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August 09, 2007 09:38 PM UTC

Conservatives' Newest Bridge to Nowhere

  • 28 Comments
  • by: davidsirota

( – promoted by Colorado Pols)

In the wake of the Minnesota bridge disaster, conservatives like Denver Post columnist David Harsanyi are frantically trying to avoid a debate over taxes and budget priorities. Locally here in Denver, the motivation is obvious: They are likely gearing up for one of their slash-and-burn campaigns – this one against Denver Mayor John Hickenlooper’s (D) bold ballot initiative push for more infrastructure investment. Nationally, it’s all part of a diversion game. They don’t want to have this debate because it will be another one that both shows the deficiencies of Grover Norquist/Newt Gingrich-style free market fundamentalism and that has proven to be a political loser in recent years – even in states considered Republican strongholds. They would rather try to exploit the tragedy as a supposed rationale for continuing their anti-tax, anti-government agenda that has helped erode the safety and durability of the very public infrastructure that helps sustain our economy.

Conservative pundits and politicians really do think we – the public – are just flat-out stupid. They expect us to ignore all the basic, undebatable facts as laid out, for instance, in this recent Legislative Alert from the Progressive States Network (whose board I serve on) that details just how right-wing free market fundamentalism has put our nation’s basic infrastructure at risk (by the way – sign up for regular PSN dispatches here). We are expected to simply laugh off the report from those supposed radical communists at the American Society of Civil Engineers that shows we face roughly $1.6 trillion in infrastructure needs. We are supposed to ignore the fact that our major economic competitor, China, is spending 9 percent of its GDP on infrastructure investments, while we spend less than 2 percent of our GDP on the same priorities – a significant decline since free market fundamentalism was ushered in by the Norquist-Gingrich monster. Yes, as Rudy Giuliani asserted recently with a straight face, we should believe in conservatives’ newest bridge to nowhere: The Laffer Curve-ish concept that actually enacting MORE tax cuts for the superwealthy will fix our infrastructure.

But see, I’m a reasonable guy, so I’m willing to try to meet conservatives half way. Let’s say for a moment that you are an anti-tax zealot and just oppose any effort to raise taxes for society’s most basic priorities. Well, ask yourself, would you be willing to at least collect the taxes that are already owed?

I ask this question because yes – while America’s infrastructure crumbles, states and the federal government are leaving billions of dollars on the table by refusing to enforce basic tax laws already on the books. In Minnesota alone, the state government reports that the gap between taxes owed and taxes paid is roughly $700 million. Federally, the numbers are astounding. The IRS reports that the government doesn’t collect roughly $350 billion a year in taxes that are owed. Do an even slightly better job of collecting these taxes and we could tamp down tax increases while still making some real strides in tackling our infrastructure needs.

Unfortunately, I can answer my own question by looking at the record. No, most Republicans and conservative Democrats in American politics – whether they are pundits or politicians – don’t want to make sure existing tax laws are enforced. They are great with the law and order rhetoric when it comes to terrorists, but when it comes to making corporate executives and the superwealthy follow basic tax laws, the rhetoric disappears. As President Bush himself declared in 2004, we don’t need to really enforce tax laws on the books because “the really rich people figure out how to dodge taxes anyway.” That rationale has been a big justification for the IRS “to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans,” according to the New York Times.

The rationale also trickles down by setting the stage for the kind of thing that happens in Montana to happen everywhere. Big Sky country has one of the largest tax gaps per capita in America, leaving almost a quarter billion dollars on the table in uncollected taxes. When Montana Gov. Brian Schweitzer (D) and progressive Democratic legislators tried to pass legislation to beef up tax enforcement, Republicans went to the wall to kill the legislation. Meanwhile, Montana’s U.S. Senator Max Baucus (D) continues to issue press releases railing on the tax gap, while quietly using his position as chairman of the Senate Finance Committee to stop House-passed legislation to crackdown on corporations that hide their money in offshore tax havens.

So here’s what I say to conservative pundits like Harsanyi: Give us a shout when you are ready to support a real law and order agenda on issues like taxes so that we have the resources to fund basic societal priorities. Until then, us responsible folk who live in the real world of fact-based budget analysis will be laughing at your anti-tax chest-thumping and anti-“nanny state” nonsense for what it is: A sad joke.

