Tax-and-Spend Principles do Harm

There are times I wish our Founding Fathers had the foresight to insert the phrase “First do no harm” somewhere near the beginning of our Constitution. It is a phrase each of us should utter before we commit to an action that will live beyond the immediate moment of decision, especially those we select to represent us in government at every level.

Undoubtedly, the issue for some would be defining what constitutes harm, something I don’t think most politicians worry about.

We exist in a constant state of polarization and about the only thing many of you reading those wise words (first do no harm) would agree with is that “harm” is something we should avoid at all cost. Our disagreement arises when discussing actions by our government we deem harmful. The only saving grace is that almost everyone reading this article has uttered the expression “what were they thinking?” Usually at a moment of shared misery, but often for different reasons. One would only need to look at the reaction of the “Green New Deal,” to understand my point. One person’s understanding of “harm,” is deemed by another as salvation.

We have all spoken the sentiment expressed by Laurence Peter (of the Peter Principle fame): “Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it.” Imbeciles might be a bit much, but many of those we elected lack the peripheral vision to see beyond their own biases, or the harm their ideas would create if they became reality.

The newly formed New Hampshire House and Senate has been in session just over 30 days but has offered a lifetime of harmful pieces of legislation. It does not matter if any of this legislation sees the light of day beyond their respective committees, or whether they can pass a vote in either chamber, or if they would ever get past an executive veto. Bad legislation may die the death it deserves, but the idea that brought forth the legislation will remain, waiting to reappear like a thief in the night. For example, let’s look at House Bill 482.

HB 482 would have given the fiscal committee the opportunity to move money from the Revenue Stabilization Reserve Account (Rainy Day Fund) to the general fund, while permitting the fiscal committee to raise business taxes if the Rainy Day Fund projected zero balance. The bill would have automatically allowed for changes to the business profits and business enterprise taxes if the Rainy Day fund reached a zero balance. In essence, this bill would have permitted a complete lack of fiscal discipline, placing both the general and Rainy Day funds in a perpetual state of crisis.

HB 482 would have created a cycle of irresponsibility, where misspending related to the general fund would have been encouraged, and done so without any real oversight. Once the general fund “sink holes” started to emerge, our representatives would pounce like pirates on booty, raiding the Rainy Day Fund to cover sink holes of their own creation. Like bailing water from a boat with a hundred holes, taxpayers would be placed in an unwinnable situation, similar to the position we found ourselves in 2017 (https://tinyurl.com/nhsinkhole).

Legislation like HB 482 serves only to create uncertainty for businesses and placing the state’s citizens at the mercy of unruly tax-and-spend politicians, both of which would have a negative effect on our state economy. As ill-advised as HB 482 is, it almost pales in comparison when debating Senate Bill 1.

With SB 1, the Democrats offered a de-facto income tax in the form of family leave. SB 1 imposes a mandatory payroll tax of .5 percent, covered either by the employer or passed along to the employee. The “fund” would be run entirely by the state, which means a bureaucratic entity would have to be funded to “oversee” the account. The oversight would be funded by the money collected, meaning the public siphoning would start before the funds even arrive, and continue throughout the fund’s existence. What could go wrong there?

Ignoring the fact this is an income tax (hidden behind a piece of legislation of good intentions), and that history has shown us these types of funds rarely maintain solvency, there is a competing solution that does not shackle the state’s taxpayers to the inefficiencies of government bureaucracy.

Gov. Chris Sununu has offered a public-private partnership solution, which combines the buying power of the New Hampshire and Vermont public sector workforce with the added benefit of being open to those in the private sector who would voluntarily like to participate. It is net-neutral to taxpayers, and has the immediate funding power of a large, willing workforce. The fact the government doesn’t control the money inserted into the fund could be the reason so many Democrats oppose Sununu’s sound plan.

HB 482 and SB 1 are just two poorly conceived bills that do more harm than good. There are thousands of others, some that will never see the light of day. These types of bills create uncertainty, lack proper fiscal discipline or needlessly expand the role of government in our lives, and most assuredly ignore the creed “First do no harm.” It makes us wonder if Laurence Peter’s words are more accurate than we want to believe.

Share Button

Leave a Reply

Your email address will not be published. Required fields are marked *

*