So I asked him, “Suppose I were willing to offer you a full-time job paying $5 an hour. Would you take it?”

“Well, you can’t do that,” he correctly answered.

“I know, but let’s say I could. I have a job for someone with your skills. It pays $5 an hour. That’s more than you’re making now, right?” I asked.

“Yes.”

“And would you do that? Would you accept my offer?”

“Yes.”

“But you make a good point,” I said. “I can’t pay you $5 an hour. That’s illegal. And frankly, I don’t have the money to pay you $7.25 an hour. So do you know what that means?”

“You can’t give me a job?” he replied.

“That’s right,” I asked.

What’s more, I added, if Idaho raises its minimum wage, it will make jobs like the one I might have given you, for employees with your skill sets, that much more difficult to fill.

And indeed, this is the legacy of the minimum wage. Politicians offer to pay entry-level wage earners more money, with promises that their economic meddling will yield helpful benefits. It never does, and furthermore, it makes economic opportunity for our most vulnerable people, especially teenagers and entry-level workers, even more out of reach.

Peter Crabb, a business professor at Northwest Nazarene University and a member of the Idaho Freedom Foundation’s Board of Scholars, pointed out recently, “The national unemployment rate for workers age 20 and over is averaging 7 percent in 2013, down from 8.6 percent in 2009 when the federal minimum wage last went up. Meanwhile, 24 percent of workers ages 16 to 19 are unemployed today, the same average rate as in 2009, despite nearly 1.5 million new jobs since then.”

In other words, current public policies are making it harder for young people to realize the American Dream.

Anne Nesse, a former candidate for the Legislature who is leading the charge to raise the minimum wage, told reporters a couple of weeks ago that she wants to raise the minimum wage in Idaho, and is working on a statewide voter initiative to make it happen. She called it a moral issue.

There is a moral issue involved, but the solution is different.

The waitress working a low-paying job at a restaurant could always leave that job and become a masseuse, a plumber, a driver’s education instructor, an electrician, a lawyer. And so on. Ah, but if only the state government didn’t make entry into those good-paying professions so much harder. She’s trapped in her low-paying job because her alternatives are out of reach and unaffordable, thanks to government,

That waitress could always open her own restaurant. Ah, but if only the government didn’t make it so hard to open a business, wherein one must navigate a labyrinth of agencies just to get started, including the tax commission, IRS, Department of Labor, planning and zoning board, city licensing office and district health office, at minimum. Alas, this option is out of reach, thanks to government.

Idahoans do have reason to be concerned about the fact that so many of their friends and neighbors earn the minimum wage of $7.25. Recent data show that a greater proportion of our state’s residents earn a minimum wage than any other state in the country.

The reason for this—the thing that is keeping Idahoans from experiencing the full level of economic opportunity—is not the state government’s failure to adopt a higher minimum wage, but the government’s willingness to put in place more and more barriers to economic opportunity, even in Idaho.

That has changed, even reversed. Now, lawmakers openly talk about how the state’s tax commission is worse to deal with than the IRS, that the tax commission has become increasingly aggressive in its scrutiny of Idaho taxpayers.

It is a story that I hear over and over again as I travel the state, taxpayers tell me of being targeted by the tax commission, undergoing the agency’s relentless nitpicking and reinterpretation of Idaho law. Sometimes it costs as much to fight an audit as the bill being proposed by the tax commission, so some choose just to pay up. One told me (and backed it up with documentation) that the tax commission went after an Idaho business simply because it expanded, auditors figuring “there was probably something there.” Another business owner is contemplating a move to another state, just to escape the clutches of the Idaho tax commission.

So frustrated were lawmakers this winter that the Senate nearly rejected an appropriation for the tax commission. Now legislators are asking the Office of Performance Evaluations to determine whether the state should create a taxpayer advocacy office within the State Tax Commission. Republicans and Democrats are interested in this as a way to offer some protection to taxpayers, modeling a similar office in the IRS.

“As an attorney who represented clients before IRS taxpayer advocates, I’d estimate that I won the dispute for my clients 75 percent of the time,” tax commission critic Sen. Les Bock, a Boise Democrat who is one of the state Senate’s most vocal tax commission critics, told IdahoReporter.com. “The IRS sets a good model for how to do taxpayer advocacy, and our state needs to seriously consider it” as an independent advocate for taxpayers.

