Taxes

Don’t Start A Discussion With Tax Cuts
Nicholas Johnson
The Gazette, November 10, 2021, p. 6A
Random thoughts about taxes.

1. Years ago I researched what political campaign donors get for their money. It turns out to be 1,000 or more to one.

An example: The Department of Agriculture sets milk prices. Imagine it refuses producers’ request for an increase. The industry makes a $200,000 “contribution” to the president. The milk price is increased. Next year Americans pay $200 million more for their milk. That’s a 1,000-to-one return on their “investment.”

You needn’t imagine. It happened. Except we paid $500-$700 million more.

Returns can include government contracts, tariffs, merger approvals, tax cuts and more.

This is an example of when increasing our taxes — to pay millions for publicly funded campaigns — could save us billions in family expenses.

2. Don’t mess with the tax code. If a business is to get taxpayer money make it a transparent appropriation on the table, not a hidden, manipulation of the tax code.

3. There are 12 or more categories of reasons why TIFs are objectionable.

For example, it’s backward. If a city or school board wants to spend tax money for legitimate public purposes, it needs voters’ approval. If it wants to distribute taxpayers’ money to for-profit private ventures, voters have no say.

We shouldn’t have different standards. But if we’re going to, aren’t taxpayers’ gifts to private businesses the ones requiring voter approval?

4. Our conversations should begin, not with taxes, but with the kind of life we want for ourselves and others. What our founders called “life, liberty and the pursuit of happiness.” Let’s pursue why the citizens of Finland and Denmark are number one and two on the worldwide happiness index while Americans are 18th. (Photo credit: Tiia Monto, Happy People road sign, Muuratsalo, Muurame, Finland, commons, wikimedia.org)

Only the most hardhearted among us will bad-mouth Jesus’ appeal for food, water, shelter, clothing, and health care for the poor (and prison visits). Matthew 25.

What to do? Economist Milton Friedman once told me, “There’s nothing wrong with poverty that money can’t cure.”

Money, yes. And taxes are one source. President Richard Nixon joined Friedman in the negative income tax idea. In 2019 Stockton tried a guaranteed basic income experiment. Forty cities followed, including Los Angeles and now Chicago.

5. But taxes aren’t the only source.

Some employers have voluntarily provided employees what Democrats are proposing: full health care, retirement packages, family leave, on-premises child care — and company housing or wages that can cover rent.

Foundations such as Bill Gates’ fund social programs. So do churches and nonprofits. And consider the economic value of volunteers’ efforts. It’s estimated to be the equivalent of all cash contributions and major philanthropy combined.

6. Public policy discussions should progress through: What do we want? What are the alternative ways of accomplishing it? What is the most efficient and effective way to do it? If personnel and funding are needed, what are the alternative sources of both? What are their pros and cons?

Fiscal responsibility? Of course. But please, no more starting off backing up with talk about “taxes.”

_______________
Nicholas Johnson, Iowa City, maintains nicholasjohnson.org. Comments: mailbox@nicholasjohnson.org

SOURCES Nixon & Milk Producers.
See heading and three relevant pages of notes on these events below.

TIFs.
Nicholas Johnson, “TIFs: Links to Blog Essays (2006-2015), https://fromdc2iowa.blogspot.com/2014/03/tifs-links-to-blog-essays.html

Nicholas Johnson, “Talking TIF: Costs Outweigh Possible Benefits,” The Gazette, April 13, 2014, pp. A9, A12, https://fromdc2iowa.blogspot.com/2014/04/tussling-over-tifs-pros-and-cons.html

TIFs often unnecessary. Dave DeWitte, “Ft. Madison Picked for Wind Turbine Blade Plant,” The Gazette, August 18, 2006, p. 7B (Of interest to rain forest followers because it involves “Earthpark’s corporate partner” (having declared its love but offered no dowery), Siemens (from whom nothing has been reported as having been heard since the “partnership” was announced) mentioned only one factor in its selection of Iowa for manufacturing these 146-foot-long, 11 ton blades. “Siemens conducted a nationwide site search . . . [and] the Iowa site’s proximity to the more northerly year-around navigation port on the Mississippi River at Keokuk was critical to its success.” Nonetheless, $5 million was provided by the state, county, city, and a community college.

Happiness index.
“Finland ranked happiest country in the world – again,” BBC, https://www.bbc.com/news/world-europe-56457295, and “Happiness report:

“Finland is world’s ‘happiest country’ – UN,” BBC, March 15, 2018, https://www.bbc.com/news/world-43414145 (includes US at 18th place)

Nicholas Johnson, “World Happiness Index 2021; We're Number One?” April 19, 2021, https://fromdc2iowa.blogspot.com/2021/04/world-happiness-index-2021-were-number.html -- provides links to our Declaration of Independence assertion “among these (unalienable rights is) “the pursuit of happiness” and to: Thomas Jefferson wrote the Maryland Republicans, “the care of human life and happiness … is the only legitimate object of good government.”

“Why are Danish people so happy?” Denmark Ministry of Foreign Affairs, https://denmark.dk/people-and-culture/happiness (“Denmark citizens pay some of the world’s highest taxes – up to 56% of their income, plus a 25% value added tax and up to 150% on automobiles. Yet most think it a bargain for what they get in return.”)

Nikolaj Skydsgaard, “Denmark’s high tax consensus wobbles as Danes told to spend,” Reuters, June 23, 2020, https://www.reuters.com/article/us-health-coronavirus-denmark-economy/denmarks-high-tax-consensus-wobbles-as-danes-told-to-spend-idUSKBN23U1SE (“Denmark rivals France among advanced economies for the heaviest tax burden on its citizens – who by and large accept it as the price to be paid for their cradle-to-grave welfare state.”)

Basic income.
Mark Guarino, “Chicago poised to create one of the nation’s largest ‘guaranteed basic income’ programs,” The Washington Post, Oct. 25, 2021, https://www.washingtonpost.com/nation/2021/10/25/ ritica-poised-create-one-nations-largest-guaranteed-basic-income-programs/ (Stockton; 40 cities; LA and Chicago)

Employee benefits.
Jillian D’Onfro and Lucy England, “An Inside Look at Google's Best Employee Perks,” Inc., Sept. 21, 2015 https://www.inc.com/business-insider/best-google-benefits.html (free gourmet food; free fitness classes and gym (with showers); free transportation to and from work; free one-hour massages (rewards for good job); can bring dogs to work; matching 401Ks; post birth of child, moms get 18 weeks paid leave, dads 6 weeks (while continuing to receive stock and bonuses) and “baby bonding bucks” for supplies; on-site daycare; surviving spouse gets half the employee’s salary for 10 years plus $1000 a month for each child; 80/20 rule (80% of time for on primary job, 20% on “passion projects”); libraries and limited gifts of books; presentations and lectures; 3-month unpaid leaves (with healthcare up to 3 months)

Bill Gates Foundation. Bill and Melinda Gates Foundation, https://www.gatesfoundation.org/

Economic value of volunteers. Eleanor Brown, “Assessing the Value of Volunteer Activity,” Nonprofit and Voluntary Sector Quarterly, vol. 28, no. 1, March 1999, pp. 3-17, https://journals.sagepub.com/doi/pdf/10.1177/0899764099281001 (“”there are estimates suggesting that its dollar value today is at least on par with personal gifts of money and financial assets”)

# # # President Nixon and Milk Producers
Nicholas Johnson, “Campaigns: You Pay $4 or $4000,” Des Moines Register, July 21, 1996, https://www.nicholasjohnson.org/rcntpubl/campaign.html

“Milk Price Support Program,” Farm Service Agency, U.S. Dept. of Agriculture, July 2004, https://www.fsa.usda.gov/Internet/FSA_File/mpsp04.pdf

“Starting shortly after Richard Nixon took office, bad money began gushing into the Nixon coffers. It sometimes came to Washington in big bundles of cash. The Nixon impeachment charges included as supporting material references to payoffs from ITT and other large firms, and from special interests, including $2 million from milk producers, $200,000 from a criminal (Robert Vesco) to block legal action, and even $200,000 from McDonald’s in return for permission to charge more for a quarter-pounder at a time when wage and price controls were in effect. Item after item cites criminal fraud and conspiracy, bribery and extortion.” Barry Sussman, “A Watergate lesson: Secret money means payoffs, bribes and extortion,” Nieman Watchdog, October 19, 2010, http://www.niemanwatchdog.org/index.cfm?fuseaction=background.view&backgroundid=49

“Chronology of Watergate Developments in 1973,” Oct. 23, 1973, CQ Almanac 1973, https://library.cqpress.com/cqalmanac/document.php?id=cqal73-867-26366-1225636

“Dairy Letter. A letter to Nixon promising a $2-million 1972 campaign contribution from a dairy industry group in return for action to curb dairy imports was leaked to the press. Signed by a representative of Associated Milk Producers Inc. of San Antonio, Texas, the letter was dated Dec. 16, 1970. Two weeks after that, Nixon imposed quotas on certain dairy products. The letter reportedly had fallen into the hands of Archibald Cox shortly before he was fired as special prosecutor. The dairy industry's financial support of Nixon's campaign had been linked previously to a 1971 increase in milk price supports.”

