South Korea has more reason to fear invasion of enemy tanks than almost any other country in the world. The DMZ has been armed to the teeth since a cease fire was reached in the Korean War, half a century ago (there is no true peace treaty), and no country in the world devotes a larger share of its resources to national defense than North Korea. South Korea's capital city is Seoul is also less than an hour's drive from the border.
Not surprisingly, Soth Korea has, as a result, invested considerable effort into designing a next generation tank of its own. The result, the KNMBT will weigh in at 55 tons. The main battle tank used by American forces, the M1, weighs in at 70 tons, about 27% larger. This extreme weight has made it difficult to get M1 tanks to the field, as only the largest airlift planes (the C-5 and C-17) can carry them and even then only one at a time (stripped down in the case of the C-17), they are too big to pass through some narrow urban streetscapes, and they are often so heavy that civilian road and rail bridges cannot support them.
When a country far more likely to see tank to tank combat than the United States produces a far lighter tank, that is a pretty good indication that the American version is overweight.
26 October 2005
Immune Systems Gone Wild.
This week's Science News (my source is the hard copy) has a couple of notable developments regarding autoimmune diseases, which are diseases that arise when the body's immune system turns on itself.
One concerns Type 1 diabetes which afflicts about a million people in the United States. In this type of diabetes, the immune system's antibodies attack the cells that create insulin in the pancreas. This means that those who suffer from the disease must inject themselves with insulin for the rest of their lives at a cost of $10,000+ per year and even with treatment are at high risk for complications and have a life expectency 15 years shorter than someone who does not suffer from the disease. The story reports that progress is being made, albeit in the early experimental stage, in treating diabetes with the same immune system suppressing drugs that are used on transplant recipients. Short term benefits have been shown, but it has not been proven as a long term treatment and has numerous side effects.
The other concerns anorexia nervosa and bulimia nervosa, the former being an eating disorder associated with simply not eating enough, and the later associated with vomitting food that is eaten. Traditionally, these have been viewed as fundamentally psychological ailments. But, a new study in Sweden shows that they may be physiologically based autoimmune disorders in which the immune system's antibodies attack melanocortin peptides which control appetite and stress responses in the body. The study involved was small, involving only about 100 subjects, but did show statistically significant links between the two diseases and antibodies related to this appetite controlling substance. A better understanding of the cause of these disorders, of course, could help doctors and scientists develop more effective treatments for these diseases.
One concerns Type 1 diabetes which afflicts about a million people in the United States. In this type of diabetes, the immune system's antibodies attack the cells that create insulin in the pancreas. This means that those who suffer from the disease must inject themselves with insulin for the rest of their lives at a cost of $10,000+ per year and even with treatment are at high risk for complications and have a life expectency 15 years shorter than someone who does not suffer from the disease. The story reports that progress is being made, albeit in the early experimental stage, in treating diabetes with the same immune system suppressing drugs that are used on transplant recipients. Short term benefits have been shown, but it has not been proven as a long term treatment and has numerous side effects.
The other concerns anorexia nervosa and bulimia nervosa, the former being an eating disorder associated with simply not eating enough, and the later associated with vomitting food that is eaten. Traditionally, these have been viewed as fundamentally psychological ailments. But, a new study in Sweden shows that they may be physiologically based autoimmune disorders in which the immune system's antibodies attack melanocortin peptides which control appetite and stress responses in the body. The study involved was small, involving only about 100 subjects, but did show statistically significant links between the two diseases and antibodies related to this appetite controlling substance. A better understanding of the cause of these disorders, of course, could help doctors and scientists develop more effective treatments for these diseases.
Yucca Mountain Cost
The projected cost of building the Yucca Mountain high level nuclear waste disposal site is about $5.5 billion. It would hold almost all high level nuclear waste ever produced in the United States, and would be cheaper than current methods of storing nuclear waste in many temporary facilities.
Gold Mining
Gold mining is an environmental nightmare. We need to get the world's banks off the gold standard so that gold to fuel demand for things like wedding rings can come from already mined gold in places like Fort Knox, instead of highly toxic gold mines.
New Nuclear Weapon Design Abandoned.
The United States has abandoned efforts to build a nuclear bunker buster bomb. Analysis by the National Academy of Sciences had shown that it could kill up to a million people far from the site where it was deployed.
Americans Are Still Evolution Idiots.
A recent CBS poll found that 51% of Americans believed that humans were created by God in their present form. Just 15% believe that humans evolved over millions of years without God's help, which is the overwhelming scientific consensus view. An August poll had put the Creationist number at 42%, although the overall trends were similar. The new poll has a 4 percentage point margin of error.
Liberals like to believe that conservatives are basically rational people with whom they differ on a few values. Polls like this one don't encourage that belief.
Americans most likely to believe in only evolution are liberals (36 percent), those who rarely or never attend religious services (25 percent), and those with a college degree or higher (24 percent).
White evangelicals (77 percent), weekly churchgoers (74 percent) and conservatives (64 percent), are mostly likely to say God created humans in their present form.
Liberals like to believe that conservatives are basically rational people with whom they differ on a few values. Polls like this one don't encourage that belief.
Wayne Allard Isn't Loved.
Republican Wayne Allard, Colorado's senior Senator facing an election in 2008, with Congressman Udall from the 2nd Congressional District as his announced opposition, has the third lowest approval rating in the entire United States Senate according to Survey USA. About 44% approve of his performance, while 44% disapprove. Only Mark Dayton of Minnesota (44-46) and Rick Santorum of Pennsylvania (45-48) have lower net approval ratings.
Colorado's junior Senator, Democrat Ken Salazar, has a 58% approve, 34% disapprove rating, slightly better than the national average.
Colorado's junior Senator, Democrat Ken Salazar, has a 58% approve, 34% disapprove rating, slightly better than the national average.
Tax Cuts.
For the most part, I've devoted most of my analysis of potential changes in the tax code to proposals that are either revenue neutral or revenue increasing. This is for the simple and practical reason that both the State of Colorado and the United States Government are in pretty dire financial straits at the moment, and hence the prospect of meaningful tax cuts in the near future look pretty bleak. But, you never know when opportunity will knock, so I'll take a post to sketch out some sensible ways to make tax cuts, should the opportunity arise.
Excise Taxes
* Repeal product based alcohol taxes. Unlike tobacco, alcohol has significant health benefits that mitigate its significant health costs. This tax is also highly regressive. Licensing fees on establishments could remain in place to cover the costs of enforcing what remains of federal alcohol regulation in addition to collecting taxes on alcohol sales (e.g. insuring purity in retail alcohol products sold to the public).
* Repeal the federal phone tax on long distance services. This is regressive and serves no obvious positive policy purpose.
* Repeal excise taxes on bows, arrows and fishing equipment. Unless these excise taxes operate as user's fees for a segregated fund that benefits hunters and fishers particularly, there is no reason to single them out for a special tax.
* Reduce the universal access fee on phone bills. This regressive fee pays to both provide lifeline service to low income phone users, which is reasonable, and to provide subsidized land line phone service in rural areas, which is an unnecessary subsidy. A reduction that would reflect an end to subsidies of rural telephone service would be appropriate.
* Repeal residual FUTA (federal unemployment) taxes. This is usually a flat $54 per employee in states that have their own unemployment insurance systems. The amount collected is both purely regressive and not worth the trouble to collect.
Sales Taxes
* Repeal sales taxes on services provided by regulated public utilities like natural gas, electricity and telephone service. These are regressive, and because utilities are regulated, the public can be assured that the savings will be passed on to consumers.
* Repeal sales taxes on diapers, toilet paper, tampons, sanitary napkins, toothpaste, tooth brushes and other toiletries. This is a particularly regressive part of the sales tax and is just as necessary as grocery store food, which is also sales tax free.
* Repeal sales taxes on fast food. This both poses questions of classification, is regressive, and to the extent that it is more expensive than grocery store food, is more expensive because of the service provided by the establishment and not because of the good content.
* Repeal the documentary tax. This is a very small sales tax in Colorado (IIRC $1 of tax per $10,000 of sales price) on commercial sales of real estate. The complexity involved in calculating the tax and accounting for the proceeds is not justified by the small amounts collected. The cost of recording documents also bears no relationship to the purchase price of the property. If necessary, recording fees can be increased to pay for the change.
* Modify lodging taxes. Often these are a fixed dollar per night amount. A percentage of the cost of lodging would be equitably share the burden of these taxes. Thus, rather than having a $5 a night lodging tax, a 10% tax might be imposed with a $30 a night place collecting $3 in tax, while a $100 a night place collects $10 in tax.
Property Taxes
* Repeal Colorado's property tax on motor vehicles. This is regressive and if we are going to tax transportation, gas taxes, which pay for roads and encourage fuel efficiency are a better tax than motor vehicle property taxes which go into the general fund and do little to impact driving or car purchasing decisions.
* Repeal or increase the exclusion amount applicable to the property tax on personal property (like plant and equipment) used in a business. This hurts small businesses and is administratively complex (requiring appraisals, for example) while producing relatively little revenue.
* Consider a modest homestead exemption for property tax purposes. While this change could discourage municipalities from allowing property to be zoned to permit affordable housing, it would transform Colorado's property tax from a slightly regressive to a slightly progressive one. This has been experimented with in the form of a homestead exemption for older Coloradans.
Income Taxes
* Establish a deduction for rent paid for a primary residence similar to the mortgatge interest deduction. The economic decision on renting v. owning is best made by the marketplace, and the current system unfairly disadvantages renters in high property value areas.
