Small Government is Beautiful
Silver Stock Report
by Jason Hommel, November 1, 2006
Election season is upon us, and I was fortunate enough to interview Carla Howell. Carla Howell is a one of America’s most successful marketers of limited (small) government. I first heard about her in 2002 when she spearheaded the 2002 ballot initiative to End the State Income Tax in Massachusetts, which won an unprecedented 45% of the vote! For more about Carla Howell, visit http://www.centerforsmallgovernment.com/aboutus.htm
My questions, and Carla Howell’s answers, follow:
Jason Hommel asks: The freedom movement in America seems to be largely fragmented. There is no major leader or organization, which is probably as it should be. Those who support and believe in free markets seem to be organized as the free market, with no central authority. So, how have you been so successful as to get a 45% of the vote in Massachusetts to end the state income tax in 2002? That seems so revolutionary, yet you were so close to winning a majority. How much did you spend, and how much did your opponents spend? What was your central message? How did you communicate your message? Did you reach across many different groups to find support or did you bring your message directly to the masses? How did you achieve so close a victory when it would seem in America today that you would only achieve a 5-10% vote at the most.
Carla Howell answers: All excellent questions.
How have we been so successful? Bold, simple, small government proposals. Proposals that offer huge, immediate, and direct benefits to voters. When offered as part of a political campaign (by candidates or ballot initiative), they get attention. They engage people. They create the possibility for real movement in the direction of small government.
Our 2002 ballot initiative to End the State Income Tax did all that.
“End the income tax” is simple. Everyone knows what the income tax is, so it requires no explaining. No complicated formulas to gradually reduce it, replace it with another tax, or anything else you can’t fit on a bumper sticker.
A simple, clear message saves precious time when you have no more than a 20-second sound bite to get your message across.
We offered voters an almost immediate payback for their “yes” vote. We proposed ending the income tax completely on Day 1 of the next fiscal year. No gradual, multi-year tax reduction schemes, which are vulnerable to losing steam or getting derailed before they’re fully implemented.
Our End the Income Tax proposal was bold. It would have reduced yearly state government spending by 39% ($9 billion). We made no pretense of needing to protect government programs or to maintain high levels of government spending. In fact, our explicit goal was to dramatically shrink government spending, hence its official name: The Small Government Act to End the Income Tax. We sold cutting government spending as one of its benefits.
Because it was bold, it offered a huge and direct payback to a large number of voters. In addition to no more filing of state tax returns, 3,000,000 taxpayers would each get back an average of $3,000 - every year.
This is wildly popular with low-wage workers. The taxpayers who would only get back $1,500 or $2,500 every year need every penny of it. These were the people who, when we asked for their signature to get ending the income tax on the ballot, yanked the petition out of our hands. They couldn’t wait to sign it.
In contrast, a minor reduction in the tax rate, or replacing it with another “fairer” tax, offers almost no value to low-income workers. If they have to pay about the same in taxes anyway, not having to file a ½-page tax return once a year is of little consequence.
Ending the income tax would also generate 300,000–500,000 desperately needed new jobs. Massachusetts was hit hard by job losses - and still is. Jobs are a godsend to the unemployed and under-employed.
Our job creation claim was based on an estimate we extrapolated from two separate studies (conducted independently by the Beacon Hill Institute). They measured the impact of reducing the income tax by lesser amounts on job creation.
Our estimate took into account job losses that would result from cutting government spending. Even after laying off state workers and cutting government contracts, ending the income tax would yield a NET GAIN of hundreds of thousands of jobs. Simply by keeping more money in the hands of the people who earned it.
Our End the Income Tax initiative was a classic grassroots campaign. A total of $616,448 – and a lot of volunteer effort – bought us 120,000 raw signatures to get on the ballot, 10 man-months of legal research, a staff of 5-1/2 full time workers for 15 months, yard signs, bumper stickers, office supplies, a web site, software, ten networked computers, and other essentials.
It also bought us a tiny advertising budget of just $80,000 to run four full-page ads in the Boston Globe to make our case for ending the income tax. This was enough to force the media to cover us. They had almost completely blacked us out until that point.
As a result, voters started to learn about their opportunity to end the income tax. But still many never even knew it was on the ballot.
Roughly half the eligible adults in Massachusetts didn’t vote. Non-voters tend to pay more for government and profit less from it. Imagine how many of them would have shown up at the polls and voted “yes” – if they’d only known it was on the ballot.
If we’d had just a few hundred thousand dollars more to spend on advertising, our initiative may well have won. We may well have made the Massachusetts income tax history.
Our biggest opposition was the Massachusetts mainstream news media: 2 chains of newspapers and the Boston radio and TV stations. When they weren’t blacking us out, they were editorializing against us, attempting to discredit us, or puffing our opponents. Their so-called news coverage was just as biased as their editorials. David Brudnoy, the legendary Boston radio host for WBZ, was among a small handful of exceptions.
