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Posts tagged with Taxes

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
That’s Tariffic
www.thedailyshow.com
Daily Show Full Episodes Political Humor rty

The outrage! The horror! The talking point?

This sort of phony sincerity, derived from a long ago established understanding in the conservative’s mind of how everything, everywhere works, has come to be the standard for those on the right-wing, especially those in the media. If only this was an earned outrage, derived from the pressing realities of the harsh world around us, but it isn’t.

Getting mad that the bottom 47 % doesn’t end up paying taxes to the Federal Government doesn’t make sense. It doesn’t make sense when unemployment is at 10% nationally and it doesn’t make sense when 200,000 homes go into foreclosure every month.

I love how the mere presence of that 47% qualifies as empirical evidence on Fox, thereby justifying whatever conclusions happen to follow the number. Honesty seems to be evaporating in conservative politics and media, with priority given to the opportunism and expediency that defines the GOP in 2010.

Tom Schaller at 538 provides a thorough analysis of America’s tax policy, its efficiency and its effectiveness in comparison with other OECD nations. This analysis comes in response to not only the rampant reliance by conservatives upon the theory that a tax code which “redistributes wealth” is inherently bad for our economy, our government and our society, but also in response to a column in USA Today which panders to the fears and pre-conceived notions of the Tea Partiers by Jonah Goldberg. Just a taste of that column follows, the full version can be found here:

We are heading toward being a country where instead of the people deciding how much money the government should have, the government decides how much money the people should have.

Only after they passed “ObamaCare” did Democrats clarify that this was one of their motives. ObamaCare’s appeal has less to do with saving money — which it won’t do — and more to do with spreading the wealth around.

Never mind the reality of heading towards an economy whose claim for social mobility was replaced by the will and desires of the insurance industry, because the Health Care Reform was just about furthering some devious, socialist, bolshevik, big government plot…

Moving away from the ludicrous premise upon which Goldberg’s concerns are based, the larger issue regarding our national discourse on taxation needs to be addressed. As such, it appears as if a large swath of this country operates under a different version of reality when it comes to taxes, how tax policy effects our economy, and how our tax policies compare to other OECD nations. Schaller’s conclusions after sifting through relative tax/transfer data from the 26 OECh nations are as follows:

1. Dollar for dollar, America offers the most effective and efficient government on the planet, doing so for about 20 cents on the dollar nationally, 28 cents if you include state and local taxes. If you ask a conservative to name a country that provides as many quality services for less, or more and better services for the same price, they can’t name one. If they do, encourage them to start packing their bags. Sure, they could save a lot of money living in Mexico–if they don’t count all the bribes they’ll have to pay to educate their kids and protect themselves from possible violence. Bottom line is we’re simply not as big as conservatives would have us believe. This doesn’t mean we shouldn’t seek efficiencies, govern more effectively within budget constraints, or try to eliminate fraud and abuse. But American government is pretty clean and fairly lean.

2. American government is redistributive, but not to the degree to which boogeyman conservatives would have us believe... We’re clean and lean, but if you believe in sharing the wealth, comparatively we’re also pretty mean.

3. When it comes to deficits and fiscal responsibility, conservatives tend to focus on the spending and not the taxation side. If you’re raising less than you’re spending, you can either raise more, spend less, or some combination of both. But conservatives invariably turn the conversation to how big government is as a spender, rather than how small it is as a taxer. And frankly, too many Americans of all ideological stripes simply want a free lunch. We know this because when you give them access to policies at the ballot, they vote for guaranteed spending and restrictions on taxes. (See California, the state with the single WORST debt burden in the country.)

4. It’s just a myth that all this American “socialism” will only constrain our growth, turning us into one of those laggard western European nanny states. There is way too much to cover here, so I’ll just point to Jon Chait’s recent takedown in the New Republic of conservative Jim Manzi’s supposed case-closed case for why America’s smaller government produces higher growth rates.

