Should We Raise the Federal Gas Tax?

Last week, John Deeth wrote that the Car Talk guys think we should raise the gas tax. Their thinking behind this...

"Gas is less than two bucks a gallon. There's never been a better time to do this. If we added a 50-cent national, gasoline tax right now, and gas cost $2.50 a gallon, would that be the end of the world? Hardly."

"This new tax would generate between 50 and 100 billion dollars every year for the treasury. That money could be used to help rebuild our crumbling roads and bridges, and develop new technologies for more fuel-efficient cars... further decreasing demand for oil. This is a way for us to get on the wagon, and stop sending money to countries that don't like us. We could become energy independent."

Tom Friedman comes to the same conclusion in his column yesterday...

Of course, it’s a blessing that people who have been hammered by the economy are getting a break at the pump. But for our long-term health, getting re-addicted to oil and gas guzzlers is one of the dumbest things we could do.

That is why I believe the second biggest decision Barack Obama has to make — the first is deciding the size of the stimulus — is whether to increase the federal gasoline tax or impose an economy-wide carbon tax. Best I can tell, the Obama team has no intention of doing either at this time. I understand why. Raising taxes in a recession is a no-no. But I’ve wracked my brain trying to think of ways to retool America around clean-power technologies without a price signal — i.e., a tax — and there are no effective ones. (Toughening energy-effiency regulations alone won’t do it.) Without a higher gas tax or carbon tax, Obama will lack the leverage to drive critical pieces of his foreign and domestic agendas.

Friedman explains this further...

The two most important rules about energy innovation are: 1) Price matters — when prices go up people change their habits. 2) You need a systemic approach. It makes no sense for Congress to pump $13.4 billion into bailing out Detroit — and demand that the auto companies use this cash to make more fuel-efficient cars — and then do nothing to shape consumer behavior with a gas tax so more Americans will want to buy those cars. As long as gas is cheap, people will go out and buy used S.U.V.’s and Hummers.

There has to be a system that permanently changes consumer demand, which would permanently change what Detroit makes, which would attract more investment in battery technology to make electric cars, which would hugely help the expansion of the wind and solar industries — where the biggest drawback is the lack of batteries to store electrons when the wind isn’t blowing or the sun isn’t shining. A higher gas tax would drive all these systemic benefits.

Obama said during the campaign that he would not just tell us what we want to hear, but what we need to hear. I think we might need to hear about the possibility to raise gas taxes.

75 million Reasons the Gas Tax is a Scam

Tom Harkin said Iowa would lose $75 million for roads and bridge maintenance under the gas tax holiday proposed by John McCain and Hillary Clinton.

Harkin, an Iowa Democrat, has objected to the idea because the proposal would eliminate at least $75 million per quarter - based on 2006 estimates - that the Iowa Department of Transportation gets to use on roads and bridges in the state. In effect, enacting a gas tax moratorium for the summer would amount to a loss of at least $75 million in revenues to rebuild the highways, roads and bridges in Iowa.

It isn't like our roads and bridges are fixing themselves. The state would be forced to find the money from another source, which would most likely be property taxes or increasing fees on vehicles.

The Gas Tax Holiday is scam that would likely increase state and local taxes, while giving your minimal relief at the pump.

Obama on the Horrible Gas Tax Holiday

John McCain introduced the idea of a gas tax holiday and Hillary Clinton jumped on the bandwagon. These two ignore the basic economic concept of supply and demand. Removing the tax on gas would increase demand, which would then increase the price.



Barack Obama isn't on board, calling the idea of a gas tax holiday a Washington gimmick...

That’s typical of how Washington works. There’s a problem, everybody’s upset about gas prices – let’s find some short-term, quick-fix, that we can say we did something even though, even though we’re not really doing anything. We cannot deliver on a better energy policy unless we change how business is done in Washington.

Iowa May Consider Raising the Gas Tax

The Des Moines Register writes that Iowa may consider raising the gas tax during this legislative session.

A coalition of Iowa highway lobby groups will seek at least a nickel-per-gallon increase in the state's gasoline and diesel taxes during the annual session of the Iowa Legislature that convenes on Monday.

The issue matters because the state's aging network of 113,786 miles of roads is wearing out from decades of use and extreme weather.

More money is needed to maintain the road system and make improvements to support economic development, fuel tax supporters contend. A 5-cent increase in fuel taxes would raise an additional $105 million annually for city, county and state road projects. Road construction projects nationwide are also expected to be a major part of President-elect Barack Obama's economic stimulus plans.

A motorist who purchases an average of 20 gallons of gasoline per week would pay an additional $52 per year if a 5-cent-per-gallon tax increase is approved. Highway engineers contend that if needed road and bridge repairs are ignored, taxpayers will face steeper repair bills in the long run as infrastructure conditions worsen.

House Speaker Pat Murphy is quoted in the article that raising the gas taxes would create 4,000 to 5,000 construction jobs and a bill will be considered in the House. Senate Majority Leader Mike Gronstal said for the bill to be brought up in the Senate that it would need broad bipartisan support.

Summary of 2009 Legislative Session

I plan on writing some about the 2009 Legislative Session, but haven't had time.

Here's a great summary of the session that I found at Covering Iowa Politics.

BUDGET/BONDING: Lawmakers approved a fiscal 2010 general fund budget of $5.78 billion but added $500 million of federal stimulus help for total spending of $6.258 billion beginning July 1. That compared with a revised $6.11 billion for the current year and Gov. Chet Culver’s fiscal 2010 recommendation of $6.46 billion. Majority Democrats also approved Culver’s multi-year infrastructure bonding plan of $715 million and $115 million mostly for University of Iowa flood recovery. The bonds are funded from several sources, most notably about $50 million in annual gambling profits for 20 years. The proceeds are expected to finance hundreds of infrastructure projects and create at least 22,000 jobs.

