Wednesday, December 31, 2008
[Since 2008 saw a national slowdown in economic activity during the last quarter, assessors may weigh sales during that period more heavily in their analysis to reflect such for their January 1st, 2009 assessment.]
By state statute, assessments are conducted to determine the fair market value of a property as of January 1st. It’s “as of” such a date because of the complexities and vagaries of the market place. Stability for this municipality revenue-producer, as with any operation, is needed for budgetary and planning constraints. Having some type of moving-target date would allow endless arbitration, court costs, and gridlock.
If a compelling case can be made by a property owner for much-needed repairs (provide a written estimate for the repair), an adverse adjacent influence, or other encumbrances that may detrimentally affect the value of the property, I don’t know of an assessor who wouldn’t make the adjustment to the property value to reflect these negatives.
But the usual thing I hear is “the market.” The market is bad and the property owner wouldn’t receive the assessed value if he tried to sell it. As if assessors aren’t paying attention to the market. Sale of the subject property, or a comparable property, gives the best indicator of the market value of a property (also by state statute). An assessor wouldn’t believe the value of your property either if he or she didn’t have the sales of that property or other similar properties indicating the value.
Assessors follow sales throughout the year. They can see trends, increases and/or decreases. They can see if recent purchases are the same, higher, or lower than the present assessment. If most valid, arms-length sales of a specific type of property in a specific area of a city are moving in one direction or another, it’s relatively easy to see.
Too often homeowners use anecdotal and incomplete information to jump to conclusions from one market to another. Yes, a housing bubble popped. But, as with all bubbles, some areas are affected more than others. Wisconsin towns and cities did not see the stratospheric rise in prices that was witnessed on the Coasts. Also, Wisconsin banks, in general, were nowhere near as invested into the Ponzi-schemes that the financial industry created over the last few decades. Arizona, California, Florida, and Nevada are taking most of the hard hits in the deflation of the housing bubble. Does that mean we won’t experience any aftershocks? Of course not. But it also means that thirty-five percent declines in the Las Vegas property market do not equate to thirty-five percent loses in the Milwaukee property market.
Valid, open-market, arms-length sales are the number one indicator of value. And, the sales must be comparable. Don't reference the homes in bad condition, that are one-thousand square feet smaller than your home, that just sold for a lower amount than your assessment. This isn't a comparable home. Compare apples to apples. Don't just search for homes that sold at lower values than your assessment and reason that your home is only worth that much.
The assessed value is used in your property tax equation. But what you’re assessed at matters much less than what the needs of the locality are, and the budget to fund such operations, in determining what your tax bill will be each year. Your assessment may go down, your tax bill can still increase. Alongside budgetary downturns are usually increased needs for public provisions – food pantry, shelter, etc – which increases city, county, and state budgets. Also, the public (MPS) and technical schools (MATC) need funding, the State takes a share to redistribute to areas of the state where the funds are needed even more, the County uses part of this money to fund it’s operations, MMSD gets part of the money to manage our sewage, and the City uses the rest for it’s day-to-day functions.
The bill for the total of these budgets is divided by the total assessed value of all the parcels in the city to determine a mill rate. Your property’s assessed value divided by one thousand, then multiplied by the mill rate will give you your property tax bill.
The bottom line comes down to: what kind of a society do we want, with what kind of quality-of-life, and what is the fair distribution of the tax burden to provide such an existence. The total bill is quite a bargain for all it provides. I would even like to see it increased so we can provide an infrastructure spending plan and create jobs, and also to provide a heightened quality of service provision throughout the state. But, I also feel that the bill does impose too heavy a burden on working and middle class families as a percentage of their income.
Making corporations pay their fair share and getting rid of many exemptions, tax breaks, depreciation schedules, and other pointless giveaways to the well-to-do would balance the budget and provide the long-term funds and infrastructure needed to attract and maintain business and assure a good quality of life that Wisconsinites have come to expect.
Wednesday, December 24, 2008
Maddow follows up on her discussion with Laura D'Andrea Tyson (whom provided excuses for the firms involved and blamed the Treasury for the lack of transparency) the next day. As a professor she knows about ethics in disclosure and research. Her action would be similar to a journalist writing a glowing piece on Apple without disclosing that he/she has millions in that company's stock. The problem isn't that she didn't know enough to disclose the connection. The problem is that all the major players in our society have entanglements and connections, which rarely any of them reveal, nor are there legal repercussions for such indiscretions. This cronyism and opaqueness throughout the system are glaring factors in the culmination of the current crisis (and throughout our country's history of class warfare).
The Treasury assuredly deserves some blame. But when all we've heard for the last thirty years is, "leave he market alone" and "the market knows best," it's difficult not to fall back on those bad habits, give firms the money they claim they need, and believe they can straighten up the mess. It's especially hard when the characters running the Treasury and their advisers are former investment bankers, Wall-Streeters, and hedge fund managers.
The CEOs, managers, brokers, and their ilk should be stripped of a major percentage of their assets (which are ill-gotten gains) to help pay for their mess. The private jets should be sold and their options given to the Treasury (to cash-in when the companies stock prices increase). Salaries and bonuses, going back years, will be automatically turned over to the Treasury.
If this were Joe Sixpack caught in illegal activities swindling money in nefarious ways, he would, no doubt, be stripped of all of his assets and face jail time. Just for good behavioral economics sake, the fine should fit the crime. Removing even ninety percent of hedge fund managers, and the other bozos, wealth still leaves them with an absurd amount of wealth to operate from...when they get out of jail.
Tuesday, December 23, 2008
It's also interesting to note that both of the worst economic times in our recent history occurred after bouts of, what I like to call, "free market flu." The belief that the market is somehow a lone, all-knowing entity. That it is not somehow merely a creation of, or lack thereof, laws and regulations and societal institutions (laws and regulations are kind of like the game-board upon which our actual lives are played). Each time we've allowed ourselves to reach a fever pitch of the ole' laissez-faire attitude - culminating in 1929 & 2008 - we've collectively destroyed far more wealth with our greed (once the bubble pops) than we gained from the short-sighted speculation beforehand.