If the conclusions reached by Schaller are viewed in their context, it becomes clear that his task in analyzing this data was a result of an ideological perspective within the American conservative consciousness that refuses to consider in earnest the effects of tax policies and a political culture that blindly assumes lower taxes are good for everyone and everything. An ideology that refuses to acknowledge the other half of the equation which creates debts and deficits needs to be shown empirical data to dispel their theories, but somehow I don’t think empirical data means anything to an ideologue.

I’ve never been an ideologue. Some find it impossible to move forward without adhering to ideologically drawn boundaries and paths, but it becomes similarly improbable that such adherence to ideology has a chance of creating positive consequences for society when one acknowledges that the world does not turn upon an ideology.

Government services play an important role in keeping the machinations of society running with the least possible conflict. The consequences of such action are readily apparent to some, though often the benefits become misconstrued through the lens of wealth and power. The most ideological thing about me stems from my inclination that government owes the least amount of aid/service to those who are wealthy, and this is similarly reflected in the propensity of wealthy folks to argue on ideological terms about the folly of social services. Indeed, this thinking begins to imply that those who are wealthy owe a certain amount of dues to the economy/government that created the circumstances in which their success could be realized. As may be expected, this social democratic perspective on taxes reinforces their necessity within society at large and relegates generic complaints about taxes to a position of “non-issue” in my mind.

If only there weren’t such glaring contradictions in the pursuit of what is oh so endearingly spun as “tax relief”, maybe this would be a serious issue that could have the propensity to improve people’s lives. But right now state governments are folding, unemployment coffers are emptying and only one state in this nation has been smart enough to enact a forward thinking policy to protect its citizens from the undulations and uncertainty of our economy. That state is Oregon, which recently passed the single largest tax increase in the state’s history (enacted by state-wide ballot initiative), and because of the tax increase vital public services like schools and health care facilities have been protected from an otherwise disruptive budget shortfall.

This is a topic of particular worth right now because of the lip-service that politicians are now required to pay to “combating the deficit/debt”. Especially with the media spinning the GOP’s shadow budget as something without precedent, a budget that finally attempts to seriously reduce the deficit and debt, it is all the more important to realize the effect tax revenues have on our government’s long-term viability. To suggest that current revenues in comparison to outlays of spending is unsustainable is a fair criticism, but this criticism often draws observers to falsely conclude that the issue can be resolved by spending less. This theory however, which has been co-opted by Tea Partier and GOPer alike, neglects to consider the inability of government bureaucrats to foresee the future accurately. Every time taxes are cut, politicians are gambling on public services and riding on unsubstantiated ideological claims.

Even Obama’s tax cut for 95% of working families played right into the hands of an ideologue’s fantasy. He justified it by adopting that old conservative catch phrase of “tax relief” and positioned the tax cut as being a necessary measure to provide economic stimulus (because remember these tax cuts comprised 55% of the overall budgeted spending for the Recovery Act). But working families already pay rather low taxes. Furthermore, it is ludicrous to propagate a framework that infers a working family’s economic woes can be alleviated by cutting some taxes. These tax cuts will do nothing to help homeowners in distress, or people who are out of work or underemployed. Rather contrarily, the tax cuts have put an excess burden on our federal government to cut spending on the exact social services that would be so helpful to such struggling families.

Namely, unemployment insurance has been put in jeopardy. Many states have no money left to provide this service and are increasingly relying upon the federal government to take responsibility, thus increasing debt/deficit. It must have been really hard for people to foresee that a recession where hundreds of thousands of people are losing their jobs would result in an increased demand for/reliance upon unemployment insurance. Nonetheless, precipitous complaints about tax burden all throughout the last 30 years continue to yield a tax scheme that famously allowed Warren Buffet to pay less in taxes than his secretary. All along the way though, hope was reserved for the day when facts would trickle in showing the positive economic effect of tax cuts, hope for vindication of conservative ideologies.

Conservative politicians have no shame in continuing to promote the centrality of taxation in their attempts to govern. These promises they sling produce nothing more than a false understanding of how the government effects the economy and how the economy effects individuals, bolstering false hopes of some magical tax rate that will create jobs for all and mark the end of poverty forever. If only the government was smaller, they say. If only it spent less money, if only it collected less taxes, if only it left the markets alone, everything would be better. Taxes oppress freedom, taxes restrict liberty, only markets can be trusted.

