Monday, May 22, 2006

Yet More Evidence There Are Only 3,000 People In The World

I learned this weekend that Ned Lamont is my college classmate, and we both were in Lowell House. He hasn't asked for money yet, but it's only a matter of time.

Tuesday, May 16, 2006

The Folks Crying "Class Warfare!" Are Actually Waging One

A report by the Center for Budget and Policy Priorities, "Tax Reconciliation Agreement Distorted by Obsession with Capital Gains and Dividend Tax Cuts: Middle-Income Households to Receive Tax Cuts Averaging Only $20," was my primary source for this column. David Corn also used the CBPP numbers here. You can get some of the analysis on the difference between the top-line economic numbers and how the economy feels to most Americans from Ezra Klein here, but what you really want to read is the LA Times commentary from Jared Bernstein ("You Know How To Add, Don't You?").

Class Warfare Continues
LIKE CREAM, TAX CUT BENEFITS RISE TO THE TOP

East Valley Tribune, May 14, 2006

While you ponder last Thursday’s revelation of the Bush administration’s database containing the date, time, and phone number of every telephone call you’ve made since 2001 -- created without a warrant, legislative authorization, and without telling us -- you might not have noticed the latest piece of really, really bad GOP tax legislation.

You may have missed it because unless you’re in the top fifth of taxpayers, the tax cut won’t really benefit you -- because that’s what it was designed to do.

UPPER-CRUST CUTS

According to the Urban Institute-Brookings Institution Tax Policy Center, the effect of the latest $70 billion tax cut package is pretty striking. Using current data, taxpayers in the bottom 20 percent will get no tax relief at all, zero percent of the benefits. Taxpayers in the middle 60 percent -- the second, middle, and fourth quintiles -- share 6.3 percent of the benefits; the tax breaks range from $6 for taxpayers in the second 20 percent to $115 in the fourth 20 percent. The vast majority -- 93.7 percent of the total -- goes to taxpayers in the top 20 percent.

But even within top 20 percent of taxpayers, it’s still painfully true that the rich get richer. The top 1 percent of taxpayers get 30.9 percent of the benefits, and the top 0.1 percent get 18.4 percent of the swag.

In other words, taxpayer with incomes of $100,000 or less get 12.8 percent of the tax cuts, with 87.2 percent going taxpayers with incomes above $100,000. But it’s not enough to make $100,000, because even within that select group, 55.1 percent of the entire tax cut goes to taxpayers with incomes above $200,000. But even that pales next to the share going to taxpayers with incomes above $1 million; they get 22.1 percent of the tax cut, an average break of $41,977.

Oh, the usual argument is that people who pay more in taxes should get more of the tax cuts. Swallowing that argument requires that you pretend that people making $35,000 or $50,000 or even $75,000 don’t pay taxes. But they do: Social Security. Medicare. State and local sales, income, and property taxes. Gasoline taxes. They just don’t pay taxes on dividend and capital gains income because they don’t have any; even if they own those assets, they’re in tax-deferred pension plans. So a tax cut focused on income that overwhelmingly goes to the well-off asset-rich misses most Americans entirely, and winds up instead in the pockets of those already doing pretty well.

If you make less than $100,000 a year and think any of these tax cuts benefit you, you’re a chump. You’re being scammed by people whose sole mission is to help the comfortable and assist the better-off. That’s why they’re pretending that extending cuts to dividend and capital gains income taxes in 2008 and 2009 is a tax cut for you -- when, unless you’re in the top 1.0 or 0.1 percent, it isn’t.

ON THE WRONG TRACK?

You’re hearing loads about how the economy is doing well and how the voters haven’t given the Republicans credit. But that’s not how voters feel; the "wrong track" number in polls is amazing, even to skeptics like me. If you want to know why voters at large feel so poorly about the economy despite pretty good top-line numbers, you should examine this latest tax cut for enlightenment.

It’s not a lack of GOP communication skills; it’s that the overwhelming share of benefits of economic growth have skewed to those at the top. The economy may be growing, but real wages actually fell despite the recovery. Just like with this GOP legislation, in which for every dollar of tax cuts, 6 cents gets shared among 80 percent of Americans and 94 cents is reserved for the top 20 percent, with a third of their share set aside for the top 1 percent and over half of that reserved for the top 0.1 percent.

The GOP wants to stiff most of the people all of the time and still expects them to feel grateful. No amount of world-class spin can fix that.

