The six year plan to reduce taxes; Sobel caused heads to explode January 31, 2008
Shoot me, please.
Does the Manchin administration purposely craft legislation with the thought… ‘lets do this because it may actually cause Vic Sprouse’s head to explode?’
The corporate net income tax reduction did nearly that…
The reduction starts in 2009. And, the reduction continues at a snail’s pace until… (drum roll) 2014.
2014?
2014?
The administration is off its rocker.
So, in 2014, when our corporate net income tax is 6.5% and now only 0.5% higher than our surrounding states (assuming of course that those states don’t make any changes between now the 2014), we will finally be able to sell to the business world that West Virignia is open for business.
Geez Louise.
Are they serious?
It’s absolutely unfortunate. Manchin’s advisors have him believing completely that tax cuts for business cost you money. So, instead of actually make a step change and reducing the amount quickly and then selling that change to corporate America, the administration creates its own self-fullfiling prophesy.
What happens when it’s announced?
Yawns occur in corporate boardrooms across America. When we call them, they tell us to call them back on January 1st, 2015.
And what else happens? We lose tax revenue.
Why?
Well, because we haven’t changed anything, we haven’t attracted any new companies because of the change, and we haven’t changed our economic base one iota. Thus, we have less revenue coming in… it’s maddening.
The change helps one person. Joe. He is able to go out and talk about all these changes that he is making, the business community will carry him around on their shoulders like he won the Super Bowl and our economic activity… well, our economic activity MAY change - in 2015 - if other states don’t change between now and then.
Shoot me, again.
I’ve heard a few times on commercials that Joe (and his family) ran a carpet business. You know, when they had a sale to try to spur growth in their store I wonder if their banner read: “Carpet Sale; We are reducing our prices by 2% each of the next few months, so in six months, you’ll be able to purchase carpet for a 12% savings!”
My guess is it didn’t work that way. Why? Because what customer cares today if you are reducing your price by 2%. Maybe they’ll take a look in your store when you finally get to the full savings, but my guess is the other stores will have already beaten you to the punch. Ahhhh… the story of West Virginia’s economic life.
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The Governor should hire Russ Sobel as his chief economist. Then and only then will the Governor start making economic sense.
Sobel spoke to a joint Finance Committee meeting Friday and I’ve never seen more people sit in stunned disbelief. A few may still be sitting in that room facing ahead with blank stares. It was almost like Sobel was speaking a foreign langauge.
The best and most simple point that Sobel made?
That our economy is like an oven baking cakes.
You have inputs - all the money government throws at problems, education, etc. You have the oven, which is government, regulations, and the rules of the game… and you have outputs, the economy, i.e. cakes.
Sobel implored the legislators in that room to stop adding more ingredients and throwing money at West Virginia’s problems. His point was if government and regulations (the oven) are broken, your not going to make more cakes by adding more ingredients.
It was wonderful.
Of course, when Russ started talking about cutting taxes that spur the economy - basically any tax that hits capital expenditure in the state - the legislators practically wept with “how are we going to replace the revenue?”
Russ’ answer was simple - by cutting taxes that spur economic growth.. get this boys and girls… you’ll actually grow your revenue.
The legislators wept again, but what about the lag time between, what are we to do?
Russ’ answer - how about this novel idea - CUT SPENDING.
When asked what we would cut, he said - means test Promise Scholarships.
Kaploueee! A few legislators’ heads nearly burst.
Sobel pointed out that Bill Gates’ kids were eligble for a free education in the state and you know, he might, possibly… maybe… be able to spring for that education himself.
Kapow!
It was awesome.
All the legislative myths that the Democrats have created over the years were completely exploded in about 15 minutes.
It was like they had been told their god (government spending) didn’t exist. They simply couldn’t comprehend what he was saying.
Again, it was awesome.
One other quick analogy he gave that he gives to his students was around private property rights.
He used the example of college roommates. When you have roommates in college what’s in the refrigerator? Well, most likely, nothing.
Why? Well because if you went out and bought a bunch of beer and food, when you got home, they would most likely have been confiscated and consumed by your fellow roommates because you have no property rights in that common refrigerator. So, what happens throughout the year? Well, you can’t trust that you will be able to keep food and beer in there, so you don’t invest any money in food and beer.
The importance of property rights, i.e. your own refrigerator, is that you are much more willing to invest in expensive beer and food if you know your property is secure.
Thus, Russ implored the Legislature to protect property rights from the Kilo Supreme Court decision as a basic fundamental building block in the free economy.
Joe needs Russ. Joe needs someone explaining to him basic economics.
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15 Responses to “The six year plan to reduce taxes; Sobel caused heads to explode”
Joe’s not interested in economics. Joe is only interested in political power he can amass at the expense of this poor state. Those knuckleheads in the legislature are not interested in improving the economic circumstance in West Virginia. They are only interested in the attention that gets focused on them at this time of the year.
This is what happens when there is no viable political party able to challenge the democrat party which maintains a monopoly status in this state.
There are probably not three Democrats in the legislature who actually believe Dr. Sobel. Capitalism is still just a theory. Where has it actually worked? Oh, wait. Everywhere. My fault.
Thankfully, Sobel is smart enough and brave enough to tell people the truth. Having two political parties sure would be useful during this discussion.
I love it when those who believe fiction are directly confronted with truth.
There was a growing, viable Republican Party in West Virginia. I have no doubt that Joe was worried sick for a number of years.
Miraculously, friends of Joe insinuated themselves in things Republican. Committees were changed and miracle of miracles, conservatives, evangelicals, pro-lifers, and second amendment supporters (mostly one in the same) found themselves thrown out and otherwise not welcome.
