Taxes, Blood, and Spending
Here’s the next-to-last Tribune column. My suggested headline was above, but even I thought that wasn’t suitable. However, my original lede was “This week, several disconnected thoughts (usually called the “Political Notebook” or “Quick Hits” style of column)” but the parenthetical got edited out. Too close to home, apparently.
So, do you think that those Republicans, outraged that Gov. Napolitano is still governor until her confirmation as Secretary of the Department of Homeland Security, who are demanding that she stop issuing executive orders, will contact “still President” G. W. Bush and demand the same from him?
CHANCES TO GIVE, EVEN FOR LAWMAKERS
East Valley Tribune, Dec. 21, 2008
This week, several disconnected thoughts:
Arizona Tax Credits -- Act Now! Dec. 31 looms, so make your contributions to qualify for Arizona’s dollar-for-dollar tax credits for donations to private school tuition organizations (up to $500 individuals, $1,000 jointly), public schools ($200/$400), working poor charities ($200/$400), and Clean Elections ($610/$1,220).
But -- as I discovered only after filing my Nov. 30 column -- this year through 2012, there’s one more state tax credit, for the Military Family Relief Fund operated by the Arizona Department of Veterans’ Services. You donate to the MFRF, up to $200 for single taxpayers and $400 for joint returns, and get a federal deduction and a state dollar-for-dollar tax credit.
You’ll need a receipt from ADVS, and to give you a receipt, ADVS needs your full name, address, and last four digits of your Social Security number, all of which is required by law. Send your contribution to MFRF, c/o Arizona Department of Veterans’ Services, 3839 N. 3rd Street, Suite 200, Phoenix, AZ 85012. A form for the contribution is available at the ADVS website, www.azdvs.gov, scroll down to the MFRF link, or contact Diane D’Angelo, MFRF Outreach Coordinator, by email at ddangelo@azdvs.gov or by phone at (602) 263-1837.
Give Blood -- But Call First. In the tax credit column, I always urge you to donate blood by contacting United Blood Services at (602) 431-9500 or at www.bloodhero.com. But the last two times I’ve contacted UBS, they haven’t needed my blood as much as in the past. My next donation instead will be white blood cells, not red.
My blood type is pretty common, so with many donors like me, blood banks now can search for more specialized and rarer blood. That’s not because suddenly Americans became unafraid of needles, but rather the recession is reducing elective surgeries and the need for blood. So still consider becoming a donor, but call first to make sure your blood will be needed.
The usual wisdom has been that health care is, if not recession-proof, then at least not affected as much by a bad economy. Instead, physicians and hospitals often see increases in elective surgeries -- knee replacements, dental work -- as people expecting to lose their jobs want work done before their insurance, or their post-employment COBRA benefits, run out.
That’s not true for all facing economic uncertainty; some of the “pre-uninsured” decline treatments, because they don’t want any pre-existing conditions in their records when searching for new jobs and insurance. But recessions do reduce demand for health care; according to a stock analyst quoted in Business Week, demand for hospital services during the 2001-02 recession was the lowest on record. And this recession will be far more severe.
My prediction for the biggest health care losers this recession are the specialty hospitals and surgery centers which depend on higher-margin elective procedures. People cutting back on their spending won’t just keep their current car a year or two longer; they’ll keep their existing body parts, too, until the economy turns around.
Teaching By Example. State legislators are already announcing that the state’s budget situation will mean cuts to education funding. Fairness requires that legislators match funding cuts with similar percentage reductions to required scores on the AIMS test, doesn’t it? I await these legislators reminding parents that it’s all about individual responsibility, that they shouldn’t have had children who would wind up needing to be educated during a recession. You simply can’t expect government to bail you out of those kind of mistakes.
But if schools have to do more with less, the legislators should show them how. Rather than increasing the political contribution limits by inflation as the state does every cycle, instead legislators should reduce the contribution limit by the same percentage as the per-pupil cut to education funding. Show the schools how to do more with less by doing it in your own political fundraising, legislators. It’s the least that leadership requires.
Since January 8, 2011, this is a personal blog only. Comments? Email the author, Sam Coppersmith, at SCoppersmith at Charlie Bravo Lima Alpha Whiskey Yankee Echo Romeo Sierra dot com.
Monday, December 22, 2008
Monday, December 15, 2008
If You Drive In Phoenix and Know about the Middle-of-the-Road Turning Lane, Why Would You Want to "Govern From The Center?"
Before we get to this week’s column, Arizona taxpayers need to know that there is one more state tax credit that allows a dollar-for-dollar credit against your Arizona personal income tax liability for a charitable contribution. It’s the Military Family Relief Fund credit, which is available only for tax years 2008 through 2012, so it’s both new and time-limited – and, of course, news accounts of this new credit all appeared after my annual tax credit column. But, via the miracle of the Internet, I get to revise and extend my remarks.
The MFRF credit is available only to individuals; corporations can’t claim the credit, nor may partnerships, LLCs, or S corporations pass the credit through to partners, members, or shareholders. The credit is capped at $200 for single taxpayers or heads of households, and at $400 for married couples filing joint returns. To claim the credit, you need a receipt from the Arizona Department of Veterans’ Services, and to give you a receipt, the ADVS needs your full name, address, and last four digits of your Social Security number. (The SSN numbers are required by law, A.R.S. §41-608.04(F). Sorry.) Send your contribution to MFRF, c/o Arizona Department of Veterans’ Services, 3839 N. 3rd Street, Suite 200, Phoenix, AZ 85012. A form for the contribution is available here. For more information, contact Diane D’Angelo, the MFRF Outreach Coordinator, by email at ddangelo@azdvs.gov or by phone at (602) 263-1837.
