Let’s start with a simple fact: It’s not economic “stimulus” when someone comes along, takes money from your right pocket and puts some of it back in your left pocket (keeping much of it for “other uses”). That’s sleight-of-hand, not stimulus, which is a reason the government can’t stimulate anything other than more government.

That’s more and more true when less and less of the funds go back in your pocket. And make no mistake, President Joe Biden’s plans for a third “stimulus” bill—eclipsing the previous two—isn’t about helping struggling Americans hit hard by the pandemic and the shutdowns. Instead, it’s a massive, pork-laden bill that seeks to keep many of his lavish campaign promises and shore up support among key constituencies.

And nowhere is this more evident than in the area of climate activism.

According to CNBC, “The recovery plan, to be unveiled this week, will likely involve installing thousands of electric vehicle charging stations and building millions of new energy-efficient homes.” (Note to President Biden: Out-of-work Americans can’t afford new electric vehicles.)

Biden’s plan to “Build Back Better” also “supports his broader goal to achieve carbon-free power generation by 2035 and net-zero emissions by 2050”—an impossible goal that, even if it was achievable, would have little effect on global temperatures.

But that’s not all.

The Washington Post reports that it would spend “hundreds of billions of dollars to repair the nation’s roads, bridges, waterways and rails. It also includes funding for retrofitting buildings, safety improvements, schools infrastructure, and low-income and tribal groups, as well as $100 billion for schools and education infrastructure.”

And he plans a slew of massive tax hikes to help pay for it.

He could raise the corporate tax rate from 21% to 28%, which would destroy hundreds of thousands of jobs, and raise taxes on American individuals. These actions and others would undo key parts of the Tax Reform and Jobs Act of 2017 that combined with deregulation helped launch tangible economic prosperity until the global pandemic.

Each of these initiatives—climate activism, massive “infrastructure” spending and tax hikes—is bad economic policy in and of itself. Together, they’re a trifecta of terrible, guaranteed to overburden our economy and saddle us and future generations with more government, more debt and less opportunity.

History demonstrates that despite the promises of a Green New Deal, new green jobs prove elusive—and the ones that are created are very, very expensive, which requires more government spending of our hard-earned tax dollars that reduces growth and jobs in the process.

Here’s what President Obama said in his 2008 acceptance speech at the Democratic National Convention: “I’ll invest $150 billion over the next decade in affordable, renewable sources of energy—wind power, and solar power, and the next generation of biofuels—an investment that will lead to new industries and 5 million new jobs that pay well and can’t be outsourced.”

That never happened.

Obama himself later acknowledged that “Shovel-ready was not as shovel-ready as we expected.” That went for both the climate jobs (his policies sent solar panel manufacturing to China, for example, and other companies simply misled the government, took the money and declared bankruptcy) and for infrastructure jobs.

The good news is that we know what works. We can truly support more self-sufficiency, dignity, and human flourishing by fully opening the economy up.

Americans aren’t clamoring for a Green New Deal (when they’re told what it will cost), but they sure would like to dine out, see family members again and open up their businesses without the heavy-handed pandemic measures imposed by governments at every level.

It begins with Congress rejecting the third “stimulus” boondoggle. States should also reject some if not all of the latest round of bailout money to keep from unnecessarily expanding government programs and losing some independence to the federal government. And Congress should instead adopt the Texas Model of less spending, lower taxes and more reasonable regulation.

A great next step would be for the Biden administration to lift its “halt” on new oil and gas permits on federal lands and in federal waters.

That action alone would achieve all three of Biden’s stated goals for his “stimulus”: It would reduce emissions by allowing access to cleaner-burning natural gas, it would support many new and existing high-paying jobs for Americans (instead of outsourcing them to other countries, which we’ll be forced to buy our petroleum from), and it would support infrastructure improvement through the taxes producers pay for their use of our roads and bridges.

Another step would be to rein in excessive government spending that is bankrupting our country.

Ultimately, we can regain the prosperity we had before the pandemic—but not with Biden’s progressive plan.

https://thecannononline.com/more-stimulus-no-thanks/

Toyota Financial Services recently announced that as a result of consolidating customer service centers, the Cedar Rapids facility will close and cut 600 jobs, due in part to the private sector employing 5% fewer people than a year ago. The consolidation of customer service centers is a loss for Iowa and a win for other states, such as Texas. Businesses are responding to both economic climates and the new work environment brought about by the COVID-19 pandemic.

States with high tax rates are seeing an exodus of both people and businesses while those with lower rates are seeing them arrive in droves. This is yet another example of how people vote with their feet when the burden of government becomes excessive.

Iowa has made progress in recent years by lowering the individual and corporate income tax rates, but policymakers should beware of becoming too complacent, and they should work to continue reining in spending and lowering rates to attract people and businesses.

Many states have or are gradually lowering their personal and corporate income tax rates. This happened at the federal level during the Trump administration and many people had tangible prosperity that they’d never experienced. But the Biden administration may soon reverse those gains if progressives in D.C. have their way, which makes more competitive tax systems in Iowa and other states essential.

Legislatures in Arizona, Mississippi, and West Virginia are currently considering bills to phase-out their state income tax. For Iowa to remain economically competitive, it must follow suit. Iowa’s tax rates matter because we are in direct competition with 49 other states for businesses, jobs, and people. For example, South Dakota, Iowa’s neighbor, does not tax individual or corporate income, making it far more economically competitive.

Texas, another no-personal-income tax state, is a national leader in terms of economic growth and attracting both people and businesses. Iowa could also learn from Texas’s recent property tax reform in 2019, which limited growth in property taxes without voter approval to 3.5 percent for local governments and to 2.5 percent for school districts. They are even considering improving their tax system by eliminating nearly half of their property taxes.

Higher tax rates not only deter economic growth, but they also penalize hard-working individuals, families, and businesses. Taxes on income are considered the most harmful of taxes as they discourage productivity, hiring, and investing in Iowa.

In 2018, Governor Kim Reynolds and the Republican-led legislature passed pro-growth tax reform that lowered income tax rates and broadened the sales tax base. Reducing tax rates and practicing responsible spending policies is making Iowa more competitive and economically strong.

As a result of the 2018 law, this year Iowa’s corporate tax rate fell from 12 percent, the highest in the nation, to 9.8 percent—matching Minnesota’s. Even at 9.8 percent Iowa still has the third high corporate tax rate in the nation.

In 2023, the income tax is scheduled to be reduced to 6.5 percent—making it more competitive in the region. The caveat is, for the rate reduction to occur, it must meet two stringent revenue triggers.

First, state revenues must surpass $8.3 billion. Second, revenue growth must be at least 4% during that fiscal year. The use of revenue triggers in state tax policy can be a good idea but creating a high threshold can unnecessarily delay tax rate reductions and reduce the necessary restraint on government spending—the driver of higher tax burdens.

Lowering income taxes should not be hindered by the 4% growth trigger, so repealing it to use any revenue above $8.3 billion for cutting the income tax would reduce a major roadblock to tax relief and provide taxpayers with more certainty they can use to plan for their more prosperous futures.

Gov. Reynolds continues to stress the importance of making Iowa’s tax code more competitive. The Iowa Senate has passed legislation that will repeal both revenue triggers and phase-out the obsolete inheritance tax. Both measures would place taxpayers first and make the state’s tax code more competitive.

Iowa can look to states such as Texas, Indiana, North Carolina, among others that are creating pro-growth tax codes and practicing fiscal restraint. To be an economic leader in the Midwest—and to let people prosper—Iowa cannot afford to become complacent.

https://thecannononline.com/iowa-beware-of-tax-rate-complacency/

Texas’s economy continues improving from the challenges of the COVID-19 pandemic and forced business shutdowns by government since spring 2020. More on the data and how Texans can get back to work as quickly and safely as possible ⬇️

“Hey Florida! Help is Here.”

That’s how Vice President Kamala Harris recently put a 21st Century spin on Ronald Reagan’s famous quote, “The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.”

What does this have to do with the Texas budget and House Bill 3548? Let me explain.

The premise of the Vice President’s tweet is that government’s job is to swoop in and solve all of our problems. The premise of Reagan’s quote is that too often, government is the problem—or at least standing in the way of solutions. Reagan was right, of course; government fulfills some necessary functions, but in most cases, more government means less freedom.

That’s why we at the Texas Public Policy Foundation have labored for years to chisel the idea of a Conservative Texas Budget into the hard granite at the Texas state capitol. Our reasoning is clear — people don’t need more government; they need more opportunity. And our simple formula reflects that: The state’s total budget, which is the footprint of government funded by taxpayers, ought not to grow faster than our population growth plus price inflation. This spending limit is reflected in Rep. Matt Krause’s committee substitute for HB 594, which has been referred to the House Appropriations Committee.

Growth beyond that equation is an excessive growth of government—meaning bigger state agencies, which inevitably assume more and more regulatory powers to themselves. And a bigger budget also means more taxes, since states (unlike the federal government) can’t hide behind deficit spending. Government shouldn’t grow faster than the citizens’ ability to pay for it.

Now, state Rep. Greg Bonnen, who chairs the House Appropriations Committee, has had his HB 3548 referred to that committee. And Sen. Kelly Hancock, a member of the Senate Finance Committee, has the companion SB 1336 that will be heard before the Senate Finance Committee (of which he is a member). This legislation would improve the state’s current weak spending limit by expanding the base to all general revenue funds and by changing the growth limit to one closely related to ours of population growth times inflation.

It’s important to note that the Conservative Texas Budget is a ceiling, not a floor. It’s a limit on how much the budget can increase, not a target. There’s no limit on shrinking government, cutting taxes and reducing regulations. That course would be best for Texans, and TPPF has outlined many ways in which lawmakers should do so. Our top 10 legislative priorities for this Session, which we call our Liberty Action Agenda, provides a clear path for legislators to shift power and prosperity back to the people of Texas.

