Think Before Taxing Poor Additional 17%

October 8, 2014, 7:00 a.m.

October 9: Added, below, are comments regarding this blog essay/column posted to the Press-Citizen's online version of the column, and Facebook mentions of the column. They conclude with an emailed comment from a reader, and Nick's response to it. Below that are two comments from present and former Johnson County officials: an excerpt from Supervisor Rod Sullivan's Sullivan's Salvos, and a comment posted directly to this blog essay/column from former Auditor Tom Slockett.

On the Local Option Sales Tax, Think Before You Vote

Nicholas Johnson
Iowa City Press-Citizen
October 8, 2014, p. A11
My response to the dueling sales tax columns on the Oct. 6 opinion page? Think before you vote. That’s all I ask.

Income inequality is as American as apple pie. The wealthy get the largest slices. So it has always been.

The 18th Century sentiment, “Those who own the country ought to govern it,” is attributed to John Jay, our first Supreme Court Chief Justice. It didn’t just burst forth as a talking point from today’s conservative rightwing corporatists or Fox News.

We’re familiar with the results from Washington. One family owns more than do 40 percent of the American people combined. The increased value since the 2008 bank fraud has gone to the upper one percent -– including those very bankers too big to jail.

What we and the media lose with our focus on Washington is that the same forces are playing out in state capitals, county courthouses, and city councils.

It would be hilarious if it was not so inhumane.

Why does the City Council tell us we need this sales tax increase? To make up for lowered property tax receipts, they say. And what are they going to do with the additional sales tax receipts? Why, use at least 40 percent of them to lower property taxes even further.

Read that a second time before you go on. Can you imagine what Jon Stewart would do with that one?

Landlords’ apartments that the occupants don’t own will now be taxed as if they did, with lower taxes for landlords. Guess how those savings will be divided between reductions in rents and increases in landlords’ profits.

The rich become ever-richer because the tax laws are rigged. The wealthy have lower rates on profits from investing money than the working poor have on pay for investing physical effort.

Those who have to spend every dime they earn are the ones hit hardest by the sales tax. (That’s why the quickest way out of the recession in our 70-percent consumer-spending economy would have been to flow money through their hands rather than the wealthy.) [Photo credit: Ehrenreich, Nickel and Dimed.]

Don’t be fooled by this increase of “a penny,” or “one percent.” For the math-impaired, an increase from six percent to seven percent is closer to a 17 percent increase.

Be aware we are playing Washington’s game right here in Iowa City. The Council is offering you a deliberate scheme to shift even more money from Iowa City’s working poor to its upper middle class and rich. Washington’s conservative corporatists would be proud.

[Illustration credit: Working Poor Families Project.]

You see, this is not just tax breaks for the rich -– which it also is. It’s worse. It’s Robin Hood in reverse: further enriching our local well-off by actually taking money out of the pockets of those most in need.

Before you vote to take 17 percent more from those suffering the most, consult your head, your heart, your conscience, your God. Is that who you are? Is that who you really want to be?
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Iowa City resident Nicholas Johnson maintains the website fromdc2iowa.blogspot.com.

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Comments Regarding this Blog Essay/Column
From comments posted to the the Press-Citizen online version of the column:

Mary Murphy, Iowa City, Iowa

Thanks for writing this. I’d like to have seen everyone think more creatively about how to conserve funds before asking for more. Is every capital project truly necessary? For example, my sense is construction work to raise Dubuque St. (IC’s Gateway project) will be far more disruptive than any flooding of Dubuque and cost the taxpayers an enormous amount—Only $10.5 million of its estimated $51 million plus cost will be covered by grants and the rest will be paid for by local option taxes, general obligation bonds, and wastewater operations revenues. If this project was set aside, other compelling projects like creating a secondary access to the Peninsula and extending Foster Road to Prairie Du Chien could be done at a fraction of the cost. Extending Foster Road would also create an alternative access to the downtown to and from the Dubuque St. I-80 exit in the event of future flooding on Dubuque St. Sure Dubuque St. would need some maintenance dollars spent on it; however, not $51 million plus dollars. As another example, Johnson County could work with Iowa City staff to use more consersation bond money to develop parks and trails within Iowa City (saving Iowa City some money), especially since Iowa City voters helped pass the bond. See http://www.icgov.org/site/CMSv2/file/finance/budget/FY15/Adopted/CapitalProjectFunds.pdf for a list of Iowa City’s capital projects.

Mona SpeaksforthePoor Shaw

Nick, you nailed this to the wall. Thank you.

Thomas J. Gill, Coralville, Iowa

But it's only a Penny!, Great editorial, Thank-You

From comments posted to a Facebook notification of the column:

Phil Specht

On the other hand reducing the sales tax and replacing it with a transaction tax covering all movement of money would save the poor and tax where the "willie sutton" wealth is made.

Steve Hanken

Damned straight it would, Phil.

From Mona Shaw's Facebook share of the Facebook post:

Nicholas Johnson nailed this one to the wall. Johnson County, just don't vote for this. It's wrong. It's flat out wrong.

Lynda Waddington

What's the alternative? (Have not yet read Nic's piece.)

Tim Weitzel

The alternative is to not tacitly approve of tax cuts to the wealthy by approving additional regressive taxes that will most affect the poor. There are alternatives to the issue of affordable housing and budgeting for roads is a choice made between staff and city council.

Lynda Waddington

Due to state property tax reform, which included moving multi-family dwellings off commercial roles and to residential roles (bet no one has seen a reduction in rent), Iowa City is facing between $37 & $50 million revenue shortfall. Not saying LOST [Local Option Sales Tax] is answer, just that options for city government are limited.

Tim Weitzel

I'm aware of the limitations on revenue for local government. However, taxing the poor disproportionately greater to make up the shortfall seems highly counter intuitive. The argument has been made that most people won't even notice the difference in an extra 1% but those who are low income will notice. I guarantee it. Tough budget choices are part and parcel of running local government.

And, as a reader's email:

Just finished reading your guest opinion in today's Press-Citizen, and I both agree and disagree with what you wrote.

I agree with your description of our governmental landscape as unfair. Sometimes grossly unfair. Just off the top of my head is the reality that sales tax and Social Security tax both require significantly greater percentages from poor than from the rich. In the meantime, in between time, ain't we got fun.

I agree we have a flawed government, because it was designed and is now operated by flawed people. Someone once said we have the worst possible form of government.....except for all the others.

For instance, it wasn't infinate wisdom that our governor-for-life and tag-along legislature used to determine that buildings filled with rental apartments aren't actually commercial properties.

