Taxes

How Reporters Subtly Inject Opinion

Date: May 26, 2010
Author: Bob Griendling
Categories: Lori Montgomery, Taxes, Washington Post

There are plenty of ways reporters add opinion or subjectivity into supposedly objective news articles.  Lori Montgomery of The Washington Post does it here with a simple word:  only.  It’s in a story about Obama’ plan to ask for authority to cut “pork” in the budget.

I’m all for cutting pork.  I’m all for cutting Social Security and Medicare spending.  That’s not my point.  Read the two ‘graphs.

Some outside analysts were equally dismissive of Obama’s rescission proposal. "A lot of people want to believe our looming budgetary crisis is caused by bridges to nowhere" and other pork barrel projects, said Cato Institute vice president Gene Healy. "But it’s not true. That sort of thing is a rounding error" compared with defense spending and entitlement programs, he said.

To that list, others would add Obama’s tax policies: A new report scheduled to be released Tuesday by the Pew Economic Policy Group found that Obama’s plan to extend a series of middle-class tax cuts would add $2.3 trillion to the national debt over the next 10 years — saving only about $800 billion compared with a GOP plan to extend the cuts for high-earners as well.

Think about this.  $800 billion is the cost of the stimulus plan that many conservatives deride as exorbitant wasteful spending.  Adding $800 billion to a $2.3 trillion tax cut would be more than a 33 percent increase in its cost.  Yet, it is “only” $800 billion, suggesting to the reader that it is an insignificant amount for which the Obama administration must, what, apologize, rationalize, repeal?  Montgomery seems to be taking sides with the GOP here by suggesting that the difference between giving tax cuts to the middle class and adding “high-earners,” which are undefined in the article, is insignificant, i.e., only.

Cuts and Tax Hikes

Date: May 19, 2010
Author: Bob Griendling
Categories: Income Equality, Oil spill in Gulf Coast, Stock Market, Taxes

Looming deficits will require both tax hikes, especially on the upper class who have seen their tax responsibility slashed over the past 30 years while their incomes soared, and spending reductions in the biggest program elephants in the room.  Michael Gerson, of course, doesn’t, speak of tax fairness or returning to the levels when America’s economy was at its zenith.  It needn’t be one or the other.  But at least Gerson has the cuts right.

There can be no serious reduction in federal spending without entitlement reform. Social Security and Medicare eventually will need to be transformed from middle-class entitlements given because of age to entitlements given to those with lower incomes.

…Necessary changes will not resemble the relatively painless deficit reduction deals of 1990 or 1993. This round may require not only the means testing of Social Security and Medicare but also the reduction or elimination of middle-class entitlements such as the mortgage interest deduction and the employer health-care exclusion.

I agree with all four cuts.  But then he suggests the number of public employees must be reduced.  Do we really need fewer financial and environmental regulators?  Do we need fewer teachers and police officers?  Can we get buy with fewer road repairs, snowing plowings, median mowings and parole officers?

I bring up the last four because they are of particular interest in my locality.  I’m attending a meeting tonight about what local organizations can do to get the grass mowed on our highway medians, which grows so high due to dwindling funds in the highway department responsible for maintaining them that site lines are obscured, creating traffic hazards.  My neighbors were upset about the lack of snow plowing during the past winter’s storms, which left many streets pot-marked—and still that way three month later.  And last week, some neighbors learned that a convicted sexual offender had rented a house immediately across from our local elementary school.  They were all up in arms and contacted the local parole office.  Within a day or so, the parole officer apprehended the man for violating the terms of his parole.  There are  a lot of communities who can’t afford that level of service. 

With more oil spills, stock meltdowns, and sexual predators in our communities, if Gerson gets his way, people may yearn for the days when we had adequate government.

‘Wealth for the Common Good’ Needs Your $$

Date: May 11, 2010
Author: Bob Griendling
Categories: Taxes

Wealth for the Common Good is positioned as “a network of business leaders, high-income households and partners working together to promote shared prosperity and fair taxation.”

Then this afternoon I get an email with a lede concerning the House of Representatives’ upcoming hearings on the Bush tax cuts, which the organization wants to allow to expire.  But then there is the third ‘graph.

