Tag Archives: tax policy

Hook us up, Santa

My kids are pretty into Christmas, I’ll admit.

Somehow, despite watching absolutely no television (they can only have ~20 minutes/day of a video from the library, with no previews or commercials) and having parents who very rarely buy anything (Mommy does not have time to shop), they have grown some of the same propensity to “want” as most of the rest of our society, and this manifests itself, each year, in a Christmas list.

Truthfully, it could be a lot worse. My oldest son has asked for some paint in his stocking for the past couple of years, and they LOVE fruit snacks, so they each get a box of those, too. Other than that, it’s mostly some books and maybe a puzzle, some pajamas, and one special present for which they’ve been longing. It doesn’t get too out of hand, and we work in a lot of giving–the kids each choose one brand-new present they receive to give away without opening, and we divert much of what others give them before they even see it.

So, in all honesty, Mommy’s Christmas list is probably a bit more audacious than the kids’, a bit longer, and certainly more aspirational. Mommy wants a lot, and, while I’m committed to working hard to bring much of this about, it’s been a rather rough couple of years, and I figure that we could really use some help, you know? So if Santa can bring my daughter the dolls with snap-on outfit changes that she’s been coveting for months, surely he can hook us up with some social justice, too.

Here’s my list, edited to not seem too greedy.

What’s on yours?

  • Election protection: I want people’s votes to count in November 2012. I’m very concerned that efforts in states around the country, including notably my home here in Kansas, are eroding individuals’ abilities to exercise their constitutional rights, and that elections will be truly stolen under the guise of ensuring their “integrity.” Our nation cannot, and should not have to, withstand a confusing and unnecessarily contested election that destroys our confidence in the democratic process.
  • The DREAM Act: I’ll admit, Santa, that my faith is waning a bit, since I asked REALLY nicely for immigration reform last year and didn’t even get the DREAM Act in that December 2010 vote. Is there an example of more commonsense legislation that we’re stubbornly refusing to pass, even though it’s in our best interest? I’m not sure that I can think of one. These kids are incredible. Even our most ardent anti-immigrant policymakers, when confronted with them face-to-face, acknowledge that. Let’s give them a chance and give ourselves a break.
  • Progressive tax policy: OK, so maybe this is a bit like my daughter asking for Barbies (not going to happen). But what is Christmas if not a time to dream? Instead of a long list of what shouldn’t be cut (and what should be restored) in our state and federal budgets, what I want is a revenue foundation that would make those investments possible, while at the same time addressing the tremendous inequalities that are corrosive in themselves. We should have the money to do what we must, but we’ve got to collect it in a way that makes sense. As one of my students said in class this fall, “it’s all about the orange.”
  • Foreign debt forgiveness: Can’t we get out of the international payday loan business? We’ve collected what we were owed, many times over, and yet we’re still holding developing countries hostage so that we can receive our interest payments, despite the fact that their debt service cripples their ability to invest in their own economies (and people) in ways that would not only relieve suffering but contribute to prosperity (thereby reducing the need for our later intervention)! I’ll compromise; it doesn’t even have to be across-the-board, but let’s put real debt forgiveness on the table, now.
  • An invigorated movement for social justice, to make it all possible: Santa, I know you’re getting older, and I’m sure you’d like a break. The truth is, unlike elaborately hand-crafted wooden toys or correctly-assembled dollhouses, we can take care of this list ourselves, if we can build the kind of grassroots cohesion necessary to chart our own collective futures. I see signs, in the labor movement and with immigrant youth and in exciting campaigns that integrate social technologies, that this potential is within our grasp. I hope that this is the year that we look back on as having made the difference.

    I’ll set out the cookies, Santa. You know what to do.

  • We’re all on welfare: a look at tax expenditures

    I like to start many of my social policy semesters by asking my students what kind of welfare they receive (I figure they might as well know, from the beginning, how it’s going to be!). When I inevitably get some uncomfortable looks in response, I start in on the welfare that my own household receives, most of it in the form of tax expenditures, those nearly-invisible ways in which the U.S. government and the state of Kansas subsidize my family’s most important economic activities.

