LVTFan's Blog

A 21st Century Georgist in the Revised Common Lectionary

(With a nod to Mark Twain!) The OT lesson in my church today was from Exodus, about God raining bread from heaven for Moses and his people. 

In the evening quails came up and covered the camp; and in the morning there was a layer of dew around the camp. When the layer of dew lifted, there on the surface of the wilderness was a fine flaky substance, as fine as frost on the ground. When the Israelites saw it, they said to one another, "What is it?"  For they did not know what it was.  Moses said to them, "It is the bread that the LORD has given you to eat."

Can you imagine if some of us claimed the land onto which that bread had fallen as our own, and told those who wished to collect their share of that bread that they must first pay us rent for the privilege?  Can you imagine if some of us gathered it, and sold it to our fellow human beings at high prices?  Can you imagine if we permitted the landholders to charge their fellow human beings for access, and then turned around and imposed an income tax on the general community, pretty much ignoring land value in the process?

David Cay Johnston: The Prospering Swedes

120TN1085.pdf (application/pdf Object).

David Cay Johnston's newest article at Tax Analysts describes his experiences on recent trips in Europe and Canada, chatting with ordinary people about their life situations.  Much of the article is focused on Sweden, where taxation is equal to roughly 50% of GDP.  (The corresponding figure for the US is about 28%.)   DCJ captures the texture of life in several European countries through his conversations with ordinary people -- working people whose counterparts in the US are engaged in a struggle to provide their families with the basics.

Ask a gaggle of bus drivers waiting for the tourists touring Old Town about housing, and every one of them turns out to own a summer home. How can bus drivers bear the burden of two mortgages? That’s a question that evokes polite smiles. These working-class Swedes explain that they own their homes outright.

Continue reading "David Cay Johnston: The Prospering Swedes" »

The LA Times ran an article entitled Can California survive 'no new taxes'?, and I thought it merited a comment.  However, it turns out that they only accept comments of 650 CHARACTERS or less.  Here's what I tried to post...

The Ianded gentry ...  sounds so noble ... so gentle ...  so aristocratic .... so entitled!

What is it about? 

link: 120TN0887.pdf

A few lifts:

• While median income rose year-over-year in 2007, it was still smaller than way back in 1999 by $408 or nearly 1 percent. Eight years and no gain is not good news. My analysis of the latest reports from the IRS Statistics of Income Division showed that in 2006, taxpayers reported higher average income for the first time since 2000. But the gain was just $740, from $57,289 in 2000 to $58,029 in 2006.
• Looking deeper, the data show that the gains are almost all at the top. Among people making less than $75,000 — roughly 8 of every 10 taxpayers — 2006 average incomes remained below those of 2000 levels. And of the gains of the top fifth, an astonishing 42 percent went to the 1 in 400 taxpayers who reported seven figures or more of adjusted gross income on their Form 1040.
• The dominant and often only form of income for most Americans is slowly eroding, while the capital incomes earned by those at the top are soaring.
• And while it is true that the top 10 percent pay the lion’s share of income taxes, this levy explains only about a sixth of the dollars that governments at all levels collect.   When you look at all federal taxes that fall directly on individuals, the data show that schoolteachers, cops, and office workers pay marginal tax rates of more than 40 percent on wages that have been mostly stagnant over the past three decades. But at the very top, where the marginal tax rate is just 15 percent, incomes soar.
• We need policies that focus on wages if we want broad prosperity. We need to look at the world the way employers do, who see the payroll tax as a good reason to shed workers and hire people on contract and, when they can, shift jobs overseas.

"Capital incomes."   Hmm.  Capital tends to depreciate.  What appreciates is what the classical economists classified as LAND.  Neo-classical economists have managed to tuck land into capital as a subset, and thus appear to justify a lot of things which simply have no justification.  Oil revenues are somehow treated as if corporations had created that oil.  (The governor of Alaska declared recently that that resource rightly belonged to all Alaskans, and raised the tax rate a bit.)

