Politicians That Promise Lower Taxes

Recently, I’ve heard from a lot of readers who have asked me whether they should give priority to voting for a candidate that promises to cut their taxes. My answer to them is a nice and decisive “It depends.”

If you’re primarily looking to vote for a candidate that will help your bottom line, there are several aspects that you need to look at. Please note that any direct mentions of candidates isn’t an endorsement of their politics as a whole, merely an example so you can see what I mean.

First, is the candidate running for an office that could directly impact your taxes? Generally, legislators usually have the power to influence taxation, so candidates for the Senate and for the House of Representatives can at least have some influence in that debate. Executives, like the mayor, the governor, and the president, have limited impact unless they’re very popular or they have access to a line item veto (which enables them to trim budgets as they wish) or their party controls both houses of the legislature (meaning their proposed budget is close to what will actually be passed).

Second, does the candidate have a track record of actually supporting that position? If you have a candidate talking about cutting taxes but their past shows that they have not cut taxes, you can be reasonably confident that they’re blowing smoke. For example, Rudy Giuliani has an extensive record of tax cutting and he is promising more of the same as President, so I would be inclined to believe his promises on tax reduction.

Third, does the candidate match your other views? If you’re looking at Presidential politics, there are a lot of tools to identify candidates that match your views. (which indicated my best two matches were Ron Paul and Dennis Kucinich – I’m not even sure how to interpret that). In 2004 and 2006, similar tools appeared for Senate and House races all over the internet, so you should be able to use such tools again in future elections.

In local elections, make an effort to get to know the candidates. Find out if they have any forums. Quite often, they’ll have a free meal involved and it’s a great way to get to know your community. In 2006, I had five free meals on behalf of candidates for various positions, where the candidate ate with us and discussed their stances.

In short, if you’re voting with your wallet first, you’re likely to have a set of positions on a lot of issues beyond just taxation. Find a candidate that best matches those views and support that candidate, even if the candidate seems to not have a good chance of winning. Remember, Jimmy Carter was polling at less than 4% in early 1976 and he was the president in November – don’t let opinion polls sway you at all.

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  1. lorax says:

    If you’re old enough, you can finish this sentence:

    “Read my lips…”

    You can’t rely on what a candidate says during an election campaign. (Except for Josiah Bartlet!)

  2. guinness416 says:

    I can’t conceive of only voting with my wallet, but I suppose if any community represents the “I’ve got mine” position it’s the moneyblog bunch. I’m inclined to the lorax position above – you mention Giuliani, but he’s already speaking contrary to his track record on immigrants, for example.

  3. Trent Hamm Trent says:

    I don’t trust politicians either, which is why I don’t encourage people to use the sound bites as a basis on which to vote. You should use a wide variety of issues, for starters, and make an effort to find candidates that match your views, not the one that the talking heads on Fox News or CNN say is going to win.

  4. SJean says:

    Only if while cutting taxes, they also can manage to balance the budget!

  5. js says:

    Why should I believe politicians that say they are going to cut taxes who don’t also have a plan to cut spending? It’s gotten so I hear “cut taxes” and think “deficit spending”. I don’t believe that’s good for the long term future of the economy. And incidently I pay a boatload of taxes (I think way too much for my very middle class income!), but I’d rather pay taxes than watch the debt increase stupendously every year.

  6. CV Rick says:

    One other consideration that those of us in Minnesota have learned the hard way is what a politician means by “taxes.” Our Governor absolutely refuses to raise taxes, however all the fees and costs associated with Government services and licensing have gone through the roof here.

    As a side effect of not raising taxes, he cut support to local governments and schools which in turn caused those organizations to raise property taxes and fees.

    Bottom line is that it’s far more expensive to live here now than it was four years ago. But on a technicality, taxes weren’t raised.

  7. ScottMGS says:

    Assuming that the prospective electee intends to cut spending in proportion, take into account *what* s/he intends to cut and the effect that will have on daily life for real people. Will it positively or negatively affect health care, food production, oil subsidies, the country’s ability to attack other countries, the country’s ability to protect itself from attack, the environment (local and global), education, etc.

