...And No Jerry Lewis Telethon!
Donations are starting to come in for the planned enhancement of this web site and its mission of serving as a conservative watchdog on both Tennessee government and the press, and highlighting stories and policies that get ignored or maligned by the mainstream liberal press. We are aiming to raise $1,000 in the next six weeks. The money will be used to establish and maintain a permanent home on the Internet for this information service. We intend to use the funds to purchase new computer hardware and software necessary to revamp the site and turn it into an information clearinghouse for multiple writers to post information and commentary here, more rapidly distribute information, and solicit reader comments and input.

Three ways you can help:
1. Donate via the Amazon tip jar located near the top right corner of this web page.
2. Email me at bhhobbs-at-comcast.net for my mailing address to send a check.
3. Shop online HERE for vitamins and personal care items. (Added bonus: purchases at that online store are exempt from Tennessee's state and local sales taxes - so you can simultaneously help fund this site and stick it to Don Sundquist!) Half of your purchase price will go to the financial needs of expanding this web site and ongoing operating costs.

Why should you help? Because the other side is extremely well-funded and hasn't given up its dream of imposing an income tax and liberal big government on the state of Tennessee.

Thanks in advance,
- Bill Hobbs

The Next TennCare HMO Debacle
Universal Care of Tennessee is a big HMO that is paid by TennCare to take care of sick people. Problem: It hasn't been paying its bills. Universal blames TennCare for not paying it enough money. Either way, its starting to look like the next Xantus or Access MedPlus - two TennCare HMOs that went belly-up. TennCare advocates claim that despite its exploding costs, TennCare has actually saved money. Well, I'd save money too if I didn't pay my bills. But when TennCare and/or its HMOs don't pay their bills, a lot of people and small businesses get hurt. Somebody's gotta be making money off this debacle. Somebody always does. Phil Bredesen, for example, became a multi-millionaire by selling an HMO not long before it went out of business.

Clement's Campaign Cash
One of the biggest donors to Democrat U.S. Senate candidate Bob Clement is HillPAC, the political action committee of Sen. Hillary Clinton, one of the Senate's most liberal members. Why does Clinton support Clement? Birds of a feather....

You can peruse a list of the sources of all of Clement's campaign funds by visiting this page at OpenSecrets.org. Thanks to the publisher of Half-Bakered for the heads up on this one.

The Wisdom of Jackie Mason
I'm not a fan of comedian Jackie Mason. Don't like him at all. But he's gotten some undeserved bad press for dropping a Palestinian-American comedian as his opening act. Big Media spin on the story: Mason, a Jew, dropped Ray Hanania, a Palestinian, in an act of petulant discrimination based on race. But wait... turns out Hanania is an activist for Palestinian causes and excuser of Palestinian terrorists who has written lovingly of the hoped-for destruction of Israel. Hanania has written that he looks forward to the "possibility of correcting the original injustice of 1948 and restoring Palestinian control over all of Palestine." 1948 was the creation of the state of Israel. It was also the year the Palestinians and their Arab supporters rejected creation of a neighboring state of Palestine and instead dedicated themselves to destroying Israel and killing as many Jews as possible.

No wonder Mason booted Ray Hanania from his show. Hanania sides with terrorists.

The weblog InstaPundit brought this to my attention. Wouldn't it be nice if Big Media brought you the whole story? But until they do, trust weblogs to ferret it out.

No Strike
The news just reported that the baseball strike has been averted. The billionaires and the multi-millionaires agreed on how to split up a massive pile of cash. Good. Now we can all stop watching ESPN reports about baseball's labor troubles and spend more time watching... football.

The Liberals' Only Option
The Tennessean scolds the people of Wilson County for not wanting their property taxes raised (to fund construction of a new elementary school), expressing the view that revenue must be raised. In the world of 1100 Broadway, there is never any option other than raising taxes. The editorial in a nutshell: Blah blah blah people don't want higher taxes blah blah blah raise taxes anyway because that's being 'responsible' blah blah blah it's the legislature's fault (because they didn't pass an income tax) blah blah blah do it for the children blah blah blah.

You Wilson Countians don't want higher property taxes? Then you'll have to accept a higher wheel tax, says The Tennessean. Don't like that? That's too bad, because raising the local sales tax would be a "tougher sell."

Here's some ideas The Tennessean doesn't urge Wilson County to consider: Live within existing revenues! Don't buy something you can't afford! Stop putting more and more stuff on the public credit card! Pay off some current debt before incurring new debt that requires more revenue! That's the "responsible" thing to do. And why not consider selling the exising school property to a developer to raise a portion of the cost of building the replacement school? The wise sages at The Tennessean never consider alternatives to raising taxes because, well, because only by raising taxes does government, which The Tennessean trusts implicitly (unless run by conservatives) take more money away from taxpayers, whom The Tennessean doesn't trust unless they vote for liberals.

Boosting Bredesen?
The Tennessean will publish a special feature Sunday, Sept. 1, likely designed to boost favored gubernatorial candidate Phil Bredesen. The feature, titled From Hick to Hip: How pro sports shaped Nashville, will no doubt present pro sports as a boon to Nashville and laud the former mayor for bring pro sports to Nashville. It's a good bet questions over the financial wisdom of the Titans stadium deal and, to a lesser extent, the downtown arena, will be downplayed while the positive but fuzzy "community-building" aspects of professional sports will be emphasized. Bonus prediction: the story will include a racial-harmony angle.

New American Heros
The anti-gun nuts won't say so, but the war against crime got a new hero last week. He's the shooter in this story from South Florida. The anti-gun nuts don't like this either. I found this story via a fine new L.A. blog, Sabertooth Journal.

There's a similar story happening in Memphis - a retiree shoots two home-invaders, killing one. But there's a typically Memphian racial twist. Death threats and a drive-by shooting courtesy of the thug's friends has scared the retiree into moving his family outta the 'hood. Check out this post and this one from Half-Bakered for the details and some wonderful deconstruction of the Memphis Commercial-Appeal's coverage.

War Update
The French give in ... to the notion of war with Iraq, according to today's New York Times. Well, I guess they had to surrender sometime. They are the French.

Road to Loserville
Watt Childress says here that one of them "Republicans for Bredesen" is just a sore loser who had wanted a road built.

Referring to just-defeated state Rep. Zane Whitson, Childress writes: Perhaps their close friendship extends back to Bredesen's last statewide campaign, when he filled Northeast Tennessee mailboxes with glossy fliers telling recipients that if elected governor he would build a new half-billion-dollar highway from the Tri-Cities Regional Airport into rural Greene County, roughly parallel to I-81. The sprawling highway was subsequently pushed by Sundquist, despite its rejection by local voters in a public referendum. The redundant corridor is a pet project of Whitson and state Sen. Tommy Haun (who also lost his recent bid for re-election).

Incidentally, Whitson and Haun backed the income tax, which proved at least as unpopular as that silly road which Bredesen wanted to waste half a billion taxpayer dollars on.

Thanks to the ever-eloquent HB for the link pointing me to this Kingsport Times-News story.

What Teachers Unions Are Good For
Chattanoogan.com offers a good look at how the Hamilton County Education Association - the Chattanooga local division of the statewide teachers union - is doing a good job preventing its members from learning how they could save a lot of money. Read it. Print it. And share it with every public school teacher you know.

HobbsOnline Fundraiser
Donations are starting to come in for the planned enhancement of this web site and its mision of serving as a conservative watchdog on both Tennessee government and the press, and highlighting stories and policies that get ignored or maligned by the mainstream liberal press.

We are aiming to raise $1,000 in the next six weeks. The money will be used to establish and maintain a permanent home on the Internet for this information service. We intend to use the funds to purchase new computer hardware and software necessary to revamp the site and turn it into an information clearinghouse for multiple writers to post information and commentary here, more rapidly distribute information, and solicit reader comments and input.

Three ways you can help:
1. Donate via the Amazon tip jar.
2. Email me at bhhobbs-at-comcast.net for my mailing address to send a check.
3. Shop online HERE for vitamins and personal care items. (Added bonus: purchases at that online store are exempt from Tennessee's state and local sales taxes - so you can simultaneously help fund this site and stick it to Don Sundquist!) Half of your purchase price will go to the financial needs of expanding this web site and ongoing operating costs.

Why should you help? Because the other side is extremely well-funded and hasn't given up its dream of imposing an income tax and liberal big government on the state of Tennessee.

The tip jar is over there ------>.

The online store is here.

Thanks in advance,
- Bill Hobbs

1 Reezon Publik Skoolz Suk
Here's some interesting data you probably won't find in your local liberal newspaper: Across Tennessee, 36 percent of all secondary classes in core academic subjects are assigned to a teacher lacking at least a minor in the subject. That means more than a third of those classes are taught by unqualified teachers. The data comes from The Education Trust, a Washington D.C.-based education think tank, in a report titled All Talk, No Action: Putting an End to Out-of-Field Teaching. Only two states rank worse - Delaware at 37 percent and Louisiana at 40 percent.

The news is even worse for secondary schools with large populations of low-income and minority students. The Education Trust says 40 percent of classes in high-poverty schools are taught by teachers untrained in the field, and 39 percent of classes in high-moinority population schools.

French teachers teaching history. Art teachers teaching biology. Gym teachers teaching English. You get the picture. No wonder test scores in such districts are so low. This is what continuing to throw money at the entrenched public education bureaucracy buys you: untrained teachers and lousy results. No wonder the teachers union is so opposed to merit pay, voucher-based competition and other sensible reforms.

Since 1993, Tennessee taxpayers have spent billions of extra dollars under the "Better Education Program" to reform schools and fix education. It was "for the children." Test scores haven't improved. And the educrats continue to put untrained teachers in the classroom.

The report says, "Fortunately, the new No Child Left Behind Act recognizes that the key to raising student learning and closing achievement gaps lies in access to a highly qualified teacher for all students. That new federal requirement should signal to all of us that the time for empty talk is long over. To provide every student with a qualified teacher, education leaders must take action now to put an end to the practice of assigning out-of-field teachers once and for all."

Tennessee gubernatorial candidate and current U.S. Rep. Van Hilleary was instrumental in passage of the No Child Left Behind Act, the cornerstone of the Bush Administration's much-needed education reform agenda.

The Education Trust's report is available here as a PDF file.

Bak 2 Skool
Syndicated columnist Michelle Malkin takes on the California public education monopoly, which is attempting to criminalize home-schooling, in this on-target column.

"The public education monopoly can't stand the thought of 'unqualified' parents teaching their own children. That is why they are cracking down on home schooling, even as a new study shows that thousands of public school teachers themselves are shamefully unqualified to educate the nation's students," writes Malkin. "Our public schools are filled with substandard math teachers who never took math in college, French teachers lecturing about biology, art teachers masquerading as history teachers and other instructors who have absolutely no expert knowledge or intellectual curiosity about the subjects they've been assigned to teach.

"This is a system whose first priority is self-preservation of its tax-subsidized employees, not academic enlightenment of its captive charges. And they dare to accuse home-schooling parents of educational malpractice."

Malkin notes that, in mid-July, the state Deputy Superintendent of Schools sent a memo to all school employees statewide informing them that home schooling is not an authorized exemption from the state's regulations governing mandatory public school attendance. Home-schooled children absent from the schools will be considered 'truant' unless the parent is a certified teacher licensed by the state.

Already, Sonoma County and San Diego school officials have issued memos declaring home schooling illegal.

Why is California's public school monopoly attacking home-schooling?

Because it is successful.

More than 1.2 million children nationwide are home-schooled and they are running rings around public school students in academic competition, on national tests and in college. This "poses a mounting threat to the government-run education monopoly and to the public school teachers' unions," notes Malkin, adding that "mocking home schoolers as fringe radicals and religious extremists, meddling with their teaching materials, and forcing them to beg public school officials for permission to educate their own children wasn't enough to defeat the growing movement. So now California's educracy has adopted a new motto: If you can't beat 'em, criminalize 'em."

It's sadly ironic given a new report by the Washington, D.C.-based Education Trust, which found that one of every four secondary school classes in public schools are taught by teachers untrained in the class subject.

Thanks to Chuck Muth, head of the American Conservative Union, for bringing Malkin's column and the California assault on home-schooling to my attention. If you don't get Muth's free daily email, you should. Just go to ChuckMuth.com to subscribe.

Smoking Something
The Nashville Scene pretends to smoke out a secret income tax supporter. It's almost funny and aspires to a level of cleverness reached most often by smart-alecky college newspaper staffers writing snarky columns when they have nothing worthwhile to say. Just remember, it's not true. Which, come to think of it, makes it similar to virtually everything else printed in the weekly liberal rag.

.

What's an MBA worth?
Not as much as business schools' hype suggest, says researchers at Stanford University, according to this story from the San Francisco Chronicle. Stanford researchers Jeffrey Pfeffer and Christina Fong "contend that America's business schools aren't effective in preparing students for the real world of business," says the Chronicle. On the other hand, MBA graduates have an average starting salary of $77,000, which is roughly $27,000 per year more than when they started pursuing a business degree, says Dave Wilson, president of the Graduate Management Admission Council.

Bias Watch: Nashville Scene
The Nashville Scene looks at the future of "tax reform" and loads its story with pro-income tax quotes, stats and spin. You'll note that the Scene quotes two pro-income tax people, labeling one an "economist" (but not listing her credendtials), but provides comments from only one person opposed to the income tax, Further note that he is identified only as a "conservative radio personality," although WTN host Steve Gill also is a lawyer and former White House Fellow.

The story also cites uncritically a prediction by Dr. Bill Fox, a pro-income tax economist at the state of Tennessee, that the one-cent sales tax increase will cause $800 million in lost retail sales. What the Scene fails to provide is contect: Fox's abysmal record for accuracy in economic and revenue predictions for Tennessee in the past decade. Let's review: The State Funding Board, which makes revenue projections based in large part on Fox's reports, is almost always wrong and usually under-projects actual revenue. And Fox himself predicted three economic slumps in the 1990s in annual reports to the governor on the Tennessee economy. Each time, the economy grew faster.

One gem in the story: Jason Bell of the spectacularly misnamed Tennesseans for Fair Taxation, which favors a grossly unfair graduated income tax, says the inefficiency of Tennessee state government is because the state spends too little, not too much. Yes. And the alcoholic's problem is too little booze.

Free Drugs!
Can Tennessee's taxpayers afford this? Hard to tell, since The Tennessean doesn't tell us what it's gonna cost Tennessee to provide a prescription drug benefit to TennCare enrollees who qualify for Medicare. Tennessee is one of 23 states participating in a three-year pilot program to offer drug coverage through Preferred Provider Organization insurance plans. Just remember: TennCare isn't the cause of Tennessee's too-rapid budget growth. (Ha.)

Oh Canada?
All those people who insist the Canadian healthcare system is worth emulating are wrong. "When Bill Clinton attempted to reform US healthcare in 1994, his administration often touted Canada's publicly funded, universal access system as a model to be emulated. As it turns out, the Canadian system may be crumbling under its own weight," reports today's Christian Science Monitor.

We may have 40 million uninsured people in this country (millions of them by choice). At least we don't wait three months for an MRI - and those uninsured do get healthcare.

Don't Pay Sales Tax!
This helpful notice from the Tennessee Department of Revenue reveals why you can now save as much as 9.75% on your vitamins and dietary supplements by shopping online here instead of at your local healthfood store.

The savings come from not having to pay Tennessee's 7 percent sales tax and the local-option sales tax that can run as high as 2.75%. You can avoid paying the tax - legally - by shopping online here instead of buying your vitamins at a store in Tennessee. You see, when the legislature raised the sales tax a penny, it exempted "food and food ingredients" from the increase. Ah, but vitamins and dietary supplements aren't "food" according to the legislature, and thus are subject to the new higher tax rate.

Incidentally, this online store sells a variety of other personal care items in addition to a range of dietary supplements from Summit Nutritionals. And all products are exempt from Tennessee's state and local sales taxes because of the Commerce Clause of the U.S. Constitution, which the Supreme Court ruled prohibits states from levying sales taxes on out-of-state merchants that don't have a physical presence in the state. And purchases made at the site have the added benefit of helping fund this website.

Helping Those Who Need It Least
Proponents of the proposed Tennessee state lottery say revenue from the games will go to scholarships similar to Georgia's much-touted HOPE Scholarship Program. But a new study of the HOPE scholarship program and similar programs in three other states says most of the money is going to students from well-to-do families that don't need the help. The study, Merit Scholarships: Who Is Really Being Served?, was released yesterday by Harvard University's Civil Rights Project, and is the subject of this story in the Christian Science Monitor. In Georgia, which spent $300 million in lottery revenue on HOPE scholarships in 2000-01, 96 percent of scholarships went to students who would have attended college anyway, sort of a "Robin Hood in reverse" as lotteries tend to attract mostly lower-income players, whose money goes to fund scholarships for students from upper-income families.

Surging Tax Revenue
According to this report from the state Department of Revenue, total tax collections in the state of Tennessee surged 9.2 percent in July - shortly after the legislature ended the budget stalemate. Franchise & Excise taxes, which had mysteriously dropped in the last months of the 2000-02 fiscal year, rose 55% and 554% respectively in July compared to July 2001, leading some analysts to question whether the Sundquist administration under-reported May and June revenue in order to make the budget shortfall look worse and increase pressure for passage of an income tax to solve a budget "crisis." That kind of political gamesmanship could explain such large increases in July revenue.

Incidentally, sales tax revenue rose 2.07% in July compared to July '01. That's strong growth compared to the 0.2% growth in the just-finished fiscal year. Part of the growth is due to the increase in the sales tax, which went into effect in mid-July, but the rebounding economy also played a role. You can expect very rapid growth in the sales tax as the economy improves - and Tennessee may well end this fiscal year with a sizable surplus.

Tax Increase Fails
County commissioners reject a proposed increase in the Wilson County property tax rate, and will look for another way to fund construction of a new elementary school. Here's an idea: fund the new school by selling the old one. Surely some developer would like that property, located in fast-growing Mt. Juliet. Better to try that route before forcing tax-weary homeowners to shell out even more money.

HobbsOnline Fundraiser
Are you one of HobbsOnline's regular readers? Now is you chance to help further the mission of this web site - which is to act as a conservative watchdog on both Tennessee government and the press.

We need to raise $1,000 in the next six weeks (not $1,500, as previously mentioned). The money will be used to establish and maintain a permanent home on the Internet for this information service and purchase new computer hardware and publishing software necessary to improve this site in ways that will let us offer more information and resources and allow additional writers to post information and commentary here, and more rapidly distribute information.

The easiest way for you to help is to donate via the Amazon tip jar featured in the column that runs down the right side of the page. Amazon takes a percentage as their fee, so if you don't want to go that route, email me at bhhobbs-at-comcast.net for my mailing address.

Another way for you to help is to shop for vitamins and personal care items at this online store. Half of your purchase price will go to the financial needs of expanding this web site and ongoing operating costs. In addition, purchases at that online store are exempt from the onerous Tennessee sales tax, which on a $50 purchase will save you roughly the cost of your shipping.

I'll provide regular updates regarding funds raised and spent. You'll know when we have reached the goal, and down to the penny what every cent was spent for.

Phil Bredesen is going to raise and spend $10 million or so in order to bring his tax-raising big-spending governmental philosophy to the governor's mansion. Surely you can donate $10 to $25 to support this site and its ongoing efforts to push policy in the other direction.

The tip jar is over there ------>.

The online store is here.

Thanks in advance,
- Bill Hobbs

Singing Soprano
The Tennessean wants you to think Jimmy Naifeh can't lose so it runs this story about his massive campaign war chest.

But Naifeh lets slip in the story that the income tax is dead for two years, hardly the long time he indicated previously. So now you can bet Naifeh will try to bring the income tax back in 2005 if Phil Bredesen is elected governor. After all, Bredesen says he doesn't think the income tax is "the right answer" now, but has left the door wide open to changing his mind. And he's never said he'd veto one if it passes the House and Senate.

The Tennessean says Naifeh plans to give generously from his prodigious political slush fund of nearly half a million dollars to help Democrat incumbents and pro-income tax Republicans get re-elected, no doubt in return for their promise to re-elect him as Speaker of the House so he can lay the groundwork for pushing the income tax again two years from now. It's a good bet he won't be helping Rep. Frank Buck get re-elected.

Publisher's News
Are you one of HobbsOnline's regular readers? Now is you chance to help further the mission of this web site - which is to act as a conservative watchdog on both Tennessee government and the press.

We need to raise $1,500 in the next six weeks. The money will be used to establish a permanent home on the Internet for this information service and purchase new computer hardware and publishing software necessary to improve this site in ways that will let us offer more information and resources and allow additional writers to post information and commentary here, and more rapidly distribute information.

The easiest way for you to help is to donate via the Amazon tip jar featured in the column that runs down the right side of the page. Amazon takes a percentage as their fee, so if you don't want to go that route, email me at bhhobbs-at-comcast.net for my mailing address.

Another way for you to help is to shop for vitamins and personal care items at this online store. Half of your purchase price will go to the financial needs of expanding this web site and ongoing operating costs. In addition, purchases at that online store are exempt from the onerous Tennessee sales tax, which on a $50 purchase will save you roughly the cost of your shipping.

I'll provide regular updates regarding funds raised and spent. You'll know when we have reached the $1,500 total, and down to the penny what every cent was spent for.

Phil Bredesen is going to raise and spend $10 million or so in order to bring his tax-raising big-spending governmental philosophy to the governor's mansion. Surely you can donate $10 to $25 to support this site and its ongoing efforts to push policy in the other direction.

The tip jar is over there ------>.

The online store is here.

Thanks in advance,
- Bill Hobbs

Government 'Helps' Hospitals
Here's an interesting white paper from the American Hospital Association showing how inadequate Medicare reimbursement is damaging the financial health of the nation's healthcare industry. By underpaying for services rendered - the only real way Medicare "controls" costs - Uncle Sam is wringing the life out of hospitals the same way TennCare is undermining the financial health of Tennessee's hospitals even as it continues to carve big holes in the budget of the state of Tennessee.

Meanwhile, yesterday's news reported that an escaped prisoner from Michigan was on TennCare. Your tax dollars at work!

------Support Our Advertiser!------
You can avoid Tennessee's sales taxes on your vitamins, nutritional supplements and a range of personal care products by shopping here. We're also looking for three or four serious and committed independent sales reps to market a new brand of vitamins and other personal care products sold only through the Internet. Work at own pace. Free training available. Extensive online support. Commissions limited only by your work. To learn more, with no obligation, Click Here.

Progress in Oak Ridge
Martin McBride, leader of Citizens for Oak Ridge Accountability, reports that after this story ran in the Oak Ridge newspaper on Tuesday, "many have written in asking us how they might help."

This column by the same reporter who wrote the above story is pretty good. Reporter R. Cathey Daniels writes that, now that CORA has managed to defeat a bond issue (most of which would have gone to benefit a private developer) local politicians should stop trying to marginalize CORA and respect them, even if they don't agree with CORA's goals.

After all, few thought CORA could gather the necessary 1,800 signatures in 20 days to force a referendum on a city bond issue. "What did they get for their embarrassing expectations? Almost 5,500 signatures and a defeat of the city center project, as well as a whipping of an organization raising over 300 times more in funds than their small group," says Daniels.

Her description of how elected Oak Ridge elected officials tried to ignore public opinion sounds like a training ground for the next Jimmy Naifeh:

"Remember when citizens (likely many who eventually signed those petitions) showed up in March at the 'first' second reading of the budget to beg council to cut something - anything - to reduce the 11-percent tax increase? Remember what council did? Adjourn until the next night when a 'second' second reading was heard amid service-friendly folk. Council left the tax increase in place, which in more than one observer's opinion started the whole referendum ball rolling."

Says Daniels, "You don't have to press your ear to the ground to pick up the most-talked-about lesson from the Aug. 1 referendum: Local property taxes are too high."

You gotta wonder how three-time-property-tax-raiser Phil Bredesen is going to do in Oak Ridge come November. Not very well, I imagine.

Spending Reform Idea
The Associated Press reports that, in some states, school districts in rural areas are using a four-day school week to save money on transportation, heating, and substitute teachers. Students attend school longer hours to make up for attending fewer days. There's less teacher and student absenteeism. And education performance is enhanced. It saves money, improves education, and doesn't require an income tax.

"In many rural areas, the change allows schools to keep art, music, and other classes that are often cut in tight budgets," reports the AP.

Education Week reported in 1997 on an Arkansas school district that instituted the 4-day school week and saved enough money to pay for a pre-school program, tutoring, and subsidized college courses. And this piece at Education-World.com documents the progress a year later.

Property Tax Revolt Brewing
The Tennessean seems a tad surprised people in Wilson County don't want their property tax rate raised. After all, it's for the children. But the anti-tax group, calling itself the Wilson County Property Owners Association, has as many as 1,700 signatures of Wilson County property owners on a petition opposing the tax increase - and plan a rally outside the county commission's office when the commission next votes on the tax increase on Monday. Expect a few horns honking.

------Support Our Advertiser!------
You can avoid Tennessee's sales taxes on your vitamins, nutritional supplements and a range of personal care products by shopping here. We're also looking for three or four serious and committed independent sales reps to market a new brand of vitamins and other personal care products sold only through the Internet. Work at own pace. Free training available. Extensive online support. Commissions limited only by your work. To learn more, with no obligation, Click Here.

Massachussets May End Income Tax
A Massachussetts ballot initiative to abolish that state's income tax is at 37% in the polls, despite an avalanche of hostile press coverage. And election day is still three months away.

"Should it pass, the state's annual budget would shrink from $23 billion to $14 billion, effectively mandating a less intrusive, more streamlined, more responsive state government. On average, it'd give the average resident of the state an extra $3,000 to throw back into the economy. Of course, those who have the most to lose if the referendum passes - politicians and bureaucrats - are predicting Armageddon. Note the state rep who says the measure could turn the state into 'the Idaho of the East Coast.' What's wrong with that?" says web pundit Radley Balko in this lengthy essay that's well worth reading.

Balko says the initiative "is polling at about 37%, a pretty remarkable number considering that we're talking about Massachusetts. And it's quickly gaining momentum in a state rife with government waste and mismanagement." We in Tennessee know how they feel.

Here's a Boston Globe story on the tax repeal measure.

Bias Watch: CBO
Here's an excellent essay on the Congressional Budget Office's built-in bias against tax cuts, from the Washington Times and Dan Bartlett.

NEA: Not Educating Accurately
Think the National Education Association loves America? Think again. If you're a teacher and NEA member, here's a good reason to quit the union. The NEA is telling its member teachers that when they teach about the Sept. 11 terror attacks, they should not not say any specific group is responsible, (but of course talk about all of the sins of America and such, in order to plant the false notion that the United States somehow caused or provoked the attacks). Of course, we know who is responsible for the attacks: Arab Muslims driven by a fanatical version of Islam that preaches death to all non-Muslims, especially Americans and Jews.

Bias Watch: New York Times
The Washington Times exposes how the New York Times intentionally and falsely depicted Henry Kissinger as opposing going to war with Iraq. The NYT lied about Kissinger's stance because the highly-regarded former Secretary of State favors prompt action against Iraq and the NYT is opposed to the U.S. using military action to defend the U.S. by pre-emptively striking Iraq and deposing Saddam Hussein before he succeeds in developing and deploying weapons of mass destruction against us. Apparently, for the NYT, one Sept. 11 is not enough.

Why Hilleary is Right
Republican candidate for governor Van Hilleary is coming under fire from liberal newspaper editorialists for ruling out an income tax over the next 8 years if he is elected and then re-elected in 2006. But Hilleary is right for taking such a stance.

"Nothing should be off the table in the state's continuing budget discussions," says The Tennessean in this Sunday editorial.

But the state constitution is clear - the income tax has never been on the table.

The income tax is not authorized by the state constitution. That means it is unconstitutional - and it has been declared unconstitutional by the state Supreme Court, three times. In layman's terms, it is illegal for the legislature to create one. So Phil Bredesen promises to uphold the constitution only for 4 years.

Only the people of Tennessee, via a constitional convention or a referendum on a proposed constitutional amendment, may create an income tax. They don't seem inclined to do so.

If pressed on the issue, perhaps Hilleary should expand his 8-year promise this way:

If I'm your governor, no matter what happens I will not propose an income tax nor ask legislators to pass an income tax, nor urge legislators to vote for an income tax. If an income tax is passed, I will veto it. If the legislature overrides my veto, I'll work to elect legislators willing to repeal it. If I am unable to repeal it, I'll use my line-item veto to cancel funding for administring collection of the tax.

The supreme court of this great state has said repeatedly that an income tax is not allowed by the constitution of this great state. If the people of Tennessee decide one day to ask for an income tax, they'll have to do it via a constitutional convention or a referendum. Until that day, and as long as I am your governor, Tennessee will not have an income tax.

Bredesen is being lauded in the liberal press for remaining "flexible" and showing better "management" skills by leaving the income tax as an option during his second term, when the reality is he is ignoring the state constitution, which does not authorize the income tax. Hilleary's approach is constitutionally correct - and reflects the view of the vast majority of Tennesseans.

TABOR Update: Oak Ridge
Efforts to put a Taxpayers Bill of Rights into the charter of the city of Oak Ridge get some coverage from the nearby Knoxville News-Sentinel. The Oak Ridge effort is led by MartinMcBride, leader of a successful grassroots referendum effort that killed a large city bond issue that was designed mostly to benefit a private mall developer. The Knox paper also offers this column from Bob Fowler, the paper's Oak Ridge reporter.

Incidentally, McBride writes in an email that the New-Sentinel's Oak Ridge reporter hasn't called McBride's organization, Citizens for Oak Ridge Accountability, in three months, though he has covered both the bond issue referendum and the emerging TABOR drive.

Perhaps that's because the reporter, Bob Fowler, is opposed to TABOR - as this laughably bad column shows. Fowler, by my count, raises three questions about McBride and his organizations. Perhaps it was just too tough to actually pick up the phone and call.

Feel free to email Bob Fowler and tell him how bad his column was - and urge him to actually McBride before he writes another story - by sending email to bfowler@infi.net.

Cover Fire
The Tennessean tries to provide cover for Phil Bredesen's wishy washy stance on the income tax as revealed in the first gubernatorial debate between Bredesen and Van Hilleary. The paper sought out comments from political analysts to support its spin that Bredesen won the exchange on the income tax issue because his refusal to shut the door completely on the income tax indicates he is a better "manager" because he isn't totally ruling out any option. But wait ... during a recent appearance on the Teddy Bart's Round Table radio show, Bredesen said he didn't think the income tax was constitutional. He rarely repeats that contention, so it's hard to tell if he believes it. But if he does - how can he leave the income tax option on the table at all?

Van Hilleary knows the income tax is unconstitutional. He knows a governor swears to uphold the state constitution. If elected to two terms he will swear that oath twice - and, therefore, rules out the income tax for eight years. Bredesen, on the other hand, will promise only to rule out the income tax for four of a possible eight years in the governor's office.

Lydia Lenker, Bredesen's spokeswoman, says Bredesen won't rule it out because, "'No responsible, mature leader is going to close the door on anything eight years down the road.''

But the constitution of the state of Tennessee rules out the income tax, period.

War Update
The inestimable Victor Davis Hanson explains why we must do Iraq, soon. And why we are both right to do it, and quite capable of doing it.

And these guys explode the notion that pacifism is the proper response to aggression. Be sure to read the comments, too, especially this wonderful quote from Gandhi:

"Cowardice is wholly inconsistent with non-violence. Translation from swordsmanship to non-violence is possible and, at times, even an easy stage. Non-violence, therefore, pre-supposes ability to strike. It is a conscious deliberate restraint put upon one's desire for vengeance. But vengeance is any day superior to passive, effeminate and helpless submission. "

A Joke
David Coffey sent me the following gem.

One day a florist goes to a barber for a haircut. After the cut he asks the barber about his bill. "I am sorry, I cannot accept money from you. I am doing community service this week." The florist is pleased and leaves the shop. The next morning when the barber goes to open his shop, there is a thank you card and a dozen roses waiting at his door.

Later a Cop comes in for a haircut and he also goes to pay the barber, and the barber replies: "I am sorry I cannot accept money from you. I am doing community service this week." The cop is happy and leaves the shop. The next morning when the barber goes to open his shop, there is a thank you card and a dozen donuts waiting at his door.

A Democrat comes for a hair cut and when he asks the barber what he owes, the barber replies: "I am sorry I cannot accept money from you. I am doing community service this week." The Democrat is very happy and leaves. The next morning when the barber goes to open his shop, a dozen Democrats are lined up waiting for a free haircut.

TABOR Update
Stay tuned for details on WSMV Channel 4's story on the Taxpayers Bill of Rights, set to air at 6 p.m. today. Republican gubernatorial candidate Van Hilleary supports bringing the TABOR concept to Tennessee from Colorado, where it has resulted in restraining the growth of state spending, preventing serious budget shortfalls and causing more than $3 billion in tax rebates for Coloradans in the past decade. Hilleary's opponent, Democrat Phil Bredesen, raised taxes three times in eight years as mayor of Nashville. He opposes TABOR, naturally.

UPDATE: The 6 p.m. version of the story had Bredesen's spokesperson Lydia Lenker saying Bredesen opposes TABOR because it would lock Tennessee into being forever 49th in spending for education. Perhaps Bredesen and Ms. Lenker are unware that, in Colorado, legislators asked voters for permission to dedicate a portion of all future TABOR surpluses to public education - instead of returning the funds to taxpayers via tax cuts or rebates. And the voters of Colorado APPROVED it. That shows the strength of the Taxpayers Bill of Rights - it allows government enough additional revenue each year to maintain current services (growth is capped at population growth plus inflation), but involves the voters in the decision over what happens to surplus revenue, and whether or not taxes will be raised or new taxes imposed. This forces legislators to set priorities within the growth cap, and do a much better job convincing taxpayers of the need for additional spending or new taxes. Perhaps Mr. Bredesen doesn't want people that involved. Perhaps he just wants to tax and spend ... as he did as mayor of Nashville.

The 10 p.m. version of the story said Bredesen opposes TABOR because it involves having an income tax. That's deceptive, and Bredesen knows it. TABOR simply caps the amount of revenue the state can keep and spend without getting voters permission - and TABOR doesn't care what kind of tax produced the revenue. TABOR will work equally well with or without an income tax.

Squeezing Saddam
Good news here. We're starting to say 'buh bye' to Saddam.

Bias Watch: AP Finds No Hilleary Supporters
There were supporters of Republican gubernatorial candidadate Van Hilleary in the audience for Wednesday night's debate with Hilleary and Democrat Phil Bredesen - and Hilleary supporters outside. But Associated Press reporter Karin Miller could find none for this story on the debate. She did, however, manage to find a Democrat and a Republican who's leaning toward Bredesen. That must be what passes for "balanced" reporting at the AP.

Bias Watch: CA's Debate Spin
The Memphis Commercial Appeal provides a decently comprehensive report on the Tennessee gubernatorial debate, although writer Paula Wade mistakenly says "the most striking differences between the men were those of style and approach." No - the most striking difference is that Van Hilleary is against the income tax, period, and Phil Bredesen is against it, question mark.

Your Tax Dollars At Work
This is how the federal government is trying to protect you from terrorists on airplanes. Hmmm. Makes me think we ought to just let pilots - most of whom are ex-military - carry guns.

Bias Watch: Tennessean's Debate Spin
The Tennessean, trying hard to obscure the very real differences between Van Hilleary and Phil Bredesen on taxes, says today that the candidates in their televised debate last night differed only "subtly" on the state's need for more revenue. But nothing in the paper's story on the debate indicates a "subtle" difference. Hilleary is against the income tax forever; Bredesen is not. Hilleary favors rolling back the 1-cent sales tax increase the Legislature just passed; Bredesen does not.

Bredesen left the door WIDE open to an income tax after 2006. Hilleary slammed it shut, locked it, nailed it shut, put a chain around it, padlocked it, and welded the padlock. Advantage: Hilleary.

Sundquist Takes Ball, Goes Home
Recently, NewsChannel 5 aired a series of damning reports exposing how some of Gov. Don Sundquist's pals got lucrative state contracts without bidding on them, in obviously questionable deals. Well, it seems one of the governor's other buddies didn't like Channel 5 exposing such shenanigans. So, recently, the head of the administration's highway safety office, Art Victorine, pulled state business away from Channel 5, as the Nashville Scene reports this week. Victorine pulled $120,000 worth of highway safey public service announcements from Channel 5, the top-rated station in Nashville. Victorine says he ran the plan to pull the ads from Channel 5 past both Sundquist and Tennessee Department of Roadbuilding Commissioner Bruce Saltsman. I guess Victorine, Sundquist and Saltsman think retailiating against Channel 5 is more important than reaching the maximum number of people with the highway safety announcements.

Victorine, incidentally, was head of American Airlines' Nashville hub until it closed - and was running AA's Nashville operations when it benefited from one of Nashville Mayor Phil Bredesen's many corporate-subsidy deals. Bredesen's Nashville gave the airline a big chunk of Nashvillians' tax dollars to underwrite and promote a Nashville-to-London route that the airline soon abandoned.

Support for TABOR Spreading
State Sen. Curtis Person and Oak Ridge political activist Martin McBride are pushing variations of the Colorado Taxpayers Bill of Rights.

Sen. Person issued a press release yesterday promising to sponsor legislation creating a Taxpayers Bill of Rights law that would be in force until a constitutional convention or referendum added a TABOR provision to the state constitution. The text of his press release is available here on his website. In Oak Ridge, McBride - who lead a successful citizen petition drive and referendum to defeat a bond issue there - is now pushing a TABOR for the city of Oak Ridge.

Below is an excerpt from the pro-TABOR announcement from Citizens for Oak Ridge Accountability:

The Citizens for Oak Ridge Accountability is proposing a seventeen-element Oak Ridge Taxpayers Bill of Rights to the city council. "Oak Ridge has one of the highest property tax rates in the state," said Martin McBride, spokesperson for the group. "This Taxpayer Bill of Rights (TABOR) is designed to implement a set of common-sense government reforms, that lays the groundwork for an economic revitalization of the Oak Ridge community and that will significantly strengthen the accountability of Oak Ridge government to its citizens."

You can reach McBride and the Citizens for Oak Ridge Accountability via email at accountable@earthlink.net.

Only Hilleary Favors Spending Control
It's official. Democrat Phil Bredesen - who as mayor raised taxes 42 percent on the average Nashville homeowner and much higher for many others - has come out against bringing to Tennessee the Taxpayers Bill of Rights, a simple constitutional provision in Colorado that restrains government spending in good times in order to prevent budget crises in bad times.

For good measure, the Tennessee Democratic Party - which is on record favoring creation of a state income tax - has also called TABOR a bad idea, in a press release filled with lies about how the Taxpayers Bill of Rights works in Colorado.

Today’s Chattanooga Times Free Press reports in this story by John Commins that Hilleary wants to bring the Taxpayers Bill of Rights concept to Tennessee. Bredesen and the Tennessee Democratic Party oppose it.

The Tennessee Democratic Party in a press release issued today calls Colorado's TABOR "a controversial plan ... that hinges on a statewide income tax." That's a double lie. TABOR was adopted by Colorado voters in a near-landslide in 1992, and the most recent poll in the state finds it retains widespread support today. If anything, support has grown. And although the Tennessee Democratic Party deceptively calls Colorado’s 4.63% flat income tax "the key" to TABOR, the truth is TABOR does not require or "hinge" on the existence of an income tax. TABOR works with any type of tax code.

Colorado’s Taxpayers’ Bill of Rights, or TABOR, is a state constitutional amendment that prohibits raising taxes or creating new taxes unless that is done by public referenda. If tax collections exceed the rate of inflation and population growth, taxpayers get a refund. Legislators may propose to retain surpluses but those requests are subject to voter approval. TABOR applies at the state level and also to cities and counties.

In the past decade, TABOR has resulted in more than $3 billion in surplus revenue being returned to Colorado taxpayers. Contrast that with Tennessee, where the legislature has since 1985 exceeded the constitutional cap on spending growth by $3 billion. (Click here for details.)

Tennessee Democratic Party Chairman William E. Farmer charged that Hilleary wants to "overhaul" Tennessee's tax code and replace it with Colorado's, implying Hilleary secretly admires Colorado's income tax. But the truth is Hilleary favors copying only the Taxpayers Bill of Rights provision in Colorado's constitution - a provision that has resulted in tax reductions and rebates of more than $3 billion in the last 10 years, while not inhibiting Colorado's ability to balance its budget and grow spending at a rate necessary to cover increases in population and inflation.

Hilleary told the Chattanooga paper: "We can live with growth that is the rate of inflation plus the rate of population growth."

Bredesen responded that he does not think the Colorado plan is "the right answer for the state of Tennessee." Bredesen further said Colorado's plan is "problematic in several ways," and when it comes to state spending in Tennessee, "we don’t need to be frozen."

Bredesen clearly does not understand TABOR, which doesn't freeze spending but only restrains it to a sensible level of sustainable growth. Or perhaps he does understand TABOR - but doesn't like that it would limit his ability to tax and spend. This is the same Bredesen, after all, who said for months he could "manage" the state with existing resources, but after the legislature passed a tax increase he said it would be "irresponsible" to repeal it.

Economist J.R. Clark at the University of Tennessee at Chattanooga says linking revenue growth to inflation and population growth "has worked in other states." Clark says a TABOR-type provision "serves as a very useful yardstick to guide the rate of growth of expenditures and it helps the Legislature to discipline itself and set priorities."

Clark's comments echo the findings of economist Dr. Barry Poulson at the University of Colorado at Boulder, whose extensive research into TABOR found that it caused a "smoothing" of state finances and, by restraining spending during boom times, it prevents large budget gaps from emerging during inevitable economic slumps.

The emerging debate over TABOR has certainly brought a new clarity to the governor's race. Van Hilleary supports spending restraint and giving voters more control over tax increases and what happens to revenue surpluses. Bredesen doesn't.

Links to More Info on Colorado Plan:
I've put together a list of links to assorted other information and commentary about Colorado's Taxpayers Bill of Rights.

Media Commentary
Click here for Media Praise for Colorado Plan. Also, here is a link to a very recent Wall Street Journal commentary on the Colorado plan. If you don't have a paid subscription to WSJ's web site, I've put the text of the editorial online here.

Also see:
Triggering tax rebates
By Michael New, research assistant and data analyst with the Center for Representative Government at the Cato Institute. Source: Washington Times, April 2, 2002.

Academic research into TABOR:
The TABOR Amendment: Learning To Live Within Colorado's Tax & Spending Limits
By Dr. Barry Poulson, professor of economics at the University of Colorado at Boulder, Senior Fellow with the Independence Institute, and a member of the Colorado Commission on Taxation. Also available as a PDF file. Nov. 2001.

Limiting Government through Direct Democracy: The Case of State Tax and Expenditure Limitations
By Michael New, research assistant and data analyst with the Center for Representative Government at the Cato Institute. The full Cato study on the effectiveness of tax and expenditure limitations on state spending growth. Source: Cato Institute, December 2001. Click for the Executive Summary.

We still need fiscal discipline
By Dr. Barry Poulson, professor of economics at the University of Colorado at Boulder, Senior Fellow with the Independence Institute, and a member of the Colorado Commission on Taxation. Source: June 23, 2002, Denver Post.

This poll by a Colorado political polling firm last summer found strong support among Coloradoans for the Taxpayer Bill of Rights. Source: Ciruli Associates

My other commentary on the Colorado plan:
Busting the Cap
My recent commentary showing how Tennessee's current cap on the growth of government spending has utterly failed to restrain spending, and why Tennessee needs a Taxpayers Bill of Rights.

For more on the Colorado Taxpayers' Bill of Rights please read two columns of mine published last year and one published last March in the Nashville City Paper.

Finding Common Ground on Taxes - August 23, 2001
Tennessee Should Consider Taxpayers' Bill of Rights - August 30, 2001
Spending Cuts Now May Lessen Future Deficits - March 21, 2002

Trip Notes
I forgot to mention one little event from my recent trip to the Northeast. While waiting to board my return flight in Baltimore, I watched as the security screeners selected for extra screening a toddler - a little blond-headed very caucasian girl, no older than 3, wearing shorts and a t-shirt. She had no clue why she was being made to stand on the little rubber pad, hold her arms out and be scanned with the wand. A few dsays earlier, as I arrived in Baltimore, I saw the security screeners select a very elderly wheelchair-bound lady for extra screening at the gate. All 19 Sept. 11 hijackers were young Arab men, not toddlers and grannies.

Congress and the Copyright Cartel
Here's a fine analysis of the current political battle over copyright protection and Hollywood vs. technology from the San Jose Mercury News.

The Revenooers
For years in New York City (and probably still today) a small cartel of garbage collection companies used various means to coerce customers into doing business with only them - thus keeping out competition and propping up artificially high prices. Controlling the garbage collection business was such good business that they used threats, intimidation, and violence to keep customers in line and drive off would-be independent competitors. "They" were the mob and what they were doing is called "organized crime."

Strangely, a similar effort to stop an elderly Tennessee man from trying to make a living selling beer is called a "compliance effort." Consider this Tennessee Department of Revenue press release dated Aug. 6:

Bristol, TN - The Tennessee Department of Revenue today announced it has arrested a Greenville man for illegally transporting 200 cases of beer from Virginia to Tennessee. The suspect, Leonard H. Cutshall, 74, was apprehended by special agents of the Tennessee Department of Revenue, in cooperation with the Sullivan County Sheriffs Department and the Virginia Alcoholic Beverage Commission, on Interstate 81 as he entered Tennessee from Virginia. The illegal transportation of over 100 cases of untaxed beer is a Class E felony. Tennessee and Virginia agents video taped Cutshall loading and transporting 200 cases of beer he purchased at a retail store in Bristol, Virginia. The beer was allegedly destined for Cutshall’s businesses in Greeneville, Tenn. It is unlawful for any untaxed beer to be brought into Tennessee from another state by an individual or business except for immediate delivery to a licensed brewery, wholesaler or distributor. The beer and vehicle used in transporting it are subject to seizure, and the perpetrator may face criminal sanctions. Since taxes on beer, cigarettes and tobacco products increased as of July 15, 2002, the Tennessee Department of Revenue has increased its compliance efforts to discourage individuals and businesses from crossing state lines to purchase these products and illegally transport them back into Tennessee.

Consider just this one sentence in the press release: "It is unlawful for any untaxed beer to be brought into Tennessee from another state by an individual or business except for immediate delivery to a licensed brewery, wholesaler or distributor."

Here's a question: Why, unless you deliver it to a "licensed brewery, wholesaler or distributor," it is illegal for you to buy beer in another state and bring it into Tennessee?

The answer is simple: Tennessee state legislators have put in place a system of licensing, taxation and law enforcement to protect a very small cartel of liquor/wine/beer wholesaler-distributors, who reward legislators for perpetuating that system with copious financial support in the form of sizable donations to legislators' campaign funds. The entire system is run solely for the benefit of the wholesalers and the legislators - while you, the consumer, get screwed via higher prices and less competition for your business.

One ripple effect is that you can not legally purchase wine direct from out-of-state wineries that might wish to sell it to you over the Internet. Instead, you can only buy wine that is distributed by a licensed wholesaler or distributor, who have tacked on a hefty mark-up. The Tennessean published this fairly in-depth report on this a few weeks ago. I also posted a commentary on it on July 28. You can scroll down, but here's the relevant excerpt:

Tennessee is one of about three dozen states that prohibit out-of-state wineries from shipping direct to retail customers in Tennessee. Such protectionist laws in all likelihood violate the Commerce Clause of the U.S. Constitution, which forbids states from regulating interstate commerce. Such protectionist laws involving the sale of wine are also among the laws hampering the growth of e-commerce - and costing U.S. consumers an estimated $15 billion a year in higher prices for such things as wine, real estate, cars and caskets, according to the Progressive Policy Institute.

The Federal Trade Commission recently announced it will investigate such laws. E-Commerce Times reports here the FTC study whether individual states' legislative and regulatory actions are hampering the growth of e-commerce, and will host a three-day workshop in October where representatives of several industries that face such regulations and restrictions can state their case. Giga Information Group analyst Andrew Bartels told E-Commerce Times that the FTC will learn of "a patchwork of specific state laws governing industries, particularly those like alcohol sales and real estate" that are "undoubtedly a hindrance to interstate commerce." Other industries likely to be looked at by the FTC: online wine sales, online real estate, online automobile sales, online education, healthcare, pharmaceutical sales and online casket sales.

Any legitimate study of Tennessee's tax code with an eye toward positive reform would include a plan to end the regulations that have made Tennessee's wine and liquor wholesalers a government-protected cartel, and open the market so that Tennesseans can benefit from more choice and rational pricing.

The Commerce Clause of the federal constitution was intended to prevent the very sort of thing Tennessee (and, to be honest, every other state) does involving the sale of alcoholic beverages. The Commerce Clause was intended to prevent states from using tariffs, licenses and such to "regulate" interstate commerce. Under the federal constitution, Greeneville businessman Leonard Cutshall should have the right to buy alcoholic beverages in Virginia - paying whatever tax Virginia levies - and then bring them into Tennessee to sell - and collect whatever tax Tennessee levies. By forcing him to only use wholesalers in the state-protected cartel, the state of Tennessee has stolen his right - and your right - to do business with whomever you please. Here's hoping the FTC will soon strike down such regulations as a violation of the Commerce Clause and the personal economic freedoms it is supposed to guarantee.

Sales Tax Beats Income Tax for Revenue Growth
You have been told that an income tax would be a more stable source of revenue for the state than a sales tax, because it is more "elastic" and less susceptible to economic slumps. But in the second quarter of this year - April, May and June - Tennessee raked more sales tax revenue than it did a year ago. Meanwhile, according to this Reuters report, 36 states that rely on a personal income tax saw revenues fall in the last fiscal year

According to Reuters: Total personal income tax collections for the 36 states fell by 23 percent in the second quarter from the year-earlier period, according to a new survey of the 36 states that provided the Nelson A. Rockefeller Institute of Government with data.

But here's the kicker: the same report found that states' sales tax revenues rose an average of 1.2 percent during the quarter compared to April-June 2001.

In Tennessee, revenue from the sales tax totaled $1.0714 billion during the quarter, up 0.23 percent comapred to the same months in 2001.

If Gov. Don Sundquist had managed to put an income tax in place two years during the special legislative session in the fall of 2001, one thing is clear: Tennessee's budget gap in the just-ended fiscal year would very likely have been much larger than it was. Tennessee's sales tax didn't cause that shortfall - overspending did. But Tennessee's continued reliance on the sales tax clearly protected the state from a much larger budget gap. And, without a doubt, the horn-honkers, anti-tax activists, anti-tax legislators and talk radio hosts who successfully fought the income tax saved Tennessee from a much-worse budget crisis.

Near-Record Revenue
Tennessee's tax collections in the just-ended fiscal year were the third highest on record, a remarkable achievement given the sluggish economy for most of the fiscal year. Despite the slow economy, revenue in the just-ended fiscal year was down just 1.7 percent from the prior fiscal year.

The Department of Finance & Administration reports $7.508 billion in revenue, $127.6 million less than the previous fiscal year's record revenue of $7.636 billion, and only a hair below the $7.558 billion recorded during 1999-2000 fiscal year, at the peak of the economic boom.

Revenue from the state sales tax set a new record at $4.654 billion, up a fraction over last year's $4.642 billion and the $4.608 billion collected in fiscal year 1999-2000.

But What About Colorado?
The Christian Science Monitor reports today that states are resorting to tax increases to fill budget shortfalls - and reveals that the elected officials who want to spend more are already prepping their people to expect more budget crises and more tax increases. But a few things are missing from the story. There's no mention of using spending growth restraint to deal with reduced revenues. There's also no mention of Colorado, which used a fiscal thermostat called the Taxpayers Bill of Rights to regulate spending which, amazingly, resulted in a balanced budget and a $927 billion tax rebate this year.

1100 Broadway Logic
The Tennessean says in an editorial Sunday that lowering the sales tax is a good idea, but Van Hilleary is "irresponsible" for proposing it. Whatever. Methinks what The Tennessean really opposes is Van Hilleary setting a successful political trap for Bredesen, deftly exposing that Bredesen isn't really as opposed to higher taxes as he pretends to be in his campaign.

Relevant factoid: property tax rates rose 42% for the average Nashville homeowner during Bredesen's 8 years as mayor. Bredesen sought each and every tax increase.

Trip Notes
Saw G. Gordon Liddy in the Baltimore airport. Shook his hand. So did many others. Sat next to a Southwest Airlines pilot on the flight home - he is based out of Baltimore but lives in Nashville and shuttles to and from Baltimore on Southwest, of course. I asked him if he thinks pilots should be allowed to carry guns. Yes, he said, adding that most Southwest pilots and many commercial pilots in general have a military background and are trained to handle weapons. The pilot - first initial J - once flew medical choppers and a spy plane for the U.S. Army, and said he'd like to have the option to have a gun to use against terrorists. Without armed pilots, he said, the next step after a terrorist take-over of the cockpit is being shot down by an F-16. We put our lives in the hands of men like him every day when we fly. There's no good reason not to trust them to protect our lives with a gun if necessary. Let the pilots go armed now!

Blame Delaware?
Is Delaware to blame for Tennessee tax revenue not growing as fast as the politicians want? As a kid growing up in southeastern Pennsylvania, I was well aware that Delaware, just a few miles away, had no sales tax, and that some people would cross the state line to save a few dollars on large-ticket items. But Delaware is also a low-tax state for corporations.

Today’s Wall Street Journal has an interesting article on how some corporations are using Delaware’s business-friendly tax code to reduce their taxes. However, those who favor higher taxes are complaining that other states are losing “billions of dollars” in revenue.

If you’re a WSJ.com subscriber you can read the story by clicking here.

Here is an excerpt:

Wilmington, Del. - Limited Brands Inc. takes in tens of millions of dollars each year from its thousands of retail stores in 48 states. But when it comes to paying state taxes, the Columbus, Ohio, retailer prefers to deal with Delaware, which collects no income taxes on out-of-state holding companies and investment firms.

Limited bases seven subsidiaries in a drab office building in the heart of this city's downtown. The subsidiaries, which don't produce anything tangible and don't employ anyone from Limited, are big money-makers. Their primary function is to hold the trademarks for famous Limited chains such as Bath & Body Works and Victoria's Secret, and charge their retail siblings huge fees for use of the brand names. The arrangement transfers hundreds of millions of dollars each year away from Limited's retail outlets in high-tax states and into the Delaware subsidiaries, which don't pay a penny of state tax.

In the view of many state tax authorities, it's just one of the more striking examples of an increasingly alarming manipulation of the tax system. At a time when offshore tax havens are drawing intense heat on Capitol Hill for their role in siphoning off federal revenue, state officials complain that domestic tax havens such as Delaware and Nevada are going unchecked.

Some tax experts contend that the strategy is inflicting billions of dollars in revenue losses on states. Corporate tax receipts have plummeted over the past decade as a share of states' total tax revenue, according to several studies, and many states have begun to see major revenue shortfalls.

The average effective state tax rate for corporations -- what companies really pay, as opposed to what the tax schedules say they should pay -- has declined from 9.6% in 1980 to about 5.2% today, says Dan Bucks of the Multistate Tax Commission, which represents state revenue agencies.

"It's a matter of fairness," says Norris Tolson, North Carolina's Secretary of Revenue. "It's not fair to the corporations that do properly report their income or to the millions of working people who pay their taxes without trying to avoid them."

Companies that use the maneuver say they aren't breaking any laws, and in fact the rules are very murky. Decisions by state courts have been mixed, and many legal experts believe it would take a Supreme Court decision to settle the issue. Many companies also argue their duty to shareholders demands that they seek any legal way to lower their tax burden.

For its part, Limited says it isn't using Delaware to dodge taxes at all, and that it has other good business reasons for its holding-company structure. "We currently pay income taxes as well as sales and use taxes on all retail transactions completed by every Limited Brands retail business in every state in which we operate," Limited spokesman Anthony Hebron says.

No Income Tax=Friendly For Small Biz
This letter to the editor in today's issue of the pro-income tax Memphis Commercial Appeal alerted me to this story I had missed from the Aug. 3 edition of that same paper. The headline: Tenn. ranks No. 7 in kindness-to-business. The gist of it: Tennessee ranks highly in part because it doesn't have an income tax.

Relevant excerpt: Tennessee has surpassed Mississippi in a list of states ranked according to how well they treat small business, as judged by the Small Business Survival Committee. In the seventh annual Small Business Survival Index, released in July, Tennessee was ranked No. 7, out of the 50 states and the District of Columbia, according to 20 criteria designed to show how much of a burden government places on small businesses. Mississippi was No. 9, same as in 2001. Tennessee was No. 10 in 2001.

Tennessee's rejection of a state income tax worked in its favor on this list.

"Tennessee's recent budget session was a mixed bag," the report states. "The good news was that another effort to impose a general personal income tax in the state was defeated. Income taxes are, by far, the most destructive levies imposed by government. However, the state sales tax was increased from 6 percent to 7 percent."

Small business is, of course, vital to the economic well-being of Tennessee and its people. Gubernatorial candidate Van Hilleary has called for the rollback of the one-cent sales tax increase, and also firmly rejects an income tax. His opponent, former Nashville Mayor Phil Bredesen, calls reducing the sales tax an "irresponsible" idea even though a few months ago he was claiming to be able to "manage" the state without a tax increase.

Praise for the Governor
Writing in the Knoxville New-Sentinel, George Korda comments Don Sundquist was right about something regarding the income tax, at least in one respect.

"In a Chamber of Commerce luncheon speech in Knoxville six months ago, the governor said if legislators showed political guts voters would reward them on election day. Darned if he wasn’t right," Korda says, recalling that Sundquist told legislators in the audience of legislators to "find the political courage to do the right thing and the voters will reward you at the polls."

Knoxville area state representatives Jamie Hagood and Steve Buttry heard Sundquist that day and they did the right thing. They honored their word given to voters during their campaigns and voted against the income tax. "Sure enough, they were rewarded at the polls," Korda says. They won.

Hagood and Buttry didn't cave in and flip-flop, despite immense pressure to do so. "They were under enough pressure to turn coal into diamonds," Korda says. "Throughout the legislative session Hagood, Buttry and a number of other like-minded legislators were tabbed as being members of a 'do-nothing caucus.' To do nothing in this case meant to not support an income tax."

They were also called "obstructionist," says Korda, "obstructionist in the sense that they weren't going to vote for an income tax. Tiresome is the best word to use to describe the repeated 'obstructionist' denunciations aimed at legislators who would not back an income tax. Presumably they could have avoided being obstructionist if they cast aside their convictions and their promises and double-crossed their constituents.

"Interestingly, the 'obstructionist' label was not applied to income tax supporters. This despite their unwillingness to budge from their goal of impressing upon the state a revenue program the people of Tennessee did not want, and continue not to want."

Whaddabout the Warranty?
The Nissan Sentra isn't made in Smyrna, Tennessee, anymore. Now it's assembled in Mexico. Which may explain this story which is the kind of thing that could give Nissan a bad name. P.S., My dad loves his new Camry.

NYT's Krugman Gets It Wrong
Would it shock you that a New York Times columnist would misrepresent the last three years of tennessee history with a column about the tax debate? Check out Half-Bakered's take on Paul Krugman's recent column.

Much Ado About Nothing
The Tennessean goes to great pains to make Van Hilleary look bad with this story but the facts are on Hilleary's side. Hilleary didn't ask the SEC to "take no action" on issuing regulations to end the practice of accounting firms also offering consulting services to their corporate clients, as charged by Dave Cooley, a senior aide to Hilleary's opponent, Democratic gubernatorial candidate Phil Bredesen. Hilleary merely asked the SEC to extend the public comment period before approving the new rules. Any one who has ever followed the federal bureaucracy's rules-making process knows that agencies often are asked to allow more time for comment on those rules. The Tennessean knows this is not out of the ordinary, and that Hilleary did nothing wrong.

The actual letter Hilleary wrote, which The Tennessean makes available here in a PDF file, clearly shows that Hilleary's only concern was that a highly complex new rule was being rushed through with insufficient time for public comment. Does The Tennessean really think the best law is made by rushing rules into place without sufficient time for the public to consider them and comment on them? Perhaps not - but against the current backdrop of corporate scandal, the opportunity to smear Hilleary and help the Bredesen campaign was clearly too tempting for the liberal paper to pass up.

A question for readers. Bredesen made mega-millions by selling his first healthcare company, an HMO called Health America. I would be interested to know what happened to HealthAmerica after Bredesen cashed out.

Good Stuff
This is hilarious. But this is scary. On the other hand, this is good news that isn't getting enough coverage.

Watch Out For The Grannies
Flew from Nashville to Baltimore on Southwest. Exiting the plane in Baltimore, saw the security people informing a little old lady in a wheel chair that she'd been singled out for extra specially special extra screening. A little old white-haired extremely caucasian lady in a wheelchair. All of the Sept. 11 hijackers were young Arab males.

27,000
Some 600 people have been killed by Palestinian terrorists' bombings in Israel this year. That's approximately one in 10,000 people in Israel. Per capita, that's the equivalent of the Islamikazes killing 27,000 people in the United States in a series of attacks - roughly nine World Trade Center attacks.

