"Howard Gleckman examines presidential hopeful Gov. Rick Perry’s record as a low-tax politician. His record, “suggests, in fact, a politician who has gradually toughened his anti-tax views over the years but remains willing to boost some levies…Perry’s biggest revenue challenge came in 2004-2006. Texas had been funding its schools through local property taxes, an arrangement courts found problematic. In 2004, Perry proposed replacing some school property levies with a basket of other taxes, including sales taxes, a higher cigarette tax, and an increased payroll tax. Perry’s plan died in the legislature in 2004 but in 2006, after the state Supreme Court determined the school funding system was unconstitutional, lawmakers did pass a major tax reform bill—a measure praised and signed by Perry. This version reduced local property taxes but created a new gross receipts tax on business (called a margins tax), raised the cigarette tax, and even taxed patrons of topless bars…Conservatives blasted the 2006 deal as ‘the largest tax increase in state history.’”

I ended up over on TaxVox where I read a great post there: Rick Perry, Texas, and Taxes

Excerpt (the emphasis is mine):

…Perry’s plan died in the legislature in 2004 but in 2006, after the state Supreme Court determined the school funding system was unconstitutional, lawmakers did pass a major tax reform bill—a measure praised and signed by Perry. This version reduced local property taxes but created a new gross receipts tax on business (called a margins tax) , raised the cigarette tax, and even taxed patrons of topless bars. Thanks to my Tax Policy Center colleague Yuri Shadunsky for helping review the Perry years.

Conservatives blasted the 2006 deal as “the largest tax increase in state history.” While it remains unclear whether this new mix of taxes was a net revenue increase, many in Texas did pay higher taxes.

In recent years, Perry has taken a much harder line on revenues but not an absolute one. While in 2009 he signed Grover Norquist’s anti-tax pledge (to “oppose and veto any and all efforts to increase taxes”), he also increased taxes on smokeless tobacco by $105 million over two years. In June, Perry vetoed a bill that would have required some Internet retailers to collect Texas sales taxes.

While state taxes are generally regressive, Texas is among the worst– not surprising since it has no personal income tax. In 2009, the labor-funded Institute on Taxation and Economic Policy estimated that the lowest-earning 20 percent of Texas households paid about 12.2 percent of their income in state and local taxes, while the top 1 percent paid only 3.3 percent, compared to the national average of 10.9 percent and 5.2 percent .

There are a couple of things to keep in mind when reviewing Texas taxes. The first is that the state has an extremely weak governor, one of the least powerful in the nation. Thus, many of these tax changes can properly be laid at the feet of the legislature, although Perry did sign them into law.

It is also worth noting that Texas has enjoyed the benefits of the run-up in oil prices in recent years (the price of a barrel of oil was just $25 when Perry first became governor). High energy prices may be bad for most state economies, but not for Texas, where the oil and gas business produced $13 billion in state revenues last year, more than 40 percent of total revenues. Texas also receives an outsized amount of money from the federal government and has embarked on major spending cuts. In this environment, Perry has been under much less pressure to raise taxes than other governors.

"…a new gross receipts tax on business (called a margins tax)" That’s a tax on businesses right? And it’s not a tax on the profit a business earns it’s a tax on the gross receipts. Well I’ll be.

And I find the disparity between what the folks at the top pay in taxes vs. what the folks at the bottom disconcerting too. The folks at the bottom in Texas pay 400% more in terms of percentage of their income than do the folks at the top? Texas is #5 on the list of the ten most regressive tax systems in the country (regressive meaning that the poor pay a higher percentage of their income in taxes than do those that are well off) (see Who Pays? A Distributional Analysis of the Tax Systems in All 50 States).

The bit about Texas (being a lot like Alaska) in that a large substantial portion of the state’s revenues are thanks to a quirk in geography rather than any great management policy are certainly worth noting (see In Texas, Perry has ridden an energy boom).

And one last point if Rick Perry and Rick Perry’s supporters want to use the "the state has an extremely weak governor, one of the least powerful in the nation" to shirk the responsibility for such a unfair regressive tax system and not admit to the energy revenues being so helpful then they/he can’t claim it due to his brilliant fiscal management and the policies he instituted as governor.

