Category Archives: economy

FED’s $600 Billion Quantative Easing Tax, Is it Necessary?

Posted on November 22, 2010 by | Leave a comment

Charles Plosser, CEO of Philadelphia’s Federal Reserve, addressed an audience at Cato Institute on the topic of employing monetary policy to prevent asset bubbles, which caused the current recession. He told the audience that using monetary policy to adjust interest rates in order to compensate for asset price gaps (bubbles) was not a good idea. One example given was raising rate on mortgages to restrict rising housing prices. Two reasons for being against employing broad-based monetary policy for individual asset markets like housing were: (1) The risk of wrecking havoc in other parts of the economy is too great, and (2) no precise measure of asset-movement exists by which to form sound rule-based monetary policy. (Read his Cato speech titled “Bubble, Bubble, Toil and Trouble: A Dangerous Brew for Monetary Policy.)

John Mauldin, CEO of Millenium Wave Advisers, came to a similar conclusion about Fed Chairman Ben Bernanke’s decision to inflate the economy through the latest $600 billion quantitative easing. Bernake’s reason was to prevent deflation, which means core inflation rate as measured by the Consumer Price Index (CPI) dropped below 1 percent. Core inflation is all consumer goods except food and energy. Mauldin claims core inflation is actually about 1.5% not 0.6% when housing costs are removed.

There seems to be two reasons Mauldin measures inflation without housing costs: (1) Historically, the Bernanke should have used monetary policy to lower an increasingly high inflation rate back in 2005 that was caused by the housing price bubble. (2) More important is the fact that over the past few years housing cost is growing at near zero percent (see the chart below).

If Puru Saxena, CEO of Hong Kong based Puru Saxena Wealth Management, is right, Bernake’s quantitative easing will not revive the U.S. economy. Just like the previous two stimulus bailouts, quantitative easings never do. (Read his article titled “Band-Aid Solutions”

What Bernanke’s cash infusion will do is devalue the dollar. This will causing food, energy, and everything else to rise, which will act as a tax on disposable income. Less disposable means fewer sales. As Mauldin also pointed out, food and energy costs already are high for those with lower income. These people will suffer the most as a result of the Fed’s easy quantitative induced inflation.

There are some creative ideas that could solve the housing price problem. For example, Fannie Mae, Freddie Mac, and FHA could rent their growing stock of foreclosed houses, which would keep some people in their homes. Banks also could lend to investors (landlords) to buy cheap housing if they promise to rent them out. Read Maudlin’s article “O Deflation, Where is Thy Sting?” to learn more.

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Rep. Austria on Bush Tax Cuts

Posted on November 16, 2010 by | Leave a comment

Now that the dust from the recent election has settled, the real work begins. Before the newly elected Congress is sworn in on January 3rd, the lame duck Congress still has important work to do on issues ranging from extending the expiring tax cuts to addressing cuts to Medicare reimbursement payments to physicians.

We must address the expiring Bush tax cuts. If Congress does not extend these tax cuts, it will equate to a $3.8 trillion tax increase that will affect all taxpayers, from families to farmers to small business owners. The indecision surrounding this issue is causing uncertainty for those who are seeking assurance in these difficult economic times. All the temporary tax cuts need to be extended, including those affecting the estate tax, capital gains tax and dividends tax so as to spur confidence and encourage local entrepreneurs to invest in their businesses, creating long-term, sustainable jobs.

The potential cut in Medicare reimbursements to doctors is another issue that will likely be considered in the lame duck session. Unfortunately, a permanent fix to the physician fee schedule was not included in the health care reform law and instead a temporary extension is in place, which is set to expire at the end of this month. These short-term extensions have only increased uncertainty for physicians, forcing many of them to close their practices or severely limit the number of Medicare patients they see. Reform is necessary to establish a fair and equitable physician fee schedule for Medicare providers and patients.

