Welcome to the July Agribusiness issue of NorthBay biz magazine. California’s economy has seen boom and bust cycles occur in the glamorous and highly publicized iterations of the high-tech industry over the past several decades. Possessing a lower profile and much steadier performance, the state’s economy, however, remained largely rooted in agriculture during the same timeframe. In 2004, California’s principal agriculture revenue crops—including livestock, poultry and aquaculture—generated more than $30 billion in sales. In the North Bay, the Ag sector continues to contribute mightily, not only to the local economy, but also to the rhythm of life in this fertile region.
Our cover story looks at the equine communities in the North Bay not only for how surprisingly much they contribute to the local economy, but also why their continued prosperity is being threatened. Other stories include why more and more farmers are climbing aboard the organic/biodynamic bandwagon; the emergence of premium olive oils as yet another cash crop; and a glimpse at an agricultural renaissance rippling through Marin County. Plus inside, you’ll find lots more stories, columnists and all our new and regular features in the North Bay’s only locally owned business publication, NorthBay biz.
A nationwide poll conducted in April of this year by Harris Interactive and commissioned by the Tax Foundation found that the majority of adult Americans believe the federal tax system “needs major changes or should be completely overhauled, and are willing to give up some deductions in exchange for tax simplification.” What gives that statement added weight is it flies in the face of the most common objection used by opponents of changing the tax code—losing or trading deductions for simplification! “Surprisingly, the survey suggests that those most willing to trade deductions away are the same ones who may likely benefit from the deductions—adults who itemize when filing federal tax returns, who claim home mortgage interest deductions, and with incomes over $75,000 per year.”
Other noteworthy results from the poll include:
• Nearly 60 percent believe the amount of federal tax they currently pay is too high.
• When asked to choose between a flat-rate income tax with no deductions, a national sales tax or the current system with deductions, 33 percent chose a flat tax, 20 percent favored a national sales tax and 21 percent chose the status quo.
• 68 percent wanted the complete elimination of the estate tax.
• 65 percent rated the value they personally get from the taxes they pay as “poor.”
• The maximum percentage of anyone’s income that should ever go to taxes is just 15 percent—far below the nation’s estimated tax burden of 30.9 percent.
• When told that an estimated 42.5 million Americans who file tax returns pay no taxes because of credits and deductions, 63 percent of adults said that everyone should be required to pay some minimum amount to help fund government.
Harris Interactive says with 95 percent certainty in samples this size, the overall results have a margin of error of plus or minus 2 percentage points.
These poll results are very revealing and seem to corroborate the sense that there’s a tax revolt in the making that’s been simmering for quite some time. The fact that our elected officials in Washington are unresponsive to the people’s will isn’t surprising. As I’ve said in this column on many occasions, the current generation of politicians are primarily concerned with the retention or acquisition of their own party’s power. Their goal is to expand the general population’s dependence on their largesse through promises of more and more entitlements to be accomplished through the redistribution of wealth.
As government grows, so does the political party’s and federal government’s power in an ever more dependent nanny state. And the accumulation of power with its attendant controlling manifestations is the prime motivator. Let’s sum it up this way: diapers on infants are a lot like our elected officials—they should be changed often and for the same reason. I didn’t think that one up. I’d like to give the author attribution but I don’t know where I read it. As the late, great Senator Everett Dirksen (D-Il) once said about his brethren in Congress, “When they feel the heat, they will see the light.” If Congress ever needed to feel the heat, it’s now. The great issues of the day aren’t being meaningfully addressed; instead we get rhetoric designed to divide and inflame—to pit the nation against itself. It’s beyond time to get some leadership in both parties that wants to lead and heal, not snipe and divide for their own purposes.
It’s been said that people get the leadership they deserve. If we as a nation don’t deserve better than what we’ve got the future is truly grim. It’s time to shed our complacency and demand better from government. It’s time to turn up the heat in Washington.
Last month, I talked about the merits of a national sales tax replacing our current federal tax code. This month, in the little space left, I’d like to enumerate some of the benefits of the flat tax versus our present system. Dick Armey, one of the champions of the attempt to adopt a national flat tax, recently commented on an engraving on the IRS building in Washington that reads, “Taxes are what we pay for a civilized society,” by saying, “Unfortunately paying taxes does not bring society a civilized tax code.” He’s right. When the average person spends 26 hours filling out a Form 1040 and more than 60 percent of Americans are forced to pay a tax professional for their help, something’s wrong. It’s not surprising professional help is needed when you begin to sort through the thousands of pages that comprise our tax code. According to Armey, more man-hours will be required to file our taxes this year than the time it takes to build every car, truck and van assembled in this country.
Nine countries currently employ and enjoy the benefits of a flat tax system. The flat tax approach allows personal deductions for everyone so families can feed, clothe and shelter themselves before paying a cent to the government. All income earned above that rate would be taxed at the same rate. No other exemptions. No loopholes. No special interests. No fuss. Annual taxes could be filed in minutes. A flat tax treats all income equally and eliminates double taxation. And in an ever more global economy, a flat tax makes America more attractive for investment and job creation. Soon after America was founded, Chief Justice John Marshall wrote, “The power to tax is the power to destroy.” Let’s hope that more than 200 years later the Chief Justice’s words aren’t prophetic.
That’s it for now. Enjoy this month’s magazine.
