Taxes, jobs, and the NC Legislature

So, the Republicans in charge of the NC legislature asked for an analysis of how many jobs would be created by dropping a temporary $.01 sales tax (which, actually goes a huge way towards plugging our budget hole and would help avoid massive cutbacks in education) and the UNC Center for Competitive Economies estimated this could lead to about 19,000 new jobs over two years (along with a few other tax cuts for rich people and corporations).  NC Republicans have been brandishing this number as the basis for their cuts in education, health and public welfare, etc.  Here’s the thing, they specifically did not want an analysis of how many jobs would be lost from the cutbacks in state spending.  I’ll let Chris Fitzsimmon provide the details:

A new report released by the N.C. Budget and Tax Center shows the budget would cost North Carolina more than 30,000 jobs next year, $1.3 billion in lost wages and $2.8 billion in reduced industry output…

Then there is the study’s methodology, the exact same one used by researchers in a report prepared for legislative leaders earlier in the session that showed the tax cuts in the Republican budget would create thousands of jobs in the next year.

That study was done by the UNC Center for Competitive Economies but only looked at the tax cuts, not the huge reductions in state spending the budget makes in areas like Medicaid where state investments are matched two to one with federal dollars.

The author of the UNC study noted in a cover letter to legislative leaders that he only looked at one side of the equation, a point never mentioned by House Speaker Thom Tillis and Senate President Pro Tem Phil Berger when they are defending their budget proposal.

The BTC study looked at both sides, the jobs created by the tax cuts and the jobs lost by slashing public investments, and the conclusion is clear. The budget would be a massive blow to the state’s still sputtering economy and throw thousands of people out of work in both the public and private sectors.

A trade only the Republicans would make in their anti-tax mania: a trade of gaining 19,000 jobs for losing 30,000 (many of whom would be teachers).  And, for the record, keeping the $.01 sales tax is quite popular among NC citizens of all political stripes.  Boy, life (and politics) must be easy when you only want to look at the benefits of your proposed actions and ignore the costs.

David Brooks and the power of partisanship

I’m not going to bother reading David Brooks’ column today. All my favorite bloggers have already taken it on and Yglesias sums it up most succinctly:

I don’t want to go on about this at too much length, but David Brooks’ pox on both houses “Hamiltonian” lament ends with a set of positive policy proposals that seems to be entirely composed of things Barack Obama has proposed. Ezra Klein spells it out in more detail.

Why then, is Brooks doing this?  He clearly is a very smart and knowledgeable man, yet here he is writing a column complaining equally about Democrats and Republicans when it’s clear that the Democratic president is pretty much trying to do what Brooks wants.  Because Brooks is a Republican, that’s why.  No matter how knowledgeable, analytically, etc., even a smart thinker like Brooks can be, partisanship has a way of coloring everything.   If Brooks had pretty much the exact same politically views, but had identified himself as a Democrat for years (really, not that unreasonable a suggestion), his columns would be dramatically different.  Of course, personally, I’m above all that.

Republican debate

As long-time readers can surely guess, I did not watch the Republican debate last night.  Firstly, I watched Next Food Network Star on the DVR with my wife.  Secondly, I still would have watched most anything else.  I don’t need to see these maroons spout their idiocy for 90 minutes (just grow the economy at 5% a year!  Why didn’t Obama just think of that?).  Thirdly, what I think based on watching doesn’t matter.  What the mainstream media et al., thinks is what matters going forward.  And from what I’ve seen there’s a near consensus that Romney and Bachman did well, Pawlenty was weak, and nobody else really mattered.   As John Dickerson mentioned in his nice roundup:

Reagan’s 11th commandment was in effect: These Republicans did not speak ill of each other.

It was all about bashing Obama.  That may be just fine in June, but when these characters are competing in a zero sum game for votes in Iowa, New Hampshire, etc., you can’t just ignore the people you are actually competing against for votes.  That’s when things will really get interesting.  For now, nobody really jumped on Romney for his health care plan.  No way would that be the case in December.  For now, nobody jumped on Bachmann for her myriad lunatic statements (even for a Republican House member).  Again, if she’s a serious threat for votes as we approach the new year, that will change.  Pawlenty was lame, but by all accounts so was Obama’s debate performance at this time four years ago.  So, one really should not make too much out of all of this.  That said, I do think it is notable that Bachmann impressed and Pawlenty didn’t.  A strong Bachmann campaign could strangle Pawlenty’s campaign in its crib and make this a fascinating two-person race between her and Romney.  Not predicting that, just saying it seems a very real possibility at this point.