Let's also keep in mind that the gains go to mostly a top, select few. "Free" market practices as preached by it's disciples have never produced the gains, growth, or shared prosperity that they claim. Our employment is basically the financial speculators' insurance plan. Keep enough rats running on the wheel so that we can still provide something worthwhile to sell in the global market, just to keep up enough credit-worthiness for Wall Street's movers-and-shakers to get Chinese loans to make highly-leveraged and risky financial bets on everything under the sun. But then everything blows up. The managers and brokers keep their bonuses, salaries, and options. The loses incurred because of their poor management are paid by the U.S. Government (us). They get a meal. We're just left with the bill. This is criminal.
This is what happens when a country believes a bit too much in it's own hype, and forgets to give respect to the professions that provide the real long-term capabilities for the Country to do quality research and development, to manufacture it's own necessities, to provide for it's own energy and transportation needs, and to have the intellectual capacities to make technological innovation possible. This isn't just economic security, it's national security.
When the shit hits the fan, everyone comes with their hand out to Uncle Sam. (Suddenly socialism and redistribution aren't such dirty words.) The U.S. Government is supposed to sit idly by while the Masters of the Universe * (aka The Fortune 500 & Wall Street) pontificate about how they can create financial innovations to reduce risk, increase credit, provide high-yield returns, and make everything it's utmost efficient because of a magic place called the market, where everything is Utopian if you just leave it alone.
But when you leave the market alone, if it should happen to destroy retirement accounts, pensions, jobs, or employment opportunities, you must simply step in to cover the market's debts (aka private speculators loses) and leave it be. If you try to regulate, the next time will only be worse. Even though the market is supposedly somehow always moving toward an optimal state without regulation. Supply-side economics: one incorrect economic assumption after another in circularly infuriating logic.
It's been the cause of two depressions. The effects of the misguided supply-side theories have impoverished generations. Can we please let go of the chatter as if this is some sort of credible economic theory? We know what works. We know what gives modest returns, predictable growth, and stability. Can't we just do that and stop appeasing the discredited free-marketeers?
Sunday, December 21, 2008
Watch The Corporation.
1) Campaign Finance Reform
2) Universal Health Care
3) The Green Economy
Changing our way of financing campaigns – getting private money out – would go a long way toward reforming our broken government, illusory democracy, and fraudulent corporate culture. The national discourse would suddenly change from whoever has the most money to get their viewpoint or issue to the top of the national spotlight, to what is in the best interest of the majority of the nation. This is the quickest route back to a politics of, by, and for the people.
With all the talk of globalization, competitiveness, and manufacturing these days, one obvious way to make the U.S. more viable is to enact universal health care and remove the cost from our employers. Also, with a reinvigorated medical establishment focusing more on preventable disease and providing services to more citizens, we would have a healthier, better educated, and more productive labor force. And, in the end, this would save money, which could be reinvested in more productive uses.
And, finally, as a way to recreate some of the well-paying jobs lost to globalization and outsourcing (and corrupt political & private dealings) we need to reconfigure our manufacturers to build technologically advanced, sustainable, "green" products desired the world over. I can’t think of a better way to reestablish our automakers. By downsizing their line-ups – making fewer brands and fewer styles – U.S. automakers can concentrate on fuel economy and quality. The excess productive capacity can be used to begin generating more solar panels, geothermal, wind turbines, etc. Not to mention, this last initiative also helps save the planet – which we kind of need.
Saturday, December 20, 2008
Friday, December 19, 2008
These state and local subsidies for foreign-owned auto assembly plants total approximately $3.6 billion.
Just more of the beggar-thy-neighbor, zero-sum development policy we're pursuing in the U.S.
This whole - make the automakers sweat - episode is really just cutting off our own nose to spite our face.
But wait a minute, things aren't going as planned.
I thought this was a slam-dunk economic development initiative?
One of those unstoppable catalysts that was necessary, creates jobs, and spurs further development.
So why can't the developers even sign tenants?
Maybe it has something to do with the duplicative, sprawling, inefficient, environmentally unsound, and bribery-laden path of our urban planning & economic development. Sites compete for capital, subsidizing businesses to locate in less than optimal locations. This increases productive inefficiency, whilst hamstringing the unsubsidized competition. All this slows growth from what it would be without the subsidization. It also decreases municipal tax revenue which reduces the provision of public services (which are crucial to quality of life indicators) and encourages labor force contraction.
I can only hope Obama's appointment of an Urban Czar can correct some of these deficiencies.
Sunday, December 14, 2008
Saturday, December 13, 2008
Reduce The Wages Of American Workers
Automotive Industry Necessary For National Security
Bailout City Madness
Death By The GOP
It's Payback Time
It's All About Union Busting
GOP Trying To Bust Union
Senate To Middle-class: Drop Dead!
Republicans Want To Kill Unions
Meet The GOPs Wrecking Crew
Saturday, December 6, 2008
John Kovari opines, "There has been little empirical evidence linking regional cooperation initiatives or regional governing bodies with clear economic benefits." In the Midwest region, alone, Indianapolis and Minneapolis are shining examples of regional governance done correctly. The problem isn't a lack of empirical evidence supporting regional governance, but NIMBYist parochialism and a lack of political will to put such plans into operation.
Mr. Kovari reports, "There is much economic research, based on the “public choice” theory of Charles Tiebout, that argues that local competition is more efficient than regional cooperation." Tiebout's model is based on highly restrictive assumptions, which rarely pan out in the real world. The model places much reliance on the invisible hand of the market to steer decisions, somehow, toward Pareto optimal outcomes (which are assumed the apex of outcomes, but again are based on an unreasonable framework of theoretical idealism). The model assumes that every person can move whenever and wherever they wish. It also presupposes that local government public goods provision is known and stable. All of which are highly dubious assumptions.
Kovari writes, "Strong, tangible incentives from individual municipalities (along with state tax breaks) draw the first-class corporations." This is a roundabout, and very kind way to describe our system of economic development, which is basically bribery by businesses pitting one city against another, driving up their bounty. Numerous studies by Peter Fisher, Greg LeRoy, et al have shown the inefficiency of this system.
