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TwinSwords
02-01-2010, 12:29 PM
More than a third of the streetlights in Colorado Springs will go dark Monday. The police helicopters are for sale on the Internet. The city is dumping firefighting jobs, a vice team, burglary investigators, beat cops — dozens of police and fire positions will go unfilled.

The parks department removed trash cans last week, replacing them with signs urging users to pack out their own litter.

Neighbors are encouraged to bring their own lawn mowers to local green spaces, because parks workers will mow them only once every two weeks. If that.

Water cutbacks mean most parks will be dead, brown turf by July; the flower and fertilizer budget is zero.

City recreation centers, indoor and outdoor pools, and a handful of museums will close for good March 31 unless they find private funding to stay open. Buses no longer run on evenings and weekends. The city won't pay for any street paving, relying instead on a regional authority that can meet only about 10 percent of the need.

"I guess we're going to find out what the tolerance level is for people," said businessman Chuck Fowler, who is helping lead a private task force brainstorming for city budget fixes. "It's a new day."

Some residents are less sanguine, arguing that cuts to bus services, drug enforcement and treatment and job development are attacks on basic needs for the working class.

"How are people supposed to live? We're not a 'Mayberry R.F.D.' anymore," said Addy Hansen, a criminal justice student who has spoken out about safety cuts. "We're the second-largest city, and growing, in Colorado. We're in trouble. We're in big trouble."

Mayor flinches at revenue

Colorado Springs' woes are more visceral versions of local and state cuts across the nation. Denver has cut salaries and human services workers, trimmed library hours and raised fees; Aurora shuttered four libraries; the state budget has seen round after round of wholesale cuts in education and personnel.

The deep recession bit into Colorado Springs sales-tax collections, while pension and health care costs for city employees continued to soar. Sales-tax updates have become a regular exercise in flinching for Mayor Lionel Rivera.

"Every month I open it up, and I look for a plus in front of the numbers instead of a minus," he said. The 2010 sales-tax forecast is almost $22 million less than 2007.

Voters in November said an emphatic no to a tripling of property tax that would have restored $27.6 million to the city's $212 million general fund budget. Fowler and many other residents say voters don't trust city government to wisely spend a general tax increase and don't believe the current cuts are the only way to balance a budget.


What goes unmentioned by the liberal media fails are the free market magic ponies which are about to appear to solve all these problems.

(Read the rest (http://www.denverpost.com/news/ci_14303473#ixzz0eJ3P2nXE).)

nikkibong
02-01-2010, 01:12 PM
Why should the working poor be subsidizing things like museums and swimming pools? It's interesting that this is a SALES TAX issue. I'm all for steep income taxes - but sales taxes?

Twin -- mr. supposed progressive -- has it occurred to you how regressive sales taxes are? Something tells me that with your Fortune 50 pedigree, they don't hurt you that much.

http://trueslant.com/ethanepstein/2010/01/19/cutting-taxes-is-progressive-social-policy/

(sorry -- just this once)

TwinSwords
02-01-2010, 03:05 PM
Why should the working poor be subsidizing things like museums and swimming pools? It's interesting that this is a SALES TAX issue. I'm all for steep income taxes - but sales taxes?

Twin -- mr. supposed progressive -- has it occurred to you how regressive sales taxes are? Something tells me that with your Fortune 50 pedigree, they don't hurt you that much.

http://trueslant.com/ethanepstein/2010/01/19/cutting-taxes-is-progressive-social-policy/

(sorry -- just this once)

Nikkibong,
First of all, I don't think it's reasonable of you to assign me the position of regressive sales tax supporter; I have taken no such position.

Second: The article said that voters rejected a property tax, a progressive tax that would have averted this shutdown of government services and would have placed most of the tax burden where, IMO, it belongs: on the relatively well-to-do.

Third: My point had nothing to do with the means for paying for government services, but was intended to simply highlight the fact that it's easy to take government for granted until suddenly all the services disappear. Anti-tax rhetoric sounds good until people see traffic lights no longer working, libraries closing, cops and teachers laid off, and garbage piling up in the streets. An important fact of American life is that there is broad public support for a public infrastructure, and we need polticians who are honest about what said infrastructure requires.

