Killing the Golden Goose

As global demand for energy rises, West Virginia is poised to take advantage through use of our abundant energy resources. West Virginia has produced oil and natural gas continually since the 1800’s. Our mountains allow us to efficiently produce electricity from both hydroelectric and wind energy, but coal is still the energy Golden Goose to the states economy.

Unfortunately instead of feeding and caring for the Golden Goose most of the time the state stalks the Golden Goose like a predator using taxes as its favorite weapon. Some 200 years ago US Supreme Court Chief Justice and namesake of Marshall University, John Marshall warned, “The power to tax involves the power to destroy.” The evidence that Marshall was correct is all around us in West Virginia as we rank 50^th in business opportunity due to our punitive business tax structure destroying our economy.

The latest hunter taking aim at the Golden Goose is DEP Secretary Stephanie Timmermyer, who went before the Senate Finance Committee February 7^th requesting a state tax on coal be doubled. West Virginia is already at a huge economic disadvantage and this will only add more. We have the 7^th highest tax rate in the nation and at the same time we rank 49^th in per capita income. The destruction of the states economy through a punitive tax structure has dropped the states population from 1.3% of the US population in 1950 to 0.6% today, a drop of more than half.

Simple economics explains how the global coal market will respond if the coal tax increase is enacted. West Virginia coal will become more expensive in the market place. Just as we shop for the lowest price on food or gasoline, those in the coal market will also shop for the lowest price of coal. That will put West Virginia coal producers at a disadvantage. It will be harder for them to be price competitive. New coal orders will drop as a result. The drop in orders will mean less need for manpower, transportation, and supplies further increasing the adverse effects on the West Virginia economy.

Secretary Timmermyer’s request for an increase in coal taxes personifies the problem with Charleston’s understanding of the economy. Ronald Reagan clearly identified the problem when he stated, "The problem is not that people are taxed too little, the problem is that government spends too much." West Virginian’s have been taxed so heavily for so long that a large unused surplus exists in various state accounts. In 2005 State Senator Russ Weeks estimated that at $1 billion, Senator Herb Snyder at $3 billion, and West Virginians Want to Know at $5 billion. When the state has somewhere between $1 and $5 billion dollars sitting unused in various accounts; we should not be talking about raising taxes.

With world demand for energy high and West Virginia sitting on coal, oil, gas, hydroelectric and wind to supply the world, tax cuts are in order to help our economy grow. The money not spent on taxes will be plowed back into the businesses of the state thus feeding the Golden Goose. If the power to tax is the power to destroy, then the power to reduce taxes is the power to create.

A Valentine's Day Poem

The Poem is at the bottom, it's about our government's true love...taxation.

In case there are still doubters, I am NOT a fan of our tax system. Not that I don't think that we all need to do our part to support the government, I am not against paying my portion. The problem is that no one knows what their portion is or even should be. If you make more, you pay more. OK, but how much more? No one knows. I bet you don't even know how much you will pay to the government this year. Even if you are savvy enough to look at your income tax filings each year and figure approximately how much they will pay in taxes in the future, that is only half the story. There are still many hidden taxes that the government collects like sales tax, and gasoline tax, and tax on your insurance premium, and B and O tax, the list goes on and on. These hidden taxes are so common that we don't even pay attention to them any more.

This is the perfect scenario for a politician looking to raise taxes. If you don't know what you pay now, and don't know what you are paying in the future, how can you know or object to an increase. Even better, by hiding the tax in the cost of our everyday purchases, the government gets to blame private enterprise for the increased cost. If not directly as with oil companies, then indirectly by simply taxing items like bread and milk and even insurance. Make it a percentage sales tax and the income from taxes goes up with inflation. I can see it now, income taxes rise, so the insurance companies I represent raise rates to offset the increased cost of their payroll and sure enough I will have a line out my door demanding to know why the price of insurance went up even though my clients weren't in an accident of any kind. As the middle man, my payroll and other expenses go up disproportionate to the increase in my income and now my clients are paying more and I am making less.

Imagine if the government acted like a private enterprise. Let's say that they took the annual budget, divided that amount by the number of people ages 18 and up in our country and sent all of us a bill for the same amount...payable in mid-April. How difficult would it be for our government to pass a tax increase or to increase spending if you knew that your annual tax bill was going to be 10% higher this year? If my customers behavior is any indication, there would be marches on Washington demanding to speak to congress about why their bill went up this year. I know that it is unfair to make everyone pay regardless of whether or not they made any money...then again I took a net loss last year in my business, but still managed to pay several hundred dollars in B and O income taxes to the City of Keyser. How does that work? My income is negative but my income tax is positive? It wouldn't so the government uses my gross income instead of net income.

I know that is an extreme example, but it leads to one of the fairest solutions available, the FAIR Tax. If you haven't read about it, you should. Then again, it would make it almost impossible for the government to raise taxes in the future and politicians would end up holding each other accountable for the projects that they earmark to their friends.

As promised....the poem. I did not write this it was sent to me

Tax his land,Tax his wage,and Tax his bed in which he lays.

Tax his tractor,Tax his mule,Teach him taxes are the rule.

Tax his cow;Tax his goat,Tax his pants,Tax his coat.

Tax his ties,Tax his shirts,Tax his work,and Tax his dirt.

Tax his tobacco,Tax his drink,and Tax him if he tries to think.

Tax his booze,Tax his beers,If he cries,Tax his tears.

Tax his bills,Tax his gas,Tax his notes,and Tax his cash.

Tax him good and let him know

That after taxes, he has no dough.

If he hollers,Tax him more;Tax him until he's good and sore.