While Chairman Bonnen’s and Sen. Hancock’s legislation would set an improved formula closer to ours into stone and ensure that future Legislatures comply, we are pleased to see that both the House’s and the Senate’s introduced (proposed) budgets fit within our guidelines. Our math says that a total of $246.8 billion in all funds for 2022-2023 would represent a 5% increase over the last biennium, matching the growth in population plus inflation. Both proposed budgets came in under that number after excluding $6 billion toward maintaining property tax relief from last session instead of growing government.

Historically, lawmakers have been too ready to increase the Texas budget and grow government. But in 2015, we introduced the Conservative Texas Budget, giving legislators a clear bar. Prior to this, the average growth rate of the biennial budget from 2004 to 2015 was 12%. With the Conservative Texas Budget in place, the average growth rate was just 5.5%. More importantly, before 2015, the average growth rate of appropriations exceeded that of population plus inflation by almost 5 percentage points, while since then, growth has been limited to an average of almost a full percentage point below population and inflation.

The Conservative Texas Budget provides a path toward responsible state spending. It has proven to be successful at restraining excessive growth in government in the past, and it will continue to do so in the future if followed each session.

That’s why Chairman Bonnen’s and Sen. Hancock’s legislation, which codifies much of the Conservative Texas budget, is so important. It’s the help Texas families truly need.

https://thecannononline.com/hey-texas-help-is-here/

“Stimulus” checks are in the mail to many (but not all) Americans, and the news is awash in stories about the best ways to spend that $1,400, and even speculation about whether we’ll see a “stimmy rally” on Wall Street.

But Texans are smart enough to know that no check from the government comes without strings attached.

President Joe Biden’s $1.9 trillion monstrosity is filled with a progressive “wish list;” only about 9% of the funds have to do with the pandemic.

Additionally, it will add substantially to the national debt, saddling us and our kids and grandkids with the tab while moving toward another redistribution recession as these funds reduce incentives to work, open states, and move off of government dependence.

And to make things worse, President Biden is already planning huge tax hikes to pay for more that would ultimately be paid by workers.

It’s no different for the states, which will also be receiving ARPA funds soon. There’s no such thing as free “stimulus” money; there are always strings attached. That’s why Texas’s leaders must be very careful with the roughly $43 billion from the American Rescue Plan Act (ARPA) they’re slated to receive. We must use the money wisely, and possibly, not to use it at all.

Some of the money is already earmarked. As for the more flexible funding the state will receive, Texas can expect about $17 billion to state government and $10 billion to local governments.

The Texas Attorney General’s Office, along with its counterparts in 20 other states, are already questioning the biggest string attached to the funding—Congress’ stipulation that it not be used “to either directly or indirectly offset a reduction in the net tax revenue.”

They rightly argue in a letter to Treasury Secretary Janet Yellen that this provision oversteps the federal government’s authority and could be used to prevent any state from cutting any tax. We need answers from her as soon as possible, especially as legislative sessions in Texas and elsewhere are quickly coming to an end.

On Monday, White House Press Secretary Jen Psaki seemed to confirm this interpretation of the bill. “The original purpose of the state and local funding was to keep cops, firefighters, other essential employees at work and employed, and it wasn’t intended to cut taxes,” she said.

The best strategy for the Texas leadership would be to follow a pro-growth course that lets people prosper without government interference. This approach would seek to keep taxes lower than otherwise, reduce debt obligations and fund only one-time expenditures. And Texas should reject all or most funds with strings attached.

We don’t need to adapt our approach to taxes and spending to fit the vision of progressives in Washington; we already have the successful Texas Model, thank you very much.

We must ensure that we don’t spend taxpayer money in ways that will create fiscal cliffs later on. Boosting public education funding with ARPA, for example, would result in public education “cuts” once that money is gone, and those “cuts” would be met with loud demands for more money from Texans, as was the case after receiving President Obama’s “stimulus” funds in 2009.

We must stick with one-time purchases, or paying off things, if possible, like loans to the federal unemployment insurance trust fund of at least $6.6 billion, paying down state debt that was borrowed at a high interest rate, better funding and reforming other post-employment benefits, or funding startup costs for market-based options in education and health care.

And we would like to see a high level of transparency and accountability. Ideally, all spending related to ARPA would be separated from the rest of the state’s budget and documented clearly on a government website.

But we have something even bolder to suggest: Texas should use some of the funding to extend the border wall, addressing another growing crisis.

The best way to help Texans recover from the economic devastation wrought by the government’s response to the pandemic is simply to let them return to work. ARPA ignores this. Instead, it’s a distraction from the onerous hikes in taxes, spending, and regulation by the Biden administration.

So, if Texas is going to accept this money (and rejecting it in full or in part should be strongly considered given the many restrictions and strings attached), let’s use this taxpayer money wisely, and ensure it goes to help keep Texas Texan.

https://thecannononline.com/theres-no-such-thing-as-a-free-stimulus/