REVENUES THAT SHRINK GOV’T

By Dick Morris on July 13, 2011

Published on TheHill.com on July 12, 2011

As Republicans scrounge for revenue sources that will satiate Democratic desires to extract more money for the public sector but will not run afoul of their pledges not to raise taxes, they should look carefully at some of the ideas pushed by Arizona Sen. Jon Kyl and by Grover Norquist’s Americans for Tax Reform.

There are several sources of revenue that will not grow government, but will shrink it, warming the most conservative of hearts. Conservatives should not reject all efforts to increase revenues. Some are not taxes. Some are good common-sense policies that can help reduce the footprint of the federal bureaucracy, stop unnecessary subsidy of frivolous litigation, and increase our energy self-sufficiency, all while generating increased revenue to use in cutting the deficit.

Americans for Tax Reform points out that the federal government owns 650 million acres of land , which is about one-third the area of the United States. The Bureau of Land Management says that 3.3 million acres are suitable for sale to the private sector. Sell them off! The Heritage Foundation estimates that we spend $25 billion a year maintaining unused or vacant federal properties. Shrink government ownership and raise revenue at the same time.

Reducing the sway that federal bureaucrats at the Department of Interior have over federal land and putting the acreage to good use creating jobs is just the kind of free-market solution that Republicans love — and it brings in revenue. (Auctioning off the spectrum of bandwidth was a key source of revenue in the 1995-96 budget deal that eliminated the deficit.)

Sometimes politicians raise taxes and call them user fees. But artificially low fees really invite taxpayers to subsidize people and businesses that should be asked to pay their own way. This is particularly true in federal litigation. Conservatives embrace the idea of “loser pays” to force plaintiffs to bear the legal fees corporations, doctors and insurance companies must incur to defend against frivolous lawsuits. But what about the costs the taxpayer has to pay? Judicial salaries, court costs and courtroom facilities are all expensive, and user fees should be accurately adjusted so that those who use the system have to pay the costs. In a host of areas, user fees are artificially low and should be raised.

When Kyl first proposed these and other revenue sources, Republican conservatives smelled a rat and criticized what many saw as a backdoor way to increase taxes. And, clearly, we need to be sure that increased user fees are not, in reality, taxes by another name. But it makes sense to ask those who use government services to pay for them. Loser pays is right. But so is “user pays.”

And we should increase our revenues from oil-and-gas leases for offshore drilling up and down the East and West coasts. To lessen our dependence on foreign oil and to increase domestic production and self-reliance, we should speed the leasing process and use the increased revenues to plug some of the deficit.

House Majority Leader Eric Cantor (R-Va.) deserves credit for pulling House Speaker John Boehner (R-Ohio) back from the precipice of a $4 trillion budget deal with $1 trillion in extra revenues. One can see how to increase revenues without raising taxes by the $300 billion to$400 billion needed to cement a $2.4 trillion deal, but when we get up to the $1 trillion range, we have to be talking about real tax increases.

And, if the Republicans and Obama cannot cut a deal and head for a showdown, the House should pass a conditional increase in the debt limit of a few hundred billion dollars, the money only to be used if the secretary of the Treasury certifies that he needs the funds to avert default and that there is no other source of money available. House Republicans need to take the default sword out of the president’s hands, and even a one-house bill for such a conditional debt hike would do it.

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Please leave a comment below - I would love to hear what you think! Thanks, Dick
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