I believe this started before Joe even ran for Governor, however. In Heathergate the web and tentacles w/ which Emperor Joseph has sought to control everything West Virginia is clearly visible. It is a microcosm of what is going on statewide.
What was a growing, successful Republican Party has been reduced in several years to the old, comfortable, ineffective group the Democrats loved so well. Now that Joe has the committee chairs he wants, no pesky little conservative pro-life, etc. issues will cross his desk to embarass his rising star.
Of course the Democrats do not want Dr. Sobel’s ideas. One, they work w/o Democrats largess and two, Democrats would have to give up standing on the necks of West Virginia citizens. No way!!After all, w/ the Soviet Union gone, we are all they have left.
Joe NEEDS Russ? He’s already had Russ. Russ spent time with Joe and the Legislature. It’s not that Joe needs Russ - It’s that Joe needs to listen to what he’s already heard Russ say. But he doesn’t want to do that. It might cost him something.
Vic, right on with this one.
Cutting taxes aggressively will spur our economy. Throwing money at us, like Bush is doing, will inflate the economy.
But we don’t need a tax cut and spending increase republican here in WV like Bush. Bush cut taxes and increased spending.
The only thing worse than a tax increase and spending increase democrat is a tax cutting&spending incrase republican like Bush.
I’m glad you highlighted the cut spending need in government.
That would produce a smaller government, more transparent government and possible a more constitutional government.
KUDOS!
Russ Sobel and his colleagues have given us a “blueprint”, as Bray Carey said on his show. However, Bray excoriated me for suggesting that the Republican Party adopt “Unleashing Capitalism…” as platform for our candidates, saying that we would only inflame the Democrats who control the Legislature. We need to inflame the populace of WV to demand the changes Russ has suggested. Vic, you are correct that we will see these changes only with a Republican majority. WV need to wake uo or to choose to continue to wallow in mediocrity. Mitch Carmichael is right in demanding that the Legislature start taking GIANT STEPS rather than the baby steps the governor has been promoting.
What is truly amazing is that Sobel had to speak to the STATE LEGISLATURE in language that any 8 year old country girl could understand.
These are supposed to be our leaders. Shouldn’t they be able to function and reason on a level above the average 8 year-old?
And, you know what happens when you purchase carpet. You aquire something designed to hide the cold hard floor [facts] that you have to walk on every day. You get the feeling of a cushy life every time your feet hit the floor.
So, what are carpet salesman really selling you?
Maybe “Unleashing Capitalism” should be converted into an audio book format and hand delivered to every state congressman. It could also be piped throughout the capital complex as ambient sound…subliminal programming!
Do you these politicians communicate with grunts and groans? Is that why WV is still in the Neanderthal age? That’s the impression I get. Time after time, experts such as Sobel and other members of economic think tanks have addressed the WV legislator, with the same results…it doesn’t sink in.
Any college student, who took the required economic courses and barely passed, could understand what you mentioned in this commentary. This leads me to ask the question–did these “leaders” get their credentials from a diploma mill, or are they career politicians acting out of self interest? I tend to believe the later. We need a political shake-down in this state ASAP, or we can look forward to staying in the Dark Ages.
Yes, This is stale as 8 day loaf of bread, but isn’t this what we got with gov Manchin ?
He doe’snt know the truth, and if he did, he (Manchin) cannot handle the TRUTH !
Vic:
I applaud your column, anyone and everyone should forward it and talk about it. The Mitch Carmichaels and other delegates and Senators who understand this are actually banging their head against a wall…..Wake up people! DEMAND SOMETHING…anyone will tell you that someone who makes no mistakes DOES NOTHING!!! We are at the end of our rope in WV. I know I served with these republican house members who bravely tried to abolish the food tax…Craig Blair worked endlessly, only to have the “we must act fiscally responsible speech” sent back at us. I don’t have an economic degree, but I was told by a couple of people with economic degrees that the 150 million dollars that we would put into the hands of our WV citizens would turn over in a moderate economy between 5 and 7 TIMES A YEAR!!!!!!!!!!!!!! Do the math yourself!…..now what did our Governor do? He took 1 % off and MADE A 25 MILLION DOLLAR HOLE IN OUR BUDGET BECAUSE NO ONE CHANGED SPENDING HABITS!!!!!!!!!!!!!!!!!!!!!!!!
Good job….wake up and rally the troops folks!
Former Delegate DEB
If you want money back in the economy then stop gambling.
All the money that goes into the lottery per year would be spent at local businesses intsead!!!!
All the money at tri-state gaming center would be spent at local establishments instead or even better yet, as much as some people spend they might have started a business and hired some one.
If they weren’t gambling they would be bored enough to venture into business.
There’s another good place to start. Stop the gambling.
God Bless
Vic:
Russ Sobel is “duh Man.”
GOP needs to fill its statewide ballot (every House and Senate seat contested) and outfit every one of its candidates with Russ’ book (candidates must read the Book!). Every GOP candidate must suppress their egos and sublimate themselves to the truths contained within — human freedom, property rights, capitalism, morality, limited government, and material well-being all go hand-in-hand.
Ayn Rand had it right and so does Russ Sobel. When the State GOP finally does its job and stands for principal, idealism, and truth; West Virginia and its People will be saved.
Let’s get on with it and stop all the crying and self pity. To date, the GOP remains part of the problem rather than the solution.
Amen Sam!
Russ Sobel is wasting his breath.
This is West Virginia, land of the Unions, Trial Lawyers and big Government which is what the voters want.