The same deal applies as with the other credits; you take the credit on your Arizona return, and make sure you include it in your charitable donations for deduction on Schedule A of your federal return, and the contribution is completely offset by the credit and deduction and costs you nothing.
Now for the column. This column reprises one of my pet themes over the years, and I thought it was time (in my next-to-penultimate column) to trot it out again. My suggested headline was “It's Not The Mandate, It's The Change,” but the editor found that a bit too obscure. My thanks to Eric Schnurer, whose article, published in Italian (I got the English translation; like James Thurber apparently Eric is not as funny in the original) by the Aspen Institute got me thinking about this topic again. At some point Eric will put the English version up on his website for Public Works, his consulting firm, but it isn’t available yet.
FIGHTING OVER BIG IDEAS IS NOT ONLY GOOD, IT’S NEEDED
East Valley Tribune, Dec. 14, 2008
Soon both parties -- the Democrats in Washington, the Republicans here in Arizona -- must stop talking and actually produce “change.” Unfortunately, as with TV shows, vegetables, and furniture, it’s easy to convince people to demand something different, but much harder to guess what they want instead.
That shouldn’t surprise anybody. Hey, almost half the electorate is men. We frequently don’t want to drive the way we’re going, but as to where we actually should be headed? We don’t know, but we’re not asking for directions.
Of course, change is hard. In our system of government, it’s much easier playing defense, because there are many ways to stop things, but to accomplish anything, you must overcome every obstacle. And that’s difficult without a fairly dominant political philosophy or policy consensus.
If a strong majority of Americans become convinced that we should have a New Deal, or new civil rights laws, then even substantial procedural hurdles (Senate filibusters, congressional seniority, court decisions) eventually will be overcome. But without a broad consensus -- if people remain conflicted between wanting a better health care system while worrying about losing what they have now -- then process and delay will prevail.
It’s rare for a closely-divided legislature to produce worthwhile legislation. Divided government more often leads to gridlock, which (in the absence of major crisis) may be an acceptable second choice to a majority of voters. Gridlock has little to do with tone or civility, which are more of a byproduct of a lack of consensus than its cause.
There may be legislatures where really nice key leaders manage to keep their own troops in line and still find time to build and maintain wonderful relationships across the aisle, but that must be rare -- as it requires an entrenched majority that doesn’t overreach. Good luck finding that. And when legislators actually are buddies, then angry voters accuse them of being part of a self-interested club. Voters hate partisanship and bickering, while mistrusting legislators who aren’t partisan and don’t bicker.
Divided government or narrow majorities usually result in a narrow, tactical politics, where one branch sees its job as blocking the (obviously unworthy) initiatives of another branch, or the minority senses that the majority is shaky enough that the minority could block the majority from passing some of its program. With politics generally a zero-sum game, making the other side lose is often the only possible form of victory.
Whenever the parties are closely matched or government divided, people talk a lot about “governing from the center” and “taking the best ideas of both sides.” But there are two problems with that approach. First, isn’t insisting on splitting the difference between two conflicting approaches just a different form of orthodoxy, assuming that sincere and committed ideologues are always wrong? And how do you combine opposite approaches? Do you cut taxes and raise them at the same time? Decide to spend more on autism research, then cut all spending across the board, including on autism?
And second, most elections are determined not by those who follow politics deeply -- the dreaded base voters, you already know whether and how we’ll vote -- but by those lower-information, lower-efficacy undecided voters. Swing voters don’t follow whether an idea came from the D or R camp, or instead is some “govern from the center” synthesis. They’ll know whether something got passed, but only rarely know where it came from.
Maybe “pragmatic” compromise is the way to tackle a particular problem. But laws adopted with no bipartisan support are just as valid as those passing unanimously. Governing from the center is a tactic, not a strategy, which may not fit every circumstance.
Both parties need to be practical and tactical, but in the sense of getting things done. Big things, requiring an ideological point of view. The economy’s a wreck, the state budget a black hole. Let’s not demand that everybody work together. It’s not about personalities, or tone, or compromise. You can’t average out two different directions, you have to pick one.
We’ve got big problems. Let’s not fear fighting over big ideas.
Before we get to this week’s column, Arizona taxpayers need to know that there is one more state tax credit that allows a dollar-for-dollar credit against your Arizona personal income tax liability for a charitable contribution. It’s the Military Family Relief Fund credit, which is available only for tax years 2008 through 2012, so it’s both new and time-limited – and, of course, news accounts of this new credit all appeared after my annual tax credit column. But, via the miracle of the Internet, I get to revise and extend my remarks.
The MFRF credit is available only to individuals; corporations can’t claim the credit, nor may partnerships, LLCs, or S corporations pass the credit through to partners, members, or shareholders. The credit is capped at $200 for single taxpayers or heads of households, and at $400 for married couples filing joint returns. To claim the credit, you need a receipt from the Arizona Department of Veterans’ Services, and to give you a receipt, the ADVS needs your full name, address, and last four digits of your Social Security number. (The SSN numbers are required by law, A.R.S. §41-608.04(F). Sorry.) Send your contribution to MFRF, c/o Arizona Department of Veterans’ Services, 3839 N. 3rd Street, Suite 200, Phoenix, AZ 85012. A form for the contribution is available here. For more information, contact Diane D’Angelo, the MFRF Outreach Coordinator, by email at ddangelo@azdvs.gov or by phone at (602) 263-1837.