Ditto, Nov. 17, “ilk Prices. None of his interrogators asked Nixon about the milk price supports case, so the President brought up the subject himself. It had been alleged that in exchange for a $422,500 donation to the Nixon reelection campaign from the dairy industry, former Secretary of Agriculture Clifford Hardin reversed himself in March 1971 and ordered increased price supports for milk producers. The increase was estimated to add $500-million to $700-million in income for dairy farmers.

Nothing of the sort occurred, said the President. He related that he had accepted Hardin's original recommendation not to raise price supports, but that three weeks later, “Congress put a gun to our head.” He agreed to an increase when his legislative advisers told him that members of Congress, mostly Democrats, he said, wanted the increase and could override his veto if he tried to prevent it. (Earlier action, Oct. 23)

Ditto, Dec. 17, “Milk Tape. U.S. District Judge William B. Jones agreed to a Justice Department request to temporarily seal all subpoenaed documents and tapes related to a civil suit brought by consumer advocate Ralph Nader against the Nixon administration for alleged- favors to the milk industry. Jones acted after a Nader attorney, William A. Dobrovir, admitted in court that he had played one of the tapes at a party. Dobrovir apologized for what he called the “very foolish mistake.” The tape he played contained a March 31, 1971, conversation between Nixon and dairy industry representatives, which White House attorneys had turned over in response to a subpoena.”

Jan. 8 ITT and Milk Statements. The White House released two lengthy papers detailing the President's rebuttal of charges that he granted favors to the dairy industry and to the International Telephone and Telegraph Corporation (ITT) in exchange for large campaign contributions. The papers showed the allegations to be “utterly false,” said a statement accompanying them.

Political and national economic considerations, but not campaign financial needs, guided the administration's decision to approve higher milk price supports in March 1971, the White House contended in the milk background paper. The paper denied any connection between the milk support decision and the fact that dairy industry groups contributed $427,500 to the Nixon campaign in 1972.

The White House, however, acknowledged that Nixon knew as early as September 1970 that dairy groups planned to contribute large sums to his 1972 campaign. According to the White House, the President was informed in a 1970 memo of a $2-million campaign pledge from the Associated Milk Producers Inc., the largest dairy cooperative. But at no time, the statement added, did Nixon discuss the contributions with the dairy industry.

Jan. 11 Milk Case. Lawyers associated with consumer advocate Ralph Nader filed a motion in U.S. District Court in Washington, D.C., asking for access to more White House tapes and documents relating to their suit charging that the Nixon administration based a 1971 decision to raise milk price supports on political considerations, including campaign contributions from milk industry groups. The brief included a quotation from a White House recording of a March 23, 1971, discussion between Nixon and industry representatives, which the attorneys said brought into question Nixon's contention that he did not refer to campaign contributions during the meeting. According to the brief, Nixon said: “And I must say a lot of businessmen and others I get around this table, they yammer and talk a lot but they don't do anything about it. But you and I appreciate that. I don't need to spell it out.” (Nixon milk statement. Jan. 8.)

Jan. 23 More Hearings. The Senate select Watergate committee voted four to three along party lines to hold six days of additional hearings into the $100,000 given by billionaire Howard Hughes to Nixon's friend, Charles G. (Bebe) Rebozo, and the $427,500 given to the Nixon campaign in 1971 by milk producers. # # #

Taxes Are Last Step Not First

[This blog post contains both a Gazette column, immediately below, a variation that appeared in the Iowa City Press-Citizen, the earlier blog post from which both were drawn [Introduction; Follow the Money; Where to Begin], and a sample of two of the comments they produced.]

Decisions Must Come Before Taxes

Nicholas Johnson

The Gazette, January 3, 2018, p. A5
[link to location on Gazette Web site.]
The worst thing about tax cut discussions is the “Oh, look at the squirrel” distraction from what we should be talking about.

Example? Cutting Iowa employers’ taxes can’t create more jobs when employers say their real problem is a shortage of skilled workers.

If a skilled workforce is needed, it’s time to increase, not slash, funding for the state’s universities and community colleges that create those workers.

What is your vision for America?

Some believe we are a nation of 320 million rugged individualists, where everyone is obliged to pull themselves up by their own bootstraps — even those without boots. As Grover Norquist revealed, “My goal is to get government down to the size where we can drown it in the bathtub.”

Others believe those benefiting from a community are morally obliged to care for everyone in the human family. Some cite Jesus’ urging us to provide food, drink, clothing, health care, and prison visits for “the least of these.”

Until we decide whether we want an America of rugged individualism or humanitarianism, little agreement on public policy can follow.

This newspaper is full of reporting and opinion about our plethora of policy challenges — affordable housing, education, environment, flood control, health care, homelessness, hunger, jobs, net neutrality, refugees, transportation, water quality. The Gazette’s Iowa Ideas project explores some answers.

Lynda Waddington recently described Philip Alston’s U.N. report on U.S. poverty and human rights. Read his comparative rankings for U.S. infant mortality (highest), water and sanitation (36th in the world), incarceration rate (highest), youth poverty (highest), poverty and inequality (35th of 37). [Philip Alston, "Statement on Visit to the USA on Extreme Poverty and Human Rights," United Nations, Office of the High Commissioner Human Rights, December 15, 2017.]

We built this America. Is it the nation and state you want? No? Then fix it. How do we do that? In order:

1. Don’t start with tax talk.

2. Decide whether we’re rugged individualists or humanitarians.

3. Provide enforcement of metrics for the values and society we want — for ourselves and “the least of these” — not just aspirations.

4. Develop public policies that can reach those goals.

5. Calculate their costs.

6. Explore ways of accomplishing goals through education and training, philanthropy and volunteerism, churches and trade unions, corporate policies and cost avoidance, other innovative approaches.

7. Propose a tax code, consistent with community values, sufficient to provide the remaining, necessary public funding. And remember:

• No tax cuts until there are surpluses and declining debt.

• When corporations and the wealthy have trillions of dollars they don’t use, don’t hand them more.

• Consumer spending drives 70 percent of the economy. If stimulus is needed, give the money to the bottom 80 percent who will spend it.

8. Vote.

Philip Alston reports that only 64 percent of Americans bother to register, and many of them don’t vote. In Canada and the U.K., 91 percent register, 96 percent in Sweden, nearly 99 percent in Japan.

Could that possibly be a part of our problem?
_______________
• Nicholas Johnson is a former law professor and commissioner on the Federal Communications Commission. Comments: mailbox@nicholasjohnson.org

____________________
Taxes Are Last Step, Not the First, to Making U.S. Great

Nicholas Johnson

Iowa City Press-Citizen, January 27, 2018, p. A6
The worst thing about tax cut discussions is the “Oh, look at the squirrel” distraction from what we should be talking about.

Example? Cutting Iowa employers’ taxes can’t create more jobs when employers say their real problem is a shortage of skilled workers.

If a skilled workforce is needed, it’s time to increase, not slash, funding for the state’s universities and community colleges that create those workers.

What is your vision for America?

Some believe we are a nation of 320 million rugged individualists, where everyone is obliged to pull themselves up by their own bootstraps — even those without boots. As Grover Norquist revealed, “My goal is to get government down to the size where we can drown it in the bathtub.”

Others believe those benefiting from a community are morally obliged to care for everyone in the human family. Some cite Jesus’ urging us to provide food, drink, clothing, health care, and prison visits for “the least of these.”

Until we decide whether we want an America of rugged individualism or humanitarianism, little agreement on public policy can follow.

There’s no shortage of policy challenges, such as affordable housing, education, environment, health care, hunger, jobs, net neutrality, refugees, transportation and water quality.

Last month, Philip Alston, United Nations special rapporteur on extreme poverty and human rights, reported America’s standing among nations: infant mortality (we’re highest), water and sanitation (36th in the world), incarceration rate (highest), poverty and inequality (35th of 37). (Read more: https://tinyurl.com/y8avqv4p)

We built this America. Are the present policies of America, Iowa, and Iowa City what you want? No? Then fix it. How do we do that? In order:

1. Don’t start with tax talk.

2. Decide whether we’re rugged individualists or humanitarians.

3. Provide enforcement of metrics for the values and society we want — for ourselves and “the least of these” — not just aspirations.

4. Develop public policies that can reach those goals.

5. Calculate their costs.

6. Explore ways of accomplishing goals through education and training, philanthropy and volunteerism, churches and trade unions, corporate policies and cost avoidance, other innovative approaches.

7. Propose a tax code, consistent with community values, sufficient to provide the remaining, necessary public funding. And remember:

• No tax cuts until there are surpluses and declining debt.

• When corporations and the wealthy have trillions of dollars they don’t use, don’t hand them more.

• Consumer spending drives 70 percent of the economy. If stimulus is needed, give the money to the bottom 80 percent who will spend it.

8. Vote.

Alston reports that only 64 percent of Americans bother to register, and many of them don’t vote. In Canada and the U.K., 91 percent register, 96 percent in Sweden, nearly 99 percent in Japan.

Could that possibly be a part of our problem?

Nicholas Johnson is a former law professor and commissioner on the Federal Communications Commission.

# # #
Original Blog Post
Why Would You Want to Do That?
Introduction. It's not easy losing weight, and I wanted to share my accomplishment with my doctor.