Where I disagree is your contention that we shouldn't use flawed governing tools, even though they're the only funding tools available. When cities -- especially those such as Iowa City and Ames with tons of apartment buildings -- are stripped of tax funding by the millions, they're forced to use the only alternative sources of funding realistically available at the present time.

Thus, my head and my heart and my conscience will vote in favor of the local option tax. About God, I believe he must have a sense of human, so he's out there somewhere laughing himself silly at what fools these mortals be.

And by the way, percentages and statictis do sometimes fall into the category of damn lies. It's correct that one penny is just one percent of a dollar. But it's also correct that one penny can represent a nearly 17 percent increase.

The whole situation is somewhat modified by the fact that all of us flawed people have at least modest control over what retail itejms we purchase, and important items such as groceries and medicdal items aren't included in the local option taxes.

As usual, I find your writing enjoyable and provocative. And what an uninteresting world this would be if we all agreed on everything."

And Nick's Reply to the reader's emailed Analysis:

You've indicated where you disagree with my contentions. Where I disagree with yours is the assertion that a 17% hike in taxes paid by the poor is "the only alternative source of funding realistically available at the present time." It's a sentiment also expressed in a letter on the Press-Citizen's opinion page this morning [October 9], James Conger's "Hold Your Nose and Vote 'Yes' on Sales Tax", p. A9. He writes, "The local option sales tax . . . is one of the only options available to . . . say[ing] goodbye to services that now serve the poor and the elderly."

Why is it that you, he, and undoubtedly many other local residents, immediately leap from "we need other sources of revenue" to "let's either raise taxes on the poor or cut their services"?

Not only do I believe there are many alternative ways to fund a City's legitimate governmental functions that I'll briefly discuss in a moment -- including expenses that can be cut as well as alternative sources of revenue -- I also believe that some of those alternatives are so unambiguously morally reprehensible (a category that, for me, includes taxes on the poor) that they should be off the table from the beginning of any discussion.

As now-Vice President Joe Biden once told me, "There are some things worth losing an election for."

Similarly, when it comes to budgets, revenue decreases, and cost cutting, whether for government, for-profit or non-profit corporations, I believe we retain moral as well as fiscal obligations to address the human consequences.

"Revenue is needed" was the justification offered by UI's athletic department for entering into contracts with the gambling and alcohol industries. As I said at the time, "Once 'revenue is needed' becomes your polestar, your moral compass begins to spin as if on the North Pole."

"Revenue is needed" was the reason a high school principal once gave me -- and a gathering of dentists concerned about what they called "Mountain Dew mouth" -- for keeping sugar-drink-dispensing vending machines in his high school. He had to do it, he said, in order to pay for the scoreboard for the football field. I said to him, "We've now established that you are willing to assign a higher priority to revenue for a football scoreboard than the health and welfare of your students. Apparently you do not feel constrained to avoid ways of raising money that will be harmful to them, including in this instance ways that are known to increase their rates of obesity, diabetes, and tooth and gum disease, among other medical conditions. That being the case, freed of such constraints, have you given thought to other even more lucrative, though harmful, revenue possibilities -- such as, say, a teenage prostitution ring?" Of course, it wasn't a serious proposal, but it made the point. Half the crowd applauded and laughed, the other half booed.

I'm really troubled by the knee-jerk, first reaction, when government expenses loom, or revenues decline (often, as in this instance, to cover tax cuts for the wealthy), "Well, I guess we'll just have to impose tax increases on the poor, or cut their programs."

That's really the beginning and end of the point I'm trying to make.

Given the sales-tax-increase advocates' conviction that there really are no other alternatives, however, let me list a few. Others might be even more undesirable, even bordering on the illegal. But we are not looking for a "good" alternative solution; we're looking for the "least worst" solution. And from my vantage point anything would be "least worst" than increasing taxes on the poor.

The first place I'd start would be for the City to limit the expenditure of the property tax revenue it does have to historically traditional, public, governmental services and functions. If it would stop providing gifts of substantial amounts of cash, "forgivable loans," tax deferrals, and redirecting dedication of tax revenues to specific for-profit developers and other private businesses, a significant portion of the problem would disappear. See, "TIFs: Links to Blog Essays" and this morning's column by Peter Fisher, "If Lucky's Getting Lucky, What About the Taxpayers?, Iowa City Press-Citizen, October 9, 2014, p. A9.

Sources tell me there are inefficiencies, and cuts in staff, programs and projects, within the City's budget that could also help cover some of the revenue decline.

Corporations and governments confronting budget cuts sometimes simply postpone previously budgeted maintenance, repair, renovation and construction projects -- if they are not essential to prevent death, disease, or injury. For example, the University's College of Pharmacy wanted to begin construction on a new building this year; the project has been postponed. Raising Dubuque Street might be an example of a project that could be postponed by the City.

Increases in fees could be focused on the upper middle class rather than the poor -- fees for building permits, trash taken to the City's dump, water and sewer, weekly trash pickup, and whatever else the City now charges for. It might even charge downtown bar owners for the cost of City employees' Sunday morning clean up of the vomit outside their businesses, and other goods and services provided downtown merchants. It might even cancel the program that enables downtown businesses to spruce up their storefronts at taxpayer expense.

Bear in mind, I'm not advocating any of these alternatives. I don't have to. I'm just making a point about the role of the ethical, moral, philosophical -- and for some, religious -- values that ought to be in play when a government decides that increasing taxes on the poor is its only alternative. This brief list of untested alternative possibilities is only provided for those who insist there are none.

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Rod Sullivan, Sullivan's Salvos
"More Sales Tax"
July 1, 2014, issue; emailed June 26, 2014
[Supervisor Rod Sullivan, a member of the Johnson County Board of Supervisors, publishes a newsletter he calls Sullivan's Salvos. You may request a (free) subscription by emailing him at RodSullivan@mchsi.com. His views on sales tax are especially relevant both because of his official position and the experience and knowledge that position provides. This excerpt from Sullivan's Salvos is republished here with his permission. -- N.J.]

As many of you know, I am a bit of a wonk when it comes to taxes. My interest in this area has led to some strongly held opinions against sales taxes. Here are a few reminders as to why increasing our reliance on the sales tax is NOT a good idea.

Regressivity This means that the poor pay a higher percentage of their income in taxes than do the wealthy. Sales taxes are the most regressive taxes. Income taxes are the most progressive taxes.

In 2003, a person with an income of $90,000 paid 3.2% of her income in taxes. A person earning $19,500 paid 11.1% of her income in taxes.

Relative to income, the poor pay twice what the middle class pay, and nearly 5 times the amount the wealthy pay. Even with exemptions, sales taxes hit the poor hardest.