Fourth: I'll read the article later. Thanks for the link.

Finally: I'm glad you have taken a stand in favor of a progressive taxation as a general principle. It's one with which I am in wholehearted agreement.

cragger
02-01-2010, 03:52 PM
Is the property tax progressive where you are? Everywhere I am familiar with it is a flat rate just like a sales tax. That is, the latter takes a fixed percentage of spending whether one has and spends $20k per year or $200k, and the former similarly takes a fixed percentage whether one owns a small 2-bed 1-bath home on a quarter acre lot or a McMansion on a landscaped estate. Aren't both regressive taxes?

bjkeefe
02-01-2010, 04:11 PM
Is the property tax progressive where you are? Everywhere I am familiar with it is a flat rate just like a sales tax. That is, the latter takes a fixed percentage of spending whether one has and spends $20k per year or $200k, and the former similarly takes a fixed percentage whether one owns a small 2-bed 1-bath home on a quarter acre lot or a McMansion on a landscaped estate. Aren't both regressive taxes?

Seems to me that tax figured as a percentage of home value is at least moderately progressive (added: in spirit), since richer people presumably have considerably more pricey homes. This makes it seem different, somehow, from, say, a flat income or sales tax rate.

But, I do take your point: by some definition, the percentage itself should increase as the home value increases to truly be a progressive tax (i.e., socialism!!!1!).

AemJeff
02-01-2010, 04:12 PM
Is the property tax progressive where you are? Everywhere I am familiar with it is a flat rate just like a sales tax. That is, the latter takes a fixed percentage of spending whether one has and spends $20k per year or $200k, and the former similarly takes a fixed percentage whether one owns a small 2-bed 1-bath home on a quarter acre lot or a McMansion on a landscaped estate. Aren't both regressive taxes?

Flat=Regressive?

bjkeefe
02-01-2010, 04:27 PM
Flat=Regressive?

Flat=non-progressive seems fair.

(That is not a minus sign. ;))

AemJeff
02-01-2010, 04:33 PM
Flat=non-progressive seems fair.

That's kosher.
(That is not a minus sign. ;))

Heh! I actually first typed "Flat==Regressive?"

bjkeefe
02-01-2010, 04:40 PM
Heh! I actually first typed "Flat==Regressive?"

Hah! And then instead of merely testing for equivalence, you decided to assign one word to mean another. JONAH WAS RIGHT (http://bjkeefe.blogspot.com/2008/10/need-quick-pix-me-up.html).

claymisher
02-01-2010, 04:44 PM
Isn't Colorado Springs the capital of the right-wing Christianity industry?

I'm all for progressive taxation. I'm for shockingly extreme progressive taxation. But not every single tax needs to be progressive. And from the data I've seen, depending on the details (food exemptions, etc), most sales taxes are mildly regressive to mildly progressive. Note that actually existing social democracies (northern Europe) have really high VATs.

If you figure that the gross benefits are roughly equal -- rich folks get the same benefits out of sidewalks and libraries as anybody else -- even regressive taxes can be net progressive. For example, if you had a single-payer insurance system funded by a VAT, a working-class person might pay $2000 in consumption taxes, a rich dude might pay $4000, but both receive $2500 in benefits.

TwinSwords
02-01-2010, 06:22 PM
Is the property tax progressive where you are? Everywhere I am familiar with it is a flat rate just like a sales tax. That is, the latter takes a fixed percentage of spending whether one has and spends $20k per year or $200k, and the former similarly takes a fixed percentage whether one owns a small 2-bed 1-bath home on a quarter acre lot or a McMansion on a landscaped estate. Aren't both regressive taxes?

Yes, you make a good point. The property tax is not progressive for those who pay it, assuming there are no homestead tax credits, tax credits for low-income, credits for first-time buyers, credits for people who purchase property in depressed areas, etc.

