Editor’s Preview: Dean Kleckner, president of the nearly four million-member American Farm Bureau Federation, speaks out on his pivotal role on the National Economic Commission and on growing public opposition to more taxes.
Reducing runaway government spending, not increasing the tax burden is the answer to the U.S. “debt crisis.” Over the next five years, tax revenues will average $70 billion or more, according to Kleckner, but “there is a shortage of political spending restraint. The money can never flow in fast enough to keep afloat a Congress hell-bent on promising everything to everybody, including farmers.”
This special Shavano Institute presentation was delivered on May 12 on the Hillsdale College campus.
Dean Kleckner, is the president of the American Farm Bureau Federation. Prior to his election in 1986, he served as president of the Federation’s Iowa Farm Bureau for ten years. Still active as a farmer, Kleckner has attracted worldwide attention in his drive to reform the GATT trade agreements to reduce protectionism and in his crusade against new taxes. A member of the National Economic Commission, in recent years, he has led the fight against turning the Commission into a “cover” for increased taxes.
Unlike other varieties, our “tax crop” seems to do well regardless of the weather. These days it takes more brains, time and effort to make out the income tax forms than it takes to make the income.
1914 was the first year income tax was collected in this country and the average per-capita tax at that time was just 41 cents. Only one percent of the population was obligated to pay taxes at all. Contrast that with here and now. These days, the average per-capita tax is closer to $5,000 and just about everybody has to pay taxes.
It’s illogical to carry such a comparison too far. After all, taxes and laws are the penalties we pay for civilization. We like running water and electric lights and parks and playgrounds; we even support that misnamed “postal service.”
At one time, the expression “rural roads” was a great oxymoron. The rule, in our parents’ and grandparents’ day, was that if it was “rural,” it wasn’t much of a road. Fortunately, that’s changed. These days, most of us wouldn’t care to drive over a national network of dirt roads. We wanted better roads and we agreed to pay for them. Boy, are we paying for them. As the toll roads have taught us time and again, there’s nothing “free” about a modern freeway. I find it interesting that the word “turnpike” is said to have originated in the days when toll collectors were armed with actual pikes, those long-handled weapons with sharp iron heads wielded to prevent travelers from using the roads without paying the tariff. But testing the need to pay the tariff is a very human trait—and, in fact, a very positive trait in terms of personal freedom. Of course, to be effective, one has to use discretion in a complex society.
Fed up with all of the Tri-State tollway construction, one Illinois motorist recently refused to pay his tolls. He concluded that the stop-and-go traffic, the potholes, and ripped up sections exempted him from having to pay the toll fee. Because he didn’t want to encounter the modern version of the pike-to-the-head, he explained his objection and left his business card at each collection point. No money, just his business card. It was quite a legal battle. The driver contended the tollway authority was obligated to provide driving conditions worthy of the fees it collected. Failing this, the man said, people shouldn’t have to pay the tolls. But, as you can guess, he lost the case.
Regardless, a lot of people were rooting for him. And, perhaps that tells us something about the mood of America.
Most of us have rather vivid and, perhaps, emotional memories of each April 15th income tax deadline. And while taxes may be the price we pay for civilization, there are a growing number of citizens who feel we have become sufficiently civilized. At least for now. At least until we can catch our breath enough to see if much of the road “repair” is caused by prior shoddy work or construction mistakes or some form of political payoff. Or decide whether the local forest preserve really needs to “preserve” additional hundreds of acres. Or whether the national park service really needs more tax dollars to add a multi-million dollar commercial resort-sized “wet and wild water slide” to the public entertainment sector this year.
A prime example of unnecessary spending schemes is the “American Heritage Trust Fund”—once more being considered by Congress. If you haven’t heard about the American Heritage Trust Fund Act, you ought to know that this is a bill to create a billion-dollars-per-year government land acquisition program. This would be a permanent, self-perpetuating revolving trust fund of between $25 and $30 billion, operating pretty largely at will, without oversight, forever…or until available land runs out—or taxpayers cut off the funds—whichever comes first.