But lawmakers share some blame in the problem with the tax commission. In 2003, lawmakers rejected a tax commission budget because it didn’t have enough auditors. They wanted a robust team of auditors working to bring revenue into state coffers, pursuing tax scofflaws and closing the gap between the amount collected and the amount owed. Well, they got what they asked for.

Furthermore, rather than just reduce overall tax rates, lawmakers and the governor prefer to manipulate the market with tax incentives and credits against tax liability. But tax credits for certain economic behaviors invite government scrutiny. It invites the tax commission to ask “do you really deserve this credit” and to say “show me the documents to prove you are entitled to this break.” Do we really need tax auditors asking taxpayers if they hired certain employees, installed certain equipment or insulated a building?

The Legislature set the stage for the tax commission we have. Would taxpayers be better off with a taxpayer advocate within state government? Hard to say. An easier approach might be for the Legislature to take ownership of the problem it helped create.

The Idaho Press-Tribune opined on Friday that Allaire’s proposal was not grounded in reality, magnanimous but not fully vetted, because the proposal got sideways with Idaho state lottery officials who say the plan violated state regulations.

Because the state lottery objected, Allaire gave up on his proposal. “The irony of the situation is that the same form of bureaucracy and incompetence of government that created the financial crisis we currently face is now preventing a common sense and cost effective solution,” he wrote in a press release. “Had it not been for the obstinate attitude and positions of the Idaho lottery, the generosity of the community would have provided a solution to the financial troubles that have threatened the future of Nampa’s students.”

He’s absolutely right.

Allaire’s proposition put some creativity in the mix. It was a private, nonprofit, charitable solution. The Press-Tribune accuses Allaire of not fully airing his idea with lawyers before going public with his plan.

But under-reported in the press is Allaire’s side of the story. From the same statement released to the media, Allaire claims the Idaho lottery obstructed his plan from the beginning. He said the lottery’s position regarding online raffle ticket sales, end dates for drawings and prize donations are not based in Idaho law. But Allaire says he has no desire to spend time and energy in a legal tussle with the state lottery.

It is unfortunate that the blame in all of this has been placed on a private citizen who thrust himself into the spotlight to help his community. The blame should really be placed on the policymakers and bureaucracy that have created a regulatory barrier to a plan that would help students, parents and teachers in the Nampa School District. Whether Allaire is right or the lottery is right doesn’t matter. Either way, government stands in the way of enabling a free-market solution from occurring.

Where is the outrage at government for making it harder to solve this problem? Where is the outrage at government for standing in the way of a solution that required no additional taxes and had the potential to stop or offset serious cuts to the Nampa school system? Where is the outrage at government for failing to help Allaire make his plan become reality? Where is the outrage at government for having a thicket of regulations that make it so that an individual who comes forward with an idea cannot determine if it is legal or not, or has to battle to prove that it is permissible?

This reminds me of a case a few years ago where volunteer doctors arrived in Joplin, Mo., site of a devastating tornado, to offer free eye exams and glasses. They were told to go home because they weren’t licensed to practice medicine in that state. Then as now, certain sectors of the community were upset with the doctors for failing to acquire the proper documentation or to “fully vet their idea” before arriving to provide aid.

Once again, a Good Samaritan has raced to help the community, not because he was compelled, but because he cares. Because he didn’t want students like mine, parents like me and teachers like the ones who teach my kids to suffer. And once again, government has stepped in to shut it down at great cost to the community and the giving nature of people like Philip Allaire

The “Marketplace Fairness Act” allows states to collect sales taxes from online out-of-state retailers who sell products to residents of their states. Its advertised objective is to restore fairness because brick-and-mortar businesses must collect sales taxes, while competing with out-of-state businesses that don’t. It may not be a new tax, but it would require additional sales taxes to be collected by out-of-staters.

