We survived!

No. Not the latest weather crisis over the weekend that all the weather stations had to interrupt regular programming to tell us about. Our survival was not weather related. What we survived was the end of the latest session of the Missouri General Assembly.
The Missouri General Assembly ended its regular session last week. There is still the veto session in the fall. There might even be a special session. However, for now the legislature is likely done until September.

There was a lot of excitement as the session began. Republicans had veto-proof majorities in both the State House and State Senate. If they voted as a block, they could mathematically do anything they wanted despite a likely veto by the governor. However, building consensus on what they wanted to do proved more difficult than some had expected or at least hoped.

Some big things were kicked around as the session began. Some hoped that Right to Work would be addressed. Others advocated for sweeping education reforms. Others thought this might finally be the year that we clean up the mess with tax credits. None of those things happened.

Of course, some times the victory is legislation that does not get passed. A major victory is that the legislature resisted the push to expand ObamaCare in Missouri. It sounds good on the surface. If Missouri will expand Medicaid eligibility, then the federal government will send all this money to Missouri. However, the extra money from the federal government is temporary. If the legislature agreed to the expanded Medicaid eligibility, in a few years it would mean massively greater Medicaid costs for Missouri without the money from the federal government to cover those costs.

We have been down this path before. Carnahan and Holden made massive expansions to Medicaid eligibility. It put Missouri on a path that Medicaid costs were going to overwhelm the state budget. It took the leadership of then-Gov. Matt Blunt and a Republican legislature to rein in this out of control Medicaid spending. We don't want to go down that path again.

The legislature also resisted the push to pass a new statewide sales tax. Early on it sounded like this was going to pass. The tax increase was for a legitimate state functions – primarily roads and bridges. All those set to profit from the tax (i.e., heavy contractors and unions) were pushing the legislation. However, the proposal died on the last day of session.

The legislature did pass a historic income tax cut. This legislation is designed to reduce the highest marginal tax rate paid by all taxpayers. It is also designed to reduce the taxability of the income of certain pass-through entities (such as partnerships, LLCs and S Corporations). This is designed to compete with the tax law that went into effect in Kansas on Jan. 1. However, Gov. Nixon is expected to veto this bill.

Some less sexy things did get done. The legislature did send more than 150 bills to the governor, including an attempt to fix the Second Injury Fund, which has been near collapse. Exciting? Maybe not. Important? Yes.

You know how the joke goes “No one is safe when the legislature is in session.” Well, lucky for us, the legislators have all gone home for the summer. Phew!

(James Thomas of Platte County has long been active in Republican politics. Email him at james@jct3law.com)

Last week food service workers in St. Louis walked off the job pushing for higher wages. These sorts of protests started in Chicago and New York City. Now they have come to St. Louis. Kansas City or even Platte City will likely be targeted soon by these union organizers.

These fast food workers are pushing for higher wages. Their argument on the surface might sound reasonable. Rev. Martin Rafana, co-chairman of the Missouri Jobs with Justice workers' rights board of St. Louis aid “We're not asking for the moon, we are asking for what these multi-billion dollar corporations can afford to pay.” The slogans the workers chanted of “We need change, and we don't mean pennies” and “We can't survive on $7.35” may also sound kind of catchy. The organizers also presented a study from the Missouri Women's Council that claims the self-sufficiency standard for an adult with one child living in St. Louis County is $14.85 per hour working full time with benefits.

The problem is that these workers are completely missing the point. Wages are NOT set based upon how much money you want or need to live on. Wages are set based on the value of the service you as a worker provide. Making sandwiches at Jimmy John's or flipping burgers at McDonalds (two of the fast food establishments picketed last week) is not a highly skilled job. Almost anyone can do it. That is why these jobs are often the entry point for teenagers with no prior work experience wanting to make some extra money for car gas, car insurance or date money.

There is nothing wrong with doing entry-level jobs. We all have to start somewhere. No matter what the job, all workers need to take pride in their work, be responsible, show up on time and provide as efficient and faithful service as possible.

I got my first job when I was in junior high. I truly started out in the legal business on the ground floor or, more accurately, on the floor. I cleaned a law office. I got down on my knees and scrubbed the floor. I dusted the bookshelves, did the dishes, ran the vacuum and scrubbed the sink and toilet. Not exactly a lofty beginning to a legal career, but we all have to start somewhere. I did this job with the dedication that my parents instilled in me. And, just in case I might fall short of this standard, my mom would come by and do an inspection before she took me home from my job. (Obviously she was still my ride in junior high.)

I made a whopping $8 a week. I was thrilled to have the job and the pay was certainly fair for the services I provided. That's the whole point. How much you make at your job is NOT based upon how much you would like to make or how much you need to support your family. Your pay is to be based upon the value of the service you provide.
How would my clients feel if I told them I was going to double my hourly rate because I needed/wanted to buy a third Suburban this year? They would fire me and go somewhere else for their legal services. I see that same thing happening to folks who want to strike at a burger or sandwich joint.

(James Thomas is a veteran of local Republican politics. Reach him at james@jct3law.com)

News out of Jefferson City this week reminded me of a childhood book where a character learns of good news only to learn of bad news, followed by goods news, followed by bad news, back and forth until the end of the story. As Missouri citizens we got a bit of good news, bad news and semi-good news from the Missouri capitol.
The Missouri Budget Director Linda Luebbering announced a dramatic jump in April revenue collections by the State of Missouri. Missouri's year-to-date net general revenue collections are reported to be up 11.2 percent compared to 2012. Net collections for last month were 27.4 percent higher than April 2012. Luebbering estimated that Missouri is on track to collect nearly $500 million more in state revenue this year than it had expected.

Luebbering stated that a major source of the increased revenue in April was the collection of income taxes on capital gains. She attributed this to the taxpayers' stock holdings no longer losing money. Of course, she did not mention that a lot of capital gains may have been generated at the end of 2012 -- and the taxes on those capital gains collected in April -- because taxpayers were fearful that favorable federal capital gains rate were going to expire on December 31. Luebbering also reported a sharp increase in sales tax collections, but she did not offer an explanation for this windfall.
Regardless of the events that triggered the new revenue, Missouri being able to exceed its budgeted revenue projections is a good thing. This is especially true because Missouri has had to borrow money from the Budget Reserve Fund during fiscal year 2013. The strong revenue numbers for April have allowed this loan to be repaid.

Now for the bad news: The rosy revenue report was announced on Thursday morning. By mid-morning, Gov. Jay Nixon announced a proposed use of this “newfound” money. Even worse, by the end of the day, the Republican-dominated Missouri House had adopted an amendment to spend much of this “new” money.

