Too many Americans have been tricked into believing that the government can no longer help them and their families. Until enough people realize that as a lie, take back the government, and use it to bring economic equality back we will continue in this depression. WCNews at Eye on Williamson says it’s It’s the inequality stupid.
As long as Mitt Romney didn’t bring bacon-wrapped shrimp to the Knesset after leaving London, then last Thursday was the worst day of his European vacation, writes PDiddie at Brains and Eggs.
In his letter to Health and Human Services Secretary Kathleen Sebelius rejecting the expansion of Medicaid under the Affordable Care Act, Texas Governor Rick Perry tells a whopper. Expanding Medicaid, he writes, would “threaten even Texas with financial ruin.”
Texas has the highest rate of uninsured residents in the country (25 percent), and it stands to enroll some 1.8 million new Medicaid recipients through the expansion. These are some of the poorest people in America, making less than 133 percent of the federal poverty level (just $31,000 a year for a family of four). In the first six years of the expansion, from 2014 to 2019, the total cost of insuring these Texans would be about $55 billion—not an inconsiderable sum. But the federal government would pay more than 95 percent of that amount; Texas’s share would be just $2.6 billion. That’s not chump change—but threaten Texas with financial ruin? Not by a long shot.
What does threaten Texas with financial ruin is the fact that it has some of the most regressive, insane tax policies in the nation. According to Matt Gardner, executive director of the Institute on Taxation and Economic Policy (ITEP), Texas is one of nine states without any broad-based state income tax. Back in 2008, the Center for Public Policy Priorities calculated that Texas could raise $7 billion a year through a modest personal income tax comparable to what its neighbor Kansas had at the time (6.45 percent for individuals making more than $30,000 a year). If Texas collected that amount annually through a personal income tax during the first six years of the expansion, it would raise $42 billion. That would pay for its share of the Medicaid expansion more than sixteen times over. (I suspect the state’s teachers, social workers, firefighters, police and other public employees would have some ideas on how to spend the surplus.)
That’s not all. In 2006, the Texas state legislature required school districts to cut their property tax rate and then failed to make up fully the difference with new taxes. The result was a $10 billion structural deficit in every biennial budget. If Texas just returned to the property tax rate it had before 2006, it would raise at least $30 billion in the six years of the expansion. Or in another words, it could pay for the Medicaid expansion more than eleven times over. (If Texas both passed an average state income tax and repealed its property tax cut, it could pay its share of the Medicaid expansion almost twenty-seven times over!)
Rick Perry is not alone. Ever since the Supreme Court allowed states to opt out of the law’s expansion of Medicaid without forfeiting all their Medicaid funding, at least five other Republican governors—led by Tea Party darlings like South Carolina’s Nikki Haley, Florida’s Rick Scott and Louisiana’s Bobby Jindal—have summarily refused to implement the expansion on the grounds that their states just can’t afford it. They’re as wrong as Rick Perry. The federal government covers 100 percent of the expansion in 2014 through 2016. In 2017, states begin sharing the cost, paying 5 percent; that share grows to 10 percent in 2020. States are never on the hook for more than 10 percent of the annual cost. To put that in perspective, states currently pay between 25 to 50 percent of current Medicaid’s costs.
The priority is protecting business and corporate interests. Not making sure Texans have health care, (see below).
Those two links highlight very well the state of our state. We’re 1st in taking care of businesses, and 44th in taking care of children. That’s a strong indictment of the legislative and economic priorities our elected leaders have taken over the last several decades.
While the safety net in Texas was never particularly strong, we used to make public education a priority, had affordable higher education, and a solid – pay as you go – transportation infrastructure. Those, at least somewhat, enabled more equality, social mobility, and kept poverty from skyrocketing. But those days are no more. If the theory of trickle-down economics were true, we should all be swimming in prosperity. Obviously that is not the case.
To put this in perspective most states fund their government with a balance of three taxes major taxes – sales, property, and income. Texas doesn’t have an income tax, has an under performing business tax causing annual shortages, and now we’re supposed to start looking at doing away with the property tax. That not only makes no sense it’s crazy.
