All Maine Matters

April 2006



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Tax Expenditures
by John Frary

“I have been very clear that a tax break is spending money. At the end of the day, we have less revenue, no matter how you cut it.” These words were uttered a short while ago by Chris Gregoire, Democratic governor of Washington. This assertion is embodied in the expression “tax expenditure,” a phrase that became commonplace during the Reagan administration, although I first remember hearing it back in 1968.

Let’s be clear about what tax expenditure means. It means our take-home pay. Twirl it around, stand on its head, examine it under a microscope or gaze at it from afar; any way you look at it, it means that liberals have come to view our take-hone pay, investment income, business profits, or pension payments as a government expense. When Governor Gregoire says that “WE have less revenue,” she cannot be referring to “we the people.” Obviously, the taxpayers have more revenue to spend if their taxes are reduced. It is the government’s revenue that she speaks of.

Some may find my assertion farfetched, a wild exaggeration, perhaps outrageous. Maybe so, but it is up such critics to explain the logical fallacy of which they believe I am guilty. I am not saying that liberals articulate this belief in so many words, but I do say that this belief is implicit in their actions and logically explicit in the idea that a tax break (i.e., allowing taxpayers to keep more of the money they earn) is a government expenditure.

Middle class taxpayers should beware of the incessant palaver about tax reductions as “giveaways to the rich.” They should keep in mind the following points:

  1. If Bill Gates’s income is the government’s to “give” or keep, then so is theirs.
  2. They should always be sure to determine exactly what is meant by the “rich.” Check the figures, and they may find that their family income, in their peak years, places them in the ranks of the “rich.” I remember a New Jersey high school teacher, married to a school librarian, who found himself temporarily among the top 2 percent a few years before his retirement. This, plus 9/11, cured him of forty years of allegiance to the Democrat Party. College professors, dentists, morticians, highly skilled blue-collar workers with years of seniority, and many others may find that they are counted among the rich. Just check to be sure, that’s all I’m saying.
  3. If this sounds strange, remember that we are talking about your income at age fifty or thereabouts. The great majority of the population pass up through the classes of income earners as they gain in age, experience and seniority. Redistribution of income rich to poor usually turns out to be redistributing income from John Smith, age 50, to Joe Smith, age 25.
  4. Keep in mind that a hundred years ago, every Socialist party in Europe promised to redistribute money from the rich to the working man. Today, most European workers find themselves paying half their income straight into the national treasury to pay for all their welfare goodies. Nevertheless, every European state still has billionaires.
  5. In 1969, Congress passed the Alternative Minimum Tax to insure that the rich paid their “fair share.” Today, millions of middle class taxpayers are finding that they must pay a surcharge because of this tax.
  6. When the graduated income tax was passed in 1912 to tax the rich, nobody with an income under $10,000 paid income tax. In Maine today, you have to pay taxes on income above $17,000 in 2006 dollars,

It all comes down to this: is your income something you earned, or is it an allowance granted to you by a “generous,” paternal government?

John Frary was born in Farmington, where he now resides. He graduated from U of M, Orono. He did graduate work in Political Science and in Ancient, Medieval, Byzantine and modern history at U of M., Rutgers and Princeton, completing his Masters degree along with all courses and examinations for the PhD. He worked in administration and as a professor of history and political science at Middlesex County College in Edison, NJ for 32 years. He is associate editor of The International Military Encyclopedia, has been assistant editor of Continuity: A Journal of History as well as editor and publisher The LU/English Newsletter. After returning to Maine he was chosen to be the conservative columnist for The Kennebec Journal and The Morning Sentinel. He was dismissed from this position in December for refusing to drop his criticism of the Dirigo Health Plan. He is currently chairman of the Franklin County Republican Committee.

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