We spend TOO LITTLE, 1: Wake up and smell the coffee. (Publicus Proventus)

All I hear, every day when I listen to the news, is that we're broke. There's no more money to go around, people say, so we have to cut spending.

As I've pointed out before, cutting spending is NOT a long-term solution. While it's never a bad idea to save money, saving money can only go on for so long before you have to spend... and then spend more.

But, people say, there's no money out there... we're broke. But that's a lie; it's wrong and a lie, pure and simple. There's money out there. You just don't want to spend it.

I've pointed out before that America has more money than it could possibly use, including spending $396,000,000 filming TV shows nobody will watch. But it bears repeating, so in what will be an ongoing feature of a feature, We Spend Too Little will help point out the ridiculous, selfish, stupid choices we as a society make -- and point out that there's plenty of money to go around, if we want to use it.

Today's point is this: We spend too little, because we're going to cut out the "earned income credit" in Wisconsin, when there's plenty of money to pay that. The "earned income credit" is -- there's no way around this -- welfare. But it's welfare that helps employers, too: this "tax credit" is money the government just takes and gives to poor people who have a job -- which lets them work for lower wages while still earning enough to feed their kids. (It only applies to people with kids.)

Gov. Patsy is going to reduce that earned income credit in Wisconsin by $16 million per year. Never mind that Patsy hypocritically said that reducing the EIC will allow other taxpayers to give more money to the poor -- that's a sham reason and the habitual liar Gov. Patsy knows it -- and consider instead that the credit will take anywhere from $50 to $100 out of the pockets of the poor in Wisconsin, and give it to the rich and better-off, who no doubt will use it, but need it less.

What will they use it for, you ask? Perhaps to buy single-serve coffees. America is nuts over single-serve gourmet coffees and their dispensers: we can't be bothered with making a whole pot of coffee, or measuring out enough to make one cup. No, we have to have a specific dispenser that will specifically make one specific cup of coffee.

And how much do we spend annually on our single-serve fixation? $500 million, by one estimate, or up to $2,000,000,000 by another estimate.

Two billion dollars, voluntarily spent on single-serve coffees. But we can't spare $16 million to help employers keep poor mothers and fathers working for them?

Another non-sarcastic ACTUAL BUDGET SOLUTION to a crisis that doesn't exist. (Publicus Proventus)

If we're near, in Wisconsin, a "Constitutional Crisis" as the Daley-Family-Wannabe Fitzgeralds insist, it's not because of the 14 Democrats who are refusing to pretend that democracy works when run by lying power-grabbers working for the Koch brothers; if there is such a crisis, it's because the Governor Patsy administration increasingly is ignoring Constitutional rules while making up a fictitious fiscal problem and refusing to consider reasonable solutions -- such as the one I'll propose herein -- to solve minor financial dilemmas.

First the Constitutional problems: The Fitzgerald Clan, more like a criminal gang than a political dynasty (that's what you get when hicks discover patronage) has helped authorize the detention -- not arrest, the GOP loves its wordplay -- of the missing 14 Senators, ignoring Article 4, Sec. 15 of the Wisconsin Constitution, which protects legislators from civil or criminal arrest. (The GOP is well aware of this privilege, using it to keep girl-punchers in power in Arizona).

More seriously, and posing more long-term problems but as yet largely unremarked, is Governor Patsy's proposal to shift $1.2 million in funding from the Department of Public Instruction, whose head is independently elected and a Constitutional officer, and therefore not subject to Governor Patsy's direct control; the law requires that DPI, not the administrators appointed by Governor Patsy, direct education... but Governor Patsy evidently believes that "the law is an ass," or at least that voters are, because he's just barging ahead anyway and nobody's paying attention.

There are, as I've pointed out before, long-term structural budget fixes that DON'T require shredding the constitution and transferring power to Governor Patsy, let alone don't require cutting government services that don't need to be cut.

We don't overspend, we underspend, and cutting taxes is counterproductive. Here's why:

Let's assume that government is costing too much, and let's assume that Governor Patsy cuts out all waste and all overspending. Let's, in fact, assume he slashes government spending by 50%, so that beginning in 2012 we live in a paradise where our now-lower taxes exactly match the government spending that is at the exact right level and which features no waste or fraud whatsoever.

That's great, right?

What happens next?

Nobody in charge of the let's cut all spending and all taxes forever hurrah governing parties --which includes both Democrats and Wife-Beating/Child Killing Republicans -- has thought that far, but I have and here's what happens next:

What happens next is 2013 comes, and prices rise. The cost of living inevitably goes up, because that's inflation and it always happens. So, your government, perfectly priced and perfectly budgeted in 2012, is going to cost a bit more in 2013.

What will you do then?

Cut more spending to avoid raising taxes? But the hypothetical says that government spending is perfect: we're at the right level in 2012, so if you cut spending in 2013, you cut essential services.

And if you do that to balance the budget without raising taxes in 2013, cutting into services you thought were essential in 2012, essential and perfectly priced, what happens in 2014? And 2015?

