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Tag Archives: Tax policy

Flush prosperity down the drain, rinse with a little derp, and you’re home free

11 Thursday Jun 2015

Posted by Michael Bersin in Uncategorized

≈ 2 Comments

Tags

Alabama, Job-creation, Kansas, missouri, municipal courts, Sam Brownback, Scott Walker, tax cuts, Tax policy

A couple of days ago Digby drew my attention to Paul Krugman’s definition of the term “derp”:

Derp” is a term borrowed from the cartoon “South Park” that has achieved wide currency among people I talk to, because it’s useful shorthand for an all-too-obvious feature of the modern intellectual landscape: people who keep saying the same thing no matter how much evidence accumulates that it’s completely wrong.

Based on that definition, many of you may notice that there’s lots of examples of derpiness around SMP in the past few days as well. I allude to all the posts about the doings of Kansas Governor Brownback and the economic disaster that he has created in Kansas with his tax-cuts for the wealthy friends of the GOP (see here, here, and here). Nevertheless, in spite of the emergency created by epic budget shortfalls and ranking 44th in job creation this year, there are those who persist in their embrace of derp, claiming that the “Kansas experiment” has been at least a moderate success, or, given time, will succeed colossally.

Notable among Kansas-disaster deniers is billionaire Rex Sinquefield who set out to buy himself enough compliant politicians to take Missouri down the same road. Sinquefield wants the Kansas experiment to be successful so badly that he doesn’t scruple to re-engineer the facts as he did in a recent Forbes Magazine article. Of course maybe that’s an example of plain garden-variety dishonesty rather than derp.

Sinquefield’s dollars though have had their effect on many of the Republican members of the Missouri legislature who passed their own gift to the very well-heeled, S.B. 509, last year. The standard rationale for ignoring what similar cuts did to Kansas: it’ll take more time for the positive effects of the Kansas tax-cuts to be felt. In other words, unless you belong to the  intrinsically deserving 1%, you should suffer now since we’ve heard that there’ll be pie in the sky someday. Maybe. This is classical derp, folks.

The same kind of derpiness makes Scott Walker a viable Republican presidential candidate. Walker cut taxes for Wisconsin corporations and the wealthy by almost $2 billion dollars over his tenure, and, in spite of trying to pay for the cuts on the backs of the poor and middle class via massive cuts in education, other public spending, and tax “reforms” that cost the poor and seniors, he is facing a  $283 million budgetary shortfall this year alone. He also failed to create more than half the jobs he promised would follow his tax-cuts.

How can we still regard the Republican economic philosophy as financially fiscally responsible when it leads a governor to put his state into debt default as Walker has done? What responsible, clear-thinking individual could even entertain the thought that after destroying the prosperity and endangering the public well-being of Wisconsin, Walker should be entrusted with the keys to the White House? But hey, he’s still singing the same tune and he won re-election. Derp at its best.

Examples of red-state tax-cutting failure abound. Most recently, we’ve read about how Louisiana Governor Bobby Jindall and his Louisiana legislative cohorts are begging Grover Norquist, instigator of the GOP endorsed anti-tax pledge, to let them off the hook so that they can salvage the Louisiana economy from the effects of their tax-cuts.

Want another example? Here in Missouri we’ve recently been learning about how the municipal courts have been used to generate revenue for small jurisdictions that would be unable to pay the bills otherwise. But what about a whole state that works on a similar principle? I’m talking about Albama here:

AL.com points out some of the examples of costs that are now paid for by court fees, not tax revenue: “In Chambers County, drug offenders pay into the fire and rescue fund. In Madison County, since 2000 fees for serving court papers have paid for county employees to get a raise. In Lawrence County, court costs help fund the county historical commission, so ostensibly future generations can learn about a time when Alabama adequately funded its court system.”

The State of Alabama has become so dependent on money extracted from increased court fees that, in 2014, Cleburne County officials were apoplectic when they realized that construction on nearby I-20 had cut traffic tickets in half.

[…]

The result? Working class people are paying for the cost of giving tax cuts to the wealthier residents of these states.

That last sentence? It’s true about Kansas, Wisconsin, Missouri, and red states everywhere. What allows this situation not only to persist but to become even more prevalent? Which is to say, how does the wrecking crew get re-elected? Easy-peasy. Misinformation: think Fox news, Rush Limbaugh, Sean Hannity, spin and outright lies from elected officials. Deflection: steer the conversation to abortion, guns and gays (did it ever occur to you that Obama took so much heat for a similar observation because it hit too close to home?). Fear: ISIS is coming, or Sharia law, or the U.N jack-booted troops. And last, but not least: derp: if you don’t wanna believe the facts, don’t; if they’re inconvenient, disregard them.

