taxes

Report: Barbara Lifton town hall in Newfield, 2-22-11

First in a series:

Governor Cuomo said, “You can never solve a problem if you refuse to acknowledge it”.  After listening to Assemblywoman Lifton, at her town meeting, she obviously is not heeding his words.

Taxes:

Here are some recent news and quotes on taxes, from Democrats!

In a recent visit to the Ithaca Brewing Company, Senator Schumer said, “By cutting taxes for these small businesses, we can help grow the economy and put more New Yorkers back to work in stable, good-paying jobs.”

Senator Gillibrand has a proposal to expand, simplify and make permanent a research and development TAX CREDIT.  (A tax cut by another name.)

Governor Cuomo has said, “New York has no future as the tax capital of the nation.”  

Assemblywoman Lifton isn’t listening to her fellow Democrats.  She believes that high taxes help drive the economy, not hinder it.  She said that we need to keep on supporting the private sector by keeping the public sector intact.  Huh? Intact?  No changes?  Who in the private sector believes an intact public sector is supportive? This goes beyond failing to acknowledge a problem and joins Alice in Wonderland.

Assemblywoman Lifton also believes that the wealthy do not make decisions based on taxes.  She was asked about the hedge fund manager issue last summer; (the legislature wanted to tax hedge fund managers and then backed off when there was a danger of many hedge funds moving operations to Connecticut).  She believes that the legislature “blinked” and that the hedge funds would not have moved. (In essence, the rest of the liberal-dominated Assembly was wrong.) She then discusses the federal capital gains tax as if it was an issue with the hedge funds managers, while the real issue was double taxation by both states of those hedge fund managers living in Connecticut.

Assemblywoman Lifton decries the tax breaks for the wealthy, using a publication from the Center for Working Families. Check out their web site, http://www.cwfny.org/; it’s not exactly a paragon of unbiased thinking.  

Ms. Lifton quotes their calculations of how much these tax breaks are costing.  Is it logical to believe that, if the highest taxed state increased its current rate by 50%, at least some and maybe most of the wealthy would not migrate out? (Think Tom Golisano, etc.)

State taxes are not an issue to Ms. Lifton.  She believes the problem is only local property taxes and she mentions how taxpayers react more strongly to their property tax bills than to their state tax bills.  Let’s compare apples to apples; how would taxpayers react if they did not have state taxes deducted from every paycheck and they had to come up with their entire state tax bill at one time – as they do with property taxes.  

She also ignores the total tax burden of fees, surcharges, permits and corporate taxes (which are actually paid by the consumer).

The current tax law on the wealthy will expire on December 31st and taxes on the wealthy will increase. Assemblywoman Lifton does not believe this is a tax increase.

Cognitive dissonance

From yesterday's Ithaca Journal article, "Municipalities brainstorm money-saving ideas":

"Martha Robertson, chairwoman of the county legislature, said if pension costs, which can't be controlled by local governments and school districts, could be carved out of the property tax cap, it would take a huge burden off local taxing entities."

Let me see if I can figure out what this means. "...pension costs, which can't be controlled by local governments and school districts,..."  Public employee union (PEU) pensions are guaranteed by the state constitution. But the state comptroller has the authority in the constitution to restructure the state’s finances as needed. Maybe the towns, counties, and school districts need to gang up on Comptroller DiNapoli (I know, I know—there's that reprehensible far-right violent rhetoric again)...oh, wait.  That probably wouldn't do any good.

               Pepe LePEU

Then, if those "uncontrollable" pensions "could be carved out of the property tax cap..." Translation: PEU pensions would be exempt from the 2% (or CPI, whichever is lower) proposed property tax cap.

Lastly, if that exemption existed, "...it would take a huge burden off local taxing entities."  So towns, counties, and school districts wouldn't have to figure out how to live within their means; they could just pass the "price increases" on to the "consumers." This is better?

At its root, what Martha is saying is that "local taxing entities" are being crushed under the weight of unaffordable and structurally unsustainable PEU pension costs. True. So what do you do about that?  Here's the cognitive dissonance part: she doesn't seem to notice that if you carry what she's saying to its logical conclusion, you end up saying essentially the same thing as Wisconsin Governor Scott Walker.  

After all, how are those budget-busting pensions arrived at? Through collective bargaining on benefits with powerful unions who use their closed-shop union dues (taken from paychecks funded with money from taxpayers) to help elect the politicians they're bargaining with. And then those pension costs are enshrined, in NYS anyway, in the state constitution making them really difficult to do anything about.