The same deal applies as with the other credits; you take the credit on your Arizona return, and make sure you include it in your charitable donations for deduction on Schedule A of your federal return, and the contribution is completely offset by the credit and deduction and costs you nothing.
Now for the column. This column reprises one of my pet themes over the years, and I thought it was time (in my next-to-penultimate column) to trot it out again. My suggested headline was “It's Not The Mandate, It's The Change,” but the editor found that a bit too obscure. My thanks to Eric Schnurer, whose article, published in Italian (I got the English translation; like James Thurber apparently Eric is not as funny in the original) by the Aspen Institute got me thinking about this topic again. At some point Eric will put the English version up on his website for Public Works, his consulting firm, but it isn’t available yet.
FIGHTING OVER BIG IDEAS IS NOT ONLY GOOD, IT’S NEEDED
East Valley Tribune, Dec. 14, 2008
Soon both parties -- the Democrats in Washington, the Republicans here in Arizona -- must stop talking and actually produce “change.” Unfortunately, as with TV shows, vegetables, and furniture, it’s easy to convince people to demand something different, but much harder to guess what they want instead.
That shouldn’t surprise anybody. Hey, almost half the electorate is men. We frequently don’t want to drive the way we’re going, but as to where we actually should be headed? We don’t know, but we’re not asking for directions.
Of course, change is hard. In our system of government, it’s much easier playing defense, because there are many ways to stop things, but to accomplish anything, you must overcome every obstacle. And that’s difficult without a fairly dominant political philosophy or policy consensus.
If a strong majority of Americans become convinced that we should have a New Deal, or new civil rights laws, then even substantial procedural hurdles (Senate filibusters, congressional seniority, court decisions) eventually will be overcome. But without a broad consensus -- if people remain conflicted between wanting a better health care system while worrying about losing what they have now -- then process and delay will prevail.
It’s rare for a closely-divided legislature to produce worthwhile legislation. Divided government more often leads to gridlock, which (in the absence of major crisis) may be an acceptable second choice to a majority of voters. Gridlock has little to do with tone or civility, which are more of a byproduct of a lack of consensus than its cause.
There may be legislatures where really nice key leaders manage to keep their own troops in line and still find time to build and maintain wonderful relationships across the aisle, but that must be rare -- as it requires an entrenched majority that doesn’t overreach. Good luck finding that. And when legislators actually are buddies, then angry voters accuse them of being part of a self-interested club. Voters hate partisanship and bickering, while mistrusting legislators who aren’t partisan and don’t bicker.
Divided government or narrow majorities usually result in a narrow, tactical politics, where one branch sees its job as blocking the (obviously unworthy) initiatives of another branch, or the minority senses that the majority is shaky enough that the minority could block the majority from passing some of its program. With politics generally a zero-sum game, making the other side lose is often the only possible form of victory.
Whenever the parties are closely matched or government divided, people talk a lot about “governing from the center” and “taking the best ideas of both sides.” But there are two problems with that approach. First, isn’t insisting on splitting the difference between two conflicting approaches just a different form of orthodoxy, assuming that sincere and committed ideologues are always wrong? And how do you combine opposite approaches? Do you cut taxes and raise them at the same time? Decide to spend more on autism research, then cut all spending across the board, including on autism?
And second, most elections are determined not by those who follow politics deeply -- the dreaded base voters, you already know whether and how we’ll vote -- but by those lower-information, lower-efficacy undecided voters. Swing voters don’t follow whether an idea came from the D or R camp, or instead is some “govern from the center” synthesis. They’ll know whether something got passed, but only rarely know where it came from.
Maybe “pragmatic” compromise is the way to tackle a particular problem. But laws adopted with no bipartisan support are just as valid as those passing unanimously. Governing from the center is a tactic, not a strategy, which may not fit every circumstance.
Both parties need to be practical and tactical, but in the sense of getting things done. Big things, requiring an ideological point of view. The economy’s a wreck, the state budget a black hole. Let’s not demand that everybody work together. It’s not about personalities, or tone, or compromise. You can’t average out two different directions, you have to pick one.
We’ve got big problems. Let’s not fear fighting over big ideas.
Monday, December 08, 2008
"Pay for Performance" In The Bailout Era
Here’s this past Sunday’s column, now we’re caught up. Hope you like the Robert Rubin-Robert Downey line; I thought that would get a rise out of the editor, but nothing. Of course, he’s also so short he can’t stand up, sir, and maybe it’ll get a bigger reaction for you guys. Newspaper version here.
DON’T CONFUSE INTELLIGENCE WITH LUCK
East Valley Tribune, Dec. 7, 2008
Business types (by exquisitely powerful social custom) detest lawyers, because we get paid for providing services but they claim to get paid only for results. But given the world-wide financial meltdown, wouldn’t your 401k be better off if you had gotten rid of all the bankers instead?
Even the most successful trial lawyer is far less destructive of wealth than the financiers whose work boiled down to following the herd making highly-leveraged bets on poorly-understood and opaque debt instruments.
Admittedly, a year when Robert Rubin’s reputation sinks below that of Robert Downey, Jr. is, by definition, unusual. I also used to worry that I didn’t fully understand these new securities, but unfortunately the financiers being paid millions to create, market, and value this stuff didn’t fully understand them, either.
