Tuesday, September 13, 2005

We must simplify Indiana's tax system!

One of the largest barriers to business growth in Indiana is the complexity of The Indiana tax code.

Most small businesses are forced to hire a Certified Public Accountant to help them deal with the complicated Indiana tax code. That is good for me; my wife is a Certified Public Accountant. That is bad for small businesses and for our economy. We can make Indiana more business friendly by doing nothing other then simplifying the tax code. My taxation plan will simplify our tax code and will generate an extra fifty million dollars over the two year budget cycle.

We should eliminate several Indiana taxes completely. One of the first to eliminate is the small portion of property taxes that is paid to the State. Believe it or not, we actually pay a small amount of property taxes to the State of Indiana; the State of Indiana then turns around and pays it back (and a lot more) to various localities. What a wasteful idea. Property taxes should have nothing to do with State government. Only a politician could come up this “revolving door” method; no self-respecting economist would create the current system.

The State of Indiana charges an estate tax on people when they die, this is wrong. We pay taxes on our income every year, we pay taxes on almost every item we purchase, we pay fees (Some hidden) on countless items; enough is enough. We pay a tax for the privilege to consume alcoholic beverages in Indiana. This tax on alcohol consumption should be repealed, Prohibition ended in 1933. There are also many other additional taxes listed as “other.” All of these taxes should be abolished immediately.

After abolishing the above taxes I would levy a new tax. “Cherry Masters” should be legal and taxed. “Cherry Masters” are video gambling machines that have been in operation in many Indiana businesses for years. “Cherry Masters” allow consumers to play games like video poker. I propose that each machine cost $500 to license per year and the profits be taxed at a flat rate of 20%. This would enable businesses that rely on “Cherry Masters” to profit from these machines and would generate enough revenue to allow Indiana to abolish the previously mentioned taxes. These machines have been in operation for years and harm no one. They provide revenue for many Indiana small businesses and for various organizations such as The American Legion and Veterans of Foreign Wars.

This proposal will generate an extra fifty million dollars of tax revenue over the two year budget cycle. Indiana currently has over four billion dollars of debt upon which the taxpayers are paying interest. This is absurd. I want to give my children and grand children a better future; I do not want them to pay for the spending excesses of our current government officials. The State should act in a fiscally responsible manner and use this excess revenue to lower the shameful four billion dollar debt our elected officials have incurred.

We need one additional immediate change to our tax system and we need it badly. We must eliminate the Property Tax Replacement Fund. What happens currently is the State collects taxes in excess of what it requires. Then, using a complex formula, it “re-distributes” these taxes to various local government entities to subsidize local property taxes. This is wasteful and unnecessary; even worse, it masks the true cost of both local and State government.

I propose that we change the system to one that applies common sense. I propose that 75% of all Sales tax revenues be distributed to the 92 counties based on population. The State would then completely remove the Property Tax Replacement Fund from its budget. This is a revenue-neutral proposal.

This second proposal would prevent the State from doing what it did this last session. The State lowered the amount it paid to subsidize local property taxes; this forced localities all over Indiana to raise property taxes or to cut spending. We all know which one both Republican and Democratic localities will choose. Expect so see your property taxes go up another 7% this year!

24 comments:

Debbie said...

Mike you have some glaring flaws in logic in this article.

First you say to get rid of the tax on alcohol consumption. Okay, so far so good.

But then you propose to make another "vice" item legal and then tax it??!!! Are your proposals supposed to be libertarian in nature?

Why should Cherry Masters be taxed and alcohol not? Neither one of these activities should have special taxes levied against them.

And you want the government to license the machines? Where are your libertarian proposals here?

You really think that generating an "extra 50 million" dollars of revenue would be spent reducing debt? Come on, they'd find ways to simply spend it on "bold new initiatives" and "fresh ideas."

LP Mike Sylvester said...

Actually this article makes complete sense, at least to a fiscal conservative.

Of course I want to make "Cherry Masters" legal and of course I want to tax them; it is common sense. Most people think "Cherry masters" should be legal, so they should be legal.

I think taxing them is reasonable. I cut the proposed taxes in HALF. What is un-reasonable about that?

I am very Libertarian. Libertarians do not have a problem with licensing items and paying taxes; at least, the ones I know do not.

You ask do I think an extra fifty million in income would be used to pay debt?

I think the politicians in office will spend EVERY dime they can get their hands on and then borrow some more of my money to spend.

That being said; if I were in office I would vote to use that fifty million dollars to pay down Indiana's debt.

Debbie said...

Mike, I'm sorry, but I still don't understand your underlying principle. Why is it okay to tax Cherry Masters, but not alcohol?

And you really don't know any libertarians who have a problem with government forcing business owners to pay licensing fees simply to sell a product?

Count me as one.

LP Mike Sylvester said...

Indiana has a lot of gambling. It is all taxed. "Cherry Masters" should be taxed just like all other forms of gambling. This is a very simple principle.

