Meet the initiatives!

by: Jay Stevens

Tue Jul 20, 2010 at 13:20:47 PM MST

• I-161, which proposes changing how hunter access programs are funded. If voters approve the measure, it would abolish outfitter-sponsored nonresident licenses and nix the requirement that licensed outfitters supervise hunts conducted by out-of-state clients. It would also increase the cost of a nonresident big game license 43 percent and a combination deer license by 61 percent. Opponents of the initiative claim the signatures were gathered illegally.

• I-164, known as the "payday loan initiative." The measure proposes limiting the annual interest, fees and charges certain lenders may charge on loans to 36 percent.

• CI-105, which would amend the Montana Constitution to prohibit creating a new tax on the sale or transfer of property in the state.

B'birder problembear, of course, has helped gather signatures for I-164 and has written a few posts on it. I won't jinx the initative, but I can't imagine a majority of Montanans voting for 400 percent interest rates on the poor.

I have no opinion on I-161. Is it a spiteful attack on outfitters? Or a means to cut down on trophy hunting and keep permits out of the hands of wealthy hobbyists and the exclusive clubs that serve them? Anyone want to make an argument for or against that one?

And then there's CI-105. Dan Testa profiled it way back in April:

Its goal is to gather enough signatures to place Constitutional Initiative-105 on the ballot in November. If passed by voters, the measure would amend the state Constitution to prohibit the Legislature or any municipality from passing a real estate transfer tax (RETT). Such a tax can be applied to sales, inheritances or like-kind exchanges of property, and is usually imposed at the time of closing, along with other taxes or fees.

All you need to know about it is that John Sinrud's working on it, so it must fit in with some especially creepy and radical right-wing machinations.

But if guilt-by-association doesn't work for you, here's Eric Feaver with a reasoned argument against the initiative:

"CI-105 would prohibit a tax that does not exist. It would embed that prohibition in Montana's state constitution," said MEA-MFT President Eric Feaver. "It is at root an anti-government measure."

CI-105 would constitutionally prohibit a real estate transfer tax. CI-105 could also potentially prevent local governments and public schools from using local impact fees to cover the costs of new subdivisions and student enrollment growth. 

The Montana Association of Realtors is the chief group backing CI-105. "We are surprised to see the Realtors pushing a measure like this," Feaver said. "They are playing right into the hands of right-wing, anti-government groups that have worked for years to cripple Montana's public services by amending our state constitution through ballot initiatives."

"Demonizing government and taxes hurts us all. Taxes are the dues we pay to live in a civilized society."

I'm not optimistic about stopping this. It's sort of flown under the radar, for starters. For another, it's sort of a brilliant rhetorical campaign: the group organizing it is calling itself the "Coalition Against Double Taxation," a clear, negative message about the tax - which doesn't even exist - forcing opponents to defend "double taxation" and to imply they favor expanding new taxes. All of which leads me to believe that Sinrud and friends must be getting outside help on this one...

And, last, some good news: CI 102, the "personhood" amendment, that would strip Montana women of their right to privacy and define life as beginning at conception, failed miserably. This isn't the first time this has come up, of course. Back in 2007, Rick Jore tried to stick his nose into the state's vaginae in the state legislature with a bill that was too radical for the Catholic Church. The usual folks trotted the initiative out again this year, and again, the initiative couldn't find enough backers to make the ballot.

"We have barely begun the fight," says bill backer, Dr. Annie Bukacek, "we will keep working on it until their personhood is established in our Montana constitution."

"Um, Ms. Bukaceck," writes Cowgirl, "you've been working on this for three years already, it's not happening..." That probably won't dissuade Bukacek, but it does bode well for the rights of Montana women and their right to privacy.  

A call for "small-government egalitarianism" from an unusual place

by: Jay Stevens

Tue Jul 13, 2010 at 08:39:25 AM MST

This policy is typical of the way the federal government does business. In case after case, Washington's web of subsidies and tax breaks effectively takes money from the middle class and hands it out to speculators and have-mores. We subsidize drug companies, oil companies, agribusinesses disguised as "family farms" and "clean energy" firms that aren't energy-efficient at all. We give tax breaks to immensely profitable corporations that don't need the money and boondoggles that wouldn't exist without government favoritism....

