Virginia Tax Policy

Stephen Haner writes about tax policy for the Thomas Jefferson Institute for Public Policy (TJIPP). The Institute self-describes it’s mission as providing:

“…Virginia’s political, business, academic, community and media leadership with thoughtful, realistic, useful and non-partisan analysis of public policy issues confronting our Commonwealth.

These alternative policy ideas focus on state and local issues and are based on the Institute’s belief in free markets, limited government and individual responsibility. The general areas of interest for this Institute are reforming government, economic development, improving health.”

This is a conservative journal, and I don’t often agree with the policy proposals I read about there. But Haner has this one right:

“Virginia needs to substantially increase the standard deduction it offers to all taxpayers, with the goal of matching the amount offered on their federal taxes. That would be an increase from $9,000 tax free income for a couple filing jointly to $25,100 for that same couple, removing more than $16,000 from taxable income. An individual’s standard deduction is $12,550.

Virginia needs to index its tax code to inflation, again mirroring federal practice. Failure to do so, and allowing tax rates to increase due to inflation, is itself a form of tax increase. This is even more important now because the massive federal deficit spending on individual cash benefits, and other federal actions to overheat the economy, are likely to produce the kind of inflation many of us remember from the 1970s.”

I agree that Virginia should stop taxing the labor wages of it poorest citizens. Taxing minimum wage income creates a disincentive to work. Any employers out there have employees quit after their first paycheck when they realized that a week working for $10 an hour netted them $236 instead of $400?

Raising the standard deduction to $25K doesn’t mean much to Michael Bills, but it helps all those single mothers trying to feed the kids and pay the rent by working at Wal-mart and driving for Uber. Indexing this deduction to inflation helps the same people. Of course, the full TJIPP tax reform plan for the Commonwealth includes decreasing corporate tax rates (which makes sense if the plan also closed loopholes).

So I wonder if Haner and TJIPP would support a couple more changes. I’ll buy into this tax cuts for low earners and corporations if they also further support cutting taxes on the poorest Virginians by eliminating sales taxes on food, adding another tax bracket, and increasing Virginia’s capital gains tax to 6%. After all, cutting taxes on the poorest Virginians is a great idea. I’m less enthusiastic about cutting corporate rates, but most don’t pay full freight anyway.

But doing both will cost the Commonwealth revenue we need for schools, infrastructure, and public safety. So let’s add another bracket for higher earners (over $100K with a 7% rate). Revenue generated this way might let us cut the lower bracket rates from 5.75% to 4%, by the way.

We should also increase the capital gains tax to 6.5% – only a $7K increase on a million dollar profit – not enough to keep people from investing. And eliminate sales taxes on food, hygiene items, and medications of all kinds. We should level sales taxes only on discretionary purchases, not those survival requires.

Virginia overtaxes its poorest citizens and lets its wealthiest off the hook. Those who do the best here prosper because Virginia has effective education institutions, governance, public safety, and infrastructure (well…except maybe for the I-95 corridor). It’s time for our most prosperous neighbors to invest in the Commonwealth that made them wealthy.

James Bacon Hasn’t Heard About Medicare for All

James Bacon writes at The Bull Elephant that he doesn’t think Virginians should have health care if that means taxing the wealthy and regulating providers.

“The healthcare system is so immensely complicated, with so many moving parts, so many feedback loops, and so many hairy ethical questions of life, death, and well being, that it is exceedingly difficult for politicians or the public to understand.”

These “hairy questions of life, death, and well being” are what makes allocating health care as a commodity through market forces so immoral – and impossible, Mr. Bacon.

Also, too:

“Here’s the problem with subsidies: They’re never enough. Never ever. The political class always wants more. There’s always someone who falls between the cracks. There’s always some unmet need. There’s always a new, higher standard of care to be insisted upon. Unlike taxpayer’s pocketbooks, the demands are endless.”

Too long, don’t read James Bacon: We cannot improve health care access through regulation because it’s just too complicated, and subsidies are never enough. No program will ever meet every need, so we should do nothing at all. And by the way, some taxpayer’s pocketbooks are, in many practical ways, more or less endless.

Bacon thinks “price transparency, competition, and innovation with the goal of enhancing productivity and improving outcomes” (that is, markets), will solve the problem. And I guess that if you’re a conservative who thinks access to life-saving treatment should depend on ability to pay instead of a shared moral obligation to our fellow man (as expressed, for example, in the “red letter” Bible verses) you might be right. Only, of course, if you’re OK with the “some people will die because they cannot afford to buy insulin” part.

At the end of the day, no amount of price transparency, competition, innovation, or enhanced productivity will change this one fundamental fact: every consumer’s demand for health care will eventually become so inelastic that none of these things will matter in any way. Everyone will pay any price demanded because it keeps them alive.

