Tuesday, September 6, 2011

Business Leaders to Maryland: "Tax Cuts Cure Chlamydia" // Plus, More on MD's Millionaires Tax

UPDATE: Rockville Council candidate Tom Moore sent the following related story from the Onion - "Tea Party Congressman Calls For Tax Breaks To Put Out Raging Wildfire In District."

Can you guess which photo is Ellen Sauerbrey and which is Blanche Devereaux?
I've always been amazed at how knowledgeable people in the DC Metro area are about national affairs -- but it is sometimes a spectacle to see state and local politicians making decisions that would be far less certain votes for many federal-level Democrats.

For years, Democrats and activists at the national level have been pushing to undo the Bush-era tax cuts (ie: giveaways for the super-wealthy). I'm sure you've heard of the disappointment some still have that Obama was not able to deliver on similar progressive tax goals. But amazingly, in Democratic-controlled Maryland, the tax debates contain so much hesitation and fear about the impact on the super-rich.

Former Maryland Republican gubernatorial candidate Ellen Sauerbrey would be proud.

In Maryland, O'Malley previously did what even Obama was unable to achieve, as he was able to create a temporary "millionaires tax." Since the bill expired last December however, the State has been unable to revive it through recent legislative efforts. Prince George's Delegate Jolene Ivey had a bill this year to make permanent the temporary 6.25% income tax rate on millionaires in Maryland. It was co-sponsored by Delegates Barnes, Carter, Glenn, Howard, Hucker, Niemann, Oaks, Ross, V. Turner, Valderrama, and Vaughn. The bill appears to have died in committee, but this should not be a surprise.

Federal, state and local governments are clearly the targets of a concerted messaging campaign to push the idea that tax cuts, corporate welfare, privatization of government, elimination of collective bargaining and environmental deregulation are necessary to save us from the recession. The only thing is, that is what the GOP was pushing when the economy was good, too.

This kind of fear-mongering is standard operating procedure in GOP policymaking circles. I guess I don't really knock them though, because they are simply stating what is in their benefactors' self-interest. But that doesn't mean anyone should listen to them!

Very slowly, this voluntary starving of our tax base will start to have consequences. Today's pension cuts, furloughs and other sacrifices may just be the beginning. As yesterday's article, "Confessions of a GOP Operative," warned:
If you think Paul Ryan and his Ayn Rand-worshipping colleagues aren't after your Social Security and Medicare, I am here to disabuse you of your naiveté. They will move heaven and earth to force through tax cuts that will so starve the government of revenue that they will be "forced" to make "hard choices" - and that doesn't mean repealing those very same tax cuts, it means cutting the benefits for which you worked.
My first experience with GOP tax cut wackiness came in 1994. When I was in high school, one of my good friends was volunteering for Republican gubernatorial nominee and Blanche Devereaux look-alike, Ellen Sauerbrey. If you can remember, the U.S. was still facing economic troubles, and only two years earlier, President H.W. Bush got whacked for breaking his famous "no new taxes" pledge. So, of course, Sauerbrey argued tax cuts were needed to get our economy going again. Amusingly, back then, she saw Pennsylvania (rather than Virginia) as our threat (there always has to be an enemy to fear, right?):
"All such ratings are disputable, but Maryland's income tax is 44 percent more burdensome than the average state income tax. Sauerbrey lives north of Baltimore and says cars stream north into Pennsylvania at the end of the workday because Maryland's income tax is 52 percent higher than Pennsylvania's."
As we know, Sauerbrey lost that race but went right back at it four years later. My friend, the Sauerbrey fan, volunteered for her again in 1998. Now in 1998, the economy was roaring back, the Republicans had pulled that impeachment nonsense, and President Clinton was announcing massive budget surpluses. What was Sauerbrey's reaction? We need a tax cut!

So let me get this straight:
  • Economy bad? You need tax cuts.
  • Economy good? You need tax cuts.
  • No revenue coming in? You need tax cuts.
  • Lots of money? You need tax cuts.
  • Got chlamydia? Well, clearly you need............  tax cuts!
You can replace the phrase "tax cuts" above with practically any Republican fiscal or regulatory policy, and the joke still works. [ Note: Try it right now by replacing "tax cuts" with "government layoffs."]

That's right, in Republican orthodoxy, the tax cut must be the solution to everything. But even that isn't quite an accurate statement. The tax cut isn't the solution to the problem -- it is the goal itself. Without money, there isn't really a government, is there?

As I wrote about previously, one business representative told the Maryland Senate that it didn't matter if Maryland was beating Virginia in jobs and other indicators (read: evidence and data shouldn't factor into your policymaking). We still needed to lower taxes to compete MORE:
...it doesn’t matter if Maryland seems to be climbing the ranks to appear more business friendly, either. Dinegar said that as long as Virginia – which has the reputation of being more business friendly, has a lower 6% corporate tax rate....
This sounds fishily like Sauerbrey's economics to me. Virginia beating Maryland in job growth? Lower corporate taxes. Maryland beating Virginia in job growth? Lower corporate taxes.

Notably, many of the same people who are pushing for lower taxes in Maryland are also pushing states and counties to lower their costs (ie: layoff their workers and slash pensions). But let's call this what it is: what they are asking for is for the state and county governments to fire their workers, because it is the only way there can be room in these tight budgets for tax cuts and other corporate welfare measures.

A retired politician once told me that she always advises governments to never sell or give away their land -- "you can't grow more land." Well, in the increasingly anti-tax media environment we are in, here is my reciprocal thought: governments should be very careful when allowing higher tax rates to sunset. That is a difficult genie to get back in the bottle, and we all know that the reduced revenues will give the Republicans more ammo for layoffs and other regressive measures in the future.  

Why are we disarming ourselves?

Let me remind Maryland Juice readers again: I do not believe it is an accident that the fallacy of millionaires and their jobs fleeing Maryland keeps being drilled into our heads. They've been flogging that bogeyman in Maryland since at least 1994, and the ideologically skewed media outlets in our area cannot possibly serve as a neutral referee for the public on this. I may discuss that problem in a future post -- but let's just say that most sources of local policy coverage in Maryland have their biases and motives (some more than others).

Essentially, this sort of starve-the-government propaganda goes constantly unchallenged in our State. I am sure the Koch family, Scaife, Rove, and the rest of the gang are doing the slow-clap right now. Time to fight back.

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