If I were to say that Martha Robertson and Scott Walker weren't really saying anything all that different, the left (and maybe the right, too) would be apoplectic. But as lots of people have pointed out, the laws of economics don't stop at the state line.  You can pretend that isn't true or you can deal with reality.  Your choice.

(h/t Jim)

The rub

Although our circumstances in NYS are not precisely parallel, we can learn from the experience of our Massachusetts neighbors who voted in a 2.5% property tax cap 30 years ago. This article appeared in the Buffalo News recently:

Massachusetts offers less-taxing lifestyle

WEST STOCKBRIDGE, Mass. -- Something happens as the green "Welcome to New York" sign fades in the rearview mirror when you cross into Massachusetts: Taxes go down.

They are lower on clothing purchases. On gasoline, on furniture, on alcohol and on a range of goods and services. On businesses. And personal income is taxed at a lower rate.

But, most noticeably, property taxes are lower...

There's a lot of grist for the thoughtful reader's mill in this article, much of it having to do with just plain economics, which is classified with other social sciences for a reason—to a great degree, it has to do with how actual people behave in the actual world. And when something changes in that world, people's behavior changes as well, particularly for those at the margin (quite literally in this instance):

"Realtors in Massachusetts do use the taxes as a selling point," said Martha Piper, a broker associate with Stone House Properties in West Stockbridge.

"The difference in taxes is almost double between the border," said Ed Hoe, president of Kinderhook Real Estate Co., an agency based in Columbia County, N.Y., that does business on both sides of the border. Homebuyers use the tax difference to try to work better deals for houses on the New York side, he said.

"What it ends up doing is having an adverse effect on value or what people are willing to pay in New York State," he said.

Clearly, those who live and work along the border between NYS and Massachusetts respond rationally to things such as differences in tax burdens between the two states. There are those, like Barbara Lifton, who resist the notion that people behave in such a rational fashion.  But resistance is futile.

Another point:

...said Andrew Bagley, research director at the Massachusetts Taxpayers Association, a nonpartisan policy group, "Yes, you can control property taxes. It just means the money has to come from somewhere else -- unless you want to eliminate services," he said.

Aye, there's the rub! You can play the fiscal shell game, capping property taxes but continuing to spend like a drunken sailor and finding other "sources of revenue" to pay for that spending, or—you cut spending.  And as American Majority says:

...cutting government spending isn’t easy.  Almost regardless of what elected officials would try to cut from their government’s budget, there would be strong opposition from those currently benefiting from that government spending....

Once a person benefits from government spending, they rely upon it and will be extremely motivated to contact their elected officials if there is even a rumor of cutting that spending.  Almost without fail, there will be stronger political pressure to not cut spending than the political pressure to reduce the spending.  Moreover, government agencies always think their budgets should grow, regardless of the effectiveness or necessity of their programs.  It takes a tremendous amount of courageous commitment to see a proposed spending cut through to be enacted into law.

Looking around the country, even Democratic Governors...are proposing budgets with significant spending cuts.  In New York State, for example, Governor Cuomo, a Democrat, announced a budget with cuts to many government programs...

Stay tuned.

There's much, much more in the Buffalo News piece.  Do read the whole thing.

On a tip from Tom

Cap Property Taxes NOW

Cap Property Taxes NOWState Senator Jim Seward has an online petition to try to urge the NYS Assembly to pass the governor's property tax cap proposal.  The bill has already passed the NY Senate.

Property tax increases have made it difficult for seniors to stay in their homes, tougher for young people to afford to purchase their first home and have squeezed the budgets of families and businesses across the state.

Placing a cap on school and local government property taxes would provide the relief that homeowners desperately need.

Check it out here.

Rep. Nan Hayworth (R-NY) on cutting spending

Yesterday morning on the floor of the House.  Some of us (of all ages) in NYS get it:

from Heritage

I'm sick of this stuff

As the parent of a UC Davis grad, I decided to just print this post from Weasel Zippers in its entirety.  But that's California, you say.  Believe me, it could just as easily be publicly-funded education anywhere in the US. My only disagreement with this post is the last sentence, "Might be a good idea to debrief your kids when they come home from school before any of this garbage sinks in and takes hold."  "Zip" must not have kids or he'd realize that it's too late for that kind of advice.