If you never raise taxes and only cut spending, eventually you will have no further spending to cut, and that means you will have no government services. And shut up, Tea Party Morons, because no government means no police, no roads, no fire departments, no health inspectors... no society.

If men were angels, no government would be necessary. But we're not angels and we need to pay taxes and as long as the price of living rises, so will taxes.

But here's yet another fix that I, as a lawyer and blogger, have thought up but nobody in power has thought up yet because they're not thinking about this the right way.

Here's the fix, and it's painless, or very nearly so:

Raise personal income taxes by 3% on everyone in Wisconsin...

... bear with me here...

.. and then provide a deduction from income for Wisconsin taxes on federal government income taxes.

Right now, Wisconsin does not provide a tax credit or deduction for federal taxes paid -- not so far as I can find, anyway -- which means you're taxed, in Wisconsin, on income used to pay federal taxes. (Mostly; Wisconsin uses Federal AGI, which is your gross income less certain deductions, but those deductions do not include taxes paid to the federal government.)

Changing that will let Wisconsin taxpayers actually benefit. Right now, in Wisconsin, the top income tax rate is 7.75% on incomes exceeding $220,000. I'll use simple math and assume that the tax is 7.75% on 200,000 income, or $15,500.

With no deductions for anything else, the tax on that $200,000 at the federal level is $49,000 or so. So let's stick with a simple example: The Hypothetical Taxpayer here makes $200,000, and pays the federal government $49,000 of that. He then has $151,000 in income left, but Wisconsin taxes him at $200,000, and he pays $15,500 of that to Wisconsin, leaving him with $135,500 of after-tax income.

Under my plan, with an income deduction for federal taxes paid, that same Hypothetical Taxpayer would pay, with a 3% higher top rate, $21,500 to Wisconsin -- $6,000 more in revenues to our state.

That seems like a loss -- but it's not, because the federal government lets you deduct state taxes from income -- so the Hypothetical Taxpayer doesn't pay the US the same $49,000. Instead, his federal taxable income, after deducting the (now-higher) Wisconsin taxes, is $178,500, so he'll pay only about $41,000 to the federal government.

His ultimate tax burden is $62,500 (or so) under my plan, with about 1/3 of that going to the great state of Wisconsin, while his ultimate tax burden under current law is $64,500, with less than 1/4 of the money going to Wisconsin.

In other words, under current law, the GOP is okay with more of your money going to Washington, while you get less state services; under my plan, most people would see a tax decrease without any reduction in government services.

Why isn't anybody talking about this?

I understand there's some jiggering of the math to do -- because Wisconsin can't know what the federal income-less-taxes is until the Wisconsin state tax exemption is calculated -- but that could be worked out by allowing deductions this year for last year's federal taxes, so it's not an insurmountable hurdle, and the bottom line is that by allowing deductions from Wisconsin taxable income for federal taxes paid will have the effect of letting Wisconsin residents pay a greater percentage of their taxes to Wisconsin than to the federal government -- increasing Wisconsin's tax base without any harm to the taxpayers.


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An actual, nonsarcastic, long-term structural solution to Wisconsin's hypothetical budget woes (Publicus Proventus)

How much do Republicans like rich people? Almost as much as they like hypocrisy and not investigating the facts, judging by few recent examples.

Example number one, of course, is Gov. Patsy's willingness to take a phone call (and potentially a free trip to California) from a rich campaign contributor -- all the prank called had to do was pretend to be the man who bankrolled the counterprotests in Wisconsin and he got through to the Governor, who, if he wasn't raising campaign money on state time using state resources, was a hair away from doing just that. (On a side note, it's interesting to see that it's not just racism motivating the Tea Parties; it's also rich people. Rich white people, that is.)

Example number two of the love the GOP has for rich people -- combined with not checking the facts -- is Mike Nichols' hypocritical, biased page 2 piece in the comically-tiny Wisconsin State Journal on February 23. Nichols cites numbers without explanation -- a typical Republican tactic -- and repeatedly asks young people protesting at the Capitol "Who's gonna pay?", using the word gonna to indicate a commonality with reg'lar folks that doesn't exist.

Mike, a better question to ask is why didn't you pay? You've been supporting and voting for people for years that wrote checks without checking the balance first; can you find a time that you refused a government benefit because it wasn't funded? Did your kids go to school? Did you drive on the newly-plowed roads? Did you drink the municipal water supply that the GOP wants to now stop requiring be clean? You did those things without ever asking whether they were paid for, and now you say, hypocritically and without any examination of the facts, Who's gonna pay?

And Nichols' answer? Government employees, who already are paid less than the median in Wisconsin. That is, Nichols adopts Gov. Patsy's, and the Republicans', answer: The poor are gonna pay. Because they love the rich, whether or not they are the rich.

Example number three that the GOP belongs to the rich comes in the form of a Daily Beast/Newsweek poll that shows that Donald Trump -- Donald Trump-- would get anywhere from 8% to 41% of the vote from Republicans in a primary or general election; Trump's numbers on the poll show him taking votes exclusively from Republican candidates. So Republicans would rather nominate, and vote for, an unqualified rich white man than almost anyone else. (Still wondering how Ron Johnson got elected, Wisconsin? I'm not; I'm wondering where he went, him and Herb Kohl.)

