Mitch Daniels Just Wrecked My Day

I have long thought that Mitch Daniels would make an outstanding president. (For real change, let's try competency!)

But WHAS just aired an interview with him in which he appeared to tell Melissa Swan (at 2:58) that although raising taxes is not his preference for dealing with the nation's debt, "if it has to be the second best action, I'm open to hearing about it." In short, where I looked for an unequivocal refusal to raise taxes, Mitch Daniels went limp.

He's not doing much better on the issue of supporting Indiana's right to work law, as discussed by Allahpundit via HotAir.

Dems Try Twice to Raise Taxes

Two test votes on tax hikes took place in the Senate this morning in a rare Saturday session. Democrats failed both attempts to raise taxes.

The first vote was on a bill brought by Sen. Harry Reid to raise taxes on individuals and small business making more than $250,000. Republicans united to oppose it, joined by five Democrats.

The second bill was Sen. Chuck Schumer's plan to raise taxes on those who make more than a million dollars. Democrats previously had tested this in focus groups. That bill failed along the same lines -- five Democrats joined Republicans to oppose it.

Good to know the opposition was bipartisan!

McConnell Introduces Bill to Prevent Tax Hikes

This is a big relief after John Boehner went all wobbly this past weekend, suggesting he would about compromise with the Obama administration to allow taxes to go up for some.

Senate Republican Leader Mitch McConnell has introduced the Tax Hike Prevention Act of 2010. In addition to preventing the Bush tax cuts from expiring, the bill would help families in a number of ways. It would:

• keep the marriage penalty from coming back
• continue the child credit at $1000 per child
• save many families from the dreaded Alternative Minimum Tax
• keep current rates on the capital gain tax
• reforms the death tax.

H/t: Washington Examiner via Instapundit

And So It Begins

It is inevitable that the health care "reform" being kicked about in Congress will result in tax increases for many Americans. President Barack Obama's top political advisor David Axelrod "declined yesterday to rule out the possibility that the White House would agree to a tax hike on health insurance plans that would hit middle-income Americans," according to the Washington Post.

Of course, those Americans who still have enough money to buy anything or employ anyone will get socked worst -- at a time when the economy needs these people to spend, invest and hire. According to Bloomberg, "House Ways and Means Committee members are likely to propose a surtax on high-income Americans to help pay for an overhaul of the health-care system, according to people familiar with the plan."

Look for Democrats to seek a four percent surtax on anyone who makes more than $250,000.

David Williams Wants MORE Taxes?

Ronnie Ellis is reporting that Sen. Pres. David Williams disagrees with Gov. Steve Beshear on the amount of Kentucky's budget shortfall, and has a different idea about how to raise whatever funds we're short. Instead of agreeing to video gambling terminals at Kentucky racetracks, Williams apparently wants to raise taxes. Again.

Everyone seems to agree on one thing – although there are some competing data – the horse industry is in trouble. But Williams says there’s a better way to boost purses and breeders’ incentives than gambling, offering a plan for a 10 percent tax surcharge on lottery tickets, using some sales taxes on horse products, and taxing out of state betting on Kentucky races to boost purses and incentives. Beshear and spokesmen for Stumbo say allowing the VLTs at tracks is the only workable, available option to help the industry.

Let's unpack that.

Williams tax no. 1 would impose a "10 percent tax surcharge on lottery tickets," according to Ellis. Lottery tickets are sold to the poorest of the poor; it is already the most regressive tax we have. The notion of further taxing these desperate people is very troubling.

Williams tax no. 2 would involve "some sales taxes on horse products." Apparently the idea is to reallocate the revenue from these taxes to increase the race purses. However, if everyone agrees that the horse industry is already in trouble, we should be looking at cutting taxes specific to that industry, not raising or even reallocating them.

Williams tax no. 3, Ellis explains, contemplates "taxing out of state betting on Kentucky races." Although I appreciate the effort to sock it to the out-of-staters, this tax may not even be constitutional.

Williams's proposal does not come in a vacuum. Just last session, Williams agreed to a huge tax hike that hurts Kentucky's other signature industry, the Bourbon distilleries. That provided a long-awaited opening to Indiana Gov. Mitch Daniels, who is said to be aggressively wooing Brown-Forman to move to New Albany.

If Kentucky persists in making its tax structure hostile to those industries that make our Commonwealth unique, we will lose those industries. Take away the horse industry and Bourbon industry from Kentucky and we don't look much different than, say West Virginia. These industries define us. We must protect them. Raising taxes is not a solution and would hurt the very industries that need our help.

Bruce's Tax Increase

Admittedly, I was riding on fumes, but that still didn't make me feel any better about the $100 it took to fill my car today. Then I found out that the Kentucky gas tax had gone up July 1. And I found out why -- when Bruce Lunsford lobbied for John Y. Brown, he engineered a state gas tax that is indexed to the price of gas. As gas goes up, the tax goes up as well. And it does so automatically, so politicians don't have to vote for a tax increase.

This is an absolute outrage, in and of itself. The man responsible for it, Bruce Lunsford, wants to go to Washington where he can raise taxes on an even grander scale.

Mitch McConnell, meanwhile, is getting all sorts of national press (like today's piece in the Wall Street Journal) for actually trying to help lower the price of gas by drafting legislation that will let America drill here, drill now, pay less.

The difference between these two candidates could not be clearer. Every time Kentuckians fill up their cars, they have yet another reason to reject the perennial candidate, Bruce Lunsford, for a third time.

Rambo and the Comeback Congress

Check out the Washington Times' piece on how all the Democrats' predictions of doom -- on the economy and Iraq, in particular -- came to naught.

As David Lambro writes, "rarely has a minority party shown so much unity or beaten an incoming majority so soundly, or a lame-duck president shown more resilience on so many big showdown battles."

Republican Senate Leader Mitch McConnell deserves considerable credit for the GOP's strategy and unity, and for keeping the party focused despite a slew of ugly TV ads.

It was a remarkable record of achievement by a president who was all but written off by the pundits as an irrelevant chief executive in the twilight of his last term. But Mr. Bush reinvented himself as a veto-happy gunslinger who was not going to be pushed around by Congress — mounting a nonstop counteroffensive that kept the Democrats in retreat.

Based on their inability to govern, and relentless attempts to increase taxes and nationalize health care, Democrats' prospects for '08 look increasingly bleak.

Repeal the AMT -- Once and For All

Time is running out for Congress to fix the mess it has made with the Alternative Minimum Tax. This tax was designed to prevent the super rich from paying no taxes whatsoever. When it was enacted in 1969, it only applied to 155 families.

But Congress forgot to index the tax for inflation. Consequently, it applies to more and more families each year. In essence, this "stealth tax" allows Congress to raise our taxes automatically, without even voting on issue.

If Congress fails to act, 25 million Americans will be subject to the tax for 2007. That's up from 3.5 million for 2006. In Kentucky, the AMT will hit 174,000 taxpayers.

Year after year Congress has enacted "patches" to prevent the AMT from sweeping middle class families into its grasp. Instead of applying an annual band-aid, Republican Senate Leader Mitch McConnell has urged Congress to repeal the AMT altogether.

But the Democratically "led" Congress has stonewalled on reform so long that the IRS has said that it won't be able to process tax refunds in a timely manner.

Instead of passing out cute buttons that say "Article 1," John Yarmuth needs to prod his cohorts in the House to fix the AMT, by repealing it.

Across the Country, Voters Say "No" to Democrat Taxes

The overwhelming defeat of the occupational tax to fund the Louisville library system reflects voter hostility to similar Democrat plans to raise taxes around the country -- regardless of how laudable the rationale for the tax increase.

In Louisville, the library tax lost by a two to one margin, despite major plugging by Democratic Mayor Jerry Abramson and the reliably liberal Courier-Journal. The defeat of the library tax, however, was not a Louisville phenomenon but rather part of a national trend.

Nearby Indianapolis has a new Republican major, as well as a Republican majority on the city council. Mayor-elect Greg Ballard was outspent but nonetheless defeated the Democrat incumbent who had raised income taxes. The .65 percent income tax increase was devoted to law enforcement -- like libraries, a worthy goal. But the tax hike came at a time when voters were struggling to pay higher tax bills, following a state-ordered reassessment.

Washington state, not usually known as a Republican stronghold, also rejected a ballot initiative to impose higher taxes. Proposition 1 would have made Washington history as the biggest transportation tax proposal ever. The rationale: to improve traffic congestion in the Seattle area. Anyone who has ever driven in Seattle knows that traffic there is a nightmare. So the problem with the ballot initiative was the means -- higher taxes -- rather than the objective.

To protect themselves from future increases, moreover, Washington voters passed a ballot initiative that would require either voter approval or a two-thirds vote of each house to increase taxes.

Oregon voters voted down a 84.5 per pack tax increase for cigarettes -- even though the tax money was supposed to fund children's health insurance. The margin was not even close: 60 to 40. As in Louisville, voters saw through the plea to raise taxes "for the kids."

In Ohio, a bellwether state for the presidential race, Hamilton County residents rejected a proposed sales tax increase plan to fund the county jail. Now that doesn't mean that Ohio voters want criminals roaming their streets; these voters have simply drawn in a line in the sand against new taxes.

Note that all of the foregoing tax proposals were tied to projects that a majority of voters might be inclined to support, if funded in a fiscally responsible way. The voters distinguished between the goal -- libraries, mass transit, children's health insurance, law enforcement, and new jails -- and the means: an unending and ever-escalating tax burden.

The voters have given Republican candidates for '08 a clear road map to election: no new taxes. That's not just a formula to win; it's how to govern.

The Library Tax is Not a Done Deal

The momentum on the library tax seems to have shifted over the weekend. Previously, the tenor of the pro-tax ad campaign made it somewhat embarrassing to oppose this tax, at least publicly. The pro-taxers had cleverly defined the issue in a way that suggested that only illiterate Grinches could oppose the tax.

But as more and local celebrities -- like Denny Crum and Rick Pitino -- voiced their support, the citizenry became enraged. We may love our coaches, and happily pay them their humongous salaries. But if these guys want to give money to the library they need to donate. We pay them the big bucks, so they can spend their money as they please -- and we'd like to spend our money as we see fit. We didn't hire them to make fiscal policy.

And Mayor Jerry Abramson, whom many Republicans supported, has revealed himself to be a flip-flopper. He promised us that he could merge county and city governments with such cost-savings that we'd get new libraries without new taxes. Jerry's about-face may be the biggest factor that draws fiscal conservatives to the polls tomorrow.

People began grumbling about the tax over the weekend, and now the emails in opposition to it are going viral. (Readers, if you post your comment to this blog, I can share it. If you send it to my email, I can't).

Vote No on the Library Tax

If I hear another moving testimonial about how much some residents of Jefferson County love to read and how dearly they value the library as an institution, I may be ill. In the Courier-Journal's ongoing series, "What the Library Means to Me," we were subjected to myriad rationales as to why those guest columnists want their money go to the library.

Here's a thought: they can make a donation. All that money that the pro-library tax activists are spending on television advertising would make a nice contribution, for starters.

Some of the most beautiful libraries in the country attest to the generosity of Andrew Carnegie. Louisville's corporate base steps up and funds Thunder Over Louisville and much more. Why not the library?

The library is a worthy cause, to be sure. But donations, by definition, must be voluntary; when a patron is compelled to donate, through taxation, it's no longer a generous impulse. It's confiscatory, and that undermines personal liberty.

This tax suffers from other flaws. There is no reason why it should last forever. When the construction is complete, the tax's justification ceases to exist -- which is why a bond is a better mechanism to fund the libraries' construction than a tax.

Then there is the amount: $40 million a year -- in perpetuity. This will free up money that the Metro Council already budgeted for the library, but no one will say how these newly available funds will be spent. (How about a tax rebate to offset our tax increase!)

I'm glad that tax proponents enjoyed snuggling with Mom and reading Good Night Moon. It still doesn't follow that they know how to spend my money better than I do. If only they'd read Milton Friedman.

Senate Votes to Keep Internet Tax-Free

Most of us take for granted that our use of the internet -- including our email -- is not subject to tax. The moratorium that has kept the internet tax-free, however, expires on November 1, 2007.

Senate Republicans yesterday passed a seven year moratorium on internet taxes. New Hampshire Senator John Sununu and Republican Senate Leader Mitch McConnell earned praise from the Wall Street Journal for defeating this latest tax ploy (at least in the Senate; the House has yet to vote).

We've watched the internet change our lives -- how we do business, how our children study and how we communicate with one another. This evolution cannot be credited to Al Gore (or to Darwin), but rather to a tax free environment that let entrepreneurs and customers experiment.

Taxes kill innovation. The vibrancy and competitiveness of the American economy requires a ban on internet taxes. A permanent ban would be best, but at the very least, the House should join the Senate in passing the seven year moratorium in time for the president to sign the bill before the old ban expires.