Above all, we must ensure that these proposals are cost-effective, and are paid for by funds within the existing federal budget, rather than borrowing money and running up more debt. With the new Congress coming in, we have an opportunity to work together to address these challenges head-on, and focus our efforts on helping the job creators in the private sector generate long-term, sustainable jobs that will turn our economy around.

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Why Deficit Reduction Is Necessary and Need Not Hurt the Poor

Posted on November 15, 2010 by | Leave a comment

By Isabel V. Sawhill, Brookings Senior Fellow, Economic Studies

We need to reduce our long-term deficits. We cannot forever spend more than we collect in taxes. And if we continue on our current path we risk another economic crisis that is likely to produce even more unemployment than we have now.

To be sure, we should not cut the deficit right now—that would be very bad for the economy. We should combine stimulus now with legislative initiatives that gradually rein in spending and raise taxes once the economy has recovered.

But if we continue to ignore the huge accumulation of debt in our future, or assume it can be addressed without cutting domestic spending, it is the least advantaged who are likely to suffer the most.
Why do I say this?

First, if we have another economic crisis that produces high rates of unemployment for an extended period, social programs will do no more than temporarily reduce the harm inflicted on the least advantaged. The safety net is no substitute for a job and a growing economy. Deficits matter because, in the longer term, they undermine the economy’s ability to produce the jobs that are especially critical to moving people out of poverty and into the middle class.

Second, many progressives believe that we can solve our fiscal problems by cutting defense and raising taxes. Although I believe they are right to fight for both of these solutions, I do not think they will be sufficient. As I have argued in more detail elsewhere (see my debate with Greg Anrig in the September issue of Democracy: A Journal of Ideas), the numbers simply don’t add up unless taxes are raised across the board to unprecedented levels—and not just for the wealthy. This level of taxation is not only politically unfeasible but unfair to the many middle and working class families who are currently struggling and whose incomes were stagnating even before the recent downturn.

Third, any effort to protect Social Security and Medicare from future spending reductions – as many advocates are now arguing – will simply put more pressure on programs that serve the disadvantaged and their children. The rapid growth of spending on entitlements has already forced the Obama Administration to propose a freeze in non-security domestic spending.

In California, Governor Schwarzenegger has proposed an elimination of the state’s welfare-to-work program as well as most child care assistance for low-income families, a harbinger of what may happen at the national level as the budget squeeze plays out over the next decade or two. This should give pause to those who argue that we can’t touch health or retirement benefits for those over about age 55, since they won’t have time to adjust to the changes. There’s no such “adjustment time” permitted for single moms with a low-wage job who are suddenly forced to spend one third of their income on child care.

Those who care about protecting the less advantaged need to be willing to find savings in the largest and fastest growing portion of the federal budget—the big three entitlement programs: Social Security, Medicare, and Medicaid. In 2010, 71 percent of all revenues are devoted to just these three programs.
What kinds of changes should advocates for the poor support?

First, they should support reforms that leave the core commitments behind Social Security and Medicare intact and ensure that no one is left bereft of access to basic health care and a decent income in old age.

Second, they should support reforms that gradually trim benefits for the more affluent over time while protecting those at the bottom.

Third, they should support reforms that recognize that not all spending on health care improves health. Specifically, we need to move toward reimbursement rates for providers that are tied to evidence of effectiveness. The goal should be to improve health, not just access to health care. Thanks to the recent health care bill, health care itself is now nearly universal. But some estimates suggest that as much as a third of all health care spending does not improve health—an estimate that is further reinforced by the good health outcomes achieved in other advanced countries that spend far less than the U.S. on health care.

But the answer for those who care about low-income Americans is not to ignore deficit reduction. It’s to pursue sensible deficit reduction in a way that protects poor people now and ensures a more prosperous future for everyone.