Who are the poor? 31% (215,855) of the children in Iowa live in low-income families. 10%(70,857) of the children in Iowa live in poor families. Most of the people living in poverty in Iowa and elsewhere are children. There are more poor women than poor men. Plus we are talking poverty here, which is a much higher threshold than free and reduced price lunch.

Children are the poorest segment of our society. I will quote one of my favorite authors, Jonathon Kozol: “Charity is no substitute for economic justice.”

You cannot raise money for human services and believe they will make up for the damage done by a local option sales tax. Governmental agencies cannot improve their budget situations on the backs of the poorest of the poor. The needs of the poor will outpace any and all services that they have helped to fund.

In the Iowa City Community School District, parents and kids at Twain, Wood, and Hills pay a higher percentage of their income in sales taxes than parents and kids at Wickham, Lincoln, and Shimek. Does this make sense?

Wealthy services not taxed The services of accountants, attorneys, and stockbrokers are not subject to sales taxes. These and many other services (advertising, consulting, etc.) used primarily by the wealthy and by large corporations go untaxed. In addition, property taxes are deductible, while sales taxes are not.

Sales Taxes versus Property Taxes “Sales tax proponents frequently use the argument, “Sales taxes are better than property taxes.” First off, this is untrue. This argument is akin to saying, “Drinking is better than smoking, so we need more smoking.” Neither tax option is good for the poor.”

Sales taxes versus property taxes is a red herring The point is not which is worse, sales taxes or property taxes. The point is that BOTH hurt the poor unfairly. We need to create a more fair system of taxation, and we need to do so creatively. Sales & property taxes are not the only two options available. People who claim these are the only options are being shortsighted. We need to challenge our legislators to allow for greater local use of income taxes. This is the fairest way to finance local governments, and should be part of the mix.

What about renters? Rent includes the landlord¹s expenses plus profit. But there is no profit if there is no renter. So depending upon the market, the landlord can adjust her rent as much as she wishes, so long as the unit remains leased. Most landlords raise rents when they can, regardless of taxes. Most try to squeeze out maximum profit. This is supply and demand and will happen REGARDLESS of taxes. Supply and demand drives the rental market-nothing else. This is a fact, and economists of all stripes have backed this up. So before you E-mail me disagreeing with this fact, talk to a damned economist!

Another flaw in this argument is assuming that landlords are somehow entitled to no less profit than they are currently receiving. Owning property is an investment. People are not forced to own ¬ they can invest in CDs, gold, or the stock market. If your investments are not profitable, sell.

Programs that use relative wealth as a measure of eligibility (such as Medicaid) always include resources (property). It is not enough to have low income; you must also lack other resources, such as property. This is because the net worth of a property owner far exceeds that of a renter. Renters have less real assets. Under a sales tax, renters pay the same as their counterparts with real assets.

What about “outsiders”? Won¹t they help pay? People who live outside of Johnson County pay about 20-25% of the taxes collected. These are by and large not people from Chicago, however, but commuters who purchase goods on the way home.

I cannot, in good conscience, support a shift of the tax burden to people who have less money. What's more, I have trouble saying that a person earning$25,000 should pay more tax just because she lives in Williamsburg, Riverside, West Branch, Mount Vernon, Tipton, etc. Especially when the local wealthy would be let off the hook at her expense. It is critically important that we think of our middle and low-income neighbors who commute to this County.

In addition, there are “outsiders” who pay property tax; they are absentee landowners. Most of the buildings in downtown Iowa City are owned by people who live outside of Johnson County. Coral Ridge Mall, Proctor and Gamble, Regency Trailer Court, numerous student apartments, and thousands of other properties are owned by entities that do NOT call Johnson County home.Substituting sales tax for property tax lets these absentee landlords off the hook. Others will pay for the roads and services that add value to their properties.

Doesn¹t everyone else impose a higher sales tax? Yes. Currently, only Johnson County has no Local Option Sales Tax. When you are the only (or one of the only) counties that does something, you are either doing something very well or doing something very poorly. I believe Johnson County has been doing very well by choosing not to impose this tax.

Theological arguments I just happen to buy into a worldview that those who are able need to help those who are not. It is a basic organizing principle of any society, for one thing. Most major world religions subscribe to the idea of helping the poor.

I hold to a viewpoint (influenced by Christian doctrine) that says, “The last shall be first and the first shall be last”; “Do unto others”; “That which you do to the least among you, you do to me”; “The meek shall inherit the earth”; “Charity shall cover the multitude of sins”; “You cannot serve both God and wealth”; and “A rich man has a better chance of putting a camel through the eye of a needle than getting into Heaven.” Islam, Judaism, Buddhism, Hinduism, and most major religions share similar doctrine when it comes to caring for the poor first. If you think I am making these up, consult your own religious authority.

I prefer to follow this lead rather than doing more to comfort the comfortable.

# # #

The Religious Indictment of Republicanism

May 14, 2011, 7:00 a.m.

[And see, "Spreading the Wealth Around -- By Giving it to the Rich," ResourcesForLife.com, May 14, 2011.]

Catholic University Professors Say Republican Budget
Violates Basic Catholic Moral Teachings

"For of those to whom much is given, much is required."
-- President John F. Kennedy, January 9, 1961

Funding tax cuts for the rich and corporations by cutting social programs for the poor not only violates "basic Catholic moral teachings," but the moral teachings of virtually all of the world's great religions. It's something all elected officials -- Democrats and Republicans -- need to reflect upon.

For unto whomsoever much is given, of him shall be much required: and to whom men have committed much, of him they will ask the more.
-- Luke, 12:48, Bible, King James Version.

"Tzedakah" is the Hebrew word for the acts that we call "charity" in English . . .. However, [where] "charity" suggests . . . a magnanimous act by the wealthy and powerful for the benefit of the poor and needy . . . "tzedakah" is derived from the Hebrew Tzadei-Dalet-Qof, meaning righteousness, justice or fairness. [It] is not viewed as a generous, magnanimous act; it is simply an act of justice and righteousness, the performance of a duty . . ..
-- "Tzedakah," Judaism 101.

"Zakāt" (Arabic: زكاة‎) is giving a fixed portion of accumulated wealth by those who can afford it to help the poor or needy, and also to assist the spread of Islam. It is considered a religious obligation (as opposed to voluntary charity) that the well-off owe to the needy because their wealth is seen as a "trust from God's bounty". The Qur'an and the hadith also suggest a Muslim give even more as an act of voluntary alms-giving (sadaqah).
-- "Islam," wikipedia.org.

"More than 75 professors at Catholic University and other prominent Catholic colleges have written a pointed letter to [the Republican Speaker of the U.S. House of Representatives] Mr. [John] Boehner saying that the Republican-supported budget he shepherded through the House will hurt the poor, the elderly and the vulnerable, and that he therefore has failed to uphold basic Catholic moral teachings.

