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December 2009

Tax and Spending Reform as a Moral Issue

By John Hendrickson

“Where is the politician who has not promised his constituents a fight to the death for lower taxes — and who has not proceeded to vote for the very spending projects  that make tax cuts impossible,” asked Senator Barry Goldwater in his landmark book The Conscience of a Conservative? Goldwater, a Republican Senator from Arizona and unashamed leader with conservative principles, was a true advocate for constitutional government. In fact Goldwater believed that his responsibility was not only to uphold the Constitution, but as he told his constituents, his job was to repeal laws and not make them.

He understood that high levels of taxation and spending would lead directly to detrimental economic policies. Goldwater argued that “tax reduction has thus come to have a hollow ring,” and taxation was not just a question of economic and fiscal policy, but a question of morality. “The Conservative believes that man is, in part, an economic, an animal creature; but that he is also a spiritual creature with spiritual needs and spiritual desires,” stated Goldwater. One of the main liberties that was important not only to American colonists, but also to the Founding Fathers was the principle of economic liberty, including property rights.

The wages that a worker or business owner earns are “his property as much as his land and the house in which he lives,” argued Goldwater. Goldwater argued that “government does not have an unlimited claim on the earnings of individuals.” High rates of taxation are not only a moral issue, but are not sound policy. Higher rates of taxation not only curb an individual’s incentive to work, but they also cripple business confidence and entrepreneurial activity.

In addition, high tax rates do not mean more revenue to the government. “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue for the government, and that more revenue may often be obtained by lower rates,” argued Secretary of the Treasury Andrew Mellon in his book Taxation: The People’s Business.

This principle has been proven in the Presidential administrations of Warren Harding, Calvin Coolidge, John F. Kennedy, and Ronald Reagan. Significant tax reform would not only be moral, by allowing people to keep more of their earned property, but allow businesses to expand and encourage entrepreneurial activity which is desperately needed to reverse the climbing 10.2 percent unemployment rate.

Although a sound tax policy is both a moral and economic necessity — the issue of government spending must not be ignored. In order for a tax policy to be successful, rates must be kept low, but government spending must be reduced, that is, without government spending reductions tax cuts will not be as effective. Goldwater argued that “as a practical matter spending cuts must come before tax cuts.” As he argued: “if we reduce taxes before firm, principled decisions are made about expenditures, we will court deficit spending and the inflationary effects that invariably follow.”

Both political parties have failed to restrain government spending and at the heart of this problem is disregard for constitutional limited government. “The root evil is that government is engaged in activities in which it has no legitimate business,” argued Goldwater. The nation is at a dangerous crossroads with an out of control federal budget, national debt of $12 trillion, a rising deficit at $1.4 trillion, and rising unemployment. The entitlement programs of Medicare and Social Security are in danger of bankruptcy and Washington continues to spend and push for new entitlements.

Goldwater offered a solution that would focus on both spending and tax reductions. He called “for a 10 percent spending reduction each year in all of the fields in which federal participation is undesirable.” The basis of any free society is economic liberty and the solution for economic recovery is returning back to constitutional limited government based on reducing taxes and spending, which in the end will unleash the entrepreneurial spirit that has built our great nation.

The views expressed in this column are those of the author and not necessarily those of the Public Interest Institute.  They are brought to you in the interest of a better informed citizenry.

John Hendrickson is a Research Analyst with the Public Interest Institute in Mount Pleasant, IA.  

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Spending by Democrats out of control at all levels of government

FEDERAL TAX & SPENDING MENTALITY:  Earlier this month the Nancy Pelosi and liberal Democrat led U.S. House voted to raise the country's $12.1 TRILLION debt ceiling by an addtional $290 BILLION.  Adding to the financial burden elected officials have put on our children and grandchildren, the healthcare package will most certainly add to the deficit as well as increase our taxes.  Further compounding the problem, needless cap and trade legislation is on the table.

Run-away spending at the federal level is a very serious problem. 

STATE TAX & SPENDING MENTALITY:  The state is in a financial mess thanks to Democrat leadership.  The huge hole Governor Chet Culver and his liberal cohorts have dug for us is a direct result of spending too much money, it cannot be flippantly excused as a sudden shortfall of "revenue."  As a result of inept leadership, Gov. Culver has had to enact 10% across-the-board tax cuts.  Liberal fiscal mismanagement has resulted in unpaid furloughs, the forced renegotiation of contracts and layoffs.

In fiscal year 2007, for every $1 the state took in tax revenue for the budget, it spent $1.01.  Just three years later, for every $1 the state took in, it was spending $1.14.  Putting the Culver led spending in perspective, State Auditor Vaudt (a Republican) uses an analogy of a family with a household income of $50,000 to explain how irresponsible Democrat spending has been.  So in 2007 for example, for every $1 taken in, the 'family' spent $1.01.  That's over-spending but it's manageable, Vaudt has stated.   Basically that means the family had to put $500 on a credit card to balance their budget that year.  Not a great situation, but manageable.  In contrast, just three years later for every $1 taken in, $1.14 was spent.  That means the family had to put a whopping $7,000 on their credit card to balance their budget.  Now multiply that by the millions the state spends.