    After all, the generosity of the federal government and my fellow taxpayers makes it possible for us to:

  • Own a home, deducting all of the interest we pay on our mortgage
  • Save for my kids’ college educations, deducting our 529 college savings plan contributions from our state taxes
  • Save for retirement, excluding all of our 401(k) contributions AND deducting our Individual Retirement Account savings
  • Pay for medical care with pre-tax dollars
  • Take child credits for our three children
  • Deduct our state and local property taxes for the home for which (see above) we’re already receiving a subsidy
  • Support our favorite charitable causes, with favorable tax treatment for all of those contributions

    Pretty nice, hunh?

    And we’re not alone. The 2008 Tax Expenditure Budget looked like this.

    All of those economic activities are things the government has an interest in us continuing–as a nation, we want people to save for their retirement, and for college, and to support nonprofit organizations, and to have health insurance. We do, and we are quite richly rewarded for it, in terms of serious reductions in the taxes we would otherwise pay.

    The big problem, of course, is in the framing: while two-thirds of tax expenditures go to American households in the top 20% of incomes, there’s still a perception that it’s low-income people who receive the most “subsidy” from the federal treasury. And it’s not small change we’re talking about here: we spend about $900 billion each year on tax expenditures (and it really is “spend”–we’d otherwise be collecting all of that in taxes and then turning around and allocating it to other spending).

    Because tax expenditures are not refundable, for the most part, one only benefits if the taxpayer has a tax obligation; that’s why the vast majority go to those with over $50,000/year in income. Those tax expenditure subsidies, of course, are above and beyond the many benefits we receive from the tax system just by living in this society, which are substantial. This is actually money put in our pockets and, so, if we’re going to call means-tested benefits for low-income households “welfare”, it’s only fair to own up to the ways in which the government enriches the welfare of our own households, too.

    So, this year, when you complete your taxes and notice all of the places you get to subtract, think about the message that sends to you, as a taxpayer, and about the ways in which we use federal tax and spending policy to provide incentives for certain behaviors (the Earned Income Tax Credit is the primary example of a tax expenditure that, while much smaller in size than the ones listed above, is targeted at lower-income families who are working), whether through the tax code or through direct entitlement or discretionary spending.

    I own the fact that we’re, in so many ways, on welfare, that there’s really no such thing as being completely “self-sufficient”, and even that our family would have a hard time sustaining the lifestyle we do without these considerable tax benefits. And, so, if anyone ever asks me what kinds of welfare I receive, I’ll be ready with a list. It’s right there, on my 1040.

    Happy Tax Day!

  • Why we need a “left flank”: Reflections on the Kansas Legislature, 2010

    When I was reading The Woman Behind the New Deal last summer, I found myself thinking about the Kansas Legislature’s 2010 session during the section on the role of the Townsend Movement in the legislative battle for Social Security.

    Yes, that’s how my mind works.

    The book relates the story of how, when congressional support for the Economic Security Act (retirement support, unemployment compensation, mothers’ pensions, and other key measures in our social welfare system) was waning, passage was ultimately secured, in part, due to pressure from supporters of a more aggressively liberal proposal: the Townsend bill. These campaigners wanted $200 per month for retirees, and they sent letters to Congress, held events around the country, and, most importantly, influenced the debate over economic security legislation, such that a more modest pension plan like the one supported by the Roosevelt Administration was ultimately seen as a compromise measure, not a radical initiative.

    And that’s what made me think about the Kansas Legislature.

    During the 2010 debate on new revenue measures, the factions coalesced around the “no new taxes/cut and cut and cut” pole, versus the “sales tax increase to avoid further cuts” camp. The increase revenue side eventually won, and the legislature passed a budget which included a sales tax increase (and an increase in the state Earned Income Tax Credit, so all was not bad!) and no new cuts in education or social services. It was actually quite amazing how a coalition of Democrats and moderate Republicans came together to support the package, which none of them thought was perfect but all of them preferred to cuts upon cuts.

    But.

    Reading about this history of the role played by the Townsend Movement (whose goals were, ultimately, not all that reflected in the final version of Social Security that won approval in Congress) made me wonder…

    what if?