Cross-posted from Working Assets

Comments

28 thoughts on “Conservatives’ Newest Bridge to Nowhere

    1. a liberal misses the deeper issue. The issue you frame quite well is the lack of political will to enforce taxation. But then you ignore the cause of that issue and move on to praising Hick’s courage.

      There is a reason politicians and voters dislike taxes. You would likely feel squeamish holding a gun on your neighbor while you rifled through his pockets, no? You probably still would if the money was meant to pay for your lawn care service, even though his property values benefit from your lawn maintenance. So, it is understandable that even politicians skirt the tax issue.

      No infrastructure without taxation? Pish posh: http://www.mises.org

      1. Because people have stepped into the neocon drum beat of almost forty years, “Taxes bad.”  They never addressed what we get for our taxes, except for that dang military woody.

        My parent’s generation understood much better, having seen what gummint did in WWII, that taxes were investments.  To this day I am grateful for that brand new elementary school staffed with music and art teachers.

        Sweden has a very high tax rate and yet their economy grew at twice the rate of ours the last several years.  No one worries about health care accessibility, higher education, dealing with medical caused bankruptcy, or “food insecurity.”

        By their vary nature, private institutions try to avoid investments vague, hard to pin down benefits and way off in the future.  No private company is going to pay for education, because the payback is diffuse and way out in time. But said companies sure love to reap the benefits.

        I think the American public is re-awakening that it is “We, the people,” and not “Us, the corporations.”  It will be hard to reverse that red tide (pun intended), but we will.

        We must.

      2. I think state taxes here are the deal of the century. And I would like to see some further investment in the state via taxes. There is still a lot more the state could do that would payy off several times over.

        You have to either be stupid or selfish to want to keep our taxes as low as they are.

        1. Why am I selfish for wanting to decide how to spend my hard earned money?  Or am I too stupid to spend it without the government telling me how to do it?

          Suppose a person takes a test and gets an “A”, but the teacher takes some of their points and gives it to the student that got a “D” so the “D” student can get a “C”.  Would the “A” student be selfish or stupid for getting upset at such a structure?  How many students would work hard to get an “A” if that’s what happened?  Yeah, not many.

          Taxes-the amount of them and how they’re used-has a huge effect on a lot of things.  To whimsically say “your either stupid or selfish” for wanting lower taxes shows a lack of understanding on a lot of levels.  Policy has to be looked at more than “ooh! ooh!  Look at everything we can do!”

          1. Countries that tax from everyone to invest in the country’s future do better – much better.

            Ask anyone from Taiwan or South Korea and they will tell you the reason they are now in the 21st world is that their government taxed people and invested it in public education. And they taxed them a lot. But boy did it pay off.

            Same for transportation. The interstate highway system was a gigantic boost to the economy. The ROI for the country was immense. It was what finally made this a truly national economy.

            And that student with an ‘A’ you mention, what good would that do the student in Somalia (no taxes there)? The value of that ‘A’ is magnified many many times because of what taxes deliver to our society.

            No taxes and that ‘A’ and ‘F’ student are basically equal because all that matters is who has more guns. That’s why I say those against taxes are either stupid or selfish. Stupid that they don’t realize that most of what they get is built on what taxes deliver. Or selfish in that they do realize the value of their ‘A’ effort is built on what taxes provide, but want to keep it all for themselves.

            – dave

            1. Are we talking against taxes, or taxes where they are now.  Those against all taxes (Doug Bruce) are selfish and stupid.  But wanting to maintain the status quo is neither.  All of your examples don’t apply to the U.S.  Our country has long been more advanced infrastructure wise and economically than Taiwan or S. Korea-and we got there by a healthy combination of government intervention and personal ingenuity.  Look at the world market-the Europeans do pay for a lot of stuff for their citizens.  But no one country in Europe can compete with us economically, which is why they had to form the EU.  The government has been a burden on their individual economies, but combined they work well.  Taxes and regulations bog down business, but there are places for both in a healthy and well balanced economy.  And since there is such a fine balance, we need to look at all other areas to fund projects and priorities as opposed to automatically calling for more taxes.  That isn’t the answer.