However, there is a bit of good news about how Nixon and the Missouri House proposed to spend the money. Nixon wanted $86 million allocated to one-time spending for capital improvements. The amendment adopted by the Missouri House called for spending $121 million for several capital projects. These projects included $38 million to purchase the building next to the Capitol Building, $50 million for repairs to the Capitol Building, $20 million to improve Missouri parks, and $13 million for design work to replace a hospital for the mentally ill. Sure. The politicians are burning through this “new” money like drunken sailors on a three day pass after a six month cruise, but at least they are spending the money on capital items that are one-time costs and not new programs and new overhead. (Of course, any news buildings will obviously cost the state more money for maintenance and utilities on an on-going basis.)

So, for those keeping track at home: good news – more revenue for Missouri than expected; bad news – the politicians burn through this newfound money within 24 hours of “discovering” it; semi-good news the politicians are spending the money on capital improvements, many of which are long overdue and not spending this money on new government programs that will become part of the budget in perpetuity.

(James Thomas is a veteran of local politics in Platte County. Email him at james@jct3.com)

Another big debate is brewing for our community: Should the airport be consolidated into a new single terminal structure?

I really hate to fly. It isn't a fear of flying. It is the hassle of flying. You are supposed to be at the airport two hours early. You show up and your flight is delayed. There are all kinds of hassles of whether you can take your shampoo in your carry-on.

My wife is great at flying. She travels all over the country on business and spends at least 30 days a year out of town. So, she is really good at cramming everything she needs for a two day business trip into a single small carry-on and knows all the rules about hot big your shampoo bottle can be and how to get preferred seating on your flight and easier check-in. However, I don't have a clue about these things and simply prefer to drive if I can get to my destination in less than five hours.

On those occasions when I do have to fly, I am impressed about how friendly our airport is. It is easy to get in and out. More importantly, since my wife is usually the one flying and I usually pick her up or drop her off ever since her gas tank got siphoned while parked at the airport, I really like the convenience of being able to pull up to the gate where my wife walks off the plane and pick her up right on the street.

For quite some time now, the Aviation Department of Kansas City has been discussing consolidating to a single terminal format. They do have some really good reasons for this. One key reason for the single terminal is that the security checkpoints could be reduced to a single checkpoint. This would result in the need for less and equipment and fewer personnel because everyone at the airport would be going through the same checkpoint for all flights. Of course, for travelers, this creates the nightmare of a potentially massive and slow single checkpoint. (I have certainly experienced this sort of nightmare in other cities.)

Another reason for the new structure is that the airport terminals are aging. In our “throw away” society, there is a tendency to tear down an existing structure and build new rather than continually repairing on an aging building.

Of course, there is really probably another issue at play: money. The Aviation Department is an “enterprise fund” for accounting and budgeting purposes. Although the Aviation Department is under the umbrella of Kansas City, it has its own funding sources – leases, fees, etc. -- that do not include support from the general tax revenues of the city. Right now the department has been very well run and has a nice stream of cash flow. The concern is that if the Aviation Department does not have a need for this cash flow, the city will try to divert this money to other purposes. So, the department needs a big project that costs a lot of money.

At this early stage of the discussions, there are two key concerns that I have about a single terminal. First, I would hate to give up the convenience of our airport. Second, I just want to ask the question of whether a new single terminal is really the best way to spend $1 billion. I'm sure this will be hotly debated over the next few months. Stay tuned.

(James Thomas is a veteran of local politics in Platte County. Email him at james@jct3law.com)

Obama's attacks on the middle class continue. Obama released the fifth budget proposal of his presidency and it is loaded with ways to take more money from the middle class.

One proposal is a $3 million limit on how much people can keep in their IRAs and other retirement accounts. At first blush that might seem like a lot. However, when you think about investments like certificates of deposit paying one percent or less in interest right now, a $3 million IRA invested in certificates of deposit would only return $30,000 in interest. Not exactly enough to enjoy the “lifestyle of the rich and famous.” And, more importantly, if Obama can get such a cap in place, it is only a matter of time before such a cap is slowly lowered to capture more and more people in the limit.
Obama has also proposed reducing the deduction for the interest on your home mortgage. There are several options for how this has been proposed. One is to lower the existing $1 million cap on the size of deductible loans, eliminating the interest deduction on mortgages for a second home and imposing percentage of income limits on the itemized deductions of high income earners. This proposed tinkering with the home interest deduction won't affect everyone, but it would be a hard hit for taxpayers in the $75,000 to $200,000 income range.

The bottom line is this. All of Obama's policies are aimed at hurting the middle class. Now some folks we say these people are the “upper middle class,” but the taxpayers that Obama is targeting are heavily made up of folks who are not “rich people” by my definition.

I view “rich people” as people who don't have to get up and go to work in the morning. They have enough resources that they can just live off of their money. I do not consider someone “rich” just because they happen to get a nice paycheck. Yes. They may make more than $100,000 per year or even more than $200,000 per year. They may live in a nice house, drive relatively new cars and go on a nice vacation every year. However, when they don't get up and go to work in the morning the cash flow stops and their “comfortable” lifestyle is significantly less comfortable.

The Obama proposals aren't going to significantly hurt “rich” people. Yes. A home interest deduction might be nice for someone making more than $1,000,000 and with $20,000,000 in assets. But, they are not going to dramatically feel the pinch of the loss of the home interest deduction. Truthfully, these taxpayers probably don't have home mortgage interest. No. The real sting is going to be felt by those folks who have been living “comfortably.”

The same is true with the cap on retirement accounts. Someone who has $3 million in their retirement account might seem “rich” to most people, but a 1% return on $3 million won't allow you to live “high on the hog” especially if you are early in your retirement years and your principal needs to last you for a remaining life expectancy of 20 to 25 years.

The Obama plan is simple: Prevent lower middle class folks from ever reaching the dream of entering the upper middle class and also prevent folks in the upper middle class from ever really becoming “rich.”

(James Thomas has long been active in local Republican politics. Email him at james@jct3law.com)

The ideas of liberals are frustrating. They believe in a welfare state where as many people as possible live off the government rather than promoting policies that create a society where people become independent, personally responsible and self reliant. They tell us that they can spend our money better than we can so we need to hand our money over to them for them to redistribute in accordance with their priorities. They tell us that an unborn child is unworthy of protection, but don't any one dare harm the habitat of a migrant bird. They tell us that we need to let people share their “unnatural” sexual preferences, rather than those with such preferences just keeping these preferences private.