All of this ought to be grist for a kind of "small-government egalitarianism," in the economist Edward Glaeser's useful phrase, that seeks to shrink government by attacking Washington's wasteful spending on the well-connected....conservatives need to recognize that the most pernicious sort of redistribution isn't from the successful to the poor. It's from savers to speculators, from outsiders to insiders, and from the industrious middle class to the reckless, unproductive rich.

The Corner's Ramesh Ponnuru adds, "a reform that made the federal government more redistributive, but smaller and more efficient, would be worthwhile."

Uh, yes, it would. And you can kiss goodbye those cushy box seats in a conservative think tank they were warming for you fellas.

Seriously, this is essentially what I was ranting about the other day. Douthat does try to bring his argument back to conservative talking points now and then -- for example, he does rail against liberals' inclination to want to raise taxes on the rich, although I'd argue that we want to level taxes on the rich, simply ensuring that they pay the tax rates assigned to them. No loopholes, no tax havens, and their income taxed at the same rates as, say, mine.

In any case, it's nice to see conservatives understand that income inequality exists, and that our economic system unfairly favors the wealthy. Usually do conservatives not only care (if they recognize this unfairness), they do everything they can to rig the system for the rich.

You're too well off! (Unless you're rich.)

by: Jay Stevens

Sat Jul 10, 2010 at 09:05:06 AM MST

Billionaire owners can afford to run their leagues however they wish. But in the real world it makes little sense to punish success or reward failure. Yet that's exactly what the federal government's tax policy does.

According to a recent report by the non-partisan Congressional Budget Office, in 2007 (the most recent year for which figures are available) the top 20 percent of earners paid 70 percent of all federal taxes. The bottom 40 percent of earners paid no income tax.

The only way you can make this argument is if you conveniently narrow its scope to federal income taxes. That's right, you have to leave out the payroll tax, property taxes, various sales taxes, and local, state, and federal fees - all of which hit the working- and middle-classes the hardest. And you have to ignore that taxes on capital gains - income earned from investments - has been steadily whittled down, which directly benefits the richest among us. And that's also ignoring the byzantine tax credits and loopholes created for people with capital to slip out of paying any taxes. In 2008, the GAO reported that "72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005."

In short, to make this argument, you have to deliberately ignore actual tax policies. In reality, we do not have a progressive tax system. Instead, we have a system that's been deliberately engineered to redistribute income from the poorest to the richest.

And the premise of the article, that income rewards good work is laughable on its face. It's like the author has lived in a box his whole life. Money rewards money, not success. The unregulated financial system created the current recession - which collapsed on defaulted mortgages...for the rich - yet hits working- and middle-class families the hardest. Wealth isn't a measure of an individual's ability, it's too often the result of  having all the doors of society - education and economic opportunity - opened by money. Our nation's fiscal policy is aimed at propping up the wealthy, creating economic safety nets that allow the rich to take ill-conceived risks without having to suffer any consequences.

Ordinary taxpayers end up shouldering the bulk of costs of oil spills in Alaska and the Gulf or the medical bills of workers and their families suffering from asbestosis and other health conditions related to industrial pollution. Ordinary taxpayers bail out huge, multi-billion dollar investment banks when they lose their shirts at the blackjack table.

But Feulner's article should serve notice that, once again, the conservative lackeys of big business are sharpening their pencils in preparation to turn the facts upside-down: the rich are poor, the poor are rich, and the problem is that you have too much money.

Whose side are you on, Jon?

by: Jay Stevens

Thu Jan 28, 2010 at 15:19:26 PM MST

Sirota:

Thus, if Giannoulias, it would be a clear disaster. He is literally the walking personification of all that the public clearly despises right now - an Establishment politician closely connected to the industry that has destroyed the economy.

With him as the nominee, Democrats could lose yet another senate seat, and more broadly, they could lose any national high ground they need to reclaim. At a time when the Democratic Party desperately needs to reclaim the populist economic mantle and prevent Republicans from being able to mount their own right-wing populist campaign, Giannoulias would become the face of a Democratic Party that has already become increasingly synonymous in voters minds with the most hated aspects of the financial industry.

Like Sirota, I've been railing against big business and its too-cozy relationship with government for...years? At least ever since I've had a blog to write on. And one of the most egregious abuses of taxpayer money was the recent bank bailout, in which the high-finance institutions that caused the recent financial crash with rampant and irresponsible investing after lobbying the government to deregulate its industry received billions. (Meanwhile, we can't even pass a health care bill that would give subsidies to people without health insurance.)