"Got my weight down to 215 pounds," I proudly said, "and my new goal is 210" -- before I realized what would surely come next. It did.

"Why would you want to do that?" he asked. It was not the first time during the previous near-forty years he'd uttered those words.

If medical treatment was essential he'd provide it. Otherwise, if he thought a patient had a touch of anxiety about their health, he believed some exercise and a sense of calm and well being were often as good as, and always cheaper than, any pills he could prescribe.

He appeared puzzled. "Don't you experience the joy of eating?" he continued. "Why deprive yourself of that pleasure?"

"I just thought it might be better for my health," I mumbled. Whereupon he brought out the morbidity and mortality data to reassure me that the additional five pounds would provide no statistically significant difference in my health or longevity.

Follow the Money. I thought again of his words when reading about the Republicans' plan to put $1.5 trillion on a credit card and then hand over the cash to billionaires. "Why would you want to do that?"

The top 1% of Americans own 40% of the country's wealth -- more than the total owned by the bottom 90% combined, more than anytime in the last 50 years. Worldwide, the total wealth of 62 families exceeds that of 3.4 billion people. [Christopher Ingraham, "The Richest 1 Percent Now Owns More of the Country's Wealth Than at Any Time in the Past 50 Years," The Washington Post, December 6, 2017.] [Photo credit: Kalynn Hines, "Why Are All American Houses Like Mansions?" Quora.]

It's hard to get a precise number on the dollar value of the wealth of individuals in the 1%. It depends on which economist you ask, what is and isn't counted, means vs. medians, and what year you use. But here are some (approximate) numbers from 2007 (obviously there have been substantial increases during the last 10 years of a soaring stock market).

Top 1% -- $14,000,000
Top 5% -- $1,250,000
Middle Fifth -- $110,000
Bottom Fifth -- -$14,000 (debt)

Joshua Kennon, "How Much Money Does It Take to be In the Top 1% of Wealth and Net Worth in the United States," Thoughts on Business, Politics, and Life, Table 3, November 14, 2011.

Even more significant is the near-two-trillion dollars of cash (and cash equivalents) held by American corporations (one-third of it by the top 5; 72% held overseas). [Matt Krantz, "A Third of Cash is Held by 5 U.S. Companies," USA Today, May 22, 2016.]

"OK, so what's your point?" you ask.

Ultimately, I want to address why a discussion of taxes is not the right place to begin. But since that's where the nation's dialog is at the moment, let's deal with it.

1. There's a "National Debt Clock" that increases by the second. On December 23, 2017, at 7:30 p.m. CT, the national debt was $20.6 trillion and growing. If massive tax cuts might sometime be appropriate, this is not that time.

2. If there ever were to be rational tax cuts they should come after the national debt is significantly reduced, and from balanced budget surpluses. Putting the cost of tax cuts on a credit card makes no more sense that paying for wars of choice with debt.

3. Why mention individuals' wealth and corporations' cash reserves? Because when there are trillions in cash sitting on the sidelines and bank loan rates are relatively low, there is no compelling rationale for handing out more cash to those who already have access to more than they can use.

4. Using the funds to improve the environment and the lives of those at the bottom of the wealth pyramid would not only create more human happiness per dollar, but would also more effectively boost an economy 70% dependent upon consumer spending. The wealthy already have most of what they need or want, and tend to invest, rather than spend, any excess income. [Photo credit: unknown; file photo.]

5. If the idea of helping the bottom 50% is not appealing, the money could at least better be used to carry out President Trump's expressed support for massive, essential, overdue, infrastructure projects.

In short, "Why would you want to do that?" It doesn't make economic sense.

But economics -- more specifically taxes -- is not where this conversation should begin.

Where To Begin? Imagine this breakfast table conversation:

"What are your plans for the day?"

"Oh, I thought I'd go down to the bank and borrow some money."

"How much?"

"Maybe $10,000, maybe $25,000. I don't know."

"Tell me now, why would you want to borrow that much money?"

"I don't know. I was just thinking I'd like to have more money."

"But you wouldn't have more money. After paying off the loan and interest you'd have less money. What are you going to do with the money anyway?"

"Just have it. I haven't really thought about what I'd actually do with the money."

That's one unlikely breakfast conversation. This one is more likely:

"We have to fix that big hole in the roof. How are we going to pay for it?

Insurance should cover most of it. And what better use for our "rainy day fund"? "Rainy day fund," get it?

Yeah, I get it. It's just that right now I don't find it funny. What if we need more?

Once we find out how much it's going to be, if we don't have enough I can always go down to the bank for a loan.

Where do you start? You start with your desire for a warm, dry house, and the ongoing maintenance to keep it that way. Then you address how you're going to pay for it.

That's how it ought to be with all governmental budgets -- city, county, state, and our federal budget. You don't ignore economic growth, the need for revenue, and tax policy. It's just that you don't start there.

You start with the most fundamental question. From your answer to that one the answers to the others will more easily flow.

Do you believe you have an obligation -- or if not, at least a desire and willingness -- to create an America that is a large, caring community in which no one is invisible? Or, do you find more appealing a country of individuals, with everyone on their own, where "greed is good," pollution is acceptable as long as it's profitable, and everyone must "pull themselves up by their bootstraps" -- regardless of whether or not they have boots -- until they, like you, can say, "I've got mine, Jack"?

If we're not just talking about professions of belief on Sunday, but the supporting evidence of action throughout the week, there is a discouraging quantity of evidence that a substantial number of Americans, and their elected representatives, are somewhere between a willingness to accept, and an enthusiasm for, the second choice.

So, let's pause for a moment to examine where America may have holes in its roof -- and its safety net.

I am indebted to The Gazette's Lynda Waddington for bringing to my attention Philip Alston, "Statement on Visit to the USA on Extreme Poverty and Human Rights," United Nations, Office of the High Commissioner Human Rights, December 15, 2017. (Mr. Alston is the United Nations Special Rapporteur on Extreme Poverty and Human Rights.) Lynda Waddington, "American Poverty is On Display," The Gazette, December 23, 2017, p. A5 (not yet available online).

When Philip Alston crawled up there on America's roof to take a look, here are some of the things he found.

In talking with people in the different states and territories I was frequently asked how the US compares with other states. While such comparisons are not always perfect, a cross-section of statistical comparisons provides a relatively clear picture of the contrast between the wealth, innovative capacity, and work ethic of the US, and the social and other outcomes that have been attained.

• By most indicators, the US is one of the world’s wealthiest countries.
• It spends more on national defense than China, Saudi Arabia, Russia, United Kingdom, India, France, and Japan combined.
• US health care expenditures per capita are double the OECD average and much higher than in all other countries. But there are many fewer doctors and hospital beds per person than the OECD average.
• US infant mortality rates in 2013 were the highest in the developed world.
• Americans can expect to live shorter and sicker lives, compared to people living in any other rich democracy, and the “health gap” between the U.S. and its peer countries continues to grow.
• U.S. inequality levels are far higher than those in most European countries.
• Neglected tropical diseases, including Zika, are increasingly common in the USA. It has been estimated that 12 million Americans live with a neglected parasitic infection. A 2017 report documents the prevalence of hookworm in Lowndes County, Alabama.
• The US has the highest prevalence of obesity in the developed world.
• In terms of access to water and sanitation the US ranks 36th in the world.
• America has the highest incarceration rate in the world, ahead of Turkmenistan, El Salvador, Cuba, Thailand and the Russian Federation. Its rate is nearly 5 times the OECD average.
• The youth poverty rate in the United States is the highest across the OECD with one quarter of youth living in poverty compared to less than 14% across the OECD.
• The Stanford Center on Poverty and Inequality ranks the most well-off countries in terms of labor markets, poverty, safety net, wealth inequality, and economic mobility. The US comes in last of the top 10 most well-off countries, and 18th amongst the top 21.
• In the OECD the US ranks 35th out of 37 in terms of poverty and inequality.
• According to the World Income Inequality Database, the US has the highest Gini rate (measuring inequality) of all Western Countries.
• The Stanford Center on Poverty and Inequality characterizes the US as “a clear and constant outlier in the child poverty league.” US child poverty rates are the highest amongst the six richest countries – Canada, the United Kingdom, Ireland, Sweden and Norway.
• About 55.7% of the U.S. voting-age population cast ballots in the 2016 presidential election. In the OECD, the U.S. placed 28th in voter turnout, compared with an OECD average of 75%. Registered voters represent a much smaller share of potential voters in the U.S. than just about any other OECD country. Only about 64% of the U.S. voting-age population (and 70% of voting-age citizens) was registered in 2016, compared with 91% in Canada (2015) and the UK (2016), 96% in Sweden (2014), and nearly 99% in Japan (2014).

Is that really the country you want? Or is it just kind of what happened while we were watching the Superbowl game, neither voting nor otherwise paying attention?

That's where we need to begin. What kind of country do we want? Is it inevitable, or at least OK, that we are accelerating climate change, that some people are just going to have to sleep on the streets, go without healthcare, lack adequate nutrition, education, job training, and the dignity that comes from at least some kind of regular work?

