Loopholes for Everybody (Only in Arizona, and not quite everybody, but give anyway)

Those of you from outside Arizona may not realize exactly how the Arizona income tax system is semi-voluntary; you get to decide whether to pay taxes or make contributions to legislatively-favored charities. I remind East Valley Tribune readers of the importance of playing tax credit bingo each year around Thanksgiving; I hope we get some new people each year in the habit of giving.

If you want to see the column as it ran in the paper, click here or if that link fails (as it will in 2 weeks), try the printer-ready link here. I've redone the column to include links for online charitable forms below, without the neat drawings and internal headers my editor provided.

I'm also recommending to everybody an article by Linda Hirschman in The American Prospect. Linda speaks for herself and doesn't need me to blurb her stuff. But if you need a blurb, consider it done.

NO-COST CHARITY NEVER GOES OUT OF STYLE
East Valley Tribune, Nov. 27, 2005

It’s time for your annual reminder to take full advantage of Arizona’s many tax loopholes. A menu of state tax credits lets you make certain types of contributions instead of paying taxes, so generosity ultimately won’t cost you anything.

Playing the Arizona tax-credit game requires that you itemize deductions, aren’t subject to Alternative Minimum Tax, and have the cash on hand before Dec. 31. If so, make a contribution, then get an exact credit against your state income tax, while your federal taxes remain unchanged because you’ve merely swapped a state tax deduction for a charitable one. Net cost to you: Zero.

And thanks to some surprises when the legislature conformed the Arizona tax code to changes Congress made to the Internal Revenue Code, the credit limits have increased -- for married taxpayers only, however.

First, there’s the credit for donations to “private school tuition organizations” [these next 3 links are to last year's forms, but the form numbers won't change; check back at the Arizona Department of Revenue website after January 1]. You contribute to a PSTO by Dec. 31, then get a dollar-for-dollar credit against your Arizona income tax in April. The limit is $500 for individuals, but for married couples this year it’s $800, and next year it’s $1,000.

There are about five dozen PSTOs in Arizona, but please consider writing your check to Schools With Heart, 1131 E. Highland, Phoenix, AZ 85014, or click here; designate your check for the Family School, a unique school serving children from diverse backgrounds.

Second, taxpayers also can take a separate-but-not-equal credit for public school contributions [last year's form]. Single taxpayers can give and get back up to $200, while the limit for married taxpayers increases this year to $300 and next year to $400. You must write the check directly to the school, not to a PTO or foundation.

Please consider a gift to the Isaac School District, 3348 W. McDowell Road, Phoenix, AZ 85009, or click here [note: The amount listed on form was not updated for the 2005 legislation], or call (602) 455-6700. Inner-city Isaac receives only a fraction of the tax credit donations that wealthier suburban districts can collect. The state tax credit is “reverse Robin Hood” legislation, taking from below-median taxpayers (who also can’t itemize) and assisting upper-median districts, whose schools don’t face nearly the challenge that Isaac does, with the vast majority of its students (more than 90 percent) at or below poverty level and in non-English-speaking homes (about two-thirds). Make Arizona school finance slightly less perverse by contributing to Isaac, at no cost to you.

Third, donations to charities assisting low-income residents qualify for another tax credit [again, last year's form], (provided your gift is above your “baseline” charitable giving). The credit for single taxpayers is $200 but increases this year for married taxpayers to $300, and to $400 in 2006. As a board trustee, I can strongly recommend that you make one of these free contributions to Devereux Arizona, which is part of the nation’s largest nonprofit provider of behavioral health services.

Most children Devereux serves in Arizona are in foster care and residential programs, and most of these children come from abusive or neglectful homes. Devereux’s “My Little Stocking” fund pays for holiday gifts for children who wouldn’t otherwise get anything, and who already have suffered greater losses than most of us even can imagine. Send your check to Devereux at 11000 N. Scottsdale Road, Suite 260, Scottsdale, AZ 85254, or contribute online here, or call (480) 998-2920 ext. 2105.

Fourth, you can help fund Arizona’s system of publicly-financed elections. You can help reduce lobbyist influence and encourage public participation, all for free. The limits are quite high; $550 for individuals and $1,100 for couples, or up to 20% of your total state tax liability -- whichever is more. Send your check to the Citizens Clean Election Fund at 1616 W. Adams, Suite 110, Phoenix, AZ 85007. You can't contribute online, but the form to accompany your contribution is here.

Finally, consider giving something that also won’t cost you a penny -- your blood. The holidays always seem to stretch blood supplies, so it’s a perfect time to schedule a donation. You can call United Blood Services at (602) 431-9500, or make an appointment online.