There's been some financial regulatory bills circulating in Congress - most notably Chris Dodd's, which, among other things, would create a Consumer Protection Agency intended to streamline bank and finance regulations and protect consumers from the predatory actions of lenders. (Hint: you can't have a "free" market without consumer access to information and protection from swindlers.) And in the SOTU speech yesterday, President Obama vowed to impose a "fee" on the high-finance institutions that caused the crash.

Here's the kicker, though. Jon Tester appears to oppose these regulatory reforms.

Tester is less enthusiastic about the administration's plan to impose a new tax on financial firms that received government aid through the Troubled Asset Relief Program, or TARP.

"I'm very concerned that the tax could be passed on to customers," said Tester, who called for the idea to get close examination by lawmakers....

Proposals to create a new consumer financial protection agency aren't high on Tester's list of desired changes, though.

"Fundamentally, I'm not crazy about building another agency," he said, but added that the idea "wouldn't be a deal-killer on my part" and indicated that Senate lawmakers are debating whether the consumer-protection function might be folded into an existing agency, rather than assigned to a newly created one.

That's right. Our progressive populist Montana farmer is planning to use his Senate Banking Committee to...oppose consumer protection and a tax on big banks?

Let's be frank. Banks are not popular. And the Democratic party is quickly becoming identified with high financial interests, not only in Illinois, but apparently closer to home, in Montana.

And hasn't Jon seen the results of the Massachusetts special election? They weren't clamoring for more backroom dealing and a cozier relationship with corporate America. They voted against Coakley because she was seen as the establishment candidate. This position is electoral suicide. And it's bad policy.

Look, I'm fine with Jon being a one-term Senator...if he lost his seat fighting for his core values. But this? Defending huge, East Coast financial institutions' interests from the little guy?

Tuning the world's smallest violin...

by: Jay Stevens

Thu Jul 30, 2009 at 19:38:18 PM MST

Indeed, the IRS data shows that in 2007-the most recent data available-the top 1 percent of taxpayers paid 40.4 percent of the total income taxes collected by the federal government. This is the highest percentage in modern history. By contrast, the top 1 percent paid 24.8 percent of the income tax burden in 1987, the year following the 1986 tax reform act.

Remarkably, the share of the tax burden borne by the top 1 percent now exceeds the share paid by the bottom 95 percent of taxpayers combined. In 2007, the bottom 95 percent paid 39.4 percent of the income tax burden. This is down from the 58 percent of the total income tax burden they paid twenty years ago.

To put this in perspective, the top 1 percent is comprised of just 1.4 million taxpayers and they pay a larger share of the income tax burden now than the bottom 134 million taxpayers combined.

Holy smokes! Those poor ultra-rich!

Of course, when you think about it for about 0.0004 seconds, it becomes abundantly clear what this means, especially when you consider the tax rate of the top earners has actually fallen in recent decades: there's income redistribution going on here...into the pockets of the wealthiest Americans:

For comparison, here's a chart showing the portion of adjusted gross income earned by the top 1 percent and by the bottom 95 percent. You'll see that one major reason why the share of taxes paid by the richest Americans has risen is that the richest Americans have experienced much greater income growth...

You'll also notice that the Tax Foundation chose a rather odd benchmark - 95 percent as opposed to 99 percent - to compare tax burdens with. That's because - as made clear in the Economix site - the missing earners actually pay quite a bit of taxes, too...because they're raking it in as much as the Top One Percenters.

Oh yeah. And all this data ignores the payroll tax.

Economic incentives don't always apply to humans (health care remix)

by: Jay Stevens

Sat Jul 25, 2009 at 09:40:26 AM MST

And, to help pay for universal coverage, they would back some sort of tax on gold-plated benefit packages that encourage patients to consume too much health care or become indifferent to what things cost.

This assertion has been making the rounds lately among progressives looking to put a cap on the tax credit for employer-based health insurance policies.

Look, it's one thing to say we need to find ways to pay for reform, and that the consumers of upper-end insurance policies should help out a little, but it's another to bang on the insurance industry's meme that bad insurance leads to smarter consumption of services.