What counts as innovative leadership in business -- staying just ahead of a trend -- is wonderful when the economy grows. But when the business cycle starts topping out, it’s not that great to leap ahead of your competitors if you’ve just moved closer to the front ahead of the crash.
But as bad as boom-then-bust seems now, it’s more popular than slow-and-steady. It seems lots of businesses (apart from boring, lawyerly fee-for-service stuff) is basically real estate development with different commodities. Entrepreneurs make money in a hot new area. Others join in. A crowd gathers and generates circular enthusiasm. Prices rise, demand rises faster. People make money, and confuse a rising market for their brilliance and business acumen. Then the market crashes, which absolutely nobody could have foreseen.
Some bubbles are too small to generate the requisite delusional mass. (Remember Beanie Babies?) And some worrywarts always complain that prices are way outside historical ratios, but others see plentiful reasons why today isn’t like the past. It’s not much fun being a contrarian when the trend you’re bucking is everybody else doing really, really well. And for all the talk of the “discipline of the market,” for most entrepreneurs the real market-oriented question is “What can I get funded?”
In just the past decade, we’ve lived through the dot-com and the real estate and finance bubbles, but having seen the one didn’t help us avoid the other. It’s hard to see a bubble from the inside, which requires a degree of objectivity far beyond most of us. It also requires convincing really rich and successful people that they’ve merely been lucky, not smart, which isn’t a very promising business model. And even if you do recognize that you’re in a bubble, what incentive do you have to get out early?
Think back to 2002, and whether it made sense to invest in Arizona real estate. In five years, the market will crash, but if you stay out, you’ll miss five wonderful years. It’s also not clear what alternative investments you’d make instead. And if you can use other people’s money, then why not place more bets? Maybe the crash comes a year later than originally predicted. Or maybe if you’re told enough times that you have some special talent for business, you start believing it -- and believing you’re underpaid, too.
So after years of worshipping (and paying) CEOs who got lots of credit on the way up, we now learn that they really didn’t understand the risks their companies took to generate those wonderful numbers. It’s “pay-for-performance,” but only the pay was real; the performance, not so much. And to where do richly-compensated, smarter-faster-more efficient market-based giants of business turn, when they didn’t do their jobs properly?
To the only group they like less than lawyers: Politicians. Our biggest banks, insurers, and automakers now rely much less on their CEOs than on Congress. So isn’t the pay scale still out of whack? Not that members of Congress should make what a CEO makes, but that bailed-out executives shouldn’t make more than a member of Congress.
The leadership needed to run huge companies into the ground shouldn’t be so expensive. Not with such a plentiful supply -- and when what we once thought was smarts was really luck.
Here’s this past Sunday’s column, now we’re caught up. Hope you like the Robert Rubin-Robert Downey line; I thought that would get a rise out of the editor, but nothing. Of course, he’s also so short he can’t stand up, sir, and maybe it’ll get a bigger reaction for you guys. Newspaper version here.
DON’T CONFUSE INTELLIGENCE WITH LUCK
East Valley Tribune, Dec. 7, 2008
Business types (by exquisitely powerful social custom) detest lawyers, because we get paid for providing services but they claim to get paid only for results. But given the world-wide financial meltdown, wouldn’t your 401k be better off if you had gotten rid of all the bankers instead?
Even the most successful trial lawyer is far less destructive of wealth than the financiers whose work boiled down to following the herd making highly-leveraged bets on poorly-understood and opaque debt instruments.
Admittedly, a year when Robert Rubin’s reputation sinks below that of Robert Downey, Jr. is, by definition, unusual. I also used to worry that I didn’t fully understand these new securities, but unfortunately the financiers being paid millions to create, market, and value this stuff didn’t fully understand them, either.
What counts as innovative leadership in business -- staying just ahead of a trend -- is wonderful when the economy grows. But when the business cycle starts topping out, it’s not that great to leap ahead of your competitors if you’ve just moved closer to the front ahead of the crash.
But as bad as boom-then-bust seems now, it’s more popular than slow-and-steady. It seems lots of businesses (apart from boring, lawyerly fee-for-service stuff) is basically real estate development with different commodities. Entrepreneurs make money in a hot new area. Others join in. A crowd gathers and generates circular enthusiasm. Prices rise, demand rises faster. People make money, and confuse a rising market for their brilliance and business acumen. Then the market crashes, which absolutely nobody could have foreseen.
Some bubbles are too small to generate the requisite delusional mass. (Remember Beanie Babies?) And some worrywarts always complain that prices are way outside historical ratios, but others see plentiful reasons why today isn’t like the past. It’s not much fun being a contrarian when the trend you’re bucking is everybody else doing really, really well. And for all the talk of the “discipline of the market,” for most entrepreneurs the real market-oriented question is “What can I get funded?”
In just the past decade, we’ve lived through the dot-com and the real estate and finance bubbles, but having seen the one didn’t help us avoid the other. It’s hard to see a bubble from the inside, which requires a degree of objectivity far beyond most of us. It also requires convincing really rich and successful people that they’ve merely been lucky, not smart, which isn’t a very promising business model. And even if you do recognize that you’re in a bubble, what incentive do you have to get out early?