UC Davis Defines Christians as “Oppressors”

Update: University Scrubs Website…

This isn’t political correctness run amok, it’s leftist academia pushing its anti-Christian agenda on the rest of society.

(Fox News Radio/Todd Starnes) — More than two dozen Christian students at the University of California at Davis have filed a formal complaint over a university policy that defines religious discrimination as Christians oppressing non-Christians.

The definition is listed in a document called, “The Principles of Community.” It defines “Religious/Spiritual Discrimination” as “The loss of power and privilege to those who do not practice the dominant culture’s religion. In the United States, this is institutionalized oppressions toward those who are not Christian.”

“This is radical political correctness run amok,” said David French, senior counsel for the Alliance Defense Fund. The conservative advocacy group has written a letter on behalf of more than 25 students who object to the policy and want it revised. He said it’s absurd to single out Christians as oppressors and non-Christians as the only oppressed people on campus.

A spokesperson for UC-Davis directed comments about “The Principles of Community” to Raheem Reed, an associate executive vice chancellor. Reed did not return numerous phone calls.

“Christians deserve the same protections against religious discrimination as any other students on a public university campus,” French told Fox News Radio. “The idea that a university would discriminate against Christians is a very old story unfortunately and one that we see played out every day.”

One student, who asked not to be identified, said university officials asked her to reaffirm “The Principles of Community” last semester. She refused to do so when she realized that Christians were not protected under the policy.

Update: UC Davis has scrubbed their website, here’s the Google cache snapshotas of Feb 14, 2011 06:53:46 GMT:

While you’re at it, check out their definition of racism.

The institutionalization of collective prejudice resulting in a system of advantage based on one race having power over others. In the United States, it is the systematic oppression of people of color by white people.

This is what leftist academia is indoctrinating America’s youth with. Might be a good idea to debrief your kids when they come home from school before any of this garbage sinks in and takes hold.

Thanks to Margaret for a great catch.

Who Really Cares?

Confession: I stole the title of this post from the title of a book published by Arthur C. Brooks in 2006 with the subtitle The surprising truth about compassionate conservatism; America's Charity Divide: who gives, who doesn't, and why it matters. Everyone would benefit from reading it. In fact, I have the book on my iPod along with the Liturgy of the Hours (no, really), ready to whip out at a moment's notice, like at church this Sunday when the bulletin contained the following insert, excerpted here:

PUTTING PEOPLE ON THE ROAD TO WORK

I have a job. Why should I care about the employment of others? The answer comes when we expand our vision beyond ourselves to include our “neighbor” and the common good.

So far, so good.  No mention of government—yet.

There are many roads into poverty, and many people are but one unfortunate circumstance away....

[....]

In the current era of high unemployment, the toll is heavy on both individuals and society. Individuals and families are often thrown into desperate circumstances. Demands (and costs) on social safety nets skyrocket...

OK, here's where we start getting into issues such as the ones raised in this piece by the excellent Melanie Phillips: "Sorry, Archbishop, but there IS a big difference between the deserving and undeserving poor."

We have a choice. We can turn a deaf ear to the needs of our stricken brothers and sisters, leaving them fall back on charity, government aid, and social services for survival. Or we can advocate for policies and programs which put people on the road to work.

When did "charity" become a four-letter word?  And the logic of the rest of this paragraph escapes me.  If you "advocate for policies and programs which put people on the road to work," presumably with the target of that "advocacy" being the governor and state legislators (see the petition below), how are the resultant devoutly-to-be-hoped-for policies and programs different from the dreaded "government aid"? 

[....]

When governments are forced to tighten their belts, programs to help the poor and working poor are at greater risk of indiscriminate cuts, because advocates for the poor do not have the political influence of powerful, special interest groups.

Really?  Remember those evil lobbyists progressives are always talking about?  Let me translate: "advocates" = "lobbyists".  But "advocates" sounds so much more virtuous, doesn't it?  Almost like the third person of the Trinity. And as for not having "the political influence of powerful, special interest groups," I'm afraid I'm not buying it. Check out Discover the Networks if you want to know more about the powerful, special interest groups on the left who have a vested interest in keeping the truly vulnerable among us down. Always, always, ask "Cui bono?" The answer to that question is not repulsive Republicans or evil conservatives, and certainly not the deserving poor. 

As Catholics, we must be vigilant, encouraging our representatives to apply prudence and intelligence to budget decisions. Short-sighted decisions can have serious long-term repercussions for individuals, families, and society as a whole....

