The Unserious Party–Indiana Version

During her acceptance speech, Kamala Harris noted that Donald Trump is a deeply unserious man whose election would have very serious consequences. She might have broadened that observation by characterizing the GOP as an unserious political party.

I exited the Republican Party back in 2000, when the GOP’s transformation then underway was usually described as “rightward.” To the extent that “rightward” meant “toward fascism,” that description was accurate–but insufficient. It is equally accurate to note that the GOP has become increasingly unserious about governing.

Democrats do continue to focus on real governing issues–what should our foreign policy look like? What changes should be made to tax policy? What is government’s obligation to provide a social and physical infrastructure?  The GOP, in contrast, is focused on areas that are mostly off-limits to government under our Constitution: books they disapprove of should be removed from public libraries! Private companies should be forbidden from undertaking DEI activities! Women should be forced to give birth!

GOP priorities aren’t those that have traditionally been considered governmental.

 Indiana’s state tickets provide a picture-perfect example. The Republicans are all MAGA culture warriors, while the Democrats are focused on traditional governance issues: public education, taxation, the proper limits of government control over individuals.

The difference between the parties on issues of actual governance was recently explored by conservative economist Michael Hicks, who analyzed the seriousness of recent tax proposals. The headline was instructive: “Property taxes dominate the race for Indiana governor. Only 1 side has a real plan.” 

Indiana voters have now seen three separate property tax plans from candidates running for governor and lieutenant governor. All three offer insights into some of the fiscal philosophies of the candidates, the quality of their policy development process and the respect they have for Hoosier taxpayers.

Hicks began by discarding the plan offered by the Libertarian candidate for governor. 

Their proposal is to eliminate all residential property taxes, and instead tack on 7% sales tax to your home. I view their proposal as political posturing against the promiscuous use of tax abatements and tax-increment financing.

If you are tired of huge tax breaks for large companies, Indiana’s Libertarian Party is focused on your concerns. But their plan fails to consider things like the need to fund police protection, fire departments or provide heat to school buildings in winter.

In other words, it’s a very “unserious” plan.

Then Hicks took on MAGA Mike Braun’s plan.

The Republican — Mike Braun/Micah Beckwith — plan seems to have done two things. I say “seems” because it went through five major changes in three days after it was first announced. So, nailing down facts is not a trivial task.

The first thing this plan offers is the addition of a much larger exemption to homeowners. While this sounds alluring, it really has little or no effect on individual tax liability. Property taxes in Indiana are based on local government budgets, with caps placed on the value of the property, not the exemptions. So, for most Hoosiers, the first version of the Braun/Beckwith plan (or Beckwith/Braun plan according to the lieutenant governor candidate’s social media) had little or no effect on tax liabilities for most homeowners.

In response to major criticisms, the plan changed, but as Hicks noted, in its current iteration, it would either cut local government tax revenues or shift taxes to other taxpayers — primarily farmers and businesses.

Within farming communities, the property tax shift was enormous. Some farmers would see 70% tax increases…rural communities would see huge increases in farm taxes. Urban places would see big cuts in public services because of property tax caps, and suburban communities would need to pass school referendums to maintain bus service.

Hicks then turned to the Democrats’ plan, which would cut property taxes by roughly the same amount as the Braun/Beckwith plan, but in a way that doesn’t shift tax liability to farmers, renters or businesses. That plan

also ensured that local governments — schools, libraries, police and fire departments, and parks — would not face deep revenue losses.

Their plan had two distinguishing features. The first was that almost every element was analyzed by the Legislative Services Agency, with much of it taken from existing property tax proposals the legislature has been working on for the past 18 months. This means we know how much savings are to taxpayers, and how much and to whom the lost tax revenue flows.

The second key feature of the McCormick/Goodin plan was that most of the revenue losses were borne by state, not local government…  Notably, the Democratic plan actually caps property tax growth for individual taxpayers at a reasonable level.

Indiana Democrats want to govern. Unserious Republicans want the power to win the culture war. 

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The Things We Know That Just Aren’t So…

Michael Hicks is an economist on the faculty of Ball State University. He recently published two columns in the Indianapolis Star that deserve widespread attention.

Hicks documents two inconvenient facts: more people move into high-tax areas than into low-tax precincts, and economic conditions in Blue cities and states are significantly better than conditions in Red parts of the country.

Hicks makes that first assertion in a column discussing the repeated mantra of candidates for Indiana’s legislature--elect me and I’ll cut property taxes! High property taxes are why Indiana keeps losing population! He points out that–despite the popularity of these proposals, property tax cuts would be highly unlikely to grow population, employment, GDP or household incomes. The data shows that population growth tends to cluster in high-tax places.

In Indiana, the 10 counties with the highest effective property tax rates alone accounted for 27,105 new residents since 2020, a whopping 61.3% of the state’s entire population growth. The 10 counties with the lowest effective property tax rates saw only 878 new residents, or less than 2% of the state’s growth.

I know many readers will recoil at this challenge to a long-held notion that lower taxes cause growth. However, it is a cold, hard fact that both population and employment growth is positively correlated with tax rates on income and property.

In Indiana, a 1% increase in the average tax rate leads to a 2% increase in population growth. That is simple mathematics.