The classical economists saw three non-overlapping factors of production: land, labor and capital. The returns to each are rent, wages and interest.  If those who would open a business need a bit of land on which to operate, and that bit must be very choice in order for their business to succeed, they must pay a very high rent to the current owner of that site, leaving them less for employing workers and buying the things which will make that business a success and which, by the way, will enhance the economy.  The land rent can go either of two places.  As we conduct things now, a tiny share of it goes to the commons, as part of the local property tax; the remainder is permitted to collect in private pockets, lining those pockets more each year.  As we should do things, the lion's share of that land rent should be collected by the commons, and used to fund our common spending -- leaving wages untaxed, sales untouched, buildings unpenalized.  We can

(1) recycle the land rent, over and over and over, for public purposes, or we can

(2) gift it to the landholders, and tax our wages and our sales and our buildings in order to get the revenue we need to help make rent higher next year. 

Which of these options seems wise?  Which seems sustainable? Which seems just?  Which seems efficient?  Which seems administrable? 

If we are going to claim to value every life, and encourage every pregnant woman to bring every fetus to term, we need to acknowledge that every child born is the equal of every person already born.  Interestingly, Alaska has been doing something important in this regard, for more than 20 years.

Every man, woman and child who lives in Alaska receives an annual income from the Alaska Permanent Fund, which represents dividends from the invested proceeds of Alaska oil revenue, and which, if properly managed, will continue to provide an annual income for every Alaska long after the oil has all been tapped. And Alaska's governor has had the fortitude to increase the share of the public in Alaska's oil revenue due to the high price of oil. (See another post on the subject from a few days ago.)

(And much of Alaska's state government spending comes from oil revenues, too.)

Our oil is not the only resource that needs to be treated this way.  Urban land values can be hundreds of thousands of times the value of an acre of agricultural land.  There is an acre in Manhattan said to be worth $400,000,000 to $1,100,000,000 -- as a teardown.  If we were to tax that land value at, say, 5% per year, at $400,000,000 it would produce $20 million in income for we-the-people, relieving the need for $20 million in sales taxes, or $20 million in payroll taxes, or $20 million in income taxes.  Talk about fiscal stimulus!  Talk about a permanent tax holiday! Talk about getting the incentives right!  

Link: 411710_work_pay.pdf (application/pdf Object).
The study is entitled "Making Work Pay Enough: A Decent Standard of Living for Working Families" and it comes from the Tax Policy Institute.  Like the Self Sufficiency Standard Studies, it points out that many of America's jobs simply don't pay enough to support oneself, much less to support a small family.

I found myself very disappointed by the recommendations of the study.  They lack radicalism.  They don't seek the root of the problem, so they don't find the root of the problem.   They propose programs rather than solutions.

Advances in emergency services can make one town a better place to live than another.  Here are two examples from my home town.

• defibrillators in every police car, and every police officer trained in their use, can save lives that would otherwise be lost;
   
• EMS workers trained in therapeutic hypothermia protocol, ambulances equipped with appropriate supplies, and ER and hospital staff familiar with this innovation can save lives that would otherwise be lost
   

Would you pay more to live in a community that had adopted these innovations?

Probably.

The question is to whom you should pay it, and based on what logic.

Link: Tax Analysts: The Price of Civilization.

Bravo! Both to David Cay Johnston and to Tax Analysts, for making him a regular columnist there.  I hope that DCJ's work will remain available to us ordinary mortals who aren't subscribers to Tax Notes.  Yes, getting the conversations going among legislative aides and academics is important -- but so is reaching the public, and I hope TA will choose to do both, with this particular column!

The third paragraph says

Our national debate on tax, such as it is, suffers from "experts" who typically know little to nothing of the history, practical rationale, moral basis, or economic benefits of tax. Their expertise is in delivering memorized talking points, not imparting understanding.

Link: Leona Helmsley’s Fortune May Go to Benefit Dogs

The living and the dead, the human and the canine.

