Wednesday, December 12, 2007

Al Gore calls for a global tax on carbon to fund a progressive income tax cut for people

This is cool.

As part of his Nobel acceptance speech, Al Gore said:

And most important of all, we need to put a price on carbon -- with a CO2 tax that is then rebated back to the people, progressively, according to the laws of each nation, in ways that shift the burden of taxation from employment to pollution. This is by far the most effective and simplest way to accelerate solutions to this crisis.

That's absolutely right. We should tax what we don't like -- carbon emissions -- and use the money to fund what we do like -- purchasing power for individuals.

And we should embrace a global government for the purpose of levying, collecting, enforcing and distributing this tax. Without one, it's hard to see how we effectively reduce global pollution that causes climate change.

Thursday, December 06, 2007

Obama concert Friday at the Riv with Macy Gray, Jeff Tweedy, Stephan Jenkins, Jill Sobule, Cool Kids, The Changes, Canasta

This is a cool thing: there's a big concert tomorrow night at the Riviera for the Obama for President campaign. The headlines are in the headline (Macy Gray, Jeff Tweedy and lots of others).

Tickets aren't cheap ($50 to $500), but it's a fundraiser for the campaign that is successfully taking on the most entrenched Democratic political machine in the nation on a platform of progressive reform.

A million people donating $100 and 100 hours a year creates the world's most powerful force for justice.

The Obama campaign is getting closer every day.

Join the campaign.

If you want to buy tickets to the concert, you must do so here.

And while you're at it, tell one person you know (anyone will do) that you are going to vote for Barack Obama and ask them to consider doing so as well. Word-of-mouth is the most powerful political weapon on earth. Use it.

Sunday, November 25, 2007

Establishment loves insurance companies -- ask the New York Times (and vote for Obama to stop it)

The problem with too many elected Democrats is that they start acting as if they are part of the establishment instead of shaking it up to make life better for most people.

This New York Times editorial titled "The High Cost of Health Care" is a great example of establishment thinking that infects way too many D.C. Dems.

The topic is timely: why do we spend so much money on health care industries and end up with a poor infant mortality rates, 50 million of us without any insurance coverage and more medical bankruptcies than any other form of financially destroying Americans?

The obvious answer is because of the parasitic insurance industry. They add no value. They just make health care more expensive by profiting from taking our premiums and rationing out care. They also drive doctors, hospitals and other providers crazy by drowning them in ridiculous paperwork and inflate the cost of care by paying for all those commercials and downtown skyscrapers.

But that's too irresponsible for the establishment. The establishment likes insurance companies. You're either a pitchfork-wielding populist of a dreamy out-of-touch liberal in their eyes for pointing out the cost-driving waste of the insurance industry.

Here's how the Times puts it:

Single Payer. Deep in their hearts, many liberals yearn for a single-payer
system, sometimes called Medicare-for-all, that would have the federal
government pay for all care and dictate prices. Such a system would let the
government offset the price-setting strength of the medical and pharmaceutical
industries, eliminate much of the waste due to a multiplicity of private
insurance plans, and greatly cut administrative costs.
But a single-payer system is no panacea for the cost problem — witness
Medicare’s own cost troubles — and the approach has limited political support.
Private insurers could presumably eliminate some of the waste through uniform
billing and payment procedures.

So rich! Only those romantic liberals with their yearning hearts want to cut out the middlemen entirely. Nothing pragmatic or responsible about that -- instead, with limited political support, it's a rather silly idea that remains buried deep inside, like world peace.

The easier way to read the paragraph is simply to say: we love insurance companies. We want to keep them in the center of how we finance health care because.....well, we won't address that point directly, since there isn't any compelling reason to structure the financing of health care around for-profit middleman industries.

One of the reasons why I support Senator Barack Obama is because he is not swayed by that establishment thinking. I think he is a very shrewd operator and believes that it's in our national interest to minimize the role of insurance companies in the financing of health care. The national Republican Party has fully embraced the insurance industry as part of their corporate-evangelical coalition, and always looks to expand the profits and reach of the industry (which comes directly at the expense of all of us). The trouble is when Democrats try to look responsible or centrist and accept the Republican strategy of embracing the establishment as part of the solution to our problems. That's the problem with Senator Hillary Clinton (at least, that has been her problem -- way too corporate).

Beware the establishment Democratic elected official. They are too quick to sell us out.

Thursday, November 01, 2007

What if we had the 1979 distribution of income today?

Today's Wall Street Journal has a great line from former Treasury Secretary Lawrence Summers. I'll quote the Journal's Capital column on page A2.

If the distribution of income in the U.S. today were the same as it was in 1979, and the U.S. had enjoyed the same growth, the bottom 80 percent would have about $670 billion more, or about $8000 per family a year. The top 1 percent would have about $670 billion less, or about $500,000 a family.


The obvious remedy to this problem of a poor distribution of wealth is to increase taxes on the top 1 percent of families by about $500,000 (don't worry, they won't miss it and they can afford it) and cut taxes on the bottom 8 percent by $8,000 per year.

Sunday, October 21, 2007

State and local appetitite for tax increases due to an outdated taxes

Why is it that the State, the transit agencies, the City of Chicago and the County of Cook are all looking for tax increases?

According to the Tribune story Behind the Great Tax Push, it's because they can get away with it. Typical anti-government line: they must not represent the people (who only want lower taxes) because they just got elected, so therefore, 'they' will try to shove an unwarranted tax increase down 'our' throats because they can't manage a government.

The real reason why our state and local governments are broke is because we're taxing the wrong things. We have a great tax for the 1950s economy, but in 2007, our taxes need to be modernized.

We use the sales tax to fund a big chunk of state and local government. In Illinois, we only tax goods, not services. That means if you buy a bowling ball you pay a sales tax but if you go bowling you don't. More and more of our economy is about selling services instead of goods, so the relatively few people still selling or buying goods end up with the bill while the increasing group of people selling or buying services gets a free ride.

The sales tax rate on goods has to keep rising to try to generate the same amount of money, since less and less economic activity flows through the sale of goods and we don't tax services.

There are 168 possible services that states tax. We tax 17 of them. Iowa taxes 94. The Federation of Tax Administrators in DC put out that data recently, and you can check it out yourself here.

You'd think the Trib would have included some of our local experts, like the Center for Tax and Budget Accountability (that put out a great report on Cook County's structural deficit, due partially to a sales tax that only covers goods), but I guess there wasn't room with the anti-government quotes like:

"There seems to be a general attitude to tax everything that you can," said Msall of the Civic Federation, a non-partisan government watchdog. "That's what these government officials think their role is, to oversee the expansion of government rather than the management of government."
Well, gee! I guess our 1950s tax system doesn't have anything to do with revenues shrinking every year. It's all about those Big Government Democrats instead who don't believe in management!

I hope the Trib and the rest of the media tell a more accurate story about our governments and our 1950s-era tax systems in the coming weeks to explain why more of our governments are not balancing their budgets.

And more importantly, I hope we can modernize our tax system with a sales tax on services as well as goods and a progressive income tax instead of a flat tax.

Sunday, September 16, 2007

More voters in contested presidential states in February than in November

Did you know that, thanks to Tsunami Tuesday where 20 or so states will hold presidential primary elections on February 5th, there will be more Americans who live in a contested state for the primary election than there will be in November?

