Archive for the ‘taxes’ Category

The Attack on Colorado’s TABOR and the Threat to Other States

Posted on: January 9th, 2013 by admin No Comments

IP-1-2013 (January 2013)
Author: Robert G. Natelson and Zakary Kessler

PDF of full Issue Paper

A lawsuit challenging the constitutionality of Colorado’s Taxpayer’s Bill of Rights (TABOR) has dire implications that extend far beyond the boundaries of Colorado. The theory of the lawsuit can be used to void well-founded safeguards in the constitutions of almost all other states.

In Independence Issue Paper 12-2012, Professor Rob Natelson, II’s Senior Fellow in Constitutional Jurisprudence, debunked the lawsuit’s claim that TABOR violates the requirement that each state have a “republican form of government.” In this Issue Paper, Professor Natelson and Institute intern Zak Kessler demonstrate the practical implications of the lawsuit.

If the plaintiffs win, the result will be legal and practical chaos, not just in Colorado but across the country. This is because the theory of the lawsuit is that any fiscal restraints on a state legislature render that legislature less than “fully effective” and therefore “unrepublican.” Special interests can employ this theory to destroy well-founded and long-standing safeguards against legislative fiscal abuse. Furthermore, they can use the same theory to attack the voter initiative and referendum process, and other constitutional limits on the power of state politicians.

Obama’s State of the Union: You’re just part of his “blueprint”

Posted on: February 1st, 2012 by Brian T. Schwartz No Comments

This originally was published in the Boulder Daily Camera on Saturday, January 28, 2012.

For refutations of the President’s flawed claims and statist economic plans, see the Cato Institute’s website, blog, and YouTube channel. Regarding Obama’s “Buffett tax” on millionaires, the Associated Press explains that the wealthiest Americans already “pay a lot more taxes than the middle class,” including secretaries

To understand Obama’s statist fervor, ask yourself: Are you a machine cog? Surely not. But like many politicians, Obama disagrees, at least tacitly. How? Linguist George Lakoff explains how metaphors are key to understanding political discourse. In his speech, the President expressed his desire to “lay out a blueprint for an economy.” At least twice he’s mentioned starting a health care “system” from “scratch.” This speaks volumes.

“The economy” refers to people producing and exchanging goods and services. In a freed economy, government respects people’s right to trade voluntarily. But Obama sees the economy as a machine to be manufactured, or a cake to be baked.

Obama has the same conceit that better economists have warned about for centuries. Describing the “man of system,” Adam Smith wrote: “He seems to imagine that he can arrange … members of a great society with as much ease as the hand arranges … pieces upon a chess-board.” “Socialists look upon people as raw material to be formed into social combinations,” wrote French economist Frederic Bastiat in 1853. Or, as 1974 Nobel laureate F.A. Hayek wrote, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

Boulder’s “Climate Action Plan”: inefficient, ineffective

Posted on: January 19th, 2012 by Brian T. Schwartz No Comments

This was printed in the Boulder Daily Camera on Saturday, January 14, 2012.

The Boulder City Council’s website touts a “Climate Action Plan” as one of its primary goals. “The current goal is equivalent to the Kyoto Protocol target – to reduce emissions to a level seven percent below 1990 levels by 2012,” it says. With the city’s carbon tax set to end early next year, it’s worth asking: Is reducing carbon dioxide emissions the best way to respond to global warming?

Reviewing analysis by retired NCAR Senior Scientist Tom Wigley, Boulder’s University Corporation for Atmospheric Research (UCAR) states that even if the “industrialized and nearly industrialized countries called upon to reduce greenhouse gas emissions in the protocol … continued to abide by Kyoto’s limits” through 2100, global average temperatures would be at most 0.38 degrees Fahrenheit less than midpoint warming projections. Put in perspective, global temperatures decreased by this amount between 1900 and 1910, according to NASA.

Given this tiny effect, I’m not surprised that expert climate economists commissioned by the Copenhagen Consensus Center ranked emission reductions last among cost-effective responses to climate change. More efficient methods, listed at, include adaptation, climate engineering, and carbon storage technologies.

With or without global warming, people — especially those in developing nations –face threats from extreme temperature, coastal flooding, hurricanes, malaria, poverty, starvation, and water stress. While global warming may increase these risks, scholars including Indur Goklany and Bjorn Lomborg convincingly argue that directly reducing these threats and promoting prosperity save more lives at lower cost than attempts involving emissions reductions.

Jared Polis on U.S. Postal Service: end its “monopolistic protections and special treatment”

Posted on: December 15th, 2011 by Brian T. Schwartz No Comments

This originally appeared in the Boulder Daily Camera on December 3, 2011 in response to this question: The United States Postal Service is facing major financial constraints, and it is forecasting a record $14.1 billion loss for fiscal 2012. … What do you think the USPS should do?

