Category Archives: Public Policy and Governance

A Task for Indy’s Next Mayor

So, yesterday, Joe Hogsett opened his campaign office, joining fellow Democrats Ed Delaney and Frank Short who previously announced they’d be opposing Greg Ballard. Early as it is, it would seem that the mayoral race is officially on.

Whoever wins that election will have his job cut out for him. (And yes, “him” is the proper pronoun. So far, Indy hasn’t exactly embraced female candidates for mayor, and this time around we don’t have any.) To suggest that our city faces multiple challenges would be a real understatement–from transit (rather, the lack thereof), to crime, to poorly maintained parks, to battles over the Mayor’s role in decisions about how to fix our schools, to debates over municipal funds for fancy sporting venues, the list is long–and resources to deal with the problems are getting ever more scarce.

You can add to the list of obvious issues a less recognized one: our unenviable status as the U.S. city with the fastest-growing inequality. According to the Institute for Working Families’ Derek Thomas,

This week, the Indy Star reported on the U.S. Conference of Mayors’ ‘Income and Wage Gaps Across the U.S.’ report. The story presented the group’s finding that “wage inequality grew twice as rapidly in the Indianapolis metro area as in the rest of the nation since the recession.”

The consequences of that inequality can be seen everywhere: in taxes we don’t collect, in hopelessness that leads to all manner of social dysfunction, in crime, in economic development that isn’t sustainable….

The candidates contending for our votes need to demonstrate that they understand the ways in which these problems are interrelated–and they need to tell us how they plan to address them.

The Nitty-Gritty Matters

When I tell people I work at a school of public policy, I can often see their eyes glaze over. Policy is so…boring.

Politics, on the other hand, is interesting.

Political horse-races are so much more exciting than the intricacies of the tax code. And let’s be honest: people can decide how to vote on the basis of a candidate’s skin color or his willingness to stick a probe up a pregnant woman’s vagina; they don’t have to know anything about that candidate’s stance on tax policy.

Today’s politics, especially, is all about distraction and the “shiny object.”

And while we are all engaged with that shiny object,  American taxpayers are getting ripped off–and it’s all legal.

We’ve heard a lot lately about so-called inversions.

Companies striking deals to become technically foreign can be found in all corners of American business, from California computer-equipment manufacturer Applied Materials to Minnesota medical-device giant Medtronic to North Carolina­based banana behemoth Chiquita. Little is changing in the core business of these firms. They will just pay less in taxes – and to a foreign government, often Ireland or the Netherlands.

As the article notes, however,

[I]nversions are just the tip of the iceberg. The crisis of corporate tax avoidance is far more pervasive – and destructive – than either Obama or Lew is letting on. At a moment when Congress appears impossibly divided, a strong, bipartisan consensus has, in fact, emerged in Washington: The world’s richest corporations will get away with fleecing hundreds of billions of tax dollars from the rest of us….

Last year the IRS finally collected more in tax receipts than it did before the crash in 2007. But dig a little deeper into the numbers and it is clear we haven’t returned to normal: Corporations paid nearly $100 billion less in federal income taxes last year than before the Great Recession….

The top names in American business – from Apple to Xerox – have joined in the greatest tax dodge in world history. Using clever accounting games, these corporations have siphoned majestic sums out of the country and into tax-haven shell companies – where the money is untouchable by the IRS.

 The numbers are staggering. More than $2 trillion in U.S.-based multinational profits currently sit in offshore accounts, representing, by credible estimates, in excess of $500 billion in unpaid taxes. If that money were deposited in federal coffers tomorrow, it would wipe out the deficit for 2014. And every year that Congress dithers on a crackdown, America is forfeiting an approximate $90 billion in revenue.

The article details a variety of tax provisions–all legal, all part of the U.S. Tax Code–that privilege corporate America at the expense of individual taxpayers. The people who are outraged–outraged–by the use of tax dollars to provide poorer citizens with access to healthcare are curiously silent about the immense costs of this preferential treatment of corporations.

The silence of the elites, of course, is understandable. People who understand that our tax code is massively tilted toward America’s “haves” tend to be beneficiaries of those provisions. They are unlikely to complain.

Most of the silence, however, can be attributed to the average American’s deep-seated disdain for policy, our preference for easy issues, “shiny objects” and pop culture distractions from all those boring details.

I guess it’s just too much trouble to figure out who is picking our pockets, and how they’re doing it. And too much work to vote their lapdogs out of office.

 

The Tangled Web Politicians Weave

When three separate people send you an article, you read it.

That’s what happened to me; three readers of this blog evidently live in or around Florida, and independently emailed a link to this column from the Palm Beach Post.

Here are the pertinent sections:

 The challenge to the Obamacare law was aimed at declaring it unconstitutional. While that didn’t work, foes of the new law were given a small consolation prize by the U.S. Supreme Court — a chance for the states to opt out of the expansion of Medicaid under the new law.

Florida, like 23 other Republican-run states, hung onto that thread and waved it around like a victory flag.