DISASTER RECOVERY: Lawmakers tackled disaster recovery from many angles, offering tax abatement for property owners who improve damaged properties, authorizing the sale of bonds to finance infrastructure improvements and policy changes to requires cities to participate in programs to lower homeowners’ cost for flood insurance. Included in the relief was $45 million in bonds targeted to Cedar Rapids, the $56 million Jumpstart program to help homeowners and businesses and funding for the Rebuild Iowa Office to coordinate recovery efforts.

TAX POLICY: Despite bipartisan effort to raise the state gas tax, the effort was abandoned after Gov. Culver, who had expressed reservations, finally said he would veto it. Near the end of the session, majority Democrats rolled out a plan to lower taxes for nearly 60 percent of income taxpayers while holding another 14 percent harmless. The plan encountered vigorous opposition because it ended federal deductibility, a provision that allows Iowans to deduct what they pay in federal taxes from their state tax liability. Lawmakers did decide to cap business tax credits at $185 million a year and require more accountability for refund incentives. They also raised court fees by $16.7 million.

CONSUMER PROTECTION: Lawmakers expanded health care coverage for children with a goal of having virtually all kids covered by the end of 2010. They also expanded the ability of consumers to seek damages by bringing a private cause of action against fraudulent businesses. Iowa currently is the only state without that provision. They also beefed up efforts to prevent dependent adult abuse and strengthen the state’s response when allegations of potential mistreatment arise – action triggered by the Atalissa bunkhouse situation.

LABOR: Lawmakers gave state labor officials and county attorney more tools to prosecute employers who fail to pay employees or violate child labor law. Maximum civil penalties of $10,000 can be levied per child labor violation and child labor criminal penalties were increase from simple misdemeanors to serious misdemeanors. Also, civil penalties were increased from $100 to $500 per pay period for failing to pay an employee’s wages. The time span for collecting jobless benefits was doubled for Iowans laid off due to the economic downturn.

PUBLIC SAFETY: Lawmakers overhauled the state’s sex offender laws, scaling back a law that bans some offenders from living within 2,000 feet of a school or daycare. The bill establishes exclusionary zones around schools and other public areas where sex offenders are prohibited from visiting. Lawmakers also voted to create a statewide electronic database to track sales of pseudoephedrine, an ingredient found in cold medicine that is used to make illegal methamphetamine.

EDUCATION: Majority Democrats protected the commitment to raise teacher pay to the national average by using a share of $386 million in federal stimulus money to fully fund a 4 percent allowable growth for K-12 schools and provide nearly $280 million for salary compensation. Money prospects were less rosy for other educational sectors that face spending cuts due to budget constraints. A couple of perennial issues lawmakers have argued over will be around for a fresh debate next year. The lawmakers again could not agree to increase the compulsory school attendance age from 16 to 17. Neither did they agree to change the start date for schools to prohibit schools from beginning classes before the fourth Monday in August.

AGRICULTURE: Efforts to ban so-called “puppy mills” appeared to have failed until funding for an additional state department of agriculture inspector was included in the catch-all $2.7 billion standings bill. Opponents said the bill would unfairly restrict reputable dog-breeding operations. Lawmakers also moved to restrict the application of liquid manure on snow-covered fields and frozen ground to keep it out of waterways. They also made changes to the grain indemnity fund to address volatility in the ethanol production market.

ENVIRONMENT: Gov. Chet Culver’s bonding plan passed by lawmakers includes $25 million for watershed, water quality and soil conservation projects, as well as flood rebuilding and prevention. Another $55 million would go to sewer infrastructure needs, in an effort to improve Iowa’s water quality. Lawmakers also approved incentives for small wind energy projects and for producers of wind energy components that locate and expand in Iowa.

ECONOMIC DEVELOPMENT: Lawmakers cut spending for the state’s top economic development program, the Iowa Values Fund, by $5 million next fiscal year to $45 million. The bonding plan would spend $12 million for the Community Attraction and Tourism program and other $10 million for river enhancement projects.

UNFINISHED BUSINESS: Procedural hurdles and top Democratic leaders kept lawmakers from considering a constitutional amendment defining marriage as only between one man and one woman. The issue is guaranteed to resurface in the 2010 election-year session given that an Iowa Supreme Court ruling legalizing gay marriage becomes effective next week. Several labor-backed changes that stalled this year are likely to resurface next year as well. Bicyclists likely will push a Senate-passed safety measure that stalled in the House. Likewise for a biodiesel mandate, expanded mental health insurance coverage and vehicle emission standards. Efforts to raise the state gas tax may rekindle next session but more likely in 2011.

Raising the Gas Tax, What's it good for?

There is talk around Des Moines that the state of Iowa needs to raise taxes on gas because of a decline in revenue. Currently Iowa is 30th in the nation in gasoline taxes.

A 5-cent increase in Iowa's gasoline tax would generate an additional $110 million annually.

Iowa motorists now pay state taxes of 21 cents per gallon on regular gasoline; 19 cents per gallon on ethanol-blended gasoline; 17 cents per gallon for E-85 fuel; and 22.5 cents per gallon on diesel fuel.

What would this extra money be used for? Well, of course it would be used to build more roads or expand existing ones.

Between 1999 and 2005, the number of miles of substandard pavement on the state's primary road system increased by 44 percent, to 2,836 miles, DOT officials said. This represents an increase in pavement rehabilitation needs of $366 million above existing needs.

In addition, many parts of Iowa's interstate highway system are strained to capacity, leading to congestion, which affects air quality and dampens economic activity, DOT officials said. This is not surprising because much of Iowa's interstate system was built 50 years ago to accommodate 20 years of traffic growth, officials said.

So they are saying traffic leads to congestion, which leads to poor air quality, and building more roads will solve that. I don't think so.