Truer words were never spoken.  Progressive legislation is famous for not taking into account those unintended, but foreseeable, consequences that always seem to come back and bite us in the tush (for earlier, related posts, see this and this).

Do read the whole thing (as well as some of the other interesting documents under the general heading of "Diocesan Public Policy Committee").

The petition we're being asked to sign next weekend reads thusly:

2011 Public Policy Weekend—Diocese of Rochester

Working Out of Poverty: Transportation and Child Care for Low-Income Workers

We understand that difficult decisions need to be made regarding the 2011-2012 New York State budget.

We, the undersigned, urge the Governor, the Assembly, and the Senate to give priority to programs that preserve and promote employment, with special attention to subsidies for child care and transportation for low-income workers.

If you want to "advocate" for something, lobby Governor Cuomo and your state representatives in the Assembly and Senate to lower taxes for businesses and individuals, thereby making it more possible for businesses to hire motivated people who want to work, and more possible for individuals to care for the truly needy by leaving more of the fruits of labor with the folks who actually produce the fruit. "Advocate" for a lessening of burdensome, nanny-state regulations, which assume that everyone is stupid and/or greedy and which tie people's hands at every turn.

In an article at American Thinker, Christopher Chantrill points out that the assumption behind this kind of petition drive is

the idea that taxes and government spending are the highest and best answer to all social problems...

[Progressives] are saying that only force will solve the problem.  Government is force; politics is power.  Taxes are force; spending is force.  There's no mystery about this...

[....]

Conservatives believe in an America that is cooperative, peaceful, and egalitarian,...  But we think it can be done without all the liberal bullying.  In other words, without the force.

The sooner we start, the less the poor will suffer.

Of course, if you believe that you're not paying enough taxes and that all those efficiently-operated, corruption-free governmental social service agencies (and related entities) are horribly shortchanged in state budgets, by all means write them a check.  I'm sure they won't say no.

Speaking the Truth

Congressman Richard Hanna (NY-24, including Dryden) was quoted on NPR [audio at the link] saying that he didn't think high-speed rail would benefit the upstate region economically.
"These are challenging times," he says, "and, as you know, the money required to do this is just not available. And I think, as a society, we are going to have to sit down and reflect on all our priorities and say[:] Is this something we're willing to invest in?'"
Of course, since our government is already spending much more money than it has, it wouldn't really be investing, it would be borrowing money from China for something that very likely won't benefit us.  That's not investing, that's gambling when you know the game is fixed against you.
 
* * *
 
So, what is the positive road ahead?  In The Hill's Congress Blog, Hanna wrote today:
Next week, I'll introduce "The American Competitiveness Act," which follows up on calls from the President and members of both parties to cut the corporate tax rate. Under this legislation, the federal corporate tax rate will be lowered from 35 percent to 25 percent over two years-and kept at 25 percent permanently. Ideally, the phase-in period gives us time to simplify our tax code because government shouldn't pick winners and losers.
As he points out in his piece, U.S. corporate tax rates are far above our competitors.  Cutting taxes is the kind of action that will make it less likely that corporations will move additional jobs offshore when looking for better rates (an earlier, related post is here).
 
It's not as sexy as high-speed rail. Tax cuts don't make for great politican photo-ops with sleek locomotives. But they work.

Stop Micromanaging Us

Spending is an easy target, particularly at the local level.  We're told there really isn't any choice because a big part of that spending is due to the (unfunded) mandates of higher levels of government.  
 
It starts like this:  Local pols think they are doing us a great favor by getting grants and "earmarks" for local government and school districts.  But, first, it's actually our money, laundered through another level of government that they are "winning", and second, "our money"  comes with a lot of strings attached: the mandates that cost even more money.
 
From the Ithaca Journal:
[School d]istricts must file reports and track information on an array of topics; comply with a range of state laws and regulations, such as buying defibrillators and using "green" cleaning products; and prepare numerous plans, ranging from a pandemic flu preparedness plan to fire extinguisher testing and monitoring.
Then, there are big-ticket items, including special education requirements, academic intervention services for struggling students and auditing costs.
School officials don't dispute many mandates are well intentioned and hard to argue with. The issue is that federal and state lawmakers have added to the list over the years without providing adequate funding for districts to comply with and administer them..."
There is that "hard to argue with" line... the truth is that left to their own devices, local goverments and schools will find efficient ways to solve the local problems they actually have and will opt not to fund marginal items.
 