Monday, May 08, 2006

The Mesa Sales and Property Tax Elections

It's local news this week, as I come out in favor of the Mesa tax referenda on the ballot May 16. You can read about the CATO study about lowering taxes leading to more spending (at the federal level) from either Kevin Drum or Daniel Drezner. The column itself is also available on the newspaper website here. The overall polls don't look particularly good, but (as in virtually all local elections) it all depends on turnout. My editor said the last graf gave folks at the Tribune a chuckle.

GET WHAT YOU PAY FOR, PAY FOR WHAT YOU GET
East Valley Tribune, May 7, 2006

Although it hurts write this sentence, in its editorials on the Mesa sales and property tax election, the Tribune has been brave, consistent, and correct.

Mesa has the tax system of a small town of 60 years ago, but faces the challenges that come with being one of America’s 50 largest cities today. Mesa is the largest city in the country without a property tax. The city’s revenues come from retail sales taxes and fees, all of which fluctuate with the economy and which haven’t kept pace with inflation and population growth -- much less problems that simply didn’t exist in 1945.

Don't Sell Future

You can pretend that the budget cuts coming if the tax increases fail are merely “soft services” or some similarly dismissive term. But one family’s “soft service” is another family’s key to safety and success. The city’s neighborhood revitalization and Apartment Watch programs may not have sirens and carry guns, but both prevent crime. Maybe reducing crime and assisting the city’s already-pressed police force is a “soft service” to critics, but it doesn’t seem all that soft to crime victims and cops.

Maybe selling the city’s Pinal County water rights raises short-term cash, which critics (who’ll be long gone when future city residents actually need that water) think is fine. But those who view Mesa as more than a temporary stop might not want to sell the future short and leave their kids and grandkids facing water shortages.

The tax vote has two different sets of critics. The first group imagines Mesa as a libertarian paradise, with police and fire departments and nothing else. They think it was good enough in 1945, by jiminy, so it’s good enough today. I can’t argue with people who actually buy into the whole philosophy; any non-adolescent who still considers Atlas Shrugged great literature is beyond help, although they should move to Idaho with the others -- and not sign up for Medicare when turning 65.

For people actually living in the Mesa portion of the reality-based universe, it’s not such a great idea to eliminate the Park Rangers program, or to cut library and museum hours and staff, or eliminate Dial-a-Ride service for seniors or recreation services for the disabled. The Mesa of 1945 didn’t need 54 arterial streets projects, costing more than $800 million. There’s $585 million in regional funding available for that construction, but only if the city provides $251 million in funding -- money that won’t exist if the vote fails.

The other group of critics acknowledges that Mesa’s revenues haven’t kept up with population and inflation, and that the city faces real needs that didn’t exist 60 years ago. But they’re just not convinced that the current city leadership “deserves” additional taxes.

These folks say they’d vote for new taxes, but not unless all city officials are certified magicians, able to do their jobs and then prove to everybody that absolutely everything has been tried to keep providing more and more in services without paying anything more.

Of course, these folks wouldn’t want that standard applied to themselves; who would take a job where you had to prove, every day and to all comers, that everything you did was perfect and beyond criticism? And if you demand municipal employees who can change water into wine, you’d have to pay market rate for those skills.

Vote 'Yes' Twice

The worst part is that the argument that “if you give government more money, they’ll just spend more” is empirically wrong. William Niskanen of the Cato Institute (a/k/a Libertarianism Central) found that federal data from 1981 to 2005 show that cutting taxes increases government spending, while raising taxes actually reduces spending growth by the same percentages. Not only is it wrong to ask to get increasingly more from government without paying for it, it actually grows government bigger.

So on May 16, for once, follow the Tribune and vote yes, twice. Way to go, Bob Satnan; with you, Keno Hawker, Pat Gilbert, and me all agreeing on something, it’s clearly doomed.

Wednesday, May 03, 2006

Tuesday, May 02, 2006

Family Business

Forgive some familial bragging, but it was a very good week for the extended Coppersmith family. First, how about my sister Sue, whose election to the American Academy of Arts and Sciences was announced last week? Alan Alda, Bill Clinton, George H.W. Bush, and the other new fellows can only seem even more lustrous due to their association with the Chair of the Department of Physics at the University of Wisconsin-Madison. You can read all about it either here or here. The latter, a UW-Madison press release, has about the best simple explanation of Sue's work that I've seen and I'm putting it my PDA so I'm not such a dolt when people ask me what she does.

Then last Friday, son Ben was honored by the Scottsdale Charros, which is a Scottsdale Chamber of Commerce-affiliated group that honors outstanding teachers from every school in the Scottsdale Unified School District and also an outstanding male and female student from each of the 7 district high schools. Ben was named by his teachers as the outstanding male student for Arcadia High School. You can get a bit of Ben's responses to the questions the Scottsdale edition of the Arizona Republic asked each student here (scroll down to the fourth entry). But the online version leaves out his best Q&A:

Q: Describe your perfect day.
A: Around 10 a.m., Keira Knightley wakes me up and tenderly hands me a large mug of freshly made cocoa and a tray of warm waffles and syrup. She looks stunning….Then, Dick Vitale shows up, and we drive to the Suns game. Anything that happens after that is just gravy.