I would be for an increase in taxes on gasoline if that extra money went to public transportation. Increase the bus services in cities around Iowa or be brave and build a light rail from Des Moines to Ames or Cedar Rapids to Iowa City.

As for the chances of rasing the gas tax, since it wasn't a plan introduced by Democrats or Republicans, I feel that it may pass because both sides have political cover.

**Update**
The Waterloo/Cedar Falls Courier has a story saying that Amtrak ridership is at record levels in Iowa.

A total of 61,377 people got on and off Amtrak trains at six Iowa stations during the federal fiscal year that ended Sept. 30, the railroad said.

That’s just shy of the railroad’s all-time high of 61,418 passengers in Iowa a year earlier.

“Our experience anecdotally has been that when gasoline prices make a major move, people search for alternatives for their travel plans. For a lot of people, we are a great alternative,” said Amtrak spokesman Marc Magliari in Chicago.

A Funnel Thing Happened...

The legislative process in Iowa continues to be a daunting proposition to understand as bills are killed before they can be voted on by the full body. Below is a summary of those items that are DOA (and that doesn't mean "Department of Aging") and those that are Stayin' Alive.

According to the Des Moines Register:

ALIVE

These bills survived today's funnel deadline and will see more debate.

Jobs and economy:

WORKERS' CHOICE OF DOCTOR: Iowans injured on the job could choose their own doctor in workers' compensation cases. Senate File 155.

PREVAILING WAGE: Workers on certain government construction projects would see government-set standards for wages and benefits. House File 333.

BARGAINING: Unions representing public employees could negotiate more items. This bill could restore much of what Culver vetoed last year; Culver said he believes a compromise may be reached. House Study Bill 269.
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MENTAL HEALTH INSURANCE: Smaller businesses that provide health insurance for their workers would have to provide coverage for mental health conditions, including alcohol and drug abuse treatment. Senate File 16.

MASS LAYOFFS: Iowa companies that lay off 25 or more would have to give workers 30 days' notice. House File 681.

WEB BUSINESS: There would be a lower investment threshold for Microsoft and other Web portal businesses that expand or locate in Iowa to get tax breaks. Senate File 302.

PUPPY MILLS: The state could inspect federally licensed dog breeders in Iowa to better deal with abuse and neglect. House File 486.

PUBLIC EMPLOYEES: A technical bill on the Public Employment Relations Board. This is the bill that was amended last year to contain open-scope bargaining legislation. House Study Bill 269.

UNEMPLOYMENT: Benefits to the unemployed would be expanded for six months if they enter a training program. House File 623.

IOWA VALUES: Various business financial assistance programs would be changed. House File 656.

MORTGAGES: To help keep people in their homes, this bill would deal with those facing bank foreclosure. House Study Bill 170.

Environment, recreation, transportation:

CAR EMISSIONS: Most Iowa passenger vehicles would have emissions standards beginning with the 2011 model year to limit greenhouse gases. House File 422.

UNINSURED MOTORISTS: Coverage in case of accidents involving uninsured or underinsured motorists would be increased. Senate File 321.

BIODIESEL: Owners of diesel vehicles filling up in Iowa would be required to use biodiesel. Senate File 294.

NO BURNING: All cities would have to enact burn bans. House File 627.

HUNTING FEES: Out-of-state visitors would be charged more to hunt and fish in Iowa. Senate File 375.

BICYCLE RIGHTS: Bicyclists would have new protections, such as full use of a lane. Senate File 117.

DRUNKEN BOATING: Operators of motorboats, sailboats and personal watercraft would be considered intoxicated when their blood-alcohol level is .08, not .10. Senate File 3.

CONSUMER FRAUD: Iowa's 3,000-plus annual fraud victims could take individual court action. Senate Study Bill 178.

WAGE DISCRIMINATION: Penalties would be stiffer for businesses that violate the state's wage discrimination law. Senate File 137.

COLD MEDICINE TRACKING: Anyone who buys cold medicine that contains pseudoephedrine would have to sign an electronic logbook at the pharmacy so that Iowa law enforcement officials could track multiple purchases. Senate File 104.

GUNS: Sheriffs would have to say in writing why they denied a gun permit. House File 193.

AGRIPROCESSORS: Business owners would face steeper penalties for child labor law violations. House File 618.

INDECENT: People caught publicly masturbating could be charged even if the victim doesn't see genitals. House File 657.

PRIVATE INFORMATION: Private information would be redacted from recorders' records. House File 506.

PORNOGRAPHY: Adults who intentionally expose children to obscene images that could cause them harm would be guilty of child abuse. Senate File 271.

Government issues:

HUMAN RIGHTS: The state Department of Human Rights would undergo a major reorganization, including splitting it into two divisions: ethnic minorities and women, and disabilities. Senate Study Bill 1304.

CIVIL RIGHTS SUBPOENAS: The civil rights commission would have extra subpoena power to investigate unfair or discriminatory practices. Senate File 96.

FLOOD INSURANCE: Cities and counties with areas located in federally designated flood areas would be required to participate in national flood insurance. House Study Bill 181.

OPEN RECORDS: Loopholes in Iowa's open records law would be closed. Senate File 282. House Study Bill 234.

SEARCHABLE BUDGET: Would create a searchable database on the state budget. House File 74.

TAX: Cities that collect more sales tax than expected would have to tell voters how they spend it. House File 111.

Education, children and families:

COLLEGE COSTS: A judge would be allowed to order parents to pay for college costs even if the parents were never married. Senate File 113.

SCHOOL MERGERS: A task force would study merging school districts. House File 265.

ATHLETES AND OPEN ENROLLMENT: High school students who open enroll would be ineligible to participate in varsity sports for six months. House File 495.

SCHOOL DROPOUT AGE: Teens could no longer drop out of high school at 16. House File 259.

Health:

PROSTHETICS: Insurance companies could not deny medically necessary prosthetic devices. House File 311.