But property taxes are sort of "progressivish" in a couple of important ways: First, the working poor and lower-middle classes tend to rent, not own, and therefore are exempt; there are millions in the lower economic strata who pay zero property taxes and in effect get a "free ride," to use Republican parlance, off the taxes paid by middle- and upper-classes. Second, property taxes tend to be higher for commercial real estate and sometimes industrial real estate. The most valuable/expensive real estate is a community is (obviously) owned by the very wealthy.

My understanding, too, is that property wealth is more highly stratified than income, so even if applied at a flat rate, the majority of the revenue is drawn from the higher wealth sectors, with almost none coming from the poor.

So, your point is well taken: it's not strictly accurate to call property taxes progressive. But given the fact that a significant portion of the population owns no property, plus the fact that corporations and businesses pay a signficant amount of property tax, the tax burden falls largely where it should, in my view: on those who can afford it.

claymisher
02-01-2010, 07:15 PM
Yes, you make a good point. The property tax is not progressive for those who pay it, assuming there are no homestead tax credits, tax credits for low-income, credits for first-time buyers, credits for people who purchase property in depressed areas, etc.

But property taxes are sort of "progressivish" in a couple of important ways: First, the working poor and lower-middle classes tend to rent, not own, and therefore are exempt; there are millions in the lower economic strata who pay zero property taxes and in effect get a "free ride," to use Republican parlance, off the taxes paid by middle- and upper-classes. Second, property taxes tend to be higher for commercial real estate and sometimes industrial real estate. The most valuable/expensive real estate is a community is (obviously) owned by the very wealthy.

My understanding, too, is that property wealth is more highly stratified than income, so even if applied at a flat rate, the majority of the revenue is drawn from the higher wealth sectors, with almost none coming from the poor.

So, your point is well taken: it's not strictly accurate to call property taxes progressive. But given the fact that a significant portion of the population owns no property, plus the fact that corporations and businesses pay a signficant amount of property tax, the tax burden falls largely where it should, in my view: on those who can afford it.

I don't know how much of the property tax gets passed on to renters. I googled 'tax incidence rent property tax' and came across this: Houses, Apartments and Property Tax Incidence (http://scholar.google.com/scholar?hl=en&lr=&cluster=7150445965915574727&um=1&ie=UTF-8&ei=eGdnS8e3LJD4sQPN-sn5BA&sa=X&oi=science_links&resnum=1&ct=sl-allversions&ved=0CBEQ0AIwAA)

The study finds that multifamily rental housing bears an effective tax rate at least 25 percent higher than the rate on single-family owner-occupied housing for the nation overall. The level of taxation, and the apartment/house differential, varies considerably from place to place. Much, but not all, of the differential is associated with the lower property values per unit of apartments compared to houses. The gap in tax rates appears to have arisen during the 1990s, as tax rates of apartments and houses were nearly identical in 1991. The paper concludes that the residential property tax, as implemented, promotes low density development, disproportionately burdens lower valued properties, and may impose higher taxes on apartment residents than on homeowners of identical incomes.


The question of more interest for this study is whether homeowners and apartment renters of the same income pay the same property tax. It is a difficult question to answer. One reason is that it is more complicated to compare property tax expense to incomes for renters than for owners. For rental housing, there is a sharp distinction between the legal incidence of the property tax and the economic incidence of the tax (Youngman, 2002). The rental property owner pays the tax bill but attempts to recoup the cost through the rent payments of the property’s residents. In the short run, market rents are set by the current balance of housing demand with the available stock. Thus property taxes or other expenses have no direct effect on rents in the short run. But in the long run the stock will adjust up or down depending on the relationship of rents to costs of providing rental housing. In equilibrium, rents will equal the “user costs” to the owner of providing that rental housing. Property taxes, as one operating expense, are a part of that user cost and must be recouped through rents.

cragger
02-02-2010, 09:46 AM
The point about property taxes being passed on to renters is a good one, however difficult it might be to determine just how heavily that burden lies. While similarly lacking in hard data, and likely lacking somewhat in clarity as well, I suspect that within the realm of homeowners the property tax burden is related to income and wealth in a pretty non-linear manner as well.