This article was originally published by Brookings on October 18, 2010 at www.brookings.edu/opinions/2010/1018_deficit_reduction_sawhill.aspx

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Real World Employment News

Posted on November 8, 2010 by | Leave a comment

Last week, mainstream news outlets gleefully reported a booming growth of 151,000 new jobs. Even the liberal Economic Policy Institute (EPI) joined in the celebration of accelerated job growth. The EPI was also pleasantly surprised by the modest level of state and local government jobs. The real party pooper was the announcement that the national rate of unemployment remained at 9.6 percent. In a more sober moment, the EPI said it will take years before we will see pre-recession levels of employment growth. Bummer….

Unfortunately, the above employment numbers are not real. According to the Dr. Lacy Hunt of Hosington Investment Management, the broader measure of household employment fell by 330,000. While 151,000 more people where included in payroll statistics, 330,000 more working people living in households became unemployed. Using Dr. Lacy’s figures, the total number of newly unemployed was 171,000 in October.

Dr. Lacy also explained why the unemployment rate remained the same. The reason was 254,000 members of the unemployed dropped off the statistical charts. They are no longer getting unemployment checks. They are no longer hoping for a decent job or any job. They no long looking for work. They are dropouts. As of October, the civilian labor force participation rate fell to a record low 64.5 percent. This means 35.5 percent of working age people were not employed. One can only wonder about how the paternal godfathers and mothers on Capitol Hill will attempt to save those dropouts–a new entitlement program maybe?

To make matters worse, the number of full-time workers who lost jobs was 124,000 increasing the total number of full-time job losses over the past 5 months to 1.1 million. This reduces the level of full-time employment to those in 1999. An economy cannot generate income growth by continuing to substitute part-time work for full-time employment, according to Dr. Lacy.

The Feds recent infusion of $600 billion new dollars will further erode the household incomes with which to purchase goods and service and pay their bills.

Xenia taxpayers will have even less after-tax income to spend once the 1/2% income tax, health service tax, and other tax increases take effect.

Source: Thoughts from the Frontline Weekly Newsletter

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Ohio, 46th Worst Business Tax Climate : The Tax Foundation’s 2011 State Index

Posted on November 1, 2010 by | Leave a comment

The Tax Foundation released the newest edition of the State Business Tax Climate Index, which ranks from 1 (best) to 50 (worst) the tax systems of the 50 states. South Dakota’s tax system is most welcoming to economic activity while New York’s tax code ranks 50th as the least hospitable. Ohio almost caught up with New York being ranked as 46th least tax friendly state.

The goal of the index is to focus lawmakers’ attention on the importance of good tax fundamentals: enacting low tax rates and granting as few deductions, exemptions and credits as possible. This “broad base, low rate” approach is the antithesis of most efforts by state economic development departments who specialize in designing “packages” of short-term tax abatements, exemptions, and other give-aways for prospective employers who have announced that they would consider relocating. Those packages routinely include such large state and local exemptions that resident businesses must pay higher taxes to make up for the lost revenue. As a result, businesses often move to other regions or states to remain competitive.

States with the best tax systems will be the most competitive in attracting new businesses and most effective at generating economic and employment growth. As we will see, Ohio need more than government generated jobs. Ohio needs a serious tax code revision.

The index ranked states based on five component tax indexes:

• The Corporate Tax Index
• The Individual Income Tax Index
• The Sales Tax Index
• The Unemployment Tax Index
• The Property Tax Index

The Corporate Tax Index assesses both corporate income taxes and/or gross receipts taxes. Ohio taxes business on the latter gross receipts.

The Individual Income Tax Index measures the effect on small businesses and entrepreneurs, on labor costs, and, depending on the type of business, on consumer spending. One reason Ohio ranks among the worst states is it arranges the top income brackets in the middle range of income. Ohio is among the states with the highest marriage tax penalties. Ohio’s local income tax rates also are the third highest in the nation.