    What if there had been a strong, coordinated push for a truly progressive revenue package, with an increase in the income tax (especially on higher earners) and additional rollbacks of corporate tax cuts? What if there had been an effort to light a fire in middle-class and working-class households and communities, where people are feeling the simultaneous squeeze of declining incomes (which reduce their ability to absorb a sales tax increase) and the effects of reduced services? What if there had been the kind of movement that resulted in all of those letters to Congress from older adults, and the Kansas Legislature had felt some real pressure to enact a progressive revenue package? And what if that coalition, or maybe even a slightly different one, had then had to tack to the left in order to accommodate that pressure, and we had ended up with a revenue base that would have not only put us on sound financial footing for the coming budget year but also promoted the kind of just economic policy that is its own reward?

    Too often, we put forward these “reasonable”-sounding policy proposals that we think can garner bipartisan support, as though there were some kind of advocacy bonus point system for sounding reasonable, when what we really need is some outlandish proposals that make even the huge victories that we ultimately ‘settle’ for look modest by comparison.

    Townsend reportedly told his wife, who wanted him to quiet down as he was ranting about the world’s injustices (my husband could probably empathize), “I want all the neighbors to hear me! I want God almighty to hear me. I’m going to shout till the whole country hears!”

    Of course, he did. And his legacy, while perhaps unrecognizable as a shadow of his actual vision, looms huge in U.S. social policy today.

    So, for next year’s Kansas legislative session, and on the national stage too, I’m proposing a whole lot more shouting. We need to revive (and perhaps invent anew) a bunch of crazy-sounding ideas (amnesty, perhaps? guaranteed incomes? universal free higher education?) that make aggressively progressive proposals look tame and more restrictive ones look radioactive. 2011, when the deck is already stacked against us after the 2010 elections, just might be the year to go out on a limb. What do we have to lose?

    Those are the kinds of compromises I can get excited about.

    5 Ways to Celebrate Tax Day!*

    The library on campus, courtesy KU University Relations

    So every year around Tax Day, the ‘chatter’ tends to fall into a few categories, primarily how to reduce the taxes you owe or general bemoaning of the entire institution (one of the slogans of the Libertarian Party, which advocates drastically reduced government intervention, is “Make April 15th just another day”).

    I’ve got no advice on the former; I do prepare our taxes every year, but I certainly have no tax strategy, besides doing the whole worksheet in pencil before doing it online, because I just have to see things written out; and you probably know that I’m completely opposed to the philosophy of the latter. So, instead, here’s my take on Tax Day: ideas for how to celebrate those services and institutions which our income, property, sales, and special use taxes, collectively make possible.

    Having filed our taxes weeks ago, I’ll spend some time today being glad I live in a country with high tax compliance and the relatively strong infrastructure those taxes provide.

    1. Go to a public library. I go every week, because I have 3 kids and need free places to go, and because my oldest son needs a constant supply of Boxcar Children mysteries. This is our library home, but find the one closest to you, or one that you’ve been wanting to try. Browse the stacks and see what a public commons can do for you; ask the usually very helpful librarians for some assistance; use free computers; and observe the broad swath of humanity that still gathers at our public libraries. They are wonderful places, and the majority of their revenue comes from taxes (and my family’s library fines!).

    2. Get into a car accident. Okay, not really, but at least celebrate the fact that, in the United States, when you need the police, they usually come and they rarely demand bribes in order to resolve your problem. I’m not downplaying the existence of racial profiling and police brutality, which certainly exist here, but, having lived in places where the police ARE the problem, and where justice is quite elusive, I’m glad that our law enforcement and public safety officers make living wages, paid for by our tax system.

    3. Volunteer at a public elementary school, or go to a high school track meet, or watch a junior high play. Our public schools are pretty phenomenal accomplishments, really, and one of the last places where the ideal of common commitment to the future good is still in evidence. Again, I’m certainly not arguing that our public education system is perfect, but the fact that we have one is, in itself, fairly remarkable. And there are some pretty amazing things happening in public schools all around our country every school day.