Q: What is one thing you want to accomplish by the time you're 30?
A: My perfect day.


By way of comparison, the outstanding female student from Arcadia lists the Young Republicans Club as one of her activities and is holding a Bible in her picture. Yes, as the saying goes, the snark doesn't fall very far from the wisenheimer. Or is that vice versa? Ben said that once he realized that it wouldn't mean that they wouldn't find a cure for cancer if he didn't list finding a cure for cancer as his goal, it became much easier to write the questionnaire.
Changing Titles, But Not Changing Jobs

For this week's column, I had a better headline: "Fox News Commentator Becomes Bush Administration Spokesman. Like You Can Tell The Difference." But there wasn't room.

ADMINISTRATION SERVES UP ANOTHER SNOW JOB
East Valley Tribune, Apr. 30, 2006

It’s not easy to get people to leave cushy private-sector jobs to accept the lower pay and higher stress of public service -- especially when it’s a highly unpopular president (32 percent approval? Clinton was never, ever even close to being that unpopular) in the last years of his term doing the asking.

Luckily, the administration found a “loaned executive” instead, with a Fox News commentator becoming the official Bush administration spokesman. It’s the ultimate in changing a job title without changing the job. What Tony Snow does at work won’t change one bit when he leaves Fox News to become a Bush mouthpiece. He probably doesn’t have a waiting period for health insurance, either.

(I won’t go so far as humorist Andy Borowitz, who predicted a merger of the Bush administration and Fox News parent News Corporation, pending working out of the final detail of whether President Bush reports to Rupert Murdoch or continues reporting to Dick Cheney.)

The real shame here is that the appointment of a new press secretary is an official Big Deal for this administration. They’ve spun it to an unusually credulous Washington Post that Snow brings an “outsider perspective” and “fresh thinking” needed by a “too insular” White House. Because that’s what this administration considers its job, creating the illusion of progress.

What’s in the Medicare drug benefit and how much it costs are irrelevant; what matters is having something, no matter how grotesquely costly, confusing, and inefficient, that you can call a Medicare drug benefit. What matters isn’t making progress in Iraq, but ginning up something, anything, that you can call progress. After all, the latest Big Step Forward that the Shiite coalition’s choice for prime minister, whom Bush feted in Washington during the 2004 campaign as a true patriot and partner, has now been replaced by a different guy from the Da’wa party. And bonus points to any of you ‘wingers who know their names. (It’s Jawad al-Maliki and Ibrahim al-Jaafari -- but no points unless you know which one is which.)

And there’s immigration, where Republicans are ever-so-unified. You’ve got the Republican National Committee running ads on Spanish-language radio saying that it’s the Democrats’ fault that the GOP House-approved immigration bill makes illegal aliens felons. You have Sen. Jon Kyl saying that “nobody” is really calling for that felony provision. Thus, we have official GOP confirmation that Rep. J.D. Hayworth is a nobody. Good luck crafting a policy that satisfies GOP campaign contributors grown dependent on cheap labor and the readers of this page that think if we just deport 15 million people, it’ll be 1960 again (and those readers will be 40 years younger, too).

It’s also worth noting that it took John O’Sullivan, a conservative columnist for the conservative New York Post, to notice that enforcement of employer sanctions has nosedived under Bush. During 1995-1997, while Bill Clinton was president, the government arrested 10,000 to 18,000 illegal aliens at worksites each year, and served 1,000 employers with notices of fines for employing them. In 2004, with George W. Bush as president, worksite arrests fell to 159, with all of 3 fine notices to employers nationally. Yep, 9/11 sure changed everything -- except anything that might interrupt the GOP’s care and feeding of its campaign contributors’ economic interests.

It’s almost pitiful watching President Bush flail around for something, anything, to do about gas prices. Maybe you saw his Al Gore imitation, calling for alternative fuel vehicles and decrying our national dependency on the internal combustion engine. Then there’s his call for an investigation of gouging, which turns out to have been performed a year ago the last time gas prices spiked, but they hope you can’t remember what happened a year ago. It would be pitiful, except that the posturing on gas prices is exactly of a piece with an administration that confuses spin with reality, posturing with progress, and rosy hopes with reality.

Good thing “the grownups are in charge.” Maybe there’s a pony in there somewhere, but I doubt it.