“'Mr. Speaker, your voting record is at variance from one of the church’s most ancient moral teachings,' the letter says. 'From the apostles to the present, the magisterium of the church has insisted that those in power are morally obliged to preference the needs of the poor. Your record in support of legislation to address the desperate needs of the poor is among the worst in Congress. This fundamental concern should have great urgency for Catholic policy makers. Yet, even now, you work in opposition to it.'

"The letter writers criticize Mr. Boehner’s support for a budget that cut financing for Medicare, Medicaid and the Women, Infants and Children nutrition program, while granting tax cuts to the wealthy and corporations. They call such policies 'anti-life,' a particularly biting reference because the phrase is usually applied to politicians and others who support the right to abortion."

Laurie Goodstein, "Critical Letter By Catholics Cites Boehner On Policies," New York Times, May 12, 2011, p. A17.

Nor is this moral and religious failing limited to our politicians in Washington. It seems embedded in some state and local politicians as well (and thus, in fairness, to the extent they are our "representatives," in us as well).

Federal Government.

There are thousands of examples from our nation's capital, but here is a current one.

During a U.S. Senate hearing May 12, "At issue was a Democratic-sponsored bill to rescind roughly $2 billion of the $4 billion in tax incentives the oil industry now enjoys annually, with the money dedicated to deficit reduction." John M. Broder, "Oil Executives, Defending Tax Breaks, Say They’d Cede Them if Everyone Did," New York Times, May 13, 2011, p. B4.

It was regrettable, but expected, that the CEOs of the five largest oil companies would show little enthusiasm for the idea. What is far more disappointing is that all virtually conceded that it was little more than what Senator Hatch characterized as a "dog and pony show" (complete with poster-size illustration of horse and dog). All recognize it's dead on arrival (DOA) in the House, and the Democrats don't have enough votes to get it passed in the Senate. (In fact, although the Catholic University professors chose to focus on a Catholic in the leadership, who was a Republican, if they were to evaluate the voting records of all 535 House and Senate members they would have ended up with a truly discouraging number of Democrats on their list as well.)

And yet, based on sales so far this year, if the companies' continue this year's prices, they are on track to pull $140 billion of profit out of our pockets -- and gas prices look like they are continuing to go up, even when world oil prices decline. ("Collectively, the five companies reported more than $35 billion in first-quarter profits, and are on a pace to set record profits for the year." Ibid.)

The companies' tax burdens have not been great. For example, "Exxon Mobil, the most profitable corporation in the history of the world, not only paid nothing in federal income taxes in 2009, but received a $156 million tax refund from the IRS, according to their own shareholder report. Repealing tax breaks for big oil and gas companies as President Obama has recommended would raise more than $35 billion in revenue over the next decade." Bernie Sanders, "End Tax Breaks for Profitable Corporations," The Huffington Post, March 27, 2011.

Nor is this giveaway limited to oil companies. As Senator Sanders continued,

"At a time when we have a $14.2 trillion national debt and a $1.6 trillion federal deficit, it is unacceptable that Exxon Mobil, General Electric, Bank of America, Chevron, Boeing, and other large, profitable corporations are not only avoiding paying any federal income taxes at all but have actually received huge refund checks from the IRS.

Loopholes in the tax code, offshore tax havens, tax breaks to companies that export American jobs to China, and other tax breaks have allowed giant corporations in America to receive billions in refunds from the IRS. . ..

In 2005, one out of four large corporations paid no income taxes at all even though they collected $1.1 trillion in revenue over that one-year period. . . .

Bank of America received a $1.9 billion tax refund from the IRS last year, even though it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. . . . Ibid.

And see Doug Mataconis, "David Stockman’s Scathing Indictment Of GOP Fiscal Policy," Outside the Beltway, August 1, 2010.

State Government.

Now here are a couple of examples from Des Moines.

If truth in advertising were required of legislation, the property tax bill that just passed the Iowa House would have to be labeled "Homeowners: Pay More for Less."

The bill enacts complex and far-reaching changes in Iowa property taxes that over time would hamstring the ability of cities and counties to provide services, while shifting the responsibility for property taxes from business to residents. . . .

[T]he net effect is a sizable shift to residential homeowners. The commercial share of taxable property would drop by almost a third, from 29 percent to 20 percent, while the residential share would rise from 47 percent to 54 percent. . . .

Residential homeowners, many of whom also have received the short end of the deal in income-tax cuts to benefit the wealthy over the past 15 years, would again pay the tab for perks for the most well connected. . . .

Over time, the revenue limit [in the Bill] would force substantial cuts in local services because revenues would not be allowed to increase as fast as costs.

Peter Fisher, "Truth in labeling on property tax bill," Iowa City Press-Citizen, May 12, 2011, p. A7.

Another outrageous example is the Iowa Legislature's willingness, notwithstanding all the problems with nuclear power, to have Iowa utility ratepayers not only have to accept MidAmerican's multi-billion-dollar nuclear power plant project over Iowans' objections, but to pay for it. And not only pay for it after it is built, but before. And not only pay for it before it is built, but let the company keep the money if it decides not to build it. To make matters worse, it's not only a brazen effort to give MidAmerican's shareholders the profits while giving unrepresented Iowa ratepayers the risks and possible losses, it also looks like it violates the Iowa Constitution:

One of the fundamental principles of government is that the power of taxation and expenditure of taxes shall not be exercised for private benefit. Iowa's founders recognized this principle [in the Iowa Constitution, Art. I, Sec. 18, and Art III, Sec. 31] when they required that for any payment or promise of public funds there had to be a defined public benefit.

Senate File 390 violates this fundamental principle by setting forth an unprecedented scheme for forcibly transferring private citizens' money and public taxpayer funds to MidAmerican Energy, a privately owned, for-profit utility corporation. The purpose for the legislation is subsidizing the possible construction of one or more nuclear power plants of indeterminate sizes, of undefined costs, at undisclosed locations and at some indefinite time in the future -- if at all.

The legislation further provides that if MidAmerican fails to get its plans approved or simply changes its mind, Iowa's ratepayers and taxpayers will have no recourse to get their money back. . . .

The proposed law's denial of citizens from getting their money back also is a prepaid profit scheme constituting an arbitrary deprivation of taxpayers' private property interests. State senators, facing overwhelming political pressures from Iowa's utility industry lobbyists, ought to take to heart the wisdom of our forefathers and reject MidAmerican's unconstitutional proposal to finance its private owners' risky scheme.

Jim Larew, "Unconstitutionality of SF390," Iowa City Press-Citizen, May 11, 2011, p. A7.