Nix the sales tax: A question of fairness – and progessive identity

10 Tuesday Jun 2014

Posted by Michael Bersin in Uncategorized

≈ 1 Comment

Tags

Claire McCaskill, missouri, sales tax, tax cuts, Tax policy, transportation infrastructure

So on the heels of a tax cut for the wealthy that insults every middle and working class person in the state of Missouri, the state legislature has the chutzpah to put a sales tax increase on the fall ballot in order to pay for transportation infrastructure. This tax, in common with sales taxes in general, falls most heavily on those who can least afford it. Rich folks who have the means to subsidize politicians and businesses that depend on our transportation infrastructure to thrive  will once again benefit from the poor man’s mite.

And our Democatic Senator, the wealthy Claire McCaskill, is all for taxing the  little guy while the fat cats get off. She thinks the sales tax is overdue, should have been enacted last year, although she realizes that, coming as it does on the heels of the rich man’s tax cut, the optics aren’t too great:

“Is it my first choice on how to fund transportation? Probably not. But it doesn’t mean that I’m not willing to support it. I will support it. Because we’ve got to get some additional revenue for our roads in Missouri,” McCaskill said. “They want to talk about what makes Missouri an attractive business climate, well funding higher education and having good roads and bridges are way more important than Rex Sinquefield’s plan to do away with everyone’s taxes entirely and make us all into Kansas.”

I admit it. McCaskill’s absolutely right about the need for revenue. But since I’ve been in Missouri I’ve seen one serious need after another addressed by proposals to increase the sales taxes that hit the poor man disproportionately – while the top tax rate in the state remained obscenely low. Now it’s even lower. If Missourians take McCaskill’s lead next November, we’ll continue to be stuck with ever more unfair sales taxes every time a new need is identified – desperate need, that is, since the GOP-dominated legislature is more than content to let the social and physical infrastructure of the state slide until the conditions are so dire action is unavoidable. Every time Democrats go along with a sales tax when serious, progressive tax reform is what is called for, we are helping to put finis to the vision of a state that is just and where prosperity is shared by all.

The Missourians who vote for these GOP bozos need to learn what happens when their elected representatives chose to favor wealthy political donors over the working people of the state. The lawmakers that enacted the mindnumbingly stupid tax cut need to be held accountable for their shortsided, ideologically driven behavior. That will only happen if we don’t bail them out by putting the burden on those least able to carry it. Sure, it’ll hurt for a while, but it’s the only way we’ll change the direction of our state.

No on the sales tax may even benefit the state’s economy since those at the bottom end of the economic spectrum tend to spend the money that they manage to keep in their pockets, stimulating growth. Rich folks, on the other hand, tend to sit on their excess moolah.

A headline in yesterday’s St. Louis Post-Dispatch says it all. Describing the recent Jefferson-Jackson Dinner, the headline proclaimed that “Democrats defend party principles at dinner here.” That’s right, not “assert” party principles, but, like sniveling losers, they attempt to “defend” themselves from the bullies who are picking on us all and who, if things continue as they are, will probably get away with it. Claire McCaskill is willing to concede defeat, leaving us worse off in order to deal with only one of the many problems the state faces – a serious problem, but if we endorse her postion, we’re shutting the door to a real solution in the future, a solution that is fair for all. We’re also telling the big baddies in the legislature that there’ll be no price to pay for taking us in the wrong direction. Vote no on the sales tax for the sake of Missouri’s future.

Republicans vs. the facts and nothing but the facts

08 Thursday May 2014

Posted by Michael Bersin in Uncategorized

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District of Columbia v. Heller, gun regulation, HB1073, HJR47, missouri, nullification, open carry, SB509, tax cuts, Tax policy, voter ID

Yesterday Missouri’s GOP engineered the passage of a draconian tax cut for wealthy Missourians. The justification? To promote growth.

Today the Los Angeles Times cites new research from the University of Wisconsin that radical taxcutting and similar “pro-business policies don’t really contribute to economic growth. They just make the rich richer, which is not the same thing at all.” Read the details here and weep. Of course, if you’re ready for the unabridged version, you can always purchase a copy of Thomas Piketty’s Capital in the Twenty-First Century and get the same message with massively more data to support the conclusions.