There is no secret sauce. It's clear what we could do, and how to do it. Other countries have offered us examples of how to create a caring nation -- one in which everyone has healthcare and meaningful work to do, one in which free public education extends beyond the 12th grade, one in which there's always someone to care for those without family or friends. Indeed, we accomplished some of these things ourselves coming out from under the Great Depression of the 1930s.

Until we candidly confront the kind of country we have become, decide we want a change, and fashion the programs that can bring it about, we can't begin to address how much it will cost, the best ways to pay for it -- and how to restructure our tax system.

# # #
Comments
Note: These columns and blog post generated much positive comment. With the permission of the authors, I reproduce here two emails that are illustrative of the others. Most merely addressed the proposed process and thought it a good idea. The author of the second comment, below, assumed hypothetically that the proposed process was in place and set forth some of the values and approaches he would bring to the table.

Dear Mr. Johnson,

I am an old man soon to be 79. was the Mayor of my small town for 8 years. HEAR-HEAR for your logical thoughts.

I wish the common sense you express was a very contagious viral disease and you could haunt the halls of all our elected bodies, state and federal, and infect all our law makers.

I am contacting my reps and telling to read and heed your thoughts.

Please continue your efforts to instill common sense in the electorate.

-- James Raymond

____________________
Read your piece in the Gazette today.

There are 6 million open jobs in America looking for qualified applicants.

The immigration systems both legal and illegal are bringing in people who do not have the skills or ducation to fill those jobs. So I assume you oppose the current immigration systems. Many people say we need immigration but then why are so many jobs unfilled with millions of illegal immigrants here?

Let's fix it:

- Revise the immigration system to be merit based. Limit chain migration and lottery systems that support unskilled entrants. Fund the wall and improve border security. Address VISA's for foreign students who want to stay, they are skilled people. I'm OK with DACA given these limitations.

- Approve a national voucher system so parents can chose where their funding goes for their children's education. Eliminate the US Dept. of Education and start over.

- Slash university funding. Focus resources on the kinds of skills and education the economy needs and minimize producing people with degrees who cannot find a job that matches those degrees. The current situation creates financial individual burdens and wastes valuable resources on inefficient programs.

- Create more programs to encourage trade schools to fill the jobs required to support the economy. Connect the funding to actual economic needs.

- Approve a federal budget amendment to limit federal debt. There is no net benefit to keep pushing ourselves toward the brink of financial > ruin.

- Impose a border tax so that countries that limit trade with the US are limited in access to our economy. Develop trade policies that support American jobs not American wealth.

- Reform Social Security and Medicare. Eliminate people who have not supported funding the system (see immigration). Increase the expense for those that can afford to pay a larger percentage of the cost of service.

- Make sure that the bottom 80% have skin in the game. Handing out free money is a fool’s errand. Instead of minimizing the number of people in poverty government policy has actually grown the percentage of the population on government assistance. The Great Society has been a colossal failure. Refer to 6 million job openings.

I vote every election. I vote against every Democrat because their party has moved so far to the left as to be unrecognizable as American citizens. Obama and Hillary Clinton are being proven to be crooks worse than the Watergate affair. At least the Republicans had the guts to tell Nixon to leave.

In conclusion the level of taxation is well above what is reasonable in a free society. I understand your point about deciding who you want to be before setting a level of funding. We simply disagree with so much of the current funding it seems reasonable to try and starve the beast, or as Grover put it "drown it in a bath tub". I would point out that the usual zero-sum arguments made by progressives receive on distain from me. There is always middle ground. I think you proposed that but I'm not really sure.

-- Gary Ellis

_________________________

Gas Tax Critics: A Response

December 10, 2013, 9:38 a.m.

What's the Alternative?

In two blog essays and one newspaper column I have advocated that we get on with the business of tending to our deteriorating roads and bridges -- and that we continue to use the gasoline tax as a way of funding the projects. "Paying By The Mile Is A Terrible Idea," Sept. 25, 2013; Nicholas Johnson, "Think Long and Hard Before Diluting the Gasoline Tax," Iowa City Press-Citizen, Dec. 5, 2013, p. A7; "Gasoline Tax Is Our Friend," Dec. 5, 2013.

There are, of course, those who disagree with this approach. Sometimes I have responded, online when the comments are made in response to a newspaper's online article, or as appended remarks to the three items linked above. Because I continue to believe these are important issues, and those who seek to enter into a dialogue are entitled to some kind of response, I have reproduced, and added to, my responses in this new blog essay.

I'll begin with a Letter to the Editor in this morning's [Dec. 10] Press-Citizen regarding my Dec. 5 Press-Citizen column, linked above.

Taxpayers Aren't Getting Enough Bang for Their Buck
Steve Hufferd, Iowa City
Iowa City Press-Citizen, Dec. 10, 2013, p. A7
On Dec. 5, while advocating an increase in gasoline taxes, Nicholas Johnson makes the typical liberal error in assuming that increasing taxes will cure all the ills in the infrastructure. He would, I'm sure, say the same regarding taxes to fund education even while taxes spent on education has accelerated even while academic performance per student has plummeted.

We conservatives have no problem with taxes per se. The problem we have is with the plethora of irresponsible abuses of the public coffers. Where is the evidence that the gasoline taxes collected over the past half century has been spent wisely? A bit of transparency would be appreciated and might have a positive effect on the public resistance to tax increases. Of course, transparency could also work against any prospect of tax increases. With the public trust of government officials reaching new lows, it's not the best of times for politicians to be saying, "trust me with an increase in tax dollars."

Tax payers do not feel they are getting sufficient "bang for the buck." There are ways of getting big jobs done with very little. It's called management. The best example of the lack of it has been the current launching of Obamacare.

_______________
Steve Hufferd might be surprised to find the degree to which I agree with him -- as explained in these italicized comments, below:

I don't think that "increasing taxes will cure all the ills in the infrastructure [or] education." I don't recall ever saying that "the gasoline taxes [have] been spent wisely." (As a local school board member I often made the point in meetings, and newspaper columns, that some reforms both cost less and produce better results. As Hufferd puts it, "there are ways of getting big jobs done with very little.")

As a public official, and as a one-time administrative law professor, I have advocated more, not less, transparency in government.

I agree that "trust of government officials [is] reaching new lows" and that "trust me" no longer works.

I certainly share his commitment to better "management" -- and have ever since my term as U.S. Maritime Administrator during the mid-1960s (and throughout my term as a school board member). During President Lyndon Johnson's Administration we actually had a "War on Waste" program that saved taxpayers billions of dollars. (My contribution was working to reduce maritime subsidies.) Johnson symbolized the program by walking around the White House turning off needless lights -- thereby earning the nickname of "Lightbulb Lyndon." (I agree with Hufferd's criticism, and have said, that the rollout of Healthcare.gov was a classic example of poor management and oversight. "Exclusive: Insider Explains Healthcare.gov Fiasco; From 'Integration Testing' to 'Full End-to-End Testing,'" Nov. 2, 2013.)

So where do we part company?

(1) We have transportation needs. Unsafe bridges and deteriorating roads need to be fixed.

(2) There are limited options. (a) Continued crumble. We could continue to let the roads and bridges crumble, and build more detours around them. (b) Private ownership. We could sell them off to for-profit corporations -- with the tolls for driving far exceeding any gasoline taxes. (c) Different taxes. We could keep the roads public, but use different taxes: sales, property, or income -- shifting the entire burden away from the "user fee" and on to everyone. (d) Gas tax. We could continue to pay with the user fee called the gasoline tax -- hopefully, while applying Hufferd's and my focus on triage and "do we really need it," innovative cost-cutting, sound management, oversight, and increased transparency.

(3) Gas tax preference. Of these options, my preference is (d), Gas tax -- for reasons laid out in the Press-Citizen column, "Think Long and Hard Before Diluting the Gasoline Tax," Dec. 5. (Admittedly, non-drivers also benefit from our road network; thus, while I would not advocate some modest funding from income tax revenue, it would be difficult to argue persuasively against it.)

(4) We're all at fault. No institution (or individual) is free of the kind of inefficiencies, waste and abuses Hufferd and I would like to remedy -- whether corporations, the military, schools and universities, hospitals, non-profit organizations, religious institutions -- even political parties and their candidates' campaigns. It is misplaced to suggest that most of the fault, when it comes to government, falls on liberals or conservatives or libertarians or greens. Some are more willing to overlook waste in the military (billions of dollars in Iraq and Afghanistan that can't be accounted for); others less likely to come down on popular social programs. Corporate executives of companies dependent upon government contracts may complain about taxes, while spending millions on lobbyists and campaign contributions to get special tax breaks and other special interest benefits in return. (I've run numbers on the "return on investment" from campaign contributions. It's between 1000-to-one and 2000-to-one; give one million, get back one billion -- in the form of such things as contracts, tax breaks, antitrust exemptions, tariffs and other price supports.)

Local constituents, and their elected officials who campaign on reducing taxes, are among the first to squeal when a local defense contractor may lose a lucrative contract because the weapons system it's profiting from isn't wanted by the Pentagon, or just doesn't work.

So I don't think it is accurate, fair, or constructive to try to address these problems by demonizing one political party, or political movement, over another. On that Hufferd and I really do disagree.

Of course we don't want to pay for "bridges to nowhere" (a one-time Republican proposal), and we do want to have efficient and effective management of such necessary maintence projects as we may have, selected under rational systems of priority. Having said that, we're still left with the issue of how to pay for them. For the reasons I've outlined, I continue to believe the gasoline tax is the best way to do it.