Remember, voters in most states are irrelevant in presidential elections. Either they are blue and thus uncontested like Illinois are red and thus uncontested like Texas. So, irrelevant.

But with 20 states on the same primary election day, almost half the country's voters are relevant.

A little sad that the standard for success is half the country's voters are relevant, but at least it's progress.

(And of course, I'm putting in a pitch for my client, the National Popular Vote, to make all voters relevant in November....)

Tuesday, September 11, 2007

Zorn gets the corporate loophole list, particularly for the LUST fund

Good news. Eric Zorn got the list of corporate loopholes that the Governor wants to close to generate revenue.

The list is here.

The list does not include fiscal notes, likely because no one has good estimates as to what they might generate, but Zorn wrote that they will come soon. I hope they come very soon to get a sense of the size and scope of these loopholes.

It looks like the Governor's office did a good job explaining each of the loopholes to close as well.

The list looks good to me. At first blush, I think we ought to close all of them. Here's a good example:

Repeal deduction for foreign and domestic dividends received by corporations--Corporations are allowed to deduct dividends received from other corporations, while individuals are required to include dividends as income and pay tax on dividends received. Corporations exploit this loophole to create foreign subsidiaries that return profits to the U.S. parent corporation in the form of dividends, which cannot be taxed under current Illinois law. For example, an Illinois manufacturer creates a subsidiary in Mexico to manufacture widgets and closes its Illinois widget manufacturing facility. The subsidiary returns its profits to the Illinois parent as a dividend. This deduction is encouraging companies to export jobs overseas.
Why should we give a tax break to ADM or John Deere to export jobs?

And, some people think that these corporate loopholes are boring. They obviously have never dealt with the LUST fund. Check it out (cue disco ball):

Repeal exemption for fuel transported to out of state destinations --By closing this loophole, fuel stored in Illinois will be taxed at the same rate, whether the ultimate destination of the fuel is in Illinois or in another state. Currently the state collects this tax for the LUST fund (Leaking Underground Storage Tax), but gives an exemption for that fuel which is sold in another state. Fuel stored in Illinois and exported to another state poses an environmental risk so the same tax should be charged. Further, the exemption gives a gasoline retailer in a border state at $.011 per gallon advantage over an Illinois retailer, if both buy fuel from the same Illinois distributor. In addition to ending the exemption, this proposal will actually reduce the tax rate from $.011 per gallon to $.010 per gallon, thus reducing the tax on fuel used in Illinois.

Oh yes. Tell me you're not hot and bothered by generating some more revenue for the LUST fund....

Anyway, all of these loophole closings look like smart policy moves to me. That being said, we need a much higher income tax in Illinois on high incomes and the Governor should drop his opposition to that move.

And, he ought to ask his allies in the General Assembly to file some bills that actually close these loopholes. I've worked on a few bills that would have closed some of them (SB 2122, introduced by Senator Martin Sandoval in last year's General Assembly would have returned to the three-factor income tax apportionment that would have generated in the neighborhood of $100M annually), and I have no idea why these loopholes haven't been filed yet.
The sooner they get filed, the better.

Tuesday, August 21, 2007

Idea: get more election judges by letting them out of jury duty

We've got a problem: not enough election workers (called election judges in Illinois). Our elections are run essentially by volunteers and we have a lot of elections (four in a two-year cycle). Many election judges are senior citizens and they have to put in a 13 or 14 hour day. It's a challenge every election cycle to generate more volunteer election judges.

In a debate last week before the Los Angeles City Council on a motion to study instant runoff voting and several other reforms put together by rising star Eric Garcetti, President of the Council, Member Janice Hahn expressed a really interesting idea. (You can watch the debate here -- jump to Item #28 on the agenda).

She noted that election judges (called pollwatchers in California) are fulfilling their civic duty and serving the Republic. She also noted that lots of people would prefer not to serve in juries (they are hard to plan and many people get booted out of the jury pool). Council Member Hahn suggested that a great way to increase the number of election judges would be to release election judges from the jury pool, as serving on election day is as much a civic duty as serving on a jury of a defendants' peers.

I think it's a great idea and we ought to implement it in Illinois.

Saturday, August 04, 2007

Live at YearlyKos with the presidentials (version 7)

Very funny moment. Edwards repeats that we need to swear off DC lobbyists money. Hillary gets asked directly whether she'd do the same. She smiled and said "John has certainly taken that position" and the audience laughs because it was such a ridiculous response. And she smiled as well because she seemed to know how ridiculous it was.

Obama then went on the attack to make it clear that the billion dollars the insurance industry spent on contributions had an influence. "I want to challenge the notion that lobbyists don't have disproportionate influence." "they aren't giving money for the public interest. They have an objective." Huge response.

Hillary defended lobbyists, many of who represent regular people like nurses and social workers or corporations who employ thousands of people. And, as a lobbyist representing progressive clients, I appreciate that. But, Barack's point that there's a lot we can do to clean up DC before public funding is implemented resonates.

Dodd: Our Constitution is at risk!

In the Obama White House, no one can lobby after serving. We need to stop the revolving door.

Clinton actually said we're safer because we are willing to take off our shoes before we go into airports. That's absurd.

Clinton then successfully attacks the unitary executive concept infecting our government and showing incompetence all over. But she then says we need a constitutional amendment to get public funding. She's just not a reformer.

Kucinich: Reminds us that 1 million innocents have been killed in Iraq and we need strength through peace.

Live at YearlyKos with the presidentials (version 6)

Barack: China is a competitor and as long as they are our banker and we are their debtors, we have less leverage. China is also manipulating their currency and closing their markets. In Africa and Latin America, the Chinese presence is as striking as the American absence. They are building roads and schools while we are obsessed with Iraq.

Dodd: Tragic sight of the adverTISEments (funky pronunciation) in DC newspapers asking for Arabic speakers after 911 to figure out what is going on. Wants a lot more global exchange.

Edwards: Pakistan is a problem. Unstable leader, nuclear power, anti-American population, Kashmir fight. Musharref said it would change everything if our kids had a public school education, USA should use soft power to educate 100M children. Opposed to 20B arms deal to Pakistan.

Richardson: Bush-Cheney policy to Musharref is one of appeasement. We won't force them to go after Al-Queda because it's domestically hard for him, We are so easy on him and we give him so much money. Richardson seems like he knows what's going on,

Interesting that

Barack: We need to change the political map together. We have got to expand the voter base. New people will let us go into Mississippi which is 40 percent black. Our rally in Atlanta had 20,000 people, 40 percent of whom were not registered to vote.

Hillary: We need to pay attention to the red parts of the blue states. Congratulates Howard Dean for the 50 state strategy.

Richardson: We need to push for same-day voter registration. (I like that!)

Live at YearlyKos with the presidentials (version 4)

Congressman Kucinich calls for universal, single-payer, not-for-profit health care and notes that even the insurance companies want universal health care. He wants to put the money into health delivery. His new adjective is "not-for-profit" for the health care system we want. not bad.

Edwards: I will close Guantanamo. No illegal spying. No torture. And a transparent government. Calls to swear off all money from the Washington lobbyists and credits Obama for already doing it. Huge reponse.

Gravel gets asked about his support for the fairtax. But he gets a little odd. Maybe I'm not sure whether he adds a lot of value or not. He's a little Andy Rooney. But ends up with a somewhat coherent call for statutory power by referendum.