Leona Helmsley and her husband Harry individually and together accumulated billions of dollars worth of New York City real estate.  Who is entitled to that fortune?

Link: http://taxprof.typepad.com/taxprof_blog/2008/06/repetti-democra.html#more

I came across an abstract for an article which I suspect, on 3rd reading, is a comparison of the FairTax with the current income tax with respect to opportunity in America. 

I was excited by a couple of statements -- 

This article proposes that the principal equity goal underlying a just government is the creation of equal opportunities for all citizens to achieve self realization, i.e. to maximize their potential. It proposes, therefore, that a tax should be designed to achieve equal opportunity for self realization as one of its principal goals. Viewing equal opportunity for self realization as a design issue leads to the identification of another principle that is foundational - the promotion of democracy.

And disappointed by what I think is its favoring of the income tax.   Yes, the income tax is vastly superior to the Boortz FairTax, which, I realized on my 3rd or 4th reading of the abstract, was only alternative under consideration.

I hear this statement from time to time, and almost always, it turns out to be a reference to the spending side of the budget. 

But it is equally and -- perhaps more importantly -- true of the revenue side of the budget.  To the extent that we -- as individuals, corporations, philanthropies, endowments, pension funds, family trusts, small businesses, whatever -- are obtaining our revenue from illegitimate sources, and keeping it (legally), we are  stealing -- legally -- from what rightly belongs to everyone equally -- the commons.   And that theft has huge effects on others -- individuals and systems.

We hear the phrase "the landed gentry" from time to time, often in the context of first-time homeowners, lyparticularly those who have bought  in a neighborhood undergoing "gentrification."

But what does it mean to be the landed gentry?  What is it that matters about being landed?  And what is "gentry"?

Link: McCain, Obama stake out divergent paths on taxes

And neither of them gets it right.  They are proposing different arrangements of the deck chairs, and while one may provide a slightly better view of the orchestra, and the other better accoustics for enjoying the music, neither of them understand either what needs to be done or why.

I've posted before about the Self-Sufficiency Standard studies, which show, for a young family, the bare-bones cost of living by locality, for various configurations of family.  They answer the question "What does it cost to live here, without subsidies or help from relatives, with all one's most basic needs met, but no frills?"  These studies have been conducted in about 35 states, some as many as 3 times.

Now a similar methodology has been developed to measure the cost of living for seniors.  I'm looking at the study for Pennsylvania, where I grew up and where I still have an elderly relative.  He lives modestly in one of the more expensive counties, and based on what I know about wealth distribution among seniors, I've told him he's in pretty good financial condition for someone of his age.  He doesn't see it that way.

That was the title I chose for a short talk I gave at the "Building a New World Conference" at Radford, VA, a few weeks ago.  Here it is ... 

My local newspaper has set up a facility to permit comments on articles and opinion pieces, and I frequently respond to what I read.  Yesterday, I posted a comment to an article entitled Office owners strive to retain tenants whose thumbnail description says "In tough times, office building owners often look for other sources of tenants besides relocations to their properties."  Today I went back and someone had posted the comment, " Your sole issue is land value tax. Am I right?"

 

I'm pleased to share (with permission of the author) something that appeared on a mailing list I subscribe to. The conversation was along the lines of "how do we share the idea of land value taxation [a reform of the property tax] with people who are used to hating the property tax?"

Roy Langston wrote,

When I encounter the usual unreasoning hatred of property taxes, I just point out a few inconvenient truths, along these lines:

I came across a piece entitled "Why Democrats should love the FairTax," written by Laurence J. Kotlikoff, a professor of economics at Boston University, an economic adviser to Mike Gravel and a consultant to FairTax.org.

I continue to be amazed how even economists, who should know better -- far better -- than to even think about a sales tax as a solution to anything, can be in favor of such an alternative.

I've heard it said that voting and paying taxes are two of the major sacraments of citizenship. Having spent a significant part of the past week working on the machinations of the latter for several different family members, I am weary of the sacramental qualities of income taxes.  It isn't that I think taxes are a bad thing.  But our current system of taxation is both fundamentally wrong and, having said that, unbelievably convoluted.