  8. Nine Circles says:

    Voting for someone based on promised tax cuts is so short-sighted. I’m sure many people voted for the idiot we have in the WH now because he promised and certainly delivered tax cuts. Not only is the country in a ridiculous mess now, but we’re going to be paying for those tax cuts down the line in a myriad of ways. When people vote, they should be voting based on what’s good for the country, not their wallet.

  9. Jim Lippard says:

    Ron Paul and Dennis Kucinich are both principled politicians who vote consistently with their principles (though their principles are quite different). Most of the other candidates are not at all principled, with Romney and Giuliani being among the worst.

  10. Katy Raymond says:

    Trent, I SO agree with ignoring the talking heads. At this stage of an election cycle, it’s important to find a candidate who reflects your values and get behind him/her. If they’re at the bottom of the heap, who cares? They might rise to the top if you throw some energy into the process.

    I am behind Ron Paul all the way, even though the heads claim he doesn’t have a snowball’s chance. He doesn’t just claim to be for lower taxes, he wants to get rid of the federal income tax altogether. He believes it’s unconstitutional, as do I. Unlike other candidates, it’s easy to predict what Ron Paul stands for before you even hear him speak about that topic, as his positions always line up with Constitutional principles. He doesn’t flip-flop! I find that refreshing.

  11. !wanda says:

    Five free meals?! Oh, right, you live in Iowa.

  12. mgroves says:

    Cutting taxes doesn’t necessarily mean lower government revenue: take a look at laffer curves.

  13. Cat's Staff says:

    No one will be in a position to cut all your taxes at once… If the Governor will veto anything that will add or increase taxes to stay true to his “no new taxes” pledge, then local governments may have to raise taxes. The roads need to be plowed, and roads need to be fixed, bridges need to be repaired.

    Every Minnesota Governor that I can think of has invoked the 1974 image of Gov. Anderson on the cover of Time magazine with the caption “the Good Life in Minnesota” during State of the State speeches as if to say “We could have this again!”. Sorry, but we are not all going to have it at this rate, only the few who can afford it.

    There is nothing wrong with taxes if they are well spent. Think of it like economy of scale. There are places in Mexico were each block has to come up with the money to pave the street. If they can’t come up with it their block stays dirt. There are some streets the are paved, dirt, paved, etc. In the end it costs more to pave the streets, that’s not a very efficient way of spending money.

  14. Amanda says:

    Take it from a New Yorker – anything that comes out of Giuliani’s mouth is a lie. He won’t cut your taxes. He wants to make government bigger – which means either borrowing more money from the Chinese (a rock) or stealing more from the American people (a hard place). If he gets elected, it’s the taxpayers that are going to be between that rock and that hard place.

    And just what is wrong with Ron Paul, pray? He’s the only Congressman whose voting record is 100% consistent with his principles. Now THAT’s the kind of guy you want as president. (Which is exactly why he’ll never BE president, I guess.)

  15. Ryan says:

    also consider what exatly those taxes pay for. A while back in Virginia, Gilmore ran for Gov on a platform to eliminate the car tax. he won and eliminated the tax (about 8 bucks per car per year – my fam saved about 16 bucks per year) and the public education system suffered greatly (and still does). Of course VA has pretty low taxes anyway and you cant attribute all the problems to cutting the car tax – but it surely didnt help!

  16. Laszlo says:

    Taxes and spending are two sides of the same coin. Anything the government buys now will have to be paid back through taxes eventually (with interest!). The current administration pushed through some hefty tax cuts, yes. But they were coupled with huge spending increases.

    Focusing solely on whether a candidate cuts taxes is a mistake. They could simply be making a huge mess that needs to cleaned up (and paid for) by later administrations with the taxes of our children and grandchildren.

  17. q says:

    I second Ryan and Laszlo’s points! A big anti-tax movement swept through my state during the time I was in college. It saved my family probably $60 a year in cash… and severely impacted the major public university that both I and my younger sibling attended, such that by the time he got there tuition has increased by a substantial amount and a lot of the best professors were being hired away.

    It also compromised the public transportation system; the excess my parents pay in gas since they can no longer commute easily by bus is significantly more than the $60 a year.