Next question is on Kucinich's idea to use the power of the purse to get out of Iraq. Clinton explained that Senate rules really hurt Dem attempts to pass legislation. Basically says we need more Senate GOP support in September.

Kucinich says the way to deal with Cheney is to impeach him for lying. And if the President won't withdraw from Iraq, impeach him too.

Dodd: The policy has been a failure but the troops have not been.

Richardson: I have a one-point plan: Get Out. Leave no residual forces behind. Create an all-Muslim peacekeeping force. De-authorize the war with a six-month withdrawal. We did it in three months in Kuwait.

Gravel: Vote on cloture every day. Get the votes from the GOP any way we can.

Obama: There's no excuse for the act of evil of 9-11 and by the way they were not in Iraq. And we have absolutely fanned anti-American sentiment by invading an innocent nation and helping to trigger a civil war. now, end the occupation of Iraq and win the war against Al-Queda that is stronger now than they were before. We have had a pattern in the past in the Middle East where we act unintelligently where we are interested only in oil and our own interests. Pretty close to telling the truth.

Edwards: Simple formula. Less allies, more terrorists. We should not accept Bush's framing.

Live at YearlyKos with the presidentials (version 3)

The first statement from any candidate was Bill Richardson and he said "I screwed up on that one."

That was cool. The moderator (Joaninmd by her kos moniker) asked about Richardson's statement on Byron White as his ideal justice. And she's got a bit of a lisp, interestingly enough.

Dodd says the Administration is trampling over the Constitution. And he said he thinks we should not approve any more Supreme Court Justices until 2009. I buy that.

It is striking that Hillary is the only woman candidate. She pointed out that all candidates are for universal health care. Her three lessons: 1) Have a political strategy 2) Build a coalition and 3) Get ready for the drug companies, insurance companies and ideologues to attack.

Barack's question is on budget discipline. 1) Stop spending 275M every day on Iraq war. 2) Don't extend Bush tax cuts on highest income brackets and 3) Institute PAYGO. But he also says that "we've got to make some investments." And the biggest fiscal threat we have is Medicare and Medicaid and we need to control costs through universal health care for long-term fiscal discipline.

Edwards said we need big changes, not small changes. And he dodged his question and instead said the insurance, drug and oil companies will never give up their power. So you need someone who will fight them, has fought them and will continue to fight them to take the power back.

Richardson: These are fine speeches but I have balanced 9 budgets. He wants a balanced budget amendment and got booed. (Edwards got a great response).

Live at YearlyKos with the presidentials (version 2)

It works. Cool. So, in the spirit of liveblogging, here we go.

The feel of the convention is a lot less hacky and a ot more earnest than the national convention. Almost all the people here are essentially good citizens: they care about the Republic and are trying to improve it. It's refreshing.

There are about 1500 seats and a dozen or so cameras. It's got a professional feel.

The weird celebrity vibe of incoming presidential candidates is in the air. It must be tough for candidates to stay grounded when they becom famous. I'm sure @ld have a hard time staying humble if people were genuinely excited just to be in the same room as me. I don't anticipate that happening. Maybe if I get a dog.

I wonder whether we're on the cusp of a New Deal. There does seem to be a big change in the air.

I like that a forum of presidentials is pulled together because of the netroots, not because of any interest group.

And I like that Mike Gravel gets to participate in the discussion. It's like the opposite of the corporate-funded, ham-handed Commission on Presidential Debates.

The crowd just sang Happy Birthday to Barack after Matt Bai announced it's his birthday. That was fun.

Here we go.

Live at YearlyKos with the presidentials

I'm sitting in McCormick Place in Chicago with 1000 other progressive bloggers waiting for the presidential leadership forum to begin, My company, Progressive Public Affairs, had a booth so we've all been here since Thursday mixing it up with the progressive base of the Democratic Party.

I've got a new Treo 700 that I'm trying to use for a liveblog, so let me see if it works....

Monday, July 02, 2007

Vote for Illinois to host the Simpsons premiere

The Simpson's movie premiere will be held in Springfield. There are 14 Springfields competing for the honor, including our very own.

You can vote for Illinois here on a USA Today site.

The movies are fun to watch as well. Vote by July 9.

The premiere will be held before the nationwide opening on July 27, so if we win, the General Assembly will be in session.

First, the Barack Obama's presidential campaign kicks off in Springfield. Now a first-rate movie premiere. Good things happening to Springfield.....

Vote right now!

States renamed based on the gross domestic products

Thanks to Eric Zorn's Land of Linkin' comes this post from a site called Strange Maps that renames each U.S. state based on the nation with the same sized economy (gross domestic product).

So Illinois, with 12 million people, is named Mexico (which has 100 million people).

Iowa = Venezuela

California = France

Texas = Canada

That'll make you think. We are one wealthy nation.

Overtime budget decision: Senate Dems v. House GOP

The question will likely be resolved in late July: will the Senate Democratic plan for solving some problems (like a state structural deficit, poor schools in property-poor areas, a transit system shutting down in September and too many medical bankruptcies) with new revenues and new investments be implemented or will the House Republican plan for letting the problems wait for another day in return for not significantly raising taxes, fees or gambling prevail?

In legislative leader parlance, I think the real overtime battle is between Emil Jones and Tom Cross.

I'm not a fan of the leader shorthand that is often employed in state government discussions, as I think each caucus is much more diverse than the particular personality and policy preference of the leader. So, it isn't enough to say "what Madigan wants" as a substitute for what the members of the House Democratic Caucus want, because each of the leaders represents the views of their members, not just their own views.

So, it's clear that many (perhaps most) Republican members would accept not solving some problems in exchange for not increasing the state's 3% income tax, the sales tax, creating a new business tax, raising state fees or expanding gambling (aside from putting slots in existing casinos and, perhaps, race tracks).

It's also clear that many (certainly most, perhaps all) Senate Democratic members would accept raising taxes, fees or gambling opportunities in exchange for solving problems and making investments in education, transportation and health care.

Now that at least 4 House Republicans are required to pass a budget for the rest of the calendar year, the ultimate consensus over the FY08 budget must include some of the views of House Republicans.

Thus, a stalemate.

Either the Senate Democrats will have to trim their sails and allow many problems to go unsolved for another year or the House Republicans will have to grudgingly accept higher taxes, fees or gambling to invest the revenues in solving problems.

Perhaps they will "meet in the middle" but ultimately, the budget must fall between those two poles.

There are a few interesting observations.

One is that there are certainly 4 lower-income districts currently represented by House Republicans that would benefit from higher taxes, fees and/or gambling and the corresponding higher state spending that such taxes, fees or gambling can finances. Generally speaking, lower-income districts benefit from higher spending, and many lower-income rural districts are represented by Rs. Will these rural Republicans be able to "vote their districts" and support a Senate budget or will their ideological affiliation trump the economics of their districts? Ideally, these rural Republicans would get a seat at the table to help find a budget that can earn the votes of 71 Representatives and 36 Senators.

Another observation is that in the face of a stalemate, there is no natural default position. In other words, if Emil Jones and Tom Cross both dig in their heels (and forgive the leader shorthand again, as it over-emphasizes the personalities of the leaders) and stick to their respective positions, even as the 31-day budget expires and the state government starts to shutdown, accepting a no-growth budget in the face of disagreement isn't any more natural than accepting a high-growth budget in the face of disagreement.