Break free, USPS! Leave your over-protective and controlling parent: the U.S. government. Yes, the perks are nice. The Feds grant you monopolies on mail delivery and mailbox access. They exempt you from costs such as vehicle licensing, parking tickets, threats of antitrust suits, and taxes on sales, income, and property. The fifteen billion dollar U.S Treasury credit line is nice, too.

But Federal controls cripple you. The Feds make you deliver mail almost everywhere, six days a week, while restricting your ability to increase prices. Freedom to adjust prices and deliver on fewer days would save billions annually. Three of four Post Offices lose money. But U.S. Code prohibits closing them “solely for operating at a deficit,” and Congress must approve any layoffs.

Further, you must pre-fund your retirees’ health benefits, which your Postmaster General says is “effectively bankrupting” you. Yes, USPS retirees get health benefits! As your website says, “federal statutes hamper [your] ability to craft a market-based benefits package.” Indeed. describes how your employees enjoy a “postal pay premium” between 20% and 35% compared to comparable private-sector employees.

USPS, listen to what Rep. Jared Polis, D-Boulder, wrote ten years ago. Ending “monopolistic protections and special treatment enjoyed by USPS” would “benefit … postal customers, postal employees, and businesses in the delivery sector. … Unless we unshackle USPS and allow it to leverage its infrastructure effectively as a normal privately owned company, then USPS will sadly fade away as it becomes increasingly irrelevant in the marketplace.”

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Thanks to Ari Armstrong for the Jared Polis reference.

Prop. 103 supporters: You can still donate more of your own earnings to tax-funded schools

Posted on: November 14th, 2011 by Brian T. Schwartz No Comments

This article was printed in the Boulder Daily Camera on November 5, 2011.

To paraphrase Mark Twain: Don’t let funding schools interfere with funding students’ education. Boulder Senator Rollie Heath was behind the defeated Proposition 103, the proposed tax increase for Colorado’s tax-funded schools. “I just don’t know how far in education cuts we’ll have to do before people realize what we’re doing,” he told the Daily Sentinel after the election.

Heath implies that increasing school funding improves students’ education. Where’s the evidence?  As I documented in a recent Denver Post op-ed, national standardized test scores for 17-year-olds have been essentially flat since the early ’70s, while real-dollar per-pupil spending has doubled since then.

Increased spending didn’t increase test scores, but it increased teacher employment. Since the early ’70s student-to-teacher ratios decreased by almost a third. Employment in K-12 schools doubled, though student enrollment increased by just 10%.

Prop. 103 was really a Democratic Party fundraiser. Hiring more teachers sends more tax revenue to teachers unions. The unions almost exclusively support Democrat politicians, who when elected push for higher school taxes, and hence more money for unions that supported their campaign. These politicians also oppose school choice, and hence protect tax-funded schools as a monopolistic cartel.

Don’t fret if you supported Prop. 103. You’re still free to donate more of your earnings to tax-funded schools. You just can’t force others to do so.  But if you really care about quality education, you should support efficient schools that provide quality education at low cost, rather than letting politicians determine where your money goes.

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Update:  Oddly, the website for the Boulder Valley School District does not make it easy for people to donate to the district itself or specific schools. But the District has received more than $2 million in annual donations. I did find the following:

Paul Krugman’s space aliens won’t create jobs, repealing health control law will

Posted on: September 12th, 2011 by Brian T. Schwartz No Comments

This article was printed in the Boulder Daily Camera on September 10, 2011 in response to this question:

What do you think will help decrease unemployment and underemployment? What role do you think the government can, or should, play in encouraging job growth?

Space aliens attack!  Nobel laureate economist Paul Krugman says we need scientists to “fake an alien threat.”   ”A massive buildup to counter” the threat, real or not, would end the economic slump “in eighteen months,” he said. Dr. Krugman unwittingly shows how loony Keynesian economic “stimulus” schemes are.

As an EconStories rap explains: “If every worker was staffed in the army and fleet, we’d have full employment and nothing to eat. Jobs are a means, not the ends in themselves. People work to live better, to put food on the shelves. Real growth means production of what people demand. That’s entrepreneurship not your central plan.”

Repealing parts or all of last year’s health control law [HR 3590] would encourage real growth. One-third of small business owners sited the law’s requirements as the greatest or second greatest “obstacle to hiring more employees,” reports a recent U.S. Chamber of Commerce survey. Three of four business owners “somewhat agreed” that the law “makes it harder … to hire more employees.”

For example, the law compels employers to buy insurance for full-time employees.  In response, half of surveyed employers said they would “change their workforce strategy so that fewer employees work 30 hours or more a week,” reports Mercer consultants.

Is it merely coincidence that private-sector jobs growth stalled after health “reform” passed?  Economist James Sherk shows that in the fifteen months before “reform,” average monthly job growth exceeded 67,000 jobs. Since then, it has plummeted to around 6,500 jobs per month. Don’t blame alien abductions.

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Thanks to Grace-Marie Turner for her article: Repealing Health Care Legislation Will Create Jobs, which led me to the health care bill references above.