              America was founded on a lot of things, one of which was an individuals right to “property”-the right to have their own land and their own processions.  Taxation, while necessary to a degree, slowly encroaches on those values, values that should be held as sacred as possible.

              1. A lot of the reason for the EU was to create a single economy the same size as the U.S. Nothing to do with government policy, tax rates, schools – just having a larger internal market to sell to.

                As to the status quo, I think we’re a little low but reasonable people can disagree on exactly where to set that. For transportation I do think it’s pretty straightforward – more dollars means we can keep things in better shape.

                For education and healthcare though, I think the problems there are more systemic than financial. I would like to see a “grand compromise” where the systemic problems are addressed and in return funding is set at the needed level.

                – dave

                ps – sorry, I thought you were in the “there should be no taxes” camp.

                1. My thought is that the EU had to combine economic efforts to compete despite being bogged down by government regulation and taxes.  Since we wouldn’t be able to have a similar program here in North America, I think the right move for us is to keep the government involvement (taxes and regulation) at a minimum.  Somewhere to the left of 8 year old kids working and getting injured, but somewhere to the right of unions completely mucking things up.

                  I think you’re right, with a lot of programs, the problems aren’t a lack of funding as much as it is systematic.  Education is the perfect example, and I’ll take you word for health care.  I also think that this is the reason why people are so inclined to resist tax increases-if they feel like their money is being wasted, why turn more of it over?

                  While I’m not in the “no tax” camp, I am in the “less tax cuts bureaucracy” camp, and that we need to find a way of getting money to the people who need it as effiecently as possible.  I get upset when a problem comes along, and the knee jerk response from many in the Dem party is to jump into my pockets. 

                  Reviewing Colorado Law’s comments, I think that’s where he was coming from.  If we can solve infrastructure problems without raising taxes, why not?  What’s wrong with taking an honest look at spending and saying “what is less important than bridges”, cutting it, and if you still need money, then come talk to me.  At least then I’ll listen.

                  1. good thread.  You are both right and not so far apart.  Count me in your general philosophies. 

                    The other part of taxation is “Who?”  OK, another part, “What is the contribution of a given ‘Who’?”

                    Corporate taxes used to be at about 35% of federal income.  Now it’s about 7%.  And these outfits are mostly doing there stuff offshore, no less.  Yet, they run to our tax funded courts, use our tax funded roads, military protection, educational system, markets, etc.  They no longer pay a fair share of the benefits they receive.

                    I grew up “on the water.” Once upon a time, any drunk boob that ran aground radioed the Coast Guard, which sent out a mega $$$ cutter and crew and pulled the fool off. When Reagan – and here is a rare example of agreement with him – implemented the philosophy of users pay, this changed.  A small mom & pop business sprang up of tow services.  In our Sarasota, FL area, “Tow Boats USA”, a franchised operation became the service.  We used to pay about $300 a year, unlimited towing for any reason.  Their service was usually more prompt, too. If you didn’t have an annual contract with them, you paid through the nose.  I’ve seen rich jerks about crap in their pants as they were handed a $1000 bill – cash, Visa, or Amex.  LOL! 

                    I got off track.  The advantage of taxes v. user fees is that risks and services are spread throughtout the society, without surprises or need to see if services should be rendered.  This is one of the reasons Social Security works well, same for single payer health programs. 

                    Tax based programs are often amongst the most efficient because there isn’t any qualifying, you are in as a citizen or resident, or out. Compare the 3% cost to manage Medicare vs. the 30-35% of private programs.

                    Sweden’s tax rate is close to 50%, but their economy is twice as robust as our “low tax” one.  You pay one way or another, sooner or later.

      3. People like you who gladly use the infrastructure our taxes pay for, then turn around and compare taxes to robbing your neighbor are the reason we are deteriorating into third world status.  Taxes are how we chip in  for the things we all need, like a road to drive on, but couldn’t possibly afford to pay for as individuals.  The anti-tax crowd is actually costing everyone, including themselves,  much more money and getting less in return then if they just let go of their pissy little attitude.