Think back to 2002, and whether it made sense to invest in Arizona real estate. In five years, the market will crash, but if you stay out, you’ll miss five wonderful years. It’s also not clear what alternative investments you’d make instead. And if you can use other people’s money, then why not place more bets? Maybe the crash comes a year later than originally predicted. Or maybe if you’re told enough times that you have some special talent for business, you start believing it -- and believing you’re underpaid, too.
So after years of worshipping (and paying) CEOs who got lots of credit on the way up, we now learn that they really didn’t understand the risks their companies took to generate those wonderful numbers. It’s “pay-for-performance,” but only the pay was real; the performance, not so much. And to where do richly-compensated, smarter-faster-more efficient market-based giants of business turn, when they didn’t do their jobs properly?
To the only group they like less than lawyers: Politicians. Our biggest banks, insurers, and automakers now rely much less on their CEOs than on Congress. So isn’t the pay scale still out of whack? Not that members of Congress should make what a CEO makes, but that bailed-out executives shouldn’t make more than a member of Congress.
The leadership needed to run huge companies into the ground shouldn’t be so expensive. Not with such a plentiful supply -- and when what we once thought was smarts was really luck.
Sunday, December 07, 2008
My Last Arizona Tax Credit Column
With my Tribune column ending (along with the Tribune as we know it) on Dec. 31st, this is my last annual Arizona Tax Credit column, which (this being Arizona, where it only takes two times to make something a tradition) is a Thanksgiving weekend regular for me (and thus for you). In fact, my suggested headline was “My Last Annual Arizona Tax Credit Column,” but the editor gave it the same headline as in 2007. Same tax credit amounts, too. You can get the newspaper version here if you want a smaller version to print out for your year-end tax planning and donations.
Schools with Heart is the only suggestion that doesn’t have a website, for them you’ll need a stamp. That’s the PTSO that helps The Family School, which was the preschool that our son and the rest of Troop 6 BSA painted for the first time in their lifetimes for his Eagle Scout project. Plus if you didn’t come to the Devereux Arizona 40th anniversary celebration at the Phoenix Zoo last month like I asked, now’s your chance to atone on a no-net-cost basis. (And those of you who did send a check, don’t forget to take the state tax credit for the contribution!)
THESE GIFTS ARE LESS TAXING THAN MOST
East Valley Tribune, Nov. 30, 2008
Tax laws do affect behavior. You spend months worrying about declines in your investments, but in December, suddenly you're happy to "harvest" tax losses.
In Arizona, the tax laws encourage you to listen to year-end appeals for charitable donations. Of course, you should be giving to charity anyway. But in Arizona, we make it really easy even for die-hard libertarians (a/k/a "the obnoxiously cheap") to become charitable -- because it's free.
Several tax credits let you reduce your state income taxes by the amount of your donation. I'm assuming you itemize deductions and don't pay Alternative Minimum Tax. If so, donate by December 31, then in April, pay the same amount less in state tax as you gave away. All it costs you is the stamp and the time to write the checks. And for most of these charities, you can contribute online and save the stamp.
First, contributions to "private school tuition organizations" that offer scholarships to private schools qualify for a tax credit for individuals of up to $500 and for married couples up to $1,000. For your PSTO contribution, please consider Schools With Heart, 1131 E. Highland, Phoenix, AZ 85014, or call (602) 252-5866, and designate your contribution for The Family School.
You contribute now, then report your contribution on Form 323 when filing state income taxes in April, getting a full dollar-for-dollar credit up to the cap. But make sure to include these donations as charitable contributions on your federal return to get the full benefit.
Second, the less-generous public school tax credit lets single taxpayers give and get back up to $200, and married taxpayers, up to $400. You write the check directly to the school, not to a PTO or foundation, and report this credit on Arizona Form 322.
Of course, wealthier school districts benefit more from these tax credit donations, so if you want your money to make more of a difference, you should contribute to the Isaac School District, 3348 W. McDowell Road, Phoenix, AZ 85009, or at www.isaacschools.org/district/credit.htm. Your gift is far more significant in a school district with 90 percent of its students at or below poverty and two-thirds from non-English-speaking homes.
Third, donations to charities which assist low-income residents qualify for another tax credit if you exceed the "baseline" of your charitable contributions for 1996 or the first year you itemized, if later. Lots of Arizona charities qualify for this Form 321 credit, which is available up to $200 for single taxpayers and $400 for couples.
I serve on the board, and having mentioned that can urge you without any guilt whatsoever to contribute to Devereux Arizona's behavioral health programs. Devereux serves children in foster and residential programs who won't get holiday gifts without contributions like yours. You can give gifts at no cost because you'll pay exactly that much less in state income taxes. Send your check to Devereux Arizona, 11000 N. Scottsdale Road, Suite 260, Scottsdale, AZ 85254, or go to www.devereuxaz.org and click on the "My Little Stocking" link.
A fourth credit may not be around much longer; a federal judge (who would be called an "activist" except that she's ruling the way the 'wingers want, which makes her a patriot) seems likely to eviscerate Arizona's publicly-financed state elections. But while it lasts, this tax credit is surprisingly generous, $610 for individuals and $1,220 for couples, or up to 20% of your total state tax liability, whichever is greater. Send your contribution to Citizens Clean Election Fund, 1616 W. Adams, Suite 110, Phoenix, AZ 85007, or visit www.azgu.gov/CleanElections/. For this credit, there's no separate form, you credit the donation on Form 140 itself.
Finally, after making your cash donations, give something else that you won't miss. Call United Blood Services at (602) 431-9500, or make an appointment online at www.bloodhero.com, to donate blood. Easy, fast, and the post-donation cookies are tasty and guilt-free, too.
