76-05-B5
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Government Cost I[edit]
Transcript[edit]We all want the size, power and, most of all, the cost of government reduced, don't we? Or do we? I'll be right back. Ask the man on the street, the housewife, the fellows of the club, everyone who pays taxes if we shouldn't have a reduction in the cost of government, and therefore taxes, and the answer will, of course, be a resounding yes. But that makes for a puzzlement. A few years ago in California, we put an initiative on the ballot that would have limited the percentage of gross earnings the state could take from the people in taxes. Every provision for flexibility in the event of emergency had been included and we could show with sound projections that growth of the economy would result in the state getting increased revenues, in spite of the limitation. In fact, under the limitation the state could still triple its budget in 15 years but the taxpayers would save 45 billion dollars during those 15 years. Now I'm sure if you ask the people to vote on whether they wanted a budget three times the size we have now in just fifteen years, they'd vote no. But still in California they voted no on the initiative known as proposition one. The state was taking about eight and three quarter cents of each dollar earned. With the help and support of some of the greatest economists in the country, including recent Nobel Prize winner Milton Friedman, we had worked out a plan to gradually lower that percentage to seven cents at the end of 15 years. The state however would continue to get more actual money each year because the lowered percentage was far less than the increase in revenues due to economic growth. I have since blamed that lowering of the percentage for the defeat. Everyone who has a vested interest in the public trough rose up against proposition one. The educational lobby led by the California Teachers Association shamelessly used public funds, educational funds if you will, in their attack day after day. Children were sent home with leaflets and brochures to give to their parents. Most of this literature in the entire campaign against proposition one was based on an outright falsehood. The measure specifically forbade the state from dumping burdens on local government in order to hold to the limit, but ignoring this, our opponents claim this would be done and local property taxes would go up and because we would be gradually lowering the limit to an eventual seven percent they coined a campaign slogan that if we were reducing the state share we'd have to get the money someplace else. I've believed that if we'd settled for holding the percentage at the existing eight and three-quarter cents, they couldn't have used the lie. Now I discover I'm wrong. In the election just passed, Michigan put a measure on the ballot to freeze the percentage of earnings, roughly eight and a half percent, the state takes in tax. Except for that, they had followed our plan. The same forces rose up to do battle. The leadership of organized labor, public employee associations and the teachers. The press reported children bringing literature home from school and they all use the same falsehood, it would increase local taxes. The measure lost. How many more chances will we have? There are some 81 million people now depended on tax dollars for their year-round, year-in, year-out living. There are only 70 million working in American business and industry to support themselves, and their 62 million dependents. Those 70 million pay all the taxes that support the 81 million. This is Ronald Reagan. Thanks for listening.
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