Local Government.

At the local level, this takes the form of "TIFs" -- giving developers a tax break that results in either higher property taxes for local homeowners, a cut in services, or both. The local debate has raged between advocates of TIFs and the opponents -- but meanwhile the TIFs keep sprouting up like mushrooms notwithstanding the obvious objections.

Here are just a few of the problems with TIFs, excerpted from a blog entry five years ago:

There are, of course, many other problems with TIFs besides their irrational and unfair impact on the programs that take the cuts.

(a) They are unfair to the TIF beneficiary's competitors who do have to pay their fair share of the cost of public programs benefiting everyone. Those competitors are, thereby, subject to a competitive disadvantage.

(b) They [TIFs] are open to corruption and cronyism, paybacks for campaign contributions, bribes or other favors.

(c) TIFs are the public budgeting equivalent of violating the advice in "how to manage your money" columns and books: always go shopping with a shopping list. TIFs are, for a taxing authority, what impulse buying is for the rest of us. Budgeting is, if anything, more important for those who are managing public finance than for those of us managing our own personal finance. Approving a TIF is like our seeing something in a store, saying, "Gee, I've got to have that," and then finding out, come the end of the month, that we no longer have enough money in the bank to pay the rent. Public expenditures ought to be based on a zero-based budgeting process that looks at every past, present and potential future public program, its costs, wastes and efficiencies. There should be comparative benefit-cost analyses of potentially competing programs, and a kind of triage of those that pay back so much they should be expanded, those that should continue as they are, and those that should be cut (or eliminated). Taking up individual TIF requests as they are presented totally undercuts that process.

(d) They involve government intermeddling in what ought to be the decisions of owners and investors (such as, discussion about the number of apartments vs. condos, and floors devoted to a "hotel," in a proposed TIF-funded building). If "a camel is a horse built by committee," Iowa City's next TIF-ed project is going to be a building designed by committee -- some members of which want to optimize the developers' profits, others who want to optimize the taxing authority's tax revenues, and none of whom are solely focused on the public's welfare (e.g., in this context, "affordable housing").

(e) There is no sure fire way to know where the truth lies when a developer says, "Gee, we just couldn't think of going ahead with this project unless you'll increase the profits we will make from the venture as a result of the multi-million-dollar contribution of corporate welfare dollars from taxpayers." The odds that any given taxing authority will end up having paid out more via an individual TIF (or outright grant) than would have been necessary are very high indeed. (I.e., no public money ought to be going into for-profit ventures that the developer-owner, investors, venture capitalists, and bank loan officers combined don't think worth it without subsidy. But if public money is going to be handed over to private developers anyway, how much should it be? "Trust me, this is how much I'll need," isn't a very satisfactory analytical tool.)

(f) There are few, if any, guarantees the taxpayers will ever get a return on their dollars. If there are profits they go to the developer; if there are losses they are picked up by the taxpayers.

(g) Not only do TIFs involve the rankest ideological hypocrisy (state funding of "free private enterprise"?!), but they really distort the market forces at play, and what happens to a city's growth and development (compared with what happens when the system for making these decisions is left solely to the best judgment of entrepreneurs, investors, venture capitalists and loan officers -- restrained only by reasonable zoning restrictions).

__________
Not only do I not object to rational and equitable economic development, I think it's essential to providing the American people with basic necessities -- including jobs -- as well as the more civilizing elements of life.

Nor do I object -- if it need be said -- to 100% public funding of such things as roads, schools, libraries, parks, and so forth (after subjecting these expenditures to the same kind of analysis suggested in (c), above). As we move along the continuum away from the more conventional public enterprises it may become more iffy; but even then -- say, if the City of Iowa City wanted to build a mixed-use tower as a 100% City-owned project -- I'm certainly willing to listen to, and evaluate, any proposal from a position of pragmatism rather than ideology.

What I object to are programs in the name of economic development that are not effective, or are unfair, or too expensive, or that have negatives outweighing any possible benefits, are difficult to administer, and return less benefit for the cost than alternatives might provide.

Put aside the costs, ethics and morality of subsidizing private enterprise; if all that doesn't bother you at least focus on the fact that such programs don't work. Our governor offered Maytag $100 million to stay. They left. In case after case, businesses given taxpayers' money have gone belly up, or never produced the promised jobs, economic growth, and increased tax revenues.

I would actually support economic growth programs that have been proven to work; programs that are fair, rational and benefit all businesses -- and citizens -- in the state of Iowa.

Those who've studied the matter say that business is attracted by a skilled workforce (which requires the unionization, liveable wage minimums, universal single-payer health care, and other economic supports to keep workers here); it also requires quality, and affordable, K-12, community college and university systems (which will require more funding); good transportation systems (buses, trains, roads and bridges, Mississippi and other rivers); communication (reasonably priced broadband, quality newspapers, television and radio); forests, parks and trails (for hiking, biking, camping, hunting, fishing and boating, which will require some restrictions on the hog lot and fertilizer runoff that pollutes rivers, streams and lakes); the support for the arts that Richard Florida talks about, and so forth.

Build that and we will have economic development -- rational, sound, free private enterprise economic development, grounded on solid fundamentals.

Build that and they will come.

"Understanding TIFs," October 5, 2006.

See also "Brother, Can You Spare A TIF?," April 25, 2011; "TIF-ing My Toolshed," September 2, 2006; and "Supervisor Sullivan Says 'TIF, TIF, Tsk, Tsk,'" September 16, 2006; and a series of Press-Citizen opinion pieces:

Nicholas Johnson, "TIF Helps the Rich Get Richer," Iowa City Press-Citizen, April 25, 2011, p. A7 (embedded in "Brother, Can You Spare A TIF?", April 25, 2011)

Bob Elliott, "State Should Limit Use of TIF," Iowa City Press-Citizen, May 6, 2011

Christopher Manthe, "Coralville Uses TIFs Far Too Much, Too Often," Iowa City Press-Citizen, May 7, 2011

Bob Hoeft, "The Other Side of TIFs," Iowa City Press-Citizen, May 11, 2011

Bob Elliott, "It Is Possible to Use TIFs Well," Iowa City Press-Citizen, May 13, 2011

Conclusion.

Politicians who hold public office take an oath to uphold the Constitution. But they have other obligations as well that are grounded in ethics, morality -- and the teachings of most of the world's great religions.

A variant is expressed by the phrase noblesse oblige. "'Noblesse oblige' is generally used to imply that with wealth, power and prestige come responsibilities. . . . In American English especially, the term has also been applied more broadly to those who are capable of simple acts to help another, usually one who is less fortunate." "Noblese oblige," Wikipedia.org.

