Taxes and Unintended Consequences

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Taxes and Unintended Consequences

Sky high property Taxes and the unintended consequences that will follow, if not addressed, is very serious problem for rural Nebraska. When addressing any problem, the only things that matter in the analysis are the similarities and finding what dysfunctionality made it into a problem.

History and network news tells us about all the things that went wrong which is about as helpful as using only your rear view mirror to drive a car and never looking at the map. The sad part about history and news is these terrible outcomes are predictable, but until they actually happen no one wants to think about them “until the horse is already out of the barn, then saying we should have closed the barn door.”

The past is gone and will never return. The only thing that really matters are those things that have been shown to work reasonably well that got us to this point in time. These solutions are all found in science, physics and economics courses, not in history books.

During my career I have traveled to many foreign countries and notice numerous parallels that do not bode well for the future of our country. The history of these governments, repeatedly show examples where the core values of fairness, truth, sustainability and integrity were violated resulting in dire consequences with unimaginable pain and suffering inflected on a large part of their population.

In Greece, for example, the rural citizens were treated like step children with the urban population delighted to tax all the farm land to support a dysfunctional government where most of the government workers lived. The problem came to a head when the farmers were so heavily taxed, they could not make a viable living by farming.

They quit farming, moved to the city and worked for the government. The curse of inheriting farm land was a “kiss of death” as no one could afford to pay the tax on the ownership. Today much of the land is owned by the government and the land lies fallow with squatters eking out a bare subsistence on small plots .

Now 30 years later these former farmers, who now work in the government, are retiring and want their promised pension, but no one is paying their taxes. They all know the government is wasting their money supporting these pensions and lavish lifestyles. They conclude “Why pay taxes and only get half of it back?” So they pay no tax and keep it all. The real hypocrisy is the Greek Government wants the European Union to bail them out with loans to pay these pensions. Greece also knows the European Union wants them more than they want to be in the EU. If Greece was outside the EU, they could continue to print nearly worthless money to pay these pensions. That stopped when they joined. They can’t print their way out of the problem any longer.

The result is a Greek government that is broke. The only people working are in the government or the tourist industry. They grow little of their own food and have few exports as no one is making anything except souvenirs for visitors. Tourism is all the Greece has and it is a beautiful country to visit…..lucky for them.

The same thing is happening in Nebraska, except for the tourism, with the unintended consequences a cold civil war, if not addressed. The property taxes are not fair or sustainable. Taxes are becoming the highest single expense item for anyone in the agriculture business. The difference, we do not have a tourism option like Greece and there are not enough government jobs for those leaving the farm. The farmers have a feeling of being stepchildren who are there only to support the urban schools and their life style. This will grow into a rebellion if the unfairness issue is not addressed. This is similar to the situation that is happen in Spain, as well..

Government must operate like a business. They must live on the supply side and not the demand side. Raising taxes to continue paying for all their pet programs is not acceptable. In businesses and families, they know they can’t borrow to go on vacation. Governments must learn how to invest tax dollars and not spend them to get votes.

The only reason a war ever starts is when there is a direct disagreement on what is fair, honest, sustainable and has integrity. To address the property tax problem, these core values can not be violated. The current property tax situation in not fair, honest or sustainable.