Some might suggest that if there isn't a consensus for solving problems, then the coalition to increase spending has not grown strong enough so the legislature should default back to the status quo. However, when enough members have decided they will not support the status quo, then the argument is flipped: the coalition to maintain the status quo has not grown strong enough, so the legislature should default to new spending.

All that is to say that this is really the time when advocates and citizens should weigh in on their vision for state government and help forge a consensus over the smartest investments we can make. Legislative positions will change over the next four weeks or the state government will shut down.

Sunday, July 01, 2007

"Socialized health insurance" not "socialized medicine"

I haven't seen Sicko yet, but the discussion that it has generated on getting rid of the for-profit, parasitic, middlemen health insurance companies has helped me to come up with a tighter phrase.

We're not advocating for "socialized medicine." We're advocating for "socialized health insurance."

Private, for-profit or non-profit medicine -- meaning doctors and nurses and hospitals -- continues. It's just the health insurance side of things we want to socialize.

Now, some can argue that we should avoid the adjective "socialized" under any circumstances, but I'm not sure about that. We do want government health insurance, just like Medicare. And the other side wants corporate health insurance, just like we have now.

We don't want doctors and nurses working for the government. We want them private (if they want to be -- if they'd rather work for government hospitals, that's fine too). But we want all private providers to be paid by the government, instead of paid by corporate, for-profit insurance companies.

When our opponents attack with a dishonest, designed-to-confuse phrase like "socialized medicine" I like an honest, designed-to-clarify response like "socialized health insurance" to make them defend the corporate health insurance companies.

Thanks to Michael Moore for advancing the discussion.

Cross-posted at my dailykos page

Wednesday, June 27, 2007

Why is Senator Dillard getting criticized for helping Barack in a primary?

I don't get it.

Now, I'm certainly not qualified to advise the Republican Party on anything related to 'how to be a good Republican' but I really don't understand the blowback against Senator Dillard appearing in a Barack Obama television commercial for a primary election.

First, I think Senator Dillard has made it clear that he prefers a Republican candidate to Barack Obama in November.

Second, wouldn't we all benefit in Illinois if an Illinois resident were the President of the United States? Doesn't it make sense -- from the perspective of helping out the people of Illinois -- to prefer that the only Illinois candidate in either party primary get a nomination?

Third, if there's a Democratic candidate who has made a habit of reaching out to Republican colleagues and forging good, bipartisan solutions, wouldn't Republicans prefer that type of a Democratic President instead of one who governs like George W. Bush and essentially steamrolls the other side?

All of those good reasons for a former Republican colleague of one of the leading presidential candidates to appear in a primary campaign ad are apparently outweighed because, perhaps, in October or November (16 long months from now), if Barack is the Democratic nominee, then perhaps Senator Dillard's comments could be used to undercut the Republican nominee's chances, particularly if that Republican nominee doesn't have a history of forging bipartisan solutions.

Except, Senator Dillard's preferred nominee, Senator John McCain, does have such a history.

And to a certain extent, so do the other leading GOP candidates (Rommey who worked in an overwhelmingly Democratic state and Giuliani who worked in an overwhelmingly Democratic city).

If some New York City Democratic politician appeared in a Giuliani ad in Iowa or New Hampshire congratulating him for working well with the Democratic City Council (assuming that he did), who cares? Or if Senator Feingold appeared in an ad for McCain congratulating him for trying to lessen the clout of big business in political campaigns, so what? People deserve to get credit for their good work and if it means the politicians who work to reach consensus end up winning primary elections, that's a good thing.

I can understand why Republicans would be upset if Senator Dillard supported Obama's presidential campaign in the November general election. But to support the best candidate with a record of building consensus who is from Illinois and understands state legislatures in a primary election seems like smart politics rather than a partisan betrayal to me.

Monday, June 25, 2007

Paul Froehlich joins the Democratic Party

Good news: State Representative Paul Froehlich (R-Schaumburg) will join the Democratic Party on Wednesday.

Paul is an excellent legislator: an institutionalist who cares about policy and pays attention to the details. He is an electoral reformer, consistently standing up for more transparency and accountability in government. He's unafraid to take on unpopular issues that advance justice but won't win many votes, and he's probably the most aggressive white legislator of either party that reaches out to issues that matter to the Black and Latino Caucuses.

When Washington Republicans get crazy, I always looked to legislators like Paul as evidence that Illinois Republicans kept a level head. Unfortunately (for them) a few of their influential leaders decided to wage angry crusades against independent legislators like Paul, preferring a purged party to a heterogeneous caucus. Well, they've got it now.

The Democratic Party is fortunate to have an advocate for justice and reformer like Paul Froehlich among our ranks.

I'm glad our party leaders all recognize the value of a diverse caucus.

Sunday, June 24, 2007

Why do we keep for-profit health insurance companies again?

Michael Moore raises the question in Sicko: why exactly are we tolerating for-profit health insurance companies that make money by denying us the health care that we've paid for?

What sense does that make?

I recall Luis Gutierrez (who, here's my prediction, will run again in 2008 for Congress) at a town hall meeting in 1993 or 1994 on public television called for abolishing the insurance companies and the crowd, previously passive and polite in that public television way, erupted in applause. The host (probably John Callaway) asked for calm and then asked the insurance company spokesperson to justify the industry's existence. "What do you do?" he asked.

"Spread risk" was the answer.

That's it.

The health insurance guy could have said "suck resources out of health care like a parasitic middleman to build skyscrapers, run commercials and make our investors rich" which would have been more honest, but the economic basis for the health insurance industry's existence is "to spread risk."

Well, you spread risk by getting a bunch of people in the same big pool. So if there are 5 people in a small business who are paying for their own health care and one of them gets cancer or gets hit by a bus, then those 5 people have a lot of money to pay. The goal is to get 10,000 people in a big pool so when someone gets cancer, the cost is absorbed and spread out among everyone.

I've got a big pool we should all get into: Americans.

The whole country should be one big pool. That's what we do with Americans over the age of 65. It's called Medicare. And there isn't any role for private health insurance companies to make money. That's why it's so cheap to administer.

I wish I had access to Medicare.

I pay Medicare taxes. Why can't I have Medicare coverage?

Because for people under 65, we have to make health insurance companies rich to get access to the doctors and hospitals.

The best thing we could do for our economy is expand Medicare for everybody to end medical bankruptcies and encourage small businesses to grow (who now have to make insurance companies rich).

Thursday, June 21, 2007

Funders, events, parties and more

You've got an extra 50 bucks in your pocket and you're looking for a good time to meet some other civic people in Chicago.

Well, that's what summer funders are for.

Here are a bunch of them. Come to some or all.

Representative Sara Feigenholtz
Monday, July 9
6 - 8 pm
Wishbone Restaurant
3300 North Lincoln


Museum of Broadcast Communications
75th Anniversary Salute to FDR
5:30 pm cocktail reception
7:00 pm program
Auditorium Theatre
Michigan and Congress

On July 2, 1932, Franklin Delano Roosevelt accepted his first nomination for President of the United States -- in Chicago. It was the night most Americans heard FDR on the radio for the first time.