Near the end of the posting, he states, "Regional cooperation in building specific infrastructure projects, such as public transit or intermodal freight stations, has been found consistently to raise local property values." Yet these basic infrastructure improvements, other than highways, seem to take lower priority in budgets year after year. Maintaining the public infrastructure in itself is a sound public policy for providing jobs and attracting business.
As more tax code is written which allows corporations to avoid taxes, and as more cities give exemptions and breaks to business, obviously homeowners pay more. There is a minimum standard of public goods and services people expect, this is why people (with the means to move) choose a community. If cities strangle their taxpayers pocket books to provide reduced public service provision -- due to uncollected corporate taxes, and costly and unnecessary business incentives -- this is a sure way to drive away residents.
A crucial component to solving our urban issues is federal directives ending the "war among the cities" and redistributive policies that give taxpaying homeowners a break, by removing some of the exemptions, tax breaks, and unnecessary TIFs and such littering our landscape.
Friday, November 28, 2008
Plus, is a company that doesn't even pay it's workers their full amount of compensation for hours worked the kind of company Cudahy wants?
For Further Reading:
Major Flaws Uncovered in Study Claiming Wal-Mart Has Not Harmed Small Business
Thursday, November 27, 2008
Detroit's $70-an-hour auto worker
Do Autoworkers Make $70 Per Hour?
$70 per hour meme
Countdown's Worst Person in the World
Rachel Maddow & Ron Gettlefinger of UAW
Rachel Maddow Dissects White Collar V. Blue Collar Bailouts
Unions Being Scapegoated
Let's also take a look at what the executives are making.
Executive Excess 2008
Executive Pay (Business Week)
Executive Pay (Economic Policy Institute)
Executive Pay (PBS)
Executive Pay (NY Times)
Executive Pay News
Executive PayWatch (AFL-CIO)
Five Lousy CEOs Who Get Fabulous Pay
My Big Fat CEO Paycheck
Pay Without Performance
Now, for some perspective, let's look at inequality in the United States.
By The Numbers
And, some basic income numbers (obtained from the Census Bureau).
Percentage of the population & income:
30% earning under $25,000
55% earning under $50,000
75% earning under $75,000
85% earning under $100,000
95% earning under $150,000
An attempt was made here to conceptualize this issue and present it with a bit more breadth than it is being given by the mainstream media. We can see the problem isn't that workers are making extraordinary sums of money and putting their employers at a competitive disadvantage. The problem is the greed of executives, their mismanagement, and their unwavering obsession with short-term gains and share price manipulation, rather than the long-term sustainability of their companies.
But this is class warfare, never mind the truth. I'm off to Washington in my private jet to ask for a bailout. Damn those unions!
Sunday, November 9, 2008
Q: Bob Novak, is 51 percent of the vote really a mandate? NOVAK: Of course it is. It's a 3.5 million vote margin. -- Novak, on President Bush's 2004 re-election, 11/06/04
[Thanks to the Progress Report for catching this.]
Both of George W. Bush's election "victories" were dubious, heavily protested, and legally questionable. Yet somehow this was a mandate for the Republicans. They moved forward with no regard for the Democrats and with no regard for the best interests of the country. They ran up deficits, entered us into an unnecessary war, and diminished our standing in the world.
Obama won by a landslide with almost 8 million more popular votes and now all we hear from the right-wing and the punditry is how Obama must reach out, must be bipartisan, must work with the Republicans, etc.
This election was a total repudiation of Republican policy. This was the American people giving power to the Democrats to take this nation in a new direction.
Obama is going to do what he sees as right for the majority of citizens of this country. Republican trickle-down economics – gone! Your wedge issues – gone! Pretty much anything coming out of your mouths – gone! Sit back and enjoy; just stay out of the way. Watch how governance is supposed to be done. I would say they might learn something, but we know that just doesn’t happen with Republicans.
Sunday, November 2, 2008
Conversely, this is wrong for two reasons:
The truest way to measure progressivity/ regressivity or fairness is by one’s percentage of their total income that goes to taxes (tax incidence). This gives the most realistic sense to the true burden taxation imposes upon one.
It is also a matter of social justice. Whether you have $1 million or $1 billion dollars to your name, you’re living pretty well. Increasing the taxes on such a fortunate soul (raking in $1 million per year) by one percent would result in $10,000 [yes, I know, scary redistribution]. Now, don’t you think our neighborhoods, streets, schools and a host of other infrastructural, institutional, and socioeconomic factors would be better if we instead dispersed that $10,000 amongst, let’s say, 5 people, giving them each a $2,000 tax-break infusion? Their burden is eased a bit, they’re happier, they shop for a few more things, and they eat out and spend more money in their local economy [probably at one of the wealthy taxpayers’ establishments].
Or, this increased revenue could allow the government to implement public works projects, with unionized labor, to repair roads and bridges, electric grids and water systems, and to create regional light rail systems, among a host of other environmentally sustainable projects. This could establish good green jobs and pave the way for future growth and development, whilst also helping to prime the pump and get us out of the nasty economic doldrums we're in now.
This was the case during the Great Compression after WWII when a single breadwinner could provide for a family. Growth and productivity soared during this period. And, the U.S. was a shining beacon on the hill, an example for the world.
Business investment has not improved during the latest round of tax cuts. It actually increased when Bill Clinton raised taxes – alongside this the economy boomed. Spreading the wealth seems to be good policy for owners and workers alike. It allows higher levels of demand to be sustained, lessening the volatility of the market, leading to more stable growth. We might have averted our present disaster if we had followed the recommendations of some officials (Sheila Bair of the FDIC and Brooksley Born formerly of CFTC) and tightened regulation over the opaque financial instruments that took strong growth and tried to put it on steroids, ever increasing risk.