Here are some additional criticisms -- and my responses.

The first two comments, below, appear on the Patch reference to the Sept. 25, 2013, blog essay, referenced immediately above. The next four were comments on the Editorial, "Gas Tax Increase StillBest Option Left Standing," Iowa City Press-Citizen, Dec. 1, 2013.

My responses, in italics, follow each.

Johnny Johnson December 03, 2013 at 05:46 PM Hey why not? Energy prices consume a far greater share of income from middle class than the rich. Make those working fools cough up more and skip lunch to pay for it.

Johnny Johnson (no relation) is, of course, correct: as a percentage of their income, the poor and middle class pay more for gasoline (and its tax) than the rich. (And this disparity is exacerbated by the poor often having to rely on older, low gas mileage cars in less good condition, and possibly longer commutes.) But this could also be said about everything else in the marketplace (e.g., food, clothing, automobiles, housing, fines for speeding) -- with the exception of various discounts offered to "seniors" and very young children (categories not directly related to income) and public subsidies for food and housing for the poor. In my opinion, the most effective and easily administered solutions are to raise the minimum wage to "living wage" levels in the private sector, and get closer to full-employment policies by making the government the employer of last resort in the public sector -- rather than to single out the gasoline tax as a single item. -- N.J.

Brian December 04, 2013 at 07:16 PM The State needs to cut costs, not raise revenue. Do the inefficiencies bother anyone else? Look at how many times I-80 has been redone Between Dodge Street & Coral Ridge last 10 years. What about the insane waste of money to replace the barrier between East & West with a "stained faux rock face". That was 1,000,000/mile. Just the labor to haul the existing barrier away required over 100 semi tractor trailers. Did anyone notice the stain faded in ONE WEEK? It wasn't UV stable. The State should be able to fund projects with existing gas tax.

Here again, Brian may be right (I'm not familiar with his facts). Everything possible should be done by those managing projects -- whether private sector or public sector -- to do jobs as efficiently and effectively as possible, at the lowest cost consistent with the necessary quality. Clearly, this is not a problem limited to public projects -- think about the BP Gulf oil rig disaster, the Massey Coal Mine disaster, the millions of cars and other products (including food) that must be recalled. But if we are going to continue to have a highway network that is smooth and safe we are going to have to continue to spend money on it. Trying to insure that money is spent as efficiently as possible is an essential goal; cancelling all highway projects because some are unwise or wasteful is not an option. -- N.J.

[I was one of those who commented on the Press-Citizen's editorial:] Nicholas Johnson · Top Commenter No one questions the need for roads and bridges in sufficiently good condition that cars and trucks can move safely and at reasonable speeds. Few question that public construction, maintenance and funding is preferable to for-profit corporate ownership and operation. The only remaining issue is what is the best formula for raising sufficient revenue -- and most fairly allocating the burden among Americans. As today's editorial explains, the gasoline tax wins that one hands down. For even more discussion of the reasons why, along with additional benefits of this approach, see "Paying By The Mile Is A Terrible Idea; The Gasoline Tax Is Our Friend," http://fromdc2iowa.blogspot.com/2013/09/paying-by-mile-is-terrible-idea.html December 2 at 7:49am

Mike Thayer · Follow · Top Commenter · Works at Coralville Courier This is intellectually lazy thinking by the PC. It's easy to say, "Raise taxes." But the REAL answer is finding areas in other state government spending where $215 million can be cut and re-allocated to roads/infrastructure. December 2 at 8:49am

Here again, I agree that everything possible should be done to evaluate taxpayer-funded federal, state, county, and city projects. Are they worth doing at all? What's the benefit-cost analysis? Those that have public support, still make sense, and that return multiples of what they cost should probably receive more money than they presently get. Some are probably funded at a more or less appropriate level. Those that have outlived their usefulness should be investigated further to see if they should be closed out. To put the cost of highway maintenance on all Iowa taxpayers -- rather than just those who drive and buy gas -- is, of course, an option, and one that some people in addition to Mike Thayer are advocating. For the reasons laid out in the column that begins this blog essay, I believe the multiple benefits and rationale for funding roads from a gasoline tax is a better option. -- N.J.

Lynn Griebahn Jr. · Top Commenter · University of Iowa Yes! someone needs to be the adult here, democrats NEVER think about the waste in spending, December 2 at 11:21am

As a wise wag once put it, "'Always' and 'never' are two words we should always remember never to use." Some Democrats and Republicans seem to care more about wise use of public money than other Democrats and Republicans -- a bloated defense budget, earmarks and tax breaks for special interests. Members of both parties seem somewhat reluctant to specify which specific programs they would eliminate. Indeed, they are so fond of suggesting that the elimination of "waste, fraud and abuse" will solve our budget challenges (when of course, however desirable, that's not the magic solution) that it's always seemed to me they think and talk about "waste" (in general) rather than "projects value" (in particular) far more than they should. -- N.J.

Michael Hoback · Top Commenter The feds are also considering raising their gas tax using the same plea as Iowa. The DOT has used the same claim of shortfalls, every legislative session for at least the twenty years I have been paying attention. The fact is that if you gave them every tax dollar in the state they would still want more. December 4 at 10:45am

On the assumption this is true, it is a call for oversight and better management -- something I certainly support. The more we can conduct a triage among potential road building and repair projects by engineers on the basis of rational analysis and professional judgment, and the less we can rely on politicians choosing projects on the basis of contractors' campaign contributions and short term construction jobs for their constituents, the better. -- N.J.

The following comment was posted to the online version of my Dec. 5 Press-Citizen column:

Michael Hoback · Top Commenter
Your opinion sounds very reasonable but bitter experience demonstrates that increased taxes only fuels bigger government. December 6 at 3:18pm

My response would be similar to many of those above. See, e.g., my numbered paragraphs (1) through (4) in the response to Steve Hufferd's Letter, at the top of this blog essay, and to Mr. Hoback's other comment, immediately above this one.

_______________
And my son, Sherman, has sent the following comment regarding this blog essay by email:

If you do a follow-up you might touch on 2 related topics:

1) Tolls and HOT lanes (aka "Lexus Lanes").

2) Gas tax refunds/credits for poor and working class folks, as well as those who must drive lower mileage vehicles and/or long distances out of necessity.

WRT #1 -- tolls and Lexus lanes are grossly regressive and, I would say, un-American. Since when do we segregate users of public infrastructure into the "haves" and "have-nots"? Our parks, libraries, and schools are available for everyone to use and enjoy. The same used to be true of our public roads and Interstate highway system. Not any more. Now it's 'pay up or shut up'.

Charging an extra fee or toll to use certain lanes on a public road -- particularly an exorbitant per mile 'HOT lane' charge that is admittedly _designed_ to keep out the 'riff-raff' (aka the 99%) -- is outrageous. Our highways are not some exclusive private dinner club. They should be open for ALL to use. Ordinary folks who cannot afford to pay the fees should not have to sit in traffic for hours and breathe exhaust fumes while the wealthy speed past them in their German luxury sedans. If the infrastructure is inadequate it should be improved. HOT/Lexus lanes are an elitist band-aid, and one that takes pressure off of legislators to actually _do_ something about roads with inadequate capacity. If the rich & powerful can buy their way out of traffic jams then they'll be happy and not press for road improvements.

OT/Lexus lanes are the equivalent of having two (2) sections in public libraries and/or schools. One section of the library for the well-healed who can afford to pay a user fee with shiny new computers and an extensive collection of books, comfy chairs, plenty of staff, etc, and the other just a bare-bones barely adequate room with old slow computers and maybe some box fans instead of A/C in the summer. Or a school split into two sections -- one with some classrooms that have a new computer for every kid, a teacher for every 10 students, and an indoor olympic size swimming pool vs. another section with classes of 30+ and some old textbooks on the other side of the building -- for the unwashed masses, the kids from poor and working class families.

Tolls and Lexus lanes are completely unacceptable. They are immoral and should be eliminated. Raise the gas tax instead.

2) Of course, even the motor fuel tax is regressive. Some people _must_ drive long distances. They aren't out joy riding, they have no choice. Out here in the D.C./Baltimore area (and most other major metro areas) people do not usually choose to live 30-50 miles from where they work -- it is the only way they can afford to live. People do not always have the money to buy a new (or used) car that gets 40 mpg. Maybe a relative gave them an old sedan that gets 18-20 mpg and they can barely afford the maintenance on it. Many farmers and ranchers must drive big pickup trucks and have no choice but to drive long distances. The same with construction workers, etc. You get the idea. It is not right to punish them for situations which are beyond their control.

Everything being equal -- income, required driving distance, vehicles needed -- then this would be easier. If no one really had to drive at all, or, say, no more than 10 miles per day, and everyone could afford an electric car, hybrid, or ultra-high mileage car that would suit their needs, then slamming them with a big fat fuel tax for driving a full-size crew cab dually pickup truck with a huge V-8 gas-sucking engine -- 'just because', for the "image" -- would make perfect sense.

Unfortunately it's not that simple.

