By Nick Dranias
Somebody hit the panic button too quickly at the Arizona Republic. A couple of weeks ago, its editorial board declared plans for a Regulatory Tax Credit would result in “regulatory Armageddon.”
No doubt the tax credit has the potential to encourage serious regulatory reform. It would allow victims of excessive regulation to bill the government for its regulatory overreach. But, far from Armageddon, the initial impact of the pilot program proposed by the Arizona House Leadership is downright tiny.
Beginning in 2015, the reform would give taxpayers only a modest tax credit — $1,000 per tax year for individuals and $3,000 per tax year for corporations. The total for all credits would be capped at $800,000 per year—an infinitesimal 0.02% of the $3.4 billion in annual state income tax revenues.
Given the tax credit’s tiny fiscal footprint, the real question is: Why would anyone be against it?
It can’t be the cost of administration. Estimated administrative costs would be roughly $350,000 per year. That’s $50,000 less than what Phoenix recently paid for a single study of excessive government employee compensation.
It can’t be tax evasion. The handful of taxpayers who would claim a regulatory tax credit would paint a target on their backs, risking tax audits if they make frivolous claims.
And it can’t be the definition of “excessive regulation.” To trigger a tax credit, the taxpayer must show that a regulation does not verifiably protect public health and safety or guard against fraud, dangerous occupations or harmful property uses and conditions. This is the very definition of a needless regulation.
Yes, the Regulatory Tax Credit would modestly require the government to foot the bill of excessive regulations for affected taxpayers. Hopefully someday the program will expand. But this would only motivate governments to consider more seriously how and whether to regulate people and businesses. It would not repeal a single regulation government was willing to pay for.
That’s good government – not “regulatory Armageddon.”
Nick Dranias holds the Clarence J. and Katherine P. Duncan Chair for Constitutional Government and is director of the Joseph and Dorothy Donnelly Moller Center for Constitutional Government at the Goldwater Institute.
Learn more:
Goldwater Institute: The Missing Reform: Regulatory Tax Credits
Arizona Legislature: Nick Dranias Testimony in support of HB2815 (at 3:52)
Arizona Republic: Measure Itself Is Excessive
Arizona Republic: Tax credit could guard against regulatory abuse
I kind of agree with Dranias here. This tax credit is necessary since our state legislators obviously dont have the balls to reduce regulation and lower our taxes on their own. They need a crutch to help them reconcile their conservative campaign message with their absolute failure to perform.
ALSO, Please someone tell me where to go to avoid the claptrap and idiotic dialogue between Conserv Am and Tru conserv.
Please, please please.
Alright, enough, Fred! If you don’t like what I or others post here, don’t let the door hit you in the butt on the way out.
Obviously, Shane has chosen to allow our posts to remain. Why? Because I am a Conservative and TC is a liberal. What more cogent sort of debate or discussion could there possibly be in a Conservative blog?
Posts like yours above add NOTHING!
Now wipe your nose, stop your whining, and stop making YOUR objectionable posts.
My posts are concise. You insult people like a 5th grader.
Fred wrote: “My posts are concise.”
So what? Is there a rule at SA that posts need to meet Fred’s ideas regarding what is “concise”?
Fred wrote: “You insult people like a 5th grader.”
Really? Do you remember when you called me a “faggot” or have you conveniently forgotten about that, Mr.5th grader?
Get off you high horse. You post your comments and I’ll post mine. If you don’t like my comments, don’t read them.
Fred wrote: “Please someone tell me where to go…”
Why certainly, Fred. Why don’t you go to Daily Kos. You won’t find either TC or I there and that should meet your requirements and make you happy.
Have a nice day, Fred!
And one more thing, Fred. Stop trying to run Sonoran Alliance. That position is already filled. Unless and until you start paying the SA bills, Shane runs things at SA. If there are posts which he considers to be inappropriate, he’ll delete them if he chooses to do so. If there are posters he thinks need to go, Shane will ban them if he chooses to do so.
If you want to call the shots, start your own blog.
My my my, i seem to have hit a nerve Con Am.
I did call you a faggot after you said something stupid like “oh me oh my” when you were attacking Tru Con. Sometimes you do talk like one. Sorry.
I am not trying to run anything. I am just pointing out a fact – you and Tru Con have monopolized the comments on this blog to the point where it is no longer as entertaining as it used to be before you and Tru Con started flaming each other on every topic.
And stop using the freaking abbreviations like LOL and Roflmao and stupid crap like that, it only reinforces the perception that you are either in 5th grade or over 75 and way out of touch.
Fred wrote: “…you and Tru Con have monopolized the comments on this blog…”
That’s not for you to decide, Fred. This is Shane’s blog, not yours, and he’ll manage things as he sees fit, not as you see fit.
