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Proposed Fast Food Container Tax is Not A User Fee;

Campaign Finance Reform and the Goal Group

by Theresa Fritz Camoriano

1.  Fast Food Container Tax is Not A User Fee:

This past week, we have been treated to a full court press in the media promoting a tax on fast food containers.  The money collected by that tax is to be used to pick up litter along the roadsides and to clean up legal and illegal dumps in Kentucky.  Promoters are calling this a "user fee" in order to try to make it more palatable.  But it is not a user fee.  It is simply a new tax.

User fees are fees paid by the user of the services and are used to provide the services.  For example, if you pay to use a state park, and the funds received are used to maintain the park, that is a user fee.  Gasoline taxes are paid by people who use the roads, and the money is used to build and maintain the roads, so that is a type of user fee.  However, the vast majority of people who buy fast food are not responsible for litter or for the improperly maintained dumps.  Since their money would be used for these purposes, which are unrelated to their activities, the tax cannot properly be called a user fee. If we want to charge a true user fee for these activities, then we should charge the litterers for cleaning up the roadsides, and we should charge the authorities who received the fees for the dumps to clean them up. 

This particular tax generally would serve as a mechanism for taking money from people in Kentucky's urban areas who eat fast food and redistributing it to people in rural areas.  If the activities for which these funds are to be used are legitimate activities of government, such as maintaining the highways, then there certainly is no reason that the burden should fall disproportionately on the people who buy fast food.  Don't allow yourself to be fooled by the twisting of the truth.

2.      Campaign Finance Reform and the Goal Group

If you have been following the proposed NBA arena issue in Louisville lately, you will know that Louisville lost the NBA Hornets and has not decided to build an arena, but it has succeeded in receiving a large bill from the Goal Group, which was hired by  Mayor Armstrong to put together a financing package for the project.  Although the Board of Aldermen only agreed to pay $50,000 for the Goal Group’s work, the Mayor assured Goal Group that it would get paid if it continued working.  While the Mayor has already extracted a substantial amount of money from Greater Louisville Inc. and from private businesses to pay the excess over $50,000, there still is about $85,000 outstanding. The Mayor says he will get the funds from private sources.

Since local businesses already pay plenty of taxes to the state and local governments, why would they also voluntarily pay additional large amounts of money to the Goal Group?  Of course, before the deal fell through, there were businesses that stood to benefit financially from a new taxpayer-financed arena and an NBA franchise, and they might have been willing to make a contribution toward the Goal Group’s fees as a type of investment for that reason.  However, now that the deal has fallen through, that potential benefit is gone.  So why would businesses pay up now?  First, there may be favors the Mayor could grant these businesses (such as taxpayer subsidies) that would justify the “donations”.  Second, the government has great powers that it could use to punish any business that does not do what the Mayor wants.  For example, a business that does not comply with the Mayor's request might be denied building permits, might expect inspections and fines, or new regulations, and so forth.  In other words, government has become like a Mafia protection racket, and many businesses feel they have to pay up “or else”. 

So how does this relate to campaign finance reform laws?  There is currently a great outcry about the corruption of government officials by big money in political campaigns, and the pending campaign finance reform legislation would clamp down on money used in political campaigns or issue advertising campaigns, greatly curtailing the ability of people to pool their money in order to buy advertisements.  It is clear that this will reduce competition in the political arena, but will it reduce the influence of big money?

Quite the contrary!  There are still plenty of places for big money to be a player, such as in paying off debts like the one to the Goal Group, hiring family members of elected officials such as the airline industry’s hiring Tom Daschle’s wife, and so forth.  So, while the proposed law would greatly restrict competition in the political arena, especially harming outsiders, it will be a gravy train for the insiders, who will continue to be able to buy and sell political favors or protection against government abuse and harassment. 

The solution to the corruption is not to restrict competition, as would occur with the current campaign finance legislation.  Rather, the solution is to demand that government get out of the plunder business and protection racket, so it cannot be a threat to legitimate businesses and cannot be a sugar daddy to well-connected friends.

The media constantly depict campaign contributions as bribes that get business, in particular, special treatment from elected officials. They dogmatically refuse even to consider the possibility that these contributions are tributes exacted by politicians, armed with the power of government, which can make life miserable for any business that refuses to pay up.  Thomas Sowell

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