The Auditorium Theatre will be transformed into the convention floor of 1932 with bunting draped boxes, state delegate signs and "Happy Days Are Here Again" will welcome guests as the clock is turned back 75 years.

For history and political buffs, this will be a really cool night.

$25 tickets general admission; $500 VIP (for the cocktail reception)


Mikva Challenge
Developing the Next Generation of Civic Leaders
June 28
5:30 pm - 7:30 pm
McCormick Tribune Freedom Museum

The Mikva Challenge, named after Illinois great Abner Mikva, effectively engages high school students into politics and government. They are relentlessly bi- (and multi-) partisan and provide a great after-school program for students.


Tuesday, June 19, 2007

"Always look at the bright side of life...."

The post title is the title of the closing song (and my favorite part) of the Monty Python musical Spamalot. I catch myself whistling that tune quite a bit.

So, to apply that piece of wisdom to the overtime session in the Illinois General Assembly, I'd like to point out the good things about an overtime session.

Because a budget requires a 60% vote, the General Assembly has more institutional power. Once 71 Representatives and 36 Senators agree on an agenda (and the Speaker and the President sign off), lots of good things can happen that are normally taken off the table when only a 50% vote is required.

Good things like putting constitutional amendments on the ballot.

If we want a modern, progressive income tax to match the new structure of our economy (where the middle-class is under pressure and most of the new income is flowing to high income people), we need to amend our constitution.

(Note we can make our flat rate income tax more progressive as Voices for Illinois Children explains in this policy brief by raising the personal exemption and the state's earned income tax credit, but if we really want a modern income tax, we should get rid of that constitutional provision prohibited a non-graduated rate.)

It takes a 60% vote of each chamber to put a constitutional amendment on the ballot. Well, since it takes a 60% vote of each chamber to pass a budget, it's just as easy to pass a budget as it is to put a constitutional amendment on the ballot. And since most of our budget troubles are based on an out-of-date tax system (too heavy on low incomes and it doesn't tax enough of the modern economy -- services and high incomes), it would be prudent for those who care about the FY10 and FY12 budgets just as much as the FY08 and FY09 budgets to ask the electorate for the ability to implement a progressive income tax in 2009.

Note that a constitutional amendment does not require gubernatorial action.

Speaking of gubernatorial action, another nice thing about overtime is that the threat of a veto doesn't matter so much, since it takes 60% of each chamber to override a veto. So, since it takes 60% to pass a budget, and 60% to override a veto....whomever votes for a budget and sticks to their guns will be able to override a veto.

That means when the Governor makes a mistake and threatens to veto good public policy, it doesn't matter. Once 60% of each legislative chamber agree to implement good policy, a veto is irrelevant.

That dynamic opens up the possibility of a legislative consensus, since this year, the Governor's bold vision was unfortunately matched by hostility to alternatives. That hostility is less important in June.

If ever there was a time to have a big picture conversation with your legislator, this is it.

I hope 60% of the General Assembly match the Governor's attractive tendency for game-changing proposals with constitutional amendments and progressive taxes.

Tuesday, June 05, 2007

Great Chicago company has a neat blog

Inspired by Google buying Feedburner (congratulations to fellow progressive blogger Rick Klau! -- and I think former CrossBlogger Jake Parillo was working there too, congratulations), I thought I'd note another cool Chicago-based software company with products I use, 37 signals.

I use one of their products called Basecamp for project management. If you are part of projects (especially if you are in charge of them), check it out. But more interesting to everyone, perhaps, is their blog about:

entrepreneurship, design, experience, simplicity, constraints, pop culture, our products, products we like, and more. Established 1999 in Chicago.

It's called Signal vs. Noise and it's an interesting read.

California federal legislators seek $50M state ask for high speed rail

Sometimes having a state authority of high speed rail makes sense. In California, it might pay off. They've got an authority (website here) and this year they are making a move to avoid Governor Schwarzenegger's short-sighted cuts.

The Fresno Bee has the report here:

Two-thirds of California's congressional delegation has signed a letter to Gov. Schwarzenegger supporting much more funding for the state's proposed high-speed rail system than the governor's budget proposed.

Rep. Jim Costa, D-Fresno, said the 36 signatures include four other San Joaquin Valley representatives -- Reps. Dennis Cardoza, D-Merced; Kevin McCarthy, R-Bakersfield; Devin Nunes, R-Visalia; and George Radanovich, R-Mariposa.

He called the letter "a strong signal from Washington that California is serious about high-speed rail" and said the goal is to get $50 million in funding, about 10 times what the governor proposed.

This is great news. It's good to get federal legislators involved in the state budget process. Senator Dick Durbin was helpful in Illinois last year during the successful campaign to double the state appropriation for Amtrak to double service.

The Authority is clearly defining the ask. That's helpful to have an independent verification -- a professional agency and not just advocates -- of the ask and the benefits that flow from the ask.

In the Midwest, we have largely not advocated for the creation of a separate Authority for either improved Amtrak service or laying separated track for high speed rail, instead we've been working with state DOTs (who largely operate Amtrak service) for additional frequencies and capital investments to improve average speeds and reliability.

I suspect that if we ever want to make a multi-billion investment in laying new tracks, we'll need to create an Authority with separate bonding and taxing authority. That isn't in the cards for the forseeable future, at least as I see it.

Very good to see progress in California.

Cross-posted at Improving Amtrak Incrementally

DailyKos post on farm policy and the $20B connection to immigration

Inspired by David Moberg's article in In These Times on American agricultural policy ($20 billion in subsidies that flow mostly to the agribusiness that dominate the food supply chain, as I understand the industry), I posted in my new diary on DailyKos a question on how we can figure out a compelling message and a progressive policy to sell in Congress and to potentially progressive rural voters.

I've been a long-time reader of DailyKos and it's kind of fun to join in as a poster (or diarist, I guess).

Sunday, June 03, 2007

Book review: Anatomy of Buzz by Emanuel Rosen

Notes on The Anatomy of Buzz by Emanuel Rosen

The thesis of Buzz is that buzz about a product or service isn't just organic but can and should be built, maintained and expanded by the leaders of the company. Buzz, defined as positive comments, is among the most powerful marketing weapons on the planet. A comment from a trusted messenger, like a friend or colleague, cuts through the noise of television, internet, radio and print advertising and commands attention and respect. Therefore, one must build and cultivate buzz (including making the product or service extraordinary) as part of any marketing campaign.

Rosen describes a method for building buzz. First, ask your customers, especially your best customers, to buzz. They are the believers in your product (or else they wouldn't have associated with you). Give them the chance to impress their networks with their savvy by sharing their association with your extraordinary product. Ask them to spread the word with a personal letter or email to potential clients they know that explains the value of the product or service and some of them will.

Second, focus on people at the center of a social network. Rosen call them hubs. A mega-hub is Oprah Winfrey or David Broder or Markos Moulitsas ZĂșniga with tens (or hundreds) of thousands of people trusting their recommendations. A regular hub is the popular kid in high school or the county chair of the Democratic Party or the local bookseller with dozens of people trusting their recommendations.

Hubs are more likely to recommend your product, candidate, issue or service if their heart feels they are a part of something and their head knows that the quality is high. Thus, create a community of believers (Deadheads or Rangers and Pioneers or Jeep Jamboree) who can evangelize about you and your company and give them complete transparency and candor. If there's a problem, share it and solve it with the people who care most about you and your campaign. Don't spin your base.

