Taxes

This afternoon, in a purely political move, House republicans voted to hike taxes on 160 million working Americans effective January 1 by rejecting the Senate's extension of the payroll tax cut.

By a final vote of 229 - 113, including Rep. Akin, Rep. Emerson, Rep. Graves, Rep. Hartzler, Rep. Long, and Rep. Luetkemeyer, republicans violated their pledge of not raising taxes.

Just exactly how disfunctional have the republicans and their tea party darlings made Congress?  So disfunctional that a bill passed 89-10 with obvious bipartisan support in the Senate to grant a two month extension of the payroll tax cut to 160 million Americans will be voted down by the republican-controlled House.

Fact: House republicans would rather hike taxes on the 99% than make any attempt at governing. After fighting tooth and nail to protect tax giveaways for the wealthiest 1%, republicans have used every excuse in the book to avoid extending the payroll tax cut.

Even some in Senate republican leadership like Roy Blunt are voicing frustration with the disfunction in Congress, too bad Blunt refuses to do anything other than whine and complain about the disfunction his party could immediately fix, if only they had any inclination to do anything other than attempt at defeating the President.

But I won't hold my breath.

It's a little known fact that the best thing to talk about on a Wednesday afternoon is payroll taxes, so let's dive right in.

In Washington, Senate Democrats - including Missouri Senator Claire McCaskill - are preparing to hold a vote on extending the payroll tax cut that affects millions upon millions of America's working families, but as you can imagine, they're facing some stiff opposition.  I'll give you three guesses as to what that opposition is, and the first two don't count.  Here goes:

1. Republicans, like Roy Blunt, sticking up for the 1%.
2. Republicans, like Roy Blunt, sticking up for the 1%.
3. Republicans, like Roy Blunt, sticking up for the 1%.

If you guessed Republicans, like Roy Blunt, sticking up for the 1% you'd be right.  Well, almost right.  The real answer is republicans sticking up for the .2%.  That's 2 tenths of 1 percent of American taxpayers, approximately 1 in 500.

Republicans are protecting .2% of American taxpayers from a tiny tax increase of only 2.1%, and in doing so are demanding that 113,000,000 working families - that's 3.1 million Missouri families, for the record - to pay $1,000 more in taxes in 2012.  So much for sticking to their anti-tax pledge.

The question is quickly becoming: Who else besides Rex Sinquefield  thinks increasing taxes on just about everything we buy is a good idea? 

Obviously not the Washington Missourian: 

"Our guess is that Sinquefield doesn’t care about the negative impact his plan would have on existing Missouri businesses. He has already made his millions — some say billions. Our guess is he is prepared to let loose more than the $1.3 million he dropped last week. Some are already predicting this could be the most expensive ballot initiative in our state’s history.

We wonder how voters will respond to his effort to buy public policy in our state even at the expense of Missouri businesses.

We hope somebody stands up for Missouri businesses in this fight."

Chad Garrison from the Riverfront Times posted a pretty revealing item about Rex Sinquefield and his attempts to hide how much his tax proposals could cost the state. 

Let's take a look at the current fiscal note summary drafted by Auditor Tom Schweich for two recent versions and the fiscal note summary that Rex Sinquefield would like to have on the ballot. Sinquefield is suing to get the language changed.

Here is Schweich’s fiscal note.

Annual state government revenue under this proposal may increase by up to $300 million or decrease by up to $1.5 billion. The proposal is estimated to increase state operating costs by at least $15 million, and may accelerate tax credit redemptions. The fiscal impact to local governments is unknown.

And here is the fiscal not Rex Sinquefield and his lobbyist Travis Brown would like to see (emphasis added):

Annual state government revenue under this proposal may remain the same or increase by up to $300 million. The proposal is estimated to increase state operating costs by at least $15 million, which is less than expected new revenues. The fiscal impact to local governments is unknown.

Apparently, people overwhelmingly support millionaires and minimum wager earners paying the same percentage of their total income in taxes.

Q: Do you support or oppose ensuring that people who make over a million dollars a year pay the same percentage of taxes or more on their total income as those who make less than a million dollars a year?

Support: 73
Oppose: 16
Not sure: 11

Apparently, people overwhelmingly support millionaires and minimum wager earners paying the same percentage of their total income in taxes.

Q: Do you support or oppose ensuring that people who make over a million dollars a year pay the same percentage of taxes or more on their total income as those who make less than a million dollars a year?

Support: 73
Oppose: 16
Not sure: 11

It's time for a balanced approach to our state and federal budgets, and way past time for some shared sacrifice. 

From Michael Linden, the Director of Tax and Budget Policy at the Center American Progress: 

[I]f you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.

We showed last week that lower rates are not associated with faster overall economic growth—just the opposite, in fact. And now we know that lower rates don’t coincide with higher job growth, either. So where is the evidence that the lower marginal tax rates spur job creation? It’s certainly not present in the past 60 years of American history.