* Establish a deduction for homeowner's insurance (including flood and earthquake insurance). This creates a tax incentive to do something that could reduce the cost of disaster relief should a disaster occur, which is a far better incentive than the mortgage interest deduction which encourages you not to pay off your mortgage, and would involve little additional record keeping, since insurance is usually paid for in one or two payments a year, by check or credit card or through an escrow account. Of course, it also encourages home ownership.
* Establsh a deduction for private mortgage insurance. This is de facto interest in low down payment loans, and should thus be deductible since it is similar to the mortgage interest deduction. It also affects primarily loans of first time buyers thus being particularly discriminating in encouraging home ownership, if that is what you want to do, without providing unnecessary tax benefits to people who would have been home owners anyway. It also involves little record keeping.
* Establish a deduction for automobile insurance. Unlike interest, automobile insurance is something we generally want to encourage people to obtain. This also has a progressive effect and involves little record keeping. One can also think of it as a cost, not of earning income, but of avoiding casualty losses. Casualty losses are deductible, and both homeowner's insurance and car insurance are basically ways to pay for casualty losses on the installment plan in advance, instead of all at once.
* Establish a deduction for sales taxes on car purchases. Most sales tax collections aren't worth the trouble to keep track of, but a car is a rare major purchase for many people and often comprises a significant share of their overall sales tax paid. There is no good reason to distinguish sales taxes from property taxes for purposes of tax deductibility, except for the record keeping difficulties involved in most cases. Tax on tax is to be avoided.
* Make child support payments tax deductible, just as alimony payments are, although this would probably require child support payments to be treated as income. There is no reasoned justification for treating alimony and child support differently for tax purposes. The alimony approach tends to reduce aggregate federal tax collections, while the child support approach tends to increase them.
* Allow a charitable deduction for gifts to beggers with "begger vouchers". Usually, a gift to an individual may not receive a charitable deduction. But, giving to the homeless or vagrants clearly serves a charitable purpose. Vouchers would provide the paper trail needed to confirm that the gift was actually made, something that would otherwise be an accounting nightmare.
* Make the charitable deduction an above the line deduction. Now, only taxpayers who itemize can receive the full benefit of the charitable deduction. This change helps both lower income taxpayers and charities.
* Allow health insurance expenses of the non-self-employed, e.g. retirees or employees of firms that don't provide health insurance, to be deducted. The justification is the same as for the self-employed health insurance deduction.
* Reduce the percentage of AGI threshold for medical expenses. While some threshold reduces the record keeping and calculation burden associated with these expenses, the current threshold requires truly crushing expenses before any deduction is allowed.
* Create a deduction for losses on a personal residence or personal property limited to discharge of indebtedness income. The general rule is that a discharge in indebtedness, such as a lenders write off of a mortgage in a non-recourse state like California, is taxable income unless it comes within some exception to the general rule. Steps short of a true foreclosure, like a fire sale of the residence accompanied by a deal with the lender to forgive the balance of the debt, don't always fall within the exceptions, even when the seller takes a loss on the sale. This deduction would end this problem.
* Create an income tax credit for FICA taxes paid up to a certain level (say $5,000 of FICA taxable income) for both employers and employees. This would encourage employees to hire people and would help low income workers from an otherwise regressive tax that affects only earned income. Similar credits already exist for targetted populations (like welfare to work) under the current tax code with elaborate administrative requirements to qualify.
* Create a $50 tax credit for expenses incurred by foreclosing landlords to put a tenant's possession in storage for at least one month. The biggest harm to tenants from an eviction is often stolen or damaged personal property removed from the premises. Putting property in storage at the landlord's expense for a month would greatly reduce this harm and is a more civilized way to dispose of a tenant's personal property. While the credit goes to the landlord, the benefit is primarily the tenant's.
* Allow any two adults who share a household and consent to file jointly to file using the married filing jointly tax status. This disentangles the definition of marriage for other purposes from the tax benefits to people with unequal incomes of filing jointly.
* End the taxation of Social Security benefits. The maximum benefit is modest, and it greatly simplifies financial planning and tax returns for elderly people.
* Exclude unemployment benefits from income. While there is some reason to tax it, since it replaces income, almost everyone who has lost a job is already taking a massive income cut and needs a break. The revenue effects, moreover, are modest.
* Exclude tips up to $25 a day from income and payroll taxes. Most of this income goes unreported anyway, most of the people receiving these small amounts of tips are low income anyway, and the dollar cap prevents abuse by people in industries which are not traditionally tipped, or in industries where all compensation is customarily through tips (like skycaps). The dollar amount represents roughly the difference between minimum wage for non-tipped employees and minimum wage for tipped employees over an eight hour day.
* Allow taxpayers to take a 15% tax credit for up to $500 of Roth IRA savings a year (maximum benefit $75). This encourages savings at a modest tax cost, and once accounts are in place, people fill find it easier to save for retirement in the future.
* Exclude contingent legal fees from income, rather than treating them as an itemizable deduction subject to limitations.
* Allow drug dealers to deduct the actual costs incurred to make drug profits. Current law taxes drug dealers on their revenues without allowance for their expenses as a punitive measure. This has the effect of creating huge tax debts for even small time drug dealers. If one is going to impose a penalty on drug dealing, don't use the tax system to do it. Of course, this doesn't mean that true profits from illegal drug dealing (likely inferred from gains in wealth in most cases) should go untaxed.
* Create income averaging accounts. These accounts would allow taxpayers to spread income from windfall taxable income like lump sum retirement account distributions, capital gains proceeds, lottery winnings, good farm crops or bonuses deposited as cash into the account in the year earned. Contributions would be tax deductible. Total returns earned in the account would have to be distributed each year and would be taxable, as would be withdrawals of principal from the account. This would keep a windfall in one year from being taxed at artifically high rates unless the funds were actually spent in that year.
* Capital improvement tax credits. Normally, when you make a capital improvement to property (like renovating real estate), you can't take that as an expense, but receive an increase in your basis in a capital asset for capital gains tax purposes that will reduce your capital gains tax bill in the future. With this credit, a person rennovating property subject to capital gains taxes (like investment real estate) could foregoe the basis increase in exchange for a tax credit equal to 15% of the cost of the improvement, essentially taking the tax benefit of the basis improvement in advance.
Gift Taxation
* Create a gift tax exclusion for gifts made to ancestors. The gift and estate tax is designed to tax the passage of wealth to younger generations, not the other way around.
Miscellaneous Taxes and Quasi-Taxes
* End the Medicaid Estate Recovery Program. This program generates little revenue and affects only those who have already been determined to have low incomes and modest assets. Medicaid should be a grant, not a loan.
* Buy out toll road operators' rights to collect tolls on selected roads, converting them into freeways. Once the road has been constructed, a toll is another form of de facto tax on something that is usually free in our society.
* Increase the percentage of lottery ticket revenues that go to prizes. Currently the percentage is usually 50%. But, this basically acts as a tax on the poor and innumerate. If the percentage were increased to say 90%, this de facto regressive tax on lottery players would be reduced, and other forms of gambling, which provide profits to casino or racetrack operators, instead of public revenues or random redistribution of wealth, would likely be greatly suppressed due to their inability to offer similarly favorable odds.
* End head taxes on employees. This often $x per employee tax, typically imposed by employee rich localities, is grossly regressive and discourages employment. A better approach would be to have localities get a share of state income tax revenues (perhaps 0.1% of payrolls) determined through W-2s or some similar method.
Excise Taxes
* Repeal product based alcohol taxes. Unlike tobacco, alcohol has significant health benefits that mitigate its significant health costs. This tax is also highly regressive. Licensing fees on establishments could remain in place to cover the costs of enforcing what remains of federal alcohol regulation in addition to collecting taxes on alcohol sales (e.g. insuring purity in retail alcohol products sold to the public).
* Repeal the federal phone tax on long distance services. This is regressive and serves no obvious positive policy purpose.
* Repeal excise taxes on bows, arrows and fishing equipment. Unless these excise taxes operate as user's fees for a segregated fund that benefits hunters and fishers particularly, there is no reason to single them out for a special tax.
* Reduce the universal access fee on phone bills. This regressive fee pays to both provide lifeline service to low income phone users, which is reasonable, and to provide subsidized land line phone service in rural areas, which is an unnecessary subsidy. A reduction that would reflect an end to subsidies of rural telephone service would be appropriate.
* Repeal residual FUTA (federal unemployment) taxes. This is usually a flat $54 per employee in states that have their own unemployment insurance systems. The amount collected is both purely regressive and not worth the trouble to collect.
Sales Taxes
* Repeal sales taxes on services provided by regulated public utilities like natural gas, electricity and telephone service. These are regressive, and because utilities are regulated, the public can be assured that the savings will be passed on to consumers.
* Repeal sales taxes on diapers, toilet paper, tampons, sanitary napkins, toothpaste, tooth brushes and other toiletries. This is a particularly regressive part of the sales tax and is just as necessary as grocery store food, which is also sales tax free.
* Repeal sales taxes on fast food. This both poses questions of classification, is regressive, and to the extent that it is more expensive than grocery store food, is more expensive because of the service provided by the establishment and not because of the good content.
* Repeal the documentary tax. This is a very small sales tax in Colorado (IIRC $1 of tax per $10,000 of sales price) on commercial sales of real estate. The complexity involved in calculating the tax and accounting for the proceeds is not justified by the small amounts collected. The cost of recording documents also bears no relationship to the purchase price of the property. If necessary, recording fees can be increased to pay for the change.
