Grad student living

Thanks to my friend Steve S. for bringing this one to my attention.  Kim and I lived pretty frugally in grad school, but this guy is clearly in a class by himself.  I especially appreciate that he was living out of his van at Duke and I've got a pretty good idea where he parked.

 

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Good policy = bad politics (v. 1743)

The News and Observer has a nice Op-Ed today about attempts to reform the tax system in North Carolina.  As it turns out, the solutions are quite obvious, expand the tax base and lower the rate.  Jack Betts:

Almost every state commission that has studied the sales tax has
concluded that if the state were to broaden the sales tax base to
include more services, it could also pare the rate substantially –
perhaps trim other tax rates, too.

The committee heard from
witnesses that North Carolina has an extremely narrow sales tax base,
taxing less than one-fourth of the services that could be taxed,
including such things as lawn services, plumbing repairs, hairdos and
the like…

The answer, almost everyone agreed, is that the best policy is to
broaden the tax base as much as possible and reduce the rate as much as
possible. "That's the standard advice," notes House Finance Co-chair
Jennifer Weiss, D-Wake (any my Rep– she's great), "yet it's not the standard operating procedure"
in other states. "It's a very difficult nut to crack," she added.

The difficult nut is the politics of undertaking what is clearly the most sensible policy.  Political difficulty #1: the utterly inane and non-serious modern Republican party.  They are full a revenue neutral reform of state taxes if  they can also change the NC Constitution to cap the tax rates at 3% and to require a 2/3 majority to raise taxes.  That 2/3 majority requirement has sure worked out great for California. 

Okay, though, the Democrats control both houses of the legislature and the Governor's office, they should be able to get this done then, right?  Alas, political difficulty #2… straight from my Public Policy class– distributed benefits and concentrated costs.  That is, we all benefit from a more efficient tax system, but none of us benefits all that much.  The costs, however, are concentrated on the new businesses that will be taxed, e.g., plumbers, hair salons, auto repair shops, movie theaters, etc.  They will fight tooth and nail, and spend a lot of money doing so, to prevent their businesses from being taxed.  That's hard to win against, even when it is the smart and obvious policy.  Politicians aren't exactly known for taking courageous stands in favor of smart policy against well-funded, intense, interests.  And, of course, these groups will somehow convince rubes that their taxes are going up despite the fact that the bill would surely be designed to be revenue neutral for the short term. 

Alas, kind of depressing.  I'll still hold out some hope, but I'm not exactly optimistic.  \

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