The fact remains though, that none of this is true, at least not demonstrably so. Empty promises, when bought wholesale, inflate despot regimes and thus is the story of modern conservative economics. Even when given their clean slate upon which to experiment with an ideological hypothesis, in Chile, Argentina, South Africe, Poland and Russia, free peoples were necessarily silenced as a means to enact the policies necessary. Upon their fruition, after state assets were sold to the lowest, most well-connected bidder, and after markets were made uninhibited by things like wages laws and workplace safety laws, these populations continue to wait for signs that this ideology and its proponents were working in society’s interest. Those signs haven’t come though.

The same story is true in the US. The chorus of the faithful continue to promote the centrality of tax cuts to economic growth, the centrality of deregulation to individual freedom. Less people have been silenced in violent ways, but economic dissent is largely ignored. Even a president’s successful efforts to stop the worst of the insurance industry’s abuses perpetrated on consumers is slandered as apocalyptic, tyrannical and (to put it in ideological terms) socialist. The reality of how those efforts to stop the abuses allowed by the upholding of individual freedom through deregulation will benefit the lives of millions of Americans does not enter into the equation in the mind of ideologues.

So for the rest of this year, Americans will be forced to listen to a re-arbitration of a decades long debate that finally resulted in reform. This upcoming debate however, will be terribly biased and based on an unwavering tendency to inflate pre-conceived notion with sound logical reasoning supported by fact. We’ve seen it in the almost instantaneous reflex by the GOP to assert their position as “Repeal”. They proclaim that Obamacare is ushering in an end to individual freedom, they assert falsehoods about taxes and their effects, all with the hopes of silencing the possibility that government can legislate for the public good. The funny thing about all this health care related freaking out by conservatives is that it rests upon such a wobbly foundation that assumes a democratically enacted piece of legislation, that emerged in direct response to abuses perpetrated by industry, has the ability to usurp the constitution.  Various State Attorney Generals have made very clear that this is their view of health care reform, as is evidence by their attempts to sue the Federal Government to prevent a law from being enforced in their state. Pointless, self-interested or not, this has become the nature of minority-status politics in the 21st century (I refer not to racial or social minorities, but political/institutional minorities, ie the GOP).

My focus upon ideology and its habit of contaminating the political waters, while focused upon the outright hypocrisy and shamelessness of endless tax-cut platforms, extends to liberal ideologies as well. Hell, why attach contrived labels to this discussion, it extends to all ideologies.

I cannot recall a single historical instance of an ideology being infallible. Communism fell. Socialism flounders. Libertarianism went out with electricity. Capitalism implodes economies and takes citizens and governments with it. Don’t even get me started on the ideologies adjacent to theocracy, as they basically can be blamed for every instance of monarchy, empire, and all the other atrocities that mark the pre-enlightenment era and that continue to punctuate modern history.

So what in the world propels otherwise rational beings to submit to the constraints of ideology?

This question plagues me. It has no easy answer, beyond the assumption that ideologies take advantage of some common desire within humans to categorically understand the world around them. But that assumption really doesn’t explain why political ideologies survive so strongly. It explains why scientific endeavors are perpetually undertaken, but that science rests upon an ability to find, classify, reproduce and simulate factual realities. Political ideologies auspiciously rest without that burden of fact.

Let us drop the pretenses within which our political dialog exists. Let us stop prescribing for our future the tired, failed ideas of our past. Let us again raise skepticism of ideologues to the forefront of our national consciousness and propel forward an era of honesty, research and evaluation in our politics.

Did I mention that I loathe the ideologue?

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7:00 PM

Why we need a Big Bank Tax

From the most happening, data-tracking, investigating journalists on the web, ProPublica brings us some perspective on the bailout.

Note the incredible disparity between outflow of bailout money and revenues returned. And for any folks (those in Congress/media in particular) who lament the bailout or consider the national debt a burden on future generations : you must be taking something under the table if you oppose a fee on the same giant banking establishments that our concurrently turning out record profits/bonuses while acting as a vacuum for taxpayer money. THEY OWE US NOW, not the other way around.