* Modify lodging taxes. Often these are a fixed dollar per night amount. A percentage of the cost of lodging would be equitably share the burden of these taxes. Thus, rather than having a $5 a night lodging tax, a 10% tax might be imposed with a $30 a night place collecting $3 in tax, while a $100 a night place collects $10 in tax.
Property Taxes
* Repeal Colorado's property tax on motor vehicles. This is regressive and if we are going to tax transportation, gas taxes, which pay for roads and encourage fuel efficiency are a better tax than motor vehicle property taxes which go into the general fund and do little to impact driving or car purchasing decisions.
* Repeal or increase the exclusion amount applicable to the property tax on personal property (like plant and equipment) used in a business. This hurts small businesses and is administratively complex (requiring appraisals, for example) while producing relatively little revenue.
* Consider a modest homestead exemption for property tax purposes. While this change could discourage municipalities from allowing property to be zoned to permit affordable housing, it would transform Colorado's property tax from a slightly regressive to a slightly progressive one. This has been experimented with in the form of a homestead exemption for older Coloradans.
Income Taxes
* Establish a deduction for rent paid for a primary residence similar to the mortgatge interest deduction. The economic decision on renting v. owning is best made by the marketplace, and the current system unfairly disadvantages renters in high property value areas.
* Establish a deduction for homeowner's insurance (including flood and earthquake insurance). This creates a tax incentive to do something that could reduce the cost of disaster relief should a disaster occur, which is a far better incentive than the mortgage interest deduction which encourages you not to pay off your mortgage, and would involve little additional record keeping, since insurance is usually paid for in one or two payments a year, by check or credit card or through an escrow account. Of course, it also encourages home ownership.
* Establsh a deduction for private mortgage insurance. This is de facto interest in low down payment loans, and should thus be deductible since it is similar to the mortgage interest deduction. It also affects primarily loans of first time buyers thus being particularly discriminating in encouraging home ownership, if that is what you want to do, without providing unnecessary tax benefits to people who would have been home owners anyway. It also involves little record keeping.
* Establish a deduction for automobile insurance. Unlike interest, automobile insurance is something we generally want to encourage people to obtain. This also has a progressive effect and involves little record keeping. One can also think of it as a cost, not of earning income, but of avoiding casualty losses. Casualty losses are deductible, and both homeowner's insurance and car insurance are basically ways to pay for casualty losses on the installment plan in advance, instead of all at once.
* Establish a deduction for sales taxes on car purchases. Most sales tax collections aren't worth the trouble to keep track of, but a car is a rare major purchase for many people and often comprises a significant share of their overall sales tax paid. There is no good reason to distinguish sales taxes from property taxes for purposes of tax deductibility, except for the record keeping difficulties involved in most cases. Tax on tax is to be avoided.
* Make child support payments tax deductible, just as alimony payments are, although this would probably require child support payments to be treated as income. There is no reasoned justification for treating alimony and child support differently for tax purposes. The alimony approach tends to reduce aggregate federal tax collections, while the child support approach tends to increase them.
* Allow a charitable deduction for gifts to beggers with "begger vouchers". Usually, a gift to an individual may not receive a charitable deduction. But, giving to the homeless or vagrants clearly serves a charitable purpose. Vouchers would provide the paper trail needed to confirm that the gift was actually made, something that would otherwise be an accounting nightmare.
* Make the charitable deduction an above the line deduction. Now, only taxpayers who itemize can receive the full benefit of the charitable deduction. This change helps both lower income taxpayers and charities.
* Allow health insurance expenses of the non-self-employed, e.g. retirees or employees of firms that don't provide health insurance, to be deducted. The justification is the same as for the self-employed health insurance deduction.
* Reduce the percentage of AGI threshold for medical expenses. While some threshold reduces the record keeping and calculation burden associated with these expenses, the current threshold requires truly crushing expenses before any deduction is allowed.
* Create a deduction for losses on a personal residence or personal property limited to discharge of indebtedness income. The general rule is that a discharge in indebtedness, such as a lenders write off of a mortgage in a non-recourse state like California, is taxable income unless it comes within some exception to the general rule. Steps short of a true foreclosure, like a fire sale of the residence accompanied by a deal with the lender to forgive the balance of the debt, don't always fall within the exceptions, even when the seller takes a loss on the sale. This deduction would end this problem.
* Create an income tax credit for FICA taxes paid up to a certain level (say $5,000 of FICA taxable income) for both employers and employees. This would encourage employees to hire people and would help low income workers from an otherwise regressive tax that affects only earned income. Similar credits already exist for targetted populations (like welfare to work) under the current tax code with elaborate administrative requirements to qualify.
* Create a $50 tax credit for expenses incurred by foreclosing landlords to put a tenant's possession in storage for at least one month. The biggest harm to tenants from an eviction is often stolen or damaged personal property removed from the premises. Putting property in storage at the landlord's expense for a month would greatly reduce this harm and is a more civilized way to dispose of a tenant's personal property. While the credit goes to the landlord, the benefit is primarily the tenant's.
* Allow any two adults who share a household and consent to file jointly to file using the married filing jointly tax status. This disentangles the definition of marriage for other purposes from the tax benefits to people with unequal incomes of filing jointly.
* End the taxation of Social Security benefits. The maximum benefit is modest, and it greatly simplifies financial planning and tax returns for elderly people.
* Exclude unemployment benefits from income. While there is some reason to tax it, since it replaces income, almost everyone who has lost a job is already taking a massive income cut and needs a break. The revenue effects, moreover, are modest.
* Exclude tips up to $25 a day from income and payroll taxes. Most of this income goes unreported anyway, most of the people receiving these small amounts of tips are low income anyway, and the dollar cap prevents abuse by people in industries which are not traditionally tipped, or in industries where all compensation is customarily through tips (like skycaps). The dollar amount represents roughly the difference between minimum wage for non-tipped employees and minimum wage for tipped employees over an eight hour day.
* Allow taxpayers to take a 15% tax credit for up to $500 of Roth IRA savings a year (maximum benefit $75). This encourages savings at a modest tax cost, and once accounts are in place, people fill find it easier to save for retirement in the future.
* Exclude contingent legal fees from income, rather than treating them as an itemizable deduction subject to limitations.
* Allow drug dealers to deduct the actual costs incurred to make drug profits. Current law taxes drug dealers on their revenues without allowance for their expenses as a punitive measure. This has the effect of creating huge tax debts for even small time drug dealers. If one is going to impose a penalty on drug dealing, don't use the tax system to do it. Of course, this doesn't mean that true profits from illegal drug dealing (likely inferred from gains in wealth in most cases) should go untaxed.
* Create income averaging accounts. These accounts would allow taxpayers to spread income from windfall taxable income like lump sum retirement account distributions, capital gains proceeds, lottery winnings, good farm crops or bonuses deposited as cash into the account in the year earned. Contributions would be tax deductible. Total returns earned in the account would have to be distributed each year and would be taxable, as would be withdrawals of principal from the account. This would keep a windfall in one year from being taxed at artifically high rates unless the funds were actually spent in that year.
* Capital improvement tax credits. Normally, when you make a capital improvement to property (like renovating real estate), you can't take that as an expense, but receive an increase in your basis in a capital asset for capital gains tax purposes that will reduce your capital gains tax bill in the future. With this credit, a person rennovating property subject to capital gains taxes (like investment real estate) could foregoe the basis increase in exchange for a tax credit equal to 15% of the cost of the improvement, essentially taking the tax benefit of the basis improvement in advance.
Gift Taxation
* Create a gift tax exclusion for gifts made to ancestors. The gift and estate tax is designed to tax the passage of wealth to younger generations, not the other way around.
Miscellaneous Taxes and Quasi-Taxes
* End the Medicaid Estate Recovery Program. This program generates little revenue and affects only those who have already been determined to have low incomes and modest assets. Medicaid should be a grant, not a loan.
* Buy out toll road operators' rights to collect tolls on selected roads, converting them into freeways. Once the road has been constructed, a toll is another form of de facto tax on something that is usually free in our society.
* Increase the percentage of lottery ticket revenues that go to prizes. Currently the percentage is usually 50%. But, this basically acts as a tax on the poor and innumerate. If the percentage were increased to say 90%, this de facto regressive tax on lottery players would be reduced, and other forms of gambling, which provide profits to casino or racetrack operators, instead of public revenues or random redistribution of wealth, would likely be greatly suppressed due to their inability to offer similarly favorable odds.
* End head taxes on employees. This often $x per employee tax, typically imposed by employee rich localities, is grossly regressive and discourages employment. A better approach would be to have localities get a share of state income tax revenues (perhaps 0.1% of payrolls) determined through W-2s or some similar method.
25 October 2005
Please Excuse Our Mess.
I'll be tinkering with various hacks and presentation issues over the next couple of days. The site may briefly look bad or even briefly go off line. Everything should return to normal shortly, but don't be surprised if the site looks a little odd or different when you visit.
Iraq Constitution Referendum Results
UPDATE: Better Map here.
From CNN:
A map showing the provinces of Iraq can be found here. Roughly speaking, the four provinces where support for the referendum on the Constitution was weakest make up the central band of provinces of Iraq stretching from its Western border with Syria to its Eastern border with Iran. To the North is mostly Iraqi Kurdistan (a map showing its contours can be found here). To the South are the geographically tiny province of Baghdad (which is likely also fairly divided) and the nine predominantly Shi'ite Southeastern provinces likely to make up an autonomous region of Sumer.
