CLT
UPDATE
Monday, April 5, 2004
Tax
season's upon us again -- hypocrisy reigns
Paying higher taxes to protect services - a liberal drumbeat on Beacon Hill - has resulted in an underwhelming response from Bay State taxpayers, even from those in the tony suburbs.
New tax data reveal a teeny and shrinking number of taxpayers are checking the box to voluntarily cough up 5.85 percent of their income, rather than the mandatory 5.3
percent....
Only 510 people have elected to pay higher taxes, out of the 1.6 million taxpayers who have filed to date, or .03 percent of the population - and that's down nearly half from this time last year.
The Boston Herald
Friday, April 2, 2004
Tax form check-off bounces in stingy Bay State
Droves of lawmakers are getting away scot-free from the Tax Man - exploiting a Reagan-era loophole that lets them write off their federal income-tax liability just for showing up for work....
The deduction allows lawmakers to write about $150 off their federal taxes for every day they're in session - technically year-round in Massachusetts, despite long periods of idleness.
Eligible lawmakers end up owing almost no federal taxes, giving a long stretch to what many complain is a modest $53,381 salary.
"I'm not sure why we're subsidizing legislators," said Citizens for Limited Taxation chief
Barbara Anderson. "We have to pay a little more to make up for what they're not paying." ...
Lawmakers do not have to submit receipts for the special tax goody, and can count weekends and nonsession days. Separately, they rake in thousands of dollars in annual state travel per diems.
The Boston Herald
Monday, April 5, 2004
Loophole makes drive time less taxing for state pols
In 2002, Treasury Secretary Paul O'Neill asked a pair of economists to calculate the federal government's fiscal gap. In simplest terms, O'Neill wanted to know how big a tab the current generation was leaving for future generations to pay. The calculation included everything from the cost of defense and roads to the bills for Social Security and Medicare.
Their work never made it into print....
Laurence Kotlikoff is in the Paul O'Neill mold. The chairman of Boston University's economics department feels strongly that the nation needs to face up to the fact that it has created obligations that it cannot possibly afford. "This is the moral crisis of our age," he writes in his new book, The Coming Generational Storm. "We are collectively endangering our children's future without giving them the slightest say in the matter." ...
If the politicians in Washington wanted to fix the problem today, they would have to choose from among the following unpleasant options: Raising income taxes by 69 percent, boosting payroll taxes 95 percent or cutting Social Security and Medicare 45 percent. The longer we wait, the more Draconian the tax hikes or cuts will have to be.
The Boston Globe
Sunday, April 4, 2004
Debt level places US at risk
By Charles Stein
Chip Ford's CLT
Commentary
It doesn't look like our voluntary tax check-off is a
big hit with all those liberals who voted against our tax rollback in
2000. While back then they insisted they "didn't need or want a tax
cut," today they're taking it even though we made sure they weren't
forced to accept it against their will, made sure that they too could be
winners even after losing the ballot campaign.
Our point is being proven even more powerfully by our
tax-and-spend opponents themselves: Either nobody wants higher
taxes, or liberals are a crowd of phony hypocrites who don't give a hoot
about doing it "for the children" or "the most vulnerable
among us" or for anyone else but themselves if they can't drag us
all down. Actions always speak louder than words.
Last year -- the first year our check-off was
available on state income tax forms -- on Jun. 29 the CLT
Update presented excerpts from a Boston Herald report ["Thanks, but no thanks"]:
"Those who elected to pay at the higher rate: 1,197.... Their total extra payments totalled
$137,523, which means their average taxable income was just a bit over $20,000."
Year two of our check-off is here, and the number of
those electing to pay the higher 5.85 percent over the current 5.3
percent is down.
Boston Herald reporter Elisabeth Beardsley
erroneously credited "GOP lawmakers" with creating the
check-off. In fact, we established our authorship in the CLT News
Release of Dec. 5, 2000 ["With our VOTE revenue contribution everyone's a winner!"]
the day before we filed our bills with Republican legislators, and
further in the Dec. 7, 2000 CLT Update, ["CLT files VOTE contribution bills: House version claimed by
Minority Leader"]. While Republican legislators sponsored the
bills for us at our request and managed to get the check-off adopted,
CLT created the concept and its language.