Yes. The ideas of liberals are irritating. I STRONGLY disagree with them. However, we live in a free society and liberals are entitled to have their own opinions even if they are wrong. So, while I strongly disagree with liberal ideas, I respect the fact that liberals can have those opinions.

No. What I find outrageous about liberals is that they think conservatives need to be open minded about liberal ideas, but liberals do not believe that conservatives have a right to express their opinions. Even more outrageous is that liberals believe they can make vicious and rude comments about anyone who does not agree with them.

A great local example of this liberal attitude was shown recently by the editor of a left-leaning newspaper in the county. As the owner of his own newspaper, the editor is free to express his opinions in print as he chooses. Of course, he doesn't think that anyone but he and those people who agree with his positions have the authority to express an opinion on any issue.

A group of citizens joined forces to create the Taxpayer Protection PAC. This PAC was created to participate in multiple elections for many years into the future, but its first act was to oppose the Platte County Roads Sales Tax. The leftist newspaper described this PAC as “some folks who were hoping to undermine county progress in the dark and under a veil of secrecy.” Huh? “In the dark?” “Under a veil of secrecy?” All the activities of the PAC were reported to the Missouri Ethics Commission with every nickel received and spent, a public record that is online for all the world to see. Where is the “dark” and “secrecy”?

The truth is that the leftists editor didn't like that this PAC mailed postcards and made telephone calls to registered voters. Wait. Isn't that what you call free speech?
Here is a little reminder for all the liberals out there. The First Amendment reads as follows: “Congress shall make no law . . . abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for redress of grievances.”

I'm sure the leftist editor is familiar with the “freedom of the press” in the First Amendment. I'm betting it is near and dear to his heart. But, that is not the only thing in the First Amendment. It also includes the right of citizens to speak freely. So, liberals need to quit being angry about conservatives expressing themselves. Conservatives believe in the right of liberals to share their wrong ideas. Liberals need to respectfully listen to the right ideas of conservatives.

(James Thomas has long been active in local politics. Reach him at jct3law.com)

The Platte County Roads Tax passed last week. I'm not really surprised. Many local communities have become dependent upon the supplement from the county to fund their road maintenance programs. The proponents created fear amongst the citizens of these local communities that they would not have any money for roads in the future. (Of course, the people creating these fears are the same local leaders who irresponsibly allowed their funding of road improvements in their communities to be heavily dependent upon money from an outside source.)

I actually was only mildly disappointed with the renewal of the Platte County Roads Tax. Roads are a legitimate function of local government. My real objections were that (1) the county commission has failed to take a comprehensive look at the funding sources for the county and (2) the use tax generated as a result of the Platte County Roads Tax will not be spent on roads or at least spent on something that will expire when the Platte County Roads Tax expires in 10 years.

The lack of a comprehensive analysis of the county's funding sources is particularly disturbing. The county has the multi-million dollar radio obligation hanging over its head, but the county has a parks program that is the size of the county's general revenue sales tax. The allocation of resources just seems out of whack.

The “secret taxes” created by the special purposes taxes are what make me the maddest of all. The roads sales tax will generate millions of dollars of Use Tax. Is this money spent on roads? No! It is reallocated to other purposes. It just seems dishonest that one tax increase for a legitimate purpose creates another tax that is used as a slush fund for unrelated purposes.

Even if the use tax from the roads sales tax was not dedicated to roads, I would at least like to see it dedicated to something other than a general slush fund for the county. When the roads sales tax was first adopted, the corresponding use tax was used to fund the bonds for the Platte County Resource Center. The county needed the Resource Center like we need another hole in our heads, but at least the first round of use tax was dedicated to something that would expire with the original roads sales tax rather than just general spending that never goes away.

One thing that is very interesting is that the only roads that the county is responsible for are in unincorporated Platte County. However, the voters in these areas tended to vote against the roads sales tax (No votes in Platte City 57%; New Market 64%; Edgerton 53%; Camden Point 54%; Hoover 68%; Shiloh Springs 70%; and Seven Bridges 59%). The people in areas where the county is not responsible for their roads seem to be willing to pay at least twice -- once to the local jurisdiction that is responsible for their roads and a second time to the county for roads their local jurisdiction should already be paying for.

Two great things about the roads tax are that the county is much more efficient at spending its money than Kansas City and Kansas City tends to allocate money to projects in Platte County because of Platte County's contribution. So the renewal is not entirely a bad thing. I get to drive on Kansas City roads that are heavily funded by the county. Of course, I am getting to pay for these roads twice. I guess I'll just have to drive on these roads extra to make up for that.

(James Thomas has long been active in local Republican politics. Email jct3law.com)

In most things in our lives, common can sense can get us a long way. This is not the case when it comes to tax law and dealing with the Internal Revenue Service. A recent Tax Court case, Durden v. Com'r., T.C. Memo 2012-140, emphasized this lack of common sense.

The Durdens made $22,517 in contributions to their church during 2007. All but $317 of these contributions were made by checks in amounts larger than $250. The IRS audited the Durdens' return and denied the Durdens' charitable deduction. In response to the denial of the charitable deduction, the Durdens provided copies of cancelled checks and a letter from their church that acknowledged the contributions. The letter from their church was dated Jan. 10, 2008, which was before the April 15, 2008 due date of the Durdens' 2007 return.

The IRS rejected the acknowledgement from the church because it did not contain a statement that “no goods or services were provided in consideration for the contributions.” The Durdens obtained a second acknowledgement from their church that contained the “no goods or services” disclaimer. However, since this second acknowledgement was not obtained until after the Durdens had filed their return and were under audit, it was dated after the due date of the Durdens' return.

The IRS rejected the second acknowledgement because it was dated after the due date of the Durdens' return. On appeal, the Durdens argued that they had substantially complied with the substantiation requirements for their charitable contribution deduction. The Tax Court rejected the Durdens' “substantial compliance” argument.
The denial of the Durdens' charitable contribution is consistent with the letter of the law. The first acknowledgement was statutorily deficient because it did not contain the required “no goods or services” disclaimer. The second acknowledgement did contain the required disclaimer, but it was statutorily deficient because the second acknowledgement was provided after the due date of the Durdens' return. Therefore, the Durdens did not technically comply with the requirements for their charitable contribution deduction.

While technically correct, this is a ridiculous result. There was no ill will or bad intentions on the part of the Durdens. There is no argument made that the Durdens did not actually make the contributions to their church. There is no argument that the Durdens actually received any goods or services in exchange for their contributions. There is no indication that the Durdens' church was a “fake” church created to avoid taxation. These were just dedicated, faithful churchgoers who had one sentence left off the contribution acknowledgement from their church.