Why would that be? As Hicks concedes, no one looks at tax rates and says “Let’s move to where taxes are higher.” What they do look at are indicators of quality of life–public services and amenities that will be available to them.

These are places where families judge themselves better off. If you live in a state where families are moving from low- to high-tax regions, your state is underinvesting in local amenities such as schools, parks, and public safety.

That reality–anathema as it is to those who view all taxation as evil–goes a long way toward explaining another phenomenon Hicks has discussed–the difference between the economic performance of Red and Blue areas of the country.

Nationwide, it is unambiguously clear that the U.S. economy is performing historically well. On every important measure — employment, wages, GDP, or wealth — the overall economy is not just performing at record levels, but also outperforming the rest of the world.

Robust national economic performance has benefits for every county and small town, but that does not mean every place shares equally in economic growth. There are plenty of places that continue to do poorly.

And the gap between them is growing. Rich places are, for the most part, getting richer and poor places poorer–in contrast to what has typically happened before. Moreover,

poor places are increasingly governed by Republicans and rich places by Democrats. The gap between rich and poor places might help explain the partisan differences in perceptions of the economy.

The regional differences are compelling across dimensions of rural and urban places, as well as between cities and rural areas.

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Why I Don’t Think The Midterms Were An Anomaly

I have a bet with my youngest son. He’s a political pessimist, especially when it comes to the state of Indiana. (The bet involves very expensive dinners…) The bet was triggered by my excitement–and optimism–about Jennifer McCormick’s announcement that she is a candidate for Governor. I think she can win, even in deep Red Indiana; my son has written off the possibility of any Democrat winning statewide office, and has dismissed any predictive value of Obama’s 2008 Hoosier win.

My optimism about McCormick’s campaign is partially due to candidate quality (both hers and that of her likely opponent, the odious Mike Braun) but it is also based on what I see as a national trend: from top to bottom, the GOP is running truly horrible candidates.

At the very top of the Republican ticket, we are almost certain to get either Donald Trump or Ron DeSantis. American voters soundly rejected Trump in 2020, and he gets more certifiable as his legal woes mount. DeSantis appears to be basing his campaign on an “anti-woke” platform. Not only is DeSantis most definitely not a guy you’d like to have a beer with, his evident belief that a majority of Americans want to return to the 1950s, when “men were men” (and in charge), women were in the kitchen barefoot and pregnant, no one had ever heard the word transgender, and schools dutifully imparted White Christian propaganda, is simply delusional.

In a recent issue of his daily newsletter, Robert Hubbell noted that Democratic over-performance hasn’t abated since the midterms, when that predicted Red wave failed to materialize. He pointed to subsequent elections in Colorado Springs, Colorado, where voters selected the first non-Republican mayor since 1979 by a margin of 15 points;
a Pennsylvania special election to the state assembly where the Democrat won by 20 points and maintained Democratic control despite the fact that, going into the 2022 midterms, Republicans had held a 113-90 advantage; and a New Hampshire assembly race where the Democrat won by 43 percentage points, “eclipsing Biden’s 27-point margin in 2020.”

Hubbell quoted one analyst for the observation that

Democrats have overperformed the 2020 presidential results by an average of six points across 18 state legislative races this year. . . . They’ve also beaten their 2016 margins by an average of 10 points.

He quotes another analyst who focused in on the underlying reasons for that over-performance: abortion extremism, ongoing GOP-encouraged gun violence, extremist MAGA candidates, and a (finally!) fired-up Democratic grassroots.

In the run-up to the midterms, Republicans confidently pointed to Joe Biden’s disappointing approval ratings as a sign that they would sweep their gerrymandered House districts and retake control of the Senate. As we now know, despite the extreme gerrymandering and the vote suppression efforts, those victories eluded them.

As Morton Marcus and I argued in our recent book, the loss of Roe v. Wade was a major reason for that outcome. Women’s progress toward civic equality requires autonomy, control over one’s own reproduction, and most women who vote understand that. Republicans running for office in 2024 will have to “thread the needle” between primary voters who are rigidly anti-abortion and a general election electorate that is lopsidedly pro-choice.

Good luck with that…

Add to the abortion wars the daily gun carnage that feckless Republicans keep trying to blame on mental health–despite the fact that large majorities of voters, even majorities of NRA members, attribute the mayhem to the lack of responsible gun regulations.

Voters who aren’t part of the White Nationalist Cult that is today’s GOP look at Congress–at Republicans protecting George Santos, hiring Neo-Nazi staffers, threatening to ruin the economy if they aren’t allowed to deprive poor people of food and mistreat veterans...and a not-insignificant number of them are echoing the immortal words of Howard Beale in the classic movie Network:“I’m as mad as hell, and I’m not going to take this any more!”

It’s true that the GOP can count on its cult members coming to the polls. There are more of those sorry creatures than most nice people want to believe, and they absolutely pose a danger to all of us–but they are a distinct minority of Americans. We need to see them for what they are, and recognize the threat they pose to the America the rest of us inhabit, but they can’t win in the absence of majority apathy.

Democratic candidates, on the other hand, appeal to voters who (like Indiana’s McCormick) support public education and academic freedom, who believe in separation of church and state, in women’s equality, in civility and compassion and inclusion–in all those qualities that our parents taught us were admirable, but the GOP disdains as “woke.”

There’s a lot to be concerned about, but like Hubbell, I’m hopeful.

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