So make some donations by Dec. 31 and reduce your state taxes on April 15. Yes, it's bad law, but please use it to do good.
With my Tribune column ending (along with the Tribune as we know it) on Dec. 31st, this is my last annual Arizona Tax Credit column, which (this being Arizona, where it only takes two times to make something a tradition) is a Thanksgiving weekend regular for me (and thus for you). In fact, my suggested headline was “My Last Annual Arizona Tax Credit Column,” but the editor gave it the same headline as in 2007. Same tax credit amounts, too. You can get the newspaper version here if you want a smaller version to print out for your year-end tax planning and donations.
Schools with Heart is the only suggestion that doesn’t have a website, for them you’ll need a stamp. That’s the PTSO that helps The Family School, which was the preschool that our son and the rest of Troop 6 BSA painted for the first time in their lifetimes for his Eagle Scout project. Plus if you didn’t come to the Devereux Arizona 40th anniversary celebration at the Phoenix Zoo last month like I asked, now’s your chance to atone on a no-net-cost basis. (And those of you who did send a check, don’t forget to take the state tax credit for the contribution!)
THESE GIFTS ARE LESS TAXING THAN MOST
East Valley Tribune, Nov. 30, 2008
Tax laws do affect behavior. You spend months worrying about declines in your investments, but in December, suddenly you're happy to "harvest" tax losses.
In Arizona, the tax laws encourage you to listen to year-end appeals for charitable donations. Of course, you should be giving to charity anyway. But in Arizona, we make it really easy even for die-hard libertarians (a/k/a "the obnoxiously cheap") to become charitable -- because it's free.
Several tax credits let you reduce your state income taxes by the amount of your donation. I'm assuming you itemize deductions and don't pay Alternative Minimum Tax. If so, donate by December 31, then in April, pay the same amount less in state tax as you gave away. All it costs you is the stamp and the time to write the checks. And for most of these charities, you can contribute online and save the stamp.
First, contributions to "private school tuition organizations" that offer scholarships to private schools qualify for a tax credit for individuals of up to $500 and for married couples up to $1,000. For your PSTO contribution, please consider Schools With Heart, 1131 E. Highland, Phoenix, AZ 85014, or call (602) 252-5866, and designate your contribution for The Family School.
You contribute now, then report your contribution on Form 323 when filing state income taxes in April, getting a full dollar-for-dollar credit up to the cap. But make sure to include these donations as charitable contributions on your federal return to get the full benefit.
Second, the less-generous public school tax credit lets single taxpayers give and get back up to $200, and married taxpayers, up to $400. You write the check directly to the school, not to a PTO or foundation, and report this credit on Arizona Form 322.
Of course, wealthier school districts benefit more from these tax credit donations, so if you want your money to make more of a difference, you should contribute to the Isaac School District, 3348 W. McDowell Road, Phoenix, AZ 85009, or at www.isaacschools.org/district/credit.htm. Your gift is far more significant in a school district with 90 percent of its students at or below poverty and two-thirds from non-English-speaking homes.
Third, donations to charities which assist low-income residents qualify for another tax credit if you exceed the "baseline" of your charitable contributions for 1996 or the first year you itemized, if later. Lots of Arizona charities qualify for this Form 321 credit, which is available up to $200 for single taxpayers and $400 for couples.
I serve on the board, and having mentioned that can urge you without any guilt whatsoever to contribute to Devereux Arizona's behavioral health programs. Devereux serves children in foster and residential programs who won't get holiday gifts without contributions like yours. You can give gifts at no cost because you'll pay exactly that much less in state income taxes. Send your check to Devereux Arizona, 11000 N. Scottsdale Road, Suite 260, Scottsdale, AZ 85254, or go to www.devereuxaz.org and click on the "My Little Stocking" link.
A fourth credit may not be around much longer; a federal judge (who would be called an "activist" except that she's ruling the way the 'wingers want, which makes her a patriot) seems likely to eviscerate Arizona's publicly-financed state elections. But while it lasts, this tax credit is surprisingly generous, $610 for individuals and $1,220 for couples, or up to 20% of your total state tax liability, whichever is greater. Send your contribution to Citizens Clean Election Fund, 1616 W. Adams, Suite 110, Phoenix, AZ 85007, or visit www.azgu.gov/CleanElections/. For this credit, there's no separate form, you credit the donation on Form 140 itself.
Finally, after making your cash donations, give something else that you won't miss. Call United Blood Services at (602) 431-9500, or make an appointment online at www.bloodhero.com, to donate blood. Easy, fast, and the post-donation cookies are tasty and guilt-free, too.
So make some donations by Dec. 31 and reduce your state taxes on April 15. Yes, it's bad law, but please use it to do good.
Friday, December 05, 2008
If Napolitano Heads DHS, Could She Put Arizona State Government On A Terrorist Watch List?
This column ran Nov. 23, and luckily for me they didn’t announce the Gov’s appointment as head of Homeland Security until after the column ran. My suggested headline was above but I certainly did not expect any reasonable editor to use that headline.
U.S. CHANGES, ARIZONA NOT SO MUCH
East Valley Tribune, Nov. 23, 2008
So, if President-elect Barack Obama offers heading the Department of Homeland Security to Gov. Janet Napolitano, and if she accepts -- neither of which are certain as of my deadline, and both of which had better remain uncertain until after publication -- what happens?