It just seems wrong to me that people who have more money than they will ever be able to spend gain no solace from knowing that just having a smaller percentage of income in their account(s) could lead to so many social improvements. Plenty of robber barons (Carnegie, Rockefeller, Gates, Buffett, Soros, Cudahy, Zilber), most in their twilight years, realized they had benefited well from Society’s institutions and were therefore obliged to give back. It is sad the paradigms of greed is good and get all you can have won out over a more peaceful shared prosperity.
Friday, October 24, 2008
The U.S. should be ashamed that only half of the eligible voters actually vote. But, as is well known, the higher the turnout the more likely the Democrats win. Most citizens are not uber wealthy, which is the Republicans primary constituency. Noise about voter fraud is merely a political ploy to repress a majority of citizens who would undoubtedly vote Democrat.
As noted in an earlier post, Jeffrey Toobin explains, "Nationwide despite an attempt by the Bush Justice Department to crack down on voter fraud, there were only a hundred and twenty federal prosecutions and eighty-six convictions between 2002 and 2006 -- a period in which close to four hundred million votes were cast." As Eric Lipton and Ian Urbina state, "Many of those charged by the Justice Department appear to have mistakenly filled out registration forms or misunderstood eligibility rules."
Again, as is Republicans’ want, non-issues are dominating our news coverage and taking precedent over more pressing issues. We are being bogged down in Ayers, ACORN, lapel pins, voter fraud, and other meaningless distractions. Is it any wonder that election cycle after election cycle nothing of substance ever seems to get done to improve lives of most Americans? The campaigns go on and on, back and forth, debating such inane topics, rather than discussing the real challenges that we should be tackling.
I guess if my party was responsible for deficits, budgetary crises, a botched response to Katrina, a diminished standing in the world, the occupation of Iraq, shredding the constitution, the Justice Department scandals, and a whole host of other catastrophes, I’d be using all the smoke and mirrors I could to draw attention elsewhere...and possibly steal another election.
Sunday, October 19, 2008
Property Tax Limitation in the Senate Housing Bill is Unnecessary, Impractical, and Likely to Cause Harm.
And here's why the wealthy can afford to pay more:
The Great Tax Shift.
Two more reasons why we pay more and the well-off pay less.
From the Institute for Wisconsins Future:
Two Supreme Court rulings undermine state’s tax base
Two long-awaited decisions by the Wisconsin Supreme Court, released days apart in July 2008, have ripped more holes in Wisconsin’s already tattered tax base.
In one case, the Court upheld the state Tax Appeals Commission, which ruled that the Menasha Corp. was illegally charged the 5% state sales tax on specialized software it purchased. State tax collectors had argued that the company bought prewritten computer software, which is taxable. The result: an estimated $265 million in refunds that cash-strapped state government will have to pay, plus the loss of sales tax revenue going forward.
In the other, the Court ruled in favor of Walgreens, saying that the City of Madison had used the wrong method to assess the value of the buildings the drugstores are in. This ruling might squeeze the property tax base in as many as two dozen communities statewide.
Sunday, October 12, 2008
11 Lies Conservatives Tell To Avoid Blaming Wall-Street for the Financial Crisis
Myths and Falsehoods About Purported Link Between Affordable Housing Initiatives and the Financial Crisis
CRA: The facts
CRA Had Nothing to Do With The Subprime Crisis
Misunderstanding the Credit and Housing Crises
The Association of Community Organizations for Reform Now (ACORN) is neither responsible for the current financial crisis nor corrupt practices.
The Gist of the ACORN Story
The War on Voting Rights
The Republican War on Voting
The Myth of Voter Fraud
False Accusations of Millions of Dollars to ACORN
Earmarks, although some are undoubtedly pork, represent such a minuscule portion of the budget, that, at the current time, they are hardly a priority nor a pressing issue deserving so much attention; nor upon which John McCain can make more false maverick claims.
McCain's Phony Earmark Ploy
Percent of National Spending That is Pork
Defense Pork:Putting Lipstick on the Pig
We are not better off now than we were eight years ago.
The Reagan Question
Tax Cuts for the rich are definitely not the answer.
Tax Cut Snake Oil
Saturday, October 11, 2008
Saturday, October 4, 2008
If the bailouts and overall dismal performance of the last 8 years should teach us anything, it's that markets do not always work efficiently, and the private sector is no better than the public sector.
The services we all enjoy cost money. There is no free lunch. As noted in earlier blogs, the reason we keep having these arguments and discussing selling off public entities is because many among us, the uber rich and the corporate sector, do not pay their fair share (here and here) in taxes.
The Journal- Sentinel has reported on Wally Morics's, Milwaukee's comptroller, idea to consider privatizing the city's Water Works. Their own concerns with such an endeavor are that there could be rate increases and there could be a foreign owner controlling our water. Both excellent points. An editorial from the previous day's paper raised some issues with the idea, but ultimately feels the idea "deserves a thorough vetting."
Some things are not meant to be run by a private, for-profit business. Especially local infrastructure.
Better ideas for capturing more funds for the city are (as also mentioned in the Journal-Sentinel article) getting our fair share from state shared revenue and from federal sources available. Also, the sales tax, as used to support Miller Park. If we can impose such for a baseball stadium, we can do the same for parks, light rail, etc. [The City itself doesn't impose such a tax at this time. But there is obviously some way to move such an idea forward.]
Another factor to keep in mind -- these are union workers at the Water Works. These are good jobs with decent pay and benefits. These workers spend and contribute to the local economy.
Economic development is supposedly all about attracting good jobs and increasing the tax base, yet a transfer of the Water Works to a multinational would undoubtedly undercut the unionized labor force and transfer most of the income out of the area (since it would no longer be locally owned). Workers with good paying jobs are what makes our restaurants, theaters, pubs, boutiques, and all of the other wonderful attractions in our city possible. Without the leisure spending these types of good jobs allow, our city would be a ghost town.
Let's stop selling off the commons we share among us, the things we call public goods. Each time we do, we end up paying more, the amenity is usually run down to the point of dilapidation and the private owner begins asking the public to subsidize the repairs. There are many examples of privatization schemes all around the country. The majority are failures. Let's just tell the privatizers to pay their fair share of taxes instead. But as far as privatizing our Water Works, "Thanks, but no thanks!"