We have grown so used to paying a multitude of taxes these days that most of us have forgotten that at one time it was common for individual citizens to confront the tax system. Most of us don’t even remember that this country was partly founded as a way to avoid paying taxes. (You know, all that fuss there in the Boston Harbor.)
Let me add that there is no provision in the American Heritage Trust Fund to assure the land is acquired from willing sellers. Rather, government agencies, local, state and federal, have the authority to “take” the land without the owner’s consent.
The “American Heritage” Trust Act has been deliberately misnamed in an attempt to add to its public appeal. It could more appropriately be called the “Family Farm Condemnation Act” because time and again, that’s just what would happen. All levels of government, local, state and federal, would receive monies to acquire private land for recreation or open spaces. All these levels of government would have the power to condemn a farmer or rancher’s property to gain this land.
How do you think that would have played in Boston back in 1773?
In fact, the American Heritage Trust proposal is not playing so well in Washington right now. I am pleased to report it faces considerable opposition from many individuals and groups, including the American Farm Bureau Federation.
Remember, the proposed act is not a self-financing piece of legislation. Rather, the act would create a huge, new off-budget spending program; one that the “OMB” Office of Management and Budget says would increase annual federal spending by $1.2 billion per year. Government, already the nation’s largest land-owner, would add tremendous amounts of new land to its holdings. Thousands more acres would be transferred from productive, tax-paying private ownership to public, tax-consuming purposes.
These are some of the reasons why farmers and ranchers have joined with 36 other private organizations to oppose the American Heritage Trust Fund. Included are: the National Taxpayers’ Union, the U.S. Chamber of Commerce, the National Cattlemen’s Association, the Competitive Enterprise Institute, and a long list of other concerned groups.
Frankly, we need your help. May I suggest that your congressman needs to hear from you—and, not only on the issue of the land trust fund, but on federal taxing and spending policies in general as the federal deficit continues, as bold new taxing plans such as the proposed twenty to fifty-cent tax increase on each gallon of gasoline are outlined. And don’t forget the “value added” national sales tax that Washington spenders would just love to see. Every time any of these great new taxing or spending ideas surfaces, your representatives in Congress need to hear from you.
As you may have suspected by now, my theme can be summed up in just four words…just about the right amount to fit on a bumper sticker…“No to More Taxes!” Not all taxes everywhere, all of the time; we like civilization too, but remember, an elephant is a mouse built to government standards.
We should say: “No to More Taxes” to finance a continued expansion in Washington spending in the face of an incredible budget deficit and an incomprehensible national debt. We have had tax increases—any number of them—but if new taxes were the answer to the budget deficit, it would no longer exist. There actually are figures to show that for every new tax dollar received, today’s Congress gleefully spends something like a dollar and a half. We say “no” to the American Heritage Trust Fund because, first and foremost, it would increase government spending and taxes. We say “no” to any additional gasoline taxes or crude oil import taxes, or national sales taxes, because under present conditions, they would increase government spending and taxes. And we say “no” to more taxes that are proposed as the means to reduce the deficit. We know better.
There is no lack of federal revenues. There is no need to raise taxes to balance the budget. Federal tax revenues have risen dramatically since 1981. Money continues to pour into the treasury. The catch is, it continues to pour out even faster.
Tax revenues have been increasing at an incredible rate, up by an average of $60 billion per year for each of the last five years. This year, increased revenue to the federal government is expected to exceed $80 billion. Eighty-two billion dollars in revenue growth is projected for next year. Now, if Congress can’t live on that with some to spare for deficit reduction, then we need a new Congress. We certainly need new federal spending policies. Congressional budget office figures project average yearly growth in federal revenue over the next five years at $70 billion or more.
While there is no shortage of federal revenue, there is a shortage of political spending restraint. The money can never flow in fast enough to keep afloat a Congress hell-bent on promising everything to everybody, including farmers.
