Muni sweeps: Taxes are the fuel for public sphere
Taxes are the fuel for the government. Without taxation the state withers. Our governments have taken on so many responsibilities but have become starved for fuel. There is much debate on how much we as a country should spend on entitlements and defense, but often these arguments are made on the premise that the United States has higher taxes than other nations.
The Center for American Progress developed the following charts to help visualize the state of American taxation. If you check out “Ten Charts that Prove the United States Is a Low-Tax Country” you will see that our nation, on a relative basis, does not have especially high taxes. It also helps explain why our nation is running massive deficits and is close to defaulting on its debt. We have choked off the fuel to support the public realm. These charts almost make the case for the need to increase taxes on the wealthiest Americans in the short term to help reduce the deficit and bring the nation to a sounder fiscal footing:
Party is approach
An excellent piece by John Gramlich in Stateline about how party affiliation is driving state agendas. Here are the money quotes:
Holding a lock on the governorship and both houses of the legislature in 20 states, GOP conservatives advanced an agenda that may change the face of state government for decades. They honored pledges not to raise taxes by enacting huge spending cuts to balance budgets in Florida and Texas…
They put tough abortion limits back on the agenda, passing laws in Alabama, Kansas and Oklahoma. Most famously, Republicans in Indiana, Ohio and Wisconsin put new restrictions on the rights of public employees, whose protests made national news for a month.
Though Democrats proved powerless to stop those changes, they moved a profoundly different agenda in the 11 states where they enjoy total control of state government. Arguing that budget cuts could only go so far, Democrats pushed tax increases in Connecticut, Illinois and Maryland. Meanwhile, Vermont approved a health care law supported by liberals that could prove far more expansive in scope than the controversial overhaul passed in Congress last year.
Tax policy myths
Reuters has an excellent column debunking three of the common myths of the effects of tax policy: that the Mortgage Interest Deduction promotes homeownership; that lower tax rates create jobs; and that state taxes are too high.
Muniland is top 20 Barron’s tweeter
Many thanks to Barron’s for naming me one of their top 20 finance tweeters. I’m in some very esteemed company. You can follow my tweets at @cate_long or, to follow municipal news exclusively, you can follow the #muniland hashtag, which many people are contributing to now. By the way, although Barron’s identified me as an attorney, I am not. I am very familiar with securities law, and during Dodd-Frank I actively lobbied on Capital Hill that the SEC should regulate credit rating agencies. Check out my open source financial reform project, Riski.
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