Two voter ID bills introduced in the Missouri House, HB1073 and HJR47, designed by Republicans to limit voting access by Democratic leaning citizens, have advanced to the Senate where Republicans, who are all hot and bothered by non-existent voter fraud, are very likely to send them on to the Governor for what is just as likely to be another veto.

However, as Henry Waters III notes in the Columbia Tribune, judges in Arkansas, Wisconsin and Pennsylvania have found similar voter ID laws unconstitutional on the grounds that “Photo ID laws are an interference with voters’ rights not warranted as protection against voter fraud.” Doesn’t deter our lawmakers from pressing on though. Missouri may be the show-me state, but it’s awful hard to show folks something if they aren’t capable of drawing the right conclusions from the display.

Both the Missouri House and Senate have okayed similar legislation that attempts to nullify federal gun laws (but only, as Brian Nieves insists, the unconstitutional laws), punish federal agents that attempt to enforce those laws, and permit open carry – even in jurisdictions that want to prohibit the open display of guns by armed yahoos.

Guess what? Sane folks know that state lawmakers don’t get to decide which federal laws are unconstitutional and if the final bill survives a guaranteed veto by the Governor, it’ll head straight for the courts – and cost Missouri a bundle in the process. In the District Of Columbia v. Heller decision of 2008, the Supreme Court reaffirmed that the 2nd amendment permits the regulation of firearms – a point articulated by even the über conservative activist judge, Antonin Scalia . On a more immediate level, the mayors of St. Louis and Kansas City are concerned about the potential of this law to endanger cooperative federal and state task forces working to combat gang and gun violence. As for open carry, apart from the disrespect the law shows for local self-determination, the oft-stated rationale, that more guns means less crime, has been shown to be essentially false.

Have you noticed a pattern here?  The Republicans who mostly run our state spend lots of time legislating from perspectives that can’t stand the the test of fact-based reality. The result? Counter-productive, costly, and even unconstitutional laws that have the potential to seriously harm Missourians, destabilize our civic and social life, and debase our democratic institutions. The folks who stand to gain? Members of the state’s oligarchy with money to burn and the politicians who want to help them burn it. Each of the examples above either constitutes a direct giveaway to Republican political patrons, or are useful in either directly (voter ID) or indirectly (pandering to gun-related paranoia) securing Republican power. We’re governed by power-mad, corrupt (what happened to those ethics bills?) fantasists. As a result we’re left to cope with what promises to be a consistently deteriorating reality.  

The day Missouri went down the toilet

07 Wednesday May 2014

Posted by Michael Bersin in Uncategorized

≈ 5 Comments

Tags

Keith English, missouri, SB509, Tax policy, taxcuts

On the topic of SB509 and the legislature’s override of Governor Nixon’s veto, I endorse what Michael Bersin said. Ditto what Blue Girl said. In my own words: yesterday GOP dimwits (and one Democrat turncoat) voted to deprive a low-tax, low-service state and its vulnerable citizens of vital revenue; they did it because they’re retrograde ideologues or because they’re so well paid by folks like billionaire Rex Sinquefield that they just don’t care about the consequences for the rest of us.

It’s true that Republicans are mainly to blame for a tax policy that will ensure decades of mediocrity and worse for Missouri, but they’ve haven’t tried to hide their druthers and the folks who put them in office probably deserve what they get. But that doesn’t hold true for the rest of us, particularly the rank-and-file Democrats who voted for Rep. Keith English (D-68), the lone Democrat to vote for SB509 and, hence, the guy who tied the bow on the legislature’s gift to Sinquefield and other wealthy Missourians. English, a union electrician tried to claim the high ground:

“I have many co-workers within the electrical industry, residents in my district, they’re looking for jobs,” English said. If not a tax cut, “I don’t know what else in the near future we can do to get the state moving.”

Just like cutting taxes got Kansas moving:

Last week, Moody’s Investors Service downgraded Kansas’ credit rating, noting its sluggish economic recovery compared with other states. Kansas revenues declined in April. Among other things, Moody’s said the income tax cuts were putting pressure on the budget and creating risk for the state’s financial future.

English either didn’t read the Governor’s well-reasoned veto statement attentively or he can’t process complex reasoning very well since he evidently believes that the Governor must have had a perverse desire to stifle SB509’s magical economic benefits which led him to lie about the bill’s flaws provisions:

“The governor told us things about it that, after doing my homework, are not 100 percent true,” English said. “We have to generate a ton of money before those triggers happen.”

