Civitas ReviewThe Blog of the Civitas Institute

Mar

01

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Lt. Gov. Dan Forest discussed government’s role, perhaps highlighting a paradox the state GOP faces. Earlier, Jason Lewis reiterated that “government is the enemy,” as Reagan once put it. But of course in North Carolina Republicans now control government.

It might be said that, rhetoric aside, the real task is to return government to its proper role, meaning it no longer is the enemy of freedom but its servant.

For instance, Forest said the incoming administration found that “the IT infrastructure of the state is a wreck.” The most telling sign: the new technology chief found there was no way to actually communicate to with his staff, except over the building intercom. (Which the clueless media mocked.)

Meanwhile, some grand old government buildings are literally falling down, he added. Nor are state employees always happy campers. He told of one state employee who, upon being thanked for his service, tearfully said, “I’ve worked here for 35 years, and nobody’s ever thanked me before.”

That by the way could be the paradox of the Democratic Party: though they call constantly for bigger government, they often fail to properly tend and maintain it. If Republicans can restore what’s useful and prune away what’s unneeded, wasteful and even destructive in government, they could solidify their position.

BTW, in talking about the prospects for the year, he said in passing, “You are going to see voter photo ID.” That brought a standing ovation from the crowd, indicating that conservatives are behind the idea.

Forest warned the crowd that liberals will attack voter photo ID on “civil rights” grounds, so conservatives must be prepared for that.

Mar

01

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The talk-show host said “the tragedy of the GOP” is that it abandoned its stand for limited government. “Instead of asking which GOP candidate can win, we should debate what GOP candidates stand for.”

Moreover, the GOP needs to raise its game — and intensity, to match that of the liberal political machines. “What is needed is a permanent campaign,” he said, but one that will “stand up for what this nation was founded on.”

He noted that today, when we are being subjected to fearmongering about tiny cuts in the growth of government spending, the post-World War II era has some real lessons. The U.S. slashed its spending as its shut down the massive war effort, but the economy boomed.

Right now, however, Lewis said, we are suffering a confidence crisis like that of the Depression. Banks are afraid to lend; corporations are leery of investment. “Anything the government is doing now is putting the private economy into a state of paralysis.”

Mar

01

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CLC opens today at the Raleigh Marriott Crabtree Valley hotel. We’ll keep you posted on what happens here … unless, of course, the sequester brings an end to life as we know it.

Feb

28

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The Fayetteville Observer today published my op-ed on the subject of tax incidence – that is who really feels the impact of taxes versus who just writes the check for the tax.

More specifically, a concept universally accepted by economists is the difference between who remits a tax payment and the actual incidence of the tax burden. In other words, the person or business writing the check may feel less of an impact than other people.

Most notable is the reality that corporations do not pay taxes, people pay taxes. As the Tax Foundation, a Washington, D.C.-based research organization, explains, “People pay all taxes. When the government levies a tax on a corporation, the corporation is more like a tax collector than a taxpayer. The burden of the tax ultimately falls on people – the owners, customers, or workers of the corporation.”

In short, “corporations” can’t pay taxes any more than your house can write a check for the property tax. Corporations are merely a collection of individuals legally organized to produce a good or deliver a service. Taxes on businesses are really taxes on these individuals and consume resources the organization could allocate toward other purposes.

This distinction is of particular importance in light of the  current effort in NC to eliminate income taxes. Critics who cry that eliminating personal and corporate income taxes would simply amount to a tax break for wealthy corporations and high-income earners fail to understand who really suffers under our current tax structure.

The real victims of corporate taxation? Workers. As the Tax Foundation states, “New research is indicating that in a global economy, where capital is highly mobile but workers are not, labor is bearing the brunt of corporate taxation.”

For instance, a September 2007 study produced by the Oxford University Centre for Business Taxation studied data from more than 15,000 companies in four countries. The study found that more than 60 percent of corporate taxation is “shifted onto the workforce in the form of lower wages” in the short run, growing to 100 percent in the long run. In other words, over the long haul, every dollar extracted from businesses in the form of taxation reduces worker pay an equal amount.

Making matters worse, the negative effect of corporate taxation on wages falls hardest on lower-skilled workers and those on the margins of employment.

The same concept applies in the attempt to heavily tax high-income earners. They are not stationary targets and will flee to more inviting states and take their business and jobs with them. Left behind are low-income earners and the unemployed who are disproportionately harmed by the lack of opportunities.

Read the whole article here.

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Feb

27

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Yes Weekly in the Triad published a story today by Jim Longworth, LEAKED MEMO RAISES CONCERNS, which explores what the Blueprint NC scandal may mean to one of the largest charitable trusts in the Nation, the Z. Smith Reynolds (ZSR) Foundation.

“As soon as this story surfaced last Friday, I spoke with ZSR Executive Director Leslie Winner and Finance Director Terry Lockamy. Leslie confirmed that Blueprint had received funding from ZSR, and Lockamy gave me the exact figures, saying, “Z. Smith Reynolds Foundation approved a general operating support grant of $400,000 to Blueprint NC this past November for the year 2013. Blueprint’s total budget for 2013 is $1 million.”

I was dumbstruck. $400,000 is a huge sum of money… so huge that it comprised 40 percent of Blueprint NC’s entire budget. It is also significant because it’s coming from a foundation who thought they were giving money for a 501(c)3 to “strengthen democracy,” but instead awarded it to what appears to be an organization who engages in partisan politics.

Winner was understandably upset after reading the initial column…” (Read the entire article here)

While they talk about the $400,000 figure for 2013 what is left unsaid is the large and continuing support by ZSR for Blueprint NC activities. Looking through past IRS 990’s on www.guidestar.com, along with the $400,000 above, ZSR has supplied $2.1 million since 2009 to Blueprint NC. They did this either directly or through the NC Justice Center which originally started and housed Blueprint NC with the assistance of a grant from Reynolds.

Longworth goes on to talk about the attitude of the Blueprint Executive Director upon being confronted by the memo.

“Clearly, Kosofsky (Blueprint ED) felt it was his duty to criticize and harass the Republican party. In fact, he unapologetically told me, “We didn’t write the talking points, but if we had, it would have been okay. But we didn’t do it.” It was like listening to OJ Simpson try and explain his book, If I had Done it. Moreover, Kosofsky’s non-denial denial seemed to confirm for me that his organization’s beliefs and activities contradicted their own mission statement…”

Reynolds has a long time connection to liberal groups. Civitas has reported on it here, here and here. There is an old saying, “when you’re in a hole, stop digging.” In this case it may be a $2 million dollar hole for the Z Smith Reynolds Foundation.