Let’s boil down what Hilderbran is saying. As we face another budget shortfall, it’s time to begin the long process of abolishing the property tax in Texas. But first we need to cut education spending more, (reduce the growth in property tax revenues being used for schools). Because the property tax provides the majority of the money for public education. It’s a lot of money to replace (over $40 billion/yr.), and if it was just done away with it would have to be replaced by something that would generate many billions of dollars. And the only suggestion offered is to double the sales tax.
It’s hard to find the starting point for attacking this, but here goes. Texas already has one of the most regressive tax systems in the United States. Which means the less money a person makes in Texas the higher a percentage of their income they pay in taxes, and vice versa. The main reason for that is because our sales tax is so high. The sales tax is a very regressive tax. Another reason is because Texas does not have an income tax, one of the fairest taxes. The property tax is a much less regressive/fairer tax then the sales tax. Which makes it easy to see that removing the property tax and replacing it with a higher sales tax would hurt poor, working and middle class Texans, while making it better for wealthy Texans. (See Who Pays Texas Taxes).
A state income tax is the progressive solution for what’s needed in Texas. Instead those in power are discussing how much to increase the tax burden on those at the bottom, and how much to decrease it on those at the top, GOP Battle Brewing Over Texas Taxes.
Moving Texas away from such heavy reliance on property taxes has been a key plank for conservatives for more than a decade. Like TXCCRI, the Texas Public Policy Foundation has also written extensively on the issue, providing the intellectual background for discussions in the Capitol and around the state.
Of course, the devil is in the details of which property taxes are abolished, and what – if anything – replaces those revenues.
Mr. Hilderbran has offered no immediate solution on that front, but as chairman of the House Ways and Means Committee, he would have a front-and-center seat in any such discussion.
State Rep. Jim Keffer today unveiled a new study he commissioned to seriously evaluate the impact of replacing Texas property taxes with consumption taxes. The study was conducted by former Deputy Comptroller Billy Hamilton who sliced and diced the proposition.
His primary thesis is startling.
Hamilton writes, “One thing is certain. The tax rate would be eye-popping. The property tax currently produces more than $40 billion a year in Texas for all local governments. The state sales tax in 2011 produced about $21.5 billion at a tax rate of 6.25 percent.”
He continues that to simply replace the missing revenue would require adding another 11.6% to the current 6.25% charged by the state. Add the additional 2% collected by cities, counties and transit authorities, and suddenly the sales tax rate jumps to a staggering 19.85%.
In commissioning the report as part of his project, Texas Tax Truth, Keffer is challenging two vocal proponents of the property tax—sales tax swap: the Texas Public Policy Foundation and Tim Dunn’s Texans for Fiscal Responsibility/Empower Texans administered by Michael Quinn Sullivan..
Advocates argue that eliminating some sales tax exemptions would expand the base of taxable items and reduce the rate. But Hamilton points out that the Legislature has preferred to increase exemptions rather than eliminate them and that the current list of exemptions including food, medicine and real estate have been in place since 1990.
Hamilton also explains that eliminating property taxes would deny virtually all local governments’ and school districts any independence since they would have to come hat in hand to the state for any and all funding.
Anyone who watches the Legislature knows that one of things it does best is cost-shift downstream to local governments while withholding funding. Local control sounds good but is a mirage if local taxpayers have no control over their own tax dollars.
But the free market would work. A 20% sales tax would create and economic bonanza for Texas’ neighboring states as people voted with their feet. Hamilton does not mention it but Texas retailers complained about all the sales they once lost to Amazon because of a meager 8.25% cost advantage when Amazon did not collect sales tax.
The new tax would be more regressive in its effect on low- and middle-income Texans than the current tax system in that even if the consumption sales tax is “revenue neutral,” it could be a tax increase for many working and retired individual Texas taxpayers. (To see how regressive Texas taxes are see the chart on page 13 of this report, Understanding Texas Taxes 2011.)