Too bad English didn’t work a little harder at his research. As the non-partisan Missouri Budget Project pointed out:

Although supporters of SB509’s tax scheme maintain that the so-called “trigger” would protect education and other services, the trigger is just a smokescreen. State revenue needs to grow by around $250 million each year just to keep up with current services. Moreover, because the trigger fails to account for already depleted services, recession-era cuts will become Missouri’s new normal. That will make it even harder for us to compete as other states invest in their infrastructure and education needs. SB 509’s triggers would have even allowed tax cuts to go into effect during the midst of the last recession.

The St. Louis Post-Dispatch editorialist suggests that maybe English’s motives weren’t totally disinterested:

Mr. English, a wiry wireman from IBEW Local 1, is getting a lot of attention for betraying his party, his union supporters and his working-class North County constituents. Nonetheless, the bet here is that he won’t have any trouble raising money for re-election this fall.

So English sold us out or he’s just butt-stupid. Doesn’t make much difference which. Every Democrat in the state needs to make sure that nobody forgets what English did when election time rolls around. Even if it means that the seat goes to a Republican. What he did is that bad.

The other thing that everyone who is either raging or in mourning for Missouri’s lost future can do is send a donation today to the state Democratic party. The real Democrats deserve our support.

Ryan Silvey plays offense for tax-cuts

28 Tuesday Jan 2014

Posted by Michael Bersin in Uncategorized

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constitutional amendments, Educational funding, HB253, Jay Nixon, missouri, Ryan Silvey, SJR45, tax cuts, Tax policy, Tim Jones

Last year Governor Nixon froze $400 million worth of spending allocated for education, state services and capital improvements. He took this action in order to make it clear that efforts by the legislature to override his veto of HB253 would result in long-term damage to state revenue that would have to be offset by reallocating funds:

“The choice before us is stark and clear,” Nixon told reporters.  “Members of the General Assembly can either support House Bill 253 or they can support education, but they can’t do both.”

The Governor’s dramatic action, which simply underlined the detailed evidence he had already made available to support his arguments against the tax-cut, seemed to have worked. HB253 went down in figurative flames, enabling Nixon to free up some of the frozen funds.

Given the braying about spending offsets for every piece of social services spending that we get from national Republican legislators, you’d expect our GOP homies would understand how it works and man up. But no way. Nixon’s strategy enraged plenty of Republicans who were confident that they were going to be able to deliver a juicy tax-cut for their corporate patrons. Who, after all, likes to be outplayed, especially when, to all appearances, one holds all the cards?

But elephants never forget, and state GOPers now think they’ve figured out a way to get payback and thwart future efforts to make education the topic when they want it to be nothing but tax-cuts:

The Missouri Constitution allows the governor to control the rate appropriations are spent and to reduce spending when state revenues are less than the estimate upon which the budget is based.

Republican Sen. Ryan Silvey, of Kanas City, has proposed a constitutional amendment that would exclude spending through the Department of Elementary and Secondary Education from that budget-trimming authority. A constitutional amendment would require a statewide vote if it passes the Legislature.

There  you have it: Rep. Silvey’s SJR45 , a tit-for-tat move that, by putting a constitutional amendment on the state ballot, seeks to tilt the playing board for future tax policy games. It’s an interesting move since Missouri House Speaker Tim Jones claimed that the Governor was violating the constitution last year. The fact that nobody took the Governor to court and that the GOP is now hoping to ask Missourians to amend their constitution, suggests that they didn’t really think the constitutional objection had much weight. Republicans were simply playing the empty constitutional card that they always pull when they’ve not got anything else up their sleeves.

Although the true purpose of of Silvey’s gambit is clear, he also wants to pose as a stalwart supporter of education by ignoring the context the Governor’s actions, the threat posed by the Republican corporate tax-cut, tweeting “Today I filed SJR45 to amend the MO Constitution to prohibit the Governor from withholding money from schools. Education is too important. ” Damn straight education’s important. That’s why the Governor did what he did.

Silvey later added, “My SJR45 will finally remove school kids from being a piece on the Governor’s political chess board.” I don’t know about you, but I’d be glad to let the Governor use my children as pieces on his “political chess board” if it saved their schools from Republican raids on the state’s revenue stream. Good schools cost money. Heck, even mediocre schools cost money. Tax-cuts for corporations and rich people take the money we need for schools, among other things, and, to be honest,  they haven’t done much for the economy of states that have beggared themselves through  this type of tax-cutting. What we ought to be asking Silvey is, if he’s so big on eduction, why isn’t he proposing a way to secure some new revenue to pay for it?