Perhaps the gas tax should be set up like our income tax system (only simpler). The IRS recognizes that $50k/year is not the same from one person to the next. Some people have legitimate business expenses that are deductable for good reason. For example, it would not be fair to tax an independent cab driver on the entire amount he/she earns (their gross income), because they have to pay for fuel, maint., repairs, and license fees out of that. Likewise, it does not seem fair to a) have a flat tax (which the gas tax kinda is) and b) not allow any deductions for lower income folks and those who absolutely must drive long distances and/or lower mileage vehicles.

I rest my case. ;-)

_______________
This morning [Dec. 11] I discovered this Baltimore Sun editorial on the subject. It's not critical of the gas tax, quite the contrary. But I thought it sufficiently well reasoned to be worth adding here:

Editorial, “The Toll On America; With the nation's transportation network ailing, raising the federal gas tax for the first time in 20 years is the best available remedy,”
Baltimore Sun, Dec. 5, 2013; The Gazette, Dec. 11, 2013, p. A6.
Ah, to be in the U.S. economy of 1990s, a decade when the gross domestic product grew by about one-third and unemployment dropped from 7.5 percent to 4 percent. In 1993, the federal government raised the tax on gasoline to 18.4 cents per gallon, an increase of more than 30 percent from the previous year, and business boomed.

Since then, the cost of a gallon of unleaded gasoline has more than doubled, yet the per-gallon federal excise tax has remained unchanged. States have raised their fuel taxes to keep up as best they can with local transportation needs, but the federal government's source of revenue has stagnated, a problem worsened by the fact that people are driving less and using more fuel efficient vehicles.

The result? The Highway Trust Fund has run dry, and the nation's transportation infrastructure has suffered. To simply keep up with basic needs, Congress has been forced to supplement it with billions of general tax dollars — money that might have otherwise been used to pay down the debt, offset sequestration cuts or fund other myriad priorities.

In the House this week, a bill was introduced that would raise the tax by 15 cents per gallon. That would, more or less, allow the tax to at least keep up with inflation (falling a bit short as a percentage of fuel costs). It has been endorsed by AAA, and it's a safe bet that many in the business community, in the labor unions and local government would like to see it approved as well. Reducing congestion and keeping up the transportation network is vital to the economy.

Yet it's also safe to assume the bill has absolutely no chance in the GOP-controlled chamber. So inviolate is their no-tax pledge that conservatives would rather see the nation's economy wither than be caught raising a tax that is so obviously in need of updating.

This is a classic case of cutting off one's nose to spite one's face. Critics can point to transportation dollars that have been wasted, allegedly, on projects that are under-used or built too elaborately or required their contractors to pay their workers a living wage. But collectively, such waste (and we use that term loosely since many of these complaints are misplaced) is negligible, even microscopic, compared to the enormous transportation needs.

According to the American Society of Civil Engineers, the U.S. needs to invest about $2.7 trillion in transportation and other infrastructure by 2020 if the nation is to remain globally competitive. Yet the federal trust fund has become so depleted that experts say it won't be able to meet existing obligations in 2015, let alone take on new projects.

To leave the next generation a pot-hole strewn, overcrowded and unworkable transportation system would be as disastrous and as economically crippling as any budget deficit. And, as history has demonstrated, raising fuel taxes does not kill jobs. Indeed, most industrialized nations tax fossil fuels at a much higher rate.

One can argue that in the future, the U.S. must gravitate toward a system of financing transportation that is not so dependent on gas taxes, perhaps one that taxes by miles traveled instead of fuel consumed. As a recent U.S. Public Interest Group report notes, Americans are driving less and depending on public transportation more — yet we don't have the resources to accommodate this transition.

It's also reasonable to look for more public-private partnerships and other creative ways to finance airports, ports, highways, trains, light rail and other modes of travel in the future. But that is not nearly enough. The bottom line is that the country is already falling behind, and realistically, raising the federal gas tax must be part of the equation.

Would raising the tax also increase the cost of fuel? Absolutely, but that's not necessarily a bad thing. As studies have shown, getting stuck in traffic is even more costly, and Americans are doing a lot of that these days. As a recent Texas A&M Transportation Institute study found, congestion is already costing the average American an extra $818 per year. As distasteful as raising gasoline costs may sound, it's a lot better than the alternative of neglecting the roads, bridges and rails — or expecting some other miracle to come along.

_______________

Gasoline Tax Is Our Friend

December 5, 2013, 7:30 a.m. (And see --> "Gas Tax Critics: A Response," Dec. 10, 2013 <--.)

Think Long and Hard Before Diluting the Gasoline Tax
Nicholas Johnson
Iowa City Press-Citizen
December 5, 2013, p. A7

As children, we used to sing "London Bridge Is Falling Down." That was fantasy. We'd never heard of a bridge falling down.

Now we have.

Why won't Gov. Branstad advocate an increased gas tax?

No one questions the need for safe, smooth roads and bridges.

Few question public ownership and maintenance. It sure beats private ownership by profit-maximizing corporations.

The only remaining issue? How to pay for it? As an earlier [Dec. 2] Press-Citizen editorial explained, the gasoline tax wins that one hands down.

We'll either pay for roads and bridges or we won't have them. But for a gasoline tax to pick up the tab, it must take account of inflation and current needs.

Politicians who run and vote against "government," encourage the notion taxes are evil. Taxes are just another way to buy stuff we need - like roads. Taxes are often the most efficient and equitable way to pay.

Proposed alternatives, such as the mileage tax or using other State funds, are little more than a shell and pea game to enrich the oil and automobile industries.

The gas tax is a "user fee." The more you drive, the more gasoline you buy, the more tax you pay, and the more you contribute to the maintenance of the roads you use.

There are many reasons why the gasoline tax is not creating enough revenue. Mostly it's the failure to adjust for inflation.

But it's also a good news, bad news story. The good news: the price of gas (with its tax) stimulates (1) higher gas mileage cars and trucks, (2) hybrids, and (3) electric vehicles (along with some other alternatives) -- all of which use less gas per mile than cars when the tax was last set.

As a result, we are both emitting fewer greenhouse gases, and less dependent on foreign oil.

The bad news: the less gas we use, the less gas tax revenue, the less money we have for roads and bridges.

So why not abandon, or supplement, the gas tax? Because doing so reduces the marketplace incentives for better gas-mileage vehicles. Raising the tax increases those incentives.

For example, paying tax by the mile (instead of by the gallon) there's no tax incentive not to drive a spiffy Hummer (some models get 9 mpg in city) or inefficient old vehicles. You'll still pay the mileage fee, and more per mile for gas, but no additional gas tax.

Grim reality: we'll either pay for our paved roads or go back to driving on the dirt roads of my youth. Road maintenance costs are more than before. One way or another we're going to pay. That's not the issue. Increasing gas taxes is not an additional outlay that could have been avoided; it's just the best way of paying for it.

My proposal?

Continue to fund road and bridge construction and maintenance with gasoline taxes. Raise the tax rate to whatever's necessary.

Give the more efficient, alternatively-fueled vehicles the gas tax advantages of better gas mileage. Provide what's needed by any new, socially beneficial technology when trying to change culturally embedded habits (such as battery recharging stations for electrics). This is similar to the boost we gave everything from the railroads to the Internet during their early years.

Once the alternative vehicles industries are profitable enough, design any one of a number of possible approaches for collecting a road user fee from them as well.

But, please, think long and hard before abandoning, or diluting, the gasoline tax. Let's not wake up to discover that, "You don't know what you've got until it's gone."
_______________
Nicholas Johnson teaches at the University of Iowa College of Law and maintains www.nicholasjohnson.org and FromDC2Iowa.blogspot.com.

# # #
Note: For an earlier, lengthier, and slightly different take on this subject, see "Paying By The Mile Is A Terrible Idea," September 25, 2013. For the positions of critics of this position see below.

# # #
There are, of course, those who disagree with this approach. The first two comments, below, appear on the Patch reference to the Sept. 25, 2013, blog essay, referenced immediately above. The next four were comments on the Editorial, "Gas Tax Increase StillBest Option Left Standing," Iowa City Press-Citizen, Dec. 1, 2013.

My responses, in italics, follow each.

Johnny Johnson December 03, 2013 at 05:46 PM Hey why not? Energy prices consume a far greater share of income from middle class than the rich. Make those working fools cough up more and skip lunch to pay for it.

Johnny Johnson (no relation) is, of course, correct: as a percentage of their income, the poor and middle class pay more for gasoline (and its tax) than the rich. (And this disparity is exacerbated by the poor often having to rely on older, low gas mileage cars in less good condition, and possibly longer commutes.) But this could also be said about everything else in the marketplace (e.g., food, clothing, automobiles, housing, fines for speeding) -- with the exception of various discounts offered to "seniors" and very young children (categories not directly related to income) and public subsidies for food and housing for the poor. In my opinion, the most effective and easily administered solutions are to raise the minimum wage to "living wage" levels in the private sector, and get closer to full-employment policies by making the government the employer of last resort in the public sector -- rather than to single out the gasoline tax as a single item. -- N.J.

