Serious Implications

Biden, Gates, Crowley, Obama

The Telegraph has the story here.

The 22 states voting for McCain-Palin, on average, received $1.40 back for every dollar they sent to Washington; The 28 states for Obama-Biden, on average, received $1.00 for every dollar sent.

Source: 2004 Data compiled by the Tax Foundation

Ironically, those complaining loudest about federal taxes and spending tend to benefit the most. Notice the benefit-to-payment ratios for the home states of the major party presidential tickets:

Alaska (Palin) $1.87 received for every tax dollar paid (subsidized).
Arizona (McCain) $1.30 (subsidized).
Delaware (Biden) $0.79 (donor).
Illinois (Obama) $0.73 (donor).

Remember when Republicans attacked Obama for wanting to “spread the money around?” Like Blanche DuBois, McCain and Palin’s states depend on the kindness of strangers, Like Illinois, and Delaware, and Connecticut, and New York, and California, and Michigan, and New Jersey, and Minnesota, and all the other donor states on the short end of the stick. New Jersey gets a lousy 55-cents back for every dollar its sends to Washington.

The figures and 2008 voting results for all 50 states:

New Mexico $2.00 Obama-Biden
Alaska $1.87 McCain-Palin
West Virginia $1.83 McCain-Palin
Mississippi $1.77 McCain-Palin
North Dakota $1.73 McCain-Palin
Alabama $1.71 McCain-Palin
Virginia $1.66 Obama-Biden
Hawaii $1.60 Obama-Biden
Montana $1.58 McCain-Palin
South Dakota $1.49 McCain-Palin
Oklahoma $1.48 McCain-Palin
Arkansas $1.47 McCain-Palin
Kentucky $1.45 McCain-Palin
Louisiana $1.45 McCain-Palin
Maryland $1.44 Obama-Biden
Maine $1.40 Obama-Biden
South Carolina $1.38 McCain-Palin
Arizona $1.30 McCain-Palin
Tennessee $1.30 McCain-Palin
Missouri $1.29 McCain-Palin
Idaho $1.28 McCain-Palin
Utah $1.14 McCain-Palin
Kansas $1.12 McCain-Palin
Vermont $1.12 Obama-Biden
Wyoming $1.11 McCain-Palin
Iowa $1.11 Obama-Biden
North Carolina $1.10 Obama-Biden
Nebraska $1.07 McCain-Palin
Pennsylvania $1.06 Obama-Biden
Florida $1.02 Obama-Biden
Rhode Island $1.02 Obama-Biden
Ohio $1.01 Obama-Biden
Indiana $0.97 Obama-Biden
Oregon $0.97 Obama-Biden
Georgia $0.96 McCain-Palin
Texas $0.94 McCain-Palin
Washington $0.88 Obama-Biden
Michigan $0.85 Obama-Biden
Wisconsin $0.82 Obama-Biden
California $0.79 Obama-Biden
Colorado $0.79 Obama-Biden
Delaware $0.79 Obama-Biden
New York $0.79 Obama-Biden
Massachusetts $0.77 Obama-Biden
Illinois $0.73 Obama-Biden
Nevada $0.73 Obama-Biden
Minnesota $0.69 Obama-Biden
New Hampshire $0.67 Obama-Biden
Connecticut $0.66 Obama-Biden
New Jersey $0.55 Obama-Biden

This kind of unequal distribution of federal spending and taxation is likely justified, given the uneven economic conditions and opportunities around the United States. What is absurd and hypocritical, is having clear beneficiaries, including McCain and Palin, complaining about taxes and spending.

With the American Middle Class in dire straights, President Obama has appointed Vice President Joe Biden to lead a Middle Class Task Force. The opening meeting featured creation of “green jobs.” Biden might have decided to start with a fairly non-controversial topic. However those jobs are created and promoted, it’s a sure bet that tax legislation will be part of the “equation.” The same is true of initiatives in health care reform, energy, and education, the three top priorities of Obama’s agenda to build an America strong enough to compete and lead in the 21st Century.

Tax reform legislation will be a huge part of the agenda and fights over altering the status quo will be spectacular. Therefore, we need to educate ourselves and prepare for blizzards of tax policy rhetoric.

Tax Rascal has a list of Top Ten Tax Blogs. At the top of the list is Wayne State University Professor Linda Beale’s ataxingmatter, which is also one of the better economics blogs linked in my sidebar. Congratulations Dr. Beale!