HEALTH INSURANCE: Employees of nonprofits and small businesses could purchase the same health care coverage as state workers. Coverage for children and other issues are part of this bill. Senate File 48.

Elder Iowans:

NEW NAME FOR ELDER AFFAIRS: The Iowa Department of Elder Affairs would be renamed the Iowa Department on Aging. Senate File 204.

NURSING HOME TAX: A nursing facility provider tax will be created so that the state can put it in a fund that can be used to draw down federal money. Senate Study Bill 1179.

ABUSE AND INJURIES: Dependent adults would have more protections from abuse that doesn't result in physical injury. Senate Study Bill 1206.

Veterans

PREFERENCE FOR VETERANS: Veterans would get preferential hiring for government jobs. House File 522.

INCENTIVES: Veterans who served at least 12 months of active duty would get cash incentives up to $5,000 for working in jobs with a shortage of skilled workers. Senate File 250.

Elections:

ELECTIONS: Polls for city elections could open at noon. House File 450.

CAMPAIGN SALARIES: Candidates could not use campaign cash to pay themselves, spouses or children. Senate File 50.

PRESIDENTIAL ELECTIONS: The popular vote, rather than the Electoral College, would decide presidential elections. No matter how the vote turns out in Iowa, the state's electoral votes would go to the candidate winning the national popular vote. Senate File 227.

Alcohol-related

BEER AT WINERIES: Iowa wineries that host weddings and other functions could sell beer if they buy it from a wholesaler. Senate File 188.


DEAD

These bills failed to get enough votes to pass today's deadline, but no bill is ever truly dead until the session ends. Budget and tax bills are exempt from the funnel.

Jobs and economy:

FAIR SHARE: Unions could negotiate for the right to charge fees to nonunion workers covered by collective bargaining. This technically failed to meet this year's deadline, but Democratic leaders have an interest in resurrecting it House File 555.

PAYDAY LOANS: The interest rate would be capped at 36 percent for payday loans, which are based simply on a borrower's paycheck without proof of ability to pay. Advocates are pushing for it to re-emerge in a tax bill. House File 288.

MINIMUM WAGE: Iowa's hourly minimum wage would increase the same percentage every year as the increase in federal Social Security. House File 11.

Environment, recreation, transportation:

DISTRACTED DRIVERS: Drivers in Iowa would face a new penalty if they get into an accident while texting, watching TV or playing with a pet. Senate Study Bill 1217.

HANDS-FREE CELL PHONES: Drivers couldn't talk on a cell phone without a hands-free device. House File 9.

GAS TAX: State tax on gas and diesel fuel would go up, and the money would go to road and bridge repairs. Senate Study Bill 1182.

Justice:

PAROLE FOR YOUNG CRIMINALS: Iowans serving a life sentence for a crime committed while a minor could file for a sentence review after 15 years. House File 43.

Government issues:

ENGLISH LANGUAGE: An Iowa law that declares English as the state's official language would be repealed. House File 14.

HOG LOTS: Cities could regulate the siting of certain confinement feeding operation structures in unincorporated areas within two miles of city limits. Senate Study Bill 1161.

Education, children and families:

SCHOOL YEAR: The 180-day school calendar would be replaced with 990 hours of instructional school time at 5.5 hours per day for grades 1-6 and 1,080 hours of instructional time for grades 7-12. House File 26.

STUDENT ACHIEVEMENT: Students who fall behind their grade proficiency in reading or math wouldn't be able to graduate to the next level. House File 129.

GAY MARRIAGE: The marriage law would be gender neutral. The words husband and wife would be replaced with "spouse." Senate File 353.

LEAVING KIDS IN THE CAR: Leaving a child unattended in a car would be a simple misdemeanor with a $100 fine. House File 110.

SCHOOL FIELD TRIPS: Schools would be allowed to charge fees for field trips, but must waive them for low-income families. Senate File 274.

Health:

MEDICAL MARIJUANA: Restricted marijuana use would be legal in Iowa for pain and nausea relief. Senate File 293.

AUTISM: Treatment of autism spectrum disorders must be covered by health insurance for anyone under 21. Senate File 1.

Elder Iowans:

SILVER ALERT: A "silver alert" program would be created to help locate missing people with cognitive impairments, such as elderly people suffering from Alzheimer's disease. House File 369.

REPORTING HEALTH FACILITY PROBLEMS: When health care facilities commit a violation that puts someone in harm of danger or death, the Department of Inspections and Appeals would have to report those to the Legislature and governor. House File 512.

Veterans

VETERANS' PAYMENTS: Veterans' service-connected disability compensation could not be used to calculate child support or as assets in a divorce case. House File 170.

VETERANS ORGANIZATIONS: Veterans organizations wouldn't have to pay anything for a class A liquor license, regardless of how much liquor they sell. House File 66.

Elections:

CAMPAIGNING: Special interest groups couldn't distribute campaign material advocating for a certain candidate without that candidate's consent. House File 229.

Alcohol-related:

DISTILLERY SALES: Iowa distilleries could sell their products to visitors. Senate File 210.

Immigration:

STATUS DATABASE: A database would provide information to employers or state agencies on the immigration status or citizenship of a person. House File 109.

Smoking:

CASINO SMOKING: Smokers could no longer light up on the gambling floors of state-regulated casinos. House File 6.

OUTDOOR BAR SMOKING: Smoking would be allowed in outdoor areas of bars and restaurants. House File 174.

Missing in action on this list is the Senate Agriculture Committee caving in to the big-money interests of livestock commodity groups like the Iowa Pork Producers when they passed a bill (SF 308) that would undercut the Department of Natural Resources' (DNR) rulemaking process to restrict manure application on frozen ground.