Bacon thinks this is the fix because his only tool is a market, so he believes every problem is a price transparency and competition failure. In fact, we have a better chance to make our health care system more efficient by honoring our commitment to each other, accepting health care access as the human right it is, and working together to ration according to need rather than resources. In the end we all benefit because in the end we’ll all have the same need: life-saving medical care we won’t be able to pay for without help.

He has apparently not heard of Medicare for All – the best expression of this shared commitment to the common good we have today. I’ve read this legislation from cover to cover. Everyone pays in, and they do so the minute they start working. And everyone takes out, and the do so the minute they get sick. This system also costs less – and the people who oppose it do so because they generally have something to lose because it does.

Medicaid expansion has improved the lives of almost half a million Virginians, but that alone cannot save everyone. McAuliffe’s reinsurance plan won’t, and neither will Medicare for All.

The one idea Bacon doesn’t mention can get us closer. It’s time.

Circular Firing Squad, Voter Suppression Edition

Here’s a good rundown of the internal Republican Party of Virginia argument over how to nominate statewide candidates. Writing at the Bull Elephant, Doc Troxel lays it out clearly. The State Central Committee finally settled on what they call an “unassembled convention” with what amounts to 37 mini-conventions at Party-run polling locations across the Commonwealth. You can also read Lynn Mitchell’s more succinct account at Bearing Drift.

I can’t improve on Troxell’s explanation – he was in these meetings – so I won’t try. My crack at a TL;dr is that because this system limits the number of votes from each local Unit (even if it does not limit the number of delegates from each local Unit) it creates incentives for candidates to capture local unit delegations, as they would in a more…conventional…convention. Sorry.

As I read it, the minority faction fought for a primary because they believe their preferred candidate, Amanda Chase, can win the nomination with a 35% plurality in a large field. They’re less confident in her ability to win a majority at a convention with rank-choice voting. Of course, they frame the problem as “establishment RINOs” controlling the convention results to make sure Chase has no chance, but it’s not clear how including the broader GOP electorate across Virginia helps the most extremist potential nominee.

In any event, I followed the saga as it unfolded and I think it’s important to note that through the entire debate the core question focused on how to best keep opponents from voting. We see no willingness among any of these factions to form a coalition in support of a set of common goals based on commonly accepted social agreements. At every turn each one sought to expand access to their members and deny it to others.

When someone tells you who they are believe them – and the GOP is telling us that conservatives see a no path to power in building coalitions. Easier to simply shut opponents out of the electoral process altogether, and Republicans across the country have moved to do this to Democrats.

In Virginia they turn this weapon on each other.

Sunday Morning Coffee

Thoughts on a couple of things I read this morning over coffee:

American Rescue Plan Passes – Cosplay Socialist Complains

Yesterday the US Senate passed the Democrats’ $1.9T stimulus legislation on a 50-49 vote. It’s too bad this bill did not include a minimum wage increase of some kind, and I would not have means-tested the direct payment checks. But this legislation will put money in the pockets of people who will spend it, and includes changes to the way we support low-income families that should help reduce child poverty. It also provides funding to accelerate the pace of Covid-19 vaccinations.

It’s also excellent politics because passage keeps a campaign promise that will boost the economy while bringing the pandemic to an end that much more quickly. It will embed new support for poor families that will be difficult to withdraw later. I think Biden learned something from the 2010 midterm election catastrophe: Republicans cannot be trusted to negotiate in good faith, and in the end the won’t, so push through the most you can without their help.

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Wittman Watch

Banner at the @WittmanWatch Twtter Account

On January 6, an insurrectionist mob stormed the US Capitol building in an effort to stop the Electoral Vote count that would make Joe Biden President. Several groups, including the Oath Keepers and Proud Boys, planned a coordinated attack in response to an intentionally promoted Big Lie: that Democrats and others used systemic fraud to steal the election from Donald Trump. Planners did not intend to protest peacefully – they wanted to overthrow the results of an election because they did not like the result.

They wanted to overthrow a democratic election, and they said so on social media:

“Get violent. Stop calling this a march, or rally, or a protest. Go there ready for war. We get our President or we die. NOTHING else will achieve this goal.”

Reuters Staff, Reuters

Donald Trump was not the only elected official telling this lie – other American political leaders, including First District Congressman Rob Wittman, helped set the conditions for the storming of the Capitol. Wittman had the power – and the obligation associated with that power – to stop this. He refused to publicly accepting the results of the 2020 election (which he was happy to do with respect to his own race, by the way).

Instead, he supported this false narrative of a fraudulent election by objecting to the counting of Pennsylvania’s Electoral Votes on the grounds that the State “failed to follow the laws and constitutional tenets that govern its elections. Worse, he still refuses to calm divisions by publicly accepting the results of the free and fair election that made Joe Biden President and kept Wittman in Congress.

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Natural Experiment

It looks like Texas and Mississippi have decided to conduct a natural experiment by lifting all Covid-related restrictions by next week:

The governors of Texas and Mississippi both announced Tuesday that they are lifting statewide mask mandates and allowing businesses to reopen at full capacity even as the decline of daily Covid-19 cases slows and federal officials urge states to exercise caution.