Sales Tax Index measures the rates and effects of taxes both on business. A form of double taxation exists when a business pays sales tax that increases the cost of goods and services and when the consumer pays sales tax on the same goods or services. The two components of the index consist of the tax rate and tax base, which is the range and types of goods and services taxed.

The Unemployment Insurance Tax Index measures the effects state and federal rate structures and related policies and how potentially damaging to business they may be. Ohio was ranked as among the states with the best unemployment insurance structures.

Finally, the Property Tax Index is comprised of taxes levied on the wealth of individuals and businesses. These include taxes on real and personal property, net worth, and the transfer of assets. Some studies property taxes are a significant factor of business location decisions.

So how did Ohio rank on each of these indexes?

Tax Indexes 2011 2010 2009 2008 2007 2006
Corporate Tax 39 38 33 33 39 47
Income Tax 44 46 47 47 49 50
Sales Tax 35 37 39 39 38 43
Unemployment Tax 11 10 15 15 11 48
Property Tax 39 38 33 33 39 13
Overall Rank 46 47 48 48 47 47

 

Anyone for lower sales, income and property taxes? If you are, you must also be for more efficient government operations and fewer unnecessary government programs.

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Xenia Employee Conundrum and Issue 9

Posted on October 28, 2010 by | 4 comments

By Daniel Downs

City management claims the proposed income tax levy (Issue 9) will allow them to rehire six police and fire employees. The proposed levy also will be used for streets and other capital improvement projects. When looking at the 2009 State Audit Report, the employment data does not match the levy rhetoric.

Consider the following:

In 2009, the City of Xenia reported having 297 employees. The number of total city employees for 2007 was 290. That means the city had more not less employees last year than the past two years. If city officials laid off 6 police and fire employees, how can there more employees than in 2008?

The employment conundrum only gets more interesting.

In the same financial report for 2009, the total number of full time equivalent employees numbered 216.5, but in 2008 the total was 227.5 and 227.25 for 2007.

I have heard of “Two and a Half Men,” but a quarter!

The difference between the employment figures above shows the city actually laid off 11 full time employees, none of which adds up to 297 or 290.

By now, you smart readers have figured out that the large differences between 297 and 216.5 employees is probably due to volunteers who are considered employees. If the 60.5 employees are not volunteers, then who the heck are they?

Accounting for the 60.5 volunteers-employees does not solve the entire conundrum. According to the State audited report, Xenia laid off 9 full time and 2 part-time employees plus 2 employees retired. This adds up to 13. City management wants to rehire 6 laid off security personnel. So who were the other 5 employees the city let go?

Let’s look at a summary of changes in city employment for 2009:

– 3 full-time and 1 part-time finance department workers were laid off.
– 2 full-time and 1 part-time employees were added or transferred to the legal    department or court.
– 1 full-time administrator was laid off or transferred elsewhere.
– 2 full-time information technology positions were added and filled.
– 3 full-time police officers were laid off.
– 1 full-time fire fighter also was laid off.
– 7 full-time and 1 part-time street maintenance personnel were laid off.
– 2 full time of street maintenance workers were transfer to a new department    called garage.
– 4 full-time and 1 part-time recreation workers were laid off.
– 1 full-time and 1 part employee were transferred to newly formed positions    under Parks.
– 8 full-time service employees were transferred to (at least on paper) to the    following categories:
– 4 full-time positions were created under development and planning.
– 4 full-time positions transferred to engineering.
– 4 full-time and 1 part-time employees were added (or transferred) to the    water department, and finally,
– 1 full-time sewer worker was laid off–that job stunk anyway.
–  28 total full-time and 3 part-time workers laid off.
+ 17 total full-time and 3 part-time workers added (or transferred).
 

Out of all the lay-offs, transfers, and new positions, it is difficult to pinpoint who the 5 actually were. We know for certain that the number of police and fire personnel actually laid off were 4 and not six in 2009.

Did you notice only one fire fighter was laid off? Did the Second Street fire station (No. 2) employ only one fire fighter? He must have been one tired professional working 24 hours a day and seven days a week.