        Since you folks got the upper hand, our infrastructure has gone to hell.  We pay many more times for insurance and repairing damage done . We pay for healthcare that is now inferior to that available to all in every other modern industrialized country at about half the cost and it’s just as rationed, the difference being that here it’s rationed by a private insurance industry whose sole interest is making as much money as possible by providing as little service in return.  Ordinary people can’t afford higher education without huge debt. We can’t afford to inspect imports to prevent health and security hazards. We can grouse about illegal immigrants but there isn’t enough money to actually do much about it.

        Basically, people like you are so invested in being grumpy misanthropes you’d rather fall into rivers, die infloods when dams and levees fail, eat tainted food, pay for our present exorbitant universal healthcare system, the emergency room, be ruined if you lose your job and insurance, have a pre-existing condition that won’t be covered on your next plan and then  need serious care for that condition, rather than  investing in the country that is your community for your own benefit. 

        You enjoy feeling put upon too much to give it up no matter how much better off you would be.  Please do us all a favor and stop using our roads, our air traffic controllers, our municipal services, our police or fire departments and if something you eat poisons you,  your spouse is killed on the job because there is no safety regulation enforcement or your child suffers brain damage from chewing on lead-painted toys, please don’t complain. Of course, if you aren’t a very wealthy grump,  the Bush tax cuts aren’t enough to make up for the fact that your disposable income is most likely decreasing while expenses increase more than enough to make up for any pittance you’re hanging onto by just saying no to your country and community. 

    2. If this was a message board with typography tooks, I’d fisk the opening statement, which is absurd. As it is, I don’t have time to deal with it.

  1. There are two major economic issues associated with taxes.

    First, to the extent that taxes are reflected in the price of goods and services consumed in the ecoonomy, they carry a deadweight loss.  They raise prices, which reduces demand for goods and services and society loses the benefits associated with that reduced demand.

    The open welfare economics question is whether the benefits of the programs funded by those taxes exceed the deadweight losses.

    Second, when taxes are spent, they are spent on a variety of programs — including road repairs.  Just like consumers, government makes choices about what to spend its resources on. Was the bridge collapse caused by taxes that are too low or was it caused by a government that does not have its priorities straight and spent the tax money on programs that were less productive, unproductive or pointless and thus, diverted money away from essential services?

    I’ve come to believe (partly based on this blog) that a philosphical basis of Democrats is the belief that all taxes levied on society will somehow be spent by government in a beneficial manner that outweighs the losses caused to the private sector and that all government programs are, by definition, good because it comes from the government.

    1. Working backwards, yes, that’s approximately correct.  The mirror image that the “invisble hand” of Smith’s businesses will always be right for the people impacted by that business.

      Taxes in Sweden are what, about 50%?  And yet their economy grew at twice the rate of our “cut taxes to stimulate the economy” Bush-con economy. A lot of their tax money going into investment – something not much seen with corporations these days.  Investing in their people with free education through college or alternatives and free health care for a healthy population – which is more productive. 

      It’s not just that dreaded word “programs” that taxes get used for.  (Not to mention the biggest “program” of all, our Department of Offense budget.) They pay for research (which corporations do less and less of), seed money for projects that later on corporations will pick up and run with, put money back into the local or American economy with wages of police and teachers and buying their paper clips from…..an American company. 

      A dollar spent at Wal-Mart – not mine, I won’t and don’t shop there – is whisked almost immediately to Bentonville AK or places unknown.  For some companies that appear to be American, that money shoots overseas…….like Dubai?

      I don’t like paying taxes any more than anyone else.  But I do recognize that generally, it’s good for my country and me.

      1. If people are better off in Sweden with high taxes, then why don’t government loving people everywhere move there?  It’s because that government-run economy turns out to be not very prosperous.

        The per capita GDP in Sweden is less than 70% of the GDP per person in the US.  Canada, Germany and Japan outperform Sweden.  The US is #9 in GDP per capita at about $44,000; Sweden is #25 at about $31,000.

        I suspect that you’re arguing that you’d rather live in a country where everybody’s equally poor or middle class than in a country with the opportunity to become rich but an unqual distribution of income.  Very Rawlsian.