There is little doubt that the parliamentary elections will go forward and that any challenges to the validity of the result within "proper channels" will fail. The result is basically the 80-20 solution that diplomats have long talked about. The 80% of the country not made up of Sunni Arabs does appear to genuinely support, by a large majority, the new Iraqi Constitution, although low Sunni turnout and some amount of pressure to vote in favor of the constitution in less than perfectly free and fair election probably means that this support is less unanimous that it might seem.
It also seems that there is little to get in the way of the creation of a largely autonomous Kurdistan in the North, and a largely autonomous Shi'ite Sumer in the South following this election, pursuant to the terms of the new Constitution. One could easily imagine the new government asking coalition forces to largely withdraw from these autonomous areas, even if it feels it needs coalition support to continue to rule elsewhere, a request the coalition might be eager to comply with, given how unpopular the Iraq war is in the United States and Britain, and how strained the United States armed forces are for personnel as a result of this conflict. Any such partial withdrawal would likely be disproportionately British, since the British presence is predominantly in the Shi'ite South.
Likewise, there is little doubt that the leading Shi'ite and Kurdish parties will, following parliamentary elections, be able to shut out Sunni Arab participation in any ruling coalition in the country if the wish to do so. I suspect that many Sunni Arabs (although probably not as many as in the election that produced the body which drafted the constitution just adopted) will choose not to participate in the December 15 elections as they do not view the government it will create as legitimate.
It furthermore seems likely that the central government will be even acknowledged as a legitimate government in Sunni Arab dominated provinces like Anbar and Salaheddin only by force of arms, and that the insurgency is likely to be remain vigorous in provinces like Ninevah and Diyala, where the people are deeply divided over whether there should even be an Iraqi Constitution along the lines adopted.
From CNN:
Authorities with the commission said 9.85 million people voted in the referendum, about 63 percent of registered voters. More than 78 percent of voters backed the constitution, officials said. . . . While passage required a simple majority, there was one obstacle the measure faced -- if two-thirds of the voters in at least three of 18 provinces had rejected it, the draft would have failed. . . .
Anbar overwhelmingly voted against the document, with a "no" vote of 97 percent. In Salaheddin province, 82 percent rejected the charter.
On Monday, election officials said the vote count from the northern province of Nineveh would help determine the outcome. There was a "no" vote in Nineveh, but it was 55 percent.
In Diyala province, which has a slight Sunni Arab majority, 51 percent of voters said "yes."
When questioned about extreme results, including the 99 percent "yes" vote in one Kurdish province, electoral officials said U.N. experts and Iraqi teams verified the results. . . .
New parliamentary elections are set for December 15.
A map showing the provinces of Iraq can be found here. Roughly speaking, the four provinces where support for the referendum on the Constitution was weakest make up the central band of provinces of Iraq stretching from its Western border with Syria to its Eastern border with Iran. To the North is mostly Iraqi Kurdistan (a map showing its contours can be found here). To the South are the geographically tiny province of Baghdad (which is likely also fairly divided) and the nine predominantly Shi'ite Southeastern provinces likely to make up an autonomous region of Sumer.
There is little doubt that the parliamentary elections will go forward and that any challenges to the validity of the result within "proper channels" will fail. The result is basically the 80-20 solution that diplomats have long talked about. The 80% of the country not made up of Sunni Arabs does appear to genuinely support, by a large majority, the new Iraqi Constitution, although low Sunni turnout and some amount of pressure to vote in favor of the constitution in less than perfectly free and fair election probably means that this support is less unanimous that it might seem.
It also seems that there is little to get in the way of the creation of a largely autonomous Kurdistan in the North, and a largely autonomous Shi'ite Sumer in the South following this election, pursuant to the terms of the new Constitution. One could easily imagine the new government asking coalition forces to largely withdraw from these autonomous areas, even if it feels it needs coalition support to continue to rule elsewhere, a request the coalition might be eager to comply with, given how unpopular the Iraq war is in the United States and Britain, and how strained the United States armed forces are for personnel as a result of this conflict. Any such partial withdrawal would likely be disproportionately British, since the British presence is predominantly in the Shi'ite South.
Likewise, there is little doubt that the leading Shi'ite and Kurdish parties will, following parliamentary elections, be able to shut out Sunni Arab participation in any ruling coalition in the country if the wish to do so. I suspect that many Sunni Arabs (although probably not as many as in the election that produced the body which drafted the constitution just adopted) will choose not to participate in the December 15 elections as they do not view the government it will create as legitimate.
It furthermore seems likely that the central government will be even acknowledged as a legitimate government in Sunni Arab dominated provinces like Anbar and Salaheddin only by force of arms, and that the insurgency is likely to be remain vigorous in provinces like Ninevah and Diyala, where the people are deeply divided over whether there should even be an Iraqi Constitution along the lines adopted.
Death Toll in Iraq.
The United States military death toll in Iraq is 2,000.
The number of civilians killed in Iraq in war related incidents since the Iraq War began is estimated at from 26,690 to 30,051. These civilian casulties include (via Wikipedia):
The breakdown of order in Iraq that has followed the U.S. led invasion and occupation of the country has also resulted in an increased rate of not clearly political criminal homicides in Iraq (via the Wikipedia link above):
Estimates of the number of Iraqi military casulties during major combat operations (the 6 weeks of "major combat" in March–April 2003) during the Iraq War varies significantly (via Wikipedia):
The number of Iraqi soldiers and police allied with the U.S. led coalition in Iraq is estimated (also via the same Wikipedia entry) at:
The number of Iraqi insurgents (likely not all part of a single organization) killed to date in the conflict is not known with any accuracy. It is safe to assume from various new reports of battles with insurgents, in which the insurgents very frequently suffer more casualties than the U.S. troops whom they target, that this number is, at least, in the thousands, if not the tens of thousands.
The number of people who are not coalition military personnel who have been wounded in this conflict is not known. It very likely greatly exceeds the number killed.
My conservative estimate, based on the information above, is that the total number of people who have died as a result, directly, or indirectly but clearly as a result of the conflict, exceeds 48,000. My conservative estimate of the total number of people seriously wounded in this conflict is that it exceeds 100,000. I believe that it is appropriate to consider, when weighing the cost of the Iraq War, not only U.S. military casualties, but the number of dead and wounded from all parties combined in this conflict.
Since the U.S.-led invasion in March 2003, more than 15,000 American service members have been wounded in the conflict, according to the Defense Department. According to CNN's tally, 2,194 coalition troops have died in the war.
The number of civilians killed in Iraq in war related incidents since the Iraq War began is estimated at from 26,690 to 30,051. These civilian casulties include (via Wikipedia):
Many non-combatants from both coalition and non-coalition countries have also been killed or wounded, including more than 40 journalists and more than 150 international aid personnel and foreign civilians.
Some of the 18-20,000 contractors and armed guards in Iraq, many of them working for the U.S. Department of Defense, have also died. As of October 9, 2005, some 273 foreign contractors are known to have been killed. These include security contractors, truck drivers, construction workers, and businessmen. The contractors came from the USA, European coalition members, and non coalition countries like South Africa and Germany. However, the nation with the largest number of contractor deaths is the United States, with at least 105 killed.
The breakdown of order in Iraq that has followed the U.S. led invasion and occupation of the country has also resulted in an increased rate of not clearly political criminal homicides in Iraq (via the Wikipedia link above):
In 2004, the Associated Press completed a survey [25] of the morgues in Baghdad and surrounding provinces, to tally violent deaths since President Bush declared an end to major combat operations. In Baghdad alone, they counted 4,279 such deaths in a city of 5.6 million; these deaths generally do not include combatants, because they are typically not brought to morgues. This death rate translates to 76 killings per 100,000 people, compared to 39 in crime-ridden Bogotá, Colombia, 7.5 in New York City, 3.0 in Baghdad itself in 2002 (the year before the war), and the international average rate of 5.5.
Morgues surveyed in other parts of Iraq also reported large increases in the homicide rate. For example, the rate in the province of Karbala, south of Baghdad, rose from an average of one homicide per month in 2002 to an average of 55 per month in the year following the invasion; in Tikrit, north of Baghdad, where there were no homicides in 2002, the rate had grown to an average of 17 per month; in the northern province of Kirkuk, the rate had increased from 3 per month in 2002 to 34 per month in the survey period.
Estimates of the number of Iraqi military casulties during major combat operations (the 6 weeks of "major combat" in March–April 2003) during the Iraq War varies significantly (via Wikipedia):
30,000 (estimate by General Tommy Franks)
6,119 to 15,925 (from a compilation of incident reports)
4,895 to 6,370 (one study's estimate)
13,500 to 45,000 (one journalist's estimate)
The number of Iraqi soldiers and police allied with the U.S. led coalition in Iraq is estimated (also via the same Wikipedia entry) at:
Iraqi allied soldiers: number unknown. At least 2,180.
750 Iraqi policemen (according to a senior US official as of 6 October 2004
The number of Iraqi insurgents (likely not all part of a single organization) killed to date in the conflict is not known with any accuracy. It is safe to assume from various new reports of battles with insurgents, in which the insurgents very frequently suffer more casualties than the U.S. troops whom they target, that this number is, at least, in the thousands, if not the tens of thousands.
The number of people who are not coalition military personnel who have been wounded in this conflict is not known. It very likely greatly exceeds the number killed.
