Last week I highlighted the half-truths and misleading arguments that underpin Iowa Senate minority leader Paul McKinley’s case against Democratic governance in Iowa. I wasn’t planning to revisit the Republican leader’s fantasy world until I read the July 16 edition of his weekly e-mail blast. McKinley claims to offer five “big ideas” to “make Iowa again a state where jobs and prosperity can flourish.”

His premise is absurd when you consider that CNBC just ranked Iowa in the top 10 states for doing business (again), and number one in terms of the cost of doing business. Many of McKinley’s specific claims don’t stand up to scrutiny either, so follow me after the jump. There’s also a poll at the end of this post.

Later today the three Republican candidates for governor will hold their first debate. When discussing state fiscal issues, they are likely to advance two contradictory arguments. First, they will criticize alleged “overspending” by Iowa Democrats, ignoring the good marks our state has received for fiscal management and the fact that severe state budget cuts would be a big drag on the economy. I will address those points in a future post.

Second, the Republican candidates for governor will criticize spending reductions Democrats included in next year’s budget, on the grounds that those cuts will force corresponding increases in property taxes statewide. It’s true that many Iowans will pay more in property taxes because of changes related to the “rollback” calculation, which “determines the percentage of a property’s actual value that will be taxable” in a given year. Former GOP gubernatorial candidate Chris Rants explained here why the rollback figure is on the rise. It has nothing to do with the tough choices Democrats made on the 2011 budget.

Rants and other Republicans are wrong to suggest that any cut in state spending will automatically lead to further property tax hikes. (They’ve been making that claim since Governor Chet Culver’s across-the-board budget cut last October.) Here’s just one example of why their assumptions are flawed. The Des Moines Register reported Tuesday on how Des Moines area school districts are coping with budget shortages. All of the districts will receive less from the state in the next fiscal year. Thankfully, the cuts are smaller than the worst-case scenarios floated in February, because Iowa House and Senate Democrats sought to protect K-12 education from severe budget cuts.

Anyway, all Iowa school districts are adapting to the reduction in state funding. But contrary to what Iowa Republicans are telling you, many districts, including the state’s largest in Des Moines, have ruled out property tax increases. Of the 10 central Iowa school districts mentioned in this article, only three are raising property taxes, and one more is considering that step. The others are cutting expenses and in some cases using money from cash reserves to cover the shortfalls in the coming fiscal year.

Some local governments in Iowa will raise property tax rates, but as with school districts, many will get by with spending or service cuts instead. I support additional federal fiscal aid to local and state governments, because the collapse in revenues is the most severe in six decades, and spending cuts could hamper the economic recovery. But naturally, the same Republicans who scream about property tax hikes are against using “one-time federal money” to help balance budgets.

Share any relevant thoughts in this thread.

Representative Steve King doesn’t come across as the most compassionate guy in the world, bragging about opposing aid for Hurricane Katrina victims and questioning the need to stop deporting undocumented Haitian immigrants after last month’s earthquake.

But if you thought King was incapable of feeling empathy, you’re wrong. Over the weekend he spoke to a panel on immigration at the Conservative Political Action Conference:

During his closing remarks, King veered into a complaint about high taxes, and said he could “empathize” with the man who flew a plane into an IRS building last week.

During the question and answer session, the Media Matters staffer asked King to clarify his comment, reminding him of his sworn duty to protect the American people from all sworn enemies, foreign and domestic. In response, said the staffer, King gave a long and convoluted answer about having been personally audited by the IRS, and ended by saying he intended to hold a fundraiser to help people “implode” their local IRS office.

That’s right, King feels empathy for a guy who crashed his plane into a federal building, intending to harm the IRS employees inside. In the process, the man killed a loving family man and longtime federal worker who served two terms in Vietnam.

Following King’s remarks at the CPAC panel, a man with a video camera gave the congressman a chance to clarify his remarks. King dug deeper. (continues after the jump)

Republicans have complained for years about Democrats allegedly spending too much on “big government,” but a majority of Iowans think state government is about the right size, according to the latest poll by Selzer and Co. for the Des Moines Register. The poll surveyed 805 Iowa adults between January 31 and February 3 and has a margin of error of plus or minus 3.5 percent. Respondents were asked, “In general, do you think the size of state government is too big, about right, or too small?” 52 percent said “about right” and only 39 percent said “too small.”

The Des Moines Register poll also indicates that Iowans would rather tap into the state’s tax reserves, raise fees and perhaps even raise taxes than impose massive service cuts or lay off hundreds of state workers.

The poll tested eleven options for balancing the budget and asked whether that option should be considered, strongly considered or taken off the table. The largest majority (76 percent) said consolidating some state government services should be considered or strongly considered. The Iowa legislature will pass a government reorganization bill this session, but the savings won’t be large enough to avoid other painful budget decisions.

