The reason why he might be wondering about the states is the death of federalism. When the states become wholly irrelevant, one guard against the federal government is wholly gone. I forget where Madison says that, I'll have to look it up again.
ashok | Homepage | 05.30.07 - 12:54 pm | #

Thanks for visiting, ashok, and thanks for your opinion.

It's unclear to me why a member of the US congress is worrying about local government's ability to raise income. This sort of micromanaging is unnecessary unless states have called for this type of legislation. I would argue that enacting federal legislation to fix state and city revenue problems poses a greater threat to the existence and autonomy of states than does the current inability to raise revenue.

I sympathize with local booksellers, but my admiration for companies like Amazon is much greater.
The Gentle Cricket | Homepage | 05.30.07 - 1:30 am | #

I agree with Perri on this one. Sigh.....
Layla | Homepage | 05.29.07 - 1:38 pm | #

Just wandered on in. Nice blog. I'm not sure about how you framed the issue here, though.

The site explains very nicely Senator Enzi's rationale: states and localities aren't collecting enough money, and in fact, it looks like the inability of states to collect taxes because anyone can sell anywhere is a direct challenge to the existence and relevance of states. Your own post seems to conflate state and local gov'ts with the federal gov't, as you cite the IRS as the source showing that decreased taxation brings in more revenue.

Look, I'm all for lower taxes, and taxes are way way way too high right now. But I don't think we can operate on the principle "he doesn't know what he's talking about because he proposed a tax." It looks like gov't revenues increase for a time as taxes go down, but there's only so far one can drop tax rates (unfortunately, we're in no danger of ever having that problem), and furthermore, there are other reasons to tax than just collecting revenue. How do you think a local bookseller feels when they have to compete with Amazon, and have to pay taxes?
ashok | Homepage | 05.29.07 - 8:11 am | #

Someone famous once said "Government is the great fiction through which everybody endeavors to live at the expense of everybody else." Isn't it the truth. The "Fair Tax" is getting some support and these scoundrels just tagged the word because it sounds good.

Perri's analysis is exactly right, but I think the politicians understand that tax cuts are good for the economy...but if you support that position, then you cannot create victims to vote for you. Federal or State it's all the same.

Hope you're have a good Memorial Day,
Maggie
Maggie's Notebook
Maggie Thornton | Homepage | 05.28.07 - 7:19 pm | #

Sadly politicians don't look at decreased tax rates the same way we do. We know that when the tax rate goes down economic activity goes up, leading to greater revenues for the government.

A politician looks at the increased economic activity and laments the apparent loss of income for the government. After all, if economic activity goes up 20% then by their thinking, they should have 20% more if the tax rate had stayed the same.

They don't see that the increased economic activity is a result of the rate decrease. Rather they see the rate decrease as having decreased their "cut" of the increased activity.
Perri Nelson | Homepage | 05.27.07 - 4:15 am | #