Brian December 04, 2013 at 07:16 PM The State needs to cut costs, not raise revenue. Do the inefficiencies bother anyone else? Look at how many times I-80 has been redone Between Dodge Street & Coral Ridge last 10 years. What about the insane waste of money to replace the barrier between East & West with a "stained faux rock face". That was 1,000,000/mile. Just the labor to haul the existing barrier away required over 100 semi tractor trailers. Did anyone notice the stain faded in ONE WEEK? It wasn't UV stable. The State should be able to fund projects with existing gas tax.

Here again, Brian may be right (I'm not familiar with his facts). Everything possible should be done by those managing projects -- whether private sector or public sector -- to do jobs as efficiently and effectively as possible, at the lowest cost consistent with the necessary quality. Clearly, this is not a problem limited to public projects -- think about the BP Gulf oil rig disaster, the Massey Coal Mine disaster, the millions of cars and other products (including food) that must be recalled. But if we are going to continue to have a highway network that is smooth and safe we are going to have to continue to spend money on it. Trying to insure that money is spent as efficiently as possible is an essential goal; cancelling all highway projects because some are unwise or wasteful is not an option. -- N.J.

[I was one of those who commented on the Press-Citizen's editorial:] Nicholas Johnson · Top Commenter No one questions the need for roads and bridges in sufficiently good condition that cars and trucks can move safely and at reasonable speeds. Few question that public construction, maintenance and funding is preferable to for-profit corporate ownership and operation. The only remaining issue is what is the best formula for raising sufficient revenue -- and most fairly allocating the burden among Americans. As today's editorial explains, the gasoline tax wins that one hands down. For even more discussion of the reasons why, along with additional benefits of this approach, see "Paying By The Mile Is A Terrible Idea; The Gasoline Tax Is Our Friend," http://fromdc2iowa.blogspot.com/2013/09/paying-by-mile-is-terrible-idea.html December 2 at 7:49am

Mike Thayer · Follow · Top Commenter · Works at Coralville Courier This is intellectually lazy thinking by the PC. It's easy to say, "Raise taxes." But the REAL answer is finding areas in other state government spending where $215 million can be cut and re-allocated to roads/infrastructure. December 2 at 8:49am

Here again, I agree that everything possible should be done to evaluate taxpayer-funded federal, state, county, and city projects. Are they worth doing at all? What's the benefit-cost analysis? Those that have public support, still make sense, and that return multiples of what they cost should probably receive more money than they presently get. Some are probably funded at a more or less appropriate level. Those that have outlived their usefulness should be investigated further to see if they should be closed out. To put the cost of highway maintenance on all Iowa taxpayers -- rather than just those who drive and buy gas -- is, of course, an option, and one that some people in addition to Mike Thayer are advocating. For the reasons laid out in the column that begins this blog essay, I believe the multiple benefits and rationale for funding roads from a gasoline tax is a better option. -- N.J.

Lynn Griebahn Jr. · Top Commenter · University of Iowa Yes! someone needs to be the adult here, democrats NEVER think about the waste in spending, December 2 at 11:21am

As a wise wag once put it, "'Always' and 'never' are two words we should always remember never to use." Some Democrats and Republicans seem to care more about wise use of public money than other Democrats and Republicans -- a bloated defense budget, earmarks and tax breaks for special interests. Members of both parties seem somewhat reluctant to specify which specific programs they would eliminate. Indeed, they are so fond of suggesting that the elimination of "waste, fraud and abuse" will solve our budget challenges (when of course, however desirable, that's not the magic solution) that it's always seemed to me they think and talk about "waste" (in general) rather than "projects value" (in particular) far more than they should. -- N.J.

Michael Hoback · Top Commenter The feds are also considering raising their gas tax using the same plea as Iowa. The DOT has used the same claim of shortfalls, every legislative session for at least the twenty years I have been paying attention. The fact is that if you gave them every tax dollar in the state they would still want more. December 4 at 10:45am

On the assumption this is true, it is a call for oversight and better management -- something I certainly support. The more we can conduct a triage among potential road building and repair projects by engineers on the basis of rational analysis and professional judgment, and the less we can rely on politicians choosing projects on the basis of contractors' campaign contributions and short term construction jobs for their constituents, the better. -- N.J.

The following comment was posted to the online version of my Dec. 5 Press-Citizen column:

Michael Hoback · Top Commenter
Your opinion sounds very reasonable but bitter experience demonstrates that increased taxes only fuels bigger government. December 6 at 3:18pm

And this letter to the editor strikes a similar theme:

Taxpayers Aren't Getting Enough Bang for Their Buck
Steve Hufferd, Iowa City
Iowa City Press-Citizen, Dec. 10, 2013, p. A7

On Dec. 5, while advocating an increase in gasoline taxes, Nicholas Johnson makes the typical liberal error in assuming that increasing taxes will cure all the ills in the infrastructure. He would, I'm sure, say the same regarding taxes to fund education even while taxes spent on education has accelerated even while academic performance per student has plummeted.

We conservatives have no problem with taxes per se. The problem we have is with the plethora of irresponsible abuses of the public coffers. Where is the evidence that the gasoline taxes collected over the past half century has been spent wisely? A bit of transparency would be appreciated and might have a positive effect on the public resistance to tax increases. Of course, transparency could also work against any prospect of tax increases. With the public trust of government officials reaching new lows, it's not the best of times for politicians to be saying, "trust me with an increase in tax dollars."

Tax payers do not feel they are getting sufficient "bang for the buck." There are ways of getting big jobs done with very little. It's called management. The best example of the lack of it has been the current launching of Obamacare.

Steve Hufferd might be surprised to find the degree to which I agree with him.

I don't think that "increasing taxes will cure all the ills in the infrastructure [or] education." I don't recall ever saying that "the gasoline taxes [have] been spent wisely." (As a local school board member I often made the point in meetings, and newspaper columns, that some reforms both cost less and produce better results. As Hufferd puts it, "there are ways of getting big jobs done with very little.")

As a public official, and as a one-time administrative law professor, I have advocated more, not less, transparency in government.

I agree that "trust of government officials [is] reaching new lows" and that "trust me" no longer works.

I certainly share his commitment to better "management" -- and have ever since my term as U.S. Maritime Administrator during the mid-1960s (and throughout my term as a school board member). During President Lyndon Johnson's Administration we actually had a "War on Waste" program that saved taxpayers billions of dollars. (My contribution was working to reduce maritime subsidies.) Johnson symbolized the program by walking around the White House turning off needless lights -- thereby earning the nickname of "Lightbulb Lyndon." (I agree with Hufferd's criticism, and have said, that the rollout of Healthcare.gov was a classic example of poor management and oversight.)

So where do we part company?

(1) We have transportation needs. Unsafe bridges and deteriorating roads need to be fixed.

(2) There are limited options. (a) Continued crumble. We could continue to let the roads and bridges crumble, and build more detours around them. (b) Private ownership. We could sell them off to for-profit corporations -- with the tolls for driving far exceeding any gasoline taxes. (c) Different taxes. We could keep the roads public, but use different taxes: sales, property, or income -- shifting the entire burden away from the "user fee" and on to everyone. (d) Gas tax. We could continue to pay with the user fee called the gasoline tax -- hopefully, while applying Hufferd's and my focus on triage and "do we really need it," innovative cost-cutting, sound management, oversight, and increased transparency.

(3) Gas tax preference. Of these options, my preference is (d), Gas tax -- for reasons laid out in the Press-Citizen column, "Gasoline Tax Is Our Friend," Dec. 5. (Admittedly, non-drivers also benefit from our road network; thus, while I would not advocate some modest funding from income tax revenue, it would be difficult to argue persuasively against it.)

(4) We're all at fault. No institution (or individual) is free of the kind of inefficencies, waste and abuses Hufferd and I would like to remedy -- whether corporations, the military, schools and universities, hospitals, non-profit organizations, or religious institutions. It is misplaced to suggest that most of the fault, when it comes to government, falls on liberals or conservatives or libertarians or greens. Some are more willing to overlook waste in the military (billions of dollars in Iraq and Afghanistan that can't be accounted for); others less likely to come down on popular social programs. Corporate executives of companies dependent upon government contracts may complain about taxes, while spending millions on lobbyists and campaign contributions to get special tax breaks and other special interest benefits in return. (I've run numbers on the "return on investment" from campaign contributions. It's between 1000-to-one and 2000-to-one; give one million, get back one billion -- in the form of such things as contracts, tax breaks, antitrust exemptions, tariffs and other price supports.)

Elected officials who campaign on reducing taxes -- and their local constituents -- are among the first to squeal when a local defense contractor may lose a lucrative contract because the weapons system it's profiting from isn't wanted by the Pentagon, or just doesn't work.

So I don't think it is accurate, fair, or constructive to try to address these problems by demonizing one political party, or political movement, over another. On that Hufferd and I really do disagree.

Of course we don't want to pay for "bridges to nowhere" (a one-time Republican proposal), and we do want to have efficient and effective management of such necessary maintence projects as we may have, selected under rational systems of priority. Having said that, we're still left with the issue of how to pay for them. For the reasons I've outlined, I continue to believe the gasoline tax is the best way to do it.

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And my son, Sherman, has sent the following comment regarding this blog essay by email:

If you do a follow-up you might touch on 2 related topics:

1) Tolls and HOT lanes (aka "Lexus Lanes").

2) Gas tax refunds/credits for poor and working class folks, as well as those who must drive lower mileage vehicles and/or long distances out of necessity.

