Senators Burr and Tillis: We Won't Forget What You Voted For

Dick Burr and Thom Tillis of NC voted yes. With pleasure!

The redistribution of American wealth to the already wealthy is now almost complete. It's what we've all been asking, begging for, right? We need more space -- infinite levels of space -- between the mega-rich and the working poor, not to mention the getting-poorer-under-Trump middle class.

Just one hurdle left to jump: the conference between US House and US Senate. Their two different tax bills have a lot in common — dramatic cuts in corporate taxes, elimination of several key personal tax deductions, and a big change to the estate tax. But these two bills also have a number of crucial differences to be arm-wrestled before the final version reaches Trump.

Prediction: the bill that Trump signs will be more like the Senate bill than the House bill. The Senate is delicately balanced, like popovers: any shift in the crust could crash it. So the House will be more flexible. (Paul Ryan has already signaled that he's willing to accept the Senate repeal of the individual mandate under Obamacare, and ain't that a huge surprise!)

Corporate taxes will be cut forever in both House or Senate bills, but the Senate sun-sets the measly individual tax cut for the middle class, which will vanish -- poof! -- in 2025.

Both House and Senate would increase the child tax credit -- the House less so -- but both bills would also punish millions of families that don't make enough to pay income taxes but still pay payroll taxes, cutting them off from the expanded benefits. Senators Marco Rubio and Mike Lee (really!) tried last night on the Senate floor to insert a provision that would have expanded this tax credit to millions of low-income families. Rubio and Lee proposed to pay for it with a small bump in corporate taxes. Their proposal failed.

Mortgage deductions on individual tax returns -- preserved in the Senate bill; reduced significantly in the House bill.

The Senate repeal of the individual health insurance mandate will cause a likely 13 million Americans to drop insurance coverage in the next decade, which will necessitate a spike in health insurance premiums for all the rest of us. 

Since the Senate bill was being written, essentially, while it was being debated -- literally handwritten emendations in the margins of the earlier printed version -- there's still a lot of special-interest candy yet to be discovered among dozens of marginal provisions tucked in there at the last minute. Who had time to read those almost 500 pages of law? Any written text was not available to Democrats until the last minute, and it was unread by many Republicans senators who weren't about to buck the leadership no matter what might be hidden in that language.

One mysteriously added provision did get exposed on the Senate floor last night, exposed and ditched. Pennsylvania Sen. Pat Toomey had included a specific carve-out exemption to help the conservative Hillsdale College in Michigan, which is intimately connected to Sec. of Ed. Betsy DeVos.

I'm not even going to talk about the deficit-busting in both bills. I don't care. Republicans have always been total hypocrites, and they don't particularly care who knows it [cough] Virginia Foxx. That's the only take-away.

Virginia Foxx and Her Republican Pals Have Shown Their True Colors

The TV ad below -- aimed specifically at the vote of a Maine Republican on the hose-the-middle-class tax plan recently passed in the US House -- is about to be duplicated in some 25 Republican House districts with large numbers of white voters who had previously voted for Obama but who opted for Trump in 2016.

The ad probably won't be shown in Foxx's 5th Congressional District, though it ought to be.

The ad was created and paid for by Not One Penny, "a campaign launched by progressive groups to oppose all tax cuts for millionaires, billionaires, and big corporations."
The ad hits two messages: GOP changes to the tax code are enormously regressive, showering most of their benefits on the wealthy while giving crumbs to working- and middle-class Americans (or even raising their taxes). These tax cuts will necessitate big cuts to the safety net later — the ad references $25 billion in Medicare cuts that could be triggered by the GOP plan’s deficit busting — further compounding the GOP agenda’s regressiveness down the line.

The Truth Has Come Out in North Carolina

Republican Rule:

When Is a Tax Cut NOT a Tax Cut? When It's in North Carolina

The "news" is beginning to catch up with the facts, that the much ballyhooed "tax cuts" engineered by the Republican overlords in Raleigh are actually turning out to be tax hikes for many in the middle class. Welcome to reality, suckas!

From the News & Observer today:

The new changes involve tax cuts that favor high earners and corporations. North Carolina’s economy is recovering along with the nation’s economy, but there’s no sign of corporations racing to relocate to North Carolina or wealthy “job creators” creating jobs. Much of the corporate savings went to shareholders, many of them out of state. Rich people put their tax savings in the bank next to the bundle they’ve made off a record-setting stock market.

