[lbo-talk] Hypothesis for running a Progressive State Government

Wojtek Sokolowski sokol at jhu.edu
Mon Aug 30 14:39:14 PDT 2004



> I have been reading some of the post on this board, and many other
> boards, and the one thing I continue to notice is that the progressive
> left complains about a lack of order, or a lack of ideas, on how to
run
> the various systems without screwing it up and losing votes. Well, I
am
> not an economic - read a few of my other post and you can figure that
> out - but I did bother to try to conceive an idea for a progressive
> state government system.
>
>
> _Cultural Contribution_
>
> * zero state income tax
>
> # zero state property tax
>
> (1) Science Research Facility (* & #) -- for example pharmaceutical
>
> (2) Education Facility (* & #) -- schools, & job skill training
>
> (3) Health Facility (* & #) -- for example: hospitals, & GYM's (they
get
> half off each tax system)

WS: You may not be aware of it, but most research, health, and educational institutions in this country are 501(c)(3) nonprofits and thus exempt from income and property taxes. And that creates a big problem for cities like Baltimore, to which the presence of such institutions is a drain on their already meager tax base. The highly paid professional staff of these institutions usually lives outside city limits, and thus do not pay city taxes, but demand city services - police, roads, parking etc. This is why cities asks these institutions to pay PILOTS (payments in lieu of taxes) - which these 'nonprofits' fight tooth and nail. On the positive side, these nonprofits are the major or sometimes sole source of employment growth in the cities, as the private sector is shedding jobs.

The bottom line is that tax incentives are not necessarily a progressive policy - a better way is a fat progressive federal tax (see below) to prevent tax evasion by moving to different jurisdictions, which can be used to adequately fund services provided by these institutions.


> (1) Allow a democratic format in public schools (i.e. teachers get to
> vote on year-round school vs. regular format, or income spent, or
> uniforms vs. regular cloths.)

WS: Centralized at the national level policy would go be more progressive - the current system is designed to maximize the local control of schools, and that give all kinds of religious and right wing kooks an instrument to mess with school policy (cf. the Scopes trial).

Centralized nation-wide school curriculum would also eliminate the need for standardized testing - wh8ich is another highly regressive feature of the US educational system.


>
> (2) Pay-as-you-drive (this will eliminate the tax dollars going to
road
> repair, and will mean less money spent if you do not drive a lot)

WS: The current system can be described as "socialism of welfare state for cars" - government builds roads and gives them for free for anyone to drive. A kid cruising to kill time has the same right as a doctor rushing to a hospital. If th8is was any other commodity, the assorted conservative pundits would decry it as "communism" - but this is cars - the American sacred cow - so socialism for cars is perfectly consistent with American values.

More seriously, when I worked as a consultant for the Santa Clara County (aka Silicon Valley) Board of Supervisors I saw many proposals to use market mechanisms to solve the atrocious traffic congestion in the SF Bay Area. All of them were DOA - no politician would dare to mess the Amerikuns' god-given right to drive whenever and whatever he chooses. Governor Davis lost recall partly because he taxed automobiles - and Swartz promptly repeal that tax.

The only thing that will change the Amerikun love affair with cars is $5+/gallon gasoline. Luckily, things seem to be going in that direction - the sooner the price of crude exceeds $80 a barrel the better!!!!


> (4) Stop giving PBS tax dollars (recall the education facility)
>
> (5) Eliminate a state grant for the arts (again recall the education
> facility)

WS: WHY????? The problem with PBS public funding is that such funds are discretionary rather than statutory. That means that reactionaries in Congress can yank them if the PBS does not sing the tune they want to hear. Statutory transfers i.e. public payments mandated by law (as it is the case in many European countries) would free PBS and kindred institutions from political pressures that influence their programs.


>
> (6) People only have to pay tax dollars depending on their income
level
> [...] I'm still trying to figure this one out, but if you take the
state
> medium income, and break it into 7 levels - thus eliminating the
archaic
> class level - and have the highest (level 7) pay 10% and the lowest
> (level 1) pay 0%.

WS: That's quite regressive and reactionary. The current high bracket income tax is 28% if memory serves - much more progressive than you propose. The threshold for the $0 tax is, I believe somewhere around $5k a year. So the current tax system is more progressive than you suggest.

A truly progressive tax would be closer to 70-80% in high income brackets (say, over $1m a year). Abolishing the $80k ceiling for the flat social security tax would also travel a long way in eliminating the supposed "crisis" of social security.


> (9) Build either a private or state-run monorail system, over the
> interstate or state roads. This will reduce the need for automobiles
(at
> least to a small degree).

WS: Amen! Even a regular light rail will do. But that would require tight land use regulations to reduce sprawl and increase residential density.

Wojtek



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