Country First! Just don’t raise my taxes! – Essentially the “McCain Doctrine.”

As the fall political campaign goes forward, we’re likely to hear from Republican supply-siders about how high the taxes are for wealthy Americans. They’ll claim that taxes will need further cutting to keep the economy growing. They like to quote high percentages of taxes paid by top earners. The facts show, however, that while percentages of total tax payments have gone up, the top 1% of wealthy Americans have enjoyed tax cuts in terms of real dollar amounts (see the graph below).

These tax cuts have cost the current and future U.S. taxpayers roughly $500 billion a year from 2001 to present, sending the National Debt soaring from $5.6 trillion in 2000 to well over $9 trillion today, and that does not include the proposed bailouts for Freddie, Fannie, and AIG. That means the government has borrowed money to pay for the Bush tax cuts, plus to cover the “bad bets” set up by the deregulated banking and insurance industries. That amounts to socialism for the rich and politically connected, and a real problem for the rest of us and our kids.

The graph below shows tax payments adjusted for inflation in constant 2004 dollar values. Notice that total revenues decreased substantially in 2004 compared to 2000. The share of income tax paid by the richest 1% was higher in 2004 compared to 2000 but the amount they paid was actually less than in 2000.

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Source: Center on Budget and Policy Priorities

The Bush tax cuts have, in fact, been regressive, meaning that they have led to greater after-tax income inequality. The rich get richer (and politically more powerful) and the rest of us fall behind.

There’s more about this in an excellent CBPP paper here.

Regardless of what they say, the Bush Administration and their supporters, including John McCain, have and will continue to use government appropriations and tax policies to bail their people out and make them wealthier. The profits will be privatized and the liabilities will be passed on to the taxpayers of today and the future. That’s their record.

McCain chose Palin to create media buzz.

What sort of expertise would Sarah Palin, governor of Alaska since 2007, bring to the office of Vice President, second highest office in the nation? John McCain is seventy-two. His mother is in her nineties, but his father, with whom McCain most likely shares a closer hormonal and metabolic legacy, died at seventy. He’s had four episodes of melanoma. He receives monthly disability payments from the Navy.

If one looks at the other three candidates in the race, it’s reasonable to find some serious expertise among them. McCain is a Washington insider who’s been either in the House of Representatives or Senate since 1983. He knows the legislative process. He’s probably an expert in the Navy and military readiness. Some would argue he’s an expert in foreign policy but I wouldn’t.

Barack Obama is a legal expert. He edited the Harvard Law Review and taught Constitutional Law at the University of Chicago for twelve years. He was an Illinois State legislator for eight years. His years as a community organizer in Chicago brought him a credibility in urban affairs. He’s been in the U.S. Senate since 2005. He’s written two widely acclaimed books – without ghostwriters. He’s demonstrated keen intelligence, discipline and ability to motivate people in organized efforts, whether in Chicago neighborhoods or a winning national presidential campaign. His mixed ethnicity and international life experience enables him to reach across cultural divides.

Joe Biden, like McCain, has been in Washington for a long time. He too knows the legislative process. He chaired the Senate Judiciary Committee and the Senate Foreign Relations Committee for several years. He’s often accused of talking too much, but rarely of not knowing what he was talking about.

Sarah Palin has a very thin resume. Wasilla, where she was mayor, was run, like many towns including mine, by a city manager. Her time as Governor has been less than two years. I’m not aware of anything she’s written. She may be a shrewd politician, one who plays the game of “heads I win – tails you lose.” A good example is the “Bridge to Nowhere.” She supported the bridge during the gubernatorial campaign and even sent a lobbyist to Washington to help secure the earmark. Once Congress made clear it would cut the earmark, Palin made a big deal about killing it herself.

If the bridge had been built, she probably would have claimed full credit for it. It might have been named the Sarah Palin Bridge. When its federal funding was cut, she took credit for cutting pork. This is not principled leadership. This is called self-aggrandizement.

There’s a good fact checking summary about Palin at Politifact.com, which gave her a “full flop” on the “Truthometer”. Worse yet, the McCain campaign continues to tell only the alleged pork cutting part of the story and distorts the truth even more by implying that it was Palin, not Congress, who eliminated the project. They must think if they just keep feeding us garbage, we’ll eventually swallow it.

In McCain’s first presidential decision, he picked a running mate who would create “buzz,” not someone ready to be President. Sorry, but that’s damn irresponsible of him.