The Heartland Institute just opened up their new blog today, somewhatreasonable.com. I encourage a visit.
This is where the Heartland staff will post their quick takes and commentary on the rapidly developing stories of the day.
I just posted a spirited defense of Mitch Daniels there…like he needs my help.
I agree entirely. There are times when I think that Mitch Daniels is the only serious Republican in the entire country.
I was very impressed with his interview with FiveBooks. I would suggest all interested Chicago Boyz give it a read.
Mitch Daniels, being governor of Indiana, has the option of proposing an Indiana VAT. He will not. Once you ask why, it doesn’t take long to figure out why the VAT is so disliked by so many conservatives.
TM,
First, a state has the serious problem imposing taxes, as it makes them less competitive re: other states.
I’m a qualified fan for swapping gas taxes with FICA, for example, but I’d never propose a state be so foolish.
As for the VAT, there are better “consumption tax” solutions, and my admiration of Daniels is for leadership, not his specific plan.
Our corporate income tax is an obscenity vis-a-vis international competitiveness. Scrapping that, and replacing it with a GRT or GST would do wonders for us.
Bruno Behrend – The ease of escaping the VAT’s negatives inside the US makes those negatives much easier to see and comprehend. When you have VAT taxes coinciding with national boundaries it is much more difficult to see the negatives. That’s why I am proposing the intellectual exercise.
Gov. Daniels could have proposed phrenology as a substitute for the federal reserve and might as well have done so. It would have been the same category of leadership, the bold proposal of bad policy, or would it be better put as the bold trial ballooning of bad policy?
TM,
Paraphrasing military metaphors, no proposal survives contact with the legislative process.
The real problem is that no one proposes any ideas for the purposes of debating good or bad policy.
I’m anti-VAT, and pro consumption tax replacing income taxes.
Let the discussion begin. Let’s thank Daniels for talking in something other than lame right-wing talking points.
Bruno Behrend – So I can mark you down as pro-phrenology test balloons? Leadership is talking about cutting 50% of spending and taking the 7% surplus to create real old-age pensions that are sustainable and letting yourself get talked down to 43% spending cuts and a balanced budget, saving SS reform for next year.
If you start off from phrenology or some equally poor starting place, your negotiated settlement is not going to be as strong as if you’d picked your battlegrounds better. I’m not offended at bringing up the VAT, I’m appalled. I’m appalled that someone who is supposed to be so competent is picking his battle terrain so foolishly. And that’s something to worry about in a potential presidential candidate.
I don’t know why anyone would want to try to defend Daniels. In my personal opinion he is arrogant and condescending.
At a time when we were seriously gathering momentum to abolish property taxes he put a stick in the spokes with his proposal for a “1-2-3” system in which farmers and business people are by implication accused of burdening the rest of the tax base to the extent that their taxes should be doubled or even tripled. I’m really uncomfortable with the two assumptions here. One, that I should pay the government, or anyone else, rent on my own property, it smacks a great deal too much of serfdom. Two, that farmers and businesses are somehow to be penalized for being productive. I think Daniels either subscribes to the zero sum wealth fallacy in a big way, or maybe worse, he panders to those he knows do.
When pressed on these issues he resorted to the assertion that eliminating property taxes would “required too great an increase in sales or income taxes for the Governor to accept.” Of course the total tax burden could be kept constant, and merely moved to other forms of taxes (though I personally would rather it be reduced). Later in the same document he lets it slip why he finds this unacceptable: “… would encourage Hoosiers to make large purchases in neighboring states.”
So, the reason for maintaining the property tax is that it provides a “captive” tax base. People might put off buying a new car, or buy it in Kentucky, but they won’t pay less property tax because they will lose their home or business. I suppose it is a pragmatic way of looking at it, but not a view point I want to hear from an elected official.
On the whole, I think we get enough of these things: Zero sum wealth fallacy, demonization of business and business people, a condescending attitude, and the idea that the rest of us are serfs suffered to toil for the elites who know better than we do, from Obama, progressives, etc. without hearing it from Daniels. If he really is the best the Republicans can do, that’s a really sad commentary.
http://www.in.gov/gov/files/Questions_and_Answers.pdf (and other places…)