It’s worth keeping this in mind the next time a conservative lawmaker claims that raising the rates for the wealthy would “destroy jobs.”

Missouri's entire GOP delegation voted against extending the majority of the Bush-era tax cuts for middle- and low-income Americans today, refusing to support those cuts unless the wealthiest of Americans also received a budget-busting and only-somewhat-stimulative extension.  Here's a summary of what the Republicans opposed:

For all families making less than $250,000 a year, the bill permanently extends the 2001/2003 tax cuts, including current tax rates, marriage penalty relief (including EITC), capital gains and dividends rates, and $1,000 child tax credit (for earnings above $3,000). The bill also protects more than 25 million taxpayers from the alternative minimum tax by extending the AMT patch through 2011 and permanently extends small business expensing.

According to the Speaker's office, a "typical middle-class family" will save about $1,000 per year with the tax cut extensions. 

The extension passed on a mostly partisan 234-188 vote. Reps. Russ Carnahan, Lacy Clay, Emanuel Cleaver and Ike Skelton all voted for the legislation.

From ABC: "Warren Buffett, Chairman and CEO of Berkshire Hathaway, told Christiane Amanpour that the rich should be paying more taxes and that the Bush-era tax cuts for the wealthy should be left to expire at the end of December. 'If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further,' Buffett said. 'But I think that people at the high end -- people like myself -- should be paying a lot more in taxes. We have it better than we've ever had it.'"

Speaker-elect Steve Tilley is already departing from Lt. Governor Peter Kinder's post-election pledge that Republicans will not to raise taxes in the coming legislative session.  According to the St. Louis Business Journal, Tilley is promising to push the fantasy (proponents call it a "fair tax") that replacing Missouri's income tax structure with increased sales taxes will be a good thing for taxpayers and the state's economy. 

Tilley's pledge to push the sales tax hike is an interesting and unfortunate departure from the leadership of the outgoing Most Powerful Man in Missouri, Ron Richard. In September, Richard said the following about the proposal:

Here is my personal concern: If you do raise sales taxes to a certain level, and I never was comfortable with the number that the promoters decided the sales taxes were going to be, you're going to put a lot of communities, you're going to put possibly Springfield, Kansas City, Joplin, Cape Girardeau, Sikeston, St. Louis, possibly out of business on the retail side, if you have a significant raise in sales taxes and drive out, drive people going to other states to buy goods and services.

I never was comfortable with the number what the sales tax would be. And until -- I will tell you in government, when you talk about taxes, you better have the information in front of you and you better have the votes ready and the fine print. Because sometimes that changes around, and I've never been comfortable unless I see a firm commitment. And I never had really understand what the firm commitment on the tax side was.

Richard's concerns are completely justified.  None of the proponents have been able to provide a convincing argument for why big sales taxes in population centers close to state borders will be good for those communities.  And as we saw in January, supporters have a history of putting forward absurdly rosy projections for what a new sales tax would need to be for a balanced state budget. 

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In completely unrelated news, Tilley received a $100,000 check from right-wing financier Rex Sinqfuield in September (on top of a $100k check last year), and co-owns an airplane with Sinquefield lobbyist Travis Brown.

The Joplin Globe reports that legislation to clear up state law regarding local "stacked" sales taxes "is pretty much dead." The fix was sponsored by the formidable duo of Ron Richard (the Most Powerful Man in Missouri) and Birther Rep. Tim Jones, but couldn't get past Sen. Jason Crowell (and maybe Gary Nodler?).

Joplin's lobbyist, Gary Burton, pins the blame squarely on Crowell, who "killed the bill’s chances by amending it to require that the loser in a tax-stacking lawsuit pay the attorney fees of all the parties in the lawsuit."

The Globe also quotes a Municipal League associate, who wonders aloud who benefits from Crowell's moves.  Crowell isn't fighting "for the taxpayers," for sure. 

Lt. Governor Peter Kinder, Senate President Charlie Shields and Speaker Ron Richard held a joint press conference at noon today to unveil an amazing new plan for Missouri's families.  Specifically, they don't like reproductive rights, they like guns and they don't like taxes.  Shocking stuff, I know.

But interestingly, the leaders' bold promise to not raise taxes seemed a little squishy when reporters asked the Speaker a few questions.  They may or may not junk the state's income tax and replace it with a sales tax, which would increase the tax burden on middle-class families.  And they might create brand new sales taxes for internet purchases. 

Lt. Governor Peter Kinder, Senate President Charlie Shields and Speaker Ron Richard held a joint press conference at noon today to unveil an amazing new plan for Missouri's families.  Specifically, they don't like reproductive rights, they like guns and they don't like taxes.  Shocking stuff, I know.

But interestingly, the leaders' bold promise to not raise taxes seemed a little squishy when reporters asked the Speaker a few questions.  They may or may not junk the state's income tax and replace it with a sales tax, which would increase the tax burden on middle-class families.  And they might create brand new sales taxes for internet purchases.