Texas Gov. Greg Abbott said at a press briefing at Montelongo’s Mexican Restaurant in Lubbock that he will issue a new executive order that rescinds most of his previous Covid-19 restrictions, including a statewide mask mandate. He added that all businesses would be allowed to open “100 percent,” effective March 10.

Will Feuer, CNBC

As far as I can tell, these are the first states to completely lift all pandemic-related restrictions since it began last year. I call this a “natural experiment” because it will test at least two ideas.

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Circular Firing Squad?

Screen shot from Facebook video of the February 23 Virginia Republican Party State Central Committee meeting.

The inner workings and various factions that make up Virginia’s Republican Party fascinate me, and I’ve been attending Tea Party meetings and following the debate between these factions pretty much since I moved to Hanover County in 2008. The short non-academic version is that a very active and motivated base has worked to take over the Virginia GOP for more than a decade. This base very much wants to enforce a kind of ideological purity that focuses far more on cultural issues than policy.

This intra-Party insurgency initially manifested itself in the capture of local Virginia GOP units by Tea Party activists after Barack Obama won the Presidency. Ideologically, this group is to the right of what I call “Chamber of Commerce” Republicans (defined as conservatives who want small government but want it to actually work). Think of this as the “conservatives lose elections because they’re not conservative enough” crowd.

They successfully won the 7th District Congressional nomination for Dave Brat over House Majority Leader Eric Cantor in 2014 because the very conservative Cantor was not conservative enough to suit them – these activists ousted a very powerful Congressman for ideological reasons. Brat went on to win the seat and served two terms before Abigail Spanberger won the seat in 2018. She held it in 2020, but narrowly.

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Blue Collar Billionaire

We’re at a place in American politics where conservative leaders make the claim the Republican Party represents regular Americans rather than Country Club elites.

This comes from a Senator who got his degrees from Princeton and Harvard. A Senator who ran to warm-weather Cancun from a winter disaster in his home State instead of volunteering to help out the…blue collar…workers in Texas who were freezing to death because the free-market policies he supports drive profits, not reliable utility services.

In support of someone who literally owns – and lives at – a country club.

Unlike Beto O’Rourke and Julian Castro.

Not to mention Alexandria Ocasio-Cortez.

COVID Common Sense? Or Covidiocy?

Mick Staton thinks it’s time to apply some “common sense” to Virginia’s coronavirus response. From the Bull Elephant:

In just over four months the number of confirmed covid-19 cases in Virginia has reached nearly 89,000.  Of those confirmed cases,  a little over 2,100 people have died [over 2200 now].  We can argue about inflated death numbers or under-counted people who have the virus but have never been tested all we want, but all of that is pure speculation, and cannot be quantified or counted.  People who feel sick are getting tested.  If you don’t feel sick and you test positive for the antibodies, do you really qualify as a victim of a disease you never knew you had?  For now, let’s just deal with confirmed numbers.

Virginia has a population of about 8.536 million people.  Based on the confirmed numbers listed above, only about 1% of the population of Virginia has contracted this virus, and 0.024% of the population of Virginia has died from it.

Virginia hit its highest number of daily reported cases on May 25th of this year at 1,439.  When we once again compare that to our population of 8.536 million people, that means the greatest chance anyone had of contracting this disease on any given day is about 0.01%.

Mr. Staton thinks that a lockdown needed to happen based on what we knew four months ago, but now thinks it was not necessary then – and certainly not now – on the grounds that COVID isn’t really that much worse than the flu at the end of the day.  After all, only 90K Virginians have gotten this deadly disease, and only 2100 2215 have died from COVID since the pandemic started.

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No, the Angry White Guy is Not the Victim

I’m sure a lot of you have seen this video of Daniel Maples, a Florida insurance salesman, yelling at an elderly woman that he “feels threatened” because she asked him to wear a mask while shopping at Costco.

Turns out the agency he worked for let him go after this went viral on social media. Jonathan V. Last, Executive Editor at The Bulwark, thinks this is a bad thing because “maybe he’s a good guy having a really crappy day.” The Bulwark, by the way, is the internet home for the “Defending Democracy Together Institute,” a PAC put together by a group of anti-Trump conservatives like Bill Kristol and Mona Charen, among others.

I signed up for a Bulwark newsletter, and in a recent email Last made Costco Guy the victim when Maples actually victimized others. Readers of course pushed back, so Last responded with a second email elaborating on his argument. It boils down to “we don’t know anything about this guy and he should not be punished for a 17-second lapse. He didn’t pull a gun on anyone and didn’t assault anyone, so what’s the big deal? And we shouldn’t go after people who refuse to wear a mask because it’s not worth the trouble.” (Last asks if others speak up when they see someone texting while driving, and the answer is yes, I do.)

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