Oddly, we urge Israel to show "restraint" in responding to such attacks. Would we show "restraint" if, say, crazed Canadians were crossing our border and blowing themselves up, killing 27,000 Americans in the first eight months of this year. Of course not! Such "restraint" only invites more attacks.

Neither should Israel show restraint. They are under attack by the same Islamicist foe that destroyed the World Trade Center. We're all at war now, with a fanatical foe that wants nothing less than our total destruction. Wars are not won by restraint, and peace is not achieved by negotiating with fanatical killers. The Islamikazes and their support network - in Gaza, Jenin, Iraq, Syria and Saudi Arabia must be destroyed at all cost. Terrorists can't kill Israelis - or us - if they're dead.

Opportunity
We're looking for three or four serious and committed independent sales reps to market a new brand of vitamins and other personal care products sold only through the Internet. Work at own pace. Free training available. Extensive online support. Commissions limited only by your work. See my website by clicking here. You can also shop online and avoid Tennessee sales taxes by clicking here.

Score This One for Hilleary
Republican gubernatorial candidate Van Hilleary says the one-penny sales tax increase should be repealed. Democrat Phil Bredesen's camp responds by saying cutting the tax would be "irresponsible." Was Hilleary trying to bait Bredesen into taking a position in favor of higher taxes? If so, it worked. Advantage: Van Hilleary. You can read all about it here in today's Tennessean.

The Credibility Factor
"The nattering nabobs will know that what Van Hilleary says Phil Bredesen will say. Phil Bredesen will try and run to the right and create the impression that he is a conservative that Tennesseans want. But they will support Bredesen because they know he doesn't really believe it. What they are afraid of, is that Van does." So says Frank Cagle. Read the whole thing at FrankCagle.com. I make a similar point in my July 25 essay, titled Who Do You Trust?

Editor's Note
Limited or no posting for the next few days - I'm off to Philadelphia to visit my mom, who has been diagnosed with cancer. This week, we'll find out just how much it has spread. Hopefully, not far enough that we can't - I mean, the doctors can't - catch up with it.

War Update
Here's a short excellent piece from weblogger Nick Denton, explaining "Why we must make war on Iraq." And here is a long one from Parameters, the U.S. Army War College Quarterly, explaining why global stability is not in America's self interest.

Rethinking The Structural Deficit
For the past three years, we've been hearing that Tennessee has budget problems because of a "structural deficit" in the tax code and that we need to reform the "tax structure" of the state before it bankrupts state government. We've been hearing that from politicians who favor higher spending and higher taxes. Their favored reform: the unconstitutional income tax.

However, their argument is flawed. They allege that the existence of a gap between revenues and planned spending proves the tax structure is flawed. But one does not prove the other. There is no cause and effect. A politician's unaffordable wish list does not prove the tax structure is flawed because it doesn't generate enough money any more than my desire for a new Lexus proves my employer isn't paying me enough. Tennessee's tax structure produced $7 billion in revenue this year. The Big Spenders wanted to spend $8 billion. As my Daddy often said, they "have a champagne stomach and a beer wallet." (Which is a funny thing for him to say given that my Daddy doesn't drink.) Daddy never said that if I had only a beer wallet and wanted champagne it was okay to blame it on my boss and force him to buy me a bottle of Dom Perignon. The governor and legislators are the people's servants, not their boss. The people are the boss and they are willing and able to pay for the government to buy a six-pack of Bud, but not a bottle of Dom.

It makes abundantly much more sense to blame the budget shortfall on the state's recent "structural spending surplus" caused by a flaw in the "spending structure" of the state that has allowed the governor to propose budgets far in excess of what the state could afford.

Tax revenue results from the essentially natural and naturally essential activity of the economy - people working to earn a living to buy the things they need to survive. Government spending, however, is much more arbitrary and controllable. Spending is the result of voluntary decisions made by politicians who could chose to propose to spend less.

There is no law that says a government program can not be trimmed, reduced, altered, cut or eliminated once it has been established. There is no law that says government must grow as fast or faster than the people's ability to pay for it. There is no constitutional right for anyone in Tennessee not to have their favorite goverment program or entitlement reduced, reformed or ended. Every dollar government spends was first taken from someone who earned it, and what some call "entitlements" are, in fact, gifts given to them by taxpayers via the legislature - gifts the taxpayers have the right, through new legislative action, to stop giving.

It's time we stopped talking about the tax structure and started talking about reforming the state's spending structure. History shows that states that have "solved" their budget shortfalls with higher taxes and income taxes have found that government and the recipients of its largesse never seem to be satisfied, and so the politicians return to the taxpayers for more and more and more, again and again and again.

That is why it is crucial that we reform Tennessee's spending structure. We must eliminate our state's structural spending surplus, before it bankrupts the people of Tennessee.

Bredesen's 42% Problem
Democrat gubernatorial nominee Phil Bredesen has correctly noted during his campaign that Tennessee's recent fiscal problems are the result of spending growing too rapidly - far surpassing inflation and population growth, and outstripping the growth of spending in most other states. He says he's against the income tax, that it is "not the right solution" for the state budget shortfalls that grew chronically worse each year as the current governor proposed one billion-dollar spending increase on top of another.

I believe Bredesen is against the income tax. I also believe that even if he secretly believes an income tax would be a fairer tax, or a more stable tax, or even just a better way to flood state treasuries with money to splurge, Phil Bredesen is too smart to propose an income tax, and knows the political costs would be too great.

Which leads to a few observations, some which I'll pose in the form of questions.

1. Phil Bredesen has a BIG problem. During his 8 years as mayor of Nashville, Bredesen's solution to not having enough money to spend was to RAISE the property tax. Three times. The effective property tax rate rose 42% on the average home. Voters averse to all tax increases, not just to the income tax, are going to have a hard time voting for Bredesen.

2. If the legislature passed an income tax, would a Gov. Hilleary be more likely to sign it ... or veto it?

3. If the legislature passed an income tax, would a Gov. Bredesen be more likely to sign it ... or veto it?

Bias Watch: A Prediction
Sometime in the next three months, The Tennessean will issue endorsements in various political races, including the race for the 7th Congressional District seat. The district is a conservative Republican stronghold and state Sen. Marsha Blackburn is a heavy favorite to win the seat for the simple reason that her views reflect the views of the overwhelming majority of voters in the district.

Now, The Tennessean almost always endorses the most liberal candidate in race. Example: They endorsed the ultra-liberal Gayle Ray in the 5th District Demcratic primary over the eminently more qualified but moderate former congressman Jim Cooper. So you can expect The Tennessean will endorse Blackburn's Democratic opponent, one Tim Barron of Collierville, who is given little chance to win because he supprts the Democratic agenda in a district that overwhelmingly doesn't.

If The Tennessean indeed does endorse a candidate whose views do not reflect those of the majority of his district, it will raise an interesting question: Does The Tennessean still believe in and support the basic concept of a representative democracy? If it does, it should endorse the qualified candidate who most closely represents the views of the majority of the people in the district. In the 7th District, that candidate is Marsha Blackburn.

The Clinton Stock Market Crash
Is it fair to blame the stock market meltdown on the Clinton-Gore administration? Consider this, from weblogger Bill Quick:

The Nasdaq 100, once the hottest index in the world (it contained the 100 largest companies from the Nasdaq Index, the home of most of the dot.com and tech stocks) peaked in March of 2000 at 4816. On the week of January 5, 2001, President (and Hillary) Clinton's last month in the White House, that index stood at 2087, a drop of 57 percent, indicating a loss in equity values in that index alone of more than two trillion dollars, or about $24,000 for every household in the United States! In other words, the Clintons, in their last year in office, presided over the "squandering" of the equivalent of the Federal Government's entire income for 2001, plus two hundred billion dollars! Considerably less equity value has been lost in the Nasdaq 100 since President Bush took office than vanished under the Clinton-Gore watch.

Tax Revolt Gaining Steam?
Four pro-income tax incumbents - three in the House and one in the Senate - were defeated in the August 1 primary by anti-income tax opponents. Plus, state Sen. Bob Rochelle, an architect of the income tax, will be replaced by an anti-income tax senator no matter who wins in November in his old district. (Thought it's worth remembering Republican Mae Beavers has an actual track record of working against and voting against the income tax while Democrat Sherry Fisher represents a political party which has endorsed creation of a state income tax.) Out in West Tennessee, the aggressive income tax-pusher House Speaker Jimmy Naifeh, a Democrat in a heavily Democratic district, is facing a tough general election battle from write-in Republican candidate Tony Lopes, who got a flood of support for the GOP nomination from voters who want Naifeh out.

Meanwhile, voters in Robertson County rejected a referendum calling for a big increase in the local wheel tax, and voters in Wilson County (home of big taxin' Bob Rochelle) shot down a referendum calling for a half-cent sales tax increase.

Hmmm... You don't think a former mayor who raised Nashville's property taxes three times, upping the effective tax rate by a cumulative 42% for the average homeowner, is wondering as he campaigns for governor how to keep voters from focusing on that record, do you?