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Stop Coddling the Super-Rich
By WARREN E. BUFFETT

Editorial: The Truth About Taxes (August 7, 2011)

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

Read the rest of this article via:
Stop Coddling the Super-Rich – NYTimes.com.

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Sometimes, Inflation Is Not Evil
By FLOYD NORRIS

Thirty years ago, it became clear that defeating inflation was crucial, even if the means needed to accomplish that would cause a deep recession. By the time the European Central Bank was created in the 1990s, it seemed so obvious that inflation must be fought that the bank was given only one mandate — to fight inflation. The other mandate given to its United States counterpart, the Federal Reserve — to promote employment — was pointedly not included.

It is time for a new lesson to be learned. Sometimes we need inflation, and now is such a time.

Had the central bankers of the world understood that inflation in asset prices could be just as bad as, if not worse than, inflation in the prices of consumer goods, this would not be necessary. But they did not. So they did nothing to resist soaring home prices, just as they had seen no reason to worry about the Internet stock bubble.

Read the rest of the article via:
 Sometimes, Inflation Is Not Evil – NYTimes.com.

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D-squared Digest — FOR bigger pies and shorter hours and AGAINST more or less everything else: Just to be clear on this, as I think some people are confused. The bad thing about cutting the federal deficit is not that it might affect Social Security or Medicare. Even if these were totally ringfenced it would be a bad idea. The bad thing about cutting the federal deficit is not that some other virtuous program might be defunded. Even if all the savings came from military procurement it would be a bad idea. The bad thing about cutting the federal deficit is not that it “shrinks the state”. Even if all the deficit cuts were obtained by tax rises it would still be a bad idea. The bad thing about cutting the federal deficit is not that the burden falls disproportionately on the poor. Even if the deficit were reduced specifically by taxes which only fell on the top 1% of the income distribution it would still be a bad idea.

The bad thing about cutting the federal deficit is that unemployment is very high and interest rates are very low. Given that, taxing productive activity to pay down debt is really obviously the wrong thing to do, and borrowing money to employ currently unemployed resources is really obviously the right thing to do. It would not need to be spent on “shovel-ready” projects. By definition, for purposes of expansionary fiscal policy, anything you can spend money on is shovel ready. It doesnt have to be spent on vital infrastructure. Even completely pointless activity would be better than nothing. In some cases, even actually destructive activity, like war, has had a stimulative effect on the domestic economy.

The basic issue, and the one which ought to have people running around like their hair is on fire, is the unemployment rate. That, combined with the interest rate, shows you that deficit reduction is the stupidest possible policy at the current time. This is a very important issue, and the current President of the USA is on the wrong side of it.

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Conservative Republican Rep. Lankford Admits The Economy Is ‘Doomed’ Without Government Spending | ThinkProgress.

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Tripled? Usally the figure I hear cited by the right wing ideologues is quadrupled and they very often cite this chart from an article entitled Bush Deficit vs. Obama Deficit in Pictures found on the website belonging to the conservative think tank Heritage Foundation to make their point! The Heritage Foundation is quick to point out that “The Washington Post has a great graphic which helps put President Obama’s budget deficits in context of President Bush’s.”

“…in context of President Bush’s.“????

Not really. The graph represents and uneven tilted playing field.

Quoting from reporting done by Lori Montgomery and Ceci Connolly for that same Washington Post:

In addition to the substantive proposals, Obama’s team boasts of improving the budget process itself. For years, budget analysts complained that former president George W. Bush tried to make his deficits look smaller by excluding cost estimates for the war in Iraq and domestic disasters, minimizing the cost of payments to Medicare doctors and assuming that millions more families would pay the costly alternative minimum tax. Obama has banned those techniques, the senior official said.

Take 2005 for instance. If you include just the excluded cost at the time for the Iraq War the REAL deficit figure for fiscal 2005 would be $427 billion* not the $317 billion the CBO used in it’s figures.

So where did this swollen bloated deficit we face really come from? This past week the the NYTimes’ gave us this chart in the David Leonhardt article Sea of Red Ink Was Years in the Making that gives us a far better more accurate look at just where Obama’s record deficit came from:

How Trillion-Dollar Deficits Were Created

Quoting from the mid-section of the Sea of Red Ink Was Years in the Making article:

[…]

Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.