With powerful media allies, our opposition didn’t need to spend much at all to defeat us. Polls before the election showed us winning just 25-34% of the vote. They were shocked when ending the income tax won 885,683 votes (45%).
We can legally run an End the Income Tax ballot initiative again in 2008 (the state constitution requires us to sit out 2 elections before running the same initiative again). If we do, our opposition will take us very seriously. They will amass a large war chest to try to defeat us. We would need a substantial advertising budget to combat this force.
But we have a huge advantage. If we can raise enough to advertise just 1/10th as much as our opposition does, we stand a good chance of defeating them. It’s a heck of a lot easier to sell ending the income tax than keeping it! As Michael Cloud, who co-sponsored the End the Income Tax initiative with me, likes to say, “Give small government just 10% of the ink, and we win.”
Our ballot initiative did not have the luxury of support from other groups. The leading “tax limitation” group in the state refused to support us. They thought we were too bold and would lose miserably. As it turned out, we got more votes (45%) than their 1990 initiative did (40%) which proposed a miniscule reduction in the income tax rate. We proved that bold initiatives can actually do better than timid ones.
You can view our Boston Globe ads here: http://www.smallgovernmentact.org/SGAad_A.pdf
Jason Hommel: Seeing as how you oppose all big government programs, I assume that includes one of the biggest of all, the Federal Reserve. I, and many of my readers believe, that buying gold and silver is the most peaceful and most effective way to thwart the biggest power that big government has, which is the power to print money. But I notice that you do not promote ownership of gold and silver. For example, at http://www.centerforsmallgovernment.com/thingsyoucando.htm there is no mention of buying silver or gold. Why not? Are there political laws that gag your speech on this issue?
Carla Howell: In our overview of “What Big Government Costs You,” the Center For Small Government addresses the Federal Reserve’s printing of money as one of Big Government’s primary means of transferring wealth from private citizens to government: http://www.centerforsmallgovernment.com/bgcost.htm
We are not financial experts and therefore do not make investment recommendations. We advocate removing Big Government economic and social programs – and making government small. We trust the free market, and experts such as you, to exploit opportunities to invest in gold and silver. Our goal is to directly reduce Big Government’s size, scope and authority. Small government means gold and silver may be re-established as legal tender.
We are free of gag laws that inhibit many political advocacy groups. We established the Center For Small Government as a publisher so we would have the same Freedom of the Press granted our opponents in the Big Government mainstream media. We did not form as a 501c3 so we would be free to endorse campaigns – just as newspaper editorials do. As a publisher, we are not forced to disclose our donors. Privacy is a paramount concern for many of them. We keep all donation information confidential.
Jason Hommel: I understand and agree that big government does not work due to unintended consequences. Ronald Reagan was a champion of freedom and small government, yet government grew hugely under his tenure, and furthermore, gold and silver prices collapsed from the former peak in 1980 as he led people back into the dollar and bonds. So, governmental fiscal responsibility can actually lead to a stronger dollar, and more power for the Federal Reserve. Can a stronger dollar (and increased fraud of the dollar) be an unintended consequence of less government spending?
Carla Howell: I don’t have the economic or investment background to speak on this.
Jason Hommel: I see that we both seem to agree that people get the government that they deserve, which is why you are seeking to increase the number of voters who will vote for smaller government on every issue, every time. The big government of Roman history collapsed due to excessive government spending which bankrupted the treasury. Therefore, it seems that smaller government will ultimately result from too much government spending. Therefore, why wouldn't it help to vote to give people what they want, such as all increases in government spending on every issue, every time, which would more quickly destroy the dollar, and ultimately shrink the government?
Carla Howell: At what cost? Annihilating American wealth? Injuring champions of small government and free markets? If Big Government collapses, it will fall hardest on the virtuous and innocent. Far wiser and more just to quickly and directly make government small.
Jason Hommel: Where do you stand on the following free trade vs. Constitutional issues:
Jason Hommel: Patents & copyrights. Are they helpful or harmful?
Carla Howell: Our mission is to make government small - to remove all laws and regulations that do more than protect our life, liberty, and property. We endorse and support patent and copyright laws that protect real intellectual property judged by reasonable standards.
Jason Hommel: Immigration. Should we allow all immigrants or try to restrict immigration?
Carla Howell: Our mission, our one issue, is to make government small.
Jason Hommel: Tariffs. Should we open our borders to all trade, even if it's not "fair trade"?
Carla Howell: We advocate reducing taxes as much and as fast as possible. The best way to do this is to propose tax cuts that:
1. are simple and easy to understand, thus easy to sell to voters.
2. affect a broad constituency of voters. The more who benefit, the more who will vote for repeal.
3. are big and come with dramatic cuts in government spending so we make government small. Large tax cuts also give taxpayers a bigger payback – which motivates them to show up at the polls and vote.