It fits with the 2008 election results, which meant major change in America, but in Arizona, not so much. Nationally and federally, Democrats did very well, but statewide and locally, Republicans won. Sure, Democrats took two of three Corporation Commission seats -- apparently, the names “Paul Newman” and “Kennedy” are politically potent here as “Stump” -- but other than two-thirds of the “Solar Team,” if it was a Democrat and wasn’t a federal office, 2008 was the new 2004.
If the rumors are correct, Arizona gives up a very popular, savvy, and effective Democratic governor who might have checked the worst excesses of an even-more conservative GOP legislature. It helps the country to have her expertise take on the morass at Homeland Security, but won’t do much for the state.
If Napolitano does get the Homeland Security job, then maybe Americans -- alone among the nations -- will be able to fly without first removing our shoes. Could we perhaps soon take regularly-priced coffee through airport security, or is that too much to ask?
It’s good for the country for Obama to get smart, competent people to serve in his administration, and to have a president whom people are eager to serve, even in difficult positions. Homeland Security is a huge agency, with interagency rivalries making the Pentagon look harmonious, and it’s the offensive line of government: Even if you do your job perfectly, at the end of the day you’re completely beat up anyway, and the announcers mention your name only if things go wrong.
There’s only one job in government that’s going to be worse than heading Homeland Security, and that’s being a state governor during the next two years. It was simpler, and far more fun, during a boom, when any governor could both cut taxes and increase spending. To stick with the football analogies, being governor during this recession will be like coaching a bad team that just lost its best players to injury. If you do the best coaching job possible, you’ll narrow the margin of defeat, but it’s never fun (or good for job security) to lose.
The only grimly ironic news in Secretary of State Jan Brewer becoming governor is that just as everything goes all to heck, in Arizona we’ll know which party is responsible. The collapse of the real estate economy and national recession mean that our state revenues, dependent on development and consumption, are decreasing at rates economists haven’t seen before and didn’t project. In a political climate that rewards people for complaining that both taxes and university tuitions are far too high, it won’t be pretty. And nobody will have any confusion over who’s in charge.
I do have one suggestion for fiscal policy, a “perfect storm” tax. Effective immediately, using that phrase should cost $500. With the increasingly grim economic news, it could raise significant revenue.
Arizona could be a test of the GOP debate whether the party should become more centrist or more ideological. Unfortunately for Arizona, we don’t have centrist Republicans anymore, so we’d be the ideological test case. It’s a lot easier to talk about being fiscally “responsible” than it is to cut health care, schools, and public safety. It also creates the temptation to dive into the social conservative swamps, because passing anti-gay, anti-abortion, and bash-the-minorities legislation doesn’t have any fiscal impact. It’ll be perfect for the new regime, both nasty and cheap.
You know those pundits who fret with one-party control in Washington, the Democrats might “overreach?” They’re looking in the wrong direction. If you want to see overreaching, just wait if we get a governor who thinks just like the legislature does.
Yes, we certainly could have too much of a bad thing.
This column ran Nov. 23, and luckily for me they didn’t announce the Gov’s appointment as head of Homeland Security until after the column ran. My suggested headline was above but I certainly did not expect any reasonable editor to use that headline.
U.S. CHANGES, ARIZONA NOT SO MUCH
East Valley Tribune, Nov. 23, 2008
So, if President-elect Barack Obama offers heading the Department of Homeland Security to Gov. Janet Napolitano, and if she accepts -- neither of which are certain as of my deadline, and both of which had better remain uncertain until after publication -- what happens?
It fits with the 2008 election results, which meant major change in America, but in Arizona, not so much. Nationally and federally, Democrats did very well, but statewide and locally, Republicans won. Sure, Democrats took two of three Corporation Commission seats -- apparently, the names “Paul Newman” and “Kennedy” are politically potent here as “Stump” -- but other than two-thirds of the “Solar Team,” if it was a Democrat and wasn’t a federal office, 2008 was the new 2004.
If the rumors are correct, Arizona gives up a very popular, savvy, and effective Democratic governor who might have checked the worst excesses of an even-more conservative GOP legislature. It helps the country to have her expertise take on the morass at Homeland Security, but won’t do much for the state.
If Napolitano does get the Homeland Security job, then maybe Americans -- alone among the nations -- will be able to fly without first removing our shoes. Could we perhaps soon take regularly-priced coffee through airport security, or is that too much to ask?
It’s good for the country for Obama to get smart, competent people to serve in his administration, and to have a president whom people are eager to serve, even in difficult positions. Homeland Security is a huge agency, with interagency rivalries making the Pentagon look harmonious, and it’s the offensive line of government: Even if you do your job perfectly, at the end of the day you’re completely beat up anyway, and the announcers mention your name only if things go wrong.
There’s only one job in government that’s going to be worse than heading Homeland Security, and that’s being a state governor during the next two years. It was simpler, and far more fun, during a boom, when any governor could both cut taxes and increase spending. To stick with the football analogies, being governor during this recession will be like coaching a bad team that just lost its best players to injury. If you do the best coaching job possible, you’ll narrow the margin of defeat, but it’s never fun (or good for job security) to lose.
The only grimly ironic news in Secretary of State Jan Brewer becoming governor is that just as everything goes all to heck, in Arizona we’ll know which party is responsible. The collapse of the real estate economy and national recession mean that our state revenues, dependent on development and consumption, are decreasing at rates economists haven’t seen before and didn’t project. In a political climate that rewards people for complaining that both taxes and university tuitions are far too high, it won’t be pretty. And nobody will have any confusion over who’s in charge.
