Rep. Ann Wagner (R-2) voted for the House GOP tax cut sham bill. And she’s flaunting that fact. She thinks we’re stupid.

Don’t hold your breath waiting for Annie to come clean about what she actually voted for – there’s lots of undeniable details that she will try to deny apparently doen’t want you to know.

First, this bill is a veritable cornucopia of goodies for the 1%. It gives big tax cuts to rich folks – some permanent since it abolishes the estate tax, the Alternative Minimum tax that insures rich folks pay some taxes, and changes rules for pass-through income and investment income. It cuts corporate tax rates permanently from 35% to 20% without closing many of the loopholes that allowed most big corporations to actually pay somewhere in the neighborhood of 0 – 18%. Can you imagine how much less they’ll pay since they”ll be applying a plethora of tax breaks to an even lower rate?We’ll probably end up paying them.

Second, although the bill does give a few breaks to middle and lower income taxpayers with one hand, it mostly takes them away with the other. Many of the deductions and credits that are eliminated under the rubric “simplification” are those relied upon by middle class families. Some middle income earners will see higher tax bills right away, but even those who end up with a lower tax bill now may ultimately end up getting the shaft. GOPers usually neglect to point out that many of the goodies designated for the middle class are, for the most part, temporary.

Oh – crucial fact, given Rep. Wagner’s former concern for the national debt – the sham tax cut bill also adds $1.5 trillion dollars to the deficit. That’s why middle class folks don’t get permanent tax cuts and lose lots of exemptions and tax breaks they rely on – they can’t let that deficit go past the aforementioned $1.5 trillion and still pass the bill with only GOP votes.  It’s all smoke and mirrors (albeit thin smoke and murky mirrors) that lets rich investors make out like the proverbial bandit on the backs of those of us who aren’t rich enough to invest in a pet congressman. Or woman.

It’s hard to touch on all the mischief the sloppily written grab-bag of crony pleasing giveaways manages to do in its effort to please the more vicious members of the far right. It does away with the individual mandate of the ACA, a feature that will likely result in premium increases for all of us and eventually deprive 13 million people of insurance coverage. In a bid to convince dumb-as-dirt evangelicals (i.e. those who still try to excuse Roy Moore) that big gifts to GOP cronies a good thing, it does away with the provisions of the Johnson Amendment that stipulated that churches could retain tax-exempt status only by refraining from political advocacy from the pulpit. Now thanks to the corrupt GOP, we get to subsidize the efforts of some more authoritarian religious types to impose their religious views on the rest of us.

Another thing Republicans like Wagner aren’t telling us is that sooner rather than later, there will almost certainly be a $25 billion cut to Medicare:

Thanks to laws created by the Tea Party’s infamous 2010 sequester showdown over government spending, automatic cuts spring into action anytime Congress passes a bill that balloons the federal deficit, as the tax bill would. The approximately $136 billion in cuts spurred by the GOP tax bill would hit a number of government programs—including farm subsidies and the Border Patrol—but would cut most deeply into Medicare. Medicaid, Social Security, and food stamps are protected.

So if Wagner’s keeping quiet about what the GOP tax sham bill really does, what has she actually said about this travesty to justify her vote? Two words: mendacious fantasy (a.k.a. lies). Here’s an excerpt from her floor speech (I assume that the presentation of the word “yes” in all capitals means that our Annie is still screeching every time she votes for something that is bad for her constituents – her tell maybe? :

I vote YES to fix our broken tax system; I vote YES to help reignite the American economy; I vote YES to make it a little bit easier for that single mother of two, that firefighter, that teacher, shop owner, family of four, that Veteran; I vote YES for bigger paychecks, better savings and a more secure future. I ran for Congress to fight for the people of Missouri and to ensure that every hard-working American can realize their own American Dream,”

Broken economy? Not to hear economists tell it. And that nonsense about cutting corporate taxes to fix this “broken economy,” create jobs and raise wages? No one believes that trickle-down nonsense anymore. For example, when asked recently to affirm that the tax cut would inspire them to invest more, even a panel of CEOs of major companies bluntly shot that idea down. As for rich-folk goodies like eliminating the estate tax, write-offs for private jets? Like to hear how Wagner thinks that’ll help that “single mother of two” that she’s so worried about.

But hey! Annie’s has got a middle-class card up her sleeve. In her latest email newsletter she enthused about one feature of the bill that she voted for in particular: “This bill also protects the Adoption Tax Credit which I fought to protect. For decades this pro-family provision has helped provide children with loving families and stable homes.”