This is an easy problem to have. Most taxpayers probably don't even know about the required disclaimer. They probably just check the dollar amount on the charitable contribution acknowledgements against their records. Some churches or other charities may not be paying close attention to this substantiation requirement. Yes. The substantiation requirements are in the Internal Revenue Code. Yes. The taxpayers and the charities need to follow the law. However, a little common sense is necessary in the application of the law. This is just another attack on honest, hard-working people by the government. Maybe the IRS should quit picking on hard working honest folks and actually go after the REAL tax cheats, many of whom are in President Obama's cabinet, including Obama's recently retired Secretary of the Treasury.

(James Thomas has long been active in local Republican politics. Email him at james@jct3law.com)

I am worried that maybe I am becoming a liberal. Two weeks ago the extremely liberal editorial board of the Kansas City Star and I agreed that local sales tax rates were becoming too high. (I've thought this for a long time, but the Star seems to have just figured it out.) Then earlier this week I read an article that said that Sen. McCaskill is calling for an end to the free cell phone program. Have I become a liberal?

McCaskill has proposed ending the government program that gives free cell phones to people receiving low-income or disability benefits. Of course, the cell phones aren't free. Those of us who work hard, are responsible and pay our bills are actually paying for these “free” cell phones.

One of the problems with the program is that the program is fraught with fraud and abuse. One salesman worked with a TV station in St. Louis on a day he was distributing cell phones in St. Louis. The TV station noted that people were standing in line to get free cell phones while talking on a cell phone.

Of course what really set McCaskill off is that she was solicited for a “free” cell phone. Maybe they picked her name up off the government pay roster. I mean we are paying her $174,000 per year.

The whole “free” cell phone program is particularly upsetting to my younger daughter. (We let our older daughter have a cell phone a few months before she started high school, but our younger daughter still does not have a phone.) She knows we pay a ton of taxes. She is pretty hacked off that her parents are paying taxes to pay for someone else's cell phone while she doesn't have one.

On further reflection, I'm not becoming a liberal. It just happens that these off the deep end liberals (Sen. McCaskill and the KC Star) are finally admitting that some of the ridiculous level of taxation and government spending is out of hand. Finally! Too bad they aren't really opposed to the out of control taxation and spending.

Some friends and I did have a little bit of a chuckle last week. We were talking about RINOs, which stands for Republicans In Name Only. Now we normally use the RINO label in a derogatory way. It refers to people that want to be “Republicans” because it is currently the “cool thing to do,” especially in local politics, but they don't want to be “Republicans” from the perspective of conservative ideology. For many years now “Republicans” have not been acting like conservatives. This is true at the federal level where “Republican” officeholders claim to be conservative when they are in their home states, but vote like liberals when they go back to Washington. We also see local elected officials waving the “Republican” banner at election time, but acting like “tax and spend liberals” once they get elected.

My friends and I realized that maybe we are the RINOs. Of course, we are using the term in reverse of its normal usage. In this context what we mean is that we are conservatives that have traditionally considered ourselves to be Republicans, but “Republican” apparently now means supporting “tax and spend” policies. So, since we are still conservatives, maybe we're now the Republicans “in name only.”

(James Thomas is a longtime local Republican leader who can be reached at james@jct3law.com)

They're back! Yes money grubbing politicians are again trying to get in your wallet. And this time it is much closer to home than those far away folks (both geographically and politically) in Washington or even Jefferson City for that matter. No. This time those politicians are the newly elected Republican (at least in name) Junior Commissioners in Platte County who want to raise your sales taxes. (This really is the renewal of an expiring sales tax, but renewing a tax that would expire is a tax increase.)

Despite being adamantly opposed to more taxes, part of me doesn't want to be too upset about this renewal of the roads sales tax. Roads truly are a legitimate function of government. Government needs money to be able to fund its responsibility of taking care of the roads, but I still have some frustration with this particular proposal.

First and foremost I'm upset about the renewal of the roads sales tax because with the roads sales tax a corresponding use tax is created. This use tax will likely generate more than a million dollars a year. Are the commissioners willing to dedicate this use tax to roads? No. They want this money to spend on extra stuff they want and that extra stuff is NOT roads.

Second, I am extremely irritated with the way the renewal of the parks sales tax was handled just a few years ago. I have been calling for a comprehensive consideration of the allocation of the county sales taxes. Right now we have a half cent general revenue tax, a half cent parks sales tax and a 3/8 cent roads sales tax. These priorities seem all goofed up. Yes. Parks are nice, but roads are more important. Shouldn't the roads sales tax be a half cent and the parks sales tax something less than 3/8 cent?

Third, the commissioners have already admitted that more taxes are coming. They are talking about additional taxes to pay for the law enforcement radios and maybe another sales tax to create a slush fund for law enforcement. Now don't get me wrong. Law enforcement is another very important government function that needs to be funded. However, instead of asking for the parks tax a few years ago, the roads tax now and another tax later, the commissioners need to take a comprehensive view to their funding needs and not keep coming back with multiple dedicated taxes.

One good thing about the existing roads tax funds is how the funds have previously been handled. The existing funds are split between the county and the other local jurisdictions responsible for maintaining the roads, such as Kansas City. However, instead of just writing a check to Kansas City, the county has entered into agreements to jointly make improvements. The county provides the oversight of the project and Kansas City contributes part of the money. This is great for two reasons. First, it allows us to get more Kansas City projects in Platte County because Kansas City's money is leveraged with the county's money. Second, the county is much better at managing projects efficiently so the projects cost a lot less.

Should Platte County have a dedicated sales tax for roads? Probably yes. Has this particular proposal been thoroughly vetted so that the voters should approve it? No.

(James Thomas has long been active in local Republican politics. Email jamesiiiandsandra@kc.rr.com)

The world is coming to an end. Is it the sequester? No. We discussed that last week. My latest “Chicken Little” opening is due to an editorial in last Sunday's Kansas City Star. The editorial begins like this:

How high can sales taxes go?

This doesn't sound too appetizing: The total sales tax at restaurants in the Power & Light District could reach 13.85 percent within five years. Dining on the Country Club Plaza could mean a 13.35 percent sales tax added to the bill.

Sales tax rates could top 13 percent in the future at many Kansas City restaurants. The potential sales tax rates for many retail stores could reach 10.85 percent in Kansas City within Jackson County, 10.225 percent in Independence and Lee's Summit, and 9.225 percent in Liberty.

And many tax rates could be close to or above 10 percent in cities on both sides of the state line as publicly subsidized community improvement and transportation development districts multiply around the area.

