Democracy for Utah - Tax Policy

Reagbushonomis Essay 2: Spending, the Other Half of the Equation

Thu, 17 Jul 2008 12:19:53 -0600

This part in the series will focus on the fiscal policy of the Reagan administration, his priorities and it’s impact upon deficits and the national debt. Ronald Reagan put a great deal of weight into the idea that a major tax cut was necessary. Successfully selling that idea upon a skeptical Democrat-controlled Congress was not easy, but it was passed never the less.

The other half of the equation that got lost was the need to decrease spending at the same time. Reagan’s budget director David Stockman slashed away at certain departmental budgets. However, at the same time that Stockman was proposing massive cuts to certain budgets, he was confronted with another reality. Reagan had been critical of his predecessor in allowing the U.S. military to become weakened and vulnerable during Carter’s administration. Notwithstanding Carter’s development of the Trident Sub program and his failed attempt at his original proposal for an MX Missile system (mobile missiles), conservative think-tanks, many funded by arms manufacturers, had worked on selling the public on the idea that the U.S. was militarily weak relative to the Soviet Union. The result was a massive increase in military spending during the Reagan years. Military spending grew during the 1980’s from $136 billion in 1980 to $282 billion in 1987.

Vouchers: An idea whose time has gone

Fri, 02 May 2008 11:28:30 -0600

Greg Anrig says conservatives have essentially abandoned their pursuit of private-school vouchers. Good article overall, but an inaccurate account of what happened in Utah last year:

In 2000, both California and Michigan offered referendums on voucher programs for all children in the state. The initiatives were defeated by margins of forty-two and thirty-eight points, respectively. Voucher supporters like to blame the defeats on well-funded teachers unions, but the law professors James E. Ryan and Michael Heise found that voucher supporters had outspent the opposition in Michigan, and both sides had spent about the same amount of money in California. They concluded that the decisive resistance to vouchers had come from suburban voters who feared that the programs would take money away from local schools and worried about the arrival of lower-income and minority students in their children's classrooms. And last year, in the conservative, predominantly white state of Utah, the Republican legislature put a November referendum for a voucher program on the state ballot, which Overstock.com CEO Patrick Byrne and his family supported with about $4 million. It lost by 62 percent to 38 percent — the eighth decisive loss for a statewide voucher ballot initiative. There have not been any victories.

Good ideas are worth paying for

Tue, 12 Feb 2008 09:59:22 -0700

Ezra Klein:

The tendency [of Democrats] to speak of taxes as an unpleasant surcharge exacted for the government and spent on...well...who knows, is poisonous. Within that mindset, folks probably prefer if you take the cash from the rich and not from them. But if Obama is going to be the transformational, Reagan-style pol he presents himself as, he's going to have to grow comfortable speaking positively of the role of government, and selling some of his initiatives as good ideas worth paying for.

It's worth it to have effective responses to natural disasters, worth it to have a modern national infrastructure, worth it to have national health care, worth it to have more than one safety inspector examining Chinese goods, worth it to invest in medical and scientific research, worth it to enact universal pre-kindergarten.

Indeed, many of these priorities are not only worth the cost, but they're actually good investments. They're a damn good deal. And Democrats need to grow comfortable [with] making that case.

What would a progressive tax policy look like?

Fri, 25 Jan 2008 11:04:55 -0700

Ezra Klein:

Progressives have been so thoroughly bludgeoned on taxes that they've lost all appetite for engaging the issue. The Democrats running for president (with the exception of Mike Gravel who is, embarrassingly, a FairTax advocate) all have tax plans, but none do much beyond simplifying the filing system and offering the middle class some "tax relief." Both are potentially worthy goals, but they approach the discussion on firmly conservative terms: Taxes are too high, and they are too complicated. [...]

Cornell economist Robert Frank has a particularly elegant proposal for a progressive sales tax that's tabulated at year's end, rather than at the point of sale. Under his system, come tax time, families would report their income, just as they do now, but also their savings (how much they've invested, kept in the bank, etc). The difference between the two would be their taxable consumption. Everyone would then get a standard deduction of $30,000, effectively exempting low-income families from taxation altogether. As the total taxable consumption rose, so too would the rates, just as is true now. A taxable consumption of $15,000 might pay 10 percent in taxes. At $8 million the top rate could be as high as we chose to make it. [...]

A more confident progressive leader could try to generate some momentum on the issue on his or her own terms. They could, as Al Gore has suggested, implement a carbon tax, using the tax code to clean up the environment. They could, as Robert Frank has suggested, use the tax code to encourage savings and investment and take a stand against the conspicuous consumption arms race currently being carried out in the top slivers of the income distribution. They could do any of a number of things and force the Republicans to argue against those goals and values.