“For all of those who are about fiscal sanity and protecting the taxpayers of our states, the court’s decision on the Medicaid issue was a big win,” Florida Attorney General Pam Bondi said two summers ago at an event sponsored by the Koch-brothers group, Americans for Prosperity.

It certainly wasn’t a “big win” for the estimated 750,000 Floridians who have incomes that fall below 138 percent of the federal poverty wage, which is about $26,000 for a family of three and $15,000 for an individual.

Not only did Florida refuse to accept an expansion of Medicaid that would have used federal dollars to cover health-care costs for these people, but the state did its best to make it as difficult as possible for the rest of Florida’s 3.8 million uninsured residents to purchase plans under the new health-care law.

Umm…Hoosiers, does this sound familiar?

The state refused to set up an insurance exchange, spent no money to encourage citizens without medical insurance to sign up for the plan, and banned federal workers from helping Floridians sign up for insurance at county health departments. Even so, Florida led the nation with sign-ups for Obamacare plans, accounting for nearly 1 million insured state residents……

The state is losing $66.1 billion in federal Medicaid funding over the next 10 years, costing hospitals in the state $22.6 billion in lost reimbursements, the Robert Wood Johnson Foundation reported.

No other state has turned its back on so much money, the foundation found. If Florida invested $5.3 million in Medicaid expansion from now until 2022, it would get back $13.41 in federal funds for every dollar it invested in its citizens’ health care, the report said.

“Every comprehensive state-level budget analysis of which we know found that expansion helps state budgets, because it generates state savings and additional revenues that exceed increased Medicaid costs,” the report said.

Not to mention helping people like Charlene Dill, 32, a working mother of three from Central Florida. Dill died earlier this year from a lingering heart condition.

She worked a variety of part-time jobs and was selling vacuum cleaners when she collapsed and died. Dill couldn’t afford health insurance, but she would have been covered under Medicaid if Florida had expanded it under the law. But unlucky for her, she lived in a state that put her on the losing side of a “big win.”

How do you calculate that cost?

I have watched Republican governors tie themselves into pretzel-shaped knots trying to explain their hysterical opposition to a program originally developed by conservative think tanks and promoted by GOP leaders like Bob Dole and Mitt Romney (pre-presidential campaign). I’ve been amazed by the governors’ willingness to forgo billions of  dollars for their states–not to mention their willingness to let uninsured citizens continue to die–in order to deny President Obama a “win.”

(As Americans have begun to use the program, and warmed to it, some of those Republican governors have begun back-tracking. Indiana’s Governor is a case in point–his version of Medicaid expansion isn’t as inclusive as the real thing, but it’s a start.)

Here’s the thing. I’m one of many people who don’t think the ACA is particularly good public policy, although it is demonstrably better than nothing. If these naysayers proposed a better approach, I think a lot of us would consider it. Instead, we’ve been treated to a particularly ugly expression of high dudgeon–how dare the government use tax dollars to provide medical care to these worthless “takers”? 

I know that everything these days is politics, but shouldn’t there be some games even politicians won’t play?

 

The Political Climate

This introductory paragraph from an article from Grist reprinted in Mother Jones is incredibly depressing–not just because  one of our major political parties  is controlled by people unwilling to acknowledge accepted science on climate change, but because that unwillingness is symptomatic of the party’s current approach to reality generally.

It’s hard to believe, surveying the GOP field of possible presidential nominees, but back in 2008 the parties were not that far apart on climate change. Sen. John McCain of Arizona, the Republican nominee, backed cap-and-trade for carbon emissions. After joining his ticket, so did Sarah Palin. But back then, lots of Republicans and conservatives also supported an individual mandate to buy health insurance. The Republican Party of 2008 was a big enough tent to include people who admitted demonstrable problems existed and supported free-market-oriented solutions. Not anymore. The rise of the Tea Party movement and the rightward shift of the Republican base and the politicians who pander to it put an end to all that. Whoever is the Republican nominee for president in 2016, it’s a safe bet that he—and yes, it will be a he, as all the leading contenders are male—will oppose taking any action on climate change. Chances are that he won’t even admit it exists.

I don’t believe that all of these candidates are that divorced from reality. It is actually worse: those who know better are willing to ignore the threat of widespread devastation in order to pander to a frightened and uninformed “base.”

I know I sound like a broken record, but what drives me nuts about climate denial is the illogic of the “bet” being placed.

Let’s just say that the science is far less conclusive than it really is. Pretend it’s only 50-50. If policymakers decide to act on the premise that climate change is real, and prove to be wrong, there will have been some up-front costs, but the steps taken to address the problem will clean up the air and water, conserve finite resources and create new industries and jobs. If they decide to ignore the warnings, and they’re wrong, however, the earth will become less habitable. Weather disruptions and climate change will cause devastation, and mass migrations and social upheavals will follow. And that’s the best-case scenario; in the worst case, we wipe out much of humankind.

It’s Pascal’s wager on steroids.