I know VERY few Libertarians who do not believe in licensing fees. In fact, most Libertarians I know think we should have MORe fees and less taxes...

Debbie said...

Indiana also has a lot of drinking. So how did you arrive at the idea that you want to eliminate those taxes, yet want to add gambling taxes?

Also, could you please tell me what the difference is between government licensing fees and taxes, other than the wording?

Please I'm not trying to drive you crazy, I'm simply curious as to your thought process here.

LP Mike Sylvester said...

Currently "Cherry Masters" are illegal. I propose that we make them legal and tax them... I think people should be able to gamble as much as they want.

In fact I beleive we should expand gambling. Nevada has expanded gambling and that has allowed them to completely eliminate many taxes.

A "fee" is a form of tax that specifically targets the person using the government services rather then targeting the general population. IN general, the person paying the fee is the person enjoying the benefits. For example:

Paying a toll on a toll road is a fee.

Charging citizens a fee to have a library card is a fee.

Buying a fishing license is a fee.

Putting a license plate on your car is a fee.

You are not driving me crazy...

Debbie said...

Okay, if I'm not driving you crazy, I'll keep pushing. Because you're driving me crazy since you still haven't answered by very first question: How does alcohol licensing fees and taxation differ from Cherry Master and gambling taxation? What libertarian principle are you working with?

You are also confusing licensing fees with user fees. If there is a toll road, you're absolutely right, the user is the one paying the fee to use the road, and the fee is supposed to go directly in paying for and maintaining the road being used. If roads were privately owned, this is probably something that would be done.

But paying the government a fee simply for the "right" to sell alcohol or gambling services is only a method for government to increase revenue to spend on who knows what as well as place limits on the activity itself. You don't pay a fee to the government to sell oranges, so why is it okay to pay the government a fee to operate a gambling machine?

LP Mike Sylvester said...

I think we just have a differnet opinion on this.

Many people have called me a "Disgruntled Republican," maybe that is what I am...

I think taxes should be spread out among many groups. I think taxes should be SIMPLE and fair. On average today for every dollar in Federal taxes we pay, the government gets 88 cents. The other 12 cents is consumed by the IRS and other bureaucracies in collection.

You ask what is the difference between gambling taxes and alcohol taxes...

The difference is we already have gambling taxes. We have the Indaina lottery. We have 10 operating casinos in Indiana. All of these places allow gambling and tax it.

Today "Cherry Masters" are illegal. I want to make them legal and tax them. If one form of gambling is already legal, why should we not expand gambling and tax it like we tax existing gambling.

It is a simple concept for me.

Ed Godard said...

Forest / Trees, Debbie. Anything thta simplifies the tax code is a good thing. Step away from the tinfoil hat...

Debbie said...

Ed, one doesn't need a tinfoil hat to question the reasoning behind saying we need to get rid of alcohol taxes, but new gambling taxes are okay. I hope libertarian candidates who propose such ideas are able to answer these sorts of questions when the voters ask them, instead of throwing out insults.

edgodard said...

Oh? Are you a libertarian candidate, Debbie?

Debbie said...

Nope, not this year. You can read a bit about me in my blogger profile if you're that interested.

Do you really not understand what I am saying here? I have brought up a simple question that prospective voters will ask. And yet you came on here and just threw out old cliches rather than engaging me in the actual topic of debate. Now, that's fine, this is just a blogger comment file, and drive-by fun is part of the game.

I simply made the bigger point that this sort of questioning is exactly what political party promoters will encounter and need to think about when proposing ideas and solutions.

Ed Godard said...

Check your premises. You are assuming that the great unwashed public has the intellect and/or the attention span to think completely, consistently, rigorously through to the end the way you do. Tsk, Tsk. They don't.

Ergo, the actual debate you would like to sink the hooks into is in fact the stuff of the tinfoil hat for a libertarian candidate.

So, it's for the best that you are not a libertarian candidate, as youd be the kind that takes that 1% in a most self-gratified manner. Better to be the blogger that takes the 12 hits/day than actually change the world, so long as one is rigorous, righteous, and correct.

Debbie said...

LOL, you have yet to answer the alcohol/gambling question.

Ed Godard said...

It's the debate that matters, isn't it? So, to answer the question...

Legalize the cherry masters even if it means taxing them, or, keeping them illegal which jeopardizes the freedom of the business owner and player?

Easy call- legalize and tax. Once we win the legalization fight, you can then have the tax fight on the legal product.

Debbie said...

Oh, now I see. I think you have misunderstood my question. The part I was questioning was not to make cherry masters legal (which I have no problem with) and tax them (which I do have a problem with but I was not particularly interested in that issue here).

No, my question centers around the fact that Mr. Sylvester also, in the same article, said we need to get rid of alcohol taxes (and also mentioned that prohibition ended long ago, which must be intended to imply that if it's legal we shouldn't tax it over and above any other legal product). Then he proposes to make cherry masters legal and also tax them.