Nobody wants to hurt education and, in general, at any rate, everybody likes the idea of tax-cuts, but the two are tightly linked in Missouri, a state that currently can’t manage to properly fund its schools. Why does it bother Republicans so much when this linkage is made explicit? Why can’t they be upfront about the consequences of their low- or no-tax philosophy? And finally, why should anyone vote for Silvey’s constitutional amendment, which is no more than a cynical effort to checkmate a Governor who’s trying against all odds to improve Missouri’s mediocre educational system.

 

More about relative taxation in Missouri and Kansas

28 Saturday Dec 2013

Posted by Michael Bersin in Uncategorized

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Kansas, missouri, revenue reduction, Rex Sinquefield HB253, tax cuts, Tax policy

Remember how state Republicans tried to justify their give-to-the-rich tax bill, HB253, last session by claiming that if we didn’t drastically cut our state income taxes for businesses, we’d lose out to Kansas where income taxes were going bye-bye? We’ll undoubtedly hear more of the same nonsense when the GOP tries to defend the panoply of revenue-reducing bills that have already been filed for the upcoming 2014 legislaive session.

The fact that Kansas has had to revise budget projections for 2014 downward by more than 7% and that folks in the state are showing signs of buyer’s remorse when it comes to Kansas Governor Brownback’s tax policies will probably do little to diminish the Missouri GOP’s desperate search for a rationnale for their revenue-reduction fever. In fact, Missoui’s political über sugar-daddy, Rex Sinquefield, whose lavish financial donations help inflame that fever, has already published a counterfactual case in Forbes Magazine for revenue reductions in Missouri to equal those in Kansas.

When I’ve written about the effects of tax cuts in Kansas in the past, I’ve noted that the state has tried – unsuccessfully – to compensate for lost tax revenue with higher sales taxes – one of the revenue remedies proposed by past Sinquefield tax-cutting ballot initiative efforts in Missouri. Another effect, though, that has not received much attention is the effect on property taxes. The Tax Policy Center of the Urban Institute and the Brookings Institution notes in a recent report (pdf) that:

The variation in property tax burdens across counties is almost exclusively because of across-state variation, rather than within-state variation. What this means is, variation in property tax burdens is almost exclusively the result of differences in state tax regimes, not county-level differences in tax rates or housing prices.

So, given the “tax regime” in Kansas, it’s not surprising that property taxes in Kansas have increased over the past several years and are now a major source of revenue:

Property tax is the #1 source of tax revenue in Kansas, accounting for over 31% of all taxes collected in fiscal year 2012 by state and local governments. Data collected from the Kansas Department of Revenue, Property Valuation Division shows that property taxes increased 102% between 1997 and 2012. Over the same period population increased 11% and inflation increased 40%.

How do property taxes in Missouri compare to those in Kansas? This interactive map which tracks property taxes at the county level makes it clear such taxes across Kansas are significantly higher than in Missouri. But if you want numbers, the related brief (pdf, see Table 1), tells us that the mean property tax as a percent of home value in Kansas is 1.39%, in Missouri, it’s .97%.

To put the comparison in even more concrete form, look at a few border counties on the map. For example, in Linn County in Kansas, the average amount of property taxes paid is $1,167 and the average home value is $98,000. Across the border in Missouri’s Bates County, the average property tax paid is $717 while the average home value is $103,100. In these two counties, taxes paid as a share of home values stand at 1.19% in Kansas and .74% in the Missouri county. Similar discrepancies prevail across the two states with the exceptions of a few counties around Kansas City where values are relatively even.

The conclusion is clear: it costs regular, everyday people more to live in Kansas. Property taxes are higher, sales taxes are higher. Additionally, everyday taxpayers aren’t getting much for their money apart from a state government struggling with budget shortfalls, resulting in problems like that posed by an educational system facing massively lowered funding. And, if nothing changes, it’s only going to get worse:

… there is evidence that local governments are feeling enormous pressure to make up for reductions in state support by increasing their property tax rates. Hannes Zacharias, Johnson County’s Manager said, “Indeed, we are at the end of the food chain, and we’re the ones who have to clean up the mess.”  And as the Associated Press reports: “the county has lost state revenue for jobs such as inspecting sewer septic tanks for new residents in rural areas. In addition, furloughs in district court operations caused by limited state funds mean defendants must stay in county jails longer while awaiting trial, a cost picked up by local governments.”

