Mon, 29 Oct 2007

Random references for issue 28

• "Understanding Why Crime Fell in the 1990s: Four Factors that Explain the Decline and Six that Do Not" by Steven D. Levitt (2004)
• "All Choices Created Equal? How Good Parents Select `Failing' Schools", by Courtney Bell, National Center for the Study of Privatization of Education, Teachers College, Columbia University working paper, 2005.

14:40 - 29 Oct 2007 [/y7/oc] link

Sun, 28 Oct 2007

Our flinty neighbors to the north.

[Appeared in Woonsocket Call, Pawtucket Times, etc, last week.]

After a column I wrote about taxes, a reader wrote in to ask about New Hampshire. He wrote that they have half the number of state employees there, and still manage to pave their roads, and do it with no income tax and no sales tax. When you write about taxes and state budgets in Rhode Island, you hear a lot about New Hampshire, a fact that amused several of the New Hampshire officials I spoke to. It seems they don't spend much time thinking about us.

But let's clear up some misconceptions about our flinty neighbors to the north. New Hampshire has no income tax, right? Well, sort of. They have no income tax on wages, but they do tax unearned income, like interest and dividends, at 5%. A married couple here have to be making well over $100,000 a year before they're taxed at that rate. New Hampshire has a business income tax of 8.5% to 9.25%, depending on size and they define taxable businesses much more liberally than we do, with three times as many business tax returns filed than here. The business income tax funds a quarter of their budget and 4% of ours. If I, a self-employed writer, were to move to New Hampshire, my state taxes could go up.

See more ...

20:38 - 28 Oct 2007 [/y7/cols] link

Fri, 26 Oct 2007

Money can't buy love.

[Appeared in the Woonsocket Call, the Pawtucket Times, and others.]

We learned last week that Operation Dollar Bill, the federal investigation of the Senate leadership, involves tax legislation. In federal court, Gerard Martineau, the former Senate Majority Leader from Woonsocket, admitted to crimes involving taking money from CVS in exchange for legislative favors. In cases involving other former Senators, we've already heard about corruption involving "pharmacy choice" legislation, where the legislature rejected bills that would have allowed pharmacies to compete with each other for your business. But now we hear that some of the favors may have involved the 2002 capital gains tax cut. If it's true that money changed hands in order to influence tax legislation, I have some free advice for the CVS and Blue Cross executives who gave it: Don't waste your money. Most of the legislators in our General Assembly love you already, and money can't buy that kind of love.

See more ...

11:07 - 26 Oct 2007 [/y7/cols] link

Wed, 24 Oct 2007

New Hampshire taxes

For readers coming here from the column in today's newspaper: Scroll down a bit.

09:49 - 24 Oct 2007 [/y7/oc] link

Their own enemies

This publication is on several press lists, and so I receive press releases from a variety of publications looking for ink. I've been getting releases from the URI College Republicans for a little while, with some irregularities in the address that let me know that they probably got the press list from someone at the statehouse. Imagine my surprise when I got the following message, with the same irregularities.

Date: Tue, 23 Oct 2007 19:45:27 -0400
From: "Protest College Republicans"
To: protesturicollegegop@gmail.com
Subject: URI COLLEGE REPUBLICANS PROTEST

Hello,

The same URI College Republicans who brought you a White, Heterosexual Male Scholarship are now bringing you an Islamo-Fascism Awareness Week. The racism, sexism and bigotry continues.

The URI College Republicans must be stopped!

Join myself and dozens of other students as we protest the URI College Republicans tomorrow night at 7PM when they host Robert Spencer, a Muslim-Hating, Bush propogandist in the Memorial Union Ballroom.

Let's put an end to this racism, sexism and bigotry!

This man wrote "The Politically Incorrect Guide to Islam". What a sicko!

Protest Details:
What: Robert Spencer Speech
Where: Memorial Union Ballroom
When: Wednesday Oct 24 @ 7 PM

Since this clearly came from the URI College Republicans, I'd assume that anyone who showed up to protest was a willing tool of that organization. Wouldn't you?

09:49 - 24 Oct 2007 [/y7/oc] link

Tue, 23 Oct 2007

RIPR 28 Coming soon...

• Corrections budget -- Our curious priorities: Locking up criminals but slighting the police who are supposed to catch them.
• Book review -- Against Prediction Police and parole officials try to predict who will commit crimes, but is that a good way to reduce crime?
• Trying to predict the cost of our flat tax cap for the rich. The IRS withholds data.

Didn't you mean to subscribe?

07:35 - 23 Oct 2007 [/y7/oc] link

Our flinty neighbors to the north

Answering questions about New Hampshire's taxes. A table of NH property tax rates. You can see in it that the vacation towns tend to have much lower rates than the less fashionable towns. The cities tend to be on the low end of the high side. But check for yourself.

A table of RI property tax rates. Here, too, is it any accident that the lowest rates are in places like Block Island and Little Compton?

New Hampshire's property taxes, in aggregate, aren't that much different from Rhode Island's. But when you look at the non-vacation areas of that state, they're substantially higher. So New Hampshire is allowing its out-of-state owners to subsidize a slightly lower property tax, which is fine for them, but where does that leave a state whose leaders say we should emulate them?

07:28 - 23 Oct 2007 [/y7/oc] link

State Pensions: Who is the liability?