Poll finds Utahns prefer food tax cut over income tax cut

Sun, 20 Jan 2008 13:32:18 -0700

Salt Lake Tribune:

Utah's Legislature enters the session flush with cash, but with economic storm clouds on the horizon. Lawmakers expect to have more than $1 billion in surplus to juggle, and Utahns, by a large margin, support investing that money in schools.

Forty-nine percent say school spending is the highest priority; 26 percent say a tax cut tops the list. [...]

Lawmakers in the past two sessions have taken bites out of the sales tax on food. Now, the poll shows, Utahns want another helping.

Forty-four percent of residents said that, if there is a tax cut, it should be on food. Three in 10 wanted to see property tax relief and 19 percent want an income tax cut.

"I really would like to see the tax taken off food," said Lin Jatubczak, a 72-year-old retiree from St. George. "I think that would benefit a lot of people who really need help."

There is no Tax Fairy; tax cuts don't pay for themselves

Mon, 10 Dec 2007 11:09:36 -0700

Editorial in the Washington Post:

"I know that reducing taxes produces more revenues," Republican presidential candidate Rudolph Giuliani declares in a new television ad launched Thursday. "Democrats don't know that. They don't believe it."

There's a good reason for that: It's not true. [...]

You don't have to turn to Democrats to refute this point; just read the studies and comments by Republican economists, including many from the Bush administration. President Bush's Treasury Department, analyzing the "dynamic" effects of making the Bush tax cuts permanent, found that even under favorable assumptions, the positive economic impact would make up for no more than 10 percent of the tax cuts' cost. [...]

Mr. Giuliani isn't the only believer in the tax fairy; numerous Republicans, including the president, have made similarly fanciful claims. But if he were to find himself in the White House and hoping to find that extra revenue he is convinced tax cuts produce, Mr. Giuliani would discover only disappointment under the presidential pillow.

Tax cuts don't boost revenue

Fri, 07 Dec 2007 11:52:22 -0700

TIME:

If there's one thing that Republican politicians agree on, it's that slashing taxes brings the government more money. "You cut taxes, and the tax revenues increase," President Bush said in a speech last year. Keeping taxes low, Vice President Dick Cheney explained in a recent interview, "does produce more revenue for the Federal Government." Presidential candidate John McCain declared in March that "tax cuts ... as we all know, increase revenues." His rival Rudy Giuliani couldn't agree more. "I know that reducing taxes produces more revenues," he intones in a new TV ad.

If there's one thing that economists agree on, it's that these claims are false. We're not talking just ivory-tower lefties. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves — and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.

Pro-voucher CEO's company has never made a profit

Mon, 03 Dec 2007 11:32:54 -0700

Letter in Friday's Salt Lake Tribune about Patrick Byrne, CEO of Overstock.com and financier of the pro-voucher forces in Utah:

Being a financial analyst and an MBA grad, I will try to use my low Utah IQ to figure things out. Overstock.com, Mr. Byrne's company, has been in business since 1997 and to this date has yet to earn a profit. [...]

I may have a low Utah IQ, but I do know one thing: Mr. Byrne obviously has no idea about how to run a successful business. Why would anyone think he has a clue about how to spend my tax dollars? Frankly, I am glad his opinion on school vouchers differs from mine. I would be worried if I actually agreed with the guy.

Ryan Judkins
Salt Lake City

But don't blame Byrne for his company's $100-million loss in 2006 — blame the Sith Lord. (Is Patrick Byrne related to "Super" Dell?)

Low tax rates let CEOs take the money and run

Mon, 26 Nov 2007 12:48:08 -0700

Guest poster Neil at Ezra Klein's blog:

Another big difference between the 1950s and today is that top marginal tax rates have fallen dramatically. From 1951 until 1963, the top marginal tax rate was above 90%. Now it's 35%. So if you were trying to accumulate wealth in the 1950s, it would've been sensible to look after the long-term health of your business and rely on a steady income, year after year, in the lower brackets.

Nowadays, you don't have to do that. You just have to juke up the stock price without tending to the fundamental health of the corporation you're running, earn an insane paycheck for a short period of time, and the low marginal tax rates will allow you to keep two-thirds of the money you make. So CEO pay runs to 800+ times the minimum wage rather than the mere 50 multiple that prevailed in 1965, and the people at the top are ready to take the money and run.