I do have one suggestion for fiscal policy, a “perfect storm” tax. Effective immediately, using that phrase should cost $500. With the increasingly grim economic news, it could raise significant revenue.
Arizona could be a test of the GOP debate whether the party should become more centrist or more ideological. Unfortunately for Arizona, we don’t have centrist Republicans anymore, so we’d be the ideological test case. It’s a lot easier to talk about being fiscally “responsible” than it is to cut health care, schools, and public safety. It also creates the temptation to dive into the social conservative swamps, because passing anti-gay, anti-abortion, and bash-the-minorities legislation doesn’t have any fiscal impact. It’ll be perfect for the new regime, both nasty and cheap.
You know those pundits who fret with one-party control in Washington, the Democrats might “overreach?” They’re looking in the wrong direction. If you want to see overreaching, just wait if we get a governor who thinks just like the legislature does.
Yes, we certainly could have too much of a bad thing.
Monday, November 17, 2008
"Core Principles" vs. Results
This time, a real headline kvetch. My suggestion was above, but the editor's choice ("Dems focus on results while GOP ponders ideology") makes me sound more certain than I am (after all, I am a Democrat) that the new administration and Congress actually will do the right things. And, you could have fixed it without changing a word just by adding, as I've done below, a colon after "Dems" and capitalizing "Focus." That way it's more of an exhortation than a prediction. And then, lo and behold, after I filed the column, Stan Greenberg and Robert Borosage bring the data in support of the thesis that moderates actually want government to get stuff done. (H/t: Matthew Yglesias) Data and op-ed argument, together at last! I love their line that Obama and the Congress have to produce: "Failure does have consequences, as George Bush proved."
Anyway, on to this week's column:
DEMS: FOCUS ON RESULTS WHILE GOP PONDERS IDEOLOGY
East Valley Tribune, Nov. 16, 2008
I feel the GOP's post-election pain. I became chair of the Arizona Democratic Party after the 1994 Republican sweep, when Newt Gingrich seemed as fresh, exciting, and intellectual as, say, Barack Obama. A Sunday talk show could have only Republican guests, and our only statewide Democratic officeholder was Corporation Commissioner Renz Jennings, who made me seem terse.
There's a similar quality to Democrats' plaintive laments fourteen years ago and the GOP's today. Just as we hearkened back to the New Deal or Great Society for current justification, the Republicans are in thrall to the ghost of Ronald Reagan, who is about as relevant today as FDR and LBJ were in 1994. "We gave you Medicare, and you turned on us!" said the D's, just as Republicans today say, "We're the Party of Reagan, and now that means nothing to you?" Well, yes.
We Democrats went through the same "they like our ideas but they don't like us, what's with that?" phase that Republicans are going through. There's a difference, though. When Democrats talk about ideas, what we really mean are things like health insurance, jobs, and education. When Republicans talk about idea, what they really mean is ideology -- cut taxes, and cut spending that doesn't affect me.
And that's the difference, because most people aren't that ideological. Oh, there are some consistent ideological philosophers who resent reality for not conforming to their theories. Some teenage boys, too old for dinosaur toys while still too nerdy for girls, are wonderful libertarians. There may be some leftists who still believe in government programs for their own sake, in the dystopian vision of "equality" in the Kurt Vonnegut's "Harrison Bergeron." But I frequent most places in Arizona where lefties hang out, and if those folks still exist, I'm just not seeing them.
But I hear all the time from 'wingers convinced that conservatism hasn't failed, it (after eight years of Bush-Cheney!) just hasn't been tried yet. As Ed Kilgore noted last week, liberals tempered their ideology to support Barack Obama, and cut him slack during the election -- while 'wingers made John McCain demonstrate his fidelity to conservative dogma all the way to Election Day. And Democrats know that we'll be judged in 2010 and '12 on whether the economy turns around and the Iraq war ends, not on whether we complied with an abstract governing philosophy.
It's easy to convince people that they should pay less in taxes, but it's not nearly as easy to make them demand less from government. George W. Bush is getting a raw deal from Republicans these days, because the supposedly bad "big government" stuff -- Medicare Part D, No Child Left Behind, the farm bill, the steel tariff, the big increases in domestic spending -- all happened during the first term, and Bush was triumphantly reelected in 2004. During the second term, Bush laid on the conservatism, with far more restrictive budgets and attempting to privatize Social Security, and voters turned on him in record numbers. After governing more conservatively, he's about as popular as Nixon when he resigned, but then again, we're a less forgiving people than we were 30 years ago.
Even if they don't like government in general, people do expect things from Washington. They mock government agencies, but expect that FEMA won't collapse during a Katrina and leave Americans suffering in Fourth World conditions. They detest earmarks in general, but support funding for breast cancer studies, children's hospitals, and highways -- and don't dare touch foreign aid for Israel, another earmark. People support across-the-board spending freezes, but also want new spending for veterans' health, space exploration, and medical research.
All those things involve taxing everybody to pay for things that don't necessarily benefit everybody. Republicans now call that socialism. And Republicans are welcome to make a priority of cutting capital gains taxes, if they think the most important thing is helping people who still have any net capital gains to tax. The GOP is welcome to talk about core principles among themselves, but the new Democratic administration and the Congress? Their job is to get stuff done. Fast.
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