Friday Feature
This year I hope to implement a series of "Friday Features" that will highlight some of the great non-profit organizations working here in North Carolina. One of the most reliable and effective is the NC Justice Center. Today's Friday Feature focuses on one part of NC Justice, the Budget and Tax Center.
People across the political spectrum can disagree on many things, but when it comes to the base of facts needed to craft effective public policy, even free-market extremists turn to the Budget and Tax Center as a dependable source. You should too, especially when you're looking for data to fend off assaults on sanity from people who make up whatever "facts" they need to support their arguments.
The director of the Center, Elaine Mejia, wrote a guest column this week at NC Policy Watch on the case for a more progressive tax structure in North Carolina. It's worth reading every word, but here's a snippet to whet your appetite.
There are three ways North Carolina can strengthen the income tax so it will work of the state well into the future. The first issue lawmakers must address is the base, or the amount of income to which the state income tax is applied. Right now, it’s very narrow, which is why North Carolina’s rates appear higher than those in many other Southern states.
North Carolina is one of only a handful of states that uses federal taxable income as a starting point for state income taxes. Federal taxable income is the amount you come to after excluding some forms of income and applying federal deductions and exemptions. This is especially beneficial to wealthy people, who tend to itemize and take multiple deductions, while many low- and middle-income families use the standard deduction only.
Instead, North Carolina could use adjusted gross income, like most other states, and then subtract state deductions and exemptions. That would broaden the income tax base, making it possible to lower all rates.
In addition, expanding the current system from three income brackets to six brackets would enable state lawmakers to better target tax reductions at middle- and low-income families. This would have the added benefit of ensuring that wealthier families pay a more reasonable share of their incomes in state and local taxes than they do currently. The brackets should also be indexed to inflation so that as inflation pushes up wages, the income range for each tax bracket also goes up. If you’re income doesn’t increase faster than inflation, then neither should your taxes.
If Elaine's column sounds wonkish, that's because it is. She and her team don't cut corners and they don't over-simplify things that are inherently complex. But they do make them understandable, and they have the data to back their arguments.
I encourage you to bookmark the Budget and Tax Center's page at NC Justice and to use their data whenever you're looking for objective facts about the budget and tax picture in North Carolina. You may not always agree with their interpretation, but facts is facts - and theirs are as reliable as you'll find anywhere.
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Other non-profits
If there's a non-profit organization that you'd like to spread the word about, please let me know. Or better yet, write a post I'll work with you to get it placed as an upcoming Friday Feature.
Don't be bashful . . . this is your chance for shameless self-promotion if you're so inclined!
I'll take next Friday. : )
Prepare to be amazed.
Be the change you wish to see in the world. --Gandhi
You got it!
thanks
Thanks for highlighting this crucial organization.
- - - - -
Thomas Jefferson said you always get the rulers you deserve.
Yikes...you're right
she does make a lot of sense and I usually don't like to read/discuss taxes at all.
They're great
The Justice Center is behind the scenes of a lot of progressive work in North Carolina. Recently, their legal work was critical to the NC Community College System's decision to open their doors to undocumented immigrants.
Two questions, one suggestion
Anglico --
Questions:
What's a free market "extremist"?
Can one think free people should be allowed to engage in consensual exchange without being an "extremist"?
Suggestion:
Marc Dreyfours and M.K. Williams at the Forest Foundation/Carolina Biodiesel do a fantastic job of promoting local sustainability while working to encourage socially-responsible entrepreneurship. Granted, they've got a mix of nonprofit and for-profit activities, but "profit" simply means you get to keep doing what you're doing, right?
Anyway, recycling WVO and eventually trap grease into fuel for heat and transportation is fantastic. Literally recycling an old Exxon oil terminal in downtown Durham to productive and sustainable use is also fantastic. Educating the public about our State's water crisis is fantastic. Promoting free and fair trade of ecologically-sensible goods is fantastic.
Imagine -- an energy company that's not subsidized by the U.S. taxpayer and military. If we *really* had a free market, capital for their energy efforts would be more readily available. As it sits, though, who wants to compete with companies subsidized by all that "free" government money?