So that leaves us with the Adoption Tax Credit.  All this misery, but we get to keep a small-potatoes adoption tax credit that wouldn’t be in danger if Rep. Wagner and her GOP pals didn’t desperately need to please their donors in order to keep the money flowing.

Whoopee!

CORRECTION: The House Bill that Wagner voted on did not, as implied above, eliminate the ACA’s individual mandate – that provision is currently only included in the Senate version although many GOP House members have indicated that they will support its inclusion in the final legislation.

After the Jefferson City GOP posse failed to override Governor Nixon’ veto of HB253, the monumentally bad GOP tax “reform,” I wrote about the fact that as long as the makeup of the legislature stays the same, there’s just too much momentum of the folding green variety behind the idea of a rich man’s tax cut to let it go gently into that good night:

Earlier, when confronted with the obvious fact that the override effort might fail, Speaker Tim Jones had been emphatic that he wasn’t going to let this failure derail his goal, declaring that in such a case “income tax cuts will be a big priority next year.” […] As for the bill’s chief sponsor, Rex Sinquefield,  the $2.4 million dollars the billionaire spent promoting HB253 can easily be written off as a down payment; a first gambit in a game in which he plans to wear down the resistance with a combination of big spending and persistence. Nor, I suspect, will the Missouri Chamber of Commerce let Speaker Jones down when he revives his signature initiative …

I have to say that it gives me no pleasure  to be proven right so soon. Today in the Kansas City Star we learn that a task force put together by State Republican Party Chair Ed Martin and former state Rep. Shane Schoeller has authored a white paper intended to act as a “starting point for further conversations” about how to get the goodies that HB253 promised the Republicans’ rich patrons. And, if you thought HB253 was a disaster in the making, the point from which Missouri Republicans intend to start their latest reform effort is bleak in the extreme:

Recommendation one was to eliminate the corporate income tax and pay for it by erasing many state tax credits.

Calling the corporate income tax “inefficient and burdensome,” the committee said wiping out the tax was “one of the most promising ways to energize Missouri’s underachieving economy.”

In suggesting that Missouri consider eliminating the income tax, the committee said the sales tax should be broadened by wiping out the more than 400 exemptions now included in the tax code.

The panel also said that while the income tax is in place, the General Assembly should reduce the number of tax brackets and include new deductions to encourage savings and simplify the law.

We’ve been here before. Several times, if memory serves me right. Didn’t a guy named Sinquefield try to get something like this – you know, no income tax and lots of sales tax – on the ballot a couple of years ago?

Missouri Republicans probably ought to think long and hard before they go galloping into this minefield. During last year’s forray into GOP-style tax reform, Kansas was held up as the model that Missouri should emulate precisely because it had jumped off the same ideological cliff tax-wise, and our intrepid Republicans were keen to follow in spite of the obvious problems afflicting that state in the wake of the decision to eliminate the income tax. There’s now new evidence that if our Republican legislators are really concerned about the plight of families that are “falling behind,” the Kansas route may not be the way to go.

In fact, it is fair to conclude that recent polling shows that similar families in Kansas aren’t too happy with what GOP Governor Sam Brownback’s tax reform has done for their state. Two polls released Thursday indicate that if the election were held today, Governor Brownback would most likely become ex-governor Brownback poste haste. SurveyUSA has his approval/disapproval numbers at 34/59, while the Fort Hays State University’s Docking Institute of Public Affairs’ 2013 Kansas Speaks survey has his approval/disapproval at 35/42. And this is in a redder than thou red state.

I suppose it’s too much to hope that the GOP geniuses in the state legislators would take to heart indications emanating from Kansas that those who promote this rich-man’s tax voodoo aren’t going to fare too well in the long run. If they aren’t convinced by the damage that Brownback and his GOP collaborators have done to Kansas’ credit rating, physical, educational and social infrastructure, perhaps self-interest might do the trick. Or not.

Today, as my fellow-blogger Michael Bersin has already informed us, the Missouri House failed to override Governor Nixon’s veto of the infamous corporate tax cut bill which failed on a 94-67 vote, short of the two thirds majority needed to override. That means it’s over and done with, gone away, dead – for now.

It is true that HB253 was a poorly written bill, rife with unintended consequences. It was also, however,  a conceptually bad idea from the point of view of economic policy, even had the folks who put it together had sufficient brain power to do it in a cleaner fashion. And it’s important to remember that fact because indications are that it’ll be back soon, and next time the petty stupidities that plagued the bill and that persuaded some of the more thoughtful Republicans to uphold the veto, may be gone and we’ll have to try once more to fend off the bad policy it embodies – trickle down economics via monster tax cuts for corporations, big cuts for wealthy individuals and symbolic tax cuts for everyone else, the state’s solvency be dammed.