Groups including Iowa Citizens for Community Improvement, Iowa Environmental Council, Des Moines Water Works, Iowa Farmer's Union, Sierra Club, and the Department of Natural Resources strongly opposed Senator Kibbie's bill and called on him to put our health and water quality above the interest of the factory farm industry by allowing the DNR to finish their rulemaking process.

On Senate File 308 and companion bill House File 574, CCI Executive Director Hugh Espey said, "These so-called attempts to regulate manure application on frozen ground are so weak and full of loopholes that they will lead to more water pollution caused by factory farms. For all intents and purposes, this bill stops DNR from taking strong action to protect our waterways. It's an excellent example of our elected officials kow-towing to corporate interests at the expense of the common good. Today's vote by the Senate Agriculture Committee is a slap in the face to everyone fighting for clean water."

Of course, bills can be resurrected and nothing is final until My 10th when the legislature closes it session.

Fair Tax? Only for the most wealthy

Yesterday, Krusty Konservative posted about the Fair Tax system that strips all taxes on income, institutes a national sales tax, and ends all taxes on corporations.

The FairTax proposal is a comprehensive plan to replace federal income and payroll taxes, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes. The FairTax proposal integrates such features as a progressive national retail sales tax, dollar-for-dollar revenue replacement, and a rebate to ensure that no American pays such federal taxes up to the poverty level. Included in the FairTax plan is the repeal of the 16th Amendment to the Constitution. The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services, and fully funds the federal government while fulfilling the promise of Social Security and Medicare.

There is nothing Fair at all about this tax. Let's say a husband and wife are a teacher and a nurse and make $60,000 a year combined. Then look at a CEO who makes $600,000 a year and his wife does not work. Just because the CEO makes 10 times as much money, does that mean his family buys 10 times as many clothes, eats 10 times as much food, goes to the doctor 10 times as many times, buys 10 times as many prescription drugs, buys 10 times as much gas for their cars, and goes on 10 times as many vacations? The answer is no. Does the CEO work 10 times as hard as the teacher and the nurse? Again the answer is no. There is nothing fair at all about this tax.

The response from one of Krusty's readers to my commments...

The CEO probably gets a tailored suit, not one from JC Penney. The CEO probably drives a BMW, not a '98 Taurus. The CEO probably eats at Splash, not at Applebee's. The CEO probably goes to Tahiti for vacation, not to Adventureland. There's nothing wrong with being poor, you're just really dumb if you are.

I agree that the CEO probably buys nicer things, but is it fair that they do? Do they really need 8 cars in their driveway, a closet full of designer shoes that is bigger than my house when so many Americans are without health insurance and children are growing up in poverty?

Any tax based on consumption is regressive. There should be a tax system that provides the help to end poverty, provide the basic needs a person has, and to invest in our future. The government should not be giving hand outs, rather hand ups. A Fair Tax does not do that, it just allows a concentration of wealth in the hands of a few.

Tax Breaks Bleed State Revenue Dry

The Des Moines Register writes today about how tax breaks are bleeding Iowa's state revenue dry.

Hundreds of millions of dollars are spent each year on tax incentives and grants for Iowa’s businesses or residents, some of which are depriving the state of revenue, tax reform advocates say.

And legislative leaders - who acknowledge they are facing the greatest financial squeeze since the 1980s farm crisis - say it's time to evaluate and possibly chop some of the incentives when the 2009 session of the Iowa Legislature convenes at 10 a.m. Monday.

Up for grabs are more than 200 sales, income or property tax exemptions as well as dozens of tax credit programs that range from tax breaks for the purchase of argon gas to programs that refund millions of dollars every year to companies doing research in Iowa.

The exemptions - many decades old - were put into place for Iowa to remain or become competitive for high-paying jobs and skilled workers.

But many of the incentives have been on autopilot, dragging on for years without an examination of what benefits they provide to Iowans.

One of the programs discussed is the Iowa Values Fund. The Values Fund has spent $50 million for the past 10 years to offer financial assistance to companies that create jobs in the state. The Values Fund has been very controversial with opponents on both side of the aisle.

The question shouldn't be about raising taxes or cutting taxes. The question is about outdated tax breaks that are handed out to people that don't need them.

Excuse me Governor Palin, You Failed to Mention those Pesky Little Facts

Sarah Palin's speech at the Republican Convention outlined her record and was full attacks on Obama. However, she seems to have failed to mention those pesky little facts in her speech.

Palin said...

To the families of special-needs children all across this country, I have a message: For years, you sought to make America a more welcoming place for your sons and daughters. I pledge to you that if we are elected, you will have a friend and advocate in the White House.

and the facts say...

As Governor she slashed special needs education by 62%. As Joe Biden says, "don't tell me what you value, show me your budget and I'll tell you what you value."

Palin said...

I told the Congress "thanks, but no thanks," for that Bridge to Nowhere.

If our state wanted a bridge, we'd build it ourselves. When oil and gas prices went up dramatically, and filled up the state treasury, I sent a large share of that revenue back where it belonged - directly to the people of Alaska.

and the facts say...

She was in favor of the Bridge to Nowhere while campaigning for governor then was against it when it became a national laughingstock. Then, as Governor, she took the money for the bridge and spent it on something else.

Palin said...

I have protected the taxpayers by vetoing wasteful spending … and championed reform to end the abuses of earmark spending by Congress.

and the facts say...

As mayor of Wasilla, Palin hired a lobbyist and traveled to Washington annually to support earmarks for the town totaling $27 million. In her two years as governor, Alaska has requested nearly $750 million in special federal spending, by far the largest per-capita request in the nation.

Palin said...

Terrorist states are seeking nuclear weapons without delay ... he wants to meet them without preconditions.

and the facts say...

Obama worked with Republican Dick Lugar to pass legislation to track down loose nukes and keep them out of the hands of terrorists.

Palin said...

Al Qaeda terrorists still plot to inflict catastrophic harm on America ... he's worried that someone won't read them their rights?

and the facts say...