WRT #1 -- tolls and Lexus lanes are grossly regressive and, I would say, un-American. Since when do we segregate users of public infrastructure into the "haves" and "have-nots"? Our parks, libraries, and schools are available for everyone to use and enjoy. The same used to be true of our public roads and Interstate highway system. Not any more. Now it's 'pay up or shut up'.

Charging an extra fee or toll to use certain lanes on a public road -- particularly an exorbitant per mile 'HOT lane' charge that is admittedly _designed_ to keep out the 'riff-raff' (aka the 99%) -- is outrageous. Our highways are not some exclusive private dinner club. They should be open for ALL to use. Ordinary folks who cannot afford to pay the fees should not have to sit in traffic for hours and breathe exhaust fumes while the wealthy speed past them in their German luxury sedans. If the infrastructure is inadequate it should be improved. HOT/Lexus lanes are an elitist band-aid, and one that takes pressure off of legislators to actually _do_ something about roads with inadequate capacity. If the rich & powerful can buy their way out of traffic jams then they'll be happy and not press for road improvements.

OT/Lexus lanes are the equivalent of having two (2) sections in public libraries and/or schools. One section of the library for the well-healed who can afford to pay a user fee with shiny new computers and an extensive collection of books, comfy chairs, plenty of staff, etc, and the other just a bare-bones barely adequate room with old slow computers and maybe some box fans instead of A/C in the summer. Or a school split into two sections -- one with some classrooms that have a new computer for every kid, a teacher for every 10 students, and an indoor olympic size swimming pool vs. another section with classes of 30+ and some old textbooks on the other side of the building -- for the unwashed masses, the kids from poor and working class families.

Tolls and Lexus lanes are completely unacceptable. They are immoral and should be eliminated. Raise the gas tax instead.

2) Of course, even the motor fuel tax is regressive. Some people _must_ drive long distances. They aren't out joy riding, they have no choice. Out here in the D.C./Baltimore area (and most other major metro areas) people do not usually choose to live 30-50 miles from where they work -- it is the only way they can afford to live. People do not always have the money to buy a new (or used) car that gets 40 mpg. Maybe a relative gave them an old sedan that gets 18-20 mpg and they can barely afford the maintenance on it. Many farmers and ranchers must drive big pickup trucks and have no choice but to drive long distances. The same with construction workers, etc. You get the idea. It is not right to punish them for situations which are beyond their control.

Everything being equal -- income, required driving distance, vehicles needed -- then this would be easier. If no one really had to drive at all, or, say, no more than 10 miles per day, and everyone could afford an electric car, hybrid, or ultra-high mileage car that would suit their needs, then slamming them with a big fat fuel tax for driving a full-size crew cab dually pickup truck with a huge V-8 gas-sucking engine -- 'just because', for the "image" -- would make perfect sense.

Unfortunately it's not that simple.

Perhaps the gas tax should be set up like our income tax system (only simpler). The IRS recognizes that $50k/year is not the same from one person to the next. Some people have legitimate business expenses that are deductable for good reason. For example, it would not be fair to tax an independent cab driver on the entire amount he/she earns (their gross income), because they have to pay for fuel, maint., repairs, and license fees out of that. Likewise, it does not seem fair to a) have a flat tax (which the gas tax kinda is) and b) not allow any deductions for lower income folks and those who absolutely must drive long distances and/or lower mileage vehicles.

I rest my case. ;-)

_______________

Paying By The Mile Is A Terrible Idea

September 25, 2013, 9:00 a.m. (And see, "Gas Tax Critics: A Response," Dec. 10, 2013.)

The Gasoline Tax Is Our Friend

Don't it always seem to go
That you don't know what you've got
Till it's gone
-- Joni Mitchell, "Big Yellow Taxi"

As children we used to sing "London Bridge Is Falling Down." It involved a land far away, a fantasy, because none of us had ever heard of a bridge actually falling down.

Now we have.

We're told many of Iowa's bridges are in need of replacement or repair -- including our own Park Road bridge over the Iowa River. Roads, too, are crumbling and in need of replacement.

It all costs money. How to pay for it? For years it's been paid for with the federal and state gasoline taxes. Today "tax" is one of our few three-letter dirty words. Political rhetoric permits a discussion of "taxes" disconnected from a consideration of what we buy with them. Taxes are, after all, just another way of buying stuff we need -- like roads and bridges. Paying nothing for roads and bridges is not an option. One way or another we'll either pay for them or we won't have them. But in order for the gasoline tax system to work, the taxes need to be raised to a level that recognizes both inflation and current need for funds. Politicians who have convinced their constituents that taxes are evil are reluctant to do this, and are looking for alternatives.

Current proposals to substitute a kind of mileage tax, or toll road, for gasoline taxes are, unfortunately, gaining favor. Before these ideas go much further, it's time to explain why they are little more than a shell and pea game designed to further enrich the oll and automobile manufacturing industries.

One of the primary virtues of the gasoline tax is that it is what's called a "user fee." The more you drive on the roads, the more gasoline you'll buy, the more gasoline tax you'll pay, and the more you'll contribute to the building and maintenance of the roads you use. Unlike the railroads that must pay the whole cost of building and maintaining their roadways, the trucking companies have all of us pitching in to build their roadway system. [Photo credit: multiple sources.]

Ah, say the mileage fee advocates, but under our proposal the amount paid by drivers would also be tied to their usage.

To which I reply, "Yes, but . . .." Yes, but look at all we give up in the process. Abandoning the gasoline tax system, as Joni Mitchell reminds us, is going to leave us with the realization that we didn't know how good we had it before it disappeared.

Crumbling roads and falling bridges are not our nation's, and our state's, only challenges. (1) All Iowans, but especially our farmers, are discovering what "climate change" means in our day-to-day lives and business operations. We need to do everything possible to reduce our use of fossil fuels. (2) And, to the extent our dependence on fossil fuels will continue, we want to become as energy independent as possible. When "our oil" somehow gets beneath the sands of Middle Eastern countries, it costs us trillions of dollars, and thousands of lives, for our military to go get it out for us.

There are many reasons why the gasoline tax is not creating the revenue we need to keep an adequate vehicular infrastructure up to snuff. Mostly it's the failure to raise it to the levels required by inflation.

But it's also a good news, bad news story. You want the good news first? OK.

There are three other factors at play. (1) Higher gas mileage cars and trucks, (2) hybrids, and (3) electric vehicles (along with some other alternatives) all use less gas per mile than the averages when the gasoline tax was put in place. As a result, we are both (a) putting less volume of greenhouse gases into the environment than we otherwise would be, and (b) are less dependent on foreign oil supplies. There are many motivations and forces that support the growing interest in these three alternatives to low mileage cars and trucks, but a major one is the price of gas (including the gasoline taxes).

That's the good news. The other side of that coin is that, notwithstanding the benefits of our using less gasoline, the less gas we use the less revenue the gasoline tax produces, the less money we have for roads and bridges.

So why not substitute a mileage charge? There are many reasons. But whether you eliminate the gasoline tax, reduce it, or hold it at present levels, one consequence is that doing so reduces the marketplace incentive to produce and purchase better gas-mileage vehicles, including hybrids and electrics -- which is something we should want to encourage, not discourage.

By raising the gasoline tax to the levels necessary to maintain our road and bridges infrastructure we can actually increase the incentive to fuel efficiency.

It is difficult to change an entire nation's culture and habits -- as we have seen with tobacco use. But note that, in that case, we used all of Larry Lessig's four options for modifying human behavior (law, norms, market, architecture). We have laws that prohibit smoking in some places. The norm is that smokers ask permission to smoke in your presence (or simply refrain from doing so), rather than assuming it is of course OK, because, after all, "everybody smokes." And convenience stores have moved the cigarettes behind the counter, where they are more difficult for teenagers to steal (an "architectural" change). But one of the biggest factors has been a marketplace modification: teenagers are much less likely to take up smoking at $7.00 per pack of cigarettes than at $2.00.

When you pay by the mile, you can drive as low mileage a vehicle as you want -- a spiffy Hummer (some models get 9 mpg in city) or an inefficient old vehicle. You'll still pay more per mile for the gas, but at least you won't be paying a tax on top of that to maintain your roadway.

Another disadvantage to the mileage charge is the sheer administrative complexity of operating such a system, with its much wider array of possible fraudulent evasions than available with the gas tax.

My proposal? Continue to fund road and bridge construction and maintenance with gasoline taxes. Raise the tax rate to whatever level is necessary to do that. Continue to give the more efficient, and alternatively-fueled, vehicles the advantage needed by any new, socially beneficial technology when trying to change culturally embedded habits and (in the case of electrics' need for battery recharging stations) infrastructure. (That is, the advantage of paying less, or no, gasoline tax -- similar to what we've done during the early years of the Internet.) Years from now, when the alternative vehicles industries, and their necessary infrastructure, have crossed the threshold that make them sufficiently popular and profitable to stand on their own, design any one of a number of possible approaches for collecting a road-maintenance contribution from alternatively fueled vehicles.

But, please, think long and hard before adding, or substituting, a mileage fee system for the gasoline tax. Let's not wake up to discover that, "You don't know what you've got until it's gone."

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