Wealth for the Common Good is also in the middle of our spring fundraising appeal. Our work relies in large part on individual support, and we ask you to consider making a contribution.

I’ve got to donate to a bunch of rich folks?  They can’t afford this campaign?

GOP Bait and Switch

Date: April 15, 2010
Author: Bob Griendling
Categories: GOP Hypocrites, GOP message, Income Equality, Taxes

Just a brief addendum to my post the other day about the disingenuous lie that 47% pay no income tax.  As Derek Thompson of The Atlantic points out, poor people owe taxes, but they are offset by the Earned Income Tax Credit (EITC).

When Republicans rail against the 47% figure, they’re railing against features like the EITC. What is the EITC? It’s a refundable tax credit that rewards work and offsets the burden of payroll taxes for low-income payers by returning a fixed percent of income up to a maximum credit based on factors like number of children. But the EITC is a Republican creation. It was enacted in 1975 under President Ford (a Republican), and expanded numerous times over the last 35 years by Republicans. President Reagan (Republican) expanded it in 1984 and 1986. President Bush (Republican) expanded it against in 1990 and added supplemental credit for families with more than one child. President Clinton expanded it for childless claimants in 1993. President Bush (Republican) expanded it again in 2001.

So what we have is a program developed by Republicans to encourage welfare recipients to work instead.  When it succeeds, the GOP then pivots in its arguments and claims these very same people are cheating the government and are prime examples of “socialism.”  If it weren’t so cynical, it would be brilliant.

Talking About Taxes

Date: April 14, 2010
Author: Bob Griendling
Categories: Democrats, Message, Taxes, Transportation

Last night, I attended a wrap-up forum from our local state legislators. All six were Democrats. Generally, they were fairly informative. With the Q&A period afterwards, I would say that they all handled themselves well but with a big asterisk.

Sen. Chap Petersen’s overview of the budget process was frank: He, along with all the others I believe, held their noses when voting for the budget. He noted that withholding payments for the Virginia Retirement System to balance the budget could come back to haunt us when we must replenish the VRS with interest. Future employees will also find a less generous retirement system. One legislator was a little too self-congratulatory when claiming legislators saved education funding. They used this VRS budget gimmick.

In defending the budget, Petersen said the only alternative was massive cuts. That of course is not true. Another alternative is to raise taxes. There is where I place an asterisk.

We finally got around to taxes when I asked the legislators if they would support a gas tax to increase to transportation funds. While no one’s hand shot up, several said they had supported past attempts to raise transportation funding that included tax increases. Talking with one legislator after the meeting, he said that he and others had taken political risks in voting for those tax increases.

He has a fair point, one that I don’t readily concede when talking about my frustration with Democrats over the tax issue. The problem as I see is that they don’t know how to talk about taxes.

The first problem is a lack of trust that voters can digest a sensible discussion about taxes. They fear any dialogue can be parsed into a 30-second commercial against them. If that’s all they hear about taxes, they probably have a justified concern.

The solution is not to back away from the discussion but to expand it, much as Gov. Mark Warner did and Gov. Tim Kaine tried with much less determination.

One excuse I heard last night is that that discussion really is the governor’s domain. I disagree. If the Democratic Party in Virginia had a disciplined plan to engage voters, it could claim and dominate the discussion.

It’s also a problem of numbers. The numbers thrown around last night were big ones. Our transportation needs require $1.6 billion more dollars per year. The budget shortfall was $2 billion. Even after cuts to education, social services and public safety, several hundred million more in cuts were needed—and found through the VRS gimmick. All very big numbers.

A couple of weeks ago I attended two forums held by my local supervisor, a Republican with the usual antipathy toward taxes. But both groups of citizens, when asked, were willing to hike real estate taxes at least 8 cents to minimize proposed cuts to education, libraries, the police, etc.

The reason, I believe, is because they dealt with a much smaller number—the amount they would pay in increased taxes.