It feels like the fancier homes must be owned by wealthier people, who must therefore pay the higher property tax amounts despite the flat rate. That is to say that their property taxes would represent the same proportion of their wealth and income as for the less well off. I think this is likely true only to a point however. Owners of 3600 square foot homes probably have higher incomes and greater net wealth than owners of small homes. For a significant portion of such homeowners though, the home represents a significant portion of their net wealth. This I propose is not true for people with great wealth, and really high incomes. A far smaller proportion of their wealth is in their homes, and thus property taxes hit them for a much smaller portion of their wealth and incomes than they hit upper middle class folks with homes that are large and fancy compared to those of the working poor and lower middle class. Rather than being "progressive-ish" I suspect that property taxes often fall quite lightly on the truly wealthy.

Unit
02-06-2010, 01:13 AM
What goes unmentioned by the liberal media fails are the free market magic ponies which are about to appear to solve all these problems.

(Read the rest (http://www.denverpost.com/news/ci_14303473#ixzz0eJ3P2nXE).)

It's easier to take for granted markets than govt. Govt is very visible, salient would be the word. It seems like a slam-dunk that closing public libraries is a bad thing, because public libraries are very visible. But what if the only way to keep them open is to raise taxes on businesses that then have to lay off people (I'm giving this scenario for simplicity). Now you're faced with the harder problem of weighing what's more important: an inefficient public library that serves few people at high costs or some regular folks who would rather have a job than to join the ranks of the unemployed? I don't know what the answer is and yes I've set up the dilemma artificially, but the point is that the folks that loose their jobs are not as visible, as salient, as the library closing, because they're dispersed throughout the economy. It's easy to commit the fallacy of thinking that correcting a specific bad thing might not create other hidden bad things somewhere else. Of course if 'magically' there was enough money to do both: keep public libraries open AND raise less taxes then that would be great, but that's where the real magical thinking lies.

Florian
02-06-2010, 04:06 AM
Isn't Colorado Springs the capital of the right-wing Christianity industry?

I'm all for progressive taxation. I'm for shockingly extreme progressive taxation. But not every single tax needs to be progressive. And from the data I've seen, depending on the details (food exemptions, etc), most sales taxes are mildly regressive to mildly progressive. Note that actually existing social democracies (northern Europe) have really high VATs.

If you figure that the gross benefits are roughly equal -- rich folks get the same benefits out of sidewalks and libraries as anybody else -- even regressive taxes can be net progressive. For example, if you had a single-payer insurance system funded by a VAT, a working-class person might pay $2000 in consumption taxes, a rich dude might pay $4000, but both receive $2500 in benefits.

Could you tell me why Americans are so opposed to a VAT tax? In France it is 19% on just about everything except food and books (and considerably more on fuel). I understand why some consider it regressive but it is a considerably more efficient way of collecting revenues than income tax. Evasion is impossible, and the bureaucracy that administers it is less onerous than the bureaucracy that administers income tax.

Florian
02-06-2010, 04:43 AM
It's easier to take for granted markets than govt. Govt is very visible, salient would be the word. It seems like a slam-dunk that closing public libraries is a bad thing, because public libraries are very visible. But what if the only way to keep them open is to raise taxes on businesses that then have to lay off people (I'm giving this scenario for simplicity). Now you're faced with the harder problem of weighing what's more important: an inefficient public library that serves few people at high costs or some regular folks who would rather have a job than to join the ranks of the unemployed? I don't know what the answer is and yes I've set up the dilemma artificially, but the point is that the folks that loose their jobs are not as visible, as salient, as the library closing, because they're dispersed throughout the economy. It's easy to commit the fallacy of thinking that correcting a specific bad thing might not create other hidden bad things somewhere else. Of course if 'magically' there was enough money to do both: keep public libraries open AND raise less taxes then that would be great, but that's where the real magical thinking lies.

Like a typical libertarian you stack the deck against government by using loaded, irrelevant language. A public library serves "few people" and is "inefficient" (perhaps this is true where you live....). Government is "visible" and "salient"---- as if that were the defining feature of government! The defining feature of a government is that it provides services which a community has democratically decided are necessary to its well-being. There is nothing "magical" about raising taxes to provide such services. It is simply the logical consequence of thinking that there is such a thing as the common good.