And a decrease for those at the top, of course. Instead of talking about eliminating taxes with a more regressive tax, we should be talking about making taxes in Texas more progressive with a state income tax. An income tax would enable property taxes to be lowered, while finally getting those at the top of the income level in Texas to pay their fair share.
I had a discussion with a fellow Democrat this week and as we talked it became clear that they believe the number one issue facing our country is inequality. I’m in complete agreement. This is an issue I’ve posted on many times, and it’s clear that nothing is going to change until the people have had enough. And that hasn’t happened yet.
Until that does change little, if anything, can be done. And if may take a full economic meltdown, another Great Depression, before there’s enough public outrage to get things changed. Democrats in Williamson County and throughout Texas find it hard to see the light at the end of the tunnel. The only solace is that change, when it comes, can come quickly once the situation changes, (see Egypt, Libya, etc..).
We had a thriving middle class once in this country. It drove our economy to unprecedented economic growth and equality. Our public and higher education systems were the envy of the world. We the people, government research and development, put a man on the moon, and created the internet. Today the commons have been corporatized, public territory ceded to profit first organizations, the middle class is in a shambles, while inequality and poverty increase at levels not seen in decades.
Too many Americans have been tricked into believing that the government can no longer help them and their families. Until enough people realize that as a lie, take back the government, and use it to bring economic equality back we will continue in this depression. It’s the inequality stupid.
In the waning days of the 82nd Legislature, state lawmakers came up with a plan to help cushion the blow of $5.4 billion in cuts to public education.
State Rep. Rob Orr, R-Burleson, proposed a constitutional amendment that he said could bring an additional $300 million to public schools. It unanimously cleared both the House and Senate. Orr’s measure became Proposition 6, which voters passed in November.
But that money has hit a roadblock on its way to public schools — and what looked like an easy fix for hard-pressed budget writers last May has turned into a headache that awaits their return in January.
The amendment allowed the School Land Board, which operates out of the General Land Office, to put a portion of earnings from investments on real estate assets into the Available School Fund, which along with property and sales taxes helps pay for public education. Last week, the little-watched board that oversees the state’s public school lands decided not to distribute the money. Commissioner Jerry Patterson, who sits on the three-member board, said it wanted to protect the funds for upcoming investment opportunities.
“We anticipated this funding for public education,” said Jason Embry, a spokesman for House Speaker Joe Straus, R-San Antonio. “We’re evaluating the impact on the budget and working with Commissioner Patterson to ensure there is no impact to public schools.”
Whether lawmakers should have expected the money is a matter of dispute. But the $300 million made it into the budget as part of general funds used to support school operations, contingent upon the constitutional amendment’s passage in November and the School Land Board’s approval of the transfer. During the special session last June, the Legislature added a provision to the appropriations bill that reduced general revenue funding to public education by $300 million if the amendment passed. It was to be replaced with the same amount from the Available School Fund with the board’s approval — but there was no provision to add that money back in if that didn’t happen.
“I was told that there would be $300 million going into the Available School Fund. Everything was put in place to allow to that to happen,” said Orr, who said the General Land Office agreed to transfer the money if the amendment passed. “I believe it needed to happen, so I’m not sure why it didn’t.”
Patterson said he did not recall committing to a transfer of the money and that his office had been unable to find “any evidence or documents or memos or testimony” that he did.
“I don’t have any control over what was written into the budget or what was made contingent. I don’t know who wrote that in there or why,” he said. “Somebody wrote a contingency rider assuming the answer would be yes.”
Ah, we know what happens when lawmakers ass…u…me.
In the meantime, Rep. Rob Eissler, chairman of the House Public Education Committee, said the school land board’s vote was unfortunate.
“Government doesn’t always work the way we want it to,” said Eissler, R-The Woodlands. “Legislative intent doesn’t always follow through to the very end.”
Certainly it is unfortunate. But it’s pretty easy to see from the statements in the article that none of them seem too concerned. As long as wealthy Texans taxes didn’t go up, then, no harm no foul. That makes it almost $6 billion cut from public education last session.