Don’t let 2005 end without taking as much advantage as you can of Arizona’s upside-down tax system. If you live here, it’s the law, so make our community a slightly better place by writing some no-cost-to-you checks before year’s end.

The TEL-Tale Heart

I'm originally from Johnstown, Pennsylvania, and not only served with Jack Murtha in Congress, but also knew him when he served with my father in the state legislature, so I can tell certain members of the Bush administration that "I knew Jack Murtha. I served with Jack Murtha. Mr. Vice President, you're no Jack Murtha." Maybe that's this coming week's column. This week, it's state politics again (but with national implications).

WHEN REALITY BEATS THE NUMBERS GAME
East Valley Tribune, Nov. 20, 2005
As printed version available here.

Just watch as those who absolutely loved the ratchet in October now sorrowfully describe it as a “glitch” that shouldn’t detract from their rejected-by-voters-who-lived-through-it tax expenditure limitation (TEL) scheme.

For those arriving late, in 1992 Colorado voters approved a TEL, called TABOR, which limited state spending to inflation and population growth, with a “recession ratchet.” If revenues dropped -- which they did, by 17 percent during the 2001-02 recession -- spending couldn’t recover with the economy, but instead ratcheted down permanently. Public services that people demanded faced cuts, and voters approved gutting TABOR, to the dismay of Grover Norquist groupies.

Until November 1, the ratchet wasn’t a bug, it was a feature. The Heritage Foundation called TABOR “the gold standard” and, like most so-called conservatives, strongly opposed elimination. The Goldwater Institute touted the Colorado model as “the best” and used the ratchet in calculating the supposed benefits of a TEL here.

So when ‘wingers now tout some alternative TEL without the ratchet, they’re rewriting history. You can look it up. Everybody knows rewriting history isn’t for local amateurs; leave it for seasoned pros, like Dick Cheney.

You also can look up how the “gut TABOR” campaign depended not just on Democrats, but also prominent, respected Republicans like Gov. Bill Owens, former state GOP party chair Bruce Benson, and University of Colorado president (and former U.S. Senator) Hank Brown.

The Colorado referendum wouldn’t have passed without support of business leaders and Republicans fed up with the ‘wingers and their infatuation with numbers at reality’s expense. A prime example is Tom Clark of the Denver Metro Chamber of Commerce, quoted in The Washington Monthly: “For businesses to be successful, you need roads and you need higher education, both of which have gotten worse under TABOR and will continue to get worse. I’m a Republican, but I made the decision not to give any money to the state party.”

However, my lack of space to praise Bill Owens and Hank Brown in my earlier column can’t be criticized by local Republicans, because here the GOP remains in thrall to the ‘wingers, who believe that the only good Republican is a “drown it in the bathtub” Republican. But voters in red states like Colorado and Virginia think otherwise, and may lead Arizona to its own three-party system: ‘wingers, Democrats, and reality-based Republicans.

Finally, TEL boosters talk a lot about expenditure limitations forcing government to act more like a business. But government isn’t a business, and shouldn’t act like one. If we limit expenditure growth to inflation and population growth, how then are schools supposed to be qualitatively better than in 1992? We demand higher standards -- but doesn’t doing more, with more kids, and with inflation, take more money?

In 1994, 2 kids in 10,000 were diagnosed with autism or a related disorder. Ten years later, the Centers for Disease Control reported that autism-type disorders affect 1 in 166 children -- a 30-fold increase. Nobody knows why, but other countries are seeing similar numbers. If we limit increases in autism programs only to inflation and population growth since 1994, who tells all the new kids with autism that, too bad, a TEL means rationing treatment?

It just won’t work to say treating autism will just have to become more efficient. The functions we expect from government -- healthcare, education, insurance -- are the ones with the lowest productivity gains, in both the private and public sectors. Working with autistic kids is labor-intensive, and if the Goldwater types have a way to make a one-on-one therapist 30 times more productive, they should leave their think tank and start treating kids.

You can’t deal with the explosion in autism, and raise school standards, and lengthen and mandate prison sentences, and have more DPS patrols on new freeways and have more secure driver’s licenses by muttering “priorities.” Until you’re willing to tell those autistic kids that they just don’t matter as much as numbers do, tell the TEL to go to heck.

Clinton:Sex = Bush:Torture

My deadline is Thursday for a column that runs on Sunday; meanwhile, according to Eric Altermann, a letter to the editor in the Minneapolis Star-Tribune that ran on Saturday--but not yet posted to their website--had much the same theme as my column ("The naive bleeding hearts who oppose Vice President Dick Cheney's efforts to secure an exemption to the ban on the use of torture when interrogating those who are a threat to our security need to wake up to reality. This is the post-9/11 world. If some evildoer needs to be squeezed a little to obtain information that will potentially save American lives, we need to do it. The torture of Lewis (Scooter) Libby should begin this minute and continue until he gives up every neocon-man, war profiteer, misguided zealot, shock-and-awe peddler and lying politician who participated in the conspiracy to manufacture this war in Iraq.") Darn early deadline.