Earlier, when confronted with the obvious fact that the override effort might fail, Speaker Tim Jones had been emphatic that he wasn’t going to let this failure derail his goal, declaring that in such a case “income tax cuts will be a big priority next year.” Today, after losing the override vote, Jones confirmed that he has no intention of letting sleeping dogs lie when it comes to radical tax “reform”:

In a statement released after the vote, House Speaker Tim Jones, R-Eureka, said: “This is only a temporary setback for the majority of House members who believe substantive tax relief is the best way to grow our economy and to help the hard-working Missourians who deserve to keep more of their hard-earned dollars. … We will not be swayed from our efforts to provide Missourians with the tax relief they deserve and we will make a tax cut our top legislative priority when we return for the 2014 legislative session in January.”

As for the bill’s chief sponsor, Rex Sinquefield,  the $2.4 million dollars the billionaire spent promoting HB253 can easily be written off as a down payment; a first gambit in a game in which he plans to wear down the resistance with a combination of big spending and persistence. Nor, I suspect, will the Missouri Chamber of Commerce let Speaker Jones down when he revives his signature initiative, even though many commonsensical, local Chambers of  Congress broke with the big daddy organization and urged that the veto be sustained.

What can we learn from these facts? That these clowns just won’t give up. And they’ve got lots of money behind them. And if we really support progressive government, we can’t give up and sit on our – or the Governor’s – HB 253 laurels. We have to be ready for 2014 and this badly thought out tax “reform” needs to be one of the issues we trot out to make our case against the corporate-owned marauders currently holding the statehouse.

Today Governor Nixon stepped up and met his responsibility to the state and we owe him bigtime:

Nixon vetoed the disastrous GOP tax cut bill HB253. Over a ten year period, the bill would have cut corporate income taxes from 6.25% to 3.5%, and personal income taxes from 6% to 5.5%. As Nixon explained, “with a price tag of $800 million, this legislation is an ill-conceived, fiscally irresponsible experiment that would hurt our economy and jeopardize funding for vital public services.”

The reaction was swift, with GOP legislators raging about how radical tax cuts are the only way that Missouri can compete with neighboring Kansas, which has gutted its tax system. The general theme seems to be that Kansas is thriving under its new tax regime; as the Missouri branch of the Koch-funded Americans for Prosperity (AFP) put it when decrying Nixon’s move, “Many of our neighboring states have made bold reforms in the area of taxation, which have catapulted their states into being some of the most economically strong states in the union.”

Kansas is economically strong? Surprising news indeed – although it is not so surprising that it comes from the AFP since an AFP consultant on budgetary matters has been appointed Kansas’ budget director. The jury is still out (way, way out) on whether the tax cuts will spur growth – although we do know that the Bush tax cuts did not result in an economic boom – the Obama administration has already, in five years, bested the eight-year Bush administration record of job creation – in spite of having to beat back the massively deep Bush recession.

Right now, Kansas is not only promulgating a “red-state economic model”, it’s seeing reams of red, red ink that is. A predicted loss of $700 million dollars in revenue for the fiscal year beginning in July means serious budget cuts are ahead – and Kansas Governor Sam Brownback has already radically slashed spending. You name your program and it’s gonna be cut more and cut bad: education, transportation infrastructure, social services. And it’s likely to get worse if the tax-cutting experiment doesn’t work the way Kansas’ GOP is betting it will:

To make up for the revenue drop, the governor is pushing to preserve what was meant to be a temporary increase in the state sales tax, and to eliminate two popular deductions, including the state write-off for home-mortgage interest payments. Those moves would raise about $600 million next fiscal year. He also wants to transfer more than $100 million from a state highway fund to cover other expenses.

Estimates prepared by the state’s legislative research department predict that, even with the steps Mr. Brownback proposes, Kansas is on track to be short of money. The estimates suggest that the state will need to lean on its reserves in the coming years, and lawmakers by 2017 will be forced to make $780 million in spending cuts to prevent a deficit, which isn’t allowed under Kansas law. A Brownback aide said the forecasts don’t take into account the beneficial impact of the tax cuts.

Although, given the sales tax situation, one can argue that Kansas hasn’t really eliminated income taxes, it’s just asking poor folks to pay for all that magical economic growth that will surely reveal itself any day now. Huffington Post quotes one Kansas resident who states that if the home mortgage deduction is eliminated, she will move back to Missouri. Ironic, no?