Voters understand the income tax, property tax, sales tax, and estate tax. They don’t need to be explained. The savings they offer taxpayers are fairly obvious.
Tariffs indirectly tax voters and therefore are much less easily understood. I would not be surprised if many voters don’t even know what they are. This makes cutting tariffs a hard sell.
Income, property and sales taxes affect the broadest constituencies. They account for a large portion of state and federal revenues – which means they offer the biggest tax cuts for voters.
Jason Hommel: I see that you are seeking donations. There are many investors on my email list who are growing wealthy in gold and silver. How much money have you raised in 2006? What has been your budget in recent years, and what is your primary focus today?
Carla Howell: We launched the Center For Small Government in 2005. Generous donors have supported us during this start-up phase and for a year that we spent in formulation prior to launch. We put a lot of time into writing our core material and strategizing how to leverage freedom resources to make the biggest possible impact. We honed our mission, our message and our tools. They’re designed to move us in the direction of small government as fast and effectively as possible.
The Center is now moving into a second phase where we intend to focus on:
A. growing a constituency of small government voters. Increasing the number of subscribers to Small Government News**. Building a body of voters and candidates who want small government and who sign the Small Government Pledge**.
B. advocating bold and effective PROPOSALS as a key mechanism for advancing small government. Key among them will be slashing government spending and taxation.
We plan to promote small government proposals by example and by advocating their use as the centerpiece of all small government campaigns.
The Center For Small Government is uniquely focused on promoting campaigns and policy proposals that move us in the direction of small government. Almost all other political groups in America either propose:
1) more Big Government, or
2) holding the line on Big Government, i.e, keeping Big Government big, or
3) minor reductions in government that barely affect its overall size, scope, spending or authority.
In contrast, the Center For Small Government advocates bold, well-formulated, small government proposals that dramatically reduce, remove, and end taxes and government spending.
We aim to transform political discussions in America from ones that are limited to options for more Big Government to ones that always include a bold, small government choice.
Jason Hommel: What would you do, or could you do, if your donations doubled, or increased as much as ten times as much?
Carla Howell: With a budget of $350,000 in the next year, we expect to be on our way to growing a constituency of over 50,000 committed small government voters within five years – larger than the membership of Cato, of the Reason Foundation, or even the peak enrollment in the Libertarian Party.
With a budget twice that size, we can grow a movement with more than five times as many dedicated small government supporters as all the members and subscribers to liberty magazines, think tanks and organizations in existence today.
If we continue at this pace, we will start to engage the millions of Americans who already desperately want small government. Millions of small government voters will attract thousands of effective small government campaigns.
As Michael Cloud says in his Small Government Field of Dreams article*, “If we build it, they will come.” Committed small government voters will attract the quality small government candidates and ballot initiatives that we need.
The more voters who take a stand for small government, the more qualified candidates will step forward to fill the demand.
“Small Government is Beautiful”
We welcome donations to The Center For Small Government to help make small government the #1 Priority in America: https://secure.bluehost.com/%7Esavyonco/ms/csg/csgx.php
* small government Field of Dreams article: http://www.centerforsmallgovernment.com/fieldofdreams.htm
** Small Government Pledge is a service mark of Carla Howell and Michael Cloud.
In conclusion, I was very interested in some of Carla Howell's answers.
I was impressed that she did not form a 501 (c)3 organization, which increases her freedom, and removes her from the oversight of the IRS.
I was impressed that she was able to accomplish so much, she was so close with 45% of the vote, to eliminating $9 billion worth of annual State Government with only a $600,000 budget.
I found it interesting that other Libertarian groups were so discouraged that they refused to help her, thinking she would dismally fail; where she succeeded so much more than most Libertarians.
I was interested in, and admired, at how she was so successful by keeping her message so simple.
I was impressed by her understanding that most people simply do not understand what tarrifs are; and that the issue of free trade is a much harder to understand by the voters.
I am curious that there was no mention of God on her website, and no mention in any of her interview answers.
I was surprised that she simply pleaded ignorance on the economic benefits of gold and silver.
It seems I have a lot that I can learn from Carla Howell, if my Silver Coin Proposal, http://silverstockreport.com/silvercoinproposal.htm is to ever advance in a meaningful way. I hope Carla Howell learns the benefits of owning gold, and especially silver. I personally believe that because silver is so rare, that it will take just a very tiny amount of people buying silver that can dramatically change the value of the dollar, and significantly reduce the power of the government.
Which is more effective? Spending $600,000 which almost eliminated $9 billion worth of government, for leverage of 15,000 to one?
Or spending $2 billion on silver, to eliminate probably 50% of the value of the dollar, which could destroy about $25 trillion worth of dollars and bonds, for leverage of 12,500 to one?
Overall, Carla Howell gives us many reasons to remain optimistic about the future of politcal freedom.