For Further Reading:
Fighting the Corporate Theft of Our Water
Food & Water Watch
Great Lakes Water Wars
New Economy of Water
Overview of Water Privatization
Perils of Privatization
Privatization is no Panacea
Profits, Profits Everywhere - And Soon Not A Drop To Drink
Seven Myths of Water Privatization
The UK's Railway Privatization
The Water Privateers
Water as a Human Right
Saturday, September 27, 2008
This is exactly why there is a rush among the Haves to get their asses bailed out and to move forward and away from this spectacular failure as quickly as possible. Nothing to see here, keep moving along. Don’t think about the systemic failures, the deregulation, and the greed that produced this situation.
The other option, as we're seeing play out, is the Republicans using this catastrophe, as they did 9/11, for political gains. They threatened to skip the debate so that John McCain could rush back to Washington to save the day. Political theater whereby when the (latest) bailout, whatever it may be, gets completed the McCain campaign will claim it's all thanks to good ole' Johnny-boy rushing back to seal the deal. More of the same old tricks: taking credit where none is due and claiming just the opposite of what actually happened. McCain's coming back to D.C. actually blew up the deal just so John could capture some headlines and theater. He was not trying to do what best for the country, but what was best for his campaign and his corporate paymasters.
Since Reagan we’re living in a one-bubble-after-another economy. We starve the services for the poor, the needy, the hungry, the sick, the uninsured, the working-class…but oddly we pay for new professional sports stadia, convention centers, the corporate and manufacturing giants’ offices and production centers, and a whole host of other expenses that theoretically should be paid for by the business owners. Public sector jobs have been outsourced to private firms, yet the work isn’t as timely or efficient, and the costs are higher, most of the time. Our military is working alongside an increasingly privatized force without much accountability. Our economic system is in collapse because of an unregulated, nontransparent player of the financial sector (the shadow banking system).
Today we live in a world of inverse Socialism. Citizens are working longer and harder (without much retirement or health care coverage) to produce more profits for their employers, but of which they ultimately do not share.
Republicans have repeatedly won office based on outright lies and falsehoods. Once in office they basically loot the Treasury. The government takes on huge deficits, inflating economic bubbles and enriching Republican cronies, while leaving the bill to be paid by the taxpayers.
Republicans continually talk of smaller government and spending less, but their record is just the opposite. They increase government spending and size. And the problem is that their spending adds nothing to productivity and long-term growth. It merely saddles us with debt, thereby decreasing future growth.
Republicans have, for decades, jeopardized the long-term economic health of the country for the sake of their own short-term gains.
This latest malady of epic proportions is yet another chance for the true public servants to stand up and for the citizens to say enough is enough. There is another way. Re-regulation and improvement of the social safety net, both of which we cavalierly dissected and destroyed, are among the highest of priorities.
Oversight of financial transactions and rules governing those transactions is a must. Also, allowing workers wages to move in lockstep with their productivity, as they did after WWII, would go a long way toward relieving inequality in our country. This would entail a strengthening and encouragement of unionization and collective bargaining.
The free marketeers are wrong. They don’t know what they’re doing. Empirical evidence over the last 40 years has shown the emperor has no clothes. Let’s take back our country from these false prophets whom seem to only want to run government so they can use it as their personal piggy bank.
We keep taking on deficits for the Haves, but we aren’t sharing in any of the bounty. Our wages are stagnating, our health insurance is declining, the pension system has all but disappeared, and retirement accounts are dwindling. Republicans are benefiting from these deficits and bubbles, while we are left holding the bill. Is it any wonder that their primary campaign contributors are the same companies that saw meteoric increases during the heyday of the bubbles and yet are the same ones with their hands out now looking for insurance of their (deflating) asset prices due to their own poor management and oversight, risky behavior, and deceitful financial packages?
It’s clear we’re living in a socialistic country. It’s our duty to at least make it socialism of the many and not just a few.
For Further Reading:
Privatization of War
Republican Debt and Deficits
Republicans Oversee Largest Deficits in History
Republican Policies Make Deficits Worse
The Military Industrial Complex and the Obsession with Privatization
As the financial sector has become a larger portion of the economy (representing somewhere between 15 to 20 percent of total sales, receipts, and shipments), market volatility has increased, which has led to a precarious existence for most Americans. Yet cranks preached these financial changes as increasing efficiency, improving liquidity, lowering rates...all of which would supposedly help retirement accounts, grow the economy faster, create jobs, and on and on. As empirical evidence of the last thirty years shows, this is a total fabrication.
The odd part of this story is that these supposed free marketeers want Government out of their way and off their back, and blame public sector regulation for any blips in the market, yet when their mismanagement and overly-risky investment strategies go belly-up and risk collapsing the whole economy, then Government must step in to save the day. Economists call this phenomenon moral hazard.
The really strange part of all this is the same characters that established the corrupt financial practices that led to the current mess are the same people offering advice and looking to make a profit off "fixing" the problem.
Robert Kuttner details the problems of deregulation and offers some necessary reforms.
With regards to the 2008 Presidential election: "McCain voted for abolishing all of the significant rules put in place at the time of the Great Depression designed to prevent a repeat," as Robert Scheer reports.
And, there is a need for prosecution of some sort for this corruption, malfeasance, lack of ethics and deceitfulness that has taken place.
Also, finally, rather than continuing to "bail out" the causes (corrupt businesses that are too big to fail) of these financial meltdowns, why not just provide a real stimulus check to every working-aged man and woman in the country? If we must nationalize businesses, let's at least do this alongside reforms to the financial system (reimplementing a 2008 version of the Glass-Steagall Act), and with language that assures a portion of the profits made from selling off the assets of these mismanaged corporations goes toward Social Security, pension & retirement plans, energy independence, public works infrastructure programs, etc. Or to at least assure that whatever amount we decide we must spend on bailouts, an equal dollar amount will go toward those aforementioned public concerns. As long as we're pumping all this money into the economy, we might as well get all the bang for the buck we can and also initiate a new New Deal.