Billionaire says phrase 'death tax' is 'dead wrong'

Mon, 19 Nov 2007 11:45:17 -0700

And it is dead wrong, because the vast majority of Americans will not be subject to the GOP's so-called "death tax" when they die. From CNN Money:

Warren Buffett thinks those who use the phrase "death tax" are intellectually dishonest because the phrase in his words is "clever, Orwellian and dead wrong."

The billionaire investor has been an outspoken critic of efforts to repeal the estate tax and in testimony at a Senate Finance Committee estate tax hearing on Wednesday, he told lawmakers that you'd have to attend 200 funerals to be at one where the family of the deceased would owe estate tax.

Buffett said if anything the estate tax is a "death present" because heirs figure their capital gains on inherited assets based on the price when they inherited them rather than when the decedent bought them. [...]

"I believe in keeping equality of opportunity," said Buffett. "You don't get to be a quarterback ... because your father was a quarterback 20 years ago."

Vouchers lose in every county in Utah

Wed, 07 Nov 2007 11:02:48 -0700

That's the way the cookie crumbles.

(Yes, I've been waiting to use that line for months.)

Glenden Brown at OneUtah:

First, the surprise inside the not-so-surprising voucher vote. I expected vouchers would win somewhere in the state. Vouchers didn't win in a single county in the state. Not one. Think about that — in the most conservative, Republican state in the nation, after spending millions of dollars of Patrick Byrne's money and piles of out-of-state money from the Amway and WalMart families, vouchers didn't carry a single county. [...]

Broadly speaking, I expected vouchers to win at least one place (I was betting on Utah County) to provide voucher supporters rhetorical cover for a 2008 Voucher Bill. This issue isn't dead — it will come back, folks. Parents for Choice in Education has invested way too much money buying out legislators to let this issue go away. If you want it gone, vote for the Democratic candidate in next year's legislative races.

Tribune pens scathing editorial against vouchers

Mon, 05 Nov 2007 10:58:34 -0700

Salt Lake Tribune:

The Republican legislative leadership would have you believe that the voucher law on Tuesday's ballot is a solution to the problems plaguing education in Utah. It is not. Rather, it is a product of right-wing ideologues far from Utah who would like nothing better than to take education out of the hands of the taxpaying Americans who pay for it and turn it over to private interests.

These adherents to the philosophy of the late economist Milton Friedman have tried for years not just to undermine public schools, but eventually to eliminate them. In Utah, they have found an array of acolytes willing to ignore the will of the people and strong-arm enough of their colleagues to get the nation's first universal voucher program written into law — by a single vote.

Way to call a spade a spade, Trib.

George Soros opposes school vouchers!

Mon, 05 Nov 2007 10:13:34 -0700

Hilarious mailer from Parents for Choice in Education (via One Utah; click for the full image):

As Richard Warnick says, PCE has run out of actual arguments — all they have left is tribalism.

School vouchers lag by 20 points in latest poll

Fri, 02 Nov 2007 10:40:32 -0600

Salt Lake Tribune:

A new Salt Lake Tribune poll finds little chance that voters will approve Utah's education voucher program in Tuesday's referendum.

Fifty-six percent of likely voters polled said they would vote against the voucher program to 36 percent who said they support the state subsidies to private schools. Only 8 percent remained undecided. [...]

But [Lisa] Johnson [of Utahns for Public Schools] said the poll shows voters apparently like reforms — merit pay, open enrollment and charter schools — that are undertaken within the public school system.

"These are things we can do through the public schools that would serve all students and wouldn't create a second education system to be supported by taxpayers," Johnson said.

Three-fourths of pro-voucher funds are coming from one guy

Thu, 01 Nov 2007 11:35:22 -0600

Deseret News:

Pro-voucher ads urge voters not to let a national teachers union tell them how to vote next Tuesday, yet the pro-voucher movement itself is receiving three-fourths of its funds from one man — Park City millionaire Patrick Byrne. [...]

The new reports show that Byrne, president and chairman of the board of Overstock.com, a Web-based retail buying operation, has donated, along with his family, $2.9 million to PCE. That donation is 78 percent of the [political issue committee's] overall contributions. [...]

The pro-voucher money comes from Byrne, his immediate family and the Milton & Rose D. Friedman Foundation, a foundation where Byrne is a member of the board of directors. Friedman, now dead, was a famous free-market economist who advocated public support for private schools back in the 1950s.

"It is interesting to compare reports and see that we have 2,500 individual contributors," said Lisa Johnson, Utahns for Public Schools spokeswoman. "Most of (PCE) money comes from the Byrne family, and the others are large checks from a special-interest niche rather than broad-based support across the state."