I haven’t written much on the GOP primary run off for US Senate. Mostly because it’s just a bunch of crap. Both candidates are trying to out “conservative” the other, and it’s really kind of sad. I’m not a GOP voter and I really don’t see much of a difference between the two. The main difference I see is that one is able to self-finance from his bankroll, and the other is being financed by someone else’s bankroll. But they are both awash in cash.
It will be interesting for many reasons if Texas Lt. Gov. David Dewhurst loses the runoff. But one of the most ironic might be a candidate with hundreds of millions of dollars to self-finance his own campaign, will be taken down, by corporate cash that only exits because of Citizens United. In other words two years ago Ted Cruz never would have been able to compete, financially, with David Dewhurst and now he can.
The other interesting aspect of a Dewhusrt loss would be what it would mean for the Texas GOP going forward. Dewhurst has always been more of a daddy-Bush/Romney, elitist, business-first style Republican. He’s always seemed offended that he’s even being challenged. But he’s got most of the establishment GOP in Texas lining up behind him. But a Dewhurst loss will also send a pretty strong signal to moderate Republicans that they can no longer win a primary in Texas.
My take on this race is that it’s hard to out wing nut a wing nut. There’s no way Dewhurst can get to the right of Ted Cruz, and he looks silly trying. Everyone knows Dewhurst is a moderate Republican. This race parallels the Perry/Hutchison race of 2010. Who ever gets to the right first wins. But it will be a low turnout election and can still go either way. I’m not counting Dewhurst out, but this is the first time in a while he’s been seriously challenged since 2002 and it shows.
The Houston Chronicle made an endorsement in the Democratic primary that caused PDiddie at Brains and Eggs to question their integrity. It’s an unsettling account of an editorial board with few apparent scruples and even less journalistic competence.
In a July 19 article headlined, “Romney drives a truck through Obama’s ‘build that’ remark,” CNN.com reported on a new ad from the Mitt Romney campaign that attacked President Obama over his recent remarks about small businesses, without pointing out that the ad dishonestly edited Obama’s comments to portray him as anti-business.
Furthermore, here’s the way CNN described the Romney ad: ” ‘These Hands’ [is] about an owner in charge of a family business who challenges Obama’s claim that his family did not build their business on their own.” Again, CNN did not inform readers that Obama made no such claim in his remarks.
In other words the ad is blatantly, and patently, false. And CNN, as with GOP media outlet Fox News, doesn’t even bring up the fact that it’s a lie.
But during a campaign appearance in Ohio on Wednesday, Mitt Romney misquoted Obama, before agreeing that tax payer-funded programs help all American businesses succeed:
ROMNEY: I know that you recognize a lot of people help you in a business. Perhaps the bank, the investors. There is no question your mom and dad, your school teachers. The people who provide roads, the fire, the police. A lot of people help. But let me ask you this. Did you build your business? If you did, raise your hand. Take that Mr. President! This is what’s happening in this country. These people are entrepreneurs.
As Media Matters points out.
But you won’t hear that played on endless loops on Fox News. Instead what you’ll get is the narrative that Obama is anti-business, a concoction dreamed into existence with the help of deceptive edits of Obama’s comments. In fact, Fox News spent 42 segments and more than two hours of airtime pushing this manufactured controversy.
And now we’ve come full circle with Romney repeating the distortion with the full backing of Fox News. On Thursday, Sean Hannity even promoted the Romney campaign ad, with pollster Frank Luntz crowing, “I’ve been very critical of many of the ads, and that is one of the best ads that you have shown on this show since the beginning of the campaign.”
Now that the echo chamber is working as intended with this even more blatant distortion of Obama’s comments from the Romney campaign, CNN should be pointing out such dishonesty instead of promoting it.
The Obama campaign has really hurt Romney on his tax, secrecy, outsourcing, and foreign money problems. (Sparking the “you people” comment.) So much so that the campaign is stooping to blatantly lying about what the president said. While this kind of stuff is expected from the GOP’s media outlet, Fox News, it’s despicable that CNN is joining in. The fourth estates job is supposed to point out these kind of lies and deception, and bring the truth to the public, not join in with the lies.