  18. consumer_q says:

    I am fine with paying my fair share of taxes, but as others have noted, cut some spending. Perhaps divert some of the gun money to more butter…?

  19. Snit says:

    I am a professor at a state university in a state in which property taxes are being cut this year. Yippee! But so are the classes we can offer to our students, the number of new students admitted into our university, our raises, our research databases, and yep, our morale. Many our fleeing to other states where education of youth is valued. I can only imagine what other state employees are having to face — esp. those engaged in educating k-12, fire and police and other rescuse workers. I’m not running off myself but have been warned twice by my city works that utilities will be going up significantly, one by 45 per cent. Remember when you vote — taxes cut means costs occur elsewhere…nothing is “free,” not education, not safety, not paved roads, not water, sewer, energy.

  20. Trent Hamm Trent says:

    Nothing’s wrong with Paul or Kucinich… I just found it strange that my best two matches were with a paleoconservative and probably the most liberal Democrat.

  21. Heather says:

    The 2001 tax cuts actually wound up raising our taxes, because it pushed us into AMT-land. So you have to take a second look on a proposed tax cut and where you are relative to triggering AMT. As long as AMT exists, lawmakers can “cut taxes” a lot without actually reducing your tax load!

    * “reducing households’ tax liability under the regular income tax without changing what they owe under the AMT … increases the number of households that owe the AMT”

    * AMT is estimated to affect (by 2010) “37% of households with income between $50,000 and $75,000 and 73% of households with income between $75,000 and $100,000 (compared to less than 3 percent for each group in 2002).”

  22. Jason says:

    Oh FairTax, how I long for your simplicity!

  23. B. Gonzalez says:

    I don’t understand how a bunch of people concerned about being frugality can ignore that since tax rates have fallen across the board tax receipts have increased on the Federal and state level, except for states that have had legacy industry declines, there are many states operating at surpluses – hell, there are states doing all they can to make ailing programs like food stamps “no questions asked” entitlements and going so far as to advertise (in Spanish I should add.)

    Secondly, I don’t think you people are taking into consideration the new taxes that were created that were supposed to be push education over the top – everything from the lottery to 300% tobacco taxes. How about the new trend for taxation in the form of fees? In Louisiana, they added a $1 fee to milk after dropping the taxes on groceries to 3%.

    For one, a politicians primary source of power is the ability to tax. The first bullet point in their job description is to get re-elected.

    I am seriously beginning to question every bit of information that I read here. Especially when one very tragic bridge collapse in a nation with hundreds of thousands of bridges can all of a sudden mead the infrastructure of the country is in collapse. Speak to fresh from surviving the shark filled waters of the Gulf fleeing Cuba if you want to know what a crumbling infrastructure is like.

  24. Steven says:

    President Bush has done more damage to this country than the carnage on 9/11. He’s been spending our money like a drunken sailor.

    When President Reagan left office, every man, woman, and child living in this country owed $23,000 dollars as his share of the federal deficit.

    When President Clinton left office, for the first time since President Kennedy, we had a budget surplus. Clinton’s growth policies plus some good luck managed to wipe out the federal deficit.

    And then along came Bush. When Bush leaves
    office in 2009, every man, woman, and child will
    owe $300,000 toward the federal deficit. That
    chicklette brain managed to go through the Clinton
    surplus and make Reagan’s administration look
    like a balanced budget.

    Nobody mentions the federal deficit and the
    mind bogling interest we pay to support this
    administration’s policies.

    But it has to be paid! This means tax increases
    and eliminating the tax breaks for the wealthy.

    This should have been done yesterday.

  25. plonkee says:

    I don’t care who you lot vote for, I just say that you should vote for the person who would be best for society as a whole, not necessarily best for you personally.

  26. rhbee says:

    It is so encouraging to me to read such level-headed commentary from what I take to be a wide cross-section of people. Maybe there is hope for this country via the election process, afterall. One thing I haven’t heard mentioned much is the obscene amount of money the candidates are raising in order to wage their campaigns. How did it ever get to this state? And why are we supposed to be so impressed by how much they raise?