Please, can anyone show me any evidence that better policies lead to patients opting for more costly treatments? Or even make more unnecessary doctor's visits? Because, frankly, humans aren't calculating machines, and don't blithely respond to rational economic incentives. Most humans don't like to visit their doctor. And giving consumers an extra incentive to not visit their caregiver means they'll wait even longer to see someone about a condition -- which costs more money in the long run.

So discouraging people from getting "gold-plated" policies might actually drive health care costs up.

Now if we're talking about doctors opting for more expensive, more unnecessary treatments or tests because of the patient's insurance policy, that's another ballgame. In those cases, we need to examine the financial incentives for doctors at particular institutions...

Income taxes and tea parties, take 2

by: Jay Stevens

Tue Apr 14, 2009 at 07:46:54 AM MST

(Numbers courtesy of the CBO.)

Klein:

When you look at percentage of total tax liabilities, the rich do in fact bear a heavier burden. But it's because they have so much more money. They are not bearing a heavier burden as a percentage of their incomes. They're bearing it in relation to everyone else's incomes. Indeed, it's only because the sheer levels of income inequality in this country are frankly unintuitive that Fleischer can even write this sort of dreck....

Add the fact that progressive tax reform would actually help most Americans, some recent polling data that shows a majority of Americans think their tax rate is "fair." What's remarkable is that the polling data indicates that Americans' current attitudes to their own taxes is extraordinarily friendly, historically speaking, and this whole "Tea Party" think looks absolutely absurd.

More evidence against "Intelligent Design"

by: Jay Stevens

Mon Apr 13, 2009 at 08:03:57 AM MST

Picture an upside-down pyramid with its narrow tip at the bottom and its base on top. The only way the pyramid can stand is by spinning fast enough or by having a wide enough tip so it won't fall down. The federal version of this spinning top is the tax code; the government collects its money almost entirely from the people at the narrow tip and then gives it to the people at the wider side. So long as the pyramid spins, the system can work. If it slows down enough, it falls.

It's also what's called redistribution of income, and it is getting out of hand.

If the premise feels skewed, that's because it is. Fleischer, for example, argues that the top 10 percent of earners "pay 72.4% of the nation's income taxes," and represents the "tip of the triangle" of his oddly unbalanced pyramid metaphor. But...every table and piece of data I can get my hands on shows that the top 10 percent of earners has more than 72.4% of the wealth...which makes the figure Fleischer quotes...reasonable -- until you realize that payroll taxes, which aren't counted as "income taxes," drive up the tax rates of anyone making under $90K, so that an average earner actually pays a much higher tax rate than the upper income brackets.

But the oddest thing about Fleischer's proposal is that he favors the elimination of the payroll tax and a straight, loophole-free progressive income tax as a solution. Which would dramatically reduce the tax burden of the poor and middle class and jack up the rates on the very people he claims are being oppressed in our system...

And you wonder why the "Tea Parties" make so little sense. According to Fleischer, most of the people out on the streets are protesting taxes and government spending of which they are the ungrateful recipients of their betters' largesse. Not that there's much reason behind the protests, which appear to have gotten a friendly boost from FoxNews, whose media personalities are hawking the protests as if they have a financial stake in the whole deal. (Oops! They probably do!) But...why would a bunch of people stand out with signs protesting to protect the tax rates of the ultra-wealthy when those rates are at a historical low, and the distribution of income historically lopsided. If anything, the government distributes income upwards.

Whatever. I'm still waiting for a rational response from the right on how to steer the economy out of the recession. Not that I'm unwilling to listen: I'm personally abivalent about the massive bank bailouts and doubtful about the efficacy of the recently passed stimulus bill, when so many of the bankrolled projects were things like massive and unneeded highway projects...

Is the $3.5 million Estate Tax cap too high?

by: Jay Stevens

Mon Apr 06, 2009 at 11:40:56 AM MST

I bring up these reforms, because big sage mentioned in the comments of the "Links..." post that Baucus and Tester voted to raise the cap for the estate tax...

The estate tax was phased out under the Bush adminsitration, but scheduled to re-emerge from its slumbers in 2010 at pre-2001 cap levels. Baucus wants to raise the cap to $3.5 million for an individual and $7 million for a couple at 45 percent, and adjustable for inflation.