Obama believes in this piece of paper called the Constitution. You know that thing that gives us our freedoms. Those freedoms the terrorists are jealous of and want to attack us over.


Palin said...

Taxes are too high ... he wants to raise them. His tax increases are the fine print in his economic plan, and let me be specific.

The Democratic nominee for president supports plans to raise income taxes ... raise payroll taxes ... raise investment income taxes ... raise the death tax ... raise business taxes ... and increase the tax burden on the American people by hundreds of billions of dollars. My sister Heather and her husband have just built a service station that's now opened for business - like millions of others who run small businesses.

and the facts say...

The independent Tax Policy Center did a study that shows those earning less than $111,000 earn more tax cuts under Obama's tax plan and the majority of McCain's tax cuts go to those that earn more than $600,000.

Palin's speech sounded good, but it would help if she checked her facts next times.

Bush is Crippling Unborn Children with Debt and Giving the Rich Tax Cuts

Yesterday the Senate voted to pass Bush's tax cuts for the most wealthy Americans. The bill passed 54-44, so at least it was good to see most all of the Democrats sticking together on this one. Sen. Boxer discussed how these tax cuts affect Americans...

Sen. Barbara Boxer (D-Calif.) noted that someone earning more than $1 million a year would get a tax break worth $41,977.

"Well, you might say, `What does someone who earns $41,000 get back?' $46. Not even enough to fill up your gas tank in some cases," she said.

The tax cuts worth $70 nillion over the next 2 years just adds to the gigantic deficit that Bush (and Jim Nussle) has piled up. No other President in US history has cut taxes in a time of war and now Bush has done it at least 3 times. While our children are over fighting the war, these tax cuts just mean that they are the same ones that will be paying for it.

Better Buy Your Hummer Now

Time is running out on getting a $25,000 tax break when you buy a Hummer.

From ABC News...

Now some members of Congress are pushing to close the so-called Hummer Tax Loophole. Led by Rep. Earl Blumenauer, D-Ore., the Ways and Means Committee passed an energy bill last week that is expected on the House floor next month.

"We're allowing people to buy a huge expensive gas guzzler and get a benefit that was never intended for them," Blumenauer told ABCNEWS.com.

He explains that the provision in the tax code was originally intended to allow farmers and small-business owners to recover the cost of buying trucks and heavy-duty working vehicles. "But that was before the explosion of huge SUVs like Cadillac Escalades and now we're providing a tax break for a luxury car."

This reminded me of this quote by Sen. Dick Durbin from last year...

I personally think if you want to drive a Hummer, you ought to join the Army.

Then you might actually deserve getting a tax break.

Tax Cuts for the top 3.5% of Americans!

On Friday, The Woodbury Democrat posted about how much you will actually get from the tax cuts the Republicans pushed through congress.

Under the just passed Republican tax deal ...

If you make less than $10,000/year, you will save $0 in taxes annually.
If you make $10,000-20,000/year, you will save $3 in taxes annually.
If you make $20,000-30,000/year, you will save $10 in taxes annually.
If you make $30,000-$40,000/year, you will save $17 in taxes annually.
If you make $40,000-50,000/year, you will save $47 in taxes annually.
If you make $50,000-75,000/year, you will save $112 in taxes annually.
If you make $75,000-100,000/year, you will save $406 in taxes annually.
If you make $100,000-200,000/year, you will save $1,395 in taxes annually.
If you make $200,000-500,000/year, you will save $4,527 in taxes annually.
If you make $500,000-1 million/year, you will save $5,656 in taxes annually.
If you make more than $1million/year, you will save $42,766 in taxes annually.

Less than 3.5 percent of U.S. taxpayers fall into the category of making $200,000 a year or more.

So, this is a targeted tax cut -- at a $70 billion cost to the Treasury -- for less than THREE AND A HALF PERCENT of the population.

The small tax cuts the common American will be getting won't be enough to offset the rise in health care, gas prices, college tuition, etc. The Republicans make their base happy while making it harder for the common American to get by.

Running on Empty

Yesterday, BP announced it was shutting down an oil pipeline in Alaska. The Register has an article that outlines the situation and discusses the affect it will have on farmers.

BP, the largest oil producer in the nation, announced Monday that it was closing its pipelines in Alaska's Prudhoe Bay oil field for weeks, possibly months, because of pipeline corrosion. It is the largest oil field in the United States, accounting for 2.6 percent of all U.S. oil supplies, including imports.

The price of oil went up $2 a barrel to near $77 and it is expected to go even higher. On NPR yesterday, I heard the host ask one of the experts if we could hit $100 per barrel. Here in central Iowa, we are close to hitting $3.00 a gallon.

All of this brings up the topic of Peak Oil. The Chicago Tribune published a series called "A Tank of Gas, A World of Trouble" that gives an in depth look at where your gas comes from. The article had this to say about Peak Oil...

Below ground, the biggest worry is "peak oil"--the notion that the world's total petroleum endowment is approaching the half-empty mark, a geological tipping point beyond which no amount of extra pumping will revive fading oil fields. Peak oil theory is controversial. Many think it alarmist. Yet even Big Oil is starting to gird itself for possible fuel shortages: Chevron, the nation's second-largest oil company, has bluntly declared that "the era of easy oil is over" and is warning energy-hungry Americans that "the world consumes two barrels of oil for every barrel discovered."

The Energy Department announced that it is ready to open up the strategic oil reserves to help keep oil prices down. This is short term solution, but the fact is that oil is a non-renewable resource. We need to get to the point where we invest in long-term solutions. We have spent over $300 billion in Iraq. I wonder how many wind turbines, solar panels, tax breaks for hybrid cars, and research in biofuels we could have if we invested that much money on gaining our energy independence.