Most of the commentators I read and hear are only interested in simplifying the income tax. A few propose getting rid of the income tax and replacing it with a sales tax, which I regard as simpler, but nearly as evil as an income tax from a number of points of view.   And that puts aside the question of whether the necessary rate for the so-called "FairTax" is 23% (or 30% in the way we're used to thinking of sales taxes) or closer to 60%, as I understand is more realistically the case.

I received in an email recently a quote from Albert Einstein:

A clever person solves a problem; a wise person avoids it.

Friday night's PBS NOW and Bill Moyers Journal were a powerful combination.   My local station shows NOW first, followed immediately by BMJ.  NOW showed three families in Alabama, including a hard working couple whose income places them at roughly the poverty level.  They pay sales taxes of 10% on their purchases, even on food.  They only recently got indoor plumbing.

The footage also showed one of my heroes, Susan Pace Hamill, law professor at the University of Alabama, who has written several important papers, all available online [and highly recommended], about the inconsistency of Alabama's tax code [2002] and of the federal tax code [2006] with the ideals we say we hold dear.  I applaud her efforts and her scholarship and her good heart ---  and I don't think she sees the half of it, or the solution.

An article in today's Philadelphia Daily News caught my eye.  Philadelphia is home to several fine universities, some excellent medical schools and teaching hospitals, fine museums, Constitution Center and the birthplace of two of my favorite people, one in the mid 20th century, the other in the mid 19th century.  I visit its suburbs every week, and  have a sense of knowing the territory from having grown up in those suburbs.

The article, entitled Philadelphia targets one of its toughest problems, says, in part, 

Only 14 percent of city residents hold a bachelor's degree, according to the 2005 study "Graduate! Philadelphia: The Challenge to Complete," by the Philadelphia Workforce Investment Board and the Economy League of Greater Philadelphia.

In Boston, that rate is 25 percent; in Seattle, it's 36 percent.

Philadelphia's college attainment rate puts it at 92nd among the 100 largest cities in the country --€” scraping the bottom.

In fact, in Philadelphia --€” unlike Boston, Chicago or Washington, D.C. --€” there are more people who have started college and dropped out than there are residents who actually hold a four-year bachelor's degree.

What could be behind those statistics? 

LA Times: Can California survive 'no new taxes'?

The LA Times ran an article entitled Can California survive 'no new taxes'?, and I thought it merited a comment.  However, it turns out that they only accept comments of 650 CHARACTERS or less.  Here's what I tried to post...

Being born into the Landed Gentry is like holding the winning lottery ticket

The Ianded gentry ...  sounds so noble ... so gentle ...  so aristocratic .... so entitled!

What is it about? 

David Cay Johnston: Income Data and the Future of the Nation

link: 120TN0887.pdf

A few lifts:

• While median income rose year-over-year in 2007, it was still smaller than way back in 1999 by $408 or nearly 1 percent. Eight years and no gain is not good news. My analysis of the latest reports from the IRS Statistics of Income Division showed that in 2006, taxpayers reported higher average income for the first time since 2000. But the gain was just $740, from $57,289 in 2000 to $58,029 in 2006.
• Looking deeper, the data show that the gains are almost all at the top. Among people making less than $75,000 — roughly 8 of every 10 taxpayers — 2006 average incomes remained below those of 2000 levels. And of the gains of the top fifth, an astonishing 42 percent went to the 1 in 400 taxpayers who reported seven figures or more of adjusted gross income on their Form 1040.
• The dominant and often only form of income for most Americans is slowly eroding, while the capital incomes earned by those at the top are soaring.
• And while it is true that the top 10 percent pay the lion’s share of income taxes, this levy explains only about a sixth of the dollars that governments at all levels collect.   When you look at all federal taxes that fall directly on individuals, the data show that schoolteachers, cops, and office workers pay marginal tax rates of more than 40 percent on wages that have been mostly stagnant over the past three decades. But at the very top, where the marginal tax rate is just 15 percent, incomes soar.
• We need policies that focus on wages if we want broad prosperity. We need to look at the world the way employers do, who see the payroll tax as a good reason to shed workers and hire people on contract and, when they can, shift jobs overseas.