    4. Eat your lunch at a public park. Again, I’m at the park every day; anywhere my kids can eat that I don’t have to scrub the floor afterwards is my favorite place! But, also, they’re wonderful places to observe the beauty of something shared; at our local park, there are even sandbox toys that kids can play with when they come, and the ball diamond and playground and walking trail attract everyone from young families to latchkey teenagers to older adults on motor scooters getting some fresh air. The subdivision play areas just can’t substitute. So, go, and I’ll promise not to gaze too enviously as you read a book or otherwise enjoy your solitude while I push my daughter “one more time” on the swings!

    5. Visit the FDR Memorial in Washington, DC. Okay, so, in part, this IS just an excuse for me to tell you to go to the FDR Memorial. I love it, and it is my absolute favorite place to be in the District (except maybe at this one awesome Indian restaurant, but we’re talking politics, here). But the New Deal is significant not just for the expansion in the social safety net but also for considerable changes to the corporate and individual income tax systems, in order to finance them. I can think of no better way to celebrate Tax Day than by rededicating ourselves to the principles of progressive taxation in order to provide for the common welfare, and no better place to draw inspiration for that fight than at Eleanor’s feet.

    Happy Taxpaying!

    *Not all of these ideas are necessarily good ones!

    April Fool’s! But not really!

    So I had the thought that I’d put something totally awesome on here for April Fool’s Day, like some really exciting announcement about the end of global poverty or something…and then I realized that it would just be depressing, really, to read something that jazzed you up that much, and then be told, “just kidding!” I mean, we’re activists for social justice. We’ve had enough disappointment already, right?

    So my next idea was to write something totally horrible, like the criminalization of hunger, or something, and then I realized that, as bad as things are today, probably no one would be that surprised by anything I could think up, and so the “just kidding” would be only mildly relieving, and yet still depressing, because it would serve as a reminder of just how hard we are to shock these days.

    And, THEN, I heard this!

    It’s from all the way back last November, but it was stuck on my iPod somehow, and I was listening to old podcasts the other day while doing one of my marathon cooking sessions for the kids. And I hit “play” again just to hear it again. It’s totally brilliant stuff.

    Basically, if you don’t want to listen, the deal is that there is a group of wealthy Germans who are agitating to get the German government to increase taxes for rich people, voluntarily, with the only caveat that (drumroll, please) the money raised by the tax increase go to social services and ‘human infrastructure’. Seriously. Contrast this to my reflections last winter on pathological wealth.

    And, in what has to be my new favorite thing, the podcast also led me to Responsible Wealth, an organization of rich people dedicated to working for fair (read: progressive) taxation in the U.S. They count among their biggest public policy victories the efforts to sustain the inheritance tax, and their major agenda for the next congressional session is the repeal of the Bush-era tax cuts.

    Now, truth be told, we need an economic structure (tax policy included) such that no one accummulates an excessive amount of wealth (and wealth-related power) in the first place, but, in all fairness, a lot of these folks articulate that vision, too. Imagine what our world would look like if we all espoused the “I have enough. I don’t need more than enough. And we have real social needs,” mantra that I heard from one of the leaders of the German group exhort.

    April Fool’s Day. Not really. Let today’s message be, instead, that we’re all “fools,” so to speak, if we limit ourselves to thinking within the current constraints instead of envisioning how we could totally reshape our society if we played by different rules, engaged with totally new partners, and imagined totally different limits.

    Indeed.

    The Sunflower State Needs Reseeding!

    Kansans, we’ve got problems. And it’s not just that the budget is tough. We’ve known that for a long time.

    Our biggest problems are the failure of many Kansans, including many of those elected officials charged with representing us, to recognize precisely how bad it is, and what that means about the options that are and are not really viable at this point; and a lack of political will and strategic vision to make the hard choices that must be made.

    This certainly isn’t unique to this year or to our state. Moral courage, is, in general, in short supply throughout public life–NOT just among members of the state legislature. We’d all like to get as much as we can with as little pain as possible and, writ large, that can lead to some pretty appalling public policy decisions.

    But, still, as I head to Topeka this week to work with a few dozen bright, aspiring student journalists as they challenge our elected officials to think of the future, I’m hopeful.