[Appeared in the Woonsocket Call, the Pawtucket Times, and others, two weeks ago.]

The Governor has announced his plans to cut 1,000 state employees and to cut $50 million state spending and another $50 million in benefit costs for the remaining state employees. I can say stuff like that, too. Watch: I will cut all 15,353 state employees! Except the lifeguards at Scarborough. Of course I'm not the Governor, so it's a tiny bit less credible, but not by much. Until he starts to say what positions he will cut, from which departments, and which services will be sacrificed to make this plan work, it's all just words, about as valuable as mine. (Not to mention how he will overcome such obstacles as employee statutory status.)

See more ...

07:28 - 23 Oct 2007 [/y7/cols] link

Sat, 20 Oct 2007

A solution in search of a problem

[Column originally appeared in Woonsocket Call, Pawtucket Times, etc.]

Last spring, Ralph Mollis, our new Secretary of State, announced the formation of his "Voters First" commission. The idea was to find ways to improve how we vote. Some of his proposals -- extending elections to cover several days and eliminating the need for an excuse to get an absentee ballot -- aren't bad. My favorite is about improving the training and pay for poll workers. Many of them are hard working and intelligent volunteers we should honor, but they are often not informed about the details of election laws. I've twice been threatened with arrest for seeking public information from poll workers on election day.

See more ...

19:22 - 20 Oct 2007 [/y7/cols] link

Thu, 18 Oct 2007

Trickle-down works after all

Read here.

14:41 - 18 Oct 2007 [/y7/oc] link

How much is the "flat" tax costing us?

As you may know, in 2006, the legislature adopted a tax cap for very wealthy taxpayers. The idea is that we shouldn't tax those people any more than they'd be taxed in Massachusetts. This is supposed to help our economy somehow, though there is little reason to think so, unless you think that rich investors power the economy, regardless of the fate of the workers, customers, inventors, roads, schools, police and fire departments on which they depend.

But putting those little details aside, there is some confusion about how much this tax cut will actually cost us. The tax division put some numbers out in 2006, based on the 2005 tax returns, but they didn't make any predictions for the future. What's been clear over the past several years is that the incomes of the wealthy are growing at a different rate than the incomes of the less-wealthy. This makes tax projections tricky.

What makes them trickier is that the Bush administration's IRS has decided it's no longer important to provide detailed tax data for the states. (They still provide state data, but with far less detail than since the statistics of income bureau was established.) So there are some significant grains of salt to take with tax projections. That said, knowing the cost of this cut is important to what passes for policy debate around here, so I spent some time this past week reconstructing my model of income distribution and tax collections for our state, to take newer data into account.

Here is what I get for the flat tax costs. The second column is the limit, which is applied to the taxpayer's taxable income:

Caveats: I'd be willing to bet these are within 10% of the right answer, but no better than that. These are tax year predictions, not fiscal years. Here's the hit on fiscal years, more useful for discussions of the state budget:

These are the best estimates I can make with the available data. When more data becomes available, I will revise them.

08:12 - 18 Oct 2007 [/y7/oc] link

Sun, 14 Oct 2007

Where it all goes

A cool way to look at the federal government's budget.

21:53 - 14 Oct 2007 [/y7/oc] link

Fri, 12 Oct 2007

Income inequality up

Apparently as high as its been in the US since statistics have been kept. This article in the radical rag The Wall Street Journal reports that researchers say you probably have to go back to the 1920's to find a comparable period.

15:03 - 12 Oct 2007 [/y7/oc] link

Wed, 10 Oct 2007

Can you trust reporters to report?

Especially when they quote people. Read about Hillary and torture.

22:13 - 10 Oct 2007 [/y7/oc] link

Mon, 01 Oct 2007

Are state taxes your biggest problem?

[Appeared last week in RIMG papers all over Rhode Island. If this wasn't in your local paper, complain to the editor.]

It's hardly news to anyone that the state is in a terrible fiscal situation this year. It will be very surprising if we end this fiscal year without a deficit, and the deficit anticipated in *next* year's budget looks immense. Numbers north of $400 million are being discussed around the state house. For some perspective, this is over 10% of the state's entire budget.

The Governor spent a little time last week trying to prepare the ground for the upcoming budget season. He put out a press release saying how hard he was pushing the heads of state departments to find cuts to make, and sat for press interviews. He promises deep cuts in services, and wants to lay off 1,000 state employees. (When he said something similar last spring, it turned out that no member of his administration had actually identified 1,000 employees whose services could be dispensed with. Instead it appeared his office had simply picked a number from a hat, and then complained when no one in the legislature took the proposal seriously.)

As he frequently does, the Governor took some time to claim that the blame for the budget situation belongs to the legislature, who rewrites the budgets he submits. In a newspaper interview last week, he is quoted as saying, "I can propose some things, but the General Assembly has to enact it and they enacted a budget that... is not a budget that works."

The Assembly is far from blameless for the current disaster of a state budget, but he is far too modest. Without his able leadership, we wouldn't be in nearly as serious a crisis. To hear him speak, you'd think that the budgets he submitted were models of fiscal responsibility, vandalized by evil legislators, but that just isn't true, and it hasn't been since the day he was sworn in.

See more ...

15:51 - 01 Oct 2007 [/y7/cols] link

Iran?

Read here.

12:00 - 01 Oct 2007 [/y7/oc] link

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