Regarding last week's column, I didn't have nearly enough space to point out that the Colorado campaign to eliminate the TABOR ratchet brought together not just the Democrats in the legislature, but also the state's GOP governor, the chamber of commerce, and various usually-Republican-but-fed-up-with-Grover-Norquist business types. It was everybody else against the 'wingers, both the "drown it in the bathtub" anti-taxers and the religious fundamentalists, who crawled into this bed and seem determined to stay in it. But the great thing about writing about TABOR in Arizona is that none of the Republicans here are willing to speak up for Bill Owens, so my lack of room to give him credit hasn't been called out. Instead, they want to pretend that the only good Republican is a "drown it in the bathtub" Republican, so the good work by Owens goes unremarked here (while the same people who used to call TABOR "the gold standard" of tax-expenditure limitation legislation now cluck sorrowfully that the formerly "gold standard" ratchet was an ill-designed glitch that shouldn't let anyone doubt the underlying idea).

Newspaper column link here.

ADMINISTRATION TRYING TO FUDGE MEANING OF 'TORTURE'
East Valley Tribune, Nov. 13, 2005

It’s going to take way too long to find out if Karl Rove and Lewis Libby broke the law if we have a regular trial, due process, and constitutional rights. So instead, let’s torture them.

I don’t mean real torture. As President Bush says, the United States government always acts “under the law. We do not torture.” But that statement depends on (ahem) what the meaning of “torture” is.

According to our president, some things may sound like torture or “cruel, inhuman or degrading treatment” banned by the U.N. Convention on Torture, to which the United States is a party, but they aren’t really “torture.” The Bush administration spent lots of energy drawing these fine distinctions; they think about torture and evading international law as passionately as Bill Clinton thought about sex.

Call it “not-torture.” Stuff like “water-boarding” -- dunking detainees in water repeatedly to near drowning. Secret prisons in former Soviet facilities in Eastern Europe. Tying naked detainees outdoors, where they die overnight from exposure. Beating a detainee’s legs, or smashing his feet with hammers. Locking a detainee’s arms over his head, which in turn is inside a plastic bag, until he suffocates. In the Bush administration’s view, all perfectly copasetic. That’s why they’re fighting so hard in Congress to keep “not-torture” legal.

The Bush administration contends that it isn’t torture if you are “without intent to cause permanent injury or loss to vital organs.” So you can break bones (which usually heal), or pry off fingernails (which usually grow back), or maybe even pull out teeth (some dictionary should confirm that teeth aren’t organs). If anybody dies, you really didn’t mean to kill them and therefore lacked the requisite intent.

Getting the hang of what’s permissible “not-torture” yet?

After all, we’re repeatedly told that you can trust this president. He nominated Harriet Miers for the Supreme Court, and asked conservatives to trust him, and we know how well that turned out. So of course we trust him when he says these things aren’t torture, and aren’t cruel and degrading or inhuman. So there’s no reason we can’t use “not-torture” techniques on Rove and Libby, right?

But, some panty-waisted due process ACLU types may complain, you can’t do that to American citizens! Says who? After all, we’re at war, and the Bush administration has made clear that they believe there should be no oversight by Congress or by the courts in how the Commander in Chief decides to fight the War on Terror -- or exactly what he (and he alone) decides to consider part of the War on Terror.

The PATRIOT Act now allows dozens of Justice Department officials to issue secret, unreviewable “national security letters” against American citizens who are not alleged to be terrorists or spies; some 30,000 are now issued annually, without any oversight by anyone, either before or afterwards. Information about approximately 1 million tourists who visited Las Vegas in December, 2003 during an investigation of a possible terror attack remains in FBI data banks.

The Bush administration claims the right to hold a U.S. citizen who is a suspect in this amorphous and continuing War on Terror in military prisons -- on nothing more than President Bush’s determination. So how hard would it be for him to decide that Rove and Libby have something to do with the War on Terror, and that these special rules should apply to them? Once he decides they're "ticking time bombs," the administration’s lawyers already have the court filings ready to refuse to let either Congress or the courts interfere.

Maybe some still quaintly think we shouldn’t “not-torture” Rove and Libby because it would be (gasp!) wrong? Unfortunately, that train left the station long, long ago.

Of course, Bush won't treat Rove or Libby that way. Heck, he’ll probably follow in the family tradition and grant ‘em both presidential pardons, and people who railed at Clinton’s pardons will be suddenly struck dumb. But mainly Bush won’t treat people he knows personally according to the rules he (and Congress) apply to people they don’t know.