Chart of the day

I meant to post this last week, but never got around to it. Since it made Krugman’s excellent column on Medicare yesterday, I realized I better.   First, a couple comments on the Krugman column which you really should read.  Basically, it’s about how Medicare is much more cost-effective than private insurance and just how foolhardy raising the Medicare age to 67 would be.  For example:

Wait, it gets worse. Not every 65- or 66-year-old denied Medicare would be able to get private coverage — in fact, many would find themselves uninsured. So what would these seniors do?

Well, as the health economists Austin Frakt and Aaron Carroll document, right now Americans in their early 60s without health insurance routinely delay needed care, only to become very expensive Medicare recipients once they reach 65. This pattern would be even stronger and more destructive if Medicare eligibility were delayed. As a result, Mr. Frakt and Mr. Carroll suggest, Medicare spending might actually go up, not down, under Mr. Lieberman’s proposal.

When did Joe Lieberman get so stupid?  Sure, he’s been bad on foreign policy, but he supposedly kept his liberal bonafides on domestic issues while he was at it.  The man is worse than a Republican.  Republicans at least admit that they are– Lieberman just gives bipartisan cover (which the media eats up) to stupid Republican ideas.

The chart already, via Bruce Bartlett:

and a little explanation:

As one can see, the burden of taxes plus private health care spending substantially equalizes the loss of disposable income in the United States and other countries, because we pay 8.6 percent of G.D.P. for health care over and above what the government pays, whereas those in other major countries pay an average of just 2.3 percent of G.D.P. out of their pockets.

Looking at taxes alone, the burden in the United States is 25 percent below the O.E.C.D. average, but including the additional health costs Americans pay, the United States is just 4.7 percent below average.

In short, a substantial portion of the higher tax burden that Europeans pay is really illusory. They are really just paying their health insurance premiums through their taxes rather than through lower wages, as we do.

In discussing how much a better deal other country’s citizens get on their health care with my students, I always hear a version of, “yeah, but they pay higher taxes.”  Yes, for many reasons.  But here’s the thing.  Would you rather pay $10,000 in taxes with $5000 of that going to giving you solid health care coverage or only $4000 in taxes, but then spending another $7000 to pay for private insurance?  We have the most monstrously ineffecient and expensive health care in the world– we’d be so much better off with higher taxes and more efficient health coverage.  Alas, that might be the dreaded socialized medicine.

Gender, immigration, and the Supreme Court

Interesting result from the Supreme Court yesterday affirming  9th circuit ruling on an immigration case:

(Washington, D.C.)  Today in Flores-Villar  v. United States, the Supreme Court split 4-4 and affirmed the 9th Circuit Court of Appeals ruling upholding the constitutionality of a provision that makes it more difficult for an unmarried citizen father to transfer U.S. citizenship to his child born abroad than for an unmarried citizen mother to do so. Justice Elena Kagan did not participate in the decision due to her prior involvement in the case during her tenure at the Solicitor General’s office.

Given the recent history of jurisprudence on legislation that treats men and women differently, this one really surprised me.  Nice little bit of analysis from ACS:

The facts of Flores-Villar v. United States illustrate how such disparate requirements unjustly discriminate against fathers based on the stereotype that mothers, not fathers, care for their children. Ruben Flores-Villar’s father brought him to the U.S. when he was two months old and legally acknowledged him. Although his father raised him as a single parent, he was barred by the law from transmitting citizenship to his son, because he was 16 years old when Flores-Villar was born. Thus, it was physically impossible for him to satisfy the requirement that five years of his residency occur after the age of 14. Had Flores-Villar been born to a U.S. citizen mother with the same history of residency, he would be a citizen today.

The U.S. Court of Appeals for the 9th Circuit upheld the law in response to Flores-Villar’s constitutional challenge. The court failed to take into account that gender stereotypes that presume fathers are less responsible for child rearing influenced the passage of the law, despite the fact that laws that discriminate between men and women based on gender stereotypes have routinely been struck down as violating the Constitution.

I’d really like to read the opinion (I’m not, I’m thinking Dahlia Lithwick will have a Slate piece on this soon– I found out via her facebook feed), but I really do wonder how you can justify this decision without resorting to gender stereotypes.  This case is not going to have far-reaching impact, but it does show the downside of having Kagan on the court– lots of recusals.

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