If there's a tipping point on sales taxes, the Kansas City region seems closer than ever to finding it. In recent years, politicians have leaned heavily on those taxes for extra revenue, fearing voters would reject higher property taxes. But sales taxes are regressive and can't remain the “go-to” tax of choice indefinitely.

The content of this editorial is no big surprise. My friends and I have been “banging the drum” for quite a while that the sales tax rates are too high. The stunning thing is that the Kansas City Star editorial board is finally noting that the “tipping point” is near.

The editorial goes on to note several potential sales taxes on the horizon including a possible state-wide sales tax for Missouri roads. Interestingly, the article doesn't mention the exorbitant sales taxes in Platte County.

If you buy something in the Kansas City portion of Platte County, you are going to pay what is probably the highest sales tax rate in the metropolitan area. You get dinged for the Kansas City sales taxes, which are higher than most of the surrounding cities. You also get dinged by Platte County's sky high sales tax rates, which include not only the half cent general revenue sales tax, but also another half cent for the parks sales tax and three-eighths cent sales tax for roads. And, to add insult to injury, Zona Rosa has an extra one cent sales tax for everything you buy there as a result of its Transportation Development District sales tax. Ouch!

Is the end here? Maybe. Any time the super-liberal editorial board of the Kansas City Star and a faithful conservative like me agree on something, the end must be near.

(James Thomas is a veteran of local Republican politics. Reach him at jamesiiiandsandra@kc.rr.com)

Last week I saw clips on TV of President Obama out telling anyone that would listen that “the sky is falling” or “the world will come to and end” as a result of the sequester. (Okay. A slight exaggeration, but if you watch the video clips you will see that this is only a slight exaggeration.)

It is dumb that we have to have a sequester to cause mandatory spending cuts by the federal government. We really just need Congress (particularly the U.S. Senate) and the President to act like grown- ups and adopt a budget that sets spending priorities. The only reason we have the sequester is that Congress and the president were incapable of cutting 2% from federal spending.

There are those that talk about how reducing the spending by the federal government will have cataclysmic effects. They complain that the sequester will trigger “draconian” cuts.

There has also been a great deal of concern that Republicans will be made out to be the “bad guys” on the whole spending cuts scenario. Many folks remember how responsible Republicans in the mid-90s tried to “draw a line in the sand” to curb then-President Clinton's out of control spending, but ended up getting seen negatively for the government shut down created by Clinton's refusal to set a responsible budget.

It is true the Congressional Republicans will be criticized for the desire to stop the out of control deficit spending. However, maybe instead of cowering under rocks because they are afraid of such criticism, the Congressional Republicans should just find better spokespeople.

A caller to a talk radio show last week did a great job of explaining why all the bellyaching by the Democrats is laughable. He noted that the cuts were supposed to be 2%, but since the effective date of the sequester has been postponed until midway through the federal government's current fiscal year, the cuts are really only 1%.

Democrats keep talking about how devastating these cuts of 1% well be. Well, those of us who work for a pay check just saw our FICA tax increase from 4.2% to 6.2%. The federal government didn't seem to have any sensitivity to the burden this 2% reduction in household incomes caused for working Americans. Working families just had to modify their household budgets to absorb this 2% cut in take home pay. The federal government just needs to do the same thing and find ways to trim their budgets to absorb the 2%, really 1%, cuts. Congressional Republicans should make this caller the guy that needs to be in charge of messaging for the Republicans in Congress.

I'm sure that over the next few weeks the Obama Administration will try to structure the cuts in a way to try to create as much inconvenience for Americans as possible. I'm sure that the Democrats will try to paint the Republicans as evil for not wanting the federal government to spend money it doesn't have. However, Congressional Republicans need to remember this. The American people gave Congress back to the Democrats in 2006 because Republicans started acting like Democrats – albeit watered-down Democrats. If Republicans want to remain in control of Congress in 2014, they need to do what Americans elected them to do in 2010 – STOP SPENDING MONEY WE DON'T HAVE.

(James Thomas has long been active in local Republican politics. Reach him at jamesiiiandsandra@kc.rr.com)

The current fight in Washington over the sequester is exactly what I hate about politics. President Obama and the “tax and spend” Congresspeople agreed to it and now want to demonize it.

A little background is in order. The sequester was part of the compromise reached when the federal government was hurdling towards a financial meltdown in 2011. This financial meltdown was the result of the federal government approaching the maximum debt level authorized by Congress. Conservative Republicans wanted to hold the line on spending and not let the government spend more money than it takes in. Democrats and “squishy” Republicans wanted to just let the government keep spending money it doesn't really have.

The sequester was proposed as a compromise. The federal government's debt level would be allowed to rise, but President Obama and the “tax and spend” Congresspeople in both parties agreed that if Congress could not negotiate spending cuts over the next few months, there would be automatic spending cuts. These spending cuts became known as the sequester. These automatic cuts were designed to be unpleasant to both Democrats and Republicans because they include both social program and defense cuts.

All the sequester really did was “kick the can down the road.” Instead of dealing with the problem, the sequester said that the out of control spending would be dealt with in the future. Then, if no spending cuts can be agreed to, then certain automatic cuts would happen. Of course, the cuts themselves are essentially meaningless. Since Obama came into office the federal government has been spending more than a trillion dollars (with a T!!!!!) more than it takes in. The “cuts” of the sequester are really only about $100 billion a year which is only about a tenth of the cuts that are really necessary to get spending under control

Now for the outrage. President Obama and the Democrats are now crying about how terrible the cuts in the sequester will be. They want Congress to just spend even more money and just pretend that the agreed sequester never happened. They are trying – with the help of their friends in the media – to paint Republicans as the evil ones in this whole sequester process. Of course, they seem to forget that the sequester was something that they agreed to just a few months ago.

Obama and the Democrats cry about all the evil that will happen if the sequester takes place. The FBI will be shut down. School children will starve. People will be thrown into the streets with no food or shelter.

Wait a second! There is a solution. Obama and Congress can just adopt a budget. (Something they haven't bothered to do since Obama took office.) This budget can then set priorities on what the government will spend its money on. And, the bottom line is that this budget should NOT spend more money than the government takes in. Just set some priorities. We do it with our household spending. We can't spend 50% more than we take in for five consecutive years like Obama has done and not face personal financial ruin. Just make some hard choices. However, instead of making these choices, Obama and the “tax and spend” crowd will just call for even higher taxes and more spending and blame Republicans for the Democrats not adopting a budget.

(James Thomas is a veteran of local Republican politics. Email jamesiiiandsandra@kc.rr.com)

Now that the Missouri General Assembly is back in session there are a number of proposals to reign in Missouri's tax credit programs. One of those proposals is Senate Bill 5 proposed by Senator Brad Lager to place a $50 million cap on the low income housing and the historic preservation tax credits. Currently Missouri is awarding about $150 million per year in these sorts of credits.