"Capital incomes."   Hmm.  Capital tends to depreciate.  What appreciates is what the classical economists classified as LAND.  Neo-classical economists have managed to tuck land into capital as a subset, and thus appear to justify a lot of things which simply have no justification.  Oil revenues are somehow treated as if corporations had created that oil.  (The governor of Alaska declared recently that that resource rightly belonged to all Alaskans, and raised the tax rate a bit.)

The classical economists saw three non-overlapping factors of production: land, labor and capital. The returns to each are rent, wages and interest.  If those who would open a business need a bit of land on which to operate, and that bit must be very choice in order for their business to succeed, they must pay a very high rent to the current owner of that site, leaving them less for employing workers and buying the things which will make that business a success and which, by the way, will enhance the economy.  The land rent can go either of two places.  As we conduct things now, a tiny share of it goes to the commons, as part of the local property tax; the remainder is permitted to collect in private pockets, lining those pockets more each year.  As we should do things, the lion's share of that land rent should be collected by the commons, and used to fund our common spending -- leaving wages untaxed, sales untouched, buildings unpenalized.  We can

(1) recycle the land rent, over and over and over, for public purposes, or we can

(2) gift it to the landholders, and tax our wages and our sales and our buildings in order to get the revenue we need to help make rent higher next year. 

Which of these options seems wise?  Which seems sustainable? Which seems just?  Which seems efficient?  Which seems administrable? 

Valuing life, and applying fiscal stimulus, and setting us all equal

If we are going to claim to value every life, and encourage every pregnant woman to bring every fetus to term, we need to acknowledge that every child born is the equal of every person already born.  Interestingly, Alaska has been doing something important in this regard, for more than 20 years.

Every man, woman and child who lives in Alaska receives an annual income from the Alaska Permanent Fund, which represents dividends from the invested proceeds of Alaska oil revenue, and which, if properly managed, will continue to provide an annual income for every Alaska long after the oil has all been tapped. And Alaska's governor has had the fortitude to increase the share of the public in Alaska's oil revenue due to the high price of oil. (See another post on the subject from a few days ago.)

(And much of Alaska's state government spending comes from oil revenues, too.)

Our oil is not the only resource that needs to be treated this way.  Urban land values can be hundreds of thousands of times the value of an acre of agricultural land.  There is an acre in Manhattan said to be worth $400,000,000 to $1,100,000,000 -- as a teardown.  If we were to tax that land value at, say, 5% per year, at $400,000,000 it would produce $20 million in income for we-the-people, relieving the need for $20 million in sales taxes, or $20 million in payroll taxes, or $20 million in income taxes.  Talk about fiscal stimulus!  Talk about a permanent tax holiday! Talk about getting the incentives right!  

Making Work Pay Enough: A Decent Standard of Living for Working Families

Link: 411710_work_pay.pdf (application/pdf Object).
The study is entitled "Making Work Pay Enough: A Decent Standard of Living for Working Families" and it comes from the Tax Policy Institute.  Like the Self Sufficiency Standard Studies, it points out that many of America's jobs simply don't pay enough to support oneself, much less to support a small family.

I found myself very disappointed by the recommendations of the study.  They lack radicalism.  They don't seek the root of the problem, so they don't find the root of the problem.   They propose programs rather than solutions.

Advances in Local Emergency Services: How Should We Pay for Them?

Advances in emergency services can make one town a better place to live than another.  Here are two examples from my home town.

• defibrillators in every police car, and every police officer trained in their use, can save lives that would otherwise be lost;
   
• EMS workers trained in therapeutic hypothermia protocol, ambulances equipped with appropriate supplies, and ER and hospital staff familiar with this innovation can save lives that would otherwise be lost
   

Would you pay more to live in a community that had adopted these innovations?