Finally, here's a policy reason that proves that the GOP loves rich people and wants the poor and middle class to support their policies giving away the state: The GOP could fix the so-called budget crisis with a structural change in Wisconsin's government that wouldn't affect collective bargaining at all, and wouldn't hurt poor people or the middle class, and would be relatively simple to impose -- plus would put more money into the hands of local government.

Sounds good, right? It is, and it's simple-- but it's not considered at all, so far as I can tell, by the Gov. Patsy brain trust, maybe because no rich white guy has yet suggested it, and won't.

The solution: Amend the "Uniformity Clause" in the Wisconsin Constitution. That clause exists to protect the public from preferential treatment being given to wealthy landowners, which means it seems to be a good idea right now, when Gov. Patsy would almost certainly exempt rich white people's property from taxation, but it prohibits property from being taxed at different... progressive... rates.

Right now, states and the federal government tax income, and do so progressively. Taxing income is counterproductive: Income is useful money, money not sitting around in land or bank accounts, and a tax on income produces a disincentive to produce income. Taxing property -- the method used to fund schools, among other local projects -- would reduce that disincentive and put a tax on passive investments such as real estate.

But property taxes are regressive: they're applied a the same rate to all property in the state, by Constitutional rule. If the Uniformity Clause were amended to allow property to be taxed progressively with higher rates applied to more valuable property, the legislature (or local governments) could impose a higher tax rate on more valuable property.

In Wisconsin, the median value of owner-occupied homes was $112,000 at the last census. That means that 1/2 of all houses in Wisconsin are worth more than $112,000. If the Uniformity Clause were amended to allow a 0.5% increase in property taxes on homes worth 2 times the median value -- or homes worth more than $224,000 -- that would raise a lot of money, and would raise it mostly at the local level and from people who can afford to do it...

... and it would provide those people with a tax deduction at the federal level, allowing, in effect, Wisconsin residents to refuse to send tax money to Washington and keep it here at home. What's not good about that?

I'd support that plan -- and something more radical, an extra 2% surcharge imposed on homes worth more than $500,000, which would raise even more money. What schools we could get, roads we could build, sick people we could take care of, if we did that...

What things we could do, if we had state leaders who were actually interested in governing rather than punishing the poor and middle class to make rich white people happy.


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Wisconsin IS NOT in financial trouble, no matter how many lies Scott Fitzgerald and Patsy Walker tell. (Publicus Proventus.)

While Tea Partiers fantasize about Governor Patsy Walker running for president someday -- he has the only quality they look for in a president [being white] -- the rest of us have to put up with increasing lies combined with the fact that "fiscal conservatives" who are anything but are now starting to fill up the (supposed) gaps in budgets by taxing the poor while giving money to the rich.

The latest liar on the financial front, at least from Wisconsin, isn't Governor Patsy's empty threat to lay off 1,500 workers -- he won't do that -- it's Senate Liar Scott Fitzgerald, who, when he's not trying to turn his family into the Northwoods version of the Daleys, is simply making up facts. On the "Northwoods Patriot" blog, he writes (or is quoted as saying):

This problem is NOW. If we twiddle our thumbs and do nothing, our state will, plain and simple, run out of money in the Medical Assistance program, the Public Defender’s office, and the Corrections Department. The state owes $200 million to the Injured Patients and Compensation Fund, and almost $60 million to Minnesota in reciprocity payments. Even if you don’t count that $200 million debt, and you ignore the $65 million positive balance the state is legally required to carry, we’re still more than $136 million short this year alone.

That ignores the LFB's projection of a surplus this year, and assumes, as I've written, that Wisconsin will pay all those bills by June 30, which I haven't heard it plans or is legally required to do. But we know that Republicans will simply lie and ignore the facts when it suits them.

And Fitzgerald doesn't stop at simply lying; he also misrepresents what will happen if he's not allowed to follow through on his corporate bosses' instructions to break the middle class: he says that the SPD and other offices will "run out of money," but that happens pretty much yearly, as the state never fully funds that office.

Fitzgerald The Liar also ignores the fact that Wisconsin's pension fund is above 99% funded and is considered one of the safest in the nation -- so Wisconsin can meet all of its state employee pension obligations even after the recession and without additional appropriations.

But this is just the beginning, as I've said and others have said. Still not discussed much are the fact that Fitzgerald the Liar, with his GOP buddies working for megacorporations, is going to transfer more power to Governor Patsy, let him make 35 more patronage appointments, and take $900 million away from public schools... and next they'll probably follow the lead of ultraconservative states that are hiking sales taxes, a regressive move that punishes the middle class and poor by taking money out of their pockets.

The budget "crisis" isn't a crisis, and the State could raise revenue through a variety of innovative means, including amending the state Constitution, progressive taxation of luxury goods, and public-private investment. I'll start detailing those ideas as I go along, because I can't just sit and complain.