So your "dilemma" is indeed artificial. Spending on public goods may have hidden consequences, such as unemployment, but there are only two valid reasons for discontinuing a public service: because the majority of citizens think it is no longer necessary to the common good, or because they are too stupid to see the connection between the common good and taxes.

bjkeefe
02-06-2010, 09:33 AM
Could you tell me why Americans are so opposed to a VAT tax? In France it is 19% on just about everything except food and books (and considerably more on fuel). I understand why some consider it regressive but it is a considerably more efficient way of collecting revenues than income tax. Evasion is impossible, and the bureaucracy that administers it is less onerous than the bureaucracy that administers income tax.

The regressive aspect of it is one part, sure. I would speculate that opposition also comes from (1) retail outlet owners, who worry about loss of sales, (2) economists who believe that Americans and their shopping is what keeps the economy going (sadly true, I think, to a first approximation), and (3) people who don't want another complicated tax scheme codified.

To the last: yes, a VAT seems simple, and could be simple, but I don't doubt that were we to pursue one, the first thing that would happen would be clamoring for exceptions. "Surely," many would say, "we cannot tax basic foodstuffs and clothing." "Why should textbooks be taxed?" others would ask. "Isn't this a disincentive working on people who want to improve their education and get ahead in life?" A third group would say, "Since small businesses are the job creation engine of this economy, small business owners should not have to pay a VAT on vehicles, machinery, raw materials, etc. that they need to grow their businesses but have to buy at retail, because they don't buy enough at one time."

As I say, just speculating. But when things pop this easily to my less-than-agile mind, I suspect it's because I've previously heard them elsewhere.

Unit
02-06-2010, 06:47 PM
Like a typical libertarian you stack the deck against government by using loaded, irrelevant language. A public library serves "few people" and is "inefficient" (perhaps this is true where you live....). Government is "visible" and "salient"---- as if that were the defining feature of government! The defining feature of a government is that it provides services which a community has democratically decided are necessary to its well-being. There is nothing "magical" about raising taxes to provide such services. It is simply the logical consequence of thinking that there is such a thing as the common good.

So your "dilemma" is indeed artificial. Spending on public goods may have hidden consequences, such as unemployment, but there are only two valid reasons for discontinuing a public service: because the majority of citizens think it is no longer necessary to the common good, or because they are too stupid to see the connection between the common good and taxes.

Yes but I used that language on purpose. You can't say that there are no trade-offs. Let me put it in a way that you might appreciate: the original post mentioned selling the police helicopter. What if the trade-off is between retaining teachers and selling an expensive police toy (loaded word again). The other cut mentioned was that they would try not to waste water and would stop sprinkling it on semi-arid land. Who could be against that?

Florian
02-07-2010, 07:39 AM
Yes but I used that language on purpose. You can't say that there are no trade-offs. Let me put it in a way that you might appreciate: the original post mentioned selling the police helicopter. What if the trade-off is between retaining teachers and selling an expensive police toy (loaded word again). The other cut mentioned was that they would try not to waste water and would stop sprinkling it on semi-arid land. Who could be against that?

As I said, it is up to the community, i.e. its democratically elected officials, to decide what trade-offs are necessary. In your previous example, the trade-off was between a public service and its possible "hidden consequences" in the private sector. That isn't the same thing as deciding between teachers and helicopters for the police, which are both public services.

It is as clear as day that many Americans are unable to understand the relationship between the common good and taxes. They complain of "big" government and waste, but they are always happy to benefit from the services of government, big and small. Hence the title of this thread: Republican and Libertarian Dreamland

Unit
02-07-2010, 09:52 AM
As I said, it is up to the community, i.e. its democratically elected officials, to decide what trade-offs are necessary. In your previous example, the trade-off was between a public service and its possible "hidden consequences" in the private sector. That isn't the same thing as deciding between teachers and helicopters for the police, which are both public services.