Probably.

The question is to whom you should pay it, and based on what logic.

Tax Analysts column: The Price of Civilization

Link: Tax Analysts: The Price of Civilization.

Bravo! Both to David Cay Johnston and to Tax Analysts, for making him a regular columnist there.  I hope that DCJ's work will remain available to us ordinary mortals who aren't subscribers to Tax Notes.  Yes, getting the conversations going among legislative aides and academics is important -- but so is reaching the public, and I hope TA will choose to do both, with this particular column!

The third paragraph says

Our national debate on tax, such as it is, suffers from "experts" who typically know little to nothing of the history, practical rationale, moral basis, or economic benefits of tax. Their expertise is in delivering memorized talking points, not imparting understanding.

Leona Helmsley’s Fortune May Go to Benefit Dogs

Link: Leona Helmsley’s Fortune May Go to Benefit Dogs

The living and the dead, the human and the canine.

Leona Helmsley and her husband Harry individually and together accumulated billions of dollars worth of New York City real estate.  Who is entitled to that fortune?

Democracy and Opportunity: A New Paradigm in Tax Equity

Link: http://taxprof.typepad.com/taxprof_blog/2008/06/repetti-democra.html#more

I came across an abstract for an article which I suspect, on 3rd reading, is a comparison of the FairTax with the current income tax with respect to opportunity in America. 

I was excited by a couple of statements -- 

This article proposes that the principal equity goal underlying a just government is the creation of equal opportunities for all citizens to achieve self realization, i.e. to maximize their potential. It proposes, therefore, that a tax should be designed to achieve equal opportunity for self realization as one of its principal goals. Viewing equal opportunity for self realization as a design issue leads to the identification of another principle that is foundational - the promotion of democracy.

And disappointed by what I think is its favoring of the income tax.   Yes, the income tax is vastly superior to the Boortz FairTax, which, I realized on my 3rd or 4th reading of the abstract, was only alternative under consideration.

A Budget is a Moral Document

I hear this statement from time to time, and almost always, it turns out to be a reference to the spending side of the budget. 

But it is equally and -- perhaps more importantly -- true of the revenue side of the budget.  To the extent that we -- as individuals, corporations, philanthropies, endowments, pension funds, family trusts, small businesses, whatever -- are obtaining our revenue from illegitimate sources, and keeping it (legally), we are  stealing -- legally -- from what rightly belongs to everyone equally -- the commons.   And that theft has huge effects on others -- individuals and systems.

The Landed Gentry

We hear the phrase "the landed gentry" from time to time, often in the context of first-time homeowners, lyparticularly those who have bought  in a neighborhood undergoing "gentrification."

But what does it mean to be the landed gentry?  What is it that matters about being landed?  And what is "gentry"?

McCain, Obama stake out divergent paths on taxes - Yahoo! News

Link: McCain, Obama stake out divergent paths on taxes

And neither of them gets it right.  They are proposing different arrangements of the deck chairs, and while one may provide a slightly better view of the orchestra, and the other better accoustics for enjoying the music, neither of them understand either what needs to be done or why.

The Elder Economic Security Standard, new sibling to the Self Sufficiency Standard

I've posted before about the Self-Sufficiency Standard studies, which show, for a young family, the bare-bones cost of living by locality, for various configurations of family.  They answer the question "What does it cost to live here, without subsidies or help from relatives, with all one's most basic needs met, but no frills?"  These studies have been conducted in about 35 states, some as many as 3 times.

Now a similar methodology has been developed to measure the cost of living for seniors.  I'm looking at the study for Pennsylvania, where I grew up and where I still have an elderly relative.  He lives modestly in one of the more expensive counties, and based on what I know about wealth distribution among seniors, I've told him he's in pretty good financial condition for someone of his age.  He doesn't see it that way.

One Solution for Many Problems?