    Because history shows that sometimes the most amazing things happen when our backs are against the wall, when everyone knows that the only avenues left are pretty bad, and when there’s a collective sense that we’re in this together, as much as we wish that we were somewhere (anywhere!) else.

    Here’s how bad it is. At a legislative forum I attended two weeks ago (so, yes, this is tardy–ear infections in young children are evil!), I had this exchange with a senior senator closely involved in budget negotiations:

  • Kansas, as currently laid out, has a $5.3 billion budget in state general funds (which excludes those special-use funds, as my advanced policy students remember) for this year. That’s AFTER a cut of approximately $1 billion last year. With a “b”.
  • Despite those cuts from last year, to just keep everything going this year (with absolutely no program growth), we’ll still run $250-350 million short this fiscal year.
  • Okay, so that sounds like, “we need to make some cuts, but not as much as the year before, so…you know, we knew it was going to be a tough year, but everyone needs to tighten our belts and…”
  • Wait. That ~$300 million needs to get cut out of the ~15% of the budget that’s really in play. Here’s the deal. We can’t cut K-12 education anymore without having to give back the stimulus dollars that are tied to our commitment to keep school funding at at least the 2006 levels, which is where we are now. We can’t afford to give that stimulus money back, so we can’t cut K-12 education any more. And Medicaid costs are essentially out of our hands; Kansas is doing very little optional with Medicaid right now anyway, and the federal government determines eligibility and the level of state responsibility.
  • So, then, we’re left with a reality of needing to cut that $250-350 million out of approximately $800 million. And WE CANNOT. We’d have to close courts, release violent offenders, dismantle remaining safety net programs, leave dangerous roads unrepaired, lay off thousands of state workers…you can’t pretend to still have a state if you eliminate almost 40% of what the state does, especially when that’s on top of 17% cuts just the year before.

    And all of this brings us back to this question of vision and will and courage.

    Because we desperately need a restoration of our tax base. No one wants a tax increase. I know.

    But I don’t see another way out, that doesn’t include the decimation of the public infrastructure that, really, makes us a civilized society. Taxes are the price we pay for that, and we forgot that all too easily, and too often, in the boom years of the late 1990s…it’s time to rebuild.

    And you know what? My hopefulness is warranted, I really think. In the last two weeks, I’ve had conversations with 7 members of the legislature, from both political parties, who have admitted that many of the past tax cuts were mistakes, called for a revision of exemptions, and offered some specific ideas for possible tax increases. Several have even referenced that this session feels a bit different, because of the desperation, and that, by April, we could start to see a deal emerge.

    But, as that senior senator pointed out, those of us whose work depends on a strong tax base need to get working. Not one of the nonprofit legislative agendas I’ve seen has included a call for increased revenues, even though that’s undoubtedly the most important policy position the legislature could take this session.

    We need to talk with our grassroots base about the need for more revenues, and the need for tax justice. We have to build pressure to undo the excesses of the past decade. And we have to be in the process, stressing that all tax increases are NOT created equal, and articulating a vision of what tax fairness looks like.

    Things will get better (first, they’ll get worse, because we won’t have that stimulus money in FY2012!). But they won’t get as much better as they should if we don’t take advantage of this political opportunity to get the impossible done.

    Ad astra per aspera, right?

    Let’s go.

  • Should be required reading for all Kansans

    Check out this great article that a terrific statehouse reporter, Tim Carpenter, wrote in today’s Topeka Capital Journal. Tax breaks eroding budget | CJOnline.com

    This should become a major public policy issue. Social work advocates and others concerned about where our state will get the money we need for essential services can’t continue to just fight over how that pie is divided up. We’re obviously not using enough ingredients, to extend the metaphor, so then we can’t be surprised when there’s not enough to go around.

    The continuation of these tax breaks is a reflection both of a broken process–relatively little debate on the tax side of budgetary policy–and an inadequately strong lobby for the strong public expenditures our social contract requires.

    I will raise this issue with my state senator and representative in advance of the 2010 legislative session, asking them specifically if they are willing to support a full review of sales tax exemptions and other tax ‘loopholes’, and which tax exemptions they are willing to repeal. If we can win on this issue, our debates over appropriations will be much less painful.

    Shared via AddThis