It is about time Congress offers some long-term solutions. The Cheney Energy Bill passed last summer that was filled with over $8 billion in tax breaks for the energy industry isn't the answer. Congress should make a PR blitz stressing conservation and then get back to Washington and pass legislation increases CAFE standards to improve the fuel economy of cars sold in the United States. Then we need to begin a program such as the Apollo Alliance to get us on the fast track of oil independence.

However, all of this requires one thing and that is leadership. Unfortanately, that is lacking in Washington.Check out Ames Wire's suggestions on how to beat gas prices.

Read the Energy Bulletin for updates and other energy related news.

Long Term Solution to the Energy Crisis

Barack Obama sees the big picture when it comes to high gas prices. That is why he rejected the gas tax holiday scam.

He talked about his long term solution to the energy crisis while campaigning in Oregon before their primary...

If we are going to solve our energy problems we’ve got to think long term. It’s time for us to be serious about investing in alternative energy. It’s time for us to get serious about raising fuel efficiency standards on cars. It’s time that the entire country learn from what’s happening right here in Portland with mass transit and bicycle lanes and funding alternative means of transportation.

That’s the kind of solution that we need for America. That’s the kind of truth-telling that we are going to do in this campaign and when I am President of the United States of America.

Tuesday's Highlights from the Democratic National Convention

The media was all over last night's convention speeches for not attacking Bush and McCain enough. Tonight, that's is not the case...

Janet Napolitano, Governor of Arizona (YouTube video)...

Barry Goldwater ran for president, and he lost. Mo Udall ran for president, and he lost. Bruce Babbit ran for president, and he lost. For this next election, that's one Arizona political tradition I'd like to see continue.

Kathleen Sebelius, Governor of Kansas...

John McCain's version: There's no place like home...or a home...or a home...or a home...or a home...

Sen. Bob Casey, Pennsylvania (YouTube video)...

John McCain calls himself a maverick, but he votes with George Bush more than 90% of the time...that's not a maverick, that's a sidekick.

and...

The Bush-McCain Republicans inherited the strongest economy in history and drove it into a ditch. They cut taxes on the wealthiest of us and passed on the pain to the least of us. They ran up the debt, gave huge subsidies to big oil companies, and now they’re asking for four more years.

How about four more months?

Mark Warner, former Governor of Virginia and Senate candidate...

People always ask me, "What's your biggest criticism of President Bush?" I'm sure you all have your own. Here's mine: It's not just the policy differences. It's the fact that this president never tapped into our greatest resources - the character and resolve of the American people. He never asked us to step up.

Think about it: After September 11, if there was a call from the President to get us off foreign oil, to stop funding the very terrorists who had just attacked us, every American would have said, "How can I do my part?" This administration failed to believe in what we can achieve as a nation, when all of us work together.

and Warner does a great summing up what this election is about...

This election isn't about liberal versus conservative. It's not about left versus right. It's about the future versus the past.

Ted Strickland, Governor of Ohio, made a great baseball analogy...

You know, it was once said of the first George Bush that he was born on third base and thought he'd hit a triple. Well, with the 22 million new jobs and the budget surplus Bill Clinton left behind, George W. Bush came into office on third base--and then he stole second. And John McCain cheered him every step of the way.

Brian Schweitzer, Governor of Montana, is really hitting McCain hard on being in the pocket of Big Oil and against renewable energy (and having a great time while is at it)...

After eight years of a White House waiting hand and foot on big oil, John McCain offers more of the same. At a time of skyrocketing fuel prices, when American families are struggling to keep their gas tanks full, John McCain voted 25 times against renewable and alternative energy. Against clean biofuels. Against solar power. Against wind energy.

This not only hurts America's energy independence, it could cost American families more than a hundred thousand jobs. At a time when America should be working harder than ever to develop new, clean sources, John McCain wants more of the same and has taken more than a million dollars in campaign donations from the oil and gas industry. Now he wants to give the oil companies another 4 billion dollars in tax breaks. Four billion in tax breaks for big oil?

That's a lot of change, but it's not the change we need.

In Montana, we're investing in wind farms and we're drilling in the Bakken formation, one of the most promising oil fields in America. We're pursuing coal gasification with carbon sequestration and we're promoting greater energy efficiency in homes and offices.

Even leaders in the oil industry know that Senator McCain has it wrong. We simply can't drill our way to energy independence, even if you drilled in all of John McCain's backyards, including the ones he can't even remember.

Hillary Clinton caps off a fantastic night with a fantastic speech that stressed the need to elect Barack Obama. She nailed McCain with this line...

It makes a lot of sense that next week John McCain and George Bush will be together in the Twin Cities, because these days they're awfully hard to tell apart.

Cartoon Nails Clinton on the Gas Tax Holiday

From the Charlotte Observer...

Register Poll Shows Culver Might be Vulnerable

A new Des Moines Register poll conducted by Selzer and Co. shows that Chet Culver might be vulnerable against a strong Republican opponent in his reelection campaign.

Iowa Gov. Chet Culver's approval slipped to 55 percent, down from 60 percent in the Register's September and January polls. [...]

The poll also revealed some reservations by Iowans about Culver, as the Democrat looks toward mounting a 2010 campaign for a second term.

Just 35 percent said they would definitely vote to re-elect Culver, while 28 percent said they would consider an alternative and 18 percent said they would definitely vote for someone else.

On the bright side Culver's approval is above the 50% mark. However, it has dropped 5% in the past few months and only 35% would definitely vote for him for reelection in 2010.

The question, however, is if Republicans have a strong opponent out there. Would Steve King or Tom Latham give up their seats in the US House? Does Bill Northey have what it takes to win in Eastern Iowa? Will anyone take Bob Vander Plaats serious? Do people actually know who Dave Vaudt and Rod Roberts are? I would have liked to see some head-to-head numbers of these people against Culver.