About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.

If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.

How can that be? Some of his proposals, like a plan to put a price on carbon emissions, don’t cost the government any money. Others would be partly offset by proposed tax increases on the affluent and spending cuts. Congressional and White House aides agree that no large new programs, like an expansion of health insurance, are likely to pass unless they are paid for. (JJH- Yes and on the day this article came out Obama proposes making ‘pay-as-you-go’ the law)

Alan Auerbach, an economist at the University of California, Berkeley, and an author of a widely cited study on the dangers of the current deficits, describes the situation like so: “Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it.”

“And,” he added, “not fixing it is, in a “sense”, making it worse.”

When challenged about the deficit, Mr. Obama and his advisers generally start talking about health care. “There is no way you can put the nation on a sound fiscal course without wringing inefficiencies out of health care,” Peter Orszag, the White House budget director, told me.

Outside economists agree. The Medicare budget really is the linchpin of deficit reduction. But there are two problems with leaving the discussion there.

[…]

Looking at the analysis another way courtesy of Matt Yglesias here’s how it looks as a pie chart:

Months ago when I first learned that Obama wasn’t going to be playing around with budget language tricks I made the claim that if you took away the cost of the Iraq War and the Bush Tax Cuts the deficit would be a quarter of what it was and people (my Conservative & Republican friends) scoffed and dismissed what I was saying. It certainly looks now like I wasn’t that far off in my own analysis at the time.

Don’t believe the numbers? Check out the methodology in How We Crunched the Deficit Numbers.

I really don’t expect the Republican, Conservative, and NeoCon right to change their rhetorical denials and really ever own up to responsibility for the deficit, in fact just yesterday Karl Rove flat out refused to accept any responsibility for the deficit and spun his administrations record continuing the deceit (watch it):

ROVE: This guy is going to run up a $1.8 trillion deficit. That’s what it’s projected to be this year,”

VAN SUSTEREN: Do you take some responsibility, meaning you, the Bush eight years, for this…

ROVE: No.

VAN SUSTEREN: You take absolutely no responsibility? Because…

ROVE: No, lets put it this way, look look we had a deficit that ran 2% of GDP and we were fighting a war [Rove carefully avoids saying that the cost of the Iraq War was not included in the deficit] and trying to grow the economy. He planning a 4% of GDP…

VAN SUSTEREN: So that twice?

ROVE: Twice. He’s going to…his smallest deficit is 200 billion dollars larger than Bush’s largest deficit [the cost of the Iraq war, around 200 billion]. Think about that.

….but I think it’s very important for everyone to know that Obama and the Obama administration are standing up and taking responsibility for hundreds of millions , billions of dollars lost, squandered, misspent, and hidden by the last administration. Remember that the next time you hear someone on the far right rant hysterically about Obama running up the largest deficit in history. It is Obama’s deficit, he’s stood up and claimed it, but it is very certainly a gift he received from the last administration.

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“If one benefits tangibly from the exploitation of others who are weak, is one morally implicated in their predicament? Or are basic rights of human existence confined to the civilized societies that are wealthy enough to afford them? Our values are defined by what we will tolerate when it is done to others.”

“The great, unreported story in globalization is about power, not ideology. It’s about how finance and business regularly, continuously insert their own self-interested deals and exceptions into rules and agreements that are then announced to the public as “free trade.”

“The US financial position is rapidly deteriorating, due mainly to America’s persistent and growing trade deficit. US ambitions to run the world, in other words, are heavily mortgaged. Like any debtor who borrows more year after year with no plausible way to reverse the trend, a nation sinking deeper into debt enters into an adverse power relationship with its creditors — greater and greater dependency.”

“The juggernaut — the best and biggest military force in the world — lumbers on, doing what it knows how to do best. It is unwilling to rethink its future, unable to let go of the past. Like the shark, it must keep feeding, only now it is feeding on itself.”

“Modern Americans are remarkably capable people, skillful and inventive in many ways, but they are not so good at talking to one another across their vast differences of social class and economic status.”

“Americans cannot teach democracy to the world until they restore their own.”

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