There is hope. Mandate relief is recognized to be part of the movement toward a state property tax cap:
“A property tax cap only works if local elected leaders and school administrators have the tools they need to keep their costs in check. With the enactment of the mandate relief law, local officials won’t have to worry about unfunded requirements from Albany driving up their costs,” said [State Senator James] Seward.
 
“Together, a property tax cap and mandate relief forge a powerful combination — providing assistance for cash strapped citizens, businesses and municipalities, while, at the same time, renewing our state’s economy.”
It will be important to keep the pressure on, particulary in the NYS Assembly, where many special interests are lobbying to keep their own lucrative mandates in place.  
 
Remember, it's more than just the money.  It's the principal of self-determination.  Why should multiple levels of government be micromanaging us?

Kulaks and gulags

kulak n. A prosperous landed peasant in czarist Russia, characterized by the Communists during the October Revolution as an exploiter.

gulag n. 1.A network of forced labor camps in the former Soviet Union. 2. A forced labor camp or prison, especially for political dissidents.

From the Ithaca Journal:

Despite lobbying, Cuomo shuns higher taxes for the rich

BY JOSEPH SPECTOR •ALBANY BUREAU • JANUARY 25, 2011

ALBANY -- Gov. Andrew Cuomo continues to reject attempts by education groups and unions to shift the state's tax burden to the rich, saying that doing so would further hurt the state's business competitiveness.

The issue is creating a growing divide between the Democratic governor and the more fiscally liberal members of the state Legislature, who on Tuesday called on Cuomo to maintain higher income-tax rates for people making more than $200,000 a year. They also want him to move to a more progressive property-tax system based on household income not home value.

[....]

"When government resists deep cuts, when we appropriately tax the wealthiest New Yorkers and keep on public employees and keep on supporting the private sector by keeping government intact, (emphases mine) we actually see a better and stronger recovery," urged Assemblywoman Barbara Lifton, D-Ithaca.

If Assemblywoman Lifton in fact said this (and that seems likely since it sounds like the sort of thing I've heard her say with my own ears), her entire remark is absurd on its face. But let's look more closely at the parts in bold.

That last bit, about "supporting the private sector by keeping government intact," is just a wee bit bass-ackwards.  No, dear, especially at the state level where the government cannot print its own currency, the private sector props up the government, not the other way around.  

And then there's the ever-popular-amongst-progressives meme, "when we appropriately tax the wealthiest New Yorkers" (of which I am not one, not even close, according to their definition).  From a document in the Library of Congress, via Legal Insurrection (A volost' was a territorial/administrative unit consisting of a few villages and surrounding land. Think "county.")

11-8-18

                                              [...]

Comrades!  The revolt by the five kulak volost's must be suppressed

without mercy.  The interest of the entire revolution demands this,

because we have now before us our final decisive battle "with the

kulaks."  We need to set an example.

      1) You need to hang (hang without fail, so that the public       

         sees) at least 100 notorious kulaks, the rich, and the            

         bloodsuckers.

      2) Publish their names.

      3) Take away all of their grain.

      4) Execute the hostages - in accordance with yesterday's          

         telegram.

      This needs to be accomplished in such a way, that people for

hundreds of miles around will see, tremble, know and scream out:

let's choke and strangle those blood-sucking kulaks.

      Telegraph us acknowledging receipt and execution of this.

                                               Yours, Lenin

P.S.  Use your toughest people for this.

Now, am I suggesting that Barbara Lifton is on a par with Vladimir Lenin and has designs on well-to-do New Yorkers' necks? Of course not. But I'd bet good money that well-meaning people in 1875 thought that Marx had really nailed it with "From each according to his ability, to each according to his need" (not that even Marx's Communist Manifesto in 1848 was so original. The Jamestown colony in 1607 and the Plymouth Plantation in 1621, for instance, tried this very thing—spectacularly unsuccessfully). Those 1875 progressives probably never anticipated that, by 1918, a disciple of Marx would have carried Marx's philosophy to such neck-stretching extremes.

But words matter. Context matters. History matters. And while I doubt that Barbara Lifton and her like-minded fellow travelers give this much thought to the absurd nonsense they spout, they should.  Already (and I know I'm mixing time periods here) the NYS kulaks are escaping from the gulag, moving to states that place a lower tax burden on their citizens. And ultimately, this sort of progressive thinking never ends well.

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