For Further Reading:
A Crash Course in Economic Crashes
Big Rate Cuts and Fiscal Stimulus
Biggest Corporate Bailouts
Bush's Disastrous Rescue of the Finance Industry
Financial Crisis: Time for a Citizens Plan
Financial Meltdown Continues
Gaining With Trade
History of US Government Bailouts
NAFTA at Ten: The Recount
Paulson Bailout Plan a Historic Swindle
Progressive Conditions for a Bailout
Time to Take a Second Look at Our Free Trade Agreements
Redistributive policies seem to only flow upward these days (and most days). There’s never talk about controlling runaway executive pay (that’s just the “price of business”). There is no discussion of restoring equity between workers productivity and wages. Any mention of taxation, programs for improving Americans lives, money for infrastructure improvement, or what is generally regarded as investment in the public good and long-term sustainability, is immediately dismissed as socialistic and a slippery slope toward a welfare state.
When times are tough for workers…oh well, suck it up and hope for the best. When the Haves are presented with falling asset prices, measly stock returns, diminishing capital gains, or underperforming investment yields in general, then it’s time for the government to step in and spend.
If the last thirty years should have taught us anything, it’s that supply-side policies and privatization don’t work.
Scott Walker, like most Republicans, doesn’t understand this. This is why he wants to cut more Milwaukee County jobs and turn the services over to the private sector, while also selling off our airport. How convenient…more and more airlines will no doubt be facing bankruptcy due to increasing costs (fuel just being one of these). So the plan is to sell the private sector our airport, and then a few years down the line to have to bailout the private airlines, again, from the financial mess they have been creating, on and off, for many years with their mismanagement?
How often do we have to keep bailing out industry after industry before we realize they are not efficient, the market doesn’t have all the answers, and maybe, just maybe, government when run by people whom actually want to govern is a good thing? Maybe some things, like public infrastructure such as airports, are a public good and are not meant to make a profit.
James Rowen details Walker’s far-reaching incompetence regarding transit. Rowen also reports how amid all the talk of cuts and layoffs, Walker found money to give raises to some of his aides.
The problem with Walker’s shenanigans is that he won’t be the one to suffer from his policies, but his constituents in Milwaukee County will. The Republicans are a party so attached to ideology they are detached from reality.
For Further Reading:
Sunday, September 21, 2008
Enough is enough. If McCain is such a capable leader, he needs to be able to multitask – fix the economy (even thought McCain has admitted many times he doesn’t understand the economy) and debate. You know, run your campaign and also do your job as a senator. [Also, if we’re supposed to have confidence in your Alaskan soul-mate, let her face some questions and explain her qualifications and opinions.]
All of this staged, photo-op drama appears to be the usual Republican smoke and mirrors. Again, Republicans are using the fear-card to try and scare people into voting for two unfit leaders. It seems each and every day McCain opens his mouth he either has to get back to the reporter about the questions asked, he concocts some delusional contradictory explanation, or he does the usual sidestepping. Whichever, he usually sees a decrease in the polls after he open his mouth in a televised appearance. [The two interviews – here and here - Governor Palin has acquiesced to have been train-wrecks. It’s no wonder the campaign is trying to hide her.]
Josh Israel wonderfully encapsulates our presidential debate system in an article on the Center for Public Integrity’s Buying of the President 2008 website. [Excerpted below.]
“Sixty-six million viewers watched the nation’s premiere televised presidential debate, a September 26, 1960, primetime event featuring John F. Kennedy and Richard M. Nixon. It was paid for by three major television networks, but broadcast regulations prevented them from continuing their sponsorship in the next several elections.
In 1976, the independent League of Women Voters, a nonpartisan organization dedicated to citizen education, took over. The League hosted three debates between Gerald Ford and Jimmy Carter and one between their running mates, and sponsored debates in the 1980 and 1984 elections as well. The debates became part of the quadrennial election process, but the League’s management style ruffled some feathers among party insiders who wanted more control of the process.
Republican David Norcross, who helped form the Commission, called the League’s debate organizers “too dictatorial” and criticized them for “ignoring or avoiding the politics of the whole situation.”
The Commission on Presidential Debates began hosting televised debates in 1988. The Commission is a largely secretive tax-exempt organization, created and run by former chairmen of the two major parties, funded by a small group of unidentified major donors, and designed, it seems, to exclude nearly all third-party candidates.”
The Christian Science Monitor notes, “The Presidential Commission on Debates…requires a candidate have at least 15 percent of support in national polls to qualify for inclusion in debates. The commission does that so that it can accept corporate contributions within FEC rules.” It would be nice if this commission had some teeth, which it obviously doesn’t if John McCain can just decide not to participate. It appears the commission is more about controlling whom can enter into presidential politics, what issues will be discussed, and to make sure the corporate money keeps flowing to both parties. Is this our incessantly ballyhooed democracy we’re always trying to export?
If McCain doesn’t show up, the American people should respond to his quest for the presidency with a polite, “Thanks, but no thanks.” Obama vows to have a town-hall-style meeting with the audience if McCain chickens out and skips the debate. Barack has shown he is a real leader. He shows up, he explains himself, and he’s accountable. John McCain, body and brain, is missing in action.
Thursday, August 28, 2008
The tax code is not more progressive than it has been.
What is means to be classified a "small business."
Only 1% of taxpayers would be affected by Obama's proposed increase in the Social Security payroll tax.
Capital gains and dividends tax cuts primarily benefit the well-to-do.
Less than 1% of estates pay the estate ("death") tax.
Thanks to Citizens for Tax Justice for this timely research.
Tuesday, August 19, 2008
This is a must read.
Friday, August 1, 2008
First, spending at the state-level has not been exploding over the last few decades as these crusaders would like us to believe.
Second, discarding most property tax exemptions (which amount to one-third of all property) would be a boon to most state budgets and a relief to many taxpayers.
Third, trashing numerous corporate tax-code scams and collecting the fair share of taxes from the business community would be another infusion of funds into state and local coffers.
Fourth, the federal government could step in and aid the states.