Finally, use scarcity and mystery to get hubs talking. Sneak previews or special invitation-only events create excitement and buzz. Dampening supply early on to create unmet demand also fuels buzz (only permitting the candidate to personally appear at certain events or only offering a few potential customers access to the product or service at first).

Rosen's insights into buzz are particularly relevant for a class of service providers that are not known for their innovative marketing: public transportation agencies like Amtrak or the Chicago Transit Authority. For them, a key insight is to ask your best customers (like monthly pass holders) to spread the word. Existing riders are in a better position than anyone else to pitch the service to their networks and recruit new riders. They should be asked to do so on a regular basis.

Leaders of agencies should explain to riders how public transportation is a network and therefore grows more valuable as more people use it. Routes with few riders ultimately get eliminated. With more riders comes more revenue for reliability and expansion as well as more political support for public investment. Every rider has an interest in recruiting new riders to keep the service they use and to build support for more.

Network hubs who could come to understand the value of transit to their community should be recruited to spread the word as well. Local elected officials, not only those who influence transit budgets but those who control unrelated agencies like school boards or park districts should be asked to tell their constituents about the service in their area. Give them tools like neighborhood or route-specific maps that are relevant to their local network they can distribute locally. In return, the agency must solicit and respect their input.

Create events for riders and hubs to build excitement and community. Take riders to see the bus barn or the maintenance facility. Bring your best customers to your planning department to review potential designs for signs or maps. Share all ridership data by route and ask for advice on how to recruit new riders. This is particularly important with any new routes where new riders need to be quickly identified and recruited to fill empty buses.

The Anatomy of Buzz is published by Currency Books and is available in paperback.

Wednesday, May 30, 2007

Michigan Speaker: We might move to replace flat tax with a progressive tax

Good news out of Michigan that might inspire our elected officials here: the Speaker of the Michigan House is pushing for a constitutional amendment to replace that state's flat income tax (currently set at 3.9%) with a graduated or progressive income tax where higher incomes are taxed at a higher rate and lower incomes are taxed at a lower rate.

article in the Livingston Press and Argus explains the dynamic:

Top House Democrats also made clear that they want to go to Michigan voters in November 2008 to ask for a constitutional change to dump the state's flat-rate personal income tax, now at 3.9%, in favor of a graduated income tax with higher rates for taxpayers who earn more.

House Speaker Andy Dillon, D-Redford Township, said he and Senate Republicans were negotiating to raise the personal income tax, expand the state's sales tax to include entertainment, such as tickets to concerts and games, or combine both tax options.

Dillon gave 50-50 odds that the House would vote on the tax increase this week, as he and fellow Democrats continued to woo Republicans, partly by showing a willingness to support new laws designed to rein in government costs.


Dillon said a graduated income tax should give lower-income taxpayers a tax cut. "It's progressive. Those who have the means can pay," he said.

Michigan's constitution prohibits a graduated tax, and voters have rejected attempts to adopt one several times. Putting it on the ballot requires a two-thirds vote of the House and Senate. Most states have a graduated tax.

Senate Republicans would consider a graduated tax only if a solution to the current budget deficit could be found without a tax increase, said Matt Marsden, spokesman for Senate Majority Leader Mike Bishop, R-Rochester.

We should put on the November 2008 ballot a constitutional amendment that asks the voters whether we should continue to outlaw a progressive income tax.

Bills to do so are HJRCA 23 (Will Davis and Barbara Flynn Currie) and SJRCA 7 (Martin Sandoval and Michael Frerichs).

Thanks to the Citizens for Tax Justice newsletter for the tip on Michigan.

The tax debate has not settled on rich and poor districts. Yet

We advocates of a progressive income tax so the wealthiest pay more than they do now have not done a good job explaining how lower and middle class incomes are, in fact, most people in the state. And that means most legislators represent lower and middle class incomes, so ought to push for higher income taxes on higher incomes because people in districts with lower and middle incomes don't pay higher income taxes.

I started to wonder which districts were wealthier and poorer. Fortunately, the UIS puts out the Almanac of Illinois Politics that lists the median family income of each legislative district.

I went through and pulled out all of the Senate districts. Then I sorted from poorest to wealthiest.

Since the average income is just shy of $60,000, any district with a median family income less than that would benefit from raising taxes on family income above $60,000, essentially.

Who are those districts? Here they are.

34631 Munoz
35334 Hunter
38383 Forby
39115 Delgado
41451 Collins
41524 Ronen
41623 Martinez
41951 Jones
43361 Hendon
43479 Sandoval
43642 Demuzio
43655 Sullivan
44181 Trotter
44569 Koehler
44719 Clayborne
46139 Righter
46249 Frerichs
47399 Luechtefeld
48313 Syverson
48644 Raoul
48921 Jacobs
49156 Watson
50138 Meeks
50527 Sieben
52298 Haine
52458 Jones
52903 Lightford
53623 Dahl
54027 Risinger
55466 Halvorson
55602 Bomke
56081 Viverito
57290 Rutherford
57393 Wilhelmi
58405 Brady
60254 DeLeo
60749 Noland
61571 Harmon
62113 Burzynski
62407 Silverstein
63662 Maloney
64391 Holmes
66997 Crotty
69839 Bond
70923 Pankau
71762 Althoff
71951 Kotowski
74580 Link
80735 Millner
80889 Cronin
81073 Lauzen
85163 Murphy
87664 Hultgren
88700 Radogno
91877 Peterson
92565 Dillard
94302 Cullerton
99857 Garrett
100722 Schoenberg

Interesting, isn't it? Lots of Downstate districts are poor, including Downstate Republican districts. But anecdotal evidence suggests Downstate voters have not yet embraced a progressive income tax, even though it's to their economic advantage. That's a public challenge we progressive tax advocates need to meet.

[Update: typo fixed after seeing it on the front page of Capitol Fax -- thanks Rich/Paul]

Saturday, May 26, 2007

While Illinois underinvests in transit, kids and health, we spend $100 billion for Iraq

There's a disconnect.

In Illinois, we're facing much higher transit fares, much less transit service, fewer class hours, fewer after-school activities for children, fewer congestion-beating road and transit investments and more untreated sick residents because there isn't any money for investing in transit, schools, health care and other priorities. We might expand gambling in order to finance these quality-of-live investments. And this debate is happening in every state that wants to invest in people -- there just isn't enough up-front money to make the smart investments that will pay off for everyone.

Meanwhile, our federal government has just approved spending $100 billion for the war in Iraq.

That is so much money. All for somebody else's civil war.

Stop funding this war.

Tuesday, May 22, 2007

Great petition to stop gas gouging -- sign online right now

MoveOn PAC has an excellent petition to call on Congress to stop price gouging and has one of the biggest responses of any of their online petitions of all time.

To the bill: it's not just the world price of crude oil that is causing huge gas prices (Illinois actually has the highest gas prices). The profits of the oil companies are at all-time highs, even though the price of crude is lower than at this time last year, and there's a bill in Congress that would make gas gouging a federal crime.

Sign this petition here and if that doesn't work, try

It often seems like there's nothing we can do about high gas prices (besides using less gas), but this legislation offers the hope that our government can stop the oil companies from ripping us off.