Every so often, school districts face budget shortfalls. They either decide then, to hold a referendum or bond measure, or to cut back in order to work with their revenues.  But in this recession, a budget shortfall is no matter of small consequence.

In Utah, the latest attempt to rectify the state’s budgetary woes comes at the apparent expense of students attending public high school. The latest proposal, seeking to lessen the pain of a 700$ million budget shortfall, calls for the elimination of the 12th grade. Rather, it toys with the idea of eliminating the 12th grade, either fully or through an opt-out sort of arrangement.

Sidenote : the legislator who proposed this is none other than State Sen. Chris Buttars, who so callously opined that he considers gays and lesbians “the greatest threat to America going down,”. But moving on from that…

His proposal also calls for the elimination of bus service for high school students.

Seems to me, as a former public high school 12th grade, bus-riding student, that this proposal is impulsive and short-sighted. If Utah sets the precedent that budget shortfalls can be met by hacking away at the public school system, our country will be in trouble. Public school is not an entitlement, not a spending program, not social welfare and not expendable. Proposals such as this one should be called out for what they are – opportunist and disinterested.

I highly doubt that any legislator who proposes the whole-sale cutting of an entire grade has any interest in improving the public school system. Further, I highly doubt that any legislator who proposes this as a means to rectify a budget gap caused by a nationwide recession should be taken seriously as anything but an ideologue.

But then again, it may be too early to see if anyone actually takes this seriously. Things like this make for great controversy and really stir up the pot, but will it solve any problems? No. It will create a whole new slew of problems, the so-called slippery slope of selling-out Utah’s students. Because if 12th grade is dispensable, why not 11th? Why not just do away with free school lunch programs then too? Or what is to stop these partisans from just cutting all funding for school districts in time of budget shortfalls?

One thing is for sure though. I take pride in my state, Oregon’s, ability to prioritize its public schools above their corporate benefactors. We passed a tax increase, the largest one in Oregon’s history, to ensure that our budget shortfalls do not hurt the public school system and its benefactors (ie, children, students everywhere). Our state legislature passed the tax increase last year, as our 2011 budget was hinging upon the increased revenues from this increase, but it was forced to undergo a ballot referendum because of the anti-tax, Nike lobby. Even within that narrative though, common sense and the common good prevailed when a majority of Oregon voters chose their public schools over their measly 10$ minimum corporate tax rate.

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9:30 PM

Clean Energy a la Obama

The Obama administration loves to tout their support for clean energy. Who wouldn’t? They know it is popular, they know there is a huge market for it and they know it will help our economy in the short-term and long-term.

More importantly though, the awardees of the clean energy manufacturing tax credit have been announced, with the award total reaching 2.3$ billion amongst 43 states and 183 manufacturing facilities (White House press release here). The full list of projects, tax credit requested, technology area, city, state, and description is available here. An abbreviated list of 10 awardees with brief descriptions is here.

Of all the great projects and innovation being supported through this tax credit, one giant contradiction is smacking me in the face.

There are only two projects being awarded tax credits (in other words, only two employable, marketable, innovations) that have anything to do with “carbon dioxide capture and sequestration equipment”, or if you prefer clean coal. Only two projects, less than 5$ million awarded to anything related to clean coal, carbon dioxide capture or sequestration equipment out of the whole 2.3$ billion pot. Yet Obama keeps as a key selling point in his press release. Why?

From the Jan 8, 2010 press release:

Qualifying manufacturing facilities included the production of a wide range of clean energy products:

  • Solar, wind, geothermal, or other renewable energy equipment
  • Electric grids and storage for renewables
  • Fuel cells and microturbines
  • Energy storage systems for electric or hybrid vehicles
  • Carbon dioxide capture and sequestration equipment
  • Equipment for refining or blending renewable fuels
  • Equipment for energy conservation, including lighting and smart grid technologies
  • Plug-in electric vehicles or their components, such as electric motors, generators, and power control units
  • Other advanced energy property designed to reduce greenhouse gas emissions may also be eligible as determined by the Secretary of the Treasury.