My conservative estimate, based on the information above, is that the total number of people who have died as a result, directly, or indirectly but clearly as a result of the conflict, exceeds 48,000. My conservative estimate of the total number of people seriously wounded in this conflict is that it exceeds 100,000. I believe that it is appropriate to consider, when weighing the cost of the Iraq War, not only U.S. military casualties, but the number of dead and wounded from all parties combined in this conflict.
Divided Government
Julie O. of They Get Letters, noted in response to my post on corruption that:
This is a good point and one that deserves more analysis a mere comment in response to consider. You see, few people realize just how divided our government already is, and this fact has been critical in providing damage control during the Bush Administration.
As of 2002, the last year for which I have good figures easily at hand, there were about 22.8 million governmental employees, military and civilian combined, in the United States. Only a small fraction of them report to the President.
About 18.6 million of those employees worked for state and local government, (about 82% of the total). More than 37% of the civilians employed by the United States government also do not report to the President, because they work for Congress, for the Judiciary, for the Postal Service, or as one of the roughly 182 thousand other employees of independent agencies (this is really somewhat more complex, because some independent agencies like the EPA and NASA report pretty directly to the President, while other agencies within the Executive Branch, most notably the FBI have considerable independence from the President who cannot, for example, fire the FBI director without good cause). Thus, only about 11% of governmental employees in the United States report directly to the President and about 46% of those are military personnel.
Only 9,051 people who work for the United States government in the executive branch are political appointees. A significant share of these appointees, moreover, are to insignificant posts like the Barry Goldwater Scholarship and Excellence in Education Foundation, or the United States Holocaust Memorial Council. There are, for example, only eight political appointees in the Central Intelligence Agency, widely believed to have about 30,000 employees. Everybody else in the government is either a merit system employee or hired by someone who is a merit system employee. No bid contracts are the exception, rather than the norm.
The division that exists in our government has practical effects.
Within the military, political appointees rarely trouble themselves with appointments below the rank of General, and almost always make appointments to vacancies from the pool of candidates in the rank below the one for which an appointment is to be made. Brigadier General and Vice Admiral positions are not filled by outside candidates or from the ranks of junior officers. This seriously limits the ability of politicans to shape the ranks of the military brass. The Posse Comitatus Act, currently under attack in the wake of a failure to sufficiently use military assets in the wake of Hurricane Katrina, despite the fact that the law actually did permit them to be used, further limits the usefulness of the military in carrying out a domestic political agenda.
Even a Congress of the same party is not a blank check. Even with his own party allegedly in control, the President was forced to make a recess appointment of John Bolton as United Nations Ambassador. There is doubt on the Hill right now about whether Bush has the votes to approve his U.S. Supreme Court nominee Harriet Miers, due to opposition from within his own party. The President's Social Security reform package is dead, despite months of the President actively pushing for its passage in meetings of pre-screened supporters around the country. The President probably couldn't enact a draft at this point if he wanted to do so, and is have a hard time preventing a torture ban supported on the Senate floor by 90 out of 99 Senators voting from being passed by Congress.
The fate of the Bush "enemy combatant" doctrine in the Courts has still not been resolved and is far from a sure thing. The enemy combatant cases decisions last made by the U.S. Supreme Court were certainly not a complete win for the administration and have opened up further litigation. Certainly, the Justice Department does not win anything close to all of the time in the federal courts, although it does have a good track record.
Tom DeLay was able to squelch a House Ethics Committee investigation of his wrongdoing in Texas, but he didn't have the political clout to repeal the rule that has forced him to resign from his leadership post now that he is facing indictment, and it is notable that Ronnie Earle, the District Attorney who is pressing charges against him, is an elected state official who reports to neither the President, nor the Governor of Texas, nor county officials in his jurisdiction.
Wall Street corruption had to contend with New York State Attorney General Eliot Spitzer, as well as the Securities and Exchange Commission (itself an independent agency that does not report to the President). Even national corporate giants like Merrill Lynch can be forced to pay billions by state and local officials.
There is real reason to doubt that Bill Frist, the leader of the Republicans in the Senate, would be under investigation right now for insider trading, were it not for the fact that the Securities and Exchange Commission is an independent agency.
And, a mention of officials that the President does not control would not be complete without including the independent counsel, Patrick Fitzgerald. While Fitzgerald would normally report directly to the President as a U.S. Attorney, he has been permitted, pursuant to law, to operate independently while investigating top leaders in the President's administration. He has apparently done so with vigor, despite the fact that both he and most of the men and women he is investigating are Republicans. While an individual's personal integrity in the face of political pressures to the contrary is not always a reliable way to insure the independence necessary to effectively provide the benefits of a divided government, it does surface on rare occassions.
State legislatures can stymie federal efforts as well. The biggest federal education initative of the Bush Presidency is the No Child Left Behind Act. Yet, which state, of all states, was one of the first to reject funding under the act in exchange for being free of its mandates? Utah, one of only states in the nation where Bush still have positive approval ratings. At least fifteen other states are considering following suit.
This pattern is repeated at the state level. Governor Owens learned to his own chagrin earlier in his time as Governor, that he can't order the State Treasurer or State Attorney General to toe his party line. He now faces a legislature that disagrees with him, and unlike the President, he cannot chose a political crony to be a judicial appointee. He has to make his judicial picks from lists provided to him from a blue ribbon commission. Redistricting for state political office in Colorado is handled by a commission not controlled by either the legislature or the Governor completely and subject to significant restrictions on the options it is permitted to consider. Many important decisions in the state, such as land use decisions and the day to day mangement of the public schools, are reserved to counties and other local governments. Like almost every state, Colorado does not permit Governors and legislators to run signficant deficits without voter approval. Administrative policy making regarding education is largely restricted to an elected school board, and the state's flagship University likewise reports to an independently elected board of regents. And, Colorado, like the federal government, has its fair share of independent agencies.
Going down even one level further, county government outside the state's two cities and counties (Broomfield and Denver) is so hopelessly divided it is a wonder that counties are governable at all. And, the recall power in Colorado (which unlike the intiaitive and referendum process, I do support at the local government level), has been used repeatedly to remove elected officials (most recently District Attorney Truden in Aspen who faces a recall vote she is almost sure to lose in December, and before that Tracy Baker, the corrupt clerk and recorder in Arapahoe County) from office.
There is reason to question whether Presidents and Governors, in some respects, have too little power, but in moments when we face corrupt leadership, or in times past when we as a nation have faced Congresses that have been unable to reach agreement on appropriations bills, forcing much of the federal government to shut down, the divided nature of our government has come in handy. Without a doubt that is one reason that the United States is not in worse shape right now than it otherwise might be.
One way to keep government somewhat honest (or at least curb the corruption) is to keep it divided. This one-party control of all branches is really mucking everything up. But we can't control the electorate.
This is a good point and one that deserves more analysis a mere comment in response to consider. You see, few people realize just how divided our government already is, and this fact has been critical in providing damage control during the Bush Administration.
As of 2002, the last year for which I have good figures easily at hand, there were about 22.8 million governmental employees, military and civilian combined, in the United States. Only a small fraction of them report to the President.
About 18.6 million of those employees worked for state and local government, (about 82% of the total). More than 37% of the civilians employed by the United States government also do not report to the President, because they work for Congress, for the Judiciary, for the Postal Service, or as one of the roughly 182 thousand other employees of independent agencies (this is really somewhat more complex, because some independent agencies like the EPA and NASA report pretty directly to the President, while other agencies within the Executive Branch, most notably the FBI have considerable independence from the President who cannot, for example, fire the FBI director without good cause). Thus, only about 11% of governmental employees in the United States report directly to the President and about 46% of those are military personnel.
Only 9,051 people who work for the United States government in the executive branch are political appointees. A significant share of these appointees, moreover, are to insignificant posts like the Barry Goldwater Scholarship and Excellence in Education Foundation, or the United States Holocaust Memorial Council. There are, for example, only eight political appointees in the Central Intelligence Agency, widely believed to have about 30,000 employees. Everybody else in the government is either a merit system employee or hired by someone who is a merit system employee. No bid contracts are the exception, rather than the norm.
The division that exists in our government has practical effects.
Within the military, political appointees rarely trouble themselves with appointments below the rank of General, and almost always make appointments to vacancies from the pool of candidates in the rank below the one for which an appointment is to be made. Brigadier General and Vice Admiral positions are not filled by outside candidates or from the ranks of junior officers. This seriously limits the ability of politicans to shape the ranks of the military brass. The Posse Comitatus Act, currently under attack in the wake of a failure to sufficiently use military assets in the wake of Hurricane Katrina, despite the fact that the law actually did permit them to be used, further limits the usefulness of the military in carrying out a domestic political agenda.
Even a Congress of the same party is not a blank check. Even with his own party allegedly in control, the President was forced to make a recess appointment of John Bolton as United Nations Ambassador. There is doubt on the Hill right now about whether Bush has the votes to approve his U.S. Supreme Court nominee Harriet Miers, due to opposition from within his own party. The President's Social Security reform package is dead, despite months of the President actively pushing for its passage in meetings of pre-screened supporters around the country. The President probably couldn't enact a draft at this point if he wanted to do so, and is have a hard time preventing a torture ban supported on the Senate floor by 90 out of 99 Senators voting from being passed by Congress.
The fate of the Bush "enemy combatant" doctrine in the Courts has still not been resolved and is far from a sure thing. The enemy combatant cases decisions last made by the U.S. Supreme Court were certainly not a complete win for the administration and have opened up further litigation. Certainly, the Justice Department does not win anything close to all of the time in the federal courts, although it does have a good track record.