Extremist
Extremist \Ex*trem"ist\, n.
A supporter of extreme doctrines or practice; one who holds extreme opinions.
[1913 Webster]
In the free-market context, it is a person who takes the reasonable idea that free markets have value in many areas and carries it to an extreme by arguing that free markets have inherent value in virtually every aspect of culture and society.
You're too smart to be a Republican. You should be running as a pro-life libertarian Democrat.
:)
I guess we'll never know for sure
I guess we'll never know for sure, since I don't think I've ever seen a truly "free" market :-)
We probably agree that market "freedom" is typically a matter of degree, and not absolute. I'm just profoundly uncomfortable with the current amount of government power in the hands of corporate interests. My concern is even greater when Americans look at such markets and wrongly consider them to be "free". What do you know about milk?
Regarding party affiliation... well, I consider myself a "Ron Paul Republican" of average intellect. In terms of running with a particular party, I've been a Republican all my life and there's no way I could beat David Price in a Democratic primary.
You think the Republican party leadership are unhappy with me as a candidate? Some of them are... amusingly, the District 4 Chairwoman is listed as my primary opponent's press contact on his press release! Anyway, I can only imagine how unhappy the Democratic party leadership would be if I challenged Rep. Price, and we'd only have until May to spread the message of peace, prosperity, and liberty. Talk about a "low-prob" strategy!
Some of you must admit that the status quo is taking us in the wrong direction. I have nothing against Rep. Price personally, but his actions have perpetuated the failed policies of a corporatocratic state. He supported the 2007 Energy Act, as well as the Orwellian "Violent Radicalization and Homegrown Terrorism Prevention Act of 2007". Where's the honor in that?
Wow
Is that allowed within your by-laws or plan of organization? I'm seriously considering resigning as an officer in my county party so that I can actively campaign for a candidate in the primary.
Is that how you guys do things, or just how she's doing things?
Be the change you wish to see in the world. --Gandhi
Ahem...
No, it's just how she's doing things. And my opponent still refers to himself as Chair of the Orange County GOP even though he technically should resign that position if he's contested. Funny, huh?
How about this...
Why don't we turn back the clock and restart Thomas Jefferson's "Democratic Republican" party, with a correct interpretation of the Declaration of Independence's "all men are created equal" applying to folks of all genders and ethnicities?
That way we can expose the elitists beholden to corporate and special interests as Hamiltonian Federalists, and stop their attacking the American people from within BOTH of our parties!
We'd simply follow the advice of the Constitution as it was framed and ratified with respect to the federal government, and agree to work out the more challenging and divisive issues at the state and local level.
Sound like a plan?
:-)
Run the clock forward......not back!
Why don't we turn back the clock and restart Thomas Jefferson's "Democratic Republican" party,
Sound like a plan?*lawso017
Pay attention Son! It is already being plan and some parts are in action at the moment. When you have over 200,000 donors and a source of funds that will finally make it possible for a long time to come with a solid youth foundation that will compete with any neo-con major party. Does the name Freedom Party ring a liberty bell for the future?
Interesting
... that's an intriguing idea, and some intriguing economics on the Web site. Look forward to learning more! Too bad we have such restricted ballot access here in North Carolina.
Great businesses, bad example for you, BJ.
Carolina Biodiesel received a $5,000,000 start-up grant from the Golden Leaf Foundation, a non-profit that was established to disburse funds that were taken (by the courts) from Big Tobacco. So you've got the government taking away one industry's profits and giving that money to other companies, in an effort to modify agricultural behavior. In addition to that, biodiesel manufacturers receive both Federal and State tax exemptions that their competition doesn't receive, which amounts to "preferential treatment" from the government.
That's almost the polar opposite of "free market" ideology, but it is very progressive, and a great example of government intervention in the business community with an eye towards the long-term betterment of society.
The Forest Foundation is a totally tax-exempt 501 (c)(3) organization, which sells both goods and services, theoretically in competition with retailers (and travel agents). The government has said (through its behavior), "We like the way you do business, and we want to at least not hinder your success".