When framed that way, the dynamics change. We do need $1.6 billion in more transportation dollars. What that comes out to for the average driver is $192 dollars a year.  (see footnote) I believe an argument framed that way would find a more receptive audience. When the discussions were waning in our local supervisor’s budget meetings, people knew that an 8-cent increase would raise an additional $144 million in revenues and, along with other tax increases, would cost them an average of $244. They readily agreed to pay—not $144 million in the aggregate, but $244 each.

Politicians need to break down big numbers, which are incomprehensible to us, to ones we can embrace. How much will it cost me? I urge them in the next citizen forum they attend to ask people what they think it would cost them each to pay for a first-class transportation system. I’ll bet it’s more than $192 more a year. (And that figure will drop as we catch up on the backlog of projects.)

They also need to tell us what more taxes buy us. Not once last night did legislators outline what $1.6 billion a year buys. Granted, this wasn’t a forum on transportation, but any discussion about transportation revenues should always make reference to the exact benefits. In our district, more funds might mean traffic amelioration around George Mason University, which with its growth is creating gridlock in the area. It might mean mass transit alternatives that will unclog Braddock Road during rush hours. When talking about gas taxes in southern Virginia, the Coalfields Expressway might be invoked. In Hampton Roads, there are bridge and tunnel projects that are sorely needed. How would an additional $192 dollars in taxes impact the timetable for these projects?

Without this detailed discussion of benefits, voters will worry about a black hole for their tax dollars.

Lastly, the campaign for adequate state funds must be ongoing, coordinated and sustainable. But before that it must be carefully developed for prime time. We see what happens when it isn’t in Sen. Creigh Deeds’ buffoonish approach to taxes during the gubernatorial campaign. A successful campaign won’t be accomplished in a few weeks or during a typical Labor Day to Election Day General Assembly campaign. It needs to grow from small “coffees” to test messages, then on to larger forums to secure the sale.

Democrats have nothing to fear but fear itself. Then Gov. Mark Warner proved it could be done, although even that campaign was short on the small numbers people need. I concede I’ve been harsh with some Democrats, but it’s not their heart I question.  It’s their ability to communicate the need for more revenue and higher taxes to ensure our standards of living remain high. They must trust and try.

A Note: Del. Vivian Watts, a former Virginia Secretary of Transportation, made a floor speech knocking down objections to more funding. Page one is here; page 2 is here.

Footnote:  When writing this originally, I left out a needed explanation here:  The $192 figure is derived from the 32-cent increase in the gas tax required to raise $1.6 billion, based on a calculation of 15,000 miles per year driven by the average driver of a car averaging 25 miles per gallon.  I should have included this information in the original post.

The Rich Pay More Taxes Canard

Date: April 14, 2010
Author: Bob Griendling
Categories: Message, New York Times, Taxes

Monday I wrote that the latest figures showing 10 percent of the wealthiest Americans pay 73 percent of federal taxes was a canard meant to justify more tax cuts.  Today, David Leonhardt explains the details.  For liberals, it is an article that they should memorize, especially this:

There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.

The Poor Rich Folks

Date: April 12, 2010
Author: Bob Griendling
Categories: Income Equality, Message, Taxes

Whenever you read this…

According to the Tax Foundation, this year the top 10 percent of earners are on the hook for about 73 percent of all the income taxes collected by Washington.

…somebody is about to tell you how skewed the tax system has become in favor of the middle class and poor.  They’ll talk about the unfairness of a system where 10 percent of the people pay 73 percent of all income taxes

First, keep in mind that they are only talking about the income taxes, not about sales taxes, real estate taxes, payroll taxes or other taxes that fall disproportionately on the middle class and poor.

Second, the reason that rich folks are paying more of the income taxes is because they make more of the money than ever before.  See “15 Mind-Blowing Facts About Wealth And Inequality In America.”

Do What Families and Businesses Do

Date: March 23, 2010
Author: Bob Griendling
Categories: Del. David Albo, Sup. John Cook, Taxes, Washington Post

Stop me if you heard this one before.

“…[T]he state has to live within its means, just as families have to live within theirs.”

Oh, you have heard it? How ‘bout this?

“Government must do what most families and businesses in Fairfax County have done – set priorities and tighten its belt.”