President Kennedy once put it this way:

"For of those to whom much is given, much is required. And when at some future date the high court of history sits in judgment on . . . [whether] we fulfilled our responsibilities [we] will be measured by the answers to four questions: First, were we truly men of courage—with . . . the courage to resist public pressure, as well as private greed? . . . Finally, were we truly men of dedication—with an honor mortgaged to no single individual or group, and comprised of no private obligation or aim, but devoted solely to serving the public good and the national interest?"

John F. Kennedy, Speech to Massachusetts State Legislature (9 January 1961); Congressional Record, January 10, 1961, vol. 107, Appendix, p. A169 (quoted in "John F. Kennedy," Wikiquote).

It is a standard by which some of our elected officials will be judged harshly. It is, however, a standard to which we have every right, indeed the obligation, to measure their performance and judge their election.

# # #

The Economics of Conservation

October 28, 2008, 6:45 a.m.

Economic Analysis of Conservation Bond
The Johnson County Board of Supervisors has put a conservation bond issue proposal on the November 4 ballot.

I've been asked, now repeatedly, whether I think it makes economic sense for Johnson County's property taxpayers.

The short answer is "yes;" the longer answer continues below.

There are over 100 organizations, and thousands of individuals, whose recreational activities involve the use of Eastern Iowa's land and water. Iowa ranks near the bottom of the 50 states in public land. So many of them have been having to contribute their own land, money and efforts to improving Iowa's status.

But that's not the way our nation, and the other 49 states, have gone about creating this fundamental public asset over the last 200 years. They view this as a public function, appropriate for public expenditure.

Now Johnson County voters are being given the opportunity to join the rest of the nation. We get to vote on whether we want to invest $1 million a year over the next 20 years for the acquisition of private land voluntarily offered for sale. (This is not an "eminent domain" undertaking.)

Readers' comments. I welcome "comments" about my blog entries, and often benefit from their constructive criticism. But I don't use the blog to carry on an ongoing debate. I figure I have my say in the blog, and those making comments should be permitted their say unchallenged, leaving it to readers to sort it all out. So all comments except for overt advertising are retained on the blog.

But a recent anonymous comment directly asks for a response, and involves the conservation ballot issue:

Anonymous said...

People have been watching your blog for some type of analysis of the conservation vote coming up, the one where you and your wife sit on the board? You know, an analysis of the budget, the business plan, etc. The detailed plans about what happens to the land after purchase and who pays for it...the answering of questions related to conflict of interest...why we are expected to give away $20,000,000 without no more information that a one-page flyer and the exact one-page website???

We have come to expect greater thought on matters pertaining to our tax dollars. We expect more of you, Nick. How would a banker analyze your request for tax dollars? How should the general public? How can one vote on something with no details? Is it a desert topping or what?

10/22/2008 10:37:00 AM

I decided this was one comment that really did require a response, which I prepared over the weekend and intended to use today. Yesterday, he or she was back again, and after quoting from the "Missions and Metrics" blog entry of October 24, added a comment including this excerpt:

. . . These are the same issues being demanded regarding the $20 million conservation vote. All based on a one-page business plan? Give me a break Nick. By ignorning the issue you are agreeing with every argument the opponents of this handout have.

10/27/2008 11:33:00 AM

While I rather suspect that "Anonymous" is opposed to the bond issue, and will remain so regardless of what I write, it makes more sense to give him/her the benefit of the doubt and treat the comment as a serious inquiry.

Comparing Apples and Automobiles. While the implied economic questions can be and will be addressed (whether or not to the satisfaction of the author of the comment is another matter), there are some basics to address first.

1. Public money, private projects. Most of my concerns about public finance, expressed in newspaper columns and blog entries, have involved the transfer of taxpayers' money to private individuals and the bottom lines of for-profit corporations: the recent $700 billion bank bailout; earmarks such as the $50 million from Senator Grassley for the indoor rain forest proposal from Ted Townsend, Governor Ray, and Dave Oman; a vast array of other "corporate welfare" subsidies and programs; and locally the equivalent forms of gifts from the City Council to businesses in the form of TIFs and direct expenditures.

Such spending (rule by joint corporate-government authority is central to the classic definition of "fascism") should raise serious ideological problems for "free private enterprise" and "marketplace" advocates. But if it is going to be done anyway, I've argued, then claims such as those of projected ticket sale revenues, as for the rain forest or Stories Project, need to be subjected to the kind of analysis the author of the comment expresses as, "How would a banker analyze your request for tax dollars?"

2. Public money, public projects. By contrast, public projects, serving public purposes, that come from public bodies -- especially those funded with bond issues voted on by taxpayers -- are an entirely different matter.

That doesn't mean they should be exempt from economic analysis, only that comparing the issues they raise to those of typical corporate welfare projects is like comparing apples to automobiles.

When local school district residents voted a $40 million bond issue for more schools I had laid before them an alternative that would have eliminated the need for the $40 million. But enough voters were sufficiently uncomfortable with what the alternative involved (a modification of the high schools' senior year, and a different system for assigning elementary students to schools) that they thought the $40 million well worth it. And that was fine with me.

Taxpayers have as much right to make an additional contribution to new schools, or more conservation land, as they have to increase their tithe to their house of worship. (And yes, I understand that, unlike the voluntary tithe, once 60% or more of the voters vote for a bond for something those who voted against the proposal will also have to pay their fair share of the property tax used to pay it off.)

There's an enormous difference between, on the one hand, four individuals (Grassley, Ray, Townsend, Oman) deciding to spend $50 million of federal taxpayers' money on a private project in Iowa (their indoor rain forest idea), without meaningful consideration (if any) by the other 99 of the 100 senators, any of the 435 of the members of the House, or the White House staff, and no vote of Iowa's (let alone the nation's) taxpayers; and, on the other hand, the citizens of Johnson County voting to spend $1 million a year for the acquisition of additional public land for conservation and recreation in Johnson County.

Unlike transferring taxpayers' money to for-profit corporations, there are basic community functions and infrastructure that have historically been well within the role of state and local government.

Of course, public expenditures on public projects should be undertaken with as much administrative and managerial expertise, efficiency, and attention to alternatives and cost control as possible.

But there is relatively little debate that public projects can appropriately be undertaken by government -- at some time, in some way, to some degree. I would include in this category our public library, schools, roads, bridges, sewer system, and water plant.

Clearly, public parks and forests; wetlands, lakes and rivers; recreation areas and trails, have been seen to be an appropriate public purpose, and expenditure, since the time of the Boston Common in 1634.

3. "Our Land, Water and Future" and the conservation bond. Is the conservation bond proposal another example of for-profit corporations or wealthy campaign contributors trying to enrich themselves with taxpayer money? No.