Here is the excellently-written email snip from MoveOn that explains the bill and the context better than I have:

As of yesterday, gas prices are the highest in U.S. history—we just passed the 1981 record, even adjusted for inflation. Prices could reach $4.00 per gallon in parts of the country, just in time to crimp summer vacation plans. As consumers suffer, the oil industry continues to reap the windfall—breaking profit records on an almost quarterly basis. It's outrageous!

Enough is enough. Hearings start today on H.R. 1252, a House bill that would make gas price gouging a federal crime, punishable by 10 years in prison. Speaker Pelosi has said she'll move the bill to a vote this week—if there's the two-thirds majority required to fast track the bill through the process.2

Oil company lobbyists are frantically trying to stop the bill. Your representative needs to hear from you today. Will you sign our petition asking Congress to pass the price-gouging bill—and then send it to your friends?

"Gasoline price gouging should be made a federal crime before the summer price increases hurt more American families."

Rep Bart Stupak (D-MI), sponsor of the House bill said this of his motivation to introduce the legislation:

"In April ... crude oil was $7 a barrel cheaper than last year (but) gas prices were almost 50 cents a gallon higher. Clearly there's more at play than simply the world crude oil market."

Monday, May 14, 2007

Now is the time for Tax Fairness in the General Assembly

The debate on implementing tax fairness just opened up.

I think there's a fairly firm consensus in the General Assembly that our tax system is unfair. We tax people in poverty too much and we do not tax our state's largest corporations and wealthiest individuals nearly enough. Middle-class people probably are taxed a bit too much as well, particularly those in low-wealth communities.

The Governor has put tax fairness at the center of this year's session, rightfully pointing out that the corporate income tax is essentially broken as it lets the biggest corporations off the hook.

He hasn't pointed out that our 3% state income tax with a low personal exemption and a low earned income tax credit means that people who make six figures pay a smaller percent of their income in state and local taxes than people who make 40 grand or less. That's backwards and this is the month to change it.

The question before each Member of the General Assembly is how to change it.

The Governor's proposal to implement a tax on the gross receipts of the largest businesses in Illinois has largely been rejected as, in the Speaker's words, a “regressive” tax. The House, by the way, deserves credit for taking the Governor's proposal seriously with an eight-hour hearing before the entire House. That high-level policy debate is the crux of transparent governing and we should have more of it. Why can't the Governor appear before a joint session of the General Assembly every month for a British-style Question Time? That would be fun.

One of the most illuminating exchanges was between Representative David Miller and Governor Blagojevich, after the Governor said that any income tax increase – no matter how progressive -- is “off the table” as he would veto it, Representative Miller matter-of-factly reminded the Governor that the General Assembly could simply override the veto. The Governor's response: I'll campaign against any income tax increase next year! Why? Because “it's wrong.”

Here is the worst aspect of the Governor's position: he rejects, vilifies and obfuscates the existence of a progressive income tax. The absolute best way to reverse our regressive taxes is to raise income taxes on high incomes (personal and corporate) and lower taxes on low incomes. This is not difficult to do.

Our state Constitution does require a non-graduated income tax rate, which is why we have a flat rate of 3%. The Governor's position has been that this provision of the Constitution precludes any sort of progressive income tax – but that's just not true.

It would be great if we could have a federal-style income tax where the first $15,000 of income isn't taxed at all, and the next $40,000 of income is taxed at 15%, and the next $60,000 of income is taxed at 28% and then income above $250,000 is taxed at 35%. But, we don't.

What we can do, however, is raise the rate on all income to 5%. That would raise the revenue from the people who have it the most, won't miss it at all, benefit from the Bush tax cuts and (crucially) can write-off the higher state income tax they pay off of their federal returns so that the state as a whole will pay less in federal taxes.

What about people who make less than $50 grand – or people who make less than $15 grand? If we raise the income tax rate to 5%, they will pay more too, and that's the reason why the Governor thinks it is wrong to raise the income tax. There is an easy way, however, to make sure that the middle class and the poor do not pay more in income taxes in order to satisfy the Governor.

That's to raise the personal exemption to $10,000. It's current $2100. Or in other words, cut a $500 check per exemption to every taxpayer instead of what we do now which is cut a $63 check per exemption to every taxpayer (3% of $2100). That exemption is essentially meaningless.

For people with not a lot of money, $500 off of taxes is a lot. And it's probably enough to wipe out any tax they might owe: you have to earn $10,000 per person in order to owe anything (since 5% of $10,000 is $500). So a family of four wouldn't pay any state income tax at all if they earn less than $40,000. And lots of legislative districts have an median family income of less than $40,000. That is about the average family income in our state.

Compared to our current state income tax which hits people as soon as they earn $2100, a $10,000 personal exemption even with a 5% income tax would make most people better off, particularly as they have more exemptions to take (that is, kids).

Here's how it works with one exemption (look for the blue highlight to see the break-even point):

Gross family income Number of exemptions Deduction Value of exemption Adjusted income Rate Tax
$10,000.00 1 $2,000.00 $2,000.00 $8,000.00 0.03 $240.00
$20,000.00 1 $2,000.00 $2,000.00 $18,000.00 0.03 $540.00
$30,000.00 1 $2,000.00 $2,000.00 $28,000.00 0.03 $840.00
$40,000.00 1 $2,000.00 $2,000.00 $38,000.00 0.03 $1,140.00
$50,000.00 1 $2,000.00 $2,000.00 $48,000.00 0.03 $1,440.00
$60,000.00 1 $2,000.00 $2,000.00 $58,000.00 0.03 $1,740.00
$70,000.00 1 $2,000.00 $2,000.00 $68,000.00 0.03 $2,040.00
$80,000.00 1 $2,000.00 $2,000.00 $78,000.00 0.03 $2,340.00

and now here is with a higher income tax rate (5%) and a $10,000 personal exemption.

Gross family income Number of exemptions Deduction Value of exemption Adjusted income Rate Tax
$10,000.00 1 $10,000.00 $10,000.00 $0.00 0.05 $0.00
$20,000.00 1 $10,000.00 $10,000.00 $10,000.00 0.05 $500.00
$30,000.00 1 $10,000.00 $10,000.00 $20,000.00 0.05 $1,000.00
$40,000.00 1 $10,000.00 $10,000.00 $30,000.00 0.05 $1,500.00
$50,000.00 1 $10,000.00 $10,000.00 $40,000.00 0.05 $2,000.00
$60,000.00 1 $10,000.00 $10,000.00 $50,000.00 0.05 $2,500.00
$70,000.00 1 $10,000.00 $10,000.00 $60,000.00 0.05 $3,000.00
$80,000.00 1 $10,000.00 $10,000.00 $70,000.00 0.05 $3,500.00

For people who earn less than $20,000 – that's $10 an hour with a full-time job, and remember our state's minimum wage is only $6.50, and remember, about a fifth of the entire state's population earns less than $20,000 a year – they are better off under a 5% state income tax with a $10,000 exemption than they are under a 3% state income tax with a $2,000 exemption. This is about the break-even point, so anyone who makes more than $20,000 as a single filer would pay more under the change.

Let's skip ahead to people with two exemptions and watch the break-even point rise dramatically. People with two exemptions include married couples and single parents with one kid.