Missouri's tax credit system creates a way where the government is picking winners or losers by deciding who gets the tax credits. You just don't get the credit if you meet certain criteria. You have to meet certain criteria and be one of the “lucky” ones that gets awarded the credits.

Whether it's a fair statement or not, there was certainly a great of speculation that the dramatic expansion of the tax credit system in the early 90s was a mechanism to skirt the tax limitations of the Hancock Amendment while awarding “cookies” to the friends of the Democrats who were in control at the time. When Carnahan first took office in 1993, he pushed through a massive tax increase. This massive tax increase triggered provisions of the Hancock Amendment that required refunds to all income tax paying taxpayers in Missouri. One of the ways to avoid these refunds to all of Missouri's income tax paying taxpayers was to create new tax deductions, exemptions or credits. One of the exemptions that was created was the exemption of Missouri sales tax on groceries. Several tax credits were also expanded at this time.

The idea of using tax deductions, exemptions and credits to encourage certain behaviors is not necessarily a bad or evil idea. However, there is clearly the risk of corruption. If no one pays Missouri sales taxes on groceries, then everyone who buys groceries is treated the same. It is a fair approach. However, with tax credits for low income housing or historic preservation, not everyone who builds a low income housing project or makes improvements to preserve a historic structure qualifies for these tax credits. You have to fight through a politically-controlled bureaucracy to be awarded credits.

So far, there have been no charges filed for political corruption for elected officials or political appointees handing out “cookies” (i.e., tax credits) to their political friends. However, regardless of whether there has been any wrong doing, it still looks “fishy.” Furthermore, this is also a system where only certain “chosen” taxpayers get the credits instead of all the taxpayers who meet the criteria receiving the same treatment. So, the government is picking winners and losers. That isn't right.

Tax credits can be a useful tool for government to use to encourage certain behaviors. I have even received some state income tax credits. As a partner in a mega-law firm, I was allocated a few dollars every year (and I really mean very few dollars) for the firm's share of certain tax credits. I have also made a few charitable contributions to charities knowing that those contributions also qualified for certain tax credits. So, I'm not entirely opposed to the use of tax credits. However, it is very important that government manage the size of the tax credits it offers and use great caution that any tax credit system treats all similarly-situated citizens fairly instead of picking winners and losers.

(James Thomas has long been active in local Republican politics. Email jamesiiiandsandra@kc.rr.com)

While Platte County is putting forth its own road sales tax, there is a discussion going on in Jefferson City for a statewide sales tax for roads.

The Missouri Department of Transportation gets the bulk of its funding from three sources. First, there is a gasoline tax that is assessed not on a price per gallon, but rather on a specific number of cents per gallon. Second, the motor vehicle sales taxes go the MoDOT. (These used to be split between general revenue and MoDOT before Amendment 3 was adopted a few years ago.) Third, MoDOT gets a substantial portion of its funding from the federal government. Of course, the federal government gets this money by imposing its own taxes on each gallon of gasoline. So, this is really money from Missouri taxpayers coming back to Missouri.

A proposal is currently being discussed to impose a new statewide sales tax that will be dedicated to roads. This has been attempted before on multiple occasions. I am quite familiar with the discussion of this issue when a statewide sales tax was proposed in 2002. This 2002 effort failed overwhelmingly for a couple of reasons.

One factor in the failure of this proposal was that MoDOT had failed to keep some of its earlier promises. In 1992, a six cent per gallon fuel tax increase was approved. This fuel tax increase was coupled with something called the “15-Year Plan” under which MoDOT promised to build certain roads. Within a few years it became clear that the folks who were running MoDOT at the time had no intention of keeping the promises made as part of the 15-year plan. This dramatically hurt the credibility of MoDOT.

Another factor in the failure of the 2002 statewide sales tax proposal was that the cities and counties viewed the sales tax as their funding mechanism. Many civic and local government leaders expressed objections to MoDOT starting to rely on a state-wide sales tax because it would cut into their funding mechanism.

I have some concerns about adding on any more sales taxes. If you buy something in the Kansas City portion of Platte County, you are already looking at a 10% tax. If you happen to buy something in Zona Rosa or somewhere else with a Transportation Development District Tax, you will pay an extra 1%. These sales taxes are becoming a hefty burden.

In the late 90s and into the early 2000s, I was one of those people who were mad that MoDOT had essentially lied about its commitment to the 15-Year Plan. I didn't want to give them another nickel as a result of their treachery. Of course, by now, all the bad actors at MoDOT who lied about the 15-Year Plan are long gone. MoDOT has new leadership that seems to be trying hard to provide quality transportation improvements. However, I am still reluctant to create any additional sales taxes. I have a different idea.

Missouri has a lower cents per gallon fuel tax than all the surrounding states. What if instead of a sales tax, this cents per gallon fuel tax is increased to something close to the average of our neighbors so we aren't the highest and we aren't the lowest? I, of course, don't want to pay any more taxes. However, if more taxes are on the table, I would encourage an evaluation of the fuel tax as the place to have this discussion.

(James Thomas is active in local Republican politics. Email jamesiiiandsandra@kc.rr.com)

The St. Louis Post-Dispatch editorial board is absolutely clueless. Yes. I know it sounds like a broken record, but they just keep pumping out editorials that keep re-emphasizing how uninformed they are.

On Saturday the editorial board released their latest masterpiece, “What's the matter with Kansas? Rex Sinquefield's theories.” The editorial was commenting on new legislation proposed in Missouri to cut the state income tax for individuals and businesses. This legislation is aimed at combating a very real threat to the economy in western Missouri that is presented by a recent Kansas tax law change.

Effective Jan. 1, 2013, small businesses will essentially pay no state income tax in Kansas. Although federal income taxes are the big tax bite that we all face, eliminating this state income tax can still be significant. Let's say you have a sole proprietorship where you earn $200,000 a year. Assuming the 6% marginal rate of Missouri state income tax, you would pay $12,000 in state income tax. However, if you could operate your sole proprietorship in Kansas and were willing to pick up and move there, you would not have to pay this $12,000. And, this isn't just a one-time thing. You could keep the $12,000 each year for every year you are in business. Wow!

The practical aspect is that this is going to be a huge hit to Kansas' state income tax. However, Kansas is gambling on something else. They are gambling that the elimination of state income tax for small business owners will prompt small business owners to relocate to Kansas. These small business owners will then be paying property taxes and sales tax to the state of Kansas instead of the state of their former location. The idea is that these taxes will offset the loss of state income tax.