Of course, these are the well-worn platitudes of those who see taxes as weapons of mass destruction. The first is by a state delegate; the second is from an email I received from my Fairfax county supervisor.

Even on the face of it, these statements are nonsense. What do businesses do in tight times? Often, they raise prices. And families? I know few who are so defeatist that they would simply hunker down when money gets tight. Rather, they work harder to earn a promotion, or find a better paying job, or a second job. In other words, they look to increase income, not just cut expenses. They make the sacrifice to work harder today for a better tomorrow, most likely for their children’s sake.

But what is more pernicious about these statements is that they are often accompanied by the implied accusation that government is bad. At best, it presents a false dichotomy: families versus the government.

But families and businesses are part of the government. Every person or company that pays taxes or votes (and perhaps the Supreme Court will soon give that right to companies, too) is part of the government. Government is passed down from generation to generation with the implied support of a majority of its citizens.

And while such statements are often accompanied by invoking the “founding fathers,” those invocations , too, are false. Our founding fathers were not men of letters. They weren’t great artists, musicians or philosophers. Their contribution was our government. They believed in government. And because the Articles of Confederation proved to be weak, they came together to write the Constitution for a stronger government.

So efforts to malign government as the problem subvert the very idea of our country.

Here’s another look at families, or at least mine. Our kids are long gone from Fairfax schools. But they helped make them who they are today. And what a blessing freshmen sports, especially indoor track, were in providing a safe outlet for our son’s energy in that crucial first year of high school. As many a bored track parent would say at meets, “Better than on the streets.” So were libraries where our youngest daughter checked out books by the dozen. So were public parks where our oldest daughter tread their fields. Schools, libraries, parks, all will likely see major funding cuts when Fairfax approves this year’s budget.

Moreover, few expect a quick turnaround in the economy. If we don’t find the funds to maintain these services, they will decline. If not permanently, at least for a long time.

So our family will look at what we have and make tough decisions. But the easiest decision would be to pay more in taxes, i.e., raise income, to preserve our quality of life here. That’s what businesses do to survive and families do to thrive. Given the deep cuts in the state budget, the county government is the last line of defense for our communities. And many us still believe in our founding fathers’ legacy—government.

911 Call Costs $300

Date: February 21, 2010
Author: Bob Griendling
Categories: Message, Obama, Taxes, Tom Friedman

Is this our future?  No, it’s the present.

“Tracy residents will now have to pay every time they call 911 for a medical emergency. But there are a couple of options. Residents can pay a $48 voluntary fee for the year, which allows them to call 911 as many times as necessary. Or there’s the option of not signing up for the annual fee. Instead they will be charged $300 if they make a call for help.”

Tom Friedman’s column is titled “The Fat Lady Has Sung.”  While he thinks Obama’s problems are not all about how he communicates, he has failed to offer a compelling narrative.  Of course, it not at all certain that he has an attentive audience.

I am under no illusion that this alone would solve all his problems and ours. It comes back to us: We have to demand the truth from our politicians and be ready to accept it ourselves. We simply do not have another presidency to waste. There are no more fat years to eat through. If Obama fails, we all fail.

It’s true all over.  A week ago, many in my neighborhood were complaining about the lack of plows to remove the snow.  But Saturday when my state delegate and senator—David Bulova and Chap Petersen—had a town hall meeting, my wife recognized no one there from  our neighborhood.  I hope she was wrong. (I’m out of town for the week.) 

‘Open, Honest’ Debate

Date: February 15, 2010
Author: Bob Griendling
Categories: Democrats, Message, Taxes

From today’s Post story about the administration new communications strategy I was struck by this quote…

One thing for sure that people want is for us to have honest, open debate," said senior adviser David Axelrod.

..mostly because it echoed something I wrote in a letter to my local state representatives after many of my neighbors went apoplectic about the lack of snow removal around here after last week’s big storms.

I urge you to have honest and frank discussions with your constituents about how your vision for our communities informs your decisions, the cost of services and how the tax structure can be used to address our needs.

I’d like to see just one Democrat have the guts to have an honest discussion with folks about what a new tax structure could mean for our standard of living.  The party is petrified of the subject.

The full letter is here.