Sound good? Consider this:

First, why must “achieving fairness” be accomplished by imposing additional burdens through a federal law? If states want to “level the playing field,” they can already do it—just eliminate sales taxes on their own retailers (see Oregon and Montana). Idaho can best “protect” homegrown businesses, by making Idaho burdens lighter. Imagine the competitiveness and attractiveness that Idaho would have with a zero sales tax. If we had a low, simple, income tax, and nothing else, Idaho’s economy would soar.

Second, this law adds significant costs and burdens to businesses. Idaho companies should not be tax collectors/agents for other states—they should not be required to bear the costs of knowing tax laws and submitting payments in 50 states and 9,500 jurisdictions in order to comply.

Third, the interstate commerce clause was included the Constitution to stop states from imposing tariffs on goods coming from other states. The Commerce Clause is consistent with founders’ intent to create a nation of free trade within. The founders understood the myth of mercantilism.

Economics philosopher, Adam Smith ([T]he Wealth of Nations), explained how mercantilists mistakenly thought that a nation prospered by encouraging money and treasure to come in, and discouraging money and treasure from leaving. They established quotas and tariffs to limit the import of foreign goods (and its accompanying export of treasure), while encouraging exporting its own goods, sometimes with a subsidy (to get more treasure coming in).

Adam Smith expounded that the wealth of a nation lies in its production, not in its money—a nation’s wealth was better demonstrated by the value of goods and services and resources that it commanded. Thus, a nation truly prospered by encouraging trade (both imports and exports), rather than by restricting them. Prosperity comes from specialization, exchange, and industriousness—not by some false notion of shielding itself or its businesses from the benefits of things produced well elsewhere.

The Marketplace Fairness Act (MFA) creates 50 little nation-states that will all want tariffs on the others in order to “protect” their own. With the MFA, it’s only a matter of time before states will want to impose higher sales taxes on “imports” in the true spirit of mercantilism. Businesses, their employees, and consumers everywhere will be harmed. Mercantilism hurt in the 18th century, it will hurt even more now.

I’m more hopeful that advocates of urban renewal in other parts of the state, including those in Nampa, will take note: If your project is so wonderful, you ought to have no trouble presenting it to voters.

Voters in Shoshone County rejected the creation of a new urban renewal agency by a 3-1 margin. The electorate simply didn’t buy the sales pitch about the urban renewal agency and its related promise of “jobs, jobs, jobs.” Here some notions from what voters told us:

1. The county commissioners probably meant well when they promised that urban renewal would be used for the rehab of a rural road leading to mining country. But, then again, once the agency was created, there was nothing stopping commissioners from using urban renewal in other ways.

2. The commissioners promised that the urban renewal agency would cease operations in 10 years. But other urban renewal agencies have made similar promises throughout the state. Government always finds more work to do, no matter what. That rendered the commissioners’ promise invalid.

3. It didn’t seem right that the county was summarily deciding that the county’s economic future rested in mining. Perhaps some other industry would usher in the county’s economic revival. Government tends to think it knows the answer, but then gets it wrong.

4. The promise that urban renewal would mean investment in public infrastructure at no cost to taxpayers didn’t sound plausible. Voters rightfully understood that there was an associated expense, and taxpayers always pay the tab.

5. Shoshone County is not urban. And the road project targeted by elected officials is rural, remote and anything but in need of urban sprucing. The shoe just didn’t fit, and voters felt there was a disconnect between what the county was selling and what the populous was expected to buy.

In 2011, the Legislature required plans to create urban renewal agencies to go before voters. But this requirement does not extend to places where urban renewal agencies are already in place. As such, the May 21 vote was the first instance of which I’m aware that such a proposal was put on the ballot.

Meanwhile, because existing urban renewal programs don’t need voter approval, clever government officials are finding new and interesting ways to use urban renewal, including in Nampa, where a new district is to benefit one developer in one block of the city.

Like Shoshone County, Nampa officials are promising jobs, jobs, jobs at zero cost to taxpayers. Interesting, if true.

If Nampa’s plan is so wonderful, with such tremendous benefits and no downsides, Nampa officials should be willing to take their plan to voters, too. They won’t because the law doesn’t require it. They will also note the cost of an election, even though city voters just cast ballots this month and will again in November.

