that tax increases on the rich have a negative effect on the overall economy.  (But why does he think that matters only in “weak” economic times?)

Obama’s tax credit does not reduce marginal tax rates, so it won’t benefit the general economy because it provides no long term (additional) incentives for work, savings, investment or business expansion.  (People will get their $500 refund check, spend it, and that will be That.)

On the other hand, McCain wants to double the personal exemption for dependents from $3,500 to $7,000 for families regardless of income.  (For middle-class workers in the 25% tax bracket, the $3,500 exemption increase would reduce their tax liability by $875 for each child.  Families with three children are thus looking at $2,600+ in tax savings.)

And McCain proposes marginal tax rate reductions – which is great news in country that pays the second highest corporate tax rates in the entire industrialized world.  McCain wants to reduce the federal corporate tax rate from 35 percent to 25 percent – a boon for middle class workers in the form of new jobs, better pay, and a stronger dollar.

And all this will most likely raise rather than reduce tax revenues.  (Why?  Kemp cites a 2007 study by the Treasury Department which showed that Ireland — with a 12.5% corporate tax rate — raises just shy of 50 percent more revenue on a comparative basis than the U.S. does with a 35 percent rate!)

McCain would also keep the top capital gains tax rate and dividend tax at 15% which is needed in the stock world (stocks are now held by more than 2/3rds of all Americans).  McCain further wants to phase out the Alternative Minimum Tax (AMT) which burdens 25 million middle-class families with another $2,700 in taxes each year (on average).

Obama, by contrast, has proposed to raise marginal tax rates for almost every federal tax — the individual income tax, the capital gains tax, the dividends tax, the payroll tax, the death tax, etc. and he would increase corporate taxes where and when he could.

McCain’s plan is a good start, but I agree with Kemp:  we need to promote additional middle-class tax cuts through fundamental reform of our “confusing, contradictory and confiscatory tax code.”

Kemp outlines a proposal by Rep. Paul Ryan, R-Wis. to allow workers to choose a flatter tax system (which is also worth reading about, at the end of his op-ed). 

As reported by the Nevada Appeal here, about 90,500 Nevadans were out of work in June.  Our unemployment rate climbed to 6.4 percent - the highest level in more than 14 years.

Though this is bad for many residents of the state, it may be good news for Conservatives who worry that Nevada may turn Blue on this November’s electoral map.  As jobs stay scarce, businesses struggle to make payroll, and gas prices stay high, fiscal conservatism – including the desire for balanced budgets and lower taxes - will (should!) sieze the hearts and minds of those who might otherwise swing Left in both the state and national elections this fall…IF conservative candidates can convince constituents they stand for these values.