That was the title I chose for a short talk I gave at the "Building a New World Conference" at Radford, VA, a few weeks ago.  Here it is ... 

Is LVT the answer to all our problems?

My local newspaper has set up a facility to permit comments on articles and opinion pieces, and I frequently respond to what I read.  Yesterday, I posted a comment to an article entitled Office owners strive to retain tenants whose thumbnail description says "In tough times, office building owners often look for other sources of tenants besides relocations to their properties."  Today I went back and someone had posted the comment, " Your sole issue is land value tax. Am I right?"

 

A Few Inconvenient Truths about the Property Tax

I'm pleased to share (with permission of the author) something that appeared on a mailing list I subscribe to. The conversation was along the lines of "how do we share the idea of land value taxation [a reform of the property tax] with people who are used to hating the property tax?"

Roy Langston wrote,

When I encounter the usual unreasoning hatred of property taxes, I just point out a few inconvenient truths, along these lines:

Why Smart People should shun the "FairTax" concept

I came across a piece entitled "Why Democrats should love the FairTax," written by Laurence J. Kotlikoff, a professor of economics at Boston University, an economic adviser to Mike Gravel and a consultant to FairTax.org.

I continue to be amazed how even economists, who should know better -- far better -- than to even think about a sales tax as a solution to anything, can be in favor of such an alternative.

a tax reformer does the family 1040's

I've heard it said that voting and paying taxes are two of the major sacraments of citizenship. Having spent a significant part of the past week working on the machinations of the latter for several different family members, I am weary of the sacramental qualities of income taxes.  It isn't that I think taxes are a bad thing.  But our current system of taxation is both fundamentally wrong and, having said that, unbelievably convoluted.

Most of the commentators I read and hear are only interested in simplifying the income tax. A few propose getting rid of the income tax and replacing it with a sales tax, which I regard as simpler, but nearly as evil as an income tax from a number of points of view.   And that puts aside the question of whether the necessary rate for the so-called "FairTax" is 23% (or 30% in the way we're used to thinking of sales taxes) or closer to 60%, as I understand is more realistically the case.

The Purpose of Government

I received in an email recently a quote from Albert Einstein:

A clever person solves a problem; a wise person avoids it.

Taxes as oppression, taxes as incentives: Alabama

Friday night's PBS NOW and Bill Moyers Journal were a powerful combination.   My local station shows NOW first, followed immediately by BMJ.  NOW showed three families in Alabama, including a hard working couple whose income places them at roughly the poverty level.  They pay sales taxes of 10% on their purchases, even on food.  They only recently got indoor plumbing.

The footage also showed one of my heroes, Susan Pace Hamill, law professor at the University of Alabama, who has written several important papers, all available online [and highly recommended], about the inconsistency of Alabama's tax code [2002] and of the federal tax code [2006] with the ideals we say we hold dear.  I applaud her efforts and her scholarship and her good heart ---  and I don't think she sees the half of it, or the solution.

Philadelphia, its Wage Tax and its Residents

An article in today's Philadelphia Daily News caught my eye.  Philadelphia is home to several fine universities, some excellent medical schools and teaching hospitals, fine museums, Constitution Center and the birthplace of two of my favorite people, one in the mid 20th century, the other in the mid 19th century.  I visit its suburbs every week, and  have a sense of knowing the territory from having grown up in those suburbs.

The article, entitled Philadelphia targets one of its toughest problems, says, in part, 

Only 14 percent of city residents hold a bachelor's degree, according to the 2005 study "Graduate! Philadelphia: The Challenge to Complete," by the Philadelphia Workforce Investment Board and the Economy League of Greater Philadelphia.

In Boston, that rate is 25 percent; in Seattle, it's 36 percent.

Philadelphia's college attainment rate puts it at 92nd among the 100 largest cities in the country --€” scraping the bottom.

In fact, in Philadelphia --€” unlike Boston, Chicago or Washington, D.C. --€” there are more people who have started college and dropped out than there are residents who actually hold a four-year bachelor's degree.

What could be behind those statistics?