Thursday, April 22, 2010

The Peril of Partisan Politics

By: Brian D. Anderson Sr.
President & CEO
Dalton-Whitfield Chamber of Commerce

All of us are graded from time to time. Students receive regular report cards, employees have performance evaluations, and even publicly traded companies are graded by their stockholders. Do we measure our government entities? If so, how? If not, why not? Many would argue we grade our elected officials through the democratic process. But if that is true, how does Congress continue to be incumbent led while also having steadily decreasing job approval ratings? We have serious issues facing our country and our state, and the status quo is not cutting it!

Let’s begin our introspection at the Federal level. Very quickly after getting healthcare reform passed, the President and his administration are recommending new measures for regulating the financial industry. Remember the analogy used during the healthcare debate that asked the question – do you want the federal government who struggles to run the Veteran’s Administration and the Post Office, providing healthcare in America. And now the proposition is for the Federal Government (the poster child for fiscal malpractice) to oversee and regulate the financial industry.

Given the Enron, AIG, and the latest Goldman Sachs scandals, a strong argument can be made that sound regulations must be in place to prevent corporate miscreants. But the US Government is hardly credible as the entity able to play in that sandbox. I would argue that our federal government and the elected officials who run it, clean up there fiscal minefield first.

This same administration and the majority in Congress are also considering a value-added tax. A VAT is a commonly used tax vehicle in many countries, especially throughout the European Union. Given an inability to accurately define a VAT in the space of this column, a simple definition is a VAT is a sales tax on steroids. I encourage you to Google the term value-added tax and become informed of this type of tax.

Good tax policy calls for taxation to be equitable and transparent. A VAT is neither. In reading the simple definition, I instantly had a vision of hyper creation of jobs in the accounting sector. This type of tax would require armies of CPAs to simply calculate what to charge, who to charge, and how to send the proceeds to Uncle Sam. Job creation is good unless one expansion of a job type directly or indirectly creates reductions in other job types. One statement in the material I found stated that a VAT is inefficient in that the revenues that the tax provides for the government coffers is adversely affected due by the loss of revenue due to decreasing sales because of the tax. All taxes artificially alter the normal operating principles of supply and demand.

The end does not justify the means. Just because there are a few corporate bad guys, the entire financial industry does not have to be over-hauled. The free market economy can regulate itself with minimal yet well thought out and targeted regulations. Companies that are managed poorly should be allowed to fail, and corporate leaders who participate in corporate fraud should be fired and possibly jailed.

Why consider any new tax must less a VAT? One reason argued is that Washington’s massive spending has created deficits that only a new source of revenue can fill. Current estimates forecast that a VAT would generate $700 billion in revenue for the Federal Government. But given that a VAT is an “inefficient” tax, the loss of revenue from other sources could more than likely offset some of that $700 billion. Just because the French are doing it is not reason enough to convince me that this direction is good for America.

Moving down a notch, how would you rate Georgia and its elected leaders? In my twelve years as a Georgian, both parties have enjoyed being the majority party and had one of its own in the Governor’s mansion. Are you better off today? Is Georgia surviving the Great Recession as well as others? Will we come out of this down economic cycle better than others?

I would argue that Georgia is struggling. As Georgia has grown in population, the cost of providing services grew faster than state revenues. Recently some have argued that state government is too big and that proposed cuts will keep the size of government in check. Government does tend to grow even when it is not being fed. But I would argue that simply cutting taxes and cutting spending does not guarantee a prosperous future. Many types of government spending are investments not costs.

If you consider the budget proposals currently headed to a conference committee, Education (investment in our children) has been gouged. The arts (investment in quality of life) have been eliminated by one branch and severely cut by the other. And one other biggie – transportation funding – will once see another legislative session come and go without an answer. One important benchmark related to transportation ranks Georgia 49th in per capita spending for our transportation infrastructure.

As you consider the points presented, it may seem that I am just another doom and gloom pessimist. I am not. I present these two different perspectives concerning the performance of our elected officials so that I can make this point … Our way of life is seriously endangered by partisan politics. Over the last fifteen years both parties have enjoyed majorities and even total control at times. And yet, the issues facing our country and our state have worsened.

For us to tackle these tough complex issues, we have to have the brightest and best running for and being elected to office. And there primary allegiance must be to the public electorate at-large and not their party affiliation. Once elected, every official must work earnestly with their colleagues regardless of party.

America still has its best days ahead of it, if we will once again promote and respect freedom and liberty above all else. We can still be the envy of the world if we will allow all Americans to seek the America dream with a hand-up and not a handout. We still have all the basic tools to reach our destiny, but only if good, honorable, trustworthy, and servant leaders hold our elected offices.

Georgia can be the capitol of the South. But not without effective leadership that can rise above party lines, benchmark against the best, and provide legislation that produces solutions and not sound bites. I want those who represent me to lay out a vision for long-term success and the financial plan to support it. Hearing an elected official proclaim they took an oath to never raise taxes, does not a prosperous future make.

Next week is qualifying for elected office. This community has a wealth of talented and honorable citizens. Given that many offices will be up for election this fall, I encourage any and all who are impassioned about our community, our state, and our nation to step up and seek an elected office. Today, April 22, from 2-5pm, the Chamber will host a Campaign Academy for all that are interested in running for office or assisting others. Contact the Dalton-Whitfield Chamber for more information (706.278.7373).

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