Again, a very progressive approach by the government, but in no way a "free market", let-the-chips-fall-where-they-may attitude. In a true free market scenario, the Foundation's fair-traded goods would be even more expensive in comparison to goods that were aquired under less humanitarian methods.
In answer to your question:
Most of us see business as an effort by somebody to "make a living" through commercial transactions. A "successful" business is one that can make a profit while operating within the ethical and legal guidelines set forth by society; guidelines that were developed over thousands of years of social interaction.
Plainly put, a free market extremist believes that profits and losses should be not only the primary consideration in a business transaction, it should be the only consideration. Ethics, morality, fairness, etc., are judgments to be made solely by the market (consumers), and not by the government. Aside from highway robbery that results in a murder (and maybe even that), most legal restrictions are unnecessary, because the market will pass judgment on that business eventually, and all will be right in the world.
The theory is not only a crock; in many cases it's used to intentionally engineer a situation where abject slavery and oppression are viewed as "humanitarian economic assistance", and the market itself (us) are blissfully unaware of the pain we're bringing about.
Ethics and morality cannot be left out of the equation. Our government serves as our "collective conscience", and there is no suitable back-up for that function.
Two wrongs don't make a right
With respect to Carolina Biofuels, the subsidies and governmental assistance they've received are a *drop in the bucket* with respect to those provided to oil industry.
My point is that if the government was truly NEUTRAL in the energy markets, we would not be in the mess we are in today. Don't take my word for it, read The Seven Sisters by Anthony Sampson. It's a fantastic history of the birth and maturation of the oil industry, and how we started down the slippery (no pun intended) slope of defending national security, to national interests, to corporate interests.
Pretend you're a board member of Exxon listening to the following executive presentation:
"We'd like to commit to tens of billions of dollars of capital investment in an unstable theocratic state with no rule of law, respect for contracts, and minimally-developed infrastructure. There may be oil reserves there, but we expect it will take several years to know for sure. We'll need to build everything ourselves, and at the end of the day, it's likely that the government will wake up and nationalize the industry anyway."
What would you do? Uh... "No, thanks. Bad idea."
Now try this:
"We'd like to commit to tens of billions of dollars of capital investment in an unstable theocratic state with no rule of law, respect for contracts, and minimally-developed infrastructure. There may be oil reserves there, but we expect it will take several years to know for sure. We'll need to build everything ourselves, and at the end of the day, it's likely that the government will wake up and nationalize the industry. But we have the support of Congressional leaders and factions within the State Department, military, and CIA to the point that we will be able to protect our interests with covert and overt military interventions. Furthermore, Congress is willing to consider subsidizing our exploration costs with a variety of credits so we can increase our after-tax return considerably."
"Great! Let's do it!"
You'll note that ethics and morality didn't enter into that decision. It was simple risk/reward, and ultimately the marriage between business and government (i.e., CORPORATISM) led to the perverse outcome.
My point is that the current environment is NOT a free market at all. Oil, if unsubsidized by the US taxpayer and military, SHOULD be much more expensive.
It should have been so much more expensive, in fact, that private investment capital would have found groups like Carolina Biodiesel a long time ago, and rendered those minuscule grants (come on... $5MM? That's IT?) unnecessary.
If you're satisfied calling a small slice of tobacco money or oil money given to a worthwhile startup "progressive", you're completely missing the forest for the trees. The underlying problem of government being owned by corporate interests hasn't changed at all. So how does giving MORE power to an already corrupt government help?
I consider myself profoundly rational, and about as far from "extremist" as you can imagine. I just dislike when folks look at a market and declare "market failure" when the market is as far from FREE as you can imagine.
With the profits Big Oil has been pulling in,
our government shouldn't be giving them one red cent. When I see the billions we taxpayers give to oil and coal while throwing a few scraps to renewables, it pisses me off to no end.