“Not-torture.” Makes you proud to be an American, doesn’t it?

Death of a Bad Idea

The Bad Idea is TABOR, the so-called Taxpayer's Bill of Rights, which is really just mandated tax reductions ratcheting downward, ever downward. Just don't fail us now, California (where they vote tomorrow on their version, Prop. 76; let's hope they help, forgive me, Terminator the idea.)

Arizona was supposed to be one of the next stops for a TABOR-style initiative, but we can hope that Colorado may have just taken that particular wind out of those particular sails. My choice of headline was "Grover Norquist Wants Arizona To Be More Like Mississippi--And Mississippi To Be More Like Honduras." But the editor went for less metaphor and more viciousness. There's also an ambiguous cartoon accompanying the column (you can see it here). I call it ambiguous because you can't tell if the angry man demanding that the mother and child put coins in his cup is a legislator demanding they pay taxes, or a rich guy demanding his tax cuts. I guess it's a cartoon Rorschach which one views in accord with one's existing predispositions.

COLORADO VOTERS KILL FANATICAL TABOR PLAN
East Valley Tribune, Nov. 6, 2005

Last week, Colorado said “no” to the politics of personal irresponsibility. Here in Arizona, let’s hope it’s a trend.

By a 52-48 margin, voters approved suspending Colorado’s “Taxpayer’s Bill of Rights” (called TABOR), foregoing upwards of $3.5 billion in otherwise-mandated tax refunds for five years. The vote also eliminated TABOR’s “recession ratchet,” which limited state spending and revenues to inflation and population growth. When the 2001-02 recession and drought decreased state revenues by 13 percent one year and 4 percent the next, Colorado couldn’t put a temporary hold on projects until the economy recovered. The TABOR ratchet meant that spending never recovered from the sudden revenue drop.

Of course, the whole point of TABOR is ‘wingers’ belief that we should replace legislators with machines, making public policy totally automatic. It’s their “never mind what people need, here are the numbers” philosophy -- which, not incidentally, separates anti-tax extremists from the actual consequences of their proposals.

Given that mandatory health care costs, which don’t limit their growth to inflation plus population, represent huge chunks of every state’s spending, the formula concept is flawed from the start. TABOR was the highest expression of these zealots’ impervious-to-reality belief that taxes always, always, always must go down -- no matter what’s actually happening in the real world.

Colorado found itself rapidly approaching Mississippi-like levels in funding higher education and Medicaid. Despite a voter-approved initiative increasing support for K-12 education, the state dropped farther behind in funding. The state budget office announced that Colorado would have to close 11 state parks, raise university tuitions, cap the prison population, cut funding for healthcare, end instant background checks on firearms purchases, and eliminate ski lift inspections -- which cuts would close only $255 million of the TABOR-required $365 million in reductions.

The ‘wingers realized the stakes in Colorado, and they brought in a healthy amount of undisclosed out-of-state money for the “no” campaign. (These guys talk a lot about transparency, except when it concerns them. They also hate “government by initiative,” except when it’s their initiative.) Opponents ran ads claiming that all the money somehow would go to illegal immigrants. But voters weren’t buying, and recognized that their taxes actually buy useful things like healthcare, education, parks, and ski lift inspections -- and they wanted to keep them.

Colorado’s rejection of TABOR -- and of the “drown it in the bathtub” fanaticism of Grover Norquist, the man who nearly single-handedly has converted the “Party of Lincoln” into the “Party of Jack Abramoff and the No-New-Taxes Pledge” -- is good news for rational and responsible governance elsewhere. California voters get to decide on their version of one of these fiscal straightjackets on Tuesday, and Arizona was thought to be one of the next places to roll out this cookie-cutter idea.

As Douglas Bruce, the author of TABOR, said on election night, “The establishment is going to say we had 13 years of experience with spending limits and we changed our minds.” Well, yes, people might just say that, because it’s true.

That’s what the Republican House minority leader in Colorado, state Rep. Joe Stengel, told a conference call last week: TABOR is “as good as dead” in Colorado, and the voters killed it. “I think we now have become a blue state, frankly,” he said. Of course, the fact that Stengel’s Republicans lost both houses of the legislature and a U.S. Senate seat in 2004, and last week 52 percent of Colorado voters went with the other side, probably means he’s correct. There’s nothing like looking at closing state parks, eliminating funding for state universities, and slashing healthcare for the poor to show people that the extremist wackos really are pretty extreme.

So last week, the people who had to live with the consequences of the very latest in “stupid conservative governing tricks” have said it was a terrible mistake. How about if we in Arizona learn from their experience, and not make the same mistakes Colorado did?