LIBERALS HAVE NO COMMON SENSE

The article below speaks directly to one of the most important characteristics of the mind of political liberals. Simply put, they have no ability to comprehend human nature.

This instance is an obvious illustration. Anyone with a modicum of common sense understands that the more people are taxed, the less money those same people will want to pay in taxes. Thus when sales taxes are increased, people spend less money on goods and services that are subject to said sales tax.

It seems ever so simple but liberals cannot seem to get their arms around that reality. It has always been that way, it will always be that way. People will choose to spend less on taxable items, pure and simple. They will buy less. They will barter more. They will shop at tax free Internet sites or in places where there is no sales tax. They will make purchases in the black market where taxes are not collected. Human beings will always find alternatives when something they do not want or like is imposed upon them. We are nothing if not very creative.

When taxes are lower, people and business spend more and, in the case of a business, make more. The consequence of lower taxation is increased and often record setting revenues to government via taxes. The less people are taxed, the more they spend. The more they spend, the greater the income to government. We've seen that prior to the current recession. In a lower tax environment, government revenues soared to levels never seen before just in this decade.

Now that will all go away. Why? Simple. Liberals cannot comprehend the simple and obvious relationship between the cause and the effect of tax increases.

This is not rocket science, brain surgery or, as one liberal interviewed on the radio said, rocket surgery.

Here is the secret formula. Lower taxes drives up government revenues. High taxes drives down government revenues. Read the facts in the article.

Class dismissed.


Sales-Tax Revenue Falls at Fastest Pace in Years
By CONOR DOUGHERTY

State and local sales-tax revenue fell more sharply in the fourth quarter of 2008 than at any time in the past half century, and has continued to erode through the beginning of 2009, according to a report released Tuesday.
The report by the Nelson A. Rockefeller Institute of Government at the State University of New York underscores how swiftly the consumer slowdown has eaten into municipal budgets. The drop in tax revenue has forced cities and towns of all sizes to cut everything from police to summer pool hours, and has sent legislatures scrambling for federal economic-stimulus funds to help ease budget gaps.
"The sales tax has been absolutely hammered," said Don Boyd, senior fellow at the institute.
State and local sales taxes, among the largest sources of revenue for municipalities, fell 6.1% in the fourth quarter of last year, as consumers bought fewer clothes, ate out less and canceled vacations. Revenue from personal income taxes was down 1.1% in the fourth quarter; corporate income taxes dropped 15.5%, reflecting weaker profits.
The declines have continued through the beginning of this year. In the first two months of 2009, the 41 states that have reported tax revenue saw total receipts decline 12.8%, versus the same period a year ago.
States have so far been hit harder than towns and cities. Overall, states' taxes declined 4% in the final three months of 2008 versus the same period in 2007, the first decline in six years, according to the analysis of state data by the Rockefeller Institute. Local tax collections rose 3.2%, as gains in property taxes offset falling sales taxes.
While income and property taxes have generally fared better than sales taxes, those revenues are also under stress. Property taxes typically lag behind real-estate prices, because it takes municipalities a year or longer to reassess the home values on which those levies are calculated. With home prices still falling, property taxes are also set to grow more slowly or in some cases decrease.
Carnage in the stock market also is likely to substantially reduce income-tax collections. With tax day on Wednesday, this is the time of year when high-income earners start writing checks to cover capital gains and other investment-based income taxes that have accrued over the past year. "This time around, the checks will be much smaller, and some [people] may be seeking refunds," Mr. Boyd said.
Further declines in tax revenue could force legislatures -- which in many cases used heavy cuts to balance this year's budget -- to make further reductions later this year.

Write to Conor Dougherty at conor.dougherty@wsj.comPrinted in The Wall Street Journal, page A4
Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

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