        More directly, the test of whether high taxes and a government run economy played itself out in the Cold War.  Communist nations — where businesses were run by the government and most property was owned by the government — failed and are being replaced by capitalist economies.  Even China is embracing capitalism.

        1. Sweden doesn’t accept very many immigrants.  And just what is wrong with seeing a problem in the nation I was born in and trying to correct that?  “Love it or leave it.”  Do people still say or imply such things?

          I hate to tell you dude, several realities.  First, GDP is not the only standard of quality of life metrics for many reasons. The cost of living varies widely, for one thing. A person can live quite well, thank you, on $15,000 a year in Mexico, very middle class.  Includes health care, too.

          You wander all over the ideological map, pilgrim.  I never said anything about capitalism v. socialism v. Communism.  I never said anything about income distribution, did I?

          All I said is that if the argument is that high taxes cripple an economy, Sweden – and the other Scandinavian nations – prove otherwise.  Do you know what nation has the tallest citizens, a measure of food supply and health care?  No us for many years, it’s the Netherlands. 

          Do you know what nation is the richest, per capita?  You missed Norway.  Finland, despite having the big bear of the Sovite Union having a paw on its neck for 70 years, is economically vibrant and creative.  Ever hear of Linux or Nokia?

          Again, all I said, with evidence, is that high taxes don’t necessarily equate to economic stagnation. 

          I would also offer that since so much of our taxes goes to the military, which is a poor economic investment for the future, what taxes we pay are often less beneficial than building a healthy, educated population.

          1. You pointed out something that seems to hurt your argument.  Countries with a lot of services either a) limit immigration to not over extend their commitment, or b) have to raise taxes more to cover immigrants, which kills the economy.  So if universal health care meant cutting off immigration in the U.S., which would you prefer?

            Second, while many countries may spend less on their military, no other country has the level of commitment that we do through out the world.  Like it or not, since we are the major super-power, other countries look to us to “police” the world.  This would be true even if we never went to Iraq.  Should we revert to the pre WWI and WWII doctrine of isolation?

            In short, it seems to me that to obtain universal health care, we would need to shut our borders completely, or kill our economy.  We would need to revert to isolationism and create a world wide vacuum.  We would need to take America down a notch. 

            Take America down a notch, and we can no longer afford health care.  How is this a good idea again?

            Take America down a notch, and we can no longer afford health care.  How is this a good idea again?

          2. I’ve lived throughout the United States and operated companies and managed employees in many countries throughout the world.  In my experience, high-tax jurisdictions (DC, New Jersey, Texas (my property taxes ran around $8,500/year on a house comparable to my Colorado house), California) had terrible, bloated local and state government services and even worse schools.  I lived in Utah – taxes were low, government services good, schools were good – go figure. Sending money to government does not mean they will spend it wisely nor does it mean that they “need” or deserve the money.

            Same was true outside the US – high tax countries tended to be places I would not want to live and the people were not as prosperous as my US neighbors.  They might be taller and blonder, but they lived in an 800 square foot apartment and not a 2500 square foot house.

            Ever been to a government run hospital in the UK or France or the Netherlands (where the tax rate is very high to pay for those health service)?  They suck.  In enlightened high-tax Singapore where the government is involved in everything, I had an employee who came down with the mumps.  The government health service treated him by locking him in his hotel room for 2 weeks and sliding food under the door.  No doctor.  Nada.  Guess they figured if he died, they’d remove the body.  If he lived he would no longer be contagious.

            My employees carried a stash of Vomitrol and Imodium to control vomiting and diarrhea long enough to evacuate to the US in the event of sickness.  They also carried emergency evacuation insurance to get them out of the country in the event of illness.  I had no confidence in government provided health care.

            If life in Mexico is so good for $15,000/year, then why are we up to our armpits with Mexican immigrants?  The answer is – life in Mexico ain’t so good.