Iowa families can't spend more than they take in and get away with it, we shouldn't let the state do so either.

COUNTY TAX & SPENDING MENTALITY:  Up until the consideration of the fiscal year 2011 budget, the all Democrat leadership at the county level has arrogantly disregarded the possibility of sour economic times in its budget planning.   

FY 2007--Expenditures $53.8 million
FY 2008--Expenditures $66.8 million
FY 2009--Certified Budget $75.9 million (but actual expenditures were $84.2 million)
FY 2010--Certified Budget $84.08 million

Neglecting county roads and focusing on putting a 'wow' factor in the county website is an example of out-of-whack priorities.  Building a Health & Human Services building and having an entire third floor go unused is an example of callously spending taxpayer money.  Giving pay raises to officials during lean economic times is sheer arrogance.

IOWA CITY TAX & SPENDING MENTALITY:  The Iowa City Council has not seriously considered budget cuts in realistically dealing with leaner economic times.  Instead of scrapping wants on their with lists, the council's response to budget woes has been to raise taxes.  The recently passed a 'franchise fee' which is a tax on you and your energy bill.  The city is going to tax you for a product they don't manufacture or service.  The city also announced today that they'll be jacking up property taxes - AGAIN.  Mayor Bailey and her liberal cohorts want their sculptures for the parks by gosh!

No society has ever taxed itself into prosperity. 

This out-of-control spending at all levels of government is outrageous!

Supervisor Janelle Rettig is NOT a fiscal conservative

According to an article run in the Press-Citizen, Janelle Rettig is touting herself as a fiscal conservative.   

Rettig isn't being honest with voters.  Her record betrays her claims.

In October, the Natural Resources Commission approved about $2.8 million in funding for twenty recreational trails projects across Iowa as part of the Resource Enhancement and Protection program (REAP). Iowa Bicycle Coalition Development Director, Janelle Rettig, is also on the Natural Resource Commission and voted to approve the selection committee’s recommendations.

Thanks to Chet Culver and Democrat leadership, the state is in some serious financial trouble.  Culver has had to borrow money to pay the state's bills.  And here we have Rettig giving the green light to continued spending on wants, not needs.  The state can't pay its bills and Rettig is grabbing more of your money to build trails?

That's being fiscally conservative?

And here's a thought, now that Rettig is a Johnson County Supervisor, shouldn't she be resigning her other board/committee/commission posts?  Can you say "Conflict of interest?"  I think you can......  For example, she is a Commissioner with the Iowa Department of Natural Resources.  They approve or deny funds to Johnson County...... 

Janelle Rettig, not being upfront with voters, denying conflicts of interest, has a record of taxing and spending, a member of the Democrat machine.

Why did Janelle Rettig leave a very important item off her resume'?

According to an article run in the Press-Citizen, Janelle Rettig is touting herself as a fiscal conservative.   

So if she's soooooo fiscally conservative, why then did she leave the fact that she recommended pay raises for the likes of Tom "DUI" Slockett and Rod "F___ You" Sullivan off her resume'?  Yes, as a member of the Johnson County Compensation Board and during lean economic times, she recommended giving pay raises to county officialsShe left her membership on the compensation board off her resume.  Oversight?  Very doubtful.

In reviewing her website almost daily since the special election became reality and as of this writing, her resume' posted on her site, her 'Meet Janelle' page are both completely void of the fact that she is/was (did she even resign from the compensation board yet due to the obvious conflict of interest as a sitting Supervisor?) a member of the Johnson County Compensation Board.

Rettig touts all her other board/commission/committee involvement, why not the compensation board?  Is she perhaps well aware of the fact that her recommending pay raises when the county can't afford it is a sharp contrast to her claim that she's a fiscal conservative?

The public has a right to know does it not?

Rettig not being honest with voters?

According to an article run in the Press-Citizen, Janelle Rettig is touting herself as a fiscal conservative.   

Rettig calling herself a budgetary watchdog is a very misleading claim for her to make, but despite her record that's exactly what she tried to do in a story about supervisor candidates. 

Perhaps Rettig thinks voters have forgotten that she was at the forefront as a co-chair for a group that pushed the Conservation Bond issue costing Johnson County residents $20 Million.  She *fought* to give the county authorization to buy unspecified lands for unspecified uses with your money, a proposal coming on the heels of the 2008 flood and a souring economy to boot.

That's being a fiscal conservative? 