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*
*
Beardsley then turned her sights on that perennial
abuse, legislators who get a whopping federal tax write-off for each day
the Legislature is "in session" -- which ours always is
year-round -- and the many who pay absolutely no federal income tax as a
result, even as they collect their "per diem" travel pay
bonuses. Imagine, they still whine that at an annual $53,381 -- for some
completely tax-free -- they're not paid enough for in reality a
part-time job.
*
*
*
As the inevitable federal budget meltdown stalks
closer, finally some are looking doomsday in the eye and sounding the
alarm: this cannot be sustained.
Laurence Kotlikoff, chairman of Boston University's economics department
and author of The Coming Generational Storm, "isn't holding his breath waiting for Washington to move.
'Politicians are lower life forms,' he said," according to the
Boston Globe report. The implications are horrifying -- and
they're coming down the tracks like an express train. Washington's
response? Add more and more entitlements, whistle past the graveyard,
pass the buck as long as they can, and hope they're not still in office
when the unavoidable day of reckoning explodes upon us and crushes the
nation.
As CLT member Robert E. Kelly, author of The
National Debt - From FDR to Clinton, notes in closing, quoting
Thomas Jefferson: "I place economy among the first and most
important virtues, and public debt as the greatest of dangers. To
preserve our independence, we must not let our rulers load up with
perpetual debt."
Jefferson also wrote the Declaration of Independence
on which the signing founders pledged "Our lives, our fortunes, and
our sacred honor." I'm glad Jefferson isn't around today to see the
fiscal nightmare our federal "rulers" have delivered, how far
the nation that he helped create has fallen.
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Chip
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The Boston Herald
Friday, April 2, 2004
Tax form check-off bounces in stingy Bay State
By Elisabeth J. Beardsley
Paying higher taxes to protect services - a liberal drumbeat on Beacon Hill - has resulted in an underwhelming response from Bay State taxpayers, even from those in the tony suburbs.
New tax data reveal a teeny and shrinking number of taxpayers are checking the box to voluntarily cough up 5.85 percent of their income, rather than the mandatory 5.3 percent.
The state check-off was created two years ago by GOP lawmakers, who were annoyed with liberals' tax-hiking efforts.
[sic - it was created and filed in Dec. 2000 by CLT, which asked
Republican legislators to sponsor our House and Senate bills.]
Only 510 people have elected to pay higher taxes, out of the 1.6 million taxpayers who have filed to date, or .03 percent of the population - and that's down nearly half from this time last year.
"It's tax me more, but as long as everybody else pays," grumped House Minority Leader Bradley H. Jones (R-North Reading).
Top liberal lawmakers dismissed the check-off as a gimmick. "My voluntary contributions are called donations," sniffed Rep. James
Marzilli, who personally pays for plants to spruce up his Arlington district.
Geographic data showed high concentrations of people opted last year to pay higher taxes in urban areas like Boston and Cambridge.
But the affluent suburbs seem to be stingier - with only five taxpayers apiece in Weston and Wellesley ponying up extra dough, and none in Hyannis or Dover.
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The Boston Herald
Monday, April 5, 2004
Loophole makes drive time less taxing for state pols
By Elisabeth J. Beardsley
Droves of lawmakers are getting away scot-free from the Tax Man - exploiting a Reagan-era loophole that lets them write off their federal income-tax liability just for showing up for work.
With the dreaded tax-filing deadline 10 days away, a new Herald analysis reveals that 54 of the state's 200 lawmakers are eligible to grab a special federal tax break that's only available to pols who live more than 50 miles from their statehouses.
The deduction allows lawmakers to write about $150 off their federal taxes for every day they're in session - technically year-round in Massachusetts, despite long periods of idleness.
Eligible lawmakers end up owing almost no federal taxes, giving a long stretch to what many complain is a modest $53,381 salary.
"I'm not sure why we're subsidizing legislators," said Citizens for Limited Taxation chief
Barbara Anderson. "We have to pay a little more to make up for what they're not paying."
Lawmakers do not have to submit receipts for the special tax goody, and can count weekends and nonsession days. Separately, they rake in thousands of dollars in annual state travel per diems.
The IRS, citing confidentiality, declined to name which pols have taken the deduction. But the Herald calculated every lawmaker's commute and determined who's eligible - and veteran recipients say virtually everybody who qualifies grabs the break.