Now I'm a big advocate for the estate tax. We tax lottery winnings -- why not tax the biggest lottery winners of them all, the inheritors of fortunes not earned? And those fortunes were no doubt built on the infrastructure that tax dollars provided -- roads and lines of communications, a secure marketplace, education for the workforce, etc & co -- why not take some of that money back to ensure a working society so that Richie Rich, Jr. can make his stab at a fortune (with 55 percent of mom and dad's millions as a starter kit)?

But I hardly find a $3.5 million cap too lenient...you know? While the meme that the estate tax hurts  family farms is 95 percent myth, keeping the threshold well above the value of your typical farm isn't a bad idea...

Discuss.

Baucus' draft offshore tax haven bill

by: Jay Stevens

Mon Mar 16, 2009 at 10:49:44 AM MST

Now this tax haven business, and Max' association with it, is something I've been writing about  for some time. But basically, here's what's happened thus far. Way back in 2007, Michigan's Carl Levin introduced a bill called "The Stop Tax Haven Abuse Act" (pdf), which would "restrict the use of offshore tax havens and abusive tax shelters to inappropriately avoid federal taxation," only the bill died in committee. Max Baucus' Tax and Finance committee, to be specific. But Max said a proposal was on its way; sure enough, a draft is making the rounds.

So...what's the difference between the proposals? The Levin bill (pdf), which he reintroduced a few days ago, would give pretty robust powers to the US Treasury to combat offshore tax cheats. One of the bill's features is the creation of a list of economic rogue nations -- nations that have overly secretive tax codes intended to enable tax abuse by US citizens. Any transaction to and from one of the listed rogue nations by a US citizen is assumed suspect and investigated accordingly. Noncompliance with US investigations could cause foreign banks to be shut out of the US financial system. In short, the bill intends to end the practice of tax haven abuse by putting pressure on the countries that harbor tax cheats.

Pretty heady stuff, eh? It's the economic equivalent of necon foreign policy! Naturally property rights' mavens are apoplectic -- and probably not without cause -- that it might do unforeseen damage to our trade.Think of all those Swiss Army knives we'd miss out on...

The Baucus bill -- surprise! -- is much more moderate:

The more targeted draft by Senate Finance Committee Chairman Max Baucus would require entities transferring funds offshore to report to the Internal Revenue Service the amount and the account or destination to which the funds are being moved. Baucus, D-Mont., also would extend to six years, from three, the statute of limitations for the IRS to scrutinize tax returns that reported, or should have reported, certain international transactions.

In an effort to deter offshore tax evasion, Baucus would require offshore entities to file foreign bank account reports, known as FBARs, with their income tax returns, not just to the Treasury Department's Financial Crimes Enforcement Network. Under current law, any U.S. resident who has a financial interest or account in a foreign country exceeding $10,000 has to file an FBAR.

Under Baucus' bill, the IRS would require tax preparers to ask a series of questions designed to determine whether an FBAR needs to be filed. The draft also would establish a $10,000 penalty for foreign trusts that fail to file tax returns, and would treat transfers of artwork and jewelry from foreign trust the same way that "marketable securities" are treated under tax law.

The draft would double fines and penalties for underpayment of taxes on certain offshore transactions.

Basically, Baucus' plan gives a few more tools to the IRS to detect tax cheats, and imposes a stiffer fine for violators. Sure, it'd bring in more revenue, maybe make tax cheats sweat a little bit more at night, but does nothing to try and get at the root of the problem. You'd think a compromise should include some of Levin's "nuclear" options -- like his threat to shut noncompliant foreign banks out of the U.S. financial system. That'd be a neat punishment for repeat offenders...

Still, it's early. And I'm no tax code expert. Mark T? Are you there?

Obama administration gets friendly with the idea of taxing health care benefits

by: Jay Stevens

Sun Mar 15, 2009 at 10:46:47 AM MST

Mr. Orszag, an economist who has served as director of the Congressional Budget Office, has written favorably of taxing some employer-provided health benefits and using the revenue savings for other health-related incentives. So has another Obama adviser, Jason Furman, the deputy director of the White House National Economic Council.

They, like other proponents, cite evidence that tax-free benefits encourage what Mr. McCain called "gold-plated" policies, resulting in inefficient and costly demands for health care and pressure on employers to hold down workers' pay as insurance expenses rise. And, they say, the policy discriminates against those - many of whom are low-income workers - who do not have employer-provided coverage.

