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Monday, March 6, 2017

Tax Hikers Lost - Now It's Your Turn

So common sense prevailed, eventually. The Engrossed version of HB236, voted on by the Senate on Thursday, still proposed a half-percent sales-tax increase (page 17, line 12). However, the enrolled-act version, HEA125, no longer has any language about a sales tax. It is good to see that our legislature finally, in the eleventh hour of the 2017 session, came to its senses.

The tax hikers in the legislature will most certainly hold the fiscal conservatives accountable, saying things like: "Alright, you got what you wanted - no tax hikes. So what's your alternative?" Fellow fiscal conservatives - this is where the real job begins for us. What we have seen so far is only the preamble to the real battle for our state's future. Now it is time for us to step up to the plate and present our solutions.
Do not for a moment think that this is over.
We need to roll up our sleeves and fight for the fiscal survival of our state; we need to make sure that the tax hikers have no opportunity whatsoever to come back next session. We need to build the alternatives: education freedom reform; Medicaid reform and reforms to advance health care freedom; privatization of welfare programs; and comprehensive, systematic rollback of state and local regulations that raise the cost of doing business in Wyoming.

We have a lot to do. Today, though, let us take one last look at the 2017 session and wrap up our victories.

Remember all those 14 bills that were introduced specifically to raise taxes? (HB236 was more than a tax-hiking bill, so it was never put on this list.) Twelve of them died or failed; the two that were passed, HB82 and SF148, were the least intrusive ones. One word of caution, though: with HB82 becoming House Enrolled Act 39, you might want to keep an eye on your local sales taxes. 

Again, overall a good outcome of a session that was overshadowed by the worst fiscal crisis our state has faced in decades. Of course, not everyone would agree that the absence of tax increases is good. Lamented the Casper Star Tribune on March 4
The Senate killed a bill to increase cigarette taxes by 30 cents a pack to 90 cents. House Bill 191’s sponsor, Rep. Mike Madden, said the increase represented inflation over the years since the tax last increased. The money would have paid for mental health programs, but the political arm of American Cancer Society wanted a higher tax to decrease smoking rates.
There were actually two bills to raise the tobacco tax. Regardless, Representative TaxMadden will have to find other ways to pay for "mental health programs" than to do it off the back of future cancer patients. 

While we are at it, let us take a moment and ponder the quote above from the Tribune's teary-eyed farewell to the tobacco tax hike. Personally, I am no fan of cigarettes or other addictive products. But I have no love either for politicians who go trawling in morally muddy waters for tax revenue. When Representative TaxMadden says that he wants tobacco smokers to pay for government provision of mental health, he is also telling each and everyone of us that "if you think it is important with good mental health programs, you better get addicted to a product that is almost certain to ruin your health!"

Does this mean that Representative TaxMadden considers quit-smoking programs a threat to the provision of mental health? Are you a tax cheater if you stop smoking?

The American Cancer Society (ACS) would apparently disagree on that point. As mentioned in the quote above, the ACS also wanted our legislators to raise the tobacco tax - but not to pay for any specific government program. They wanted to raise the tax to make people quit smoking. 

I just have one question to the ACS: how do you make sure that the tax increase makes people quit smoking? According to Representative TaxMadden, the higher tax will not make people quit - on the contrary. They will continue to smoke, he says, because otherwise the state would not be able to fund mental health programs. 

Again, I am no fan at all of cigarettes, but taxing addictive products that ruin people's health and destroy families, for the purposes of paying for government services, is highly immoral. Addiction taxes literally tell people that "government is more important than your health and the well-being of your family".
The very idea that people would respond differently to a tax depending on what government wants to use the money for, is one of the most amusing - and frustrating - parts of public-policy economics. Not only do tax hikers and statists believe that people will continue smoking if they know that the taxes they pay are used for a good purpose, but they also believe that people will continue working and spending money when they raise taxes on income or - here in Wyoming - people's regular spending.

This is why the debate over K-12 education funding is not over. Even though HB236 was eventually stripped of its proposals for higher sales taxes, the bill still opens the door for future tax hikes. Laura Hancock of the Tribune has the story (emphasis added):
The Wyoming Legislature adjourned late Friday night, ending a contentious eight-week session with a last-minute compromise to cut education by $34 million starting July 1. While the Wyoming House wanted to solve the anticipated 25 percent yearly deficit to the $1.5 billion K-12 account with moderate cuts, taxes and funneling internal state funds to schools, the Senate wanted steeper cuts, no taxes and no earmarks on state funds. In addition to the $34 million that House Bill 236 will remove from education, the legislation requires a thorough, independent study of the state’s funding model. It creates a committee that must look at proposals to divert state money to the education account, find tax plans and more cuts. “It’s not a solution but I think it’s another step,” House Speaker Steve Harshman, a teacher and coach at Natrona County High School, said as he asked representatives to approve the deal. 
Remember the ill-fated SF131 Highway to an Income Tax bill? The "independent study" of education funding is not quite as dramatic, but something along the same line. If the state commissions this study without ruling out higher taxes, we can be almost certain that the tax hikers in the legislature will come back to the next session with a plug-and-play ready proposal, backed by the "independent" study and supported by catastrophic stories about the terrible state of our public schools.

The obvious answer to such stories is, of course, that we need fundamental school-choice reform here in Wyoming. But that answer will only be made if fiscal conservatives, friends of educational choice and others who like limited government and economic freedom join together.

Now, more than ever, we need to form a Cowboy State coalition for freedom and prosperity.

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