Tom DeLay was able to squelch a House Ethics Committee investigation of his wrongdoing in Texas, but he didn't have the political clout to repeal the rule that has forced him to resign from his leadership post now that he is facing indictment, and it is notable that Ronnie Earle, the District Attorney who is pressing charges against him, is an elected state official who reports to neither the President, nor the Governor of Texas, nor county officials in his jurisdiction.
Wall Street corruption had to contend with New York State Attorney General Eliot Spitzer, as well as the Securities and Exchange Commission (itself an independent agency that does not report to the President). Even national corporate giants like Merrill Lynch can be forced to pay billions by state and local officials.
There is real reason to doubt that Bill Frist, the leader of the Republicans in the Senate, would be under investigation right now for insider trading, were it not for the fact that the Securities and Exchange Commission is an independent agency.
And, a mention of officials that the President does not control would not be complete without including the independent counsel, Patrick Fitzgerald. While Fitzgerald would normally report directly to the President as a U.S. Attorney, he has been permitted, pursuant to law, to operate independently while investigating top leaders in the President's administration. He has apparently done so with vigor, despite the fact that both he and most of the men and women he is investigating are Republicans. While an individual's personal integrity in the face of political pressures to the contrary is not always a reliable way to insure the independence necessary to effectively provide the benefits of a divided government, it does surface on rare occassions.
State legislatures can stymie federal efforts as well. The biggest federal education initative of the Bush Presidency is the No Child Left Behind Act. Yet, which state, of all states, was one of the first to reject funding under the act in exchange for being free of its mandates? Utah, one of only states in the nation where Bush still have positive approval ratings. At least fifteen other states are considering following suit.
This pattern is repeated at the state level. Governor Owens learned to his own chagrin earlier in his time as Governor, that he can't order the State Treasurer or State Attorney General to toe his party line. He now faces a legislature that disagrees with him, and unlike the President, he cannot chose a political crony to be a judicial appointee. He has to make his judicial picks from lists provided to him from a blue ribbon commission. Redistricting for state political office in Colorado is handled by a commission not controlled by either the legislature or the Governor completely and subject to significant restrictions on the options it is permitted to consider. Many important decisions in the state, such as land use decisions and the day to day mangement of the public schools, are reserved to counties and other local governments. Like almost every state, Colorado does not permit Governors and legislators to run signficant deficits without voter approval. Administrative policy making regarding education is largely restricted to an elected school board, and the state's flagship University likewise reports to an independently elected board of regents. And, Colorado, like the federal government, has its fair share of independent agencies.
Going down even one level further, county government outside the state's two cities and counties (Broomfield and Denver) is so hopelessly divided it is a wonder that counties are governable at all. And, the recall power in Colorado (which unlike the intiaitive and referendum process, I do support at the local government level), has been used repeatedly to remove elected officials (most recently District Attorney Truden in Aspen who faces a recall vote she is almost sure to lose in December, and before that Tracy Baker, the corrupt clerk and recorder in Arapahoe County) from office.
There is reason to question whether Presidents and Governors, in some respects, have too little power, but in moments when we face corrupt leadership, or in times past when we as a nation have faced Congresses that have been unable to reach agreement on appropriations bills, forcing much of the federal government to shut down, the divided nature of our government has come in handy. Without a doubt that is one reason that the United States is not in worse shape right now than it otherwise might be.
One More Reason To Hate Cheney.
Crown Prince Dick Cheney was in Denver yesterday afternoon to campaign for Rick O'Donnell in the 7th Congressional District. This (in combination with an accident near I-70) wraught havoc on traffic on I-25 yesterday afternoon. The result, a commute that was at least a half an hour longer than usual causing my wife to be late to our daughter's first parent-teacher conference of the year. Grrr. . . .
Some accompanying observations:
Such public support for a successor (Bill Owens, House Speaker Dennis Hastert and incumbent Bob Beauprez himself have also all backed O'Donnell's candidacy) makes it nearly impossible for Beauprez to back out of the Governors race in 2006, insures that the 7th CD will be an open race, and squelches any hope Mark Paschall, Jefferson County's maverick Republican county treasurer, has of winning in a Republican primary.
Dick Cheney is not out of the woods in Plamegate yet. His top aide is widely expected to be indicted this week. A Marine assigned to his office engaged in espionage for the Phillipines from Cheney's office. The fact that Cheney provided information that was later leaked to the press by Scooter Libby about a CIA covert agent was not itself culpable -- government employees with top security clearances are allowed to talk to each other about such things. But, if Cheney himself intentionally used Libby to leak the information, or if he was involved in the coverup, an endorsement from Cheney could do more harm than good. I would hope that Democratic operatives have saved some pictures of Cheney with O'Donnell just in case they become useful.
While no one Democrat in the race has raised more funds than O'Donnell and the Cheney visit will certainly help his war chest, as of the end of September, the Democrats combined had outraised O'Donnell, the only Republican officially in the race at this point. This is not the kind of financial dominance that Republicans have grown to rely upon to win races.
Finally, it is notable how few politicans in the United States do have traffic snarling ability. Senators Ken Salazar and Wayne Allard don't, and neither does Governor Bill Owens. Even visits from cabinet secretaries, who are in the line of succession, don't have that effect. Bush, Cheney and foreign heads of state are just about the only people in the nation capable doing so. Unfortunately, they seem to visit Colorado quite often. Colorado doesn't have a lot of purple fingers, but it is a purple state.
Some accompanying observations:
Such public support for a successor (Bill Owens, House Speaker Dennis Hastert and incumbent Bob Beauprez himself have also all backed O'Donnell's candidacy) makes it nearly impossible for Beauprez to back out of the Governors race in 2006, insures that the 7th CD will be an open race, and squelches any hope Mark Paschall, Jefferson County's maverick Republican county treasurer, has of winning in a Republican primary.
Dick Cheney is not out of the woods in Plamegate yet. His top aide is widely expected to be indicted this week. A Marine assigned to his office engaged in espionage for the Phillipines from Cheney's office. The fact that Cheney provided information that was later leaked to the press by Scooter Libby about a CIA covert agent was not itself culpable -- government employees with top security clearances are allowed to talk to each other about such things. But, if Cheney himself intentionally used Libby to leak the information, or if he was involved in the coverup, an endorsement from Cheney could do more harm than good. I would hope that Democratic operatives have saved some pictures of Cheney with O'Donnell just in case they become useful.
While no one Democrat in the race has raised more funds than O'Donnell and the Cheney visit will certainly help his war chest, as of the end of September, the Democrats combined had outraised O'Donnell, the only Republican officially in the race at this point. This is not the kind of financial dominance that Republicans have grown to rely upon to win races.
As of the last campaign filings, O'Donnell had raised $420,000. Two Democratic candidates, former state Sen. Ed Perlmutter and former state Rep. Peggy Lamm, have collected $316,935 and $182,011, respectively.
Finally, it is notable how few politicans in the United States do have traffic snarling ability. Senators Ken Salazar and Wayne Allard don't, and neither does Governor Bill Owens. Even visits from cabinet secretaries, who are in the line of succession, don't have that effect. Bush, Cheney and foreign heads of state are just about the only people in the nation capable doing so. Unfortunately, they seem to visit Colorado quite often. Colorado doesn't have a lot of purple fingers, but it is a purple state.
Support For Local TABOR Limits Thin.
A Denver Post editorial reminds us that the City of Denver is asking for relief from TABOR's spending limitations (although not its limitations on voter approval of tax increases). It isn't alone in asking for this, and most of those localities that have asked for it have gotten it.
Most people voted for TABOR because they were concerned about legislators increasing tax rates, not because they felt that there was anything wrong with allowing government to use the money it collects from existing taxes. This is particularly true at the local level. Anything so routinely overridden by voters shouldn't be part of the state constitution.
A progressive backed proposal to replace TABOR spending limits at all levels of government with mandatory rainy day funds during period of increasing revenues would both remove a counterproductive limitation on ordinary government operations (rejecting the "drown it in a bathtub" philosophy) and position Democrats as the party of fiscal responsibility, a key issue for many suburban swing voters.
Voters across Colorado have routinely approved de-Brucing measures for their municipalities and special districts. About 88 percent have been approved since the mid-1990s.
Most people voted for TABOR because they were concerned about legislators increasing tax rates, not because they felt that there was anything wrong with allowing government to use the money it collects from existing taxes. This is particularly true at the local level. Anything so routinely overridden by voters shouldn't be part of the state constitution.
A progressive backed proposal to replace TABOR spending limits at all levels of government with mandatory rainy day funds during period of increasing revenues would both remove a counterproductive limitation on ordinary government operations (rejecting the "drown it in a bathtub" philosophy) and position Democrats as the party of fiscal responsibility, a key issue for many suburban swing voters.
24 October 2005
Arrogant Pharmacists Hurt Rape Victims.
Emergency contraception, which is a glorified birth control pill, effectively stops rape victims from getting pregnant. But, only if a perscription is obtained and the drug is taken within 72 hours. Moreover, the longer you wait, the less effective the drug. Yet, an Arizona pharmacist denied a rape victim an opportunity to fill the prescription she obtained (which she could not find anywhere else), due to his personal beliefs, putting the woman at risk of being impregnated by her rapist.
The notion that the pharmacists can impose his views on a customer and force her to be impregnanted by a rapist is abominable. He should be fired and his license should be yanked immediately. There is no place for that kind of abusive conduct by a medical professional in our society.
