The four Rs

Reform, revenue, regressivity, and recessions.

Taxation is always difficult. No one loves it. Those of us who believe in active government recognize its necessity, even if the yahoos on the right continue to scream for starting with cuts long after the budget has already been seriously slashed. Their thinking is a Markov chain - they can't remember any cut as long as there's something, anything left that might conceivably be cut.

Massachusetts is considering three ways to raise transportation and other revenues:

• Toll increases on the Turnpike, which the MTA board passed because it was the only act in their power to avoid default and then rescinded while the branches government dickered
  
• Increased gas taxes on everyone, most notably Gov. Deval Patrick's 19c per gallon increase
• Increased sales taxes on everyone, Speaker Robert DeLeo's proposal (now passed by the House)
  

All these revenue sources are regressive and unfair in some way. Even though the impact of each instance is small, in total they're substantial, and they disproportionately affect those who are least able to pay them. Toll increases would extract further unfair revenue from a minority subset of beneficiaries of the Big Dig.

Gov. Patrick is right to emphasize reform at the same time as revenue. It's not only good politics; it's good government. I know for a fact that the legislature is aware of this. My State Rep told me so in no uncertain terms yesterday as she dreaded the trade-offs of today's vote.

I told her I supported the gas tax. Why if it's so regressive? It's better targeted than a general sales tax, and it has other positive effects on the environment. But it's far from ideal, a confirmation as if we needed another that politics is always the art of the possible.

What no one has proposed is a progressive income tax. One reason is that Article XLIV of the Massachusetts Constitution forbids a typical progressive income tax on ordinary income.

Of course, raising taxes of almost any kind in the kind of economic downturn we're facing has very adverse effects. We don't want people to tighten their spending even more and add to the depth of the recession. But, again, the Massachusetts Constitution requires a balanced budget every year.

The best proposal would take a leaf from Obama's book. It would reduce the 5.3% tax rate to 5% for the poor and middle class, but it would raise the rate on the affluent.

Not only is this a more progressive tax, a revenue-neutral change to a progressive tax would actually be stimulative, too, since poor and middle class taxpayers are more likely to spend their cuts and thus contribute to aggregate demand in a time when the fall of demand risks a feedback cycle of further economic shrinkage. Even a revenue-increasing proposal actually has a chance to be net stimulative, though that aggregate effect would depend on actual numbers.

Taxes bring out the loonies

Don't raise taxes, just raise the subject of taxes, and total tax-free lunatics crawl out of the talk radio woodwork and explode their know-nothing bile all over everyone. The degree of their ignorance would be stunning but for long experience.

Gov. Deval Patrick is now open to raising the gas tax to fund the Turnpike Authority in servicing the debt incurred in building the Big Dig. Here's some of the reaction:

• will00407 assesses the condition of the economy by talking to one (one!) sales clerk of no known expertise. This suggests the level of will's expertise. Update (1/14): Real numbers from CNBC to show what a total dipshit will00407 is as he fantasizes about that one cute sales clerk.
  
• Timo-2 wants to revolt over this proposal because he thinks he doesn't use ... something he doesn't identify, but let's be charitable and assume he means the Big Dig. It's curious how he thinks goods get to him. Did someone finally invent a way to beam it down? I know, he gets it from the supermarket, end of story.
• XENOPHON-1 objects to legislator pensions, probably still angry from yesterday. The subtext of that story could have been how lousy legislator pensions actually are.
• sweetlandofliberty thinks the small, automatic legislator pay raises can pay for it all. Sure, if the Big Dig only needed a couple hundred thou. Learn to count? Not the tax haters.
• daviedooski thinks New Hampshire has no taxes at all. Government there is an air fern! He's an idiot.
• kickyoubutt is just mad, mad, mad. He hated Deval from the start and thinks we're all morons for not hating him.
• walpoleHSparent and bostonBBB can't remember two weeks ago or October, not even the cut of 1000 jobs from the payroll. The state never cuts its budget, except when they're conveniently not looking.
• teacher55, casinowriter, and dsilenzi want to start paying tolls on their local roads and highways, I guess, since they don't want to pay for our local roads and highways.
• -Hoss thinks he's smart to cut the tolltakers. Guess what? Already going on. Further, the MTA needs revenue, not because there's an operating shortfall, but because the Big Dig debt was moved onto the MTA for accounting purposes.

Well, that's enough stupidity for one day.

One other think: The American Petroleum Institute, which apparently now calls itself API (without all those other letters), ranks Massachusetts (PDF) below the national average for taxing gasoline.

Digging the Dig

Once again, the Boston Globe turns over prime newsprint real estate to David D'Alessandro for ... what exactly? A cab ride in London? At least we know D'Alessandro travels and probably that he reads Tom Friedman. I'd guess that the Globe is blessing us with D'Alessandro's boosterish pablum as a nudge-nudge-wink-wink sweetener for all the advertising John Hancock provides.

As they say, the market has already discounted D'Alessandro's pedestrian (heh) analysis. Putting it in print was a waste of readers' time.

Two immigrants dead

Today, the Boston Globe juxtaposed two stories on the front page:

• the indictment of the smallest player in the Big Dig ceiling collapse that killed Milena Del Valle
• the death in Federal custody and promised investigation of Edmar Alves Araujo from easily prevented epileptic seizure

I've met Martha Coakley, and two friends know her well both personally and professionally and trust her. Still, I can't help believing that Powers Fasteners, the epoxy manufacturer, is not the culprit in the Big Dig fiasco. As reported, the criminal indictment says that Powers didn't warn loudly enough about the characteristics of an epoxy that the company claims they didn't think was being used because they assumed their apparently too quiet warnings had been heeded. This is an indictment for manslaughter based on a thin rationale:

"They had the opportunity to make clear the distinction in the products and raise the red flag at that time and possibly change the course of events; they did not do so," Paul F. Ware Jr., the special prosecutor overseeing the Big Dig investigation, said...

I hope that the Powers indictment is merely the first of several indictments. It could be a public threat to Bechtel/Parsons Brinckerhoff, Gannett Fleming, and Modern Continental.

Araujo's death in custody by comparison looks like a simple case of the police reflexively saying, "No. You can't help. Get out of my lock-up." Cops are used to dealing with people who are trying to put one over on them, especially related to drugs, so it takes some way to set yourself apart to get prescription drugs to someone who has been arrested. This immigrant family apparently did not have any pull.

I suspect that the Feds will investigate by interviewing a few people. They'll hold a press conference, tsk-tsk sadly, and say that these things unfortunately happen. Then they'll close the books without doing anything.

This matters to me beyond simple human empathy because I have family members who rely on or have relied on insulin, thyroid, and anti-seizure medication to live normally. I would use every bit of pull I have to get them their medications, but then I'm a white male affluent suburbanite with an elite education and useful connections in politics and law. On the other hand, I also have a relative whose every approach to law enforcement would be a scam, whose arrests provide the only tracking data we get, so I'm not claiming this is easy to get right 100% of the time.