Is this what those Missourians who put the GOP in control of our state legislature really want? Bad schools, bad services, higher property and sales taxes? And if they do, are the rest of us going to let them get away with it? If the answer is “no,” remember that 2014 is nearly here.  

 

Some more thoughts on Boeing, the corporate extortion racket, and real-world decision making

08 Sunday Dec 2013

Posted by Michael Bersin in Uncategorized

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Boeing, corporate subsidies, Corporate Welfare, missouri, Show Me Institute, Stephen Webber, Tax policy, tax-incentives, United for Missouri

In my earlier post on the way that Missouri politicos are tripping over themselves to try to lure Boeing away from Washington, I noted that a few state legislators were resisting the pressure. In the Missouri House 3 of these stalwarts were Democrats and 17 were Republicans. For those of us with a progressive bent, the question is why the imbalance?

We can assume that the objections on the right side of the isle mirror those of several conservative organizations that lobbied against the Governor’s proposed tax breaks:

United for Missouri, a conservative activist group, took to social media on Monday to call on its members to “Stop the Governor’s Proposed Expansion of Corporate Welfare” […] In a post on its website, the group said the legislature should instead reallocate existing tax credits and pass “broad based” tax reform, not targeted tax credit expansion.

“Does all this mean that Missouri should not try to capture the new Boeing plant? Absolutely not,” the group wrote, “[b]ut the legislature should not expand corporate welfare in doing so!”

The Show Me Institute, a conservative think-tank, also voiced their opposition to the proposal, calling it the “definition of cronyism,” and, like United for Missouri, said they were in favor of broader tax changes like they supported in House Bill 253, legislation vetoed by Nixon that would have slashed corporate taxes and provided fractional relief for individuals.

As much as I loathe what these organizations stand for, I applaud their principled stance and that of the 17 House Republicans against corporate welfare when it is applied in such an unfair and discriminatory fashion. They are right that for every Boeing that is able to throw around enough weight to get what it wants from local governments, there are thousands of small businesses that continue to pay full freight.

Nevertheless, the real issue for these folks isn’t really corporate welfare, it’s the way that it is applied. They want to exempt all businesses – and in some cases, all individuals – from taxes, cut government services to a bare minimum, and if we must have taxes, make them regressive consumption taxes. Their real objection is that tax exemptions for Boeing don’t go far enough, but should be the norm for all business and to hell with revenue to support government that serves the needs of actual people. These are rigidly ideological rather than pragmatic thinkers, espousing an ideology that has revealed itself to be rotten to the core time and time again.

Contrast this stance with that articulated by one of the Democrats, Rep. Stephen Webber, who opposed the Boeing package proposed by the Governor. Webber was aware of the fairness issue, declaring that “we have a lot of hard working business owners in Columbia and I don’t see why we should make them pay more than a multibillion dollar corporation.” He also, however, articulated pragmatic concerns. The Columbia Daily Tribune reported:

But for Webber, the bill was weak, had too many loopholes and gave away too much. “We give away billions and say ‘why can’t we fund the schools?’ ” Webber said. “The answer is right there in this bill.”

There you  have it. The difference between conservatives and liberals in a nutshell. On the one hand, rigid ideologues who will always take the “principled” stand regardless of the real-world consequences for the people who stand to loose or gain the most. In this case, they’re willing to work over one of their corporate allies, but they are just as firm – or even firmer – when the entity to be worked over is part of the 99%. On the other hand, however, we have liberals and progressives who perceive and respect issues of principle, but who are more than anything motivated by the overweening principle that they serve the needs of real, live people.

One can also assume that it is the same type of pragmatism that has led other Democrats to support the Governor’s incentive package. Of course, we know that there are always political survival considerations somewhere in the background, but I think it’s safe to assume that in contrast to Webber, most of the Democrats concluded that the possibility of lots of jobs outweighs the loss of tax revenue and the uncertainty about positive outcomes, as well as any reservations they may harbour about the process.

One may or may not agree about the conclusions these folks have drawn or about Rep. Webber’s rationale, but when we’re between the proverbial rock and hard place – and the pros and cons of the Boeing situation looks a lot like a rock and a hard place to me – we’ll definitely do better in the long run if the folks coming to our aid are at least willing to deal with the real world in something approximating a concrete fashion. Before you can clear your backyard of rocks and hard places you have to be able to get yourself out from in between.

 

A case study in rightwing mendacity

29 Tuesday Oct 2013

Posted by Michael Bersin in Uncategorized

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Economic Growth, Forbes Magazine, Kansas, missouri, Rex Sinquefield, Sam Brownback, tax cuts, Tax policy

When I recently wrote about the Missouri GOP’s stubborn attempt to render unto Rex Sinquefield what – by virtue of his checkbook – is Rex Sinquefield’s, namely one more dreary iteration of their efforts to reduce or eliminate taxes for the wealthy, I also noted that a similar experiment seemed to be tanking in Kansas – even to such an extent that the popularity of Kansas GOP Governor Sam Brownbeck was in the pits.

Imagine, then, my amazement, when I learned via an opinion piece in The Kansas City Star that there are folks that think Kansas is in exemplary shape. None other than Missouri’s ever-generous billionaire, Rex Sinquefield, seems to have informed readers of Forbes Magazine that “a close look at the data backs up the economic projections of Brownback’s visionary leadership.”

So who’s right? Me? Or Rex Snquefield? The Star‘s contributing author, I’m happy to say, backs up my contentions about the state of Kansas, pointing out that, contrary to Sinquefield’s claims, the state’s economy is “tracking most of the rest of the nation” with “no discernable jolt upward.”

What interests me, though, is the way that Mr. Sinquefield, borrowing a tactic from so many movers and shakers on the right, takes a kernel of truth and by either twisting it or ignoring other equally relevant facts, begins to run a premature victory lap  – with a view to taking a similar lope around the track in Missouri once his pets in the legislature enact his long-sought after rich-man’s tax cut. Not for nothing was his Forbes article titled “How Kansas Governor Brownback Schooled Missouri On Tax Cuts, And Showed The Region How To Grow.”

Mr. Sinquefield asserts that “lower income tax rates have in fact stimulated the economy by reducing the price both of work and conducting business in the state.” Half true. The cost of work – what people get paid – did decrease. A Center for Tax Policy report cites “Bureau of Labor statistics that showed Kansas was one of 20 states where inflation-adjusted average weekly earnings of private employees decreased between May 2012 and last May.” This fact fits well with other reports that document conistent increases during Brownback’s tenure in the number of Kansans living in poverty.

What’s not so true is the part about lower income tax rates stimulating the economy. While some business organizations have upped Kansas “business-friendly” type of rating, based mostly on government policies rather than results, recent economic reports aren’t so glowing:

… another report shows Kansas lagging most states in economic growth from February to May and predicted it will trail in the next six months.

“Most states improved over the past quarter; only Alaska, Kansas, Nevada, Wisconsin, and Wyoming experienced declines,” said the State Economic Monitor report by the Tax Policy Center, which provides independent analyses of tax issues.

The report cited an economic growth measure produced by the Federal Reserve Bank of Philadelphia that combines non-farm employment, average manufacturing hours worked, the state’s unemployment rate and real wages.

The Philadelphia Fed also produces an index that measures future economic activity for six months, and again Kansas was among the bottom states.

If  you’re interested in going into Mr. Sinquefield’s claims in greater detail, you might be enlightened by what he fails to tell us, for instance, about the unemployment rate in Kansas. He reports correctly that Kansas unemployment fell from 7% in 2011 when Brownback took office to 5.8%, a decline of 1.2 percentage points. Not so spectacular, however, when you consider that during the same period, Missouri’s unemployment rate fell 2.1 percentage points. Apart from the fact that the Kansas jobless rate is actually currently 5.9%, what Sinquefield also fails to tell us is that the Kansas number reflects an increase in unemployment, from 5.5% in January. This loss of jobs occurred during a time that saw national unemployment numbers decreasing from 7.9% to 7.3%.

I don’t know about you, but when I took a closer look at Mr. Sinquefield’s claims and did a little research, I still wasn’t too impressed with Kansas’ economic growth record over the past couple of years. I will admit, though, that if I were naively reading Sinquefield’s Forbes encomium to Governor Brownback, I might think that he was on to something. Which takes us back to those polls that show Brownback tanking in Kansas. One lesson that one can draw from Mr. Brownback’s fall from popular grace is that folks learn from experience. Another lesson, though, seeks to account for the 30-some percent who still approve of his performance – and goes to show that if you jigger the numbers skillfully enough, you actually can fool some of the people all of the time.

