Democrats Can Have Ideas Too

Mitch Daniels apparently isn't done unveiling his own "big ideas", but the Democrats have now for the first time managed to actually put forth one of their own. The Indianapolis Star and the Courier-Journal both have articles about their scheme to eliminate the sales tax on gasoline. Indiana Democratic Party blog mouthpiece Taking Down Words even had a coordinated post on it.

Color me small "L" libertarian (and I like lower taxes in general and cheaper gas too), but I would hazard a guess that the primary beneficiaries of cutting the state sales tax on gasoline will not be Hoosier drivers, but oil companies and gas station owners. Heaven forbid that Democrats support tax cuts that benefit the oil companies. That might be ironic.

Will eliminating that 6% sales tax cause a matching decline in the price of gasoline attributable to that cut? My guess is no. Have the Democrats got any studies to say that this will not be the case?

It's an oft-cited Republican talking point, to be sure, but Indiana does have its first legitimately-balanced budget in something over eight years. What guarantee is there that the loss in gasoline tax revenue will be made up by an increase in sales tax revenue elsewhere, as implied?

And if you're just shifting about where the taxes come from, and not really cutting the taxes themselves (as the Democrats seem to be implying in their sales pitch), then why bother? Small wonder that the state Democrats not really proposing a tax cut, but instead--by their own description--a tax shuffle.

Again, have there been any studies showing what might happen? What spending will be cut, or future spending postponed, in order to finance a $300 million (Republican estimate) sales tax cut? What sort of the cut will be made up for in sales tax revenues from other consumption, as the Democrats claim?

I'm all for tax cuts, but Indiana Democrats should try to stay away from the rabid and mindless tax cut Kool-Aid that some Congressional Republicans have been drinking in recent years while they were simultaneously creating large new government programs, increasing spending dramatically in other areas, and running up a huge budget deficit.

I'd like to see concrete numbers on the costs, and the consequences, of cutting the sales tax on gasoline before the General Assembly does something like that. It would also be nice if the Democrats could explain how they intend to pay for this tax cut, and what the possible tradeoffs might be.

Three of their party won election to Congress by calling for fiscal responsibility, balanced budgets, and (in at least the case of Baron Hill) a return to the pay-as-you-go rules that balanced the Federal budget. Why not have that same standard for Indiana?