Taxes are the price of civilization. We all depend on the services and amenities that taxes pay for. The answer isn't the race-to-the-bottom, discard the services that make us desirable cities and states mantra we hear from the talking-heads. We need to reinstate fairness into our tax code so that our progressive tradition is fulfilled and those with the most means and whom benefit the most from such an enviable way of life pay their fair share.
Otherwise, our society will continue its gradual descent into mediocrity with only the very well-off (whom most of the tax code already benefits) being able to afford and enjoy a respectable standard-of-living. If we allow public services to be cut to such a drastic degree, only the wealthy will be able to afford many of these public-goods, that we cherish in our everyday lives, in the private market.
For Further Reading:
Budget Cuts or Tax Increase at the State Level: Which is Preferable During an Economic Downturn.
State Expenditure Growth Slowing.
State Spending as Percent of GDP.
Wednesday, July 30, 2008
Bush, as usual, is blaming his incompetence on Congress, alleging gas prices are their fault. Congress is actually doing the American people a favor by not allowing such misguided policies to continue, and finally doing what Jimmy Carter recommend we do during the oil crisis of the 1970s – trying to get off oil!
The oil companies have millions of acres of land already, federal land leased to oil/energy companies, which they are choosing not to explore nor drill for oil. The latest claim that they must be given more land and allowed to drill in ANWR is ridiculous .
As Harry Reid, the Senate Majority leader, details: 33.5 million outer continental shelf acres are not being drilled; 34.2 million onshore acres under lease are not being drilled; there are 7,740 active leases in the outer continental shelf and only 1,655 in production; there are over 41,000,000 acres in the outer continental shelf that have been leased for drilling, yet only 8,123,000 acres are in production.
The answer isn’t more tax breaks for oil companies based on the lame excuse that they need such for competitive reasons or because they need such for exploratory purposes, nor is it spending more money drilling every possible piece of land on the planet. The answer, sorry to say, is a lifestyle change for much of the planet (walking more, driving less, consuming locally, etc.) and investment in alternative energies. Jeff Rubin informs, “For the past half century, America has spent the bulk of its infrastructure money on building highways.” This has led to us sprawling outward and driving more, subsidized by cheap gas. Part of the solution to our problem is denser living and public transportation.
Jeff Hooke and Steve Wamhoff declare, “Among the largest five oil companies, less than 8 percent of profit goes to exploration for new oil fields. In the top five oil companies, managers have actually directed most of their excess cash to dividends and stock repurchases, both of which drive up the companies’ share prices and the executives’ stock option values.” And, the claim by the oil industry of an interest in alternative energy – from 2000 to 2005 the industry spent $1.2 billion on alternatives to fossil fuels; the industry earned $383 billion over this same period.
Subsidized (regarding oil companies) implies that gasoline prices paid by consumers do no reflect the full economic cost to society. Some direct and indirect public subsidies are reduced corporate income taxes, lower than average sales taxes on gasoline, government funding of programs that primarily benefit the oil industry or motorists, and hidden environmental costs caused by motor vehicles. As Doug Koplow asserts, “Tax subsidies are the result of selective tax legislation that benefit particular groups of people or industries in the economy.”
States using combined reporting are capturing more of their fair share of taxes from oil companies. Otherwise, companies shift costs and profits between subsidiaries in different states to avoid taxation or lower their rate as much as possible.
A Union of Concerned Scientist's report lists a battery of oil industry subsidies:
- Oil industry taxed at 11 percent ($2 billion per year benefit)
- Low state and local sales tax rates on gasoline, indirect subsidy exceeding $4 billion per year
- Direct government funding of oil and motor vehicle infrastructure and services costing $45 billion a year
- Oil-related health and environmental damage, roughly $232 billion annually
Douglas Koplow and Aaron Martin of Industrial Economics found:
- Maintaining the Strategic Petroleum Reserve costs $5.4 billion
- Tax break for domestic oil exploration and production $2.3 billion
- Support for oil-related exports and foreign production $1.6 billion
The Alliance to Save Energy detail that state and local governments taxed gasoline at about half the rate as other goods resulting in an estimated $2.7 billion revenue loss from gasoline sales.
Mark Zepezauer and Arthur Naiman explain how oil companies are also allowed to deduct 15 percent of the gross income they derive from oil and gas wells from their taxable incomes (the oil depletion allowance), and continue to do that for as long as those wells are still producing. Other shameful tax allowances include the enhanced oil recovery credit and the percentage depletion allowance, among many other tax breaks.
Citizens for Tax Justic further note, “Oil companies can write-off so-called intangible drilling costs, that is, much of their investments in finding and developing domestic oil and gas wells, immediately, even for successful wells.” Another gimmick is passive income limitations, whereby, “the working interest holder who manages on behalf of himself and all other owners the development of wells and incurs all the costs of their operation, may use oil and gas losses to shelter income from other sources.”
The Institute on Taxation and Economic Policy observe that the oil and gas sector is the nation’s lowest-taxed industry, paying an effective income tax rate of only 5.7 percent.
And, comparatively speaking, the U.S. still has some of the cheapest gas on the planet. Of 155 countries surveyed for a CNN Money article, U.S. gas prices were the 45th cheapest. Most of Europe has prices hovering around $8 a gallon. Our cheap gas prices are primarily responsible for our love affair with SUVs, our oversized McMansions, and our unnecessarily long commutes. The U.S. federal tax on gas is 18 cents per gallon, low by global standards. Since 1980, oil use in the UK has stayed flat, in France its dropped 17 percent, but in the U.S. it’s gone up 21 percent.
For Further Reading:
Oil Slickers: How Petroleum Benefits at the Taxpayers Expense.
Tuesday, July 15, 2008
Which is why banks are failing, automakers and the airlines are shedding jobs, bankruptcy and unemployment are on the rise, and bailouts are aplenty.
I know this guy (including his administration) is an asshole...but how much shit can one man produce?
Leave it to those know-it-all, ivory-tower liberals : Ben Bernanke, Federal Reserve chairman and former Princeton economics professor, testifying before the Senate Banking Committee, gave a more nuanced and reality-based assessment. He noted that consumer spending and exports were moving at a sluggish pace, the housing sector is continuing to weaken, inflation is inching upward, and commodity prices are rising.