"My constituents would probably think if I didn't take it, there must be something wrong with me, that I'm as wealthy as Gov. Romney," said Sen. Richard Moore (D-Uxbridge), who lives 53.54 miles away.
Lawmakers who've managed to erase their entire federal tax bill protested that they pony up in other areas - meals on the road, wear on their cars and second homes in Boston.
"It's not like I'm feathering my own nest," said Rep. Daniel Bosley, a North Adams Democrat who lives 157.89 miles away. "I'm just availing myself of what business deductions we have."
Others say they still get nailed with the alternative minimum tax, once extra income factors in, and they still pay state taxes. "I don't get away for free," said Rep. Peter Larkin, whose Pittsfield home is 138.89 miles away.
Some lawmakers ran for the hills. "Let me save you some time - call somebody else," snapped Sen. Andrea Nuciforo (D-Pittsfield). "I'm not going to discuss my own tax returns with you."
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The Boston Globe
Sunday, April 4, 2004
Debt level places US at risk
By Charles Stein, Globe Columnist
In 2002, Treasury Secretary Paul O'Neill asked a pair of economists to calculate the federal government's fiscal gap. In simplest terms, O'Neill wanted to know how big a tab the current generation was leaving for future generations to pay. The calculation included everything from the cost of defense and roads to the bills for Social Security and Medicare.
Their work never made it into print. After O'Neill was fired, his successor, John Snow, decided not to publish the findings. He may have figured that the estimate, like last week's gory atrocity photos from Iraq, was just too disturbing for the American public to handle.
Laurence Kotlikoff is in the Paul O'Neill mold. The chairman of Boston University's economics department feels strongly that the nation needs to face up to the fact that it has created obligations that it cannot possibly afford. "This is the moral crisis of our age," he writes in his new book,
The Coming Generational Storm. "We are collectively endangering our children's future without giving them the slightest say in the matter."
Kotlikoff's book arrives at a good time. Washington's spiraling budget deficit has become a campaign issue. Last month, the trustees of Social Security and Medicare released annual reports that showed the programs for seniors have multitrillion dollar liabilities. Red ink is on the nation's radar screen.
To Kotlikoff, the discussion is welcome but misguided. He is a harsh critic of government accounting, arguing that it gives a distorted picture of the country's finances. "We hide our bills the way Enron did," he said in a recent interview.
Kotlikoff is one of the pioneers of generational accounting, a system that measures the burden today's commitments will create down the road. "It's the future, stupid," he writes in his book.
O'Neill's economists used a similar approach. They concluded that America's fiscal gap was $44 trillion, more than four times the gross domestic product. To put that number in perspective, think about this. If the politicians in Washington wanted to fix the problem today, they would have to choose from among the following unpleasant options: Raising income taxes by 69 percent, boosting payroll taxes 95 percent or cutting Social Security and Medicare 45 percent. The longer we wait, the more Draconian the tax hikes or cuts will have to be.
Kotlikoff isn't holding his breath waiting for Washington to move. "Politicians are lower life forms," he said. But a failure to act will have consequences, he warns. In a worst-case scenario, he envisions a future that makes the "Terminator" seem hopeful. He
foresees a stagnant American economy crushed by debt. Taxes are dramatically higher. So is the inflation rate because the government has decided to print money to escape the fiscal vice. Money and talent are fleeing the country. "I'm not particularly optimistic," said
Kotlikoff.
Not everyone is so gloomy. While conceding that an aging population and rising medical costs pose major challenges, some economists say the problems are manageable. "We will have to make adjustments but it won't be the apocalypse," said Marilyn Moon of the American Institutes for Research, a Washington think tank.
I hope she is right. But is it too much to ask the two candidates for president this year just how they plan to make the adjustments? The early indicators aren't promising. President Bush's three tax cuts contributed $9 trillion to the fiscal gap, according to
Kotlikoff. Bush's Medicare drug benefit will add trillions more to the $44 trillion total. Like most Democrats, John Kerry has stressed the importance of preserving Social Security and Medicare benefits, without saying how he expects to pay for them. His proposed tax hikes on the wealthy will help close the gap, but compared to the size of the problem, he is spitting in the ocean.
Zoology was never my strong suit, but I recall that most "lower life forms" -- Kotklikoff's description of politicians -- wriggle around because they have no backbone. Do Bush and Kerry?
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