In short, they're considering taxing some benefit payments for two reasons: to raising revenue, and to discourage use of "gold-plated" policies.

Just curious, but does anyone have any evidence that good health insurance policies lead to higher, patient-driven insurance costs?

As for the policy discriminating against those who don't have employer-provided coverage, why not offer those consumers tax deductions for their health-care policy purchases?

Fund health care through tax reform, not taxed benefits

by: Jay Stevens

Wed Mar 11, 2009 at 08:44:41 AM MST

Sen. Max Baucus says he'd prefer funding health care reform by taxing people's health benefits rather than phasing out tax deductions on the richest Americans....Currently, the portion of health benefits that are covered by a person's employer is tax-free income. Baucus said last week that taxing those benefits should be considered. That way, health care reform would be funded with health care dollars.

Baucus says taxing health benefits wouldn't necessarily be harmful to lower- and middle-class Americans.

President Obama is proposing to phase out income tax deductions for people making more than $250,000 a year. Baucus has told Obama he doesn't like that idea.

According to a Reuters report, "critics say the tax break encourages workers to seek a more generous benefit package than they might want if it was taxed." That is, by instituting a tax on benefits, workers would seek cheaper, less comprehensive health care.

Frankly, that's the same old "moral hazard" rationale that got us into this health care mess in the first place. Malcolm Gladwell eviscerated this argument years ago; the "moral hazard" rationale is responsible for the Byzantine paperwork that has driven up administrative costs for health care, and has encouraged people to avoid routine checkups or treating minor illnesses and injuries -- which leads to more emergency care and higher treatment costs later. Basically we should be encouraging people to have good and comprehensive health care. Healthy people are less of a burden to the system; illnesses and injuries treated early reduce long-term treatment costs. Comprehensive health care for all saves money in the long run.

Taxing all health benefits is also regressive tax policy. That is, it affects middle-income families and small businesses disproportionately. It's also the same policy that John McCain was slammed for by Obama during the election. And to be honest, Obama's proposal -- phasing out health care benefits for those making over $250K -- isn't all that hot, either. We should be encouraging people to have health care, not punishing them for it.

But let's face facts. Health care reform will cost money. So...how do we go about raising the funds needed?  

Battling offshore tax havens

by: Jay Stevens

Sun Jan 18, 2009 at 11:53:47 AM MST

Most of America's largest publicly traded corporations -- including several that are receiving billions of dollars from U.S. taxpayers to finance their recovery -- have set up offshore operations that could help them avoid paying U.S. taxes on their profits, a government study released yesterday found.

This whole tax haven thing has got to be addressed by the new government. Baucus aimed some rhetoric at these people with his talk of closing the tax gap, and Obama co-sponsored a bill with Carl Levin to end tax haven abuse (pdf), so there's hope here something happens. It'd be nice if the next stimulus package included some strings requiring companies to start paying taxes.

On the other hand, Baucus' committee was where the Obama/Levin bill went to die, and there are plenty of Democrats who'll fight to protect their corporate sponsors. And you know the free-maket mavens, who for some reason still have access to power, will tell you requiring companies to pay their taxes will just drive them overseas...

...or maybe we just do what David Cay Johnston proposes:

The Obama administration could tell the Caymans - now fifth in the world in bank deposits - to repeal its bank secrecy laws or be invaded; since the island nation's total armed forces consists of about 300 police officers, it shouldn't be hard for technicians and auditors, accompanied by a few Marines, to fly in and seize all the records. Bermuda, which relies on the Royal Navy for its military, could be next, and so on. Long before we get to Switzerland and Luxembourg, their governments should have gotten the message.

Now there's a war I could get behind!

Update: Speak of free-market mavens slamming corporate tax rates, and lo! Enter Grover Norquist:

The other tax cut you could do is cutting the corporate rate. The U.S. corporate rate is 35 percent; the European rate is 25 percent. Obama is a more international guy, so we should be close to the European average. We'll stop torturing people, we'll stop torturing corporations, and that will make us more like Europe.

Don't hate the wind, Dennis

by: Jay Stevens

Tue Feb 26, 2008 at 13:55:34 PM MST

The House last year narrowly approved legislation extending the tax credit, which expires at the end of this year. It amounts to 2 cents per kilowatt-hour of electricity generated. Montana Rep. Dennis Rehberg voted with the majority of his fellow Republicans against the extension and plans to vote against it again.