            I was a cop in a previous life.  When I visited civilized, Western Europe, I was struck by the fact that many policemen carry machine guns (including security at the London airports, Paris and in the Netherlands).  I’ve been in hairy situations, but never one that required a f#@!ing machine gun.  Seen any machine guns at DIA?  I was in Paris more than once when the Metro was bombed.  When I traveled, I was constantly showing my “papers” to some border guard or policeman.  When was the last time you had to show ID to a cop in the US?  Living in a society where cops have to carry machine guns, public transportation is bombed, and carrying ID papers is a way of life is not my idea of a better world.  Did the higher taxes in Europe buy a safer, less militarized society?  Not based on my observations. 

            I understand that you don’t like our Department of Defense (or Offense) – move to a country that does not have a military and enjoy yourself.  Sweden’s “defense” in WWII was to be occupied by the Germans and wait for liberation. 

            I know that folks don’t like corporations – like WalMart – and believe that the government is somehow the source of seed capital, innovation and investment in an economy.  That just ain’t so – the Russian economy is the legacy of a government owned and run economy and it’s a wreck.  Innovations in telecom, computers, software, electronics, etc came from private companies seeking to make a buck, not from the tax dollars we spend on government bureaucrats. 

  2. The most disturbing result of the Owens regime is the fact that close to 200 million per year of federal gas tax revenue has been diverted to pay bonds on TREX for the next decade.  Even if Ritter wanted to build more roads-he can’t-because the bulk of the highway department capital improvement budget has been diverted to support the huge bonded indebtedness of his predecessor.  Expect a gas tax increase-or load restrictions on I-70 adjacent to the Denver Coliseum.

    1. I believe that transportation issues are critical for the state and often boil down to “where do we get the money for the projects?”

      From what I’ve seen, there isn’t much in the way of orginal thought or solutions from the folks who post on this blog, however.  Mostly just folks ranting about who to blame or why Ds or Rs are toads.

      There was a diary some time back that raised transportation issues, but virtually nada was posted in the way of ideas or solutions.  Talk is cheap.  Asphalt ain’t.

      Here’s the diary link …

      http://coloradopols….

    2. What you describe is one of my major complaints about our current federal tax system.

      The Feds collect the money, and then either hold them hostage, or give them back randomly.  The people that pay those taxes get little benefit from them.  I contribute to that 200 Million per year of federal gas tax revenue – and really couldn’t care less about TREX.  I probably travel through there two or three times a year.

      If those taxes should have been collected by Weld County and used to improve the local infrastructure.  Having a federal agency collect the taxes, take their cut for the service and distribute them back out to whoever cries the loudest is not efficient.

  3. In real dollars, it has shrunk by well over 50%.  When gas was a $1.20, the tax was 41 cents.  Gas is $3.00-the tax remains 41 cents.  Asphalt paving was 20 bucks a ton in 1993-now it’s eighty.

    There are over 30 billion dollars worth of CDOT projects identified that are needed today-with no existing funding mechanism for the next 20 years. These include the elevated I70 in Globeville, I70 Mountains, I25 6th Avenue to Broadway, C470 I25 to Morrison Road I225 from I70 to TREX,-and on and on.  These are roads that have been gridlocked for at least a decade.  Each of them needed to be expanded 15 or 20 years ago. I’ll be shocked if more than one of the above listed projects is even started in a decade.  We’ll see if Ritter has what it takes.  It’s too late to rezone-these roads are a mess now. 

    Owens should be congratulated for completing TREX.  That he did it through mortgaging all the other urgent highway needs is his failure.  A leader would have identified the systemic problem and provided a solution to fix it in a decade or less-a gas tax, tolls, vehicle registrations, income taxes, whatever it takes to come up with a billion a year-then sell the bonds and get the stuff built. 

    Beyond system expansion, look at maintenance.  I’m told CDOT has 3600 bridges.  Assume they have a life expectancy of 50 years-that means in any given year, an average of 72 need to be replaced.  Let’s say the average bridge costs $1 million dollars (a conservative estimate).  The bridge replacement need is $72 million per year-the budget I’m told is in the neighborhood of $40 million.  That’s why I35W fell into the Mississippi.  Complicating the situation is the fact that of the 3600 bridges, most were built between 1950 and 1970-and are rapidly approaching the end of their useful life at the same time. 

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