It is as clear as day that many Americans are unable to understand the relationship between the common good and taxes. They complain of "big" government and waste, but they are always happy to benefit from the services of government, big and small. Hence the title of this thread: Republican and Libertarian Dreamland

It doesn't matter so much where the trade-offs are: the public tends to miss them because of the concentrated-benefits/diffuse-costs dynamics. This has nothing to do with libertarianism or whether the public is American or whatnot.

Florian
02-07-2010, 11:57 AM
It doesn't matter so much where the trade-offs are: the public tends to miss them because of the concentrated-benefits/diffuse-costs dynamics. This has nothing to do with libertarianism or whether the public is American or whatnot.

Meaningless. It very much matters whether the trade-offs are in the public or private sector. If you were a little more intelligent than the average American libertarian you would understand the difference. Even your hero Hayek understood the difference.

Unit
02-07-2010, 12:27 PM
Meaningless. It very much matters whether the trade-offs are in the public or private sector. If you were a little more intelligent than the average American libertarian you would understand the difference. Even your hero Hayek understood the difference.

But that was not the point I was making. You don't get to make my points for me.

wreaver
02-07-2010, 02:13 PM
The defining feature of a government is that it provides services which a community has democratically decided are necessary to its well-being.

No, the defining feature of government is that it claims a monopoly on (legitimate) violence. (Like law enforcement, war, etc.)

Governments don't have to be democratic, as you have claimed above. There have been many governments in the past and even now that are not democratic.

wreaver
02-07-2010, 02:37 PM
If the city government (or some other government) prevents these services and "public" property from being privatized, then there is nothing libertarian about this.

I.e., this is just the equivalent of a military blockade. Or to put it another way, if the government(s) say, "we won't provide these services, but we won't let anyone else (privately) provide them either", that's not libertarian-esque at all.

A libertarian-esque scenario would need (individual) people owning things, not government(s).

Florian
02-07-2010, 02:45 PM
No, the defining feature of government is that it claims a monopoly on (legitimate) violence. (Like law enforcement, war, etc.)

Governments don't have to be democratic, as you have claimed above. There have been many governments in the past and even now that are not democratic.

No kidding!

Max Weber's definition of the state is reheated Hobbes. It was untrue in the 17th century and it is untrue today. Without a conception of the common good no state is worth preserving.

wreaver
02-07-2010, 03:09 PM
The defining feature of a government is that it provides services which a community has democratically decided are necessary to its well-being.
No, the defining feature of government is that it claims a monopoly on (legitimate) violence. (Like law enforcement, war, etc.)

Governments don't have to be democratic, as you have claimed above. There have been many governments in the past and even now that are not democratic.


No kidding!

Max Weber's definition of the state is reheated Hobbes. It was untrue in the 17th century and it is untrue today. Without a conception of the common good no state is worth preserving.

Care to elaborate why you consider the definition of government as, a monopoly on (legitimate) violence, to be untrue?

Florian
02-07-2010, 03:25 PM
Care to elaborate why you consider the definition of government as, a monopoly on (legitimate) violence, to be untrue?

I should have said that it is an insufficient definition. The common good is more than the common defense against external and internal enemies, which is all that Weber meant when he spoke of the monopoly of legitimate violence.

In any case, for the limited purposes of my exchange with Unit above, I see nothing wrong with what I said. The state (or "government" in the US) provides public goods, which are distinguishable from private goods.

PreppyMcPrepperson
02-12-2010, 02:00 PM
I should have said that it is an insufficient definition.

Weber wasn't defining this as what a state should be, but philosophically what a state IS. As in, an entity that is recognized by those living in it and those living around it as having legit use of force in its territory is a state. It may be a bad state, a cruel state etc, but it is a state. It's a philosophical starting point.

Florian
02-15-2010, 06:41 AM
Weber wasn't defining this as what a state should be, but philosophically what a state IS. As in, an entity that is recognized by those living in it and those living around it as having legit use of force in its territory is a state. It may be a bad state, a cruel state etc, but it is a state. It's a philosophical starting point.

That is exactly what I said. It is an insufficient definition of what a state is. Even a bad state defines itself by more than the common defense against external and internal enemies. There is always a common good, however imperfectly embodied, and the common good is more than "the monopoly of legitimate violence."