Their facility cost $20 million to construct and get operational, making the tobacco money grant 25% of their start-up needs. On the scale we're talking about, that contribution is far from miniscule. As a matter of fact, it would not surprise me to find out the rest of their investors funding was contingent upon some public funding. Granted, our current investment environment is not "free market", and has become adapted to the public/private hybrid reality. But speculating that the private sector could and would automatically replace the public influence and still provide all the things we really need is just that—speculation.
Who the heck said anything about giving them more power? Just because I like to bring a balance to the discussion about the positive aspects of our Federal government doesn't mean I think they walk on water. Spend enough time here and you will see me (and others) point out numerous failings that we want rectified, from serious attacks on our liberty to corporate influence in the halls of Congress.
It's a balance, BJ, like yin and yang. When you get to the point where you see nothing bad or nothing good about something, ideology has taken over your sight.
We're in violent agreement :-)
It's not that the grant was "minuscule" relative to their needs, it's just minuscule relative to what gets handed out through corporate welfare.
It's not speculation -- a $20 million investment is WELL within the reach of private capital. With a decent business plan and a committed management team, you'd have no trouble raising the funds privately. You likely wouldn't need to raise it all at once, and if you could show an incremental path to generating revenue, you could fund through a combination of debt and equity and ideally retain more ownership.
I love "real" capitalism (as opposed to corporatism) because it emphasizes "sharing" -- sharing the risk, sharing the rewards. The challenge is finding the "right" investors who will think like owners, and not like speculators/flippers. You want the investor who will bring more to the business than just the dollars, and who will take a long-term view in helping you grow the business in the right way, with the right values.
I agree that balance is necessary. Government is not the “problem”, per se. Government is the problem insofar as government interests are indistinguishable from corporate interests. My belief, however, is that it is necessary for us to make our federal government (speaking only of federal, for the moment) SMALLER and LESS POWERFUL to push the pendulum back towards a more realistic equilibrium. Just advocating for "better government" without rolling back its power and influence is not sufficient. We're already that far gone. In the words of MLK himself:
Anyone want to join me? [/shameless_plug] :-)
Re: your shameless plug. :)
You're delightful to read. And though I haven't been actively engaging in the discussion, I've read every word.
But I have to be honest with you. I could never support someone who would eventually oppose David Price. I'm sorry. I think you've got some interesting ideas. I don't agree with many of them, but they're interesting, and you've certainly made me think about what I believe, which is good - you've helped me clarify why I don't agree with you.
But I will give you this. You've restored my faith in civil discourse between people with opposing political ideas. Thank you for that. Perhaps there is hope for this country and this state after all.
Be the change you wish to see in the world. --Gandhi
Well, that's a start...
But I hope you'll come to realize that this is not about David Price, nor is it about any one individual.
It's much bigger than that.
I like your quote, as well :-)
Ah - but it is about David Price.
At least, to me. He's one of the best.
And yes, I try to live that quote. I'm not always as successful as I'd like to be.
Be the change you wish to see in the world. --Gandhi
Free Market Extremists...
...believe that markets invariably yield superior efficiencies and outcomes. Efficiency is the market's ultimate claim to legitimacy. We might not like its outcomes, but the fundamentalist believes that if the market is always the most efficient means of allocating resources and thus promoting prosperity, that reality trumps the other complaints.
The problem is, markets are not always the most efficient nor do they always deliver the best outcomes. Examples include healthcare, research, education, pollution control, the distribution of income, or even the regulation of capitalism itself. Left to their own devices, markets can lead to outcomes that are not only socially intolerable (47 million uninsured) but economically inefficient as well.
Nobody covers this as well as Robert Kuttner (founder of The American Prospect) in his book Everyting for Sale: the Virtues and Limits of Markets.
You might want to check this out
You can't have a "market failure" in a market that isn't at least reasonably free to begin with. I admit that the title sounds extreme, but at least give it a read:
http://blog.lawsonforcongress.com/2007/11/22/why-the-government-needs-to-leave-healthcare/
Oh, and I've ordered Kuttner's book
Thanks for the tip -- you'll be glad to know that I take my reading from a variety of perspectives. I've read Galbraith and Keynes, but I since I question their underlying assumptions, I come to different conclusions.