But not surprising since Kansas is taking a big gamble on radical supply side economics with no real evidence that it will work – and lot’s of history that says it won’t. Why do Missouri’s legislators want us to jump off the same cliff? Shouldn’t they at least wait to see if Kansas survives the fall? Governor Nixon is right to insist that we proceed cautiously and make sure that we can take care of our citizens’ needs. HB253 was passed by a vote of 103 to 51, six votes less than the number required to override Nixon’s veto. We’ve got to keep it that way or we’ll go the way of Kansas.

 

There’s been lots written about why Missouri Senate Bill 26 is a bad idea (some examples:  here, here and here). Most obviously, it offers big tax savings to  corporations and other wealthy Missourians; these savings, however, would be partially paid for by raising sales taxes, eating up a disproportionately larger percentage of the income of poor and middle class folks and exacerbating income inequality. The remaining revenue losses would have to be made up by cutting services offered by the state. The problems with the proposal are obvious while the promised benefits are nebulous since plenty of evidence indicates that lowering or eliminating income taxes isn’t the boon to growth that the right claims it is (see, for instance here and here).

It’s pretty clear who benefits from this type of change and who doesn’t (hint: most of us don’t do so well), so Missouri GOP pols are attempting to justify this giveaway to cronies and corporate sponsors by inciting fears of a border war with Kansas, claiming that Missouri businesses will relocate to take advantage of the no-tax climate on the other side. While it is not at at all clear that there would be significant business flight, it is very clear that the resulting loss of revenue would wreak havoc on Missouri’s quality of life and, arguably, on overall prospects for increased economic growth.

SB26 obviously isn’t too smart from an economic perspective, but, not surprisingly, it may not be too smart politically either. The vaunted (by anti-tax GOPers, at least) Kansas experiment seems to be turning off voters there in large numbers:

Brownback has a negative -15 job approval rating, with 37% of Kansas voters approving and 52% disapproving of his performance as governor. 72% of moderates disapprove of his performance as well as 30% of Republicans and 66% of independents.

Brownback’s plan to phase out the state’s income tax is almost as unpopular as he is, with 48% of voters opposed and 37% supportive. 65% of moderates and 56% of independents oppose the plan. Even 34% of somewhat conservative voters and 28% of Republicans are opposed to the proposal to overhaul the income tax.

In Louisiana public disapproval has forced governor Bobby Jindal to jettison a similar, regressive tax proposal:

… Only 27 percent of Louisiana voters supported the plan in the latest SMOR poll versus a whopping 63 percent opposed. The idea didn’t even garner majority support among Republicans.

Also likely to be of interest to state GOPers who want to hang onto their legislative majority, Jindal’s overall popularity, like Brownback’s, is also tanking:

… . His approval rating plummeted to 38 percent in a poll last week by the non-partisan Southern Media Opinion & Research, down from 60 percent just a year ago. In an ominous sign for national Republicans, the immediate cause is a sweeping economic agenda with strong parallels to the House GOP’s latest budget.

It’s a funny fact that several of the governors who rode the Tea Party bandwagon to electoral success are alienating voters now that they are trying to enact the extreme right-wing economic policies espoused by the more cogent Tea-Partiers. Eight of the ten governors who are currently below sea level in terms of their approval ratings fall into this category. Perhaps there’s a lesson here for those among Missouri’s GOP lawmakers who have the requisite discernment to see it. Since they demonstrably don’t care about the public welfare – just consider their anti-Obamacare Medicaid expansion tantrum if you doubt this claim – perhaps self-interest might keep them from the type of folly embodied in bills like SB26.

 

An excellent editorial in the St. Louis Post Dispatch discusses the disastrous effects of the GOP no-tax religion that some GOP state legislators, many lavishly funded by mega-rich, income-tax averse, retired investor Rex Sinquefield, are proposing to push even harder here in Missouri. As the Post-Dispatch implies, the already low state tax rates, far from promoting growth, have managed to reduce the state to a backwater that is near last in significant measures of quality of life – a factor likely to discourage all but sweat-shop industry.

A recent report from the institute on Taxation and Economic Policy underlines the fact that low, regressive tax rates are not exactly the panacea that Rex Sinquefield and his pet “think tank,” the Show-Me Institute (which the Post-Dispatch calls a “believe tank”), say it is. The report offers figures to support the fact that the tax burden in Missouri, along with the rest of the states, has been systematically shifted to those in the middle and at the bottom of the economic ladder. As the report’s authors note, “States praised as “low tax” are often high tax states for low and middle income families.”

The chart below details the situation in Missouri – and bear in mind that it describes the status quo, before the GOP tax masterminds in Jefferson City impose their particular brand of reform:

This situation will only get worse if those tax proposals described in the Post-Dispatch editorial are enacted. How do you think that income tax reductions, elimination of corporate taxes, and imposition of still more sales taxes to pay for necessary services (most recently proposed as the way to pay for long-overdue transportation needs), will effect the growing inequality between the wealthy and the rest of us?