Related, via FIRM, The Hill reports:

The medical device industry says it could lose 10 percent of its U.S. workforce because of a tax created by healthcare reform.

The Advanced Medical Technology Association (AdvaMed) released a report Wednesday that says device-makers might ship 43,000 jobs overseas once the tax takes effect in 2013.

Read more: Device-makers say tax will cost 43,000 US jobs.

Maintaining Boulder open space trails: user fees & sponsorships should replace taxes

Posted on: June 22nd, 2011 by admin No Comments

Opinion Editorial
June 18, 2011

by Brian Schwartz

How Boulder County finances its trail maintenance is unjust. The county sales tax forces people to finance hiking trail maintenance, whether or not they use them. Meanwhile, people who don’t shop in Boulder County can use trails without paying. The County should strive to replace tax-funded trails with user fees and sponsorships.

As a type of user fee, parking fees and annual parking passes for cars registered in other counties are a step in the right direction. The assumption is that a typical hiker coming from outside Boulder County pays less county sales tax than a trail user who resides in the county. The parking fee is an attempt to resolve this difference.

A drawback is that the fee makes some out-of-county hikers “pay twice.” Meanwhile, the sales tax still forces county residents who do not use trails to fund other people’s recreation. To resolve this, the County should both decrease taxes and extend trailhead parking fees and passes to cars registered in the county.

In addition to user fees, corporate sponsorship of trails is another way to raise revenue through voluntary means. The Continental Divide Trail Alliance does this. Since 2009, REI has contributed more than $15,000, while Home Depot, Salomon, Coleman, and Smartwool have each contributed more than $1,000. Trailhead maps and direction signs along the trail could identify sponsors: “This trail is maintained by a generous donation by …” and include the sponsor’s logo — tastefully sized of course.

A version of this article was printed in the Boulder Daily Camera on Saturday, June 18, 2011.

Colorado Medicaid Reform: Federal Matching Funds Promote Waste

Posted on: January 21st, 2011 by admin No Comments

by Brian Schwartz

The Colorado legislature should cut wasteful spending by Medicaid and the Child Health Plan Plus. When these programs spend a dollar from a Colorado taxpayer, the federal government gives them a dollar taken from a taxpayer in another state. Hence, Medicaid and the Child’s Health Plan program administrators are rewarded for spending more and punished for spending less.

These programs devour about ten percent of the state budget. Hence it’s no surprise that “Colorado faces a budget deficit of between $50 million and $257 million for the rest of this fiscal year,” reports the Denver Business Journal. Balancing next year’s budget could require $1.1 billion in cuts — about 5% of the budget.

Federal matching funds rewards extravagant spending. Administrators can expand their budgets, staff, and salaries. Programs stray from serving the truly needy, as the Independence Institute‘s Citizens Budget documents. So lax was the recent Child Health Plan Plus expansion that about six of every ten new enrollees had private insurance.

Low enrollment fees and copayments also encourage imprudent spending. For example, it’s just $2 for a podiatrist visit.

A penny squandered is a penny “earned.” Colorado Medicaid made errors processing claims more often than private insurance, which cost taxpayers thousands of dollars. But the feds reward them for this, too.

Instead of federal matching funds for Medicaid, Colorado should request a lump-sum block grant. This would reduce perverse incentives.

A version of this article was printed in the Boulder Daily Camera on January 15, 2011.

How Much Does Government Cost You?

Posted on: September 17th, 2010 by admin

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Thanks to our friends at the Independent Institute out in Oakland, California, regular folks like us can figure out just how much the government is costing us in direct payments and in lost earnings over our lifetime.  From the About Page on the MyGovCost website,

The Government Cost Calculator is a unique service from The Independent Institute that enables any American to clearly understand three aspects of federal government spending.First, the Government Cost Calculator helps you determine how much you will pay for various federal programs now and over the course of a lifetime. Second, it compares those tax payments to the forgone earnings that would have been possible if such funds were kept and invested in private, market accounts. Finally, the Government Cost Calculator enables you to see the difference between government expenditures and your tax payments, clearly illustrating the growing debt obligations you face in the future.

All you have to do is input your education, age, and income into the Government Cost Calculator and you will get results that accurately reflect how much our overbearing government costs YOU!

The Changing Role of Government, 1850 to 2011

Posted on: August 27th, 2010 by jlongo

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A good friend of the Fiscal Policy Center and Free People, Free Markets alumnus Tom Ryan has a wonderfully informative organization and website called Reclaiming Moral Government. Tom has created a slide show that displays the changing role of government from 1850 to present day. The viewer gets to see governments expansion into our lives through a beautifully color coordinated time lapse. It is truly well done. Tom was also kind enough to sit down with Fiscal Policy Center director Penn Pfiffner for an podcast. They discuss Tom’s new Reclaiming Moral Government venture and what Tom hopes to achieve through it. Please take a few minutes and see for yourself how government has managed to stick its nose into every aspect of our lives over the last 150 years.