Interestingly, closing fire state no.2 and laying one fire fighter did not decrease expenditures of the fire department. Instead of offsetting a $500,000 decrease in tax revenue, expenditures increased $26,000 in 2009.

Just when I was certain the conundrum was resolved, city council sent out a “Vote No on Issue 10” postcard claiming the passage of the 1/2% income tax levy will enable the city to bring 12 laid off public safety officers. Since when did the city lay off 12 fire and police officers? Not last year! It just so happens the city laid off 5 police officers and 2 fire fighters in 2004. Adding those laid off in 2009, the number of laid off safety personnel equals 11.

So what’s 1 lost employee anyway? Maybe he/she fell into the black hole of political rhetoric.

It is true the city had less revenue in 2009, which is actually part of a recurring trend in municipal finance. The 10-year history of the city’s revenue and expenditures shows this trend occurs every 2-3 years. This time around the decreased revenue stream is the result of government bureaucrats in Washington and their fellows in the state house as well as reckless lenders. In the financial report, city management reported a 12% unemployment rate for Xenia. Because of this, it is claimed city tax revenues have decreased. It is true some taxpayers are without jobs; some have moved away; and some small business owners who are still in business remain concerned about the possibility of a double-dip recession. Yet, if the number of tax filers is any indication, employment among residents actually increased in 2009. The number of tax filers increased by 76 among last year. The problem with more individual income tax filers was less income tax revenue. According to the financial report, their contribution to the city’s general revenues was down by $4,400. It is clear the nearly $500,000 decrease in tax revenues was not the result of unemployment. It was the result of both recessionary effects on business and property values.

Once the economy fully recovers, city tax revenue will exceed pre-recession levels. The lost employee might be found and 6-11 new safety personnel hired. That is as long most of the nearly 3,000 new residents remain and new businesses replace those the recession closed.

Because of all these factors, Xenia voters should say NO to the municipal tax levy (Issue 9); NO to the fire and police unions’ ordinance that will force Xenia taxpayers to hire previous or new employees and allow them to increase expenditures (Issue 10); and YES on Issue 11, which will enable the city to hire part-time employees until unemployment is reduced to post-recession levels and the economy is viable once again.

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The Perils of Using “Budget Deficit” Numbers

Posted on October 27, 2010 by | Leave a comment

by Joseph Henchman

The Center on Budget and Policy Priorities (CBPP) has released an updated report on the impact of the recession on state budgets, concluding that more federal aid is needed. The report relies heavily on CBPP’s own calculation of state budget deficits, drawn from state government documents. Adding them all up, CBPP estimates somewhere around $425 billion in state budget shortfalls for FY 2009-11, with more for FY 2012 and FY 2013.

The number is probably accurate from their methodology, but is ultimately meaningless. Here’s why:

* A state “budget deficit” is the revenue projected (usually by the Governor’s office) minus hoped-for spending according to some formula, in the initial budget plan. For instance, say a state raised and spent $10 billion this year, but wants to spend $20 billion next year, projecting $11 billion in revenues. Ultimately they settle on spending $11 billion. That state has “closed a $9 billion budget deficit” even though revenues and spending are up from the previous year.

* The exact method of estimating next year’s spending varies by state, with some starting with last year’s budget while others throw in additional wish list programs. Adding up all the states’ numbers is adding apples and oranges.

* States must balance their budgets so there really is no cumulative state budget deficit in the end, at least on paper.

* It’s routine for states to want to spend more than they actually can, at least at first, and having a deficit in the initial plan happens even in flush times. Thus, CBPP’s numbers overestimate the scope of actual state budget deficits.

* CBPP also presents the deficits as a percent of each state’s general fund. While the general fund is usually the largest and most important part of a state’s budget, in many states it can represent less than half of the total budget. This number thus exaggerates the seriousness of a budget deficit.