And for all the folks who want to eliminate income taxes outright, take a look at this chart:

See Texas up there? Remember that Texas had a 27 billion dollar deficit last year. You know what that means: cuts to education and other services that help contribute to middle and working class prosperity. Just think about that when you hear some of the GOP tax gurus pontificating. And, of course, as the Post-Dispatch suggests, keep a watch on Kansas as it slashes taxes and hits the skids in deficit city.

As CNNMoney commented when reporting on the 7% decline in middle class income over the last 10 years, “The first decade of the 21st century will go down in the history books as a step back for the American middle class.” The same article also notes that the wealthiest Americans got wealthier during the same period, a trend that will only accelerate if we permit the state level GOP to continue to carry water for their rich friends and campaign contributors and destroy what remains of progressive state-level taxation.

James Moody, one-time budget director for former – highly conservative – Republican Governor John Ashcroft, observed that the Sinquefield cabal’s efforts last year to abolish the state income tax in favor of a sales tax indicated that “they don’t know what they’re doing.” And it’s not just ignorance that animates our GOP brethren in this instance, but willful ignorance. These are the folks who, to borrow Hillary Clinton’s phrase, have refused the invitation to inhabit the “evidence-based world” where their victims have no choice but to reside.  

*Charts from ITEP, Who pays: A Distributional Analysis of the Tax Systems in All 50 States, ITEP, February 2013.

Everybody hates taxes, right? At least until they think about what we actually buy with them. Who wants to pay tolls on every road she drives, or to pay private school tuition for every child she can afford to educate? Think of the large numbers of the sick and helpless members of our community that private charity would be unable to assist – and as for things like Obamacare, no taxes means we wouldn’t even have the government backing up that emergency room care conservatives like to put forward as an antidote to the uninsured status of so many Americans – despite its inefficiency and expense. It’s our taxes that pay for the regulatory agencies that make sure that our foods and medicines are safe. As long as taxes provide a relatively efficient way for us to buy these and other services we collectively consume while permitting us to retain enough income to meet our needs, reasonable people understand that paying our fair share is the right thing to do.

Which must mean Blaine Luetkemeyer (R-3) and Sam Graves (R-6) have to be exempted from the company of reasonable people. Luetkemeyer and Graves have signed on to a bill, the the Tax Code Termination Act, which was put forward by demonstrably boneheaded Republican, Bob Goodlatte:

Last week, House Judiciary Chair Bob Goodlatte (R-VA) introduced the Tax Code Termination Act, which would abolish the entire federal tax code in 2018, with exceptions for Social Security and Medicare taxes – and replace it with, well, nothing. Goodlatte’s bill does offer some vague principles that should guide Congress in enacting a replacement tax system, but it does nothing to actually replace the massive amount of federal revenues it will eliminate.

In addition to cutting off about 60 percent of federal revenues, the bill includes an unconstitutional provision providing that the end of the tax code cannot be delayed except by a two-thirds vote of both houses of Congress. The Constitution does not permit a past Congress to tie the hands of a future Congress, so this provision making it functionally impossible for future congresses to delay the end of most federal revenue is unconstitutional.

Actually, Luektemeyer and Graves aren’t all by their lonesome among members of the Missouri delegation in their support of this bit of pandering – Billy Long (R-7) signed on to the legislation when it was first introduced in 2011. As an aside, I can’t resist noting the frequency with which so many of those far-right constitutional warriors (Goodlatte, for instance, thinks Medicare, Medicaid and Social Security are unconstitutional) run afoul of the constitution.

When Goodlatte introduced the bill for the first time in 2011, he described his motivation as an effort to force action on tax reform: “Congress won’t reach a consensus on such a contentious issue unless it is forced to do so.” I’ve got a few words for anyone who endorses governing by virtue of a figurative gun to the head and the words “fiscal cliff” and “sequester” figure among them. Giving the GOP one more hostage to their absurd ideology ought to scare anyone who thinks it’s a good idea to force quick action on complicated issues. As TPMDC Brian Beutler asks, “So what happens if there’s no consensus on tax reform by the end of 2015 [i.e., the cut-off date proposed by the original 2011 bill]?”

I would shudder to think of the consequences if I weren’t sure that nobody would permit such idiocy to advance. Except for a few of the worst loons in the House of Representatives, nobody who is sane cuts off their nose to spite their face. Right? … Right? Of course, for Missourians the real (and embarrassing) question is why three of the worst loons in the House were sent there from Missouri?