Meanwhile, tax revenues are running below projections, the state is struggling to meet basic education needs, most state employees apparently will go another year without a raise and many retired people are discovering that the tax cuts are a tax hike. The changes reduced exemptions for pensions and eliminated the deduction for medical expenses. As they do their taxes this spring, seniors are howling when they reach the bottom line.

Taxpayers Who Matter, Unlike the Rest of You, Who Don't

The Great Flat-Taxing of North Carolina is producing heat for the Republican General Assembly, but there's only one brand of heat that gets action from The Honorables and that's old people heat. The Great Flat-Taxing threw out tax deductions of all varieties, but throwing out medical deductions has gotten older voters exercised, and the thing about older voters is they vote. And as there's been no concerted effort in Raleigh to suppress their vote, they're particularly dangerous to incumbents, like no other voting bloc.

So quicker'n you can say "my baloney has a first name," the House Aging Committee will meet at 11 a.m. to quickly begin correctional action -- a bill that would restore the state tax deduction for older residents' medical expenses.

Now that's power.

Republicans Planning To Raise Dozens of Taxes

In order to relieve the delicate rich and fragile corporations of the tax burden of supporting North Carolina government, the new Republican majority in the General Assembly is leaning toward imposing new taxes on almost 200 services that are currently untaxed, including:

haircuts
medical attention at an urgent care clinic
insurance
pool cleaning
arcade games
beauty salon stylings
car washes

landscaping

water

debt counseling

dating services

taxidermy

newspapers

bowling alleys

most labor costs, including lawn mowing

pet grooming

investment counseling

professional services offered by attorneys, accountants, veterinarians and physicians

carpentry, painting, plumbing
diaper services

health clubs

shoe repair

internet service providers

books, music and movie downloads from the Internet

“It’s unfair to the majority of people if income taxes are lowered and sales taxes go up,” said Rep. Paul Luebke, a Durham Democrat. “The wealthy will disproportionally benefit from the decrease.”

What he said.

The Parallel Worlds of Arthur Laffer

Who is Arthur Laffer? Short answer: the man most responsible for the Reagan administration's "trickle-down" tax policy that resulted in the first huge bounce in this nation's deficit.

Also the man behind the NC General Assembly's current plan to eliminate (or perhaps only greatly reduce?) the income tax on the rich.

Arthur Laffer has been the go-to guy for conservatives in various state legislatures looking to shift the tax burden away from the rich and onto the backs of the working class. In 2011, a right-wing think-tank in Oklahoma hired Laffer's consulting firm to write a report that "suggested that Oklahoma would benefit by lowering taxes on businesses and the wealthy and scrapping credits for lower- and middle-income residents."

This plan was introduced as a bill in the Oklahoma state legislature, and its authors hosted Laffer in the state to promote the idea. But economists started actually analyzing Laffer's numbers, and the bill didn't pass. But that didn't slow down Laffer one bit.

In 2012, another conservative shop invited Laffer to do the same job for the state of Kansas and also invited Laffer to come to the state and talk up his plan. Unfortunately, unlike Oklahoma, Kansas passed the plan and are just waking up to its full effects. The purpose behind the Laffer Plan is to squeeze government down to a size that can be drowned in a bathtub, and empirical evidence shows that states that follow this path suffer:

In Kansas, ... essential services are already in serious danger. After passing the Laffer bill, the state is now projecting $800 million annual budget deficits and has extended an emergency sales tax that should have expired years ago. The Kansas budget director has instructed all state agencies – including those that handle education, law enforcement and highway safety – to plan for a 10 percent across-the-board cut. If the tax cuts aren’t repealed, Kansas’s already cash-strapped schools and universities are expected to lose over a billion dollars in funding in the next five years. 

And for what? Businesses aren’t flocking to Kansas in anticipation of a lower marginal tax rate. Since May, the state has added only about 2,000 jobs. In the same span of time, Oklahoma – which rejected the same proposal – added nearly 12 times as many.

We're indebted to Nick Carnes, who has lived in both Oklahoma and Kansas, for the quotes above and for pointing out the sheer folly of the steerer of The Clown Car in Raleigh, who appear hell-bent to bring the Laffer Laugh-Riot to North Carolina. And, yes, the NC legislators are relying on a plan written by Laffer's consulting firm.

The Republicans' entire rationale, they say, is to improve the business climate in the state and thus bolster jobs. But Carnes points out that a state that starves its infrastructure, neglects its school system, whittles away at its university system is a state that will turn off businesses looking to relocate. Who wants to relocate to a 1950s version of Mississippi? (Or a 2013 version of Kansas, for that matter?)

