A lot of health care legislation news has been about the opposition conservatives and some pro-life liberals have toward federal tax dollars being used to fund abortions. The Stupak Amendment of course passed the House and there will be likely be debate in the Senate for something similar. No matter if one is pro-life or pro-choice, there is some logic behind legislation resembling the Hyde Amendment (a similar spending limitation on the annual appropriations bill for the HHS) on a health care bill. Some are very much opposed to an act, and if they can't stop others from performing it, they at least don't want to fund it. It is a variant of the benefit principle of taxation (like an anti-benefit principal).
But with health care legislation it's complicated. If government insurance crowds out private options, as some rightly fear, and the public insurance that is left must exclude abortion, now one has pro-life values thrust upon others. (Notice the scarcity of private insurance available without one needing a subsidy is implicit in some arguments against things like the Stupak Amendment.)
It is a problem when an individual's tax dollars are spent on other people's goods, like with health care. Spending represents an individual's values. And individuals have an array of values that cannot be properly represented by government spending. If it could, then 100% tax rates might not be too bad. If a major good now becomes public, or heavily subsidized, who decides what that good looks like? It must be a political decision if not a market decision. And whatever that decision is, it now affects a large mass of population.
Drinking soda, smoking cigarettes, having an abortion—these things before mainly had an affect on the person taking part. But if I am sharing costs with all of America, those externality arguments for obesity start to make sense (though they are still wrong), and now I have a greater interest in what my neighbor buys.
Cook County officials have succeeded in rolling back half of the 1% sales tax increase it approved in 2008:
Today, a majority of Cook County Commissioners overrode Board President Todd Stroger’s veto of rollback legislation.
Despite heavy behind-the-scenes lobbying by unions and a coalition of ministers standing with Stroger to keep the sales tax in place, commissioners voted 12-5 to roll back the county’s portion of the sales tax from 1.75 to 1.25, or a half penny on the dollar.
Board President Todd Stroger, who championed the original tax increase and vetoed several attempts to roll it back, pulled a Washington Monument ploy, brazenly claiming that the only thing that could be cut if the tax was reduced would be hospitals for the poor. (A hospital named for his family was specifically included.)
I don't live in Chicago but I'd suspect cutting the county payroll would be at least as achievable as closing down hospitals for poor people. I predict that despite his threat, Stroger will succeed in finding money to keep the Stroger Hospital open. In any event, Chicago will in the New Year have a slightly less terrible sales tax, at 9.75%, tied with Los Angeles for the highest big city sales tax.
Check out our sales tax map here.
UPDATE: Not that the sales tax reduction will help your Christmas shopping. It doesn't take effect until July 1, 2010; until then Chicagoans get to keep paying the 10.25% rate.
Ohio's individual income tax—a ridiculous array of nine rates to the thousandths of a percent—could use some simplification. Instead, Ohio in 2005 adopted a complicated package whereby they would phase out the corporate income tax over five years, phase in an economically destructive gross receipts tax called the CAT, cut the sales tax by a half-point, hike cigarette taxes, phase out a distortive inventory tax, and phase in a 21% reduction in the individual income tax over five years.
Senate Republicans are willing to provide five votes to fill an $851 million budget hole by going along with Gov. Ted Strickland's plan to delay the 4.2 percent income tax cut that took effect this year[....]
Funny how tax increases seem to happen immediately (even retroactively!) but tax cuts often get phased in and then delayed and eventually dropped altogether. In our rankings and measures, Ohio experts have pressured us to give their state full credit as if they had fully phased in all those reforms. We don't, instead counting only what they have actually done for each year. And this is why!
There's some debate about whether or not Strickland's action is a "tax increase." The tax was going to be lower and now it won't be. I'd say it counts. But I guess that means President Obama's estate tax plan is a tax cut (since otherwise it will be much higher in 2011 than he proposes)? Or perhaps people measure the future change against the status quo, even though it will change regardless.
Anyways, Ohio ranks 47th in our State Business Tax Climate Index. If they expect to improve their economy, it will take real tax reform that they can enact and stick with.
On Friday, Mayor Mike Bloomberg's administration 
Gov. Arnold Schwarzenegger's "nickel a drink" liquor tax increase proposal (which is a hefty increase; the tax on wine would go from 4 cents to 29.6 cents), has some worried: