Our Dark Future

Brian points us to this Pandagon piece on Colorado Springs making drastic cuts in basic services because their residents refuse to pony up the tax money:

More than a third of the streetlights in Colorado Springs will go dark Monday. The police helicopters are for sale on the Internet. The city is dumping firefighting jobs, a vice team, burglary investigators, beat cops — dozens of police and fire positions will go unfilled.

The parks department removed trash cans last week, replacing them with signs urging users to pack out their own litter.

Neighbors are encouraged to bring their own lawn mowers to local green spaces, because parks workers will mow them only once every two weeks. If that.

Water cutbacks mean most parks will be dead, brown turf by July; the flower and fertilizer budget is zero.

City recreation centers, indoor and outdoor pools, and a handful of museums will close for good March 31 unless they find private funding to stay open. Buses no longer run on evenings and weekends. The city won't pay for any street paving, relying instead on a regional authority that can meet only about 10 percent of the need.

Brian suggests this is the future for his home state of Florida:

We've already seen cuts of this nature in Broward County, though not of this magnitude. Yet.

I say yet because I have to believe they're coming. Even if Democrats in Florida get a double winner next year in Kendrick Meek and Alex Sink--far from likely, I'd say--unless there's some massive turnover in the Legislature, we won't see any tax increases or reforms which would increase revenues for municipal services. This legislature has already made clear that they adhere to the Republican dogma that tax and budget cuts are the only tools they are willing to wield when it comes to balancing a budget, and there won't be any Washington stimulus money to bail them out this time.

I'd like to think that these sorts of cuts will wake voters up, once and for all, to the realization that you can't have services if you won't pay taxes, and that paying taxes is, in fact, a patriotic thing to do. I'd like to think that, but I have little faith that people will learn the lesson, because there are too many steps between local park closings and Tallahassee Tea Party rhetorical flourishes. I fear we'll just get more of the same.

I tend to think that this is in fact the future for much of the country. Colorado Springs has been an extreme for decades. One of the New Right's starting points in the 1950s, they along with Orange County, parts of Texas, the Atlanta suburbs, and other defense industry dominated places led the way in opposing taxes, embracing right-wing evangelicalism, and other tenets of modern conservatism. Of course, it's the home to the Air Force Academy, NORAD, Focus on the Family, Saddleback Church, and other leading institutions of the New Right. So maybe they are extreme.

But their anti-tax message has made great headway in America, to the point that almost no one is openly pro-tax anymore. Pro-tax means pro-services. Anti-tax means no street lights, police protection, garbage pickup, schools, and roads, not to mention city and state parks, public swimming pools, and other leisure activities.

The national government is infected with the same disease. Backlash against a growing deficit, caused largely by the anti-tax fever that grips the nation, has forced President Obama to issue a spending freeze that is a) unlikely to work, b) marginalizes domestic spending that would eventually cut the deficit, and c) will hurt Americans' way of life. The biggest problem here is that defense spending isn't included in the freeze. Maybe we could get away with very low taxes and some social services if we didn't devote so much money to the military. Katrina Vanden Heuvel calls for a big reduction in defense spending, which makes tons of sense and absolutely won't happen. The problem is well-graphed right here:

Eventually, I'd like to think the people of Colorado Springs, Miami, and the nation as a whole will come to their senses and realize that taxes protect our way of life. Oregon voters did so last week, approving a tax increase on the rich and businesses which will protect schools and other social services. But I'm skeptical of our future as a functional nation and I fear a day where armed bands of local militia are patrolling our streets because we refuse to pay taxes and at the same time demand an aggressive foreign policy that intervenes in other nation's affairs and spends massive amounts of money of big expensive toys that people think are cool.

PS--Here's the original Denver Post article, which as Elizabeth says in comments, is indeed scary. I love how no one seems to get why this is all happening. When government stops working because it has no money, what's the answer? Less government! Perfect!!!

Germany Is Not The United States

Some countries are different than the United States:

A group of rich Germans has launched a petition calling for the government to make wealthy people pay higher taxes.

The group say they have more money than they need, and the extra revenue could fund economic and social programmes to aid Germany's economic recovery.

The man behind the petition, Dieter Lehmkuhl, told Berlin's Tagesspiegel that there were 2.2 million people in Germany with a fortune of more than 500,000 euros.

If they all paid the tax for two years, Germany could raise 100bn euros to fund ecological programmes, education and social projects, said the retired doctor and heir to a brewery.

Signatory Peter Vollmer told AFP news agency he was supporting the proposal because he had inherited "a lot of money I do not need".

He said the tax would be "a viable and socially acceptable way out of the flagrant budget crisis".

While this idea has not exactly caught fire in Germany, can one even imagine such a movement in the United States, a nation which sees taxes as evil and yet demands the state to do any number of expensive things for the people? What would the right-wing bloviators say!

Grading America's Sacred Cow

I'm grading AP US History exams this week. What was I thinking? Anyway, the question I am grading is on the American Revolution. It's a standard question about major events between 1763 and 1776.

I've talked about my annoyance at how we think about the Revolution before. We still see this event in black and white, with the British as actual bad guys and the Founding Fathers as saints. Even progressives, people who are usually open to thinking in new ways about the past, ar e loathe to touch this question. In fact, many times, I've seen people get real touchy when you suggest the Revolution was a lot more complicated than it is usually made out to be.

Obviously, high school teachers are still teaching this subject in a black and white manner. With very few exceptions, students buy whole hog into the myths of the Revolution. According to them, the British were completely wrong, the Founders were heroes, the Tories don't even exist, and in the end, the greatest country the world has ever seen began.

I don't want to again revisit my arguments that maybe winning the Revolution wasn't as black and white as it seems. You can read about it here.

But I am very interested in how you can feel the anti-tax sentiment pour out of the students. Has our revolutionary mythology helped foster some of our greatest problems today? I wonder if those familiar with the revenue problems of California would think so.

Toll Roads

I usually like DarkSyde's posts over at Kos, but his attack on Texas toll roads has a lot of problems.

Over the past decade, Texas has decided to create toll roads out of a few of its many highways. While I recognize that a toll road is a regressive tax, in the current anti-tax climate continuing to dominate the United States, user fees are one way for states to earn money. I don't know exactly how the state spends the toll money--it could be spent poorly. Knowing Texas, it probably is misspent, but DarkSyde doesn't really explore this question.

What really bothers me about this post is that DarkSyde buys Republican anti-tax sentiment whole hog. The thrust of the post is this: "We're taxed on everything else and now we are being taxed to drive on our roads! An outrage!" Well, lots of states have toll roads and things seem to be just fine. Moreover, one can make a quite legitimate argument that people should be taxed to drive, much as they are taxed to drink and smoke. Again, while I recognize the regressive nature of this tax, ultimately if we are serious about dealing with climate change, we have to either reduce incentives to drive or tax the action to pay for the changes we need.

People can choose to take individual roads because they are faster if they want to pay for it. This leads to another problem with the post--as far as I know, there is not a single case where someone is forced to take a toll road because they face a lack of other roads. This is Texas. There are new roads being created or expanded all the time. There are lots of ways to go. Toll roads provide people a choice. Certainly, it'd be great if some of that money was going to public transportation and other progressive urban planning legislation, but even this problem is marginal to DarkSyde's argument of being pissed off when he has to pay a toll.

But again, the real problem here is the anti-tax sentiment. It's going to be a long rhetorical battle to fight back the Republicans on this issue. We have a long ways to go to convince people of taxation's benefits. Using Republican arguments when we face an issue we don't personally like is really damaging. That was a really irresponsible post that I hope other people also take to task.

"Audit"-tions for public office

A colleague of mine and I were talking this morning about the tax problems dogging the various appointees. She had an interesting idea that has a lot of upside-- why not make holding public office (any public office, from city council up to the U.S. Senate and beyond) a trigger for an automatic yearly audit from the IRS?

Why not? It seems that those in charge of public money should be held to the highest standards of kicking in their share. This could arguably lead to a couple of great results:

1) People with shady business deals and fancy book-keeping would be discouraged from being in positions of political power.

2) People in power would likely think twice before making any kind transaction or accepting a good or service that could be considered questionable if they know that their finances will be scrutinized by the IRS.

This wouldn't necessarily have helped Daschle, since he was a private citizen while these tax problems mounted, but it could have helped in other cases. Plus, it would make public officials (and those hoping to be public officials) more aware of the consequences of any kind of tax problem. I suppose the argument against would involve the cost of doing these audits, but really, I can't imagine the cost even coming close to being greater than the benefit-- increased tax revenue and more importantly, a possibility to stave off impropriety by public officials or aspiring public servants. This could be even more useful at the local level, where some of the most egregious corruption takes place.

Appointments

While I'm a bit disappointed that Judd Gregg is being replaced by a Republican, I still have no fundamental problem with the appointment. Commerce is an almost meaningless agency (really, if we wanted to save money by cutting a large agency, it seems like Commerce is the place to start. You could merge a lot of its functions back into Treasury) and it eliminates a popular Republican senator in a Democratic state. This opens up the seat to a much easier Democratic takeover in 2010 and forces the Republicans to defend yet another tough open seat (along with Florida, Ohio, Missouri, and Kansas if Sebelius runs).

That said, I still don't understand Obama's bipartisanship. It's obvious that the Republicans are not going to play along. Still, for positions this meaningless, why not.

On the other hand, I'm really disgusted by the high number of appointees who haven't paid their taxes. Given that I think a Democratic government needs to make the argument that taxes are a good thing and that we should pay more of them for needed social services, appointing so many people with tax problems is not a good message. I would have no problem if Daschle were forced to withdraw his nomination; Howard Dean would make a perfectly good Secretary of Health and Human Services. I see that Nancy Killefer withdrew her nomination for Chief Performance Officer for the same reason. Clearly Obama wasn't going to expend political capital to defend a nominee of lesser importance.

But Obama needs to send the message (or the Senate if not Obama) that not paying your taxes is completely unacceptable. To me, this is a reminder of how Democrats joined Republicans in an all-out grab for money and orgy of greed in the last 30 years. How can we trust the Democrats to reinstate necessary regulations on industry and finance and lead the nation away from the policies of Reagan and Bush if they so clearly embraced that creed?

Update: And Daschle withdraws. It's too bad--I think he would have made a good health care czar. On the other hand, pay your fucking taxes.

Bag Tax

Kudos to New York City mayor Michael Bloomberg for proposing a 6 cent tax on each plastic bag used when shopping. Plastic bags are one of those totally worthless conveniences that have real negative damage on the environment and are easily replaced.

But as this Times article suggests, Bloomberg is wrong to assume that the bag tax will create the $16 million a year in revenue for the city he hopes for. People will quickly switch to cloth bags that they own and bring with them. This has happened in European nations with bag taxes such as Ireland.

This is the core of the problem with sin taxes. They work OK for generating revenue when the product in question is actually addictive, like cigarettes. But with easily replaced consumer items like plastic bags, most people will make a quick change. This is what we should want to happen but when such plans are sold to the politicians and the public as revenue generators, the actual reason for their existence are obscured and the cities no doubt will be disappointed.

McCain by the Numbers: Imaginary Tax Rates

McCain’s campaign website has a lot to offer—a veritable treasure trove of bad ideas, overly determined-looking photos, and a creepy link to his MySpace page (under ‘Body Type’, it says 0’0”—I’m not kidding!). Now we can add sly misinformation to the list.

Mr. McCain has his knickers in a loop about corporate taxes.

John McCain Will Reduce The Federal Corporate Tax Rate To 25 Percent From 35 Percent. John McCain believes the taxes we impose on American companies should be no higher than the average rate our major trading partners impose on theirs. We currently have the second-highest combined corporate-tax rate in the industrialized world, and it is driving many businesses and the jobs they create overseas.

(Did I mention his website has a little of the Bob Dole Bob Dole thing going on?)

So we have he second highest corporate tax rate (outfoxed by only Japan on this one!). The operative word here is rate. The rate may be high, but actual revenue collected is an entirely different matter.

First of all, our complex tax code enables corporations to use a variety of tools to reduce their tax liability. Accelerated depreciation, exorbitant executive pay (which is deductible), off-shore sheltering (which the GAO estimates accounts for about $85 billion in uncollected tax revenue), stock options (deductions taken from the price difference in exercised stock options given to employees as part of compensation), leasebacks, transfer pricing, etc., all reduce the effective tax rate much lower than the statutory rate. In the first years of the Bush tax cuts, the effective corporate tax rate sank to an average of around 23%, with many corporations (some that reported pretax profits to their shareholders) having negative effective tax rates.

According to a new Congressional Research Service report, since 1993 (when the top statutory rate was set at 35 percent), the effective corporate tax rate — that is, the share of total corporate profits that is paid to the federal government in corporate income taxes — has averaged 26.3 percent for non-financial corporations, or about one-quarter lower than the 35 percent statutory rate (Congressional Research Service, 2003, as quoted by the Center on Budget and Policy)

Another way of looking at it is taxes as a part of GDP. The Organization for Economic Co-Operation and Development (OECD), which is a research organization funded by the governments of major developed nations (i.e., not a fringe lefty think tank), released a report about real taxes in various nations. Their methodology looks at corporate taxes as a percentage of GDP. Corporate taxes in 2004 (after the Bush tax cuts), dipped to 2.4% of GDP (28th lowest out of 30 countries), versus a 4.0% average for other OECD member nations. The U.S., circa 1965, had a percentage closer to 4.0%. When you include all taxes paid, the U.S. remains one of the least taxed nations as a percentage of GDP. The idea that we’re taxing business off of U.S. soil is just ridiculous.

For yet another view, we can look at corporate taxes as a percentage of all federal tax revenues; the Bush tax cuts ushered in a new low in this figure. In the 1950’s, corporate taxes comprised 28% of federal tax revenue; in the 1960’s, 21%, and now less than 10%.

With all the damage the Bush tax cuts have done with respect to corporate taxes, it seems fairly irresponsible to slash them lower. Much of the criticism about McCain deals with how close he is to Bush on most issues. On this one, he’s even more radical than Bush, and that’s just plain scary.

Brazil's CPMF Tax Goes Down

This morning, Brazil's Senate voted down the CPMF tax by a vote of 45 in favor of maintaining the tax, and 34 against keeping it (the tax would have needed a 2/3 majority, or 49 of the 79 senate votes). The CPMF (Contribuição Provisório a Movimentação ou Transmissão de Valores de Créditos e Direitos de Natureza Finança - Brazilian acronyms don't always totally match with their full names) was basically a tax waged on those who had bank accounts. Every time you paid bills online or did major withdrawals or deposits on your bank account, there was a .38% tax levied (originally the rate was .25%, but former president Fernando Henrique Cardoso gradually raised it to its current level of .38% in 2001). Because only the middle-middle to upper classes in Brazil have bank accounts (due to multiple economic and social factors), this tax really affected the wealthiest sectors of Brazil.

The failure means a couple of things. First, the opposition has celebrated this as a major victory, and it is a blow to Lula's administration (though nowhere near the "worst defeat Lula has ever suffered" and revealed a major popular refutation of his policies, which is what one member of the opposition declared. Losing a 2/3 majority by only 4 votes hardly constitutes a major refutation of his policies.) Additionally, as I mentioned in passing before, it really shows how despicably contrarian oppositional politics in Brazil are sometimes. The bill was defeated by the PSDB-Democrata right-wing political alliance, the same parties that voted for the bill's permanence in 1997 when Fernando Henrique Cardoso, of the PSDB, was president, and the tax continued to be passed during his administration. Yet the moment it came up for renewal (until 2011 in theory) under Lula, the opposition condemned the tax as one of the worst things to ever happen to "honest" (read: white and wealthy) Brazilians. Finally, there is the policy impact. The CPMF wasn't a useless tax - it played a major role in providing funds to social programs like Brazil's health care system and the Bolsa Familia, which helps families with less than the minimum income (which in Brazil is about $200/month). In seeking its renewal, Lula had pledged that all of the money would go to Brazil's health care (and most of it had already gone to health care). With this vote, the right-wing opposition, in what is in no way surprising yet still frustrating, basically said "to hell with the poor and disadvantaged in Brazil, and to hell with a funcitoning health care system".

This doesn't totally mean these programs will now disappear. Just because one form of taxation has disappeared doesn't mean others won't pop up, and already the Folha de São Paulo (incidentally, a much better example of good journalism without nearly the classism and Lula-hatred of O Globo) is already pointing out that other taxes can and will probably surface to replace the CPMF. However, the vote will also probably force Lula to reduce Brazil's budget surplus to continue to try to address the issues of social and economic inequality in Brazil.

Finally, in the area of a more personal gripe, there is the issue of the PSOL (Partido de Socialismo e Liberdade). The Party claims to be from the left and to want to fight for equality amongst all Brazilians. Its claims appear leftist on the surface, but it has been clear since the party's foundation earlier this decade that there are no pretenses to issues of social equality in every aspect, as it repeatedly and adamantly refuses to even consider basic women's rights such as abortion. The strongest claims they could make to seeking "equality" were generally on economic grounds (better distribution of wealth, combat rural poverty, improve minimum wage, etc.). However, even those claims are now in doubt. The one senator from PSOL, João Nery, voted against the tax, in effect saying that he was not interested in approving a tax that actually taxed the wealthier in an effort to help the Brazilian poor and try to reduce the numerous social and economic equalities in Brazil. I have ideologically had more problems withe PSOL than the PSDB for a couple of years - at least I knew the PSDB wasn't even going to pretend to try to really work on issues like social equality, preferring neoliberalism and openly favoring "private initiative" (and subsequently blaming the poor for their conditions) instead. But any mild shred of respect for PSOL I may have had has basically disappeared. While it is possible, I find it extremely unlikely that Nery was bucking party policy behind closed doors on this one (as it was only founded in 2003, PSOL is still very much the party of its leader, Heloísa Helena, a presidential candidate last year, and her followers). Once again, despite its protestations to represent the "uncorrupt" left, the PSOL did everything to try to help the PSDB-Democratas right-wing alliance, as it has done many times before. Nery's vote today just goes to show that the PSOL, despite its superficial appearance and insistence otherwise, is no less than a mockery and affront to all parties and people actually interested in social and economic justice.

As I've Said Before...

Months ago, I commented that taxes are not evil - they are a daily necessity that pay for basic things such as infrastructure and services the state provides, and that instead of getting outraged about whether taxes go up or not, we should get outraged on how our taxes are spent (outrage over spending on state highways is stupid; outrage on spending for a trillion dollar war that could have repaired highways multiple times over is not stupid).

Sure enough, it looks like the Minnesota disaster is going to lead to a raise in taxes (gas in this case) to pay for infrastructural improvements. Once again, it's this simple folks: if we want services like roads, interstate highway systems, fire departments, clean water, etc., you have to pay for it. As they are services states do and should provide, it will cost tax money. It's that simple. So next time somebody starts blowing up about the rates of taxes, remind them that, even with increases, the United States has some of the lowest tax rates in the world, and those taxes don't just pay for programs like Medicare and Medicaid, but things like the highway or bridges systems that, we learn too late, are in bad shape.