The good news is that the public, the voting public, that is, has caught on. A very large portion of the voting public now understands that simply restraining the growth of federal spending to the rate of inflation, essentially leaving government spending unchanged in real terms, by itself, will cut the federal deficit by $16 billion per year. Under these less-than-ideal conditions, the total federal deficit would be eliminated in just four to five years!
President Bush was right, you know. He has read the voter’s lips and they are saying, “No, no, no” to more taxes…no more taxes until Congress cleans up its act…”That’s what people are saying. I think the very negative public reaction to recent proposals to boost congressional pay was evidence of this as is the growing public opposition to the large proposed increase in federal gasoline taxes and to other forms of “energy” or “consumption” taxes.
The negative public reaction to all of this tells me that President Bush’s current anti-tax stand is right as rain. For the record, President Bush told the American Automobile Association that “As president I will oppose any attempt to raise taxes to balance the budget. That means gas taxes too.”
The myth that additional taxes are the cure for the budget deficit has been thoroughly exposed. I’m proud that farmers and Farm Bureau have headed the list of national groups that have been effective in doing this. I am also terribly proud of Farm Bureau’s continuing national “No To More Taxes” campaign which was begun well before the 1988 election.
What I’m not particularly proud of is the attitude, at least early on, of the National Economic Commission. The Commission, you will recall, was charged by the previous congress with finding means to cut the federal budget deficit without impairing national economic growth.
As a member of that Commission, however, my immediate impression was of a pro-tax group designed to provide a tax-raise cover for Congress. I knew this didn’t have to be so, but that’s the way it was designed and that’s the way it was shaping up. My feelings were confirmed when the Commission actually held official sessions to discuss possible new spending programs. Then the Commission decided to have closed meetings on the theory that Commission recommendations might stir unwelcome controversy. That didn’t make sense to me. The paying public always has the right to know about the proposals for which they will pay.
Several colleagues on the Commission shared my concerns and suggested that a public information campaign might turn the Commission—and the Congress—around.
It was also suggested that Farm Bureau itself, with our independence and our almost four million member-families, might get the job done. Farm Bureau decided to fight the pro-taxers. Remember, this was well before the fall election and well before the two congressional salary proposals. Some of the liberal spenders laughed at the naive “country folks” going out for a national “no-tax” crusade.
We used our new satellite telecommunications system to kick off our campaign and to reach a national audience. We printed bumper stickers and buttons and all of the rest of the information aids that have become so necessary these days. We contacted all of the candidates for all of the offices from that of President on down. Every time, we asked that “T” question…“What’s your stand on taxes?” And we pinned them down. And continue to offer post-election support for our elected anti-tax comrades.
Meanwhile, the National Economic Commission labored on…and on, finding it more difficult to reach a tax-support consensus. Those who, at one time or another, served on the Commission—Ludlow Ashley, Paul Laxalt, Lee Iacocca, Drew Lewis, Donald Rumsfield, Bob Strauss, Bill Gray, Casper Weinberger, Lane Kirkland, Pete Domenici, Daniel Patrick Moynihan, Felix Rohatyn, and Bill Frenzel could not agree on a position. But the initial majority view—that taxes must be raised in order to reduce the deficit—began to lose ground. Then, on the first of March in 1989, as required by law, the final Commission reports were delivered to the President and Congress.
I am pleased that both the majority and the minority reports did not call for new taxes. Without increasing taxes or indiscriminately eliminating programs, the majority report provides a workable plan to balance the budget.
It does so, recognizing the facts I recited earlier—that we can expect $70 to $80 billion annual increases in federal income; and that we need to reform the spending and budgetary process, keeping in mind that regardless of income, federal spending has outstripped federal revenues in 18 of the last 20 years.
I think the days of rampant congressional sleight-of-hand economics are gone…at least for now. Let’s make it politically profitable for members of Congress to keep it that way.
Farm Bureau’s “No To More Taxes” national campaign continues. Meanwhile, if that majority report of the National Economic Commission is tossed on the shelf to mildew along with the Grace Commission report on how to cut federal spending…we’ll just have to do something about that too.
Believe me, with the help of hundreds of thousands of informed and involved citizens, there is very little that we can’t do.
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