  27. Judith says:

    Like others, I’m more impressed with a candidate who wishes to reduce spending instead of one who simply voices a promise to reduce taxes.

    @rhbee Nice point. I would have thought that the more they raise the more turned off we should be.

  28. Tristan says:

    I would vote for the politician who promises to tax the rich and help the poor with the gains. I’m sick of leaders who steal from the poor then use tax dollars to provide corporate welfare, endless war, tax cuts for the rich, pork. The government is suppose to be for the people. Not for the elite and corporations.

    Our government needs to get with it and join every other western nation in providing fully, tax funded, universal health care for all citizens. If our taxes were spent to help people instead of killing them we would need no new taxes.

    In the end, I will vote for the most Socialist candidate. As a Christian I have to support those who have the most Christ like stance. If they have to raise taxes to care for the least of us then so be it. I’ve had enough of elite leaders who pretend to be Christians while oppressing needy Americans for gain.

    Here is some more information: http://www.nyu.edu/projects/ollman/docs/practical_christianity.php

  29. Dan says:

    Trent, I hope you read through the politicians answers and how they were mapped to positions in that web tool you pointed out.

    I read through them for several candidates and they do not map well.

    I.e. If a candidate supports long prison sentences for gun crimes then this tool indicates that they are against gun ownership.

    If a candidate is ok with a moment of silence, then this tool says they are in favor of teacher led prayer.

    etc.

    So, at best, you should be sure to read the whole site and not just see your top matches.

  30. natureboy says:

    I certainly am disappointed with questions you’ve posed in your blog. You forgot:

    6. Cut whose taxes? Republicans have done a gret job drastically cutting the taxes for the rich while throwing a few scraps to the poor.

    7. At the expense of which services? I’d be happy to pay more in taxes for the security of knowing my bridge won’t collapse for disrepair, my kids will have a decent education and having health care no matter if my employer lays me off.

    8. Are they willing to lower spending? Republicans have boosted spending in all the wrong areas, and future generations will suffer paying for our deficit.

    I’d just point out, tax is good. I enjoy paying my state tax, knowing all the good that comes of it. I dislike paying my federal tax, knowing all the money pissed away on a stupid war.

  31. sharon says:

    If a politician promising to cut your taxes is all you need to make your decision, I suggest you stop & think about what taxes do pay for — when they’re spent correctly. Police & fire depts, public schools, libraries, clearing snow from your streets … the list goes on. I’ve always believed that paying taxes is the price you pay for living in a civilized society (not sure who originally said that), but those who’d have you believe that you’d be better off by paying less taxes will likely not reveal what will be raised or cut to make up for the government’s loss of your taxes. Your local school might not get necessary funding for new books or repairs, Pell grant aid might get cut … that list goes on as well. What good is getting an extra $200/year from my taxes if I’m going to have to pay more to go to college? Better, I believe, to become and remain a well-informed voter & citizen and really pay attention to how the officials (who work for us) are spending our money. Yes, we’re all on this website to learn how to better manage our financial lives (among many other things – thank you!) … but who among us would not gladly pay more in taxes if it meant truly taking care of the less fortunate among us, especially considering that many of us might be, have been, or might in the future be in that category?

  32. Elliot says:

    Wow this blog moves fast, this post is already on the second page!

    Well, I’d like to say that if the author applied the same strenuous cost/benefit analysis he used in a previous post to determine if a second freezer should be purchased(http://www.thesimpledollar.com/2007/07/16/is-a-deep-freezer-worth-it/) to the question of voting, i would think the only advice would be… don’t vote. The chance of an individual vote affecting the outcome of the election is extremely unlikely. Thus, informing yourself to vote for the right candidate can be seen as a waste of time economically since whether you vote “correctly” or “incorrectly”
    doesn’t matter. To tip the scales of an election, the election has to be tied and your vote has to be the one vote that elects the politician. That rarely happens in large electorates however.

    If one enjoys learning about politics then sure, go learn about the candidates and have fun debating. I personally enjoy politics and follow it for that reason. To follow politics because you believe your individual action in the voting booth will affect your pocket book, however, is foolish.

    The tip about getting free meals at political events is good too. I’ll have to try that sometime.

    -Elliot

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