Pope's Icy Feet

Art Pope yesterday: "A gross transaction tax [by which he appears to mean an across-the-board sales tax on all goods and services], without any regard to whether you're actually making any money, not a tax on net income, I think that's going to hurt the economy," Pope said. "It is regressive in nature, no doubt about it."

Some are suggesting that this stance by Pope, as opposed to what Republican leaders in the General Assembly have been saying, is just shadows on the wall, that their real goal has never been the elimination of the income tax but just a further flattening of rates on high earners and corporations. And that they can achieve that best by whipsawing the public between the extremes and then "compromising" on making life much jollier for the rich.

That's a conspiracy with too many moving parts, IMHO, though the predicted ultimate outcome seems very likely. But I still think it might be a case of cold feet.

Art Pope, Disagreeing with Himself?

The first mention we saw of this very curious example of cognitive dissonance was just before noon today on WRAL reporter Mark Binker's Twitter feed:

#ncgov Budget Dir Art Pope talking to journos at UNC. Says he doesn't think eliminating personal/corp income taxes is a good idea #ncga

This is more than just passing strange, since it's been the Pope-funded "think tank" Civitas Institute that has been promoting the idea that North Carolina would be brimming with fiscal health if we could just eliminate the income tax on the wealthy and on corporations and shift the burden to sales taxes, including most notoriously taxes on groceries and services, like lawn-cutting and hair-shearing.

Art Pope

It's also more than just passing strange, because the GOP-dominated General Assembly of North Carolina is in office largely because of the accumulated expenditures of Mr. Pope, who has drawn his money from five & dime stores across the state (often located in the poorest neighborhoods). Mr. Pope's combined contributions to conservative causes and conservative (Republican) candidates is currently estimated in the $40 million range. Leaders of the GOP in the General Assembly, Mr. Pope's obedient brigade, have already opened up a call for eliminating the state's income tax even before the legislature has actually convened.

The brains behind that state income tax elimination meme is the American Legislative Exchange Council (ALEC), which is funded by the Koch Boys, who are closely tied to Mr. Pope. If any one of them gets an itch, they all scratch simultaneously.

So ... was Mr. Pope experiencing a fugue state this morning? Did Mark Binker just hear him wrong? Or is he dissembling because (a) Deputy Governor Pat McCrory is getting cold feet or (b) Art Pope Hisownself is getting cold feet? (He has of late complained that he's being personally attacked.)

We'll wait with impatience for Mark Binker's full report on that curious scene at UNC this morning.

John Cole, for NC Policy Watch

Romney Paid Zero Taxes, 1996-2009

Bloomberg News cracked the case.

Why did he stop using the tax loophole in 2009? Possibly because he knew he was going to have to reveal something about his taxes when he again ran for president in 2012?

Wow. Just ... wow.

Tax Fairness?

This report says that lower- and middle-income folks in North Carolina are taxed at a higher rate than the supremely rich: If you make $15,000 a year, you pay almost 10 percent of it in state and local taxes. If you make $15 million a year, your tax rate is less than 7 percent.

Money quote: "So if you were Gov. Bev Perdue, a Democrat at the time of her election, and you were trying to raise revenue to help fill a $2.4 billion budget hole, wouldn't you look to raise it from the folks who have it — the rich — while also trying to make the tax system in North Carolina at least slightly less regressive?"

The answer to that question would be a big fat "no."

Pity the Poor Rich!

Billionaires are DEPRESSED, sez John Melloy, Executive Producer of CNBC's "Fast Money." So what are the super-rich spending their bucks on? Vacant office buildings, farmland, and ... wait for it! ... Africa.

As you know, ah, you face the country's future with the rich assholes you have -- not the rich assholes you might want or wish to have at a later time.

Oregon Takes a Stand

A state-wide voter referendum in Oregon has passed "handily" a tax increase on the wealthy and on corporations.

Oregon has not raised taxes on corporations since 1929. And this is the "first voter-approved statewide income tax increase since the 1930s."

In other words, in this traditionally anti-tax state, the people decided that the super-rich ought to pay a fair (or at least fairer) share of the burden.

We consider this a first rebellious shot by the squeezed middle class.

The Common Good?

The GAO (Government Accountability Office, the investigative arm of Congress) reports that two out of every three U.S. corporations (and there are 1.3 million American corporations) paid absolutely no federal income tax from 1998 through 2005.