But they also won’t because it is possible the discerning Nampa voter might, just might, start to ask questions. And they might reach the same conclusion that Shoshone County voters reached. And elected officials simply wouldn’t want to risk that happening.

First, as an update, I entered a plea of “not guilty” a few days ago. It seemed problematic for me to admit I violated Idaho Code 49-654(2)(E) for excessive speeding when that statute doesn’t exist. So I didn’t. Based on the comments, I know some people will be offended by my decision. Oh well.

We all learn in fourth grade Civics that our system of government is comprised of three branches: legislative, judicial and executive. The legislative branch writes the law. The judiciary adjudicates the law and the executive carries out the law. The legislative process involves lawmakers agreeing on public policy and asking the executive branch to consent to those policy proposals by signing their legislation into law.

For those who have never seen the legislative process in action, it is a bit more intricate than a chamber of lawmakers being told “raise your hand if you want speeding to be illegal.” Laws are comprised of words. Words have meanings, and meanings have consequences. Accuracy and precision are important so people know whether their actions are legal or not. Because human beings tend to be imprecise, and words are open to interpretation, disagreements are often argued in front of judges and courts.

Here, the Legislature voted on a law that defines speeding, with specific words included. The Legislature didn’t break speeding up into categories of greater than or less than 15 miles an hour over the speed limit. The court did that, putting it in the position of writing law and setting policy, which violates the fundamental principles of our system of government.

But that’s not all. The Legislature decided that the court should be the sole decider when it comes to imposing penalties for infractions like the one that I received. The problem with that again goes back to fourth grade Civics. If I get a speeding ticket and the penalty appears too high or too low, I can petition my lawmakers to do something about it. But more likely, I’ll see them in the grocery store, or the gas station, or at church. I’ll be able to ask my very own lawmakers why they set the penalty as they did, and I’ll be able to hold them accountable for that decision at the ballot box each two years.

The system in place for determining infractions in Idaho doesn’t allow for that. The decision is made by an unknown committee, and that panel takes its recommendation to the state Supreme Court, which has final authority.

Even if you argue that it is OK for the Legislature to give the court so much authority to set fines (and I don’t), I think it’s clear that my system of meting penalties is much more transparent and accountable than the current system.

When applied correctly, our system of government with its separate branches exercising separate powers is the envy of the word. That system generally works well. But at times, not so well. This, I believe, is one of those occasions.

So today I stand with a minor disagreement regarding the application of law as passed by the Legislature, as administered by the court and as carried out by the executive branch. And I have a right to access the court with my grievance. I have the right to write about it. I’m not sure why certain people find that so offensive.

County commissioners have said that their only intent is to reinvigorate mining by fixing Big Creek Road. This is hardly an “urban” corridor, which should raise red flags for voters. And for the property owners of on Big Creek, don’t be surprised what comes next: The county will re-assess your home, determine it is worth more because of the new road, and that increase in valuation will be used to pay back the debt associated with the road project.

And indeed, just because the road is built doesn’t mean it will translate into additional mining activity. It is quite possible the county will end up with a nice, improved road but little economic activity to show for it. That means taxpayers will be on the hook for higher taxes and they will get nothing in return.

But wait, there’s more: Once an urban renewal agency is created by a vote of the people, it remain in place forever. Yes, Big Creek Road is the only project discussed today. But what’s next? A new jail? Courthouse? School buildings? We have seen this before in other parts of the state. Because voters need to approve bonds, urban renewal is a handy way to bypass voters on all projects going forward. You will never again be asked to approve anything. Yet your taxes will go up, for items you would have never imagined endorsing, all in the name of economic development.

I think a lot about the impact of Idaho law on the working poor. My job isn’t just to promote low taxes, less government and less regulation; these are items typically found in the vernacular of the people from “our” side. No, we must think more about whether a law serves to unfairly inhibit or punish people in the pursuit of happiness and the enjoyment of the fruits of their labor.

For me, a $155 speeding ticket, while annoying, isn’t devastating. Sure, I will cut something out of my budget to pay the fine, but that item won’t be food for my kids or electricity to heat my home. For others, sadly, that would be the case. The gas station attendant earning minimum wage will lose more than two days of income before taxes.