Via Talk Left.
The notion that the pharmacists can impose his views on a customer and force her to be impregnanted by a rapist is abominable. He should be fired and his license should be yanked immediately. There is no place for that kind of abusive conduct by a medical professional in our society.
Via Talk Left.
Texas Wind Farm Underway.
Wind Energy Systems Technologies, a Lousiana, is entering into a 30 year lease of an 11,000 acre tract off the Texas Gulf Coast near Galveston amidst oil and gas platforms visible from beachers for a wind farm. It will pay $10,000 a year until it is up and running and then will pay the state a royalty.
Unlike the two other projects being considered for off shore wind farms, this one is not subject to Army Corps of Engineers approval since it is in a Texas controlled part of the coast. No serious delays are anticipated.
When complete, the Texas project will represent about 0.2% of the state's total electricity production.
Construction is expected to be completed within five years at a cost of about $300 million. W.E.S.T. plans to construct about 50 wind turbines, expected to produce 150 megawatts of electricity, enough to power about 40,000 homes.
Unlike the two other projects being considered for off shore wind farms, this one is not subject to Army Corps of Engineers approval since it is in a Texas controlled part of the coast. No serious delays are anticipated.
Two other offshore wind turbine farms have been proposed along the U.S. coast of the United States, one about four miles off the south shore of New York's Long Island, and one in Massachusetts' Nantucket Sound, off Cape Cod.
The New York project, backed by environmentalists, is still awaiting approval by the Army Corps of Engineers. The Nantucket project, also in federally controlled water, faces opposition because of fears it would ruin the ocean view from shore.
When complete, the Texas project will represent about 0.2% of the state's total electricity production.
Prophet Dress Code.
The Chronicle of Higher Education has a feature story on a fellow who thinks that seven breakthroughs in biochemical level medicine could allow people to live for thousands of years. I'm skeptical, but the real reason I've noted this story is so that I know how a proper prophet should dress and act, as I have come to this profession late in life.
I looked the part to a "t" in college, although I was always a very nice prophet who wasn't too mean to my critics. But, the beard and long hair disappeared when I started dating my wife and went to law school, and I have owned a great many silk ties since then. What a pity.
If you wish to be a prophet, first you must dress the part. No more silk ties or tasseled loafers. Instead, throw on a wrinkled T-shirt, frayed jeans, and dirty sneakers. You should appear somewhat unkempt, as if combs and showers were only for the unenlightened. When you encounter critics, as all prophets do, dismiss them as idiots. Make sure to pepper your conversation with grandiose predictions and remind others of your genius often, lest they forget. Oh, and if possible, grow a very long beard.
I looked the part to a "t" in college, although I was always a very nice prophet who wasn't too mean to my critics. But, the beard and long hair disappeared when I started dating my wife and went to law school, and I have owned a great many silk ties since then. What a pity.
Colorado Needs A Revenue Shuffle.
In the short run, the solution to Colorado's fiscal woes is to pass Referenda C and D. In the long run, what Colorado needs is an overhaul of its state and local financing system which I call a revenue shuffle.
The Problems
We need to collect sales taxes at the state level, rather than the local level, to end the counterproductive development incentives this creates, to keep localities from imposing taxes designed to burden people who don't vote upon them, and to discourage businesses from basing their locations based on sales tax avoidance. This also would make sales tax collections easier for government and businesses alike, since businesses would deal with only one government agency for sales tax collections (a business with many locations may have to deal with dozens of jurisdictions and account for sales in each jurisdiction seperately). And, a state level sales tax is a pre-requisite to participating in plans to allow states to tax internet based sales, which are also a threat to this tax base. Furthermore, the state is better equipped to handle fluctuations in revenues from year to year that come with sales taxes, a highly cyclical tax, than local governments, which often provide bread and butter services which are insensistive to economic trends.
We need to increase gas taxes, so that roads are not underfunded due to scarce general fund revenues. If gas taxes reflected the actual cost of maintaining roads, this user's fee would leave Colorado with good roads, which can promote a healthy economy, through a market driven mix of less driving and more maintenance. There is no reason for road maintenance, which can be paid for by the users who make it necessary, to become entangled with the overall general fund budget process.
We also need to cease using property taxes as a way to fund schools. Funding educational services like special education through property taxes is unfair and doesn't work. Experience has also shown, in state after state, including Colorado, that property taxes as a means of funding schools more generally are unfair. The current system leaves some jurisdictions with weak property tax bases chronically underfunded, while other communities receive immense funding since their communities have high property tax bases and few students. In many mountain towns, inequitable tax bases for schools between resorts and worker communities have already prompted calls for some type of revenue sharing. The current system also makes school districts bear the burden of development decisions it has no control over.
The Gallagher Amendment creates bad development incentives that undermines the creation of affordable housing.
TABOR spending limits create a long standing financial crisis when an economic bust temporarily reduces government revenues.
The Numbers
A single comprehensive solution can solve the problems above to a great extent.
Colorado currently collects the following amounts of taxes:
State Income Tax-------$3,972M at a 4.63% flat rate.
State Sales Tax--------$1,849M at a 2.9% rate.
Local Sales Taxes------$1,862M at an average 2.95% rate.
School Property Taxes--$2,048M
Other Property Taxes---$1,366M
About 25% of Colorado's aggregate property valuation is business property now assigned to bear 55% of the total property tax burden. About 75% of Colorado's aggregate property valuation is reisdential property assigned to bear 45% of the total property tax burden.
The gas tax currently brings in about $900 million a year, with no funds currently being contributed for transporation spending from general revenues, but the Department of Transportation needs $1.4 billion a year to maintain state roads in a way that will match growing expenses and traffic.
The Plan
The first four parts of the plan need to be a package deal, as they are intimately intertwined with each other. Each of the last three items can be adopted or rejected on a stand alone basis without doing undue harm to the rest of the package. The only part of the plan which is not revenue neutral at the state level is the gas tax increase.
1. Discontinue local sales taxes (other than a couple of metro district sales taxes) and increase the state sales tax to 5.7% (a reduction of less than 0.1% in average statewide sale taxes rates). This would increase state sales tax revenues by $1,766 million. If a broader sale tax base increased collections, this would be matched by eliminating items such as diapers and toilet paper from the sales tax base.
2. End school property taxes and, instead, fund schools entirely at the state level. This would be funded in part by the sales tax increase and in part by increasing the state's income tax rate from 4.63% to 5.0%, where it was for many years until state legislators implemented TABOR spending limit driven income tax rate cuts. This would also make a statewide program that allows any student to attend any public school regardless of where he or she lives, already in place in theory, work more smoothly.
3. Impose state impact fees, which could not be waived by local governments, on developers of new residential units which would increase a school district's population in order to pay for the cost of building new schools. A back of napkin figure would be about $5,000 per new single family dwelling (a 2,000 house development with about 5,000 new residents would provide about $10 million in impact fees, half for a new 200 student elementary school, and half for additions to middle schools and high schools to reflect new enrollments). This both funds new construction in growing areas and provides an incentive to engage in infill development in places where there is already adequate classroom space, like the Denver Public Schools District.
4. Increase property taxes for the benefit of local governments to make up for lost sales tax revenues by an average of 136%. This would result in an average decrease in total property taxes of 5.4% (saving the average family of four about $184), since increased local government property taxes would be offset by decreased property taxes for schools.
5. Phase out the Gallagher Amendment. Combined with the modest property tax cut resulting from items 1-4 above, this will result on average in a 57% property tax increase for residential property, and an average 57% decrease in business property taxes. This could be phased in gradually, with the residential share of property taxes increasing by 2% per year from the current 45% for fifteen years, at which point any remaining valuation discrepency would be eliminated.
6. Increase the gas tax to 34 cents a gallon (an average family would pay about $72 a year more in gas taxes per car). Note that while the gas tax is regressive that the reduction in the average sale tax level and the increase in the share of taxes coming from income taxes would mitigate this effect by making progressive adjustments to the tax system, leaving the entire tax system distributionally similar to the existing tax system.
7. End TABOR spending limitations and replace them with rainy day fund provisions. While it is not unreasonable to require public approval for changes in tax rates, it is not reasonable to tie state spending to rigid formulas. During economic booms, the state is going to collect more revenue, and during economic busts, when state funds are often urgently needed for social services, the state is going to collect less. Rather the imposing rigid limitations, the state constitution should require the state to save a portion (perhaps 10-20%) of any increase in revenue over a prior year in a rainy day fund which, in turn, can only be spent in years when state tax revenues decline, thus buffering the state's economy. Without a rainy day fund there is a tendency to push for tax increases in bad times that never go away. But, TABOR spending limits artificially ratchet down state spending to bust levels.
The Benefits
While overall tax rates and the overall distribution of taxes between the rich and the poor would be only modestly tweaked, the incentives of the actors in the tax system to engage in rational economic behavior would be greatly increased.
Colorado's schools would be equitably and adequately funded without regard to the local property tax base. A state rainy day fund would make up for the increased revenue fluctuations associated with moving a large share of school revenues from a local property tax base to a state sales tax base.
Colorado's roads would be adequately funded by drivers in proportion to the extent to which they use the roads. The incentive to buy fuel efficient cars would also be increased slightly. Need caused by road use would automatically be matched to the revenue stream.
Local governments would have a single, inexpensive to collect (counties would collect them once for all local governments in their jurisdiction), predictable tax base that matches the tax collections from new developments to the service costs of those developments, leaving development decisions governed by the market, rather than tax policy. This would likely encourage local governments to zone to permit affordable housing and discourage sprawl, while discouraging unproductive competition for business development.