Tax his coffin,Tax his grave,and Tax the sod in which he lays.

Put these words upon his tomb,'Taxes drove me to my doom!'

And when he's gone,We won't relax,We'll still be after the inheritance TAX!!

Six Year Term

I just finished watching the always anti-climactic State of the Union speech. It’s basically the end of the road for President Bush. And there is a looming recession. Then I thought, when else in my conscious, adult life have I seen a two term President end his term. Perhaps showing my youth, the only one that happened was President Clinton. There was a looming recession back then as well. The stock market slow down after the tech bubble burst was the major theme and focus for my Business Finance curriculum in college. Granted both of these happened in consecutive order. But combine this issue with the growing length of a campaign for the white house. Let’s face it, the 2008 election really began when the party nominations for the 2004 election were announced.

Is it possible that one issue we are seeing is that everyone is seeking a two-term role in the White House? The first term is guided by re-election concerns, the second term is guided by cleaning up the first term so that a strong legacy can be left. Why not one 6 year term. You get elected, then you seek to fulfill your mandate. No re-election worries, just outright pursuit of the policies and beliefs that you truly subscribe to.

How do we display judgment on our elected President? At each election of Congress, we either make his/her job easier or more difficult by providing him/her with co-operative co-workers, or congressional enemies.

It isn’t often that I subscribe to such a dramatic change from what the founding fathers established. After all, they established a union that consistently sees peaceful power shifts even after 230+ years of existence. Then again, I also don’t subscribe to the belief that our current generations are more intelligent than our ancestors. But it is hard to believe that they could have foreseen elections where the winner would spend hundreds of millions of dollars just to get elected to a job that pays a fraction of that sticker price.

Barney, Mr. Rogers and Charles Manson

So you want your kids to watch a wholesome television show that may help shape their lives. Something that can help instill values like respect, courtesy, and personal responsibility. Growing up you were a big fan of Mr. Rogers, the trolley, Mr. McFeely, King Friday and the rest of the Neighborhood of Make Believe.

Unfortunately Mr. Rogers has passed away and you're not a big fan of the purple dinosaur, so the next obvious choice for someone to instill proper values in your kids is Charles Manson! Well to me that seems to be the current attitude among some Republicans around the nation. These so called Suicide Voters, seem to be following a similar logic.

They may have been a Fred Thompson, Rudy Giuliani, or Mitt Romney supporter and now they are saying they will vote for Barack Hussein Obama or Hillary Clinton over John McCain. Even political commentators like Anne Coulter have made the same statement. While there is large emotional attachment that develops between a supporter and their candidate, at some point logic must begin to take hold.

McCain may not be our first choice, but he is no Clinton or Obama. Just as Barney is no Charles Manson. We now have to ask ourselves do we really want to vote for a Obama-Manson ticket or do we want to stay the Republican course and vote for the McCain-Barney ticket?

What Got Lost In the Convention Furor

A lot has been said and written about the West Virginia presidential nominating convention good, bad, and ugly. Some expressed pleasant surprise, others complete dismay. Thanks ought to go out to the team that made it happen. They received a thankless assignment and achieved their goals. They made money, got the state party some attention, and made the West Virginia GOP a real factor on the most important primary day. Beneath the big picture some sore feelings emerged, but at this point it looks as though reconciliation is likely.

The big question no one asked is why did John McCain do so poorly in West Virginia? Those who did not attend might reason that the more evangelical candidate, Mike Huckabee, had the inside track in a heavily Protestant state. Not true. The power of public speaking played a large role here.

Some performed well. Mitt Romney gave a flawless delivery both at his morning breakfast with supporters and later on the floor. He gave a great speech that few Republicans could possibly disagree. Romney has a strong presence in person and one can understand why his supporters back him with such passion.

Others did not. Ron Paul gave a somewhat rambling address. Just when he made a strong point about values that libertarians and Republicans share, he would haul out an extremist comment or historical errors. Historical errors are forgivable. Romney claimed that John Adams wrote the Constitution when Adams was actually serving abroad. That's fine because Romney did not base his policy plans on those errors. Paul asserted that Congress passed laws forbidding "entangling alliances." That actually came from Washington's Farewell Address and many historians believe that he only meant that for the temporary period in which the US would be vulnerable to foreign intrigues. Paul then blundered by forgetting that the United States Navy, not privateers, defeated the Barbary Pirates. His reference to being a Baptist seemed forced.

McCain's guest speaker, former Louisiana governor Buddy Roemer, looked like a great singer who kept hitting false notes. He seemed congenial and had I been a Louisianan I would have enjoyed his speech. Roemer proclaimed that LSU was the greatest college football team in the nation and implied that he'd rather have been in New Orleans than Charleston. Later he made a small joke about Presbyterians while mentioning the different denominations that helped Hurricane Katrina victims. In doing so he omitted the West Virginia National Guard who played a very important role. A delegate behind me asked if he was trying to get people to vote against McCain.

Mike Huckabee spoke extremely well. Coming from a poor small town background in an impoverished mountain state, he knew how to speak to West Virginia Republicans. Contrary to Democrat claims, many current West Virginia GOPers came from poor and difficult backgrounds. Huckabee joked about Lava soap, a product often used to get dirt or grease off the hands. He claimed that it was not until he was about twenty that he understood that a shower was not supposed to hurt. Huckabee was warm and endearing and swayed many delegates to at least see him as a vice presidential possibility.

In many ways the convention proved a success. For me personally it was a fascinating experience. As a student of the history of politics, this was a rare opportunity to witness how our candidates were chosen before the era of primaries. Hopefully the hard feelings that emerged during the convention will pass quickly so we can get to the business of getting our state behind the next president