November 29, 2005

Tax Relief, Deficits, Tax Increases, and Spending

Carroll Andrew Morse

North Providence Mayor and Secretary of State candidate Ralph Mollis unwittingly jumps into a debate we’re having here at Anchor Rising. Mollis considers spending money on defecit reduction to be tax relief. According to Mark Reynolds in the Projo

Mayor A. Ralph Mollis was clear about his intentions for using a new stream of state economic aid earlier this year.

He said the town would use the money -- given to North Providence and other "distressed communities" -- for "property tax relief."

Months later, Mollis is saying the aid might help the town payoff a deficit created by unplanned spending at the tail end of the fiscal year that ended June 30. And employing the aid, in this case a sum of $509,000, in such a way would still be using it for "tax relief," he says.

Earlier this week, Anchor Rising commentor Tom W. expressed what could be considered a similar idea in reverse…
ULTIMATELY, ANY INCREASE IN THE FEDERAL BUDGET IS AN INCREASE IN TAXES - the only variables being whether the increase is in "real terms" (i.e., above the rate of inflation) and whether the budget is balanced (i.e., whether some or all of the current budget will be paid for with current and/or future tax streams).
What do the fiscal hawks out there think? Does using existing revenues to pay down a deficit qualify as tax relief?