[emphasis added]

One of the projects, based out of Kaukauna, WI, is a system designed to “extract/trap carbon from waste streams from coal fired power plants”. They were awarded a 75,000$ tax credit (awards ranged to 141$ million). Another project based out of Bellevue, WA promises “more efficient and cost effective Carbon capture and storage”, and was awarded 4.7$ million.

What about the gigantic amounts of carbon released in mountain-top removal, which this relatively small investment does not attempt to mitigate? We have seen no action on this contradiction of our energy/environmental policies, and the practice continues to be used in the Appalachians. The renewed support for the EPA under Obama has resulted in less permits being awarded for mountain-top removal mines, but numerous permits are still granted, perpetuating the presence of this horribly destructive practice within our energy policy. Follow this to see the most recent action by the EPA on this issue.

It would be swell if our energy policy supported where we want to go, as opposed to the habits in which we’re entrenched.

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6:21 PM

Profit for Taxpayers?

A headline on the Huffington Post caught my eye just now. It read “Paulson, Buffet : Bank bailout may result in profit for U.S. taxpayers”.

The article was a terrible let-down, as it provided the least thorough of an analysis possible. They basically provided some out-of-context quotes and short narrative descriptions in between. Very limited. And I really wish they sourced their articles better, it is nearly impossible to look further into an issue when presented by the Huffington Post. I usually don’t get any deeper than the headlines, for this reason.

But that sounds good doesn’t it – the bank bailout resulting in a profit for the taxpayer? It would be great for it to actually be true and not just the educated guess of two very rich, white men. Despite how often that scenario leads to let-down, this time it seems likely to be true.

Now that is where the Obama administration has hit a home-run. Never mind the lock-step opposition by Republicans to Obama’s every policy, this policy really sells itself especially in a time when lob losses on Main St. are high and Wall St. is reporting record bonus payouts. You might know what I’m talking about here, especially if you watched the State of the Union. If not, look below and pay special attention around 1:40.

The arguments against this will be tenuous, but hopefully they will be based on facts, not like that Republican representative who used some fuzzy math during the lead-in to his question to the President. An interesting NYTimes article gives some numbers associated with this proposal, and arguments from both sides. I just don’t see there being much of an upside for the Repubs to push back on this, especially not while simultaneously trying woo the tea partiers (I’m forgetting, do they like the bank bailout?)…

2 comments

10:09 AM

The Oregon Blues

Maybe not for long though. With the passing of Measures 66 and 67, voters in Oregon enacted by popular vote the increase of income taxes for those who reside in the top 3% (income > 250,000$/year) and the increase in minimum corporate tax for most businesses (which for decades meant most businesses paid a measly 10$/year in corporate taxes). The revenue generated by this increase (slated at roughly 727$ million) is meant to go towards public education, health care and other social services and was included in the Oregon State Legislature’s current budget.

The folks who railed against this increase saw their narrow interests overwhelmed by progressive populism – the argument for the tax increases relied upon stressing how many people would be negatively effected by the budget shortfall if the measures failed, particularly schools and students who faced the threat of having to cut 3 weeks worth of school days.

Coming on the heels of Democratic losses in a Massachusetts special election, many were quick to jump to enormous conclusions over what this means, and were keen upon drawing parallels between the two special elections. The bravado of the statements made after the Oregon election was much more reserved than those made by pundits after soon-to-be-Sen. Scott Brown’s victory, which included the brilliant analysis by David Gergen of CNN who opined “This is not the time to go out and crusade for liberal causes”.

As a matter of fact though, the two elections are completely tangential to one another, owing to the specific conditions in each coastal state. As to the Oregon vote’s larger interpretation, I think the Nation’s Katrina Vanden Heuvel got it right when she wrote:

“The campaign wasn’t about class warfare, or taking on the banks as evil beasts (though there’s nothing wrong with that!), it was about progressive taxation, an art form in economic policy that has somehow been lost over these many decades. It’s worth remembering that under President Eisenhower the top marginal tax rate was over 90 percent.”