This is clearly not only a "public money, public project" proposal, but one that originated with the Johnson County Conservation Board, with the approval of the Johnson County Board of Supervisors.

I had earlier been researching, writing about, and had created a Web site for "greenbelts," and had made efforts to contact the Conservation Board, although unsuccessful in doing so. Frankly, I had not thought about a bond issue, had not a clue the Conservation Board was thinking about such a thing, and was stunned (though pleased) when I first heard that a bond issue was in the works.

The comment indicates that my wife and I are on the "board" of "Our Land, Water and Future." In fact, the organization is sufficiently informal that it does not have a "board" as such, only a "steering committee" more or less make up of everyone who came to the first meeting, along with a couple of "co-chairs."

Certainly the organization did not exist prior to the notice of the bond issue, and thus neither it, nor to the best of my knowledge any of its supporters -- unlike the rain forest project's promoters -- could have been instigators of the conservation bond idea.

The closer analogy would be to the "Yes! for Kids" group, organized after the school bond proposal was put forward and made up of those who thought it a good idea.

The conservation bond details. How much detail can a voter reasonably expect from a bond issue proposal? It's one of the questions put by my anonymous comment writer.

Another Anonymous person (not me, obviously) actually responded with a comment of his or her own on this point, quoting the ballot language:

Shall [a] the County of Johnson, State of Iowa, [b] be authorized to acquire and develop lands [c] with public access provided, [d] to be managed by the Johnson County Conservation Board, [e] in order to protect the water quality in rivers, lakes and streams; protect forests to improve air quality; protect natural areas and wildlife habitat from development, and provide for parks and trails, [f] at a cost not exceeding $20,000,000 and [g] issue its general obligation bonds [h] in an amount not exceeding $20,000,000 for that purpose, [i] to be repaid in not more than 20 years? [j] All expenditures will be subject to an annual independent audit. [letters added]

This is about as detailed as you're likely to get from any comparable proposal.

Bonds to build schools don't indicate where the schools are going to be, the precise land and building costs for each, what the architectural plans are, the schools square footage and number of classrooms, how many students will attend, what neighborhood areas they'll come from, who the teachers will be, or where the bus routes will run.

And of course, like schools, it would be both difficult and unwise to identify precise parcels at this point because it would drive up the cost of those parcels for the public, and because it cannot be known, today, precisely what land will become available for voluntary sale, and thought to be most appropriate to the conservation purposes, 5, 10 or 15 years from now.

So what is the economic value of this proposed conservation bond? A part of our "apples to automobiles" problem involves the calculation of the economic value of public projects. It's not that it can't be done, and I'm about to show how it can be.

But you can't measure the "economic" return on a community's investment in libraries, schools -- or parks -- with the same approach you'd use to evaluate the investors' return on their investment in a hotel or shopping mall. Public libraries and schools were never created with the expectation of the "profits" they would spin off. The economic return they provide benefits not only those personally involved, but the community as a whole -- from the enhanced education and information possessed by the citizens, entrepreneurs, workers, and public officials in that community.

Similarly, there is no universally agreed upon single measure of the value of conservation, but these approaches may help:

(a) It's what the Mastercard advertisements call "priceless." What's it worth to you, today, to know that your grandchildren will have access to land in addition to that which is located in a suburban development of homes, or under the parking lots of super malls? What's it worth to you to take a bike ride along a trail through the woods and along a stream? Or to cross-country ski that same trail on a new winter's snow? To spot a rare bird in a forest? To play a game of ultimate Frisbee? To go fishing or hunting with one of your children? To camp overnight along a river?

(b) Economists say it's not "priceless"; they attempt to put a value on it. They say that, at a minimum, recreational land is worth what you are willing to pay to enjoy such pleasures: the mileage cost of driving your car there; the cost of the boat and motor; the outdoor clothes; the sporting, hunting and fishing equipment; the mountain bicycle -- possibly even an RV. In fact, this understates the value; I suspect most of us don't think about the dollar value of such pleasures, and if we did would value them far higher than our mere out-of-pocket expenses -- indeed, if the benefit from the cost was only a wash we probably wouldn't buy the stuff in the first place. And, of course, what's a "cost" (and a "value") to you is a "profit" to some local merchant. So, while I haven't run the numbers, it seems reasonable to assume that there's at least a $20 million return over 20 years from this analysis alone.

(c) Cost avoidance. What did the most recent flood cost us? I don't know the total, but I do recall a University of Iowa estimate of, was it $250 million? It was something over $200 million. And that's just one institution's loss from one flood -- over ten times the cost of the bond!

Greenways and wetlands; prairies, pastures and recreational lands in floodplains; and buffers of filters along rivers can both reduce the number and severity of floods and virtually eliminate the damage to homes and businesses. Cost avoidance alone makes the bond one of Johnson County taxpayers' best investments.

(d) Matching funds. I don't emphasize the proponents' suggestion that the $20 million can and will be "matched" with state, federal and private funds (though I have no reason to doubt them). It may be. But I haven't seen the details on that, so I'm not including it here. Obviously, however, if our $20 million ends up producing $80 million that would be another very positive economic return in the equation.

(e) "Return on investment." From the time of the Boston Common until now, America -- indeed the world -- has had a serious commitment to public lands. And for many good reasons, not the least of which is "return on investment."

"Now is not the time," say some of the bond issue's opponents. But do you know when is the absolute worst time to acquire public land? Next year. Conditions are never better than right now, whenever "right now" and "next year" may be.

It was not easy for the New York legislature to buck the political opposition 150 years ago and come up with the $50,000,000 then necessary to buy what is today Central Park in New York City. But do you know what its value is today? Some 10,000 times that much: $500 billion dollars!

Over the years, from the Boston Common and Central Park, through our vast system of national and state parks and forests today, Americans have seen that kind of return on their investment. Some 23-76% of the land in our 12 western-most states is public land. The National Forest Service alone holds 8% of all the land in America, about 193 million acres.

Imagine what our little $20 million investment will be worth 150 years from now!

(f) We know of the contribution of public lands to Iowa's ability to hold our graduates here, and encourage the immigration of others -- and the economic value that must represent, even if it cannot be measured accurately.

But even more significant, and more difficult to measure, is the contribution of conservation to the continuation of life itself. A reliable water table. Clean water in lakes and streams. The wildlife that help keep both plant and animal life in balance. The retention of our topsoil. The forests that help keep our carbon footprint and greenhouse gases in check. Healthy air to breathe. We cannot continue to take and take and never give back and expect to survive. Survival; that's truly "priceless."