Fred wrote: “And stop using the freaking abbreviations…”
Sorry, Fred, I’m going to continue to use them in my posts, LOL, ROFL. Looks like you’re just going to have to live with that, Fred, ROFL, LOL!
Ain’t it awful to see so many things that you don’t care for and have no power whatsoever to change them!
My, my, my, I seem to have hit a nerve, Fred.
Have a nice day, Fred! LOL, ROFL!
5th grader? You are giving CA waaaaay too much credit.
Hey, you deserve a little credit, Lampoon, for being the only poster who thinks that a Conservative political blog is the appropriate place to talk about your semen fetish:
“Lampoon says:
January 3, 2012 at 6:01 pm
You should go back to wiping up prisoner’s spit and feces and semen…”
“Lampoon says:
January 3, 2012 at 10:23 pm
Guard! We need your ignorant uneducated body over here to wipe up some semen…”
“Lampoon says:
January 4, 2012 at 9:02 pm
And you make a fine spectacle of what the AZ Republican party has left, a closeted simpleton who can only make a living in a prison as a feeble minded guard, scraping off semen from walls…”
Why doesn’t the legislature just cut the red tape? Better yet, cut the tax rates while they’re at it.
Agree with Fred above.
Joining your agreement.
Two additional problems accompany the legislature’s punting on its responsibility.
One, how did they come to the amount of credit needed? If they tracked down how much over-regulation costs, then they must know what those regulations are – why not just finish the job by de-regulating the over-reach. I suspect they just pulled the number out of the air.
Two, paying money back for money lost due to over-regulation is terribly inefficient. It leaves in place the over-regulation, which has its own administrative cost (government staff, etc), but now adds the administration cost of managing yet another section of the tax code.
The legislature needs to do its job. Find where the regulations over-reach, and then de-regulate. The reason they don’t is pure CYA. The fear of the average legislator is that the day after they de-regulate (or curtail regulation) is the day that regulation would have saved some proverbial kid playing in the street.
To them I say: TOUGH. If you didn’t have the intestinal fortitude to do the hard work then you shouldn’t have run for office.
TC wrote: “The legislature needs to do its job. Find where the regulations over-reach, and then de-regulate. The reason they don’t is pure CYA. The fear of the average legislator is that the day after they de-regulate (or curtail regulation) is the day that regulation would have saved some proverbial kid playing in the street.”
Well if the regulation would actually have saved some “kid” playing in the street, wouldn’t that particular regulation be effective, of value and worth keeping because it would actually have saved a child?
Not necessarily.
Remember, I wrote “proverbial kid.”
You can, literally, save thousands of lives every year by over-regulating highway speeds.
Enforce a 35 MPH national max and thousands more will live. We don’t because the losses associated with a higher speed are, sad to say, worth it.
Handcuff all air travelers to their seats …
Mandate food not have saturated fat …
Yada, Yada, Yada
In law we call it a BPL analysis. The benefit of a good, product, service, law or regulation is compared with the probability to loss.
That kind of cold analysis, which we all inherently accept, doesn’t play well when it’s your family that has felt the loss. You can’t effectively tell the person – “Hey, thanks for taking one for the team.”
It doesn’t play well with the press and no legislator wants to be the guy accused of letting “them” get away with “killing” that proverbial child.
That is the root of most over-regulation.
So what over-regulation is on the books now, which fits your description of “killing” that proverbial child, which you believe that legislators should do away with?
I don’t know which regulations are over-regulations.
However, the GW institute and the sponsors of the Regulatory Tax Credit think over-regulation exists, hence the need for a credit.
My argument is in line with the general direction of your comments: if a tax credit is needed, then why not simply identify where the over-regulation exists, fix it, and then save the transaction costs of (1) over-regulating and (2) administering yet another provision of the tax code.
It’s hard work. Certainly above my pay grade … but that is the job these people chose.
I’m just wondering how it is that you think that, “The fear of the average legislator is that the day after they de-regulate (or curtail regulation) is the day that regulation would have saved some proverbial kid playing in the street.”
That’s certainly a possibility but I don’t see a “cause and effect”, actual example of where that is the case. In other words, I’m wondering if that is actually why the legislature might decline to do away with certain regulations.
We know that one of the causes of over-regulation is that states are sometimes threatened with losing federal money if they don’t comply with federal standards. Speed limits are probably the classic example of that. The issue in that case is fear of losing federal money, although that fear may not be shared by taxpayers.
There was the motorcycle helmet law and the law seeking to ban people from riding in the bed of a pickup truck. I’m just wondering what such regulations may currently exist which legislators would be fearful of removing for fear of “killing” the proverbial child.. It’s a plausible theory but needs some actual, current examples to sustain it. Otherwise we can only say that might be the cause of fear and, perhaps, only with certain regulations.