There is some potential short term pain that Kansas will endure. In the first year or two, they can expect their state revenues to drop without new revenue coming in from relocated small business owners. However, eventually Kansas should succeed in attracting the kind of citizens they want.

The real foolishness of the St. Louis Post Dispatch is not just their failure to understand the math of these tax law changes. They also fail to understand the other benefits Kansas has to offer. They think better schools are the only reason for the migration to Kansas and that less money in the state coffers will cause a decline in the quality of Kansas schools. Yes. Many folks ran away from the Kansas City School District. Some went to Kansas. Others came north. However, Kansas has a multitude of other benefits. They have better protections for doctors. Their bankruptcy exemptions protect the full equity in your home rather than just a few thousand dollars of equity. If you are professional or a business owner there are a lot of reasons to move to Kansas.

Will many business owners cross the border? I have many clients already considering it. I know the potential tax savings is enough to get me to contemplate moving to the “state we hate.” (Yes. I'm still mad about Kansas citizens “invading” Missouri and murdering our citizens in the prelude to the Civil War.) But can I save enough money to make me willing to live among all those Jayhawkers? Maybe.

(James Thomas is active in local Republican politics. Email jamesiiiandsandra@kc.rr.com)

It was so exciting to see Republicans gain control of every Platte County office to start 2013. However, will this be a short-lived experience to have a Republican-only club at the Platte County Administration Building?

The early developments at the county-level remind me somewhat of what occurred at the federal level in early 2000s. Republicans had the presidency and control of Congress. Republicans truly had the opportunity to operate the federal government in a fiscally responsible manner.

What did Republicans do with this opportunity? They passed an incredibly expensive prescription drug benefit. They dramatically increased federal spending on elementary and secondary education. Republicans spent money the federal government didn't have.

The last year when the Republicans were in control of Congress and the presidency (i.e., 2006), they adopted a budget with a $400 billion deficit. This pales in comparison to Obama's deficits in excess of $1 trillion a year. Also, a large part of this deficit was driven by the fact that we were still engaged in a shooting war in Iraq and Afghanistan. However, Republican spending during this time made them look like Democrats – albeit “watered-down” Democrats.

Our new county commissioners seem to be off to a similar start. They are increasing spending, proposing to renew an otherwise expiring tax and talking about proposing even more taxes.

I know it isn't possible to operate county government without increasing spending at least a little bit in most years. The biggest expense of county government is payroll. It isn't fair that county employees are expected to go forever with no pay raises. It isn't even fair that elected county officials should be expected to go for years without any pay raise. (I know my wife did not have to worry about this during her time as a county official, but not every county official has a second income to cover cost of living increases – like rising grocery and car gas prices – while serving in such a position.)

Over the last few years, the county commission might have leaned a little too much toward austerity measures. However, the economy really was – and still is -- very uncertain. So, financial prudence is necessary. Folks who work hard at the county do need to get cost of living increases to be able to take care of their bills. (Yes. There are always some freeloaders in government, but most of the county employees do work hard to do their jobs efficiently and correctly.) So, some growth in spending is legitimate.

However, even acknowledging that some pay raises are necessary and appropriate, I am very concerned about the apparent attitude of the current county commission. They sure seemed to be adopting a “tax and spend” attitude. I'm not surprised about Commissioner Roper. She spent time in the “tax and spend” federal bureaucracy. This approach would fit with her other life experiences. However, I was not aware that Commissioner Soper had these sorts of tendencies.

It is a long time until Roper and Soper are up for re-election. By then the voters may forget their early “tax and spend” attitudes. However, Republicans lost control of Congress in 2006. In part this was due to it being the mid-term of a second term presidency. In part it was because the war had drug on. However, I think the main reason so many Republicans were “sent home” by their constituents is that they quit acting like conservatives. Will Roper and Soper have the same fate?

(James Thomas has been a leader in local Republican politics. Reach him at jamesiiiandsandra@kc.rr.com)

The fiscal cliff has been averted! Well . . . not really. It is true that the impact of higher tax rates for everyone was avoided and that the mandatory spending cuts were postponed, but we are still looking into the abyss even if we haven't actually fallen off the cliff. The federal government still does not have its spending under control.
A close political friend of mine sent me an e-mail that does a better job than I could to describe the real fiscal cliff. Here is what it said:

“Fiscal Cliff” put in a much better perspective.
* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000

Let's now remove eight zeros and pretend it's a household budget:
* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts so far: $38.50

Do you get it?
This isn't complicated. It's just math. A family with credit card debt of nearly seven times the size of its annual income is in big trouble. That is made even worse when that family is borrowing nearly 75% more than it is taking in every year. The same is true of a government that has similar portions of debt and annual over spending.
Dave Ramsey, the consumer financial advice guy from the radio, helps families with these problems every day. His starting point -- develop a budget. Of course, Congress hasn't adopted a budget in more than three years. They just spend money willy nilly without setting priorities of how to spend the money they do have.
The hypothetical family described above will end up in bankruptcy. The same is true for a government that operates in the same fashion. And with 75% annual over-spending, the government's bankruptcy is closer than ever.

(James Thomas has long been active in local Republican politics. Reach him at jamesiiiandsandra@kc.rr.com)

I found my “crystal ball” and it is time to predict the political future for 2013. As far as candidate elections go, 2013 will be a relatively quiet year. There are no county-wide or state-wide candidates up for election in 2013. However, there will be tax issues on the ballot in 2013.

Residents of Kansas City, which includes a large percentage of Platte Countians, will be facing a City Health Care Tax in April. Kansas City has had a health care tax for decades. However, in 2005 the city council pushed an additional property tax of $0.22 per $100 of assessed value to supplement the basic health care tax. This supplemental tax is set to sunset, but the City Council wants to extend the tax for another nine years. Kansas City's Health Director says that even after ObamaCare is fully implemented that there will be many people who will remain uninsured or underinsured. The bottom line is that those that live in Kansas City get to pay three times: first for themselves, second through new ObamaCare taxes and third through city taxes.

Another tax issue that Platte Countians will likely see in 2013 is the renewal of the county roads sales tax. The 3/8 cent roads sales tax was adopted in 2003. The tax is set to expire within a year. The roads sales tax was originally proposed to primarily address critical maintenance issues with roads and bridges in unincorporated Platte County. However, in order to get county-wide support, much of the road sales tax was spent on projects in different municipalities, particularly Kansas City.