That inconsistency was the only reason I even commented on this blog entry.

And even if the "unwashed public" doesn't notice these sorts of inconsistencies, the press probably will. So that should be reason enough to discuss and think through these sorts of proposals to make sure they make sense.

Debbie said...

Ooops I forgot to say thank you for replying to the question.

Anonymous said...

THIS IS ROACH- i AM THE FIRST AND ONLY CHERRYMASTER. i AM THE ONE WHO PUSHED OVER THE FIRST DOMINO, IN COMPLAINING LONG AND HARD TO GET THE MACHINES RAIDED, AND THEN LEGALIZED. AND NOW THE LOCAL LIBERTARIANS WANT TO PLAIGERIZE MY POSITION, AND PROFIT SO THEY CAN RUN SOMEONE TO APPEASE THE LOCAL LIQUOR BUSINESSES, SO THEY DONT HAVE TO VOTE IN A PRIMARY. WELL, A FEW YEARS AGO, I WAS TO BE A LIBERTARIAN CANDIDATE TO RUN AGAINST SEN. wYSS, WHO ANYBODY WHO LIKES TO SMOKE, DRINK, GAMBLE, AND HAVE SEX HATES. THEN IN 1995, I WAS THE FIRST LIBERTARIAN CITY CLERK CANDIDATE, AFTER BEING ACED OUT OF RUNNING FOR MAYOR IN THE GENERAL ELECTION , SO BILL KEMPF RAN INSTEAD. I HAVE MADE MY PLATFORM IN SEVERAL ELECTIONS TO RAID, THEN LEGALIZE CHERRYMASTERS.

SO BEFORE YOUR PARTY TRIES TO HIJACK MY PLATFORM FOR YOUR OWN GAINS, RMEMEBER WHO WAS PREACHING TO THE CHOIR FIRST, AND SINGING THE LONGEST. ROACH.
NOTHING AGAINST YOUR PARTY, PERSONALLY, EXCEPT FOR 1. IF YOU HAVE BALLOT ACCESS, THEN YOU SHOULD FOLLOW THE SAME ELECTION RULES AS EVERYBODY ELSE, AND HOLD A PRIMARY IN MAY TO IDENTIFY YOUR SUPPORTERS, AND THEN HOPE FOR MORE THAN A 2% TURNOUT IN THE AUTUMN, DUE TO THE PREPONDERANCE OF THE OTHER PARTIES IN aLLEN COUNTY- ONE A BUNCH OF CHRISTOFACISTS, AND LIARS, CHEATS, AND CROOKS, AND FISCAL LIBERALS, AND SOCIAL CONSERVATIVES- WHO IS THE MAJORITY PARTY, UNFORTUNATELY, AND KEEPS RAISING YOUR TAXES, AND GROWING THE GOVERNMENT. AND WHO IS THE SOCIAL LY LIBERAL PARTY THAT WANTS PEOPLE TO DO ALL TOHSE LIBERAL THINGS THAT THE GOP DOESNT WANT YOU TO? IF THE GOP DOESNT WANT YOU TO SIN, AND FORNICATE, AND THE LIBERAL PARTY DOES, WHO IS TRULY THE LIBERALTARIN PARTY, AND WHO REALLY STANDS A CHANCE OF WINNING? ONLY THE DEOMCRATS. UNLESS THE DEOMCRATIC LIBERALS JOIN WITH THE LIBERTARIANS, WE MAY END UP SPLITTING THE VOTES, AND END UP WITH 4 MORE YEARS OF SENATOR WYSS, AND HIS ILK OF CHRISTOFACISTS.
JUST WANTED TO SET THE RECORD STRAIGHT. DONT PLAIGERAIZE WITHOUT ATTRIBUTING YOUR SOURCES. INTELLECTUAL THEFT SHOWS LACK OF ORIGINALITY. FOLLOWING ME AGAIN?
BESIDES, IF IT WASNT FOR ROACH STIRRING THE POT, AND MAKING THE LIBERTARIAND EITHER SH*T OR GET OFF THE POT, WE MIGHT HAV HAD MORE LIBERTARIANS A LONG TIME AGO, BUT WITH A MARGINALLY ACTIVE PARTY, ROACH CANT ATTEMPT A PALACE COUP, AND WALTZ INTO THE GENERAL ELECTION BY DECLARING HIMSELF CHAIRMAN OF AN INACTIVE PARTY. E-MAIL ME AT DCROACH@YAHOO.COM
WHAT IS THE PLATFORM ON CENSORSHIP, AND FREDOM OF SPEECH FOR DISSENTING VIEWS.
MEANWHILE, SMOKE, DRINK, GAMBLE, SMOKE BUD, AND FORNICATE TO YOUR HEARTS CONTENT, JUST DONT GET CAUGHT BY THE CHRISTOFACISTS. VIVA LAS VEGAS.....DCROACH@YAHOO.COM

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