Friday, March 11, 2016

What the price of wine has to do with taxes and government services

Last night I had a conversation with a fellow diner about the price of a bottle of wine in eating establishments. One way such establishments can deal with the price of wine is to let the price track the quality of the wine. If the quality increases, then the price increases. The other means of dealing with the price of wine is to hold hold the price constant. In that case, the increased price of increased quality rules out serving a higher quality wine so the quality of the wine necessarily decreases.

That's what the Republican Royalists want for, and have been doing to, Arizona. By holding taxes constant, or, actually, enacting multiple tax credits and tax cuts, the GOP rulers have reduced or eliminated quality services - services like road repair, K-12 education, and health care. And more such mismanagement is on the way.

Here's more on the state of Arizona's tax revenues from AZBlueMeanie at Blog for Arizona.

I consider Prop. 108 the GOP’s “weapon of mass destruction.” Here is why: it only takes a simple majority vote of the legislature to approve cuts to tax rates, or to enact tax exemptions and tax credits (tax expenditures). But these tax revenue reducers become permanent in practical reality because Prop. 108 requires a two-thirds super-majority vote in both chambers of the legislature to increase tax rates, or to reduce or eliminate any tax exemption or tax credit.

Since Prop. 108 was enacted by voters in 1992, the Arizona legislature has not increased tax rates, and has not closed “tax loopholes” as all the pundits decry that we desperately need to do. A tyranny of a minority of anti-tax zealots in the Arizona legislature are empowered to prevent any such tax reforms: 11 members in the Senate, or 21 members in the House.

This is how the anti-government, anti-public education, anti-tax GOP game is played: in each legislature since Prop. 108 was enacted, the legislature has enacted tax rate cuts and/or special interest tax exemptions and tax credits. This has had the intended effect of reducing tax revenues, creating a structural revenue deficit which results in a budget deficit. Because raising tax revenues is always off the table in the ideological GOP, the legislature takes out its meat ax and cuts the budget to essential state services like public education, health care and infrastructure (primarily roads).

You see? It's like you have two restaurant managers. Manager #1 wants to raise prices commensurate with the quality of the wine being sold. The other, Manager #2, wants to reduce prices and offers wines of lesser quality on the menu. The restaurant owners, wanting a good bottom line, opt for firing manager #1. So the quality of the wine goes down and the customers go elsewhere.

Wait! Go elsewhere? That's where the analogy breaks down. Restaurant customers can go elsewhere. But our kids can't go elsewhere. (Remember school vouchers serve the wealthy.) And most of those who live and work here are stuck with crappy roads.

Read more from AZBlueMeanie about how Prop 108 is the Republican tool for destruction of Arizona government.

No comments:

Post a Comment