This “sharing” of the roads sales tax has been a great thing at least with respect to “sharing” with Kansas City. Platte County and Kansas City have cooperated on several projects. Two things have happened from this. First, the Platte County projects have made it higher on Kansas City's priority list because Kansas City's contribution was leveraged with outside money. Second, but even more importantly, Platte County has actually managed these projects under cooperative agreements with Kansas City so the projects have been done much more quickly and much more affordably than if Kansas City was managing the project.

The good news is the county does not have to renew the roads sales tax because it needs the corresponding un-earmarked use tax. When the roads sales tax was passed the estimated use tax created as a result of the roads sales tax was set aside to fund the bond payments on the Platte County Resource Center. These bonds should be paid off this year. Before the county commission finds non-roads ways to spend this use tax, I strongly suggest that the public demand that the use tax generated by the roads sales tax also be dedicated to roads.

One thing that will be humorous to watch is whether any of the roads sales tax will be diverted as a dedicated law enforcement tax. There was much “weeping and gnashing of teeth” at the beginning of 2012 over whether there should be a dedicated law enforcement tax and whether some of the parks sales tax should have been dedicated in this manner. Of course, the prosecutor and sheriff were both silent on this issue when the parks sales tax was proposed for renewal. We'll have to see if the prosecutor and sheriff have anything to say as the roads sales tax is debated.

(James Thomas has long been active in local Republican politics. Email jamesiiiandsandra@kc.rr.com)

The fiscal cliff has been averted! Well . . . not really. It is true that the impact of higher tax rates for everyone was avoided and that the mandatory spending cuts were postponed, but we are still looking into the abyss even if we haven't actually fallen off the cliff.

The tax code is still a mess. However, things are much better than they could have been.

Bill Clinton campaigned on a “middle class tax cut” in 1992. However, between winning election and taking the oath of office, Clinton set the stage for what at the time was labeled as “the biggest tax increase in history.” We already had 15% and 28% brackets dating back to the 1986 Tax Reform Act and George H. W. Bush's 31% tax bracket that led to his defeat by Clinton. But, Clinton added on a 36% bracket and a 39.6% bracket starting at $250,000. (This extra 3.6% was deemed to be a “millionaire's 10% surtax,” but for some reason Clinton pushed for it to start at $250,000 instead of $1,000,000.)

In 2000 George W. Bush campaigned on an across the board tax cut. After taking office in 2001 Bush pushed through a new 10% tax bracket that cut the tax burden of those in this bracket by one-third. He also led the charge for ratcheting down the brackets to 25%, 28%, 33% and 35%. Yes. Those who paid the most taxes received the largest dollar amount of a tax cut, but those in the lower brackets received a much higher percentage of a tax cut.

The problem was that all of the Bush cuts to the Clinton tax rates were implemented with a ten year sunset. Obama outsmarted Republicans in 2010 and extended this sunset for two years so he could get re-elected. If the Clinton tax rates had returned at the start of 2011, we would be inaugurating a Republican president this month. Of course, that Republican president would be inheriting an economy that was much worse off than the economy is today. So, from a “what's good for America” standpoint, the two year extension made sense even if it did keep a Republican from knocking out Obama in 2012.

The Clinton tax rates were set to return on January 1, 2013, but early in the morning on January 1, a modified version of the Bush tax rates was adopted. This kept the Bush tax rates for the lower brackets, but allowed the top Clinton rate of 39.6% to return for incomes over $400,000, which happens to be almost exactly where Clinton's 39.6% bracket kicked in if you adjust the $250,000 dollar amount for 20 years of inflation.

While this AFTER the eleventh hour tax law is flawed on many fronts, one very good thing is that the new rates are NOT subject to sunset. The rates might be amended at some point, but there is no automatic amendment due to the expiration of the rate structure. Congress also gave us an inflation adjustment fix for the Alternative Minimum Tax. Unfortunately, we get back the phase out of itemized deductions and personal exemptions and a bunch of other silly provisions. However, at least we have some degree of certainty to allow businesses and individuals to do some real planning.

Now Congress needs to fix its real problem: STOP SPENDING MONEY IT DOESN'T HAVE!

(James Thomas has long been active in Republican politics. Reach him at jamesiiiandsandra@kc.rr.com)

As we start a new year, I often “look in my crystal ball” and predict the future political events of the upcoming year, but before I started writing my first column of 2013 I decided to look back and see what I predicted for 2012.

There were two predictions that I stated a year ago that “I felt really good about.” I predicted that “Sam Graves would win in a landslide and local Republicans will win solidly in Platte County.” Yeah. I know. Not exactly going out on a limb on either of these, but those were my predictions and I was right.

At the start of 2012 I hoped and even thought that Claire McCaskill would be defeated in the U.S. Senate race. However, at that time I also stated that “since none of the Republican candidates have shown that they can raise money, I'm not very hopeful.” Boy did that prove true! None of our U.S. Senate candidates showed much ability to raise money. We did have one huge self-funding candidate, but he certainly did not put up big fund raising numbers if you didn't count his own money. Akin probably would have still won despite his inability to raise money if he hadn't put his foot (or more accurately his whole leg) in his mouth. That's what happens when you combine an unpolished candidate with a campaign staff of family members and no professional campaign advisors.

I also noted that I was “not so enthusiastic” about Republicans chances in the 2012 presidential race. I noted how Republicans have often nominated the wrong candidate (e.g., Ford, Dole and McCain). Romney also proved to be the wrong candidate. Yes. He certainly appears to be a good man and a successful businessman. Yes. He was the “tallest of the dwarfs” that threw their hat in the ring for the Republican nomination. Romney had a strong national organization and had the ability to raise money. There were other candidates who had some good ideas, but none of them could put together a successful organization to run a national campaign. And the other candidates kept making mistakes that caused their campaigns to implode. So Romney was the last man standing.

Romney did a lot of things right, but three things really hurt Romney. First, although Obama is a terrible president, he is an awesome campaigner and strategist. Second, 47% of Americans pay no federal income taxes. Nearly half of the country is freeloading off of those of us who work for a living. Obama turned these people out on Election Day to get re-elected.

The thing that really killed Romney is the ineptness of Congress. Obama outsmarted the Republican Congressional leadership at the end of 2010 by negotiating a two year extension of the Bush tax rates. Obama knew that a massive tax increase at the beginning of 2011 would have devastated his chances for re-election. So, he negotiated a two year extension that would get him past the 2012 election cycle. Similarly, Obama negotiated an increase in the debt ceiling that also “kicked the can down the road” on the out of control spending to allow him to win re-election.

So here we are. What do we have to start off 2013? Six more years of Claire. And four more years of Obama.

It sure stinks to be right!

(Local Republican James Thomas can be reached at jamesiiiandsandra@kc.rr.com)