Jon Stewart puts it into perspective nicely here.
Saturday, July 5, 2008
Nearly a third of all the property in the City of Milwaukee is exempt -- roughly $6 billion worth of property that is not taxed! Barbara Miner informs, "Wisconsin now has approximately 16,000 exempt private properties, with a value of $21.7 billion."
The Wisconsin Department of Revenue, in State Tax Incentives For Economic Development In Wisconsin, details the numerous tax incentives available in Wisconsin.
Annysa Johnson reports, “The Congressional Budget Office estimated the value of tax exemptions for hospitals nationally in 2002 at $12.6 billion.” A report by the Institute for Wisconsin’s Future found, “billions of dollars worth of property goes untaxed because it is owned by not-for-profit hospitals and medical centers…many of these hospitals generate millions of dollars in annual income and pay their top executives salaries comparable to corporate executives.”
The Wisconsin Public Service Corporation explains, “Commerical customers with residential electric or natural gas [a storefront with an apartment above it] are tax-exempt from November through April for the portion of energy used for residential purposes…Non-profit organizations [operated for religious, charitable, scientific or educational purposes or for the prevention of cruelty to children or animals] are tax-exempt year round for electric and natural gas use.”
Credit Unions are tax-exempt institutions. As even the Wisconsin Bankers Association states, “To the extent that credit unions use their tax exemption to lower home lending rates, federal and state income tax exemptions are subsidizing borrowing by high-income households.” They find this exemption will cost, over the next 10 years, $400 million in Wisconsin, and $31 billion nationally.
A few of those with property tax exemptions written right into the state statutes are: machinery and equipment used in manufacturing, farm inventories, computer hardware and software, and tax increment districts. In a recent decision, City of LaCrosse v. Wisconsin Department of Revenue and Gundersen Clinic, the Wisconsin Tax Appeals Commission ruled that a host of categories of computerized medical equipment is exempt from property tax.
Those enjoying sales tax exemptions: manufacturing machinery and equipment; manufacturing consumables; pollution abatement, waste treatment and recycling equipment; production fuel and electricity. Steven Walters notes, “The sales tax [in Wisconsin] is expected to bring in $4.2 billion this year. It is the second biggest source of state tax collections, trailing only the $6.4 billion personal income tax.” He also lists the costs of certain exemptions: computer services $136 million; legal services $113 million; advertising $103 million; personnel services $79.4 million; architectural engineering and surveying services $69.2 million; management consulting and public relations $64.1 million; and accounting $59.5 million.
The importance of a good manufacturing base to our economy is obvious, as is the importance of recycling to our environment, etc. But if the market has decided that these aren’t important things and the government must support these endeavors, then we should at least also be guaranteeing these are well-paid jobs with health care and pension plans. If we’re going to be in the business (of whichever business we might be subsidizing), we should have it on our terms and have these be solid jobs that allow the workers to be happy, productive, and fairly compensated. Consequently, they are able to support their local economy (through purchases). This multiplier effect of locally earned and spent money ripples through the economy and creates jobs and stable communities.
There are a host of “business incentives” (welfare for the rich) in Wisconsin: Economic Development Zones with development zone credits, Tax Incremental Districts with infrastructure improvements financed by tax increments, and Technology Zones with tax credits for high-technology businesses locating in the zone. Granted some of this development would not occur without the subsidy. Therefore, that is a good investment if it occurs in a blighted or declining area. But sadly too often developers, real estate magnates, and builders use this welfare to line their pockets rather than making a catalytic investment (reproducing through the local economy), which would be much better for the long-term health of their city and economy. They build whatever is easiest and will return the quickest buck. They're looking to line their pockets with the largest amount of money in the shortest period of time. They're not trying to develop a sustainable, bustling, safe city environment.
The inequity in the tax burden is at a breaking point. Workers cannot bear the brunt of this burden much longer. The economy is in a recession as this is being written, and we may be headed for another 1929-style depression. Corporations have written the tax code to their benefit. Their share of taxes is minuscule and declining. Their, in essence, looting of public dollars has ramifications on our ability to maintain: parks, libraries, public transportation, sewage, wetlands, pollution, poverty, and employment – to name a few. It has ramifications on everything we do and how we live.
This is the workers' money they are stealing. Without the productive capacity of all the workers in the world applying their craft there would be no product or service to sell. They make the profits and standard of living we all deserve possible. Sadly, they are being exploited. I’m sure we’d all prefer a higher floor for the least among us, rather than a subsidized ceiling where the already-rich take from those working their asses off to make ends meet. Our inattentiveness and inaction with regards to this growing inequality is to our own detriment. Even the middle class is now being squeezed into a paycheck-to-paycheck lifestyle. This is a dismal fact and an abomination for a wealthy, highly-educated country like America.
Why is this? To recapitulate -- about a third of the land and property the rich/well-represented own is exempt from taxation. Capital gains, which are mostly claimed by the rich, are taxed much lower than income. The tax code has a hoard of loopholes, deductions, and write-offs, which benefit the rich. So, the basic story is: workers are working longer, harder, and producing more; but they aren’t sharing in the gains. And all those gains the CEOs and executives are making off Labor’s production are not being completely or fairly taxed, if at all. So we’re making less and having to pay for more while a few greedy bastards stockpile the treasure of our exploited labor.
Jack Norman calculates, “Thirty years ago, residential property accounted for half of all state property taxes. Today, homeowners pay 70 percent of all property taxes, as the business contributions have dropped…The poorest homeowners (incomes below $15,600) paid more than 14 percent of their income in state and local taxes. The richest homeowners (incomes above $70,000) paid about 10 percent of their income in state and local taxes.”
Fred Mohs, former regent with the University of Wisconsin System currently on the board with Madison Gas and Electric, in Barbara Miner's Tax Exempt Milwaukee Magazine article, contends, "The only people left to pay were the peasants and the merchant class, and they eventually solved the problem by cutting off the heads of a lot of people."