Sales tax compliance for businesses and enforcement by government would be cheaper, consumers would have an easier time understanding the sales tax, and collections of sales taxes from internet sales would be more easily facilitated in the event of an interstate compact on the subject.
The Problems
We need to collect sales taxes at the state level, rather than the local level, to end the counterproductive development incentives this creates, to keep localities from imposing taxes designed to burden people who don't vote upon them, and to discourage businesses from basing their locations based on sales tax avoidance. This also would make sales tax collections easier for government and businesses alike, since businesses would deal with only one government agency for sales tax collections (a business with many locations may have to deal with dozens of jurisdictions and account for sales in each jurisdiction seperately). And, a state level sales tax is a pre-requisite to participating in plans to allow states to tax internet based sales, which are also a threat to this tax base. Furthermore, the state is better equipped to handle fluctuations in revenues from year to year that come with sales taxes, a highly cyclical tax, than local governments, which often provide bread and butter services which are insensistive to economic trends.
We need to increase gas taxes, so that roads are not underfunded due to scarce general fund revenues. If gas taxes reflected the actual cost of maintaining roads, this user's fee would leave Colorado with good roads, which can promote a healthy economy, through a market driven mix of less driving and more maintenance. There is no reason for road maintenance, which can be paid for by the users who make it necessary, to become entangled with the overall general fund budget process.
We also need to cease using property taxes as a way to fund schools. Funding educational services like special education through property taxes is unfair and doesn't work. Experience has also shown, in state after state, including Colorado, that property taxes as a means of funding schools more generally are unfair. The current system leaves some jurisdictions with weak property tax bases chronically underfunded, while other communities receive immense funding since their communities have high property tax bases and few students. In many mountain towns, inequitable tax bases for schools between resorts and worker communities have already prompted calls for some type of revenue sharing. The current system also makes school districts bear the burden of development decisions it has no control over.
The Gallagher Amendment creates bad development incentives that undermines the creation of affordable housing.
TABOR spending limits create a long standing financial crisis when an economic bust temporarily reduces government revenues.
The Numbers
A single comprehensive solution can solve the problems above to a great extent.
Colorado currently collects the following amounts of taxes:
State Income Tax-------$3,972M at a 4.63% flat rate.
State Sales Tax--------$1,849M at a 2.9% rate.
Local Sales Taxes------$1,862M at an average 2.95% rate.
School Property Taxes--$2,048M
Other Property Taxes---$1,366M
About 25% of Colorado's aggregate property valuation is business property now assigned to bear 55% of the total property tax burden. About 75% of Colorado's aggregate property valuation is reisdential property assigned to bear 45% of the total property tax burden.
The gas tax currently brings in about $900 million a year, with no funds currently being contributed for transporation spending from general revenues, but the Department of Transportation needs $1.4 billion a year to maintain state roads in a way that will match growing expenses and traffic.
The Plan
The first four parts of the plan need to be a package deal, as they are intimately intertwined with each other. Each of the last three items can be adopted or rejected on a stand alone basis without doing undue harm to the rest of the package. The only part of the plan which is not revenue neutral at the state level is the gas tax increase.
1. Discontinue local sales taxes (other than a couple of metro district sales taxes) and increase the state sales tax to 5.7% (a reduction of less than 0.1% in average statewide sale taxes rates). This would increase state sales tax revenues by $1,766 million. If a broader sale tax base increased collections, this would be matched by eliminating items such as diapers and toilet paper from the sales tax base.
2. End school property taxes and, instead, fund schools entirely at the state level. This would be funded in part by the sales tax increase and in part by increasing the state's income tax rate from 4.63% to 5.0%, where it was for many years until state legislators implemented TABOR spending limit driven income tax rate cuts. This would also make a statewide program that allows any student to attend any public school regardless of where he or she lives, already in place in theory, work more smoothly.
3. Impose state impact fees, which could not be waived by local governments, on developers of new residential units which would increase a school district's population in order to pay for the cost of building new schools. A back of napkin figure would be about $5,000 per new single family dwelling (a 2,000 house development with about 5,000 new residents would provide about $10 million in impact fees, half for a new 200 student elementary school, and half for additions to middle schools and high schools to reflect new enrollments). This both funds new construction in growing areas and provides an incentive to engage in infill development in places where there is already adequate classroom space, like the Denver Public Schools District.
4. Increase property taxes for the benefit of local governments to make up for lost sales tax revenues by an average of 136%. This would result in an average decrease in total property taxes of 5.4% (saving the average family of four about $184), since increased local government property taxes would be offset by decreased property taxes for schools.
5. Phase out the Gallagher Amendment. Combined with the modest property tax cut resulting from items 1-4 above, this will result on average in a 57% property tax increase for residential property, and an average 57% decrease in business property taxes. This could be phased in gradually, with the residential share of property taxes increasing by 2% per year from the current 45% for fifteen years, at which point any remaining valuation discrepency would be eliminated.
6. Increase the gas tax to 34 cents a gallon (an average family would pay about $72 a year more in gas taxes per car). Note that while the gas tax is regressive that the reduction in the average sale tax level and the increase in the share of taxes coming from income taxes would mitigate this effect by making progressive adjustments to the tax system, leaving the entire tax system distributionally similar to the existing tax system.
7. End TABOR spending limitations and replace them with rainy day fund provisions. While it is not unreasonable to require public approval for changes in tax rates, it is not reasonable to tie state spending to rigid formulas. During economic booms, the state is going to collect more revenue, and during economic busts, when state funds are often urgently needed for social services, the state is going to collect less. Rather the imposing rigid limitations, the state constitution should require the state to save a portion (perhaps 10-20%) of any increase in revenue over a prior year in a rainy day fund which, in turn, can only be spent in years when state tax revenues decline, thus buffering the state's economy. Without a rainy day fund there is a tendency to push for tax increases in bad times that never go away. But, TABOR spending limits artificially ratchet down state spending to bust levels.
The Benefits
While overall tax rates and the overall distribution of taxes between the rich and the poor would be only modestly tweaked, the incentives of the actors in the tax system to engage in rational economic behavior would be greatly increased.
Colorado's schools would be equitably and adequately funded without regard to the local property tax base. A state rainy day fund would make up for the increased revenue fluctuations associated with moving a large share of school revenues from a local property tax base to a state sales tax base.
Colorado's roads would be adequately funded by drivers in proportion to the extent to which they use the roads. The incentive to buy fuel efficient cars would also be increased slightly. Need caused by road use would automatically be matched to the revenue stream.
Local governments would have a single, inexpensive to collect (counties would collect them once for all local governments in their jurisdiction), predictable tax base that matches the tax collections from new developments to the service costs of those developments, leaving development decisions governed by the market, rather than tax policy. This would likely encourage local governments to zone to permit affordable housing and discourage sprawl, while discouraging unproductive competition for business development.
Sales tax compliance for businesses and enforcement by government would be cheaper, consumers would have an easier time understanding the sales tax, and collections of sales taxes from internet sales would be more easily facilitated in the event of an interstate compact on the subject.
What If Referendum C Fails?
It won't be pretty:
The people who vote against Referenda C and D may simply be misinformed by deceptive advertising (Colorado Public Radio noted that its opponents are lying when they says that anyone will lose $3,200 in refunds, the average, over five years, will be less than $500). But, why do the people sponsoring the campaign against these Referenda hate Colorado? Maybe it has something to do with the fact that many of the most important opponents, like Grover Norquist, don't even live here.
If C fails, state government would have to take an across-the-board 10 percent cut, says the Office of State Planning and Budgeting. At that level, the Department of Corrections would be forced to release some inmates early and relax measures to keep all high-risk prisoners under tightest control.
The reports says the Department of Human Services would have to slash $3 million from senior services such as Meals on Wheels. The Department of Public Safety would eliminate the office of domestic violence and sex offender management. The Civil Air Patrol could be grounded. Regulatory Agencies would close the unit that investigates insurance and securities fraud. Rural soil conservation grants would stop. Eleven state parks might close, and 15 would be shut for up to eight months a year.
What else? The Department of Public Health and Environment would close the suicide prevention office and end the air quality program's hazardous and toxic pollution control effort. Budget cuts could go further because of how the health department is funded. . . .
The planning and budgeting office says that small and mid-sized Colorado communities wouldn't be able to comply with new federal clean drinking water rules.There also won't be money for nursing home inspections. A dental program for low-income seniors could be eliminated. The state couldn't afford to participate in the federal Ryan White program that provides drugs to HIV patients. New efforts to increase childhood immunization rates would be shelved. Programs to address high diabetes rates in African- Americans and cancer in Hispanics would be at risk.
The people who vote against Referenda C and D may simply be misinformed by deceptive advertising (Colorado Public Radio noted that its opponents are lying when they says that anyone will lose $3,200 in refunds, the average, over five years, will be less than $500). But, why do the people sponsoring the campaign against these Referenda hate Colorado? Maybe it has something to do with the fact that many of the most important opponents, like Grover Norquist, don't even live here.
President Joins IP Abuse Bandwagon.
Everyone else is doing it, so the President too has to complain about legitimate fair use of his intellectual property rights by people who criticize him politically. In this case, it was the use of the Presidential seal as a backdrop in a fake photo in the Onion about the President appointing someone else to take care of the country for him.
One more reason to hate the incompetent Bush Administration.
One more reason to hate the incompetent Bush Administration.
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