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Archive for February 23rd, 2011

Walker Reveals In Phone Call: It’s About Power, Not Budget

Posted by Phoenix Woman on February 23, 2011

Ian Murphy of The Buffalo Beast tricked Wisconsin’s Bircher/Koched-up governor Scott Walker into thinking he was talking to Walker’s big patron, David Koch (link via MyFDL). In it, Walker admits — or rather, boasts — that this isn’t about the budget, but about a pure naked exercise of brute-force power:

Walker: I talk to Kasich every day—John’s gotta stand firm in Ohio. I think we could do the same thing with Vic Scott in Florida. I think, uh, Snyder—if he got a little more support—probably could do that in Michigan. You start going down the list there’s a lot of us new governors that got elected to do something big.

“Koch”: You’re the first domino.

Walker: Yep. This is our moment.

Your moment, indeed. You just got served, dipwad.

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WI GOP Tries The Pawlenty Gambit: “Fees” Not Taxes

Posted by Phoenix Woman on February 23, 2011

Since the boycotting Senate Democrats won’t let Scott Walker disembowel the workers in Wisconsin, he and his fellow Koch Republicans have settled for mimicking California’s disastrous Proposition 13, which single-handedly sent the state from first to near-worst in the nation in terms of education, infrastructure, and other quality-of-life measures, by making it harder to raise taxes:

Madison – Today, Governor Scott Walker signed Special Session Assembly Bill 5 which requires a 2/3s vote to pass tax rate increases on the income, sales or franchise taxes.

But really, it’s not so much California that they’re mimicking, but Minnesota — at least, Minnesota as it was under Tim Pawlenty:

Fees are Regressive

Minnesota’s revenue system has become regressive, meaning lower-income households pay a larger percentage of their income in taxes than do higher income households.  Regressivity in Minnesota’s tax system increased from 2002 to 2004 and is projected to increase again by 2009.

According to the Internal Revenue Service, fees are “considered regressive because they take a larger percentage of income from low-income groups than from high-income groups.”  There can be no doubt that Minnesota’s increased dependence on fees has shifted more costs to those with the least ability to pay.
 

Fees Can’t Replace Tax Revenue

Total FY 2008 state fee revenue-including post secondary tuition-was $2.44 billion.  The state is projected to collect $17.5 billion in taxes, seven times greater than fee revenue.

Since fees are a smaller revenue source, fee increases cannot replace massive drops in tax revenue.  This is one of the reasons why total real per capita state revenue declined by 5.9 percent from FY 2003 to FY 2008, with another large reduction anticipated for FY 2009.  Over-reliance on fees is a recipe for large scale decline in public investment, which is precisely what we have seen over the last six years.

It should tell you something that the Republicans voted down a Democratic amendment that would have kept the Republicans from pulling the Pawlenty Gambit — that is, refusing to raise income taxes (especially on the rich), but being all for using “fees” (i.e., a form of regressive taxation as static fees are more easily paid the richer you are) to try and fund state government:

Assembly Republicans also passed Special Session Assembly Bill 5, a bill that will place prohibitions on revenue modifications by the Legislature at the cost of placing additional burdens on average Wisconsin families. Seeking to address this concern, Rep. Grigsby introduced an amendment to the bill that would prevent an increase in fees on middle class and working families. Grigsby’s amendment failed on a 57 to 37 vote.

So what will likely happen in Wisconsin is what pretty much happened in Minnesota: Once-free services will have fees, existing fees will be jacked up, and revenues will still tank. But rich people will be spared the crushing burden of having to pay a small fraction of a percentage point more in taxes.

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