The zombie GOP tax reform is digging itself out of the grave, meaner and uglier than before

26 Saturday Oct 2013

Posted by Michael Bersin in Uncategorized

≈ Leave a comment

Tags

Ed Martin, Kansas, missouri, Sam Brownback, Shane Schoeller, Tax policy, tax reform

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.

 

Ask Rex Sinquefield what all that tax cutting is really about

14 Saturday Sep 2013

Posted by Michael Bersin in Uncategorized

≈ Leave a comment

Tags

education, Flat tax, HB 253, HB253, missouri, Rex Sinquefield, tax cuts, Tax policy, Tim Jones

Today an article in the St. Louis Post-Dispatch confirmed my fears that although HB253, the corporate tax-cut bill has been laid to rest at last, it will be resurrected poste haste in January when the legislature reconvenes:

On a media blitz Wednesday, House Speaker Tim Jones detailed his plan to strip out the portions [from HB 253] that Nixon found objectionable and push the legislation as the first bill of the coming session.

Those portions to be stripped out – that’ll be the hidden sales taxes and “unintended consequences” segments. Savage cuts to already low corporate taxes will remain, despite the potential damage to the state’s dismal revenue stream. Missouri’s GOPers are, after all, desperately eager to follow the “trend” set by Republican statehouses in Oklahoma, Kansas and a few other states that are attempting to spur economic growth by bankrupting their states.

It was clever of Governor Nixon to make the question of education funding the lynch-pin of his struggle to sustain the veto of HB253. Educational funding in Missouri is already dismal – per student funding in the state of Missouri is 3.1% lower than it was in 2008. But hey, guess what? Take a look at Oklahoma, one of the states that recently decimated its system of taxation – and which our Missouri GOPers cite as an example of what we have to do to be competitive. Oklahoma is now spending 22.8% less per student than it was in 2008 and is one of only 15 states that cut its per student spending this year. As for Kansas, one result of its tax cutting orgy is per student spending that is 16.5% less than in 2008 – and, according to a state district court,  failing to provide students a ‘suitable’ education.” The Governor was simply trying to warn concerned Missourians that we could expect the same deterioration in our school system if we followed the tax-cutting trend that has afflicted these states.

What the Governor didn’t tell us and what many don’t realize, though, is that many of those folks behind the tax-cutting frenzy actually want to starve public education. They probably look at those Oklahoma and Kansas education spending figures and chortle with glee.

One of the staunchest supporters of the effort to revive HB253 – to the tune of over $2 million – was St. Louis billionaire Rex Sinquefield. A year ago he floated ballot initiatives to cut income taxes and shift the burden of Missouri taxes onto the backs of the poor and middle class via expanded sales tax increases – while seriously decreasing state revenue. According to Steve Kraske, House Speaker Tim Jones wouldn’t have even brought up the sure-to-fail HB253 for an override vote if not for Sinquefield:

If you believe the hallway yak in the Missouri Capitol, Jones sought a vote on the tax bill only because the Missouri GOP’s leading benefactor, Rex Sinquefield, demanded it. Jones wanted to keep the rich guy happy more than he did his own colleagues, even though the speaker knew the vote was a loser.

Sinquefield is a never say die type of guy, and this issue is one of his two two major political obsessions The other is privatizing eduction. He has spent money lavishly attempting to drive a wedge between Missourians and their public schools, seizing on the disenchantment many feel as they are bombarded with news of failing schools in districts coping with poverty and social malaise. Nevertheless:

Education groups have balked at many of his educational initiatives, especially efforts to use state tax credits for private schools. He also sparked a backlash last year when he referenced a column in a central Missouri newspaper that seemed to suggest that the Ku Klux Klan created public education to harm black children.

You want to know why we’ll have to deal with the zombie tax-cut bill again next year and why the fight to adequately fund our public schools is a losing cause? Look no further than Rex Sinquefield and the folks who think like he does, along with the politicians who, as Steve Kraske suggests, are wholly owned subsidiaries of Sinquefield Inc.

Folks like Sinquefield are the reason that the education-for-the-future gambit that our Governor is playing to ward off tax butchery is so precarious. He’s threatening an outcome that they’ve been trying to achieve for years – the elimination of public schools, leaving education to a free market that doesn’t give a damn about the children of those on the bottom of the social heap.

 

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