Now back to the fine for a law that doesn’t exist. My speeding ticket says I violated Idaho Code 49-654(2)(E), excessive speeding, for doing 73 in a 55 zone. Turns out there is no such statute. The “E” on the ticket is the state police’s own unique way of distinguishing between regular speeding and really, really fast speeding. That’s because, apart from speeding in a work zone and speeding in a school zone, there is only one kind of speeding in Idaho law, whether you are going 5 miles an hour too fast or 30. The Legislature made no distinction

The Supreme Court, however, in 1991 said there is a difference between driving too fast and really, really driving too fast. The difference between the former and the latter is 15 miles an hour. Today, the fine for speeding is $90, but past the 15 miles an hour mark, it is $155.
A couple of observations are worth making:

First, the Legislature itself should set the penalty for speeding. Instead, lawmakers, in 1988, decided that the state Supreme Court should figure that stuff out. It gave the court no parameters for doing so, and thus, my crime of speeding could as easily be $355 as it is $155. This could probably be argued to be an unconstitutional delegation of the Legislature’s authority. But more importantly, when set by the Legislature, the questions I raised previously (“Is this penalty unduly punitive on portions of our population?”) can be properly considered.

Second, in our Republic, there is a basic concept that says only the Legislature should make law; the court should adjudicate that law. In the case of Idaho’s speeding regulations, the Supreme Court has assumed the role of a separate branch of government. Is it good policy? I don’t know.

Perhaps a better policy is one that, for example, distinguishes between speeding at night and speeding in the day, speeding in a residential area or speeding on a highway. But this is something that should be worked out in the painstaking lawmaking process of the Legislature, with hearings in front of the House and the Senate, debate in the two chambers of elected officials and the consideration of the governor.

Few regulations impact everyday Idahoans as much as the rules of the road. If you drive, you run the risk of running afoul of laws, both real and imagined. Lawmakers and the court would do well to get this portion of the law correct.

To read the full Index report, click HERE.

In the shadows of all of this opportunity, proponents of collecting taxes from Internet sales are back. They plan to show up at the Statehouse next winter armed with new ammo; namely, a column written by Reagan economist Art Laffer. Laffer wrote in the Wall Street Journal recently that states would do well to collect taxes from goods sold via the Web. Laffer wrote his column ahead of a pending U.S. Senate vote on a bill that would facilitate the multistate collection of Internet sales tax.

“The exemption of Internet and out-of-state retailers from collecting state sales taxes reduced state revenues by $23.3 billion in 2012 alone, according to an estimate by the National Conference of State Legislatures. The absence of these revenues has not served to put a lid on state-government spending. Instead, it has led to higher marginal rates in the 43 states that levy income taxes,” Laffer wrote. He said states could lower other taxes by collecting taxes on items sold online.

When I told mentioned Laffer’s position to an audience in Wallace, Idaho, the crowd erupted in laughter. His position defies plausibility.

Laffer could be correct, but only if state legislatures were made up entirely of people like Art Laffer. They’re not. They’re made up of politicians who can’t help themselves but to raise taxes, even when new revenue streams present themselves.

And lest you think that Idaho is different, it isn’t. Once the state grabs a new revenue stream it can’t help but add to it, be it a sales tax or a sin tax. And this tax, the sales tax, is particularly onerous, because it forces businesses to play the role of tax collector for thousands of locales assessing the tax throughout the country.

If Idaho retailers have a problem with state tax collectors in Arkansas, what are they to do? Which elected official will represent their interests? This is a prime reason why Congress should reject this kind of legislation.

Idaho Sen. Mike Crapo says he views the Senate proposal to be a matter of state sovereignty, and is leaning toward support for the bill. He is also echoing the Laffer argument that states will use the additional revenue to lower other taxes.

Idaho retailers may have reason to complain about the 6 percent government surcharge added to their products. But if they’re really concerned about it, maybe they should start lobbying the government to cut the spending made possible by the high sales tax rate. That’s much easier, and more preferable, than crushing our entrepreneurial spirit by compelling Idaho’s budding Internet-based small businesses to comply with sales tax enforcers from thousands of jurisdictions across the country.