Is it fiscally conservative to recommend county officials like Tom "DUI" Slockett and Rod "F___ You" Sullivan get a pay raise?  That's what Rettig did as a member of the Johnson County Compensation Board.  Rettig is supposedly experienced right?  Well not all experience is good experience, especially tax and spend experience.  Recommending raises with the economy turning sour, with state and federal coffers going in decline - coffers the county depends on for some funding.......  is smart?  That's being a fiscal conservative? 

Funny how a recommended pay raise comes shortly before Rettig announces her candidacy for county supervisor.  Jus' say'n..... 

As a Commissioner for the Iowa Department of Natural Resources (DNR), Rettig helps provide oversight on the Honey Creek Resort and state park.  From the time the government-run project went on the drawing board as a concept, the Honey Creek Resort has received a lot of criticism.  First and foremost, it's a government managed operation, the resort competes with the free market.  Going into direct competition with area hotels/lodging, entertainment and food establishments is not a proper role of government.  Another area of criticism is its cost to taxpayers in development and operating in the red.   Opening up for visitors this summer, The Honey Creek Resort project has cost taxpayers $90 million and counting.  Providing oversight?  DNR Commissioner Janelle Rettig.

"I'm very excited about this, [doing] what this project was meant to do, which is spread economic development." ~ Commissioner Janelle Rettig, May 15, 2009 - Ottumwa Courier

According to the Honey Creek Resort State Park Variance Report (July 2009), the resort totaled revenues of $944,049 compared to an operating budget of $1,119,755.  That's $175,878 in the red.  The primary areas of loss were food (-$54,000) and golf (-$74,000).  Your money lost, on TOP of the $90 million of your money used to put the whole resort project together.  Given government history, this will be an annual event.  But Janelle Rettig is "excited about this!"

The notion that Rettig is a fiscal conservative is absurd.

Oh, and from a very reliable source, during the course of the interview with the Press-Citizen, Ms. Rettig was asked in the name of financial concern if she would be so inclined to reduce the Board of Supervisors from five to three.  Apparently her jaw just dropped to the floor.

What?  And lose out on that Supervisor pay raise?  Rettig would have to go back to her lower-paying bicycle coalition job......

County Supervisors bicker about Joint Emergency Communications Center

Scheduled to go into operation on July 1, 2010 and on the drawing board since 2005, the new Joint Emergency Communications Center (JECC) is the current topic of argument among officials.

County Supervisors are voicing their concerns regarding healthcare benefits and payroll services according to a recent Press-Citizen story.  In short, officials are debating who is going to manage paperwork.

With the merging of two dispatch centers (Iowa City and the county) being the motivation behind the creation of the JECC, officials are just now getting around to bickering about who is going to manage the healthcare benefits and payroll services for the employees of the JECC.   Remember, this thing has been on the drawing board since 2005. 

Question:  Shouldn't this have been sorted out long before now? 

What kind of *leadership* is that?

Dirty little secret:  Iowa City dispatchers get paid more and have a better benefits package than county dispatchers. 

According to the PC article, Supervisor Rod "F___ You" Sullivan thinks the management of services structure is a "crock", and Supervisor Janelle Rettig wants to renegotiate the whole thing. 

"All of it should be renegotiated," Rettig said.

Just what the county needs, more dysfunctional leadership (Sullivan), delay (Rettig), coming at additional taxpayer expense (Sullivan + Rettig = taxpayers screwed).

Founding Fathers gave us the right to bear arms

"[W]hereas, to preserve liberty, it is essential that the whole body of the people always possess arms, and be taught alike, especially when young, how to use them; nor does it follow from this, that all promiscuously must go into actual service on every occasion. The mind that aims at a select militia, must be influenced by a truly anti-republican principle; and when we see many men disposed to practice upon it, whenever they can prevail, no wonder true republicans are for carefully guarding against it." --Federal Farmer, Antifederalist Letter, No.18

You might be a Johnson County Liberal if.........

You didn't say boo over the last four years as the county increased its budget 56% (from $53+ million in 2007 to $84+ million in 2010), but are crying foul now about spending $75,000 on a special election with a fiscal conservative looking to take a seat on that liberal county board.....

And never mind that the county auditor Slockett''s figure of $75,000 for the cost of this special election should be questioned, it shouldn't cost NEARLY that much.  He likes to waste taxpayer money on wages, overstaffing polling places, posting 8 people to process 2 voters at any given time....

All power is inherent in the people - not government

"We established however some, although not all its [self-government] important principles. The constitutions of most of our States assert, that all power is inherent in the people; that they may exercise it by themselves, in all cases to which they think themselves competent, (as in electing their functionaries executive and legislative, and deciding by a jury of themselves, in all judiciary cases in which any fact is involved,) or they may act by representatives, freely and equally chosen; that it is their right and duty to be at all times armed." -- Thomas Jefferson, letter to John Cartwright, 1824