Opposition to all public expenditure. There is a political/economic philosophy held by some that we should eliminate virtually all public expenditures for public purposes and "privatize" most of those functions: schools, jails, libraries, water, trash pickup, and turn the Interstate system into toll roads; give Disney the national parks. (Even these individuals might be able to concede that there's something different about meeting conservation needs essential to continued human life that have not, and will not, be satisfied with "marketplace forces.")

But unless you agree with that approach to government (or, rather, doing away with government) there is no reason to take seriously the arguments of those who do hold that view when they oppose the conservation bond. They are not really arguing against the wisdom of the conservation bond as such -- any more than they argue against schools, libraries and jails as such -- so much as they are arguing against any and all public projects.

(There are also, of course, arguments that it would be more fair and just to provide public funding for public projects with an appropriately progressive income tax rather than property tax, but that, too, is no more program-specific as an argument -- nor likely to be adopted -- than doing away with all public projects.)

As I began, "There are over 100 organizations, and thousands of individuals, whose recreational activities involve the use of Iowa's land and water." My thanks go out to all of them, as diverse in purpose as they may be, for what they have done with their own time and money -- most recently pulling trash out of the Iowa River. Rachel Gallegos, "Difference Makers; Volunteers Help with Iowa River Cleanup," Iowa City Press-Citizen, October 26, 2008 (available as, Rachel Gallegos, "More than 100 attend 'Make a Difference Day,'" Iowa City Press-Citizen, October 25, 2008).

"Flipping the ballot" and voting "Yes" for the conservation bond issue is a way we can all work together to further multiply their efforts -- while, in my humble opinion, getting one of the best returns on an investment of public money we're ever likely to enjoy.

# # #

TIF Warfare

September 7, 2007, 11:30 a.m.

I wasn't going to write this morning. Other things to do. The "let's bring weapons to campus" discussion went about the way I predicted yesterday anyway.

But just came upon an entry from my brother in arms in the "War on TIFs," State29, that should be required reading for any TIF supporters in the Iowa City City Council race -- as well as for anyone who's paying property taxes under the illusion that the money is going for public purposes.

The headline tells the tale, but the blog entry text just gets even better and better. Check it out:

State29, "eServe Gets Corporate Welfare and a Property Tax Break for Moving 11 Miles," September 7, 2007.

Unbelievable!

And don't tell me, "Oh, that's an exception. We wouldn't do anything like that in Iowa City."

Baloney! TIFs are fatally flawed. All of them. Any where, any time, for any purpose. For lots, and lots, and lots of reasons I don't have time to repeat here once again.

Just read State29's take on this one and come join the rational forces for sensible economic development. We call it the free private enterprise marketplace. A radical idea, I know, but it works -- and at a small fraction of the cost to citizen taxpayers of watching their property tax dollars drop to the bottom line of some for-profit corporation of the wealthy.

# # #

Gambling, Taxes and Cats

July 1, 2007, 8:00, 10:15 a.m. [times reflect additions to the entry -- for the benefit of those few individuals who check back occasionally during the day -- as well as reflecting the fact that what is called "life" occasionally interrupts blogging]

A number of stories today -- with links and commentary to come: "the beat goes on" (with President Sally Mason's public relations pieces behind us, today is Ken's turn; but when will we learn the true life stories of their three cats?); Iowa's economic future looking up (today is tax shift day and with one more gambling casino now open can Iowans' prosperity be far behind?); Des Moines' voters smarter than Iowa City's (poll indicates 17% hike in sales tax shift from rich to poor seemingly understood for what it is by residents).

# # #
The Gazette gives two stories equal billing on page one below the fold this Sunday: Diane Heldt, "Other Half of Mason Team Has His Own Plans for UI; Hopes teaching, writing background Will Serve Him in IC," The Gazette, July 1, 2007, p. A1; Orian Love, "Ready to Roll: Waterloo Welcomes Isle Casino," The Gazette, July 1, 2007, p. A1 (both available here).

The Gazette notes in its editorial that Iowa City voters were willing to increase their sales tax by 20% notwithstanding that neither they nor the school board had a clue how the money was going to be spent. (It was ostensibly a "school infrastructure local option" sales tax, hence "SILO"). Editorial, "Changes? A Penny for Your Thoughts," The Gazette, July 1, 2007, p. A7.

Meanwhile, thank goodness, the Press-Citizen is able to report that the tax will have no effect on the availability of SHOPPING as locals' primary leisure time activity, not to mention treatment for depression and contribution to Americans' mounting debt. Rob Daniel, "New Tax to Go Into Effect Today; Most Shoppers Say They Are Undeterred," Iowa City Press-Citizen, July 1, 2007.

However, in Des Moines, it may not be the "Destiny" of those who don't own property to accept a shift of tax payments from property owners onto the backs of the poor. Apparently they've fallen for "trust me" one time too many. The current poll indicates that, by 61% to 32%, potential voters are saying "No" to "Yes to Destiny." Melissa Walker and Jonathan Roos, "'Destiny' Faces 2-to-1 Opposition; A Poll Finds a Lack of Confidence in Public Officials to Spend the Money in the Best Interests of Residents," Des Moines Register, July 1, 2007, p. 1A.

And Rekha Basu uses "Destiny" as but one example of why the "liberal" and "conservative" labels have become virtually devoid of meaning and utility. Rekha Basu, "Political Labels Not So Clear Now," Des Moines Register, July 1, 2007, p. OP3. Her other examples include immigration reform, single-payer universal health care, environmental protection, and government spending. (I'm not going to repeat how she builds her case for each; if you're interested click on the link and read the column; it's not that long.)

General semanticists make the point that what we say, and the way we say it, is more a function of how the product of our various sensory apparatus is processed into speech by the electro-chemical soup inside our skulls than it is truly reflective of anything going on outside our skins.

They also refer to what they call "purr words" and "slur words." Some words are designed to (at least in part) invoke more of an emotional than an analytical response. They are sometimes used deliberately for that purpose -- in advertising or political speeches, say. And sometimes they've become so common that a speaker may use them without reflecting on their emotional content.

In any event, it seems to me that is what has now happened to "liberal" and "conservative." They have ceased to be very descriptive of anything, and certainly not very helpful in analyzing public policy issues -- for the reasons Ms. Baku points out, and more.

They tell you very little regarding the public policy being discussed -- indeed, very little about the person being described. All they really tell you is that, coming from some people, the charge of "liberal" (like the derogatory terms used for Italians, Hispanics, African-Americans, Jews and others) is that the speaker disagrees with the proposal, or the person, being so described. (Ditto for "conservative" coming from others.)

As Ms. Basu concludes, "each of us needs to carefully examine the issuesbeneath the labels to see who really wins and loses."

# # #