The next month is important for Culver, as the legislative session ends. Culver has bumped heads with leaders in his own party over key labor issues and an increase in the gas tax among others. Now there is a potential of disagreement over the Supreme Court's decision on gay marriage.

Of the 35% that say they would definitely support Culver for reelection, I would assume most all are Democrats and very few are Republicans. Culver needs to shore up his Democratic support. The Republicans will do what they can to ostracize independent voters as the party continues to move to the far right.

Light Rail Could Be Coming to Cedar Rapids and Iowa City

A recent study says that a light rail between Cedar Rapids, Iowa City, and the Amanas could be successful. From Radio Iowa...

The study looked at light rail service between the Amanas, Cedar Rapids -- including the airport -- and Iowa City. Josh Shamberger, head of the Iowa City Coralville Convention and Visitors Bureau, says the next step is to ask each town along the route about its needs. According to Shamberger, people in Johnson County have a "strong interest" in some kind of rail-service option between North Liberty and Iowa City, and he adds that Cedar Falls planners might have to consider it, too.

The study uncovered one big concern for Cedar Rapids, however -- the planned expansion of a local Archer Daniel Midland plant which is expected to increase freight railroad traffic by 70 percent.

Light-rail passenger routes could be competitive, according to the report, which says they'd be limited to going about 30 miles an hour. To upgrade trains and track for high-speed transit would cost about $70 million, though Shamberger says to put that into perspective, it would cost about $400 million to add one more lane to Interstate-380 in the same area.

I wrote about this last month in a post about raising the gas tax. Here is what I said...

I would be for an increase in taxes on gasoline if that extra money went to public transportation. Increase the bus services in cities around Iowa or be brave and build a light rail from Des Moines to Ames or Cedar Rapids to Iowa City.

Bills that Survived Funnel Week

The Des Moines Register has a list of bills that survived funnel week. Here they are...

Here are some of the bills that skated through this week just before today's so-called funnel deadline:

DROPOUT AGE: Students would have to attend school until at least age 17 under House File 2144.

COLD MEDICINE TRACKING: A statewide instant verification system would track the sales of certain cold medicines in order to avoid a new spike in methamphetamine abuse under House File 852.

NICKEL DEPOSIT ON BOTTLES: Consumers would pay a nickel deposit for water, juice, tea and sport drinks under House Study Bill 734. The deposit is already charged in Iowa on soft drinks and beer cans.

IMMIGRATION:All workers in Iowa would have to obtain a state-issued identification card to be employed under House Study Bill 717. The idea is to help curb illegal immigration.

ETHANOL PUMPS: A state grant program would help pay for pumps that blend ethanol so consumers can choose how much ethanol they want, between E10 and E85. Senate Study Bill 3198 would also boost incentives to retailers for increased biodiesel sales.

STUDENTS IN SPORTS: House File 2131 would shift control of sports eligibility rules to the State Board of Education. If the board gains power, it is expected to make high school students who open enroll into new districts wait a full year instead of 90 days before playing varsity sports.

PENSIONS: The state won't put as much money into pensions as public employees are asking for, and judges would have to contribute more of their salary to the pension fund under Senate Study Bill 3244.

PROMOTING ATTRACTIONS: A total of $1 million would be used to market projects receiving money from the community attraction and tourism grant under House File 871.

HEALTH INSURANCE: Senate Study Bill 3140 would require that nearly all families have health insurance for their children by 2011. The House version, House Study Bill 757, would expand coverage to needy families but not require insurance for all children.

HEALTH WORKERS: People who go into health care professions that are underserved in Iowa, such as psychiatry and nursing, could get forgivable college loans under Senate Study Bill 3186.

GIFT CARDS: To make sure consumers can redeem the full value of the gift certificates they purchase, Senate File 2091 would prohibit sellers from issuing gift cards with expiration dates and ban them from charging fees.

ROAD REPAIRS: Registration fees for vehicles may go up to raise money for road construction and repair projects. House Study Bill 628 and Senate Study Bill 3267 raise various vehicle-related fees.

RENEWABLE ENERGY: Sets a goal for Iowa utilities to have 25 percent of the electricity they produce come from renewable sources by 2025. House Study Bill 742 also sets an efficiency standard for a 1.5 percent annual reduction in energy use to all gas and electric utilities in the state.

FOREIGN-MADE FLAGS: It would be illegal to sell foreign-made U.S. or Iowa flags under House File 2191.

COMMISSION FOR BOOMERS: People nearing retirement age would be the focus of a Baby Boomer Generation Commission aimed as an economic and work force development tool for the state under House File 2038.

COLLEGE MONEY FOR VETERANS: Veterans would be able to get a $750 one-time grant to help pay for undergraduate college studies. The grant in Senate File 2253 would be only for those who have exhausted their federal education benefits.

MILITARY TAX BREAK: Many veterans would be able to avoid paying income tax on up to $20,000 of retirement pay received for their military service under House File 133.

COURSES FOR HIGH SCHOOL STUDENTS: High school seniors would have a new program to help them take college or advanced placement courses under House Study Bill 649.

SALARIES FOR NONPROFITS: Nonprofit groups would have to report compensation of some executives in various reports submitted to the Iowa secretary of state under House Study Bill 765.

INSURANCE ADVOCATE: An insurance consumer advocate office would be created in the state's insurance division by House Study Bill 737. Lawmakers may change the location to the attorney general's office.

CORPORATE TAXES: Although some Democratic leaders had called the combined-reporting idea dead, there's now renewed interest in the proposal, which would tax out-of-state corporations on their Iowa operations.

PROTECTING MONEY FOR PARKS: A proposed constitutional amendment would state that money intended for natural resources projects could not be spent on other projects. Senate Study Bill 3250 would create a new natural resources and outdoor recreation trust fund for enhancing parks, trails, fish and wildlife habitat and conserving agricultural soil in the state.