Here is the status quo:

Gross family income Number of exemptions Deduction Value of exemption Adjusted income Rate Tax
$10,000.00 2 $2,000.00 $4,000.00 $6,000.00 0.03 $180.00
$20,000.00 2 $2,000.00 $4,000.00 $16,000.00 0.03 $480.00
$30,000.00 2 $2,000.00 $4,000.00 $26,000.00 0.03 $780.00
$40,000.00 2 $2,000.00 $4,000.00 $36,000.00 0.03 $1,080.00
$50,000.00 2 $2,000.00 $4,000.00 $46,000.00 0.03 $1,380.00
$60,000.00 2 $2,000.00 $4,000.00 $56,000.00 0.03 $1,680.00
$70,000.00 2 $2,000.00 $4,000.00 $66,000.00 0.03 $1,980.00
$80,000.00 2 $2,000.00 $4,000.00 $76,000.00 0.03 $2,280.00

And here is a more progressive income tax at a 5% rate and a $10,000 exemption.

Gross family income Number of exemptions Deduction Value of exemption Adjusted income Rate Tax
$10,000.00 2 $10,000.00 $20,000.00 -$10,000.00 0.05 $0.00
$20,000.00 2 $10,000.00 $20,000.00 $0.00 0.05 $0.00
$30,000.00 2 $10,000.00 $20,000.00 $10,000.00 0.05 $500.00
$40,000.00 2 $10,000.00 $20,000.00 $20,000.00 0.05 $1,000.00
$50,000.00 2 $10,000.00 $20,000.00 $30,000.00 0.05 $1,500.00
$60,000.00 2 $10,000.00 $20,000.00 $40,000.00 0.05 $2,000.00
$70,000.00 2 $10,000.00 $20,000.00 $50,000.00 0.05 $2,500.00
$80,000.00 2 $10,000.00 $20,000.00 $60,000.00 0.05 $3,000.00

Now we're at $40,000 of family income for a family of two (where just under half the population lives). That's a $20/hour job. Not bad and getting tougher to find as our manufacturing jobs are disappearing and service jobs rarely pay that much.

Here everyone with two exemptions who makes less than $40,000 is better off with a higher tax rate (raising taxes!) and a higher personal exemption than they are today. Anyone who makes more than that will pay more.

Let's skip to the comparison for four exemptions (a married couple with two kids or a single parent with three kids):

Gross family income Number of exemptions Deduction Value of exemption Adjusted income Rate Tax
$10,000.00 4 $2,000.00 $8,000.00 $2,000.00 0.03 $60.00
$20,000.00 4 $2,000.00 $8,000.00 $12,000.00 0.03 $360.00
$30,000.00 4 $2,000.00 $8,000.00 $22,000.00 0.03 $660.00
$40,000.00 4 $2,000.00 $8,000.00 $32,000.00 0.03 $960.00
$50,000.00 4 $2,000.00 $8,000.00 $42,000.00 0.03 $1,260.00
$60,000.00 4 $2,000.00 $8,000.00 $52,000.00 0.03 $1,560.00
$70,000.00 4 $2,000.00 $8,000.00 $62,000.00 0.03 $1,860.00
$80,000.00 4 $2,000.00 $8,000.00 $72,000.00 0.03 $2,160.00
$90,000.00 4 $2,000.00 $8,000.00 $82,000.00 0.03 $2,460.00

Now, with a more progressive income tax (even with the Constitutional flat rate)

Gross family income Number of exemptions Deduction Value of exemption Adjusted income Rate Tax
$10,000.00 4 $10,000.00 $40,000.00 -$30,000.00 0.05 $0.00
$20,000.00 4 $10,000.00 $40,000.00 -$20,000.00 0.05 $0.00
$30,000.00 4 $10,000.00 $40,000.00 -$10,000.00 0.05 $0.00
$40,000.00 4 $10,000.00 $40,000.00 $0.00 0.05 $0.00
$50,000.00 4 $10,000.00 $40,000.00 $10,000.00 0.05 $500.00
$60,000.00 4 $10,000.00 $40,000.00 $20,000.00 0.05 $1,000.00
$70,000.00 4 $10,000.00 $40,000.00 $30,000.00 0.05 $1,500.00
$80,000.00 4 $10,000.00 $40,000.00 $40,000.00 0.05 $2,000.00
$90,000.00 4 $10,000.00 $40,000.00 $50,000.00 0.05 $2,500.00

90 grand! That's the break-even point!

Everyone who makes less than $90,000 in family income with four exemptions pays less with a 5% income tax rate and a $10,000 exemption than they do today.

That's a lot of middle-class (and upper-middle-class) families in both D and R districts.

This is just to show that a progressive income tax is very possible and can cut taxes for lots of low-income and working people who are paying too many taxes now because we don't tax high incomes and corporations enough.

That's how it should be.

There are other important ways to make our tax more fair -- increasing the earned income tax credit and either closing corporate tax loopholes or instituting an alternative minimum corporate income tax or even perhaps a gross receipts tax that only affects the highest grossing corporations.

But for those of us who believe in a more progressive tax, we have a challenge that so far we have not really met and that is to explain to each Member of the General Assembly exactly how each of these low-income tax cuts (a higher personal exemption of the earned income tax credit) actually works to deliver tax cuts to the people who need it most.

Tax policy is not intuitive or obvious and unless we do a better job showing Members exactly how taxes are not progressive now and how to make them more progressive, we are unlikely to overcome legislators' natural inclination against raising taxes. And ultimately, our task is to convince voters that they stand to benefit from raising taxes on incomes above their own as it is often too much to ask Members to get ahead of their voters.

This is the crux of the communications challenge: we need to convince lower-income voters (who usually have less education) that raising taxes on high incomes while cutting taxes on lower incomes is good for their bottom line. We need to convince voters that progressive tax policy is the best rural economic development and inner-city economic development the state can possibly offer – because it is.

750, the twin bills in the House and Senate that raise the income tax to 5%, expand the sales tax to include services and invest the revenue in education, human services and pension payments, also holds harmless lower incomes from the higher taxes. This is a great step and right now 750 must be considered the leading proposal before the General Assembly.

One problem, however, is that the low-income tax cuts in 750 (the Family Tax Credit) are neither obvious nor simple to explain. The Family Tax Credit is, as I understand it, a tax credit off of the higher state income tax that compensates for both the expected higher sales tax and the higher income tax that lower-income residents would pay. There is a worksheet that calculates the size of the credit based on income and exemptions which will result in everyone making less than $50,000 or so paying the same amount under 750 than they do today with a 3% income tax and a non-service sales tax.

The concept is sound and deserves to be at the center of the debate, but there are two potential improvements worth considering. One is that the bill essentially asks legislators to trust that the Family Tax Credit will work, as the mechanism is not clearly explained (for every $2,000 of income, how much is the Family Tax Credit worth?). The second is that instead of cutting taxes for those earning less than $30,000 or so, 750 keeps the tax burden the same. 750 makes our tax more progressive by raising taxes on people making more than $50,000 or $60,000 or so, which is good (since our state's long-term economy is suffering from a low-tax and thus low-investment status, particularly in education and transportation), but does not make progress on the other side to cut taxes on low-income people which would do the most good to our economy (as low-income people spend locally almost all the money they save unlike high-income people who invest their money in global vehicles like mutual funds or second homes).

This is the month to build on the Governor's campaign for Tax Fairness in the General Assembly. Let's seize it!