Hickenlooper: “We’re about as low as we can go with taxes.”

Posted by Amanda Teresi on August 25th, 2010
 
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I asked Denver Mayor John Hickenlooper, who’s running for governor of Colorado, about his plan to keep the economy growing and whether he would keep taxes low. Here’s what he said at the July 22 event in Denver:

“The question is that if you’re really gonna try to help the economy, what are my thoughts about raising taxes? And, you know, it’s funny because people keep coming up to me and asking me to lower taxes. And it reminds me of back when I was building my business. I had a couple customers, this one guy in particular came in every week and he always wanted to know what the special was. And whatever the special was, he wanted it a little cheaper; he wanted me to always lower my prices. The next week he’d say well, ‘You sold that special to me last week to me for X, why isn’t it a little less money?’ And we always did, we tried to make it cheaper for him every single time. But at a certain point you can’t keep making things cheaper and cheaper. At a certain point you’re as low as you can go. I think we’re about as low as we can go with taxes. Right? At the state level, the city levels, all the way through. So, I’m not…As I go around the state, I can guarantee you I haven’t found anywhere where people want to raise taxes…”

[At that point of the event at Bogey's on the Park, I was asked to turn off my video recorder, which I did for a few minutes.]

Upon hearing the mayor’s response, two things came to mind. First, we are NOT as low as we can go with taxes. Hickenlooper himself has said that the solution to Colorado’s state budget problems will require growing the economy. Strategically cutting taxes is the best way to do that.

Second, Hickenlooper uses a false metaphor by citing the restaurant customer, but does provides some insight into his own view on taxes. He misses the fundamental difference between taxes and commerce: coercion.

A customer at the Wynkoop Brewing Company (which Hickenlooper co-founded and once ran) or at any other restaurant can choose not to buy the lunch special if the price isn’t right. (Ah, the beauty of a free marketplace!) On the other hand, a taxpayer doesn’t have the choice to forego paying for a government service if it’s seen as too expensive to fit their budget.

You’d think that as a former businessman, current mayor and gubernatorial candidate, Hickenlooper would know the difference between an individual voluntarily patronizing a restaurant and a citizen obligated to submit to government taxation. Perhaps Hickenlooper is over the whole “voluntary” thing now that he only works within government?

After all, customers can be pretty pesky; it’s much easier when you can make people buy what you want.

——-
More about this on the Caplis and Silverman radio show.

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  • ABOUT THE AUTHOR: Amanda Teresi
    Amanda is co-founder and President of Liberty on the Rocks, a nation-wide, free market social organization.

6 Responses to “Hickenlooper: “We’re about as low as we can go with taxes.””

  1. Saul says:

    I’m not actually sure what the point of this video is. Hickenlooper says taxes can’t go lower given the cost of the Colorado State government. Yes, there’s a good analogy to be made with providing food to paying customers - i.e. services cost money. (The issue you bring up about taxes being involuntary - “He misses the fundamental difference between taxes and commerce” - is pretty tangential. Not to mention that it’s doubtful that your accusation is accurate. No analogy is ever 100% accurate, which means anyone can pick at the strings of any analogy. Your attack just comes off as trying to make pot shots at the candidate.)

    But, more on point: the missing piece of your argument is whether or not taxes can/should go lower. Hickenlooper is right that people always, invariably, want lower taxes. Libertarians are especially bad about this. One useful datapoint would be: where do Colorado’s taxes stand compared to other states? According to the tax foundation, Colorado ranks 34th out of 50 states for the highest taxes. That’s relatively low. Also notable is that Colorado’s taxes are the lowest they’ve been in the 30 year chart they provide. Perhaps you’d have a point if Colorado’s taxes were increasing and they ranked towards the top in the list of US states. As things stand, I think you come off looking a bit like the person who’s never satisfied.
    Source: http://www.taxfoundation.org/taxdata/show/335.html

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  2. Amanda says:

    @Saul -

    You’re right, the point is whether or not taxes can/should go lower, however, I disagree that our ranking in comparison to other states should be the measure to determine this. What should determine the answer to this question is whether or not there are areas of the budget that can be cut. I would say that the answer is yes, there are. For fiscal year 2010 we have already spent $9,333,869.28 on a combination of bankcard fees, interest on late payments and a host of other miscellaneous fees and fines. This is according to our new Transparency Online Project website, which was reported by Colorado Spending Transparency here: http://transparency.i2i.org/2010/06/17/states-spending-problem/

    It doesn’t matter to me what other states are paying in taxes, what matters is what our tax dollars are going towards. If over 9 million wasn’t being wasted on fees and fines, I might be a little more satisfied.

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  3. Saul says:

    “I disagree that our ranking in comparison to other states should be the measure to determine this.”
    But it does provide some evidence about whether Colorado is on the more fiscally conservative end of the spectrum as far as how US states rank. It tells you if Colorado is “running a tight ship”, at least relative to other states.

    “For fiscal year 2010 we have already spent $9,333,869.28 on a combination of bankcard fees, interest on late payments and a host of other miscellaneous fees and fines…”

    And that may be something that should be fixed, but considering that there are 5 million people in Colorado, it means that $1.80 per person went to those fees (in the first 8 months). Based on those trends, that will be $2.70 per person for the year. I don’t know how many of those fees can be removed (perhaps half of them could be eliminated, and the other half would be difficult to avoid). But, I don’t think $2.70 per person (or $1.45 assuming we could eliminate half of them) is going to provide much support for the argument that “we could be paying less in taxes”.

    To put it another way, the chart I linked to shows that Coloradans paid an average of $4,359 in state and local taxes in 2008. Eliminating that $9 million (which sounds like a lot relative to an individual person) could lower taxes by $2.70/$4,359 = 0.06% (i.e. six one-hundredths of one percent). Does it make much sense to say “Hickenlooper is wrong about not being able to lower taxes much further. We know this because elimination of fees could lower state and local taxes by 0.06%.”? Do you have some better examples of wasteful spending?

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  4. [...] trail, evenutally, he’s going to say some potentially embarrassing things, like, “Taxes are about as low as they can go,” a statement that as of this publishing, has yet to receive any scrutiny from the mainstream [...]

  5. Amanda says:

    @ Saul,

    I believe you and I will simply have to disagree about whether or not we should be outraged over $9 million + being spent on absolutely nothing, even if it only adds up to a small amount per person. This is just one example. Besides, not everyone in Colorado pays taxes, whether they are too young to work, don’t work, or don’t have to pay taxes due to a low income level. Simply put, the amount is not being split between the 5 million who live in Colorado, which makes the cost higher than your example of $2.70 per person.

    There are plenty of other examples of what most would likely agree is unnecessary or potentially wasteful spending; such as $1,463,179 spent to subsidize art in rich areas like Vail, Telluride, Apen and Steamboat between 2001-2006 as reported by Ari Armstrong here: http://www.freecolorado.com/2005/09/budgetdocs.htm.

    From the same COST site that reported wasteful spending on fees, we find that $72,899,996.09 of state expenditures was spent on travel, and that $764,024 of state money was spent on advertising since July 1, 2010.

    There are plenty of other examples out there and I encourage viewers to check out the new online transparency site to find out for themselves. But please keep in mind that aside from the obvious waste there are also other programs that may seem legitimate, but when looked into further are found to be unnecessary functions performed by our government.

    TOP website (although not easy to navigate) can be accessed here:
    http://tops.state.co.us/

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