In the Senate, Republicans were able to block the legislation by one vote. President Bush threatened to veto it because it would have been paid for by canceling tax breaks that now go to oil and gas companies.

The rationale behind Rehberg's opposition? Raising tax rates for Big Engery means passing on costs to consumers. Neat, huh? Of course, big corporations never pass on tax cuts to consumers -- and eliminating the tax credit for wind energy will also pass on costs to consumers!

Sweet, huh? Rehberg opposes wind energy tax credits because Big Energy will have to pony up a little more from its record-setting profits to pay into the system from which it derives its wealth, and  Big Energy has deep pockets to ensure it doesn't pay its fair share.

Hm. Makes you wonder exactly who Rehberg is representing in Congress.

On offshore tax havens and the Democratic party

by: Jay Stevens

Sat Nov 10, 2007 at 22:02:55 PM MST

Tax havens are one way the ultra-wealthy wiggle out of their tax obligations. Rangel's bill would basically legalize a regressive tax code. Obviously this is a wrong, and Rangel's proposal should die  --  preferably a miserable, agonizing, and very public death.

I've written about these offshore tax shelters before in the context of Baucus' "tax gap" talk. In fact, Senators Obama and Levin (Democrats, both) came up with legislation to curtail the practice, "The Stop Tax Haven Abuse Act" (S681), which was introduced in February and has seen little action since.

Now TMM used the incident to slam all Democrats, implying that the cry for folks to pay their "fair share" is simply hollow rhetoric. That's not fair, of course. In some ways the real split in American politics is between the folks that support the government's current corporate policy, and the folks that don't, and the fault lines run through both parties.

But the sad part is that Democrats are supposed to be the party of the little guys.

Luckily, our state's elder Senator, Max Baucus, can do something about both Rangel's "Help My Constituents Cheat on Their Taxes" and the Obama and Levin tax haven bills. After all, Baucus and Rangel enjoy a close working relationship, and Baucus has expressed a desire to close the tax gap - the difference between the taxes that are owed and that are paid. Going after offshore cheats seems like logical policy.

When I emailed Baucus' office about the Levin/Obama bill, I got this response:

The Obama/Levin bill has been referred to the Finance Committee. Max agrees that individuals should not be able to hide income in tax havens.

Max has been looking at several options on how best to address this issue, and is developing legislation to help curb the use of tax havens.

Obviously tax havens haven't been in the news much - feel free to speculate why - and this issue hasn't reached much of a boiling point. Whether Max will favor the "Stop Tax Haven Abuse" bill, write his own bill, or kill it remains to be seen. His rhetoric is in the right place.

All I'll say is this: going after wealthy tax cheats will do wonders for your reputation among your state's electorate.

Cobb sues to halt tax credit, Republican electoral hopes

by: Jay Stevens

Fri Nov 02, 2007 at 11:54:57 AM MST

To be honest, I don't understand the issues at play here. Apparently some folks are up in arms because of the way revenue was calculated, and claim that the trigger for the $140 tax credit wasn't legally met.

On this blog, there's been some push against legislative fiscal analysts for the flap, which was considered and rejected by the Flathead Beacon's Dan Testa. Bottom line: I don't know if this is partisan bickering, or genuine concern for the principles of accounting. Both?

What I do know is that it's not going to reflect well on Republicans. Sarpy Sam:

Talk about a stupid maneuver. Republicans opposed to a tax rebate. It doesn't matter if the Republicans are right or not about the Governor figuring it out wrong, the public is just going to see that they are opposing the rebate. If the public doesn't remember Republicans opposing the tax rebate, I am sure the Democrats will remind them come election?

As if to underscore Sam's point, enter the Good Guv (from the Gazette's report):

In response to the filing, Gov. Brian Schweitzer said Wednesday, "It's the dangedest thing. I've cut so many taxes for so many Montanans that now I'm being sued by a Republican to stop me from cutting more."

One gets the feeling from this flap that there are a group of conservatives who dislike Brian Schweitzer so much that they're willing to destroy themselves just to prove that he's wrong. About an accounting procedure.

Imagine the reaction if there had been an ad. In the newspaper.