We Have to Want Prosperity First

"The situation was getting desperate in Bulgaria. We were losing our population and our best workers. They were leaving for Western Europe to find jobs and the No.1 form of foreign capital came from remittances." All that began to change when the corporate tax was cut to 10% in 2007 and the personal income tax to 10% in January of this year. " (source)

Sound familiar? Declining tax revenue, a shrinking economy, workers leaving, a sense of desperation. Like Bulgaria was, our tax policies are designed to raise tax revenue at any cost - they're not designed to promote prosperity. The question is whether a no-growth, no-prosperity policy is really a good long-term strategy.  Perhaps we, like Bulgaria,  should consider thinking about economic consequence when we design our policies?

There really isn't a choice. Like all natural systems, the economy will either grow or decay. The only thing we know for sure is that it won't stay the same. Sustainability is just a doublespeak for government managed economy which even overt socialist states like Bulgaria have discovered simply does not work. That's not to say they've disbanded their social experiment. On the contrary, with its 10% flat tax they've increased their total tax collections enough to actually afford their social programs - perhaps for the first time. Even the former communists understand the flat tax is the key to their prosperity.

We can have a tax system that promotes prosperity and generates enough tax revenue to fund our social programs, too. But we have to want prosperity first.

Comments

[GreggB]

We will work on increasing prosperity right after we get the state's electricity shut off. Remember kids nobody do anything rash, goodtimes are a coming, right after this winter of burning furniture and eating old shoe leather soup.

I have never heard of a city or state that has been taxed into prosperity.

Even Old Europe has figured this out.

Recent election victories: Germany's free-market oriented Angela Merkel over populist Gerhard Schroeder; France's free-market oriented Nicolas Sarkozy over socialist Segolene Royel; and free-market oriented Silvio Berlusconi reclaims Italy's Prime Minister post after the resignation of the former and his disastrous anti-business economic policies.

Vermont has and continues heading down the path of Old Europe's old ways: Ever-higher taxes and ever-more regulation.

Vermont will - eventually - follow Europe's path toward freer markets.

It is only a question of when - and - how much pain will be required.

[Karen Kerin]

What is even worse than the government being so nuts is criminals are getting plea bargained to very light sentences and some minor offenders are getting plea bargained into prison because they can't afford a good attorney. The system is broken and needs fixing. We need to elect judges so the same bunglers are not reappointed and we need a new Secretary of state to get the voter records cleaned up without aliens and other people voting in multiple jurisdictions. We also need to elect an attorney general that will prosecute crime.

[David Usher]

Greg is absolutely correct in his assessment that a large contingent in Vermont does not want prosperity because they see this as growth and development.

Further, Vermont has NO tax policy. If someone asked me to describe Vermont's tax policy, I'd say "find ways to raise revenue, whether taxes or fees, because we have a spending disorder and we must balance the budget. And let's see if we can make it painless, preferable hidden."

The Telecommunications tax is but one example. Today's economy increasing depends on modern telecommunications. Yet, a decade ago Vermont needed to raise money, to fund some cause deemed worthy, so they implemented a tax on telecommunications services to be paid by the end user. After much testimony, the industry (I was in that industry then) persuaded the lawmakers to cap the tax at $10,000 annually per user.

"Act 60 of the 1997 General Assembly extended the Vermont sales tax to charges
for telecommunications services. The tax is effective beginning with services which are
provided after August 31, 1997 and billed after September 30, 1997. The tax rate is
4.36% rather than 5%, the general sales tax rate, and the law provides that no purchaser
or user will be subject to tax in excess of $10,000 in any one calendar year. This bulletin
provides basic information with respect to this new application of the sales tax."

If prosperity and economic growth is a goal in an electronic age, a rational tax policy would not continue this sort of tax.

A forward thinking Vermont Legislature would spend the time and find the talent to devise a rational, goal oriented state tax policy.

[Brattleboro_conservative]

Let's see, IBM is gradually shutting down, our bridges and roads are collapsing, more people are leaving than moving here, and we are left with a government in Montpelier who only worries about global warming and shutting down Vermont Yankee. What am I missing here? Oh yes, that rare and elusive quantity called common sense. But then, the government is a reflection of the people who voted them in...