* A budget deficit could exist because of overly ambitious spending plans that are whittled down to reality, overly optimistic revenue projections, fiscal irresponsibility, or structural imbalance. CBPP’s tale of the recession causing everything and federal aid being the only salvation doesn’t fit the facts. For instance, California’s deficit this year includes unpaid bills kicked over from last year, so it’s the same money being double-counted. This irresponsibility is glossed over in CBPP’s report.

News organizations and others like to cite a number for total state budget shortfalls, and CBPP gets a lot of media attention for its numbers, so they’re probably not changing how they do things. But I’d urge folks to look more to NCSL and NASBO, two quasi-governmental organizations, that track state budget actions with more specificity. However, a common comparison model across the states is still needed.

In addition to Henchman’s analysis, readers should remember that local government budgeting works in essentially the same way. Therefore, it is important for taxpayers and voters to see their financial audited reports in order to prove that real financial need exist as is usually sold during efforts to pass tax levies.

Source: Tax Foundation’s Tax Policy Blog, October 7, 2010

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Police & Fire Retirees Become Public-Service Millionaires

Posted on October 23, 2010 by | Leave a comment

The Buckeye Institute for Public Policy Solutions today released “Dipped in Gold: Upper-Management Police and Fire Retirees become Public-Service Millionaires.” Through the Deferred Retirement Option Plan (DROP), public safety officials are eligible to retire on paper, yet continue to work for up to eight years while their pensions (along with three percent cost-of-living allowances and five percent interest payments) accumulate in untouchable accounts. When the officers exit DROP, it is not uncommon for them to collect lump sum payments totaling roughly $1 million dollars. Since they are treated as if they are in year 9 of retirement when they exit DROP, many in upper management also collect yearly pension payments in excess of $100,000 for the rest of their lives.

Since the Ohio Police & Fire Pension Fund (OP&F) is a highly secretive entity, the report details DROP payouts and pensions for hypothetical Columbus and Cincinnati police officers. Supposing the average DROP participant is a Columbus police officer, taxpayers would save nearly $1.2 billion if the DROP program were eliminated and the retirement age were raised from 48 to 55. The report also suggests several other money-saving options such as terminating cost-of-living allowance increases during DROP, tying the interest payments to market rates, and disallowing participants to keep their required employee contributions to OP&F.

Mary McCleary, Buckeye Institute Policy Analyst, stated: “Making public servants millionaires when they retire is not the bargain you agreed to as a taxpayer. Ohioans bear the seventh highest state and local tax burden due to expensive programs like DROP. Private-sector taxpayers, many of whom have experienced job losses, pay freezes or cuts, and benefit reductions, cannot afford to finance the gold-plated compensation packages of their police officer and firefighter neighbors.”

The report can be viewed on The Wire at www.buckeyeinstitute.org.

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Conversion Levy: Permanent Tax Hikes That Remove School District Accountability

Posted on October 22, 2010 by | Leave a comment

Mary McCleary, Policy Analyst

With the start of the new school year, many school districts around Ohio, including Margaretta Local School District, have realized that their finances are in trouble. Thus, these districts (several of which experienced failed levies in the spring primary) are going back on the ballot this November to ask for more money despite the economic hardships already facing many property owners.

To address Ohio’s school funding crisis, Governor Ted Strickland and the General Assembly introduced a new way for school districts to raise money through the establishment of the conversion levy in the 2009 Ohio Budget. Margaretta Local School District is the first district in Ohio to make an attempt at passing this new kind of levy.

If passed, the conversion levy would convert existing school operating levies to a 20-mill floor. Without getting too caught up in terminology, converting to a 20-mill floor essentially removes the protection homeowners have under House Bill 920.

Because of HB 920, property owners only pay taxes on roughly 15 percent of property value increases. For example, if your home is worth $100,000 and increases in value by 10 percent to $110,000, you only pay taxes on $1,500 of the increased value instead of the full $10,000. Conversely, if your home depreciates by 10 percent, your taxes are only reduced by 15 percent of the depreciation.

Thus, HB 920 brings a degree of stability to property taxes: homeowners are not hit with large tax increases when property appreciates, and school districts do not suffer large revenue losses when homes depreciate as they have over the last several years. By design, HB 920 keeps Ohio’s property taxes relatively low.

If the Margaretta conversion levy were to pass, district homeowners would be taxed on 100 percent of property value increases instead of just 15 percent. Given Ohio’s economic condition and the fact the state has the seventh highest state and local tax burden, many homeowners cannot afford higher taxes.

?Another problem with the Margaretta conversion levy is that it is a permanent levy and will consequently cause property taxes to rise indefinitely if passed. Every three years when the county auditor’s office reassesses property values, homeowner taxes could increase significantly. Since the tax hike would not go into effect until after the next reassessment cycle, Margaretta Local School District is selling the levy to voters as type of revenue neutral renewal levy. This approach is, at best, grossly misleading and, at worst, intentionally dishonest.

In addition to skyrocketing taxes, the conversion levy removes the best tool parents have to keep their school districts accountable. When school districts fail to restrain costs, they must ask for more money. The voters then have a chance to examine spending and decide whether or not a funding increase is warranted. If a conversion levy passes, the school district would have little incentive to spend money efficiently and effectively, as revenue would rise every three years beyond the true needs of the school district, and homeowners would have no means to keep the school district accountable for spending choices, as the school district would avoid new levies.

Between 1998 and 2009, per pupil expenditures in Margaretta Schools rose by 75 percent from $5,807 to $10,172 far outpacing inflation, which was only 29 percent. Similarly, the average teacher pay increased 20.1 percent from $45,710 in 2003 to $54,913 in 2010, while inflation was only 18.6 percent. In 2009, the average physical education teacher in the district earned $48 per hour with an annual salary of $64,948. If the average physical education teacher worked the entire year (2,080 hours, instead of the contractual 1,350 hours), he would have earned over $100,000 in 2009.

Although the residents of Margaretta Schools narrowly passed a levy in August, they are notorious for rejecting school levies. When voters reject levies, they fundamentally exercise their right to hold the school district accountable. With a permanent conversion levy in place, voters would lose the ability to reject these property tax hikes.

All Ohioans must be wary of conversion levies. With one vote, taxpayers could unknowingly approve large tax increases for years to come and could lose their most valuable tool in keeping school districts accountable.

For more information, read the Buckeye Institute’s report The Need for Levy Reform in Ohio – Conversion Levy: One Vote, Permanent Tax Increases at www.buckeyeinstitute.org/reports.

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Most Americans Say Government Has Too Much Money and Spends It Unwisely

Posted on October 21, 2010 by | Leave a comment

A new Rasmussen Reports national telephone survey finds that 61% of Adults think the federal government has too much power and money.

Perhaps that’s no surprise since 66% believe America is overtaxed.

An overwhelming 70% of adults say the government does not spend taxpayer’s money wisely and fairly. Just 16% believe the government does spend this money correctly, while another 14% are not sure.

Eighty-five percent (85%) of Republicans and 60% of adults who are not affiliated with either of the major political parties believe the government has too much power and money, a view shared by just 39% of Democrats.
Just 47% of government workers say the government has too much power and money, compared to 65% of those who work in the private sector.

Republicans and unaffiliateds also feel more strongly than Democrats that the government does not spend taxpayers’ money wisely and well.

When it comes to the economy, the message from Americans is clear: Leave it in the hands of the private sector and not the government. That sentiment is shared by sixty-eight percent (68%) of voters who prefer a smaller government with fewer services and lower taxes to a more active one that offers more services and higher taxes. A plurality of Americans believe that government programs increase poverty in America.

Source: Rasmussen Reports, October 17, 2010

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