The next largest majority (61 percent) supported considering taking up to $200 million from the state’s cash reserves. But even that probably wouldn’t be enough to balance the 2011 budget.

The other three options that at least half of respondents said should be considered were “increase fines, license fees and other user fees” (53 percent), expand gambling by allowing casinos to host large poker tournaments (51 percent) and raise the sales tax by 1 percent (51 percent).

The Register reported that several political observers found the sales tax numbers most surprising. I was more surprised to see the public evenly divided on raising the income tax. Some 48 percent of respondents said “lawmakers should consider raising state income taxes by a half percentage point; 50 percent said that idea should come off the table.”

The Register’s poll found much less support for “cutting services to thousands of Iowans” (just 33 percent favored considering that option, while 60 percent said it should be taken off the table). Only 42 percent favored considering laying off hundreds of state employees or consolidating school districts. Only 43 percent said legislators should consider eliminating all business tax credits. Just 45 percent said reducing the number of Iowa counties should be on the table.

My point is not that politicians should put blind faith in the wisdom of crowds. I don’t agree with every finding in this poll. I’d rather reduce the number of counties and scrap many business tax credits than raise the sales tax, and I find Iowans’ support for the film tax credit baffling.

The larger message from this poll is that Iowa Democrats should not cower in fear when Republicans bash “big government.” Offered a range of choices for balancing the state budget, most Iowans would prefer not to see services slashed. The Register’s November 2009 poll pointed to the same conclusion, finding broad support for spending increases Democrats have adopted in recent years.

Republicans will be cheered by the portion of Selzer’s latest poll that found one-third of Iowans called themselves supporters of the “tea party” movement, and a majority believe state government is spending too much money. To me that suggests the framing of the budget issue will be critical for this November’s elections. Democrats need to convince voters that they did all they could to find efficiencies in state government without cutting priority areas. If Republicans object, for instance, that the state could have saved tens of millions of dollars by ending the preschool initiative started in 2007, Democrats must point out that doing so would have cut off early childhood education for about 13,000 Iowa kids.

The Iowa Attorney General’s Office filed the first criminal charges in connection with the film tax credit scandal today.

Tom Wheeler, who stepped down in September as manager of the office, faces a charge of non-felonious misconduct in office. Wheeler, 41, is accused of failing to verify the eligibility of applicants for the state’s film tax credit program.

Also charged is Wendy Weiner Runge, who was executive producer of a 2008 film, “The Scientist.” Runge is charged with first degree theft and is accused of taking property belonging to the state of Iowa by unlawfully reporting inflated values on applications for tax credits.

UPDATE: A later version of the Des Moines Register story noted that charges have also been filed against “Matthias Alexander Saunders, another business owner and photography director; and three limited liability corporations tied to the movie [“The Scientist”].”

The Attorney General’s Office press statement is here, and on that page you can download documents related to the charges filed. Governor Chet Culver fired Wheeler shortly after the scandal broke last September. Iowa Department of Economic Development Director Mike Tramontina and deputy director Vincent Lintz both resigned.

It sounds as if Wheeler’s attorney will be Gordon Fischer, a name familiar to many Iowa Democrats. WHO-TV journalist Dave Price posted a statement from Fischer at the Price of Politics blog. Excerpt:

We are disappointed with the Attorney General’s decision to file criminal charges under the facts and circumstances of the situation as we know them. The state has decided to pursue a novel theory of criminal liability and it is our position that their decision is a mistake that is not supported by the facts or the law. However, because they have chosen this path, Tom’s focus must now necessarily shift from trying to help the state develop a functional, and economically beneficial, tax incentive program to defending against the criminal charges. Because of this shift in focus, we will need time to review the state’s charging documents before anyone can make specific comments about the facts underlying the Attorney General’s allegations.

UPDATE: The Des Moines Register published more comments from Wheeler’s advocate:

Gordon Fischer, whom Wheeler hired shortly after a multi-agency investigation began in September, said the state was making Wheeler the fall guy for poor oversight of a program overrun with applications.

“It’s really, really disappointing that they made the decision to try to criminalize this,” Fischer said. Wheeler, he said, “continually raised to his supervisors that the workload was very heavy (inside the firm office), and he was doing the best he could with limited resources.”

The Iowa legislature is likely to eliminate the state film tax credit this session. Last week Iowa State University economist Dave Swenson wrote a good column at InsiderIowa.com about why this program was flawed from the start:

An ad hoc cabal of arts boosters, state and local economic developers, impressionable legislators, and an uncritical me-too response to other states’ attempts in this extremely iffy arena led to what was proudly