Paved With Good Intentions….

iPods.  Fun technology that allows folks to wander around with their music and video collection at the ready.  Great marketing by Apple, slick design and boom, a piece of technology that many can’t live without in their daily routines.  A few years ago, Duke University experimented with giving their incoming freshmen an iPod for the purposes of education.  Made some kind of bleeding edge sense:  students could download the profs curriculum, maybe some of the class seminars and likely some video.  A public university thinking outside the box…kudos.

Now, pardon the rage, but why are Michigan legislators even thinking about giving every Michigan student an iPod?  I agree with the headline of the Detroit News editorial; yes, they are idiots!

The Proctologist Called.  They Found Your Head. A $1 billion deficit and the mental midgets along Grand River are considering dumping more money into something that has not been shown to have tangible educational benefits!  Nevermind the school systems (Detroit) that are closing schools because of decreasing enrollment.  Nevermind schools that don’t have the budget to update their textbooks.  Let’s throw Technology at the students and they will all learn!  And to pay for this, they propose to….say it with me…Raise Taxes.

6 percent tax on some services, and taxing junk food and soda

Wha?  So to pay for someone’s kid to listen to music, CPA’s, Attorney’s, Real Estate Professionals, Doctor’s, etc will have to charge their clients more to cover the 6% tax on services?  Taxing junk food and soda?  Wait, didn’t we try to do this with tobacco? 

Does this make sense to anyone, besides a legislator, that we tax the very things that we as a society are trying to minimize?  So either they are banking on the fact that as a society we will not be successful in reducing the consumption of junk food and soda, or they are simply opening the door to further tax hikes when we are succesful.  After all, little Johnny needs his iPod when he’s munching on his carrot sticks.

Who do the legslators think they are kidding?  If I was in school now and received an iPod, the last thing I would be thinking of would be using it for school.  I’d be looking to fill that bugger up with episodes of The Office and my whole music collection.

Having worked spent time done my time in Lansing, I came to the view that it has two distinct characteristics:  it is an echo chamber and it is a vacuum.  Whatever is thought or spoken of in Lansing seems to resonate their but not travel much further than the I-496, 96 and 69 borders around the city.

Can we downsize our legislators?  Can we get some foreign competition in here to rival our “public servants?”

7 Responses to Paved With Good Intentions….

  1. Does this make sense to anyone, besides a legislator, that we tax the very things that we as a society are trying to minimize?

    Yes, it makes perfect sense. “Tax bads, not goods.”

    Economically speaking, taxation discourages whatever it is that you tax, simply by making it more expensive. Therefore, it makes much more sense to tax things that we’re trying to reduce anyways than to tax things we want to increase. Would you rather discourage cigarettes by taxing them? Or discourage income by taxing it? (This is not hypothetical – I know people who have declined promotions because the income increase would put them into a higher tax bracket, and give them a lower net income.) Taxing things that you’re trying to discourage is very sensible – you are aligning your tax policy with your other policies. If your tax policy is discouraging things that you generally want to increase, you’ve got the left and right hands not talking to each other.

    With that in mind, I am completely in favor of increasing the taxes on cigarettes, junk food, and gasoline. And, yes, when we are successful in reducing these things through a combination of taxation and other policies, we do in fact raise taxes. (Would you rather raise the income tax after successfully discouraging employment? No.)

  2. Murph,

    While I will, to some extent agree that driving the taxes up on services and “bads” that we are trying to get rid of is one way of reducing their attractiveness, I have a huge problem when that policy has been successful. When “sin” taxes are implemented and used in conjunction with other policy measures to reduce a populaces consumption, where does the legislature turn to fill the hole in the revenue stream? Property taxes, income taxes, another state targeted “sin” tax?

    And that leads to another quagmire: who decides that these are “bads” or “sins” that need to be taxed? Are we counting on the same legislators that can’t disclose they went to Cupertino, yet propose a $38 million dollar Ipod boondogle?

    You are dead right, there are folks that avoid a raise or underperform to stay under a certain tax bracket. However, I believe your assumption that the income tax be raised instead (after discouraging employment) is not the only way to fund the state. If we are successful in reducing consumption on bads, then part of the reason to raise taxes in the first place, disappears (presumably the cost of healthcare as it affects the state).

  3. I have a huge problem when that policy has been successful.

    You have a problem with getting rid of bad things? You’d rather keep them around?

    Assuming that there are behaviors we want to discourage (e.g. smoking, or carbon emissions), and also that we need some amount of tax revenue, it’s better to get that revenue by taxing the things we want to discourage.

    Your problem with this approach is when we succeed at discouraging bad things, and then have to tax good things. I’m curious what the alternative is – taxing the good things right from the start?

  4. Wow Murph, that’s some cherry pickin’ and box paintin’!

    If I answer that we should push for personal responsibility on the bad things, I am assenting that I want them around. If I answer that we should do away with the bad things, I am in favor of legislating my morality upon people. Kind of a lose-lose for me…..

    Frankly, I’m curious about two things: first, why does every service and good need to be taxed without first going through the budget with a fine toothed comb and cutting excess; and second, whatever happened to personal responsibility?

    The sense of entitlement by so many these days has contributed to the rising costs of running a state. If junk food, carbon emissions, soda, cigarettes and alcohol are such bad things, why are they still legal? For me, it circles back to the legislature’s way of sourcing a revenue stream. If they make those items illegal, that stream disappears, but if they continue to tax it they will still see a steady revenue.

    Of course no one wants to pay taxes period. So taxing the good, the bad or the ugly is nearly a moot point. It simply seems disingenuous to me for legislators to attempt to pay for misguided programs by leeching off of folks’ indiscretion, lack of self-control or whatever you might wish to call our obsession with “bads.”

  5. Me cherry-pick? I note that you go on to combine the very libertarian lines of “nobody wants to pay taxes period” and “personal responsibility should be the only regulator of bad behavior” with the very nanny state idea that we should ban junk food, cigs, and carbon emissions outright instead of taxing them. If I’m taking a few from column a and a few from column b, I’m not the only one. 🙂

    In any society outside of Ayn Rand’s daydreams, we need some amount of taxation to fund public purposes. You may not want to think about where that revenue comes from, but I do. I’d rather not criminalize things without a clear danger to others (e.g. drinking should be legal, but drunk driving should not be), but, at the same time, we have to tax something. And, if we’re going to tax something, I’d rather tax bads (things we’re allowing as matters of freedom, but not thrilled about) than goods (things we are thrilled about).

    Meanwhile, you ask about going through the budget with a fine toothed comb before taxing. As far as I can tell, we as a State already have – as provided by the Michigan Fiscal Responsibility Project (mitaxtruths.com) , Michigan’s general fund budget is 40% *smaller* now than 6 years ago, and our tax burden as a share of total personal income is $5.2 billion *lower* than in 2000. That’s a lot of combing and cutting! And, personally, if we’ve done that much combing and cutting, and it’s gotten us where we are today, I don’t think we’re going to accomplish anything useful through further combing and cutting.

  6. (And, by the way, I’m posting this while taking a break from my Form MI-1040. So what you see right here is probably as close to knee-jerk anti-tax bias as I get…)

  7. You are correct that it is a nanny state idea to outright ban things, instead of taxing them. I am merely pointing out the incongruity between (at least in my noggin’) the taxation of “bads” (creating a self destructive revenue stream) and behaviour modification.

    The question becomes, what are the state’s goals with “bads?” If it is behaviour modification, then outright banning the offensive “bads” seems to be the way to go. If the goal is revenue stream, then taxation is the way to go. And yes, I am not so naive as to think it is simply an either/or proposition. It simply seems backwards, to me, to create a self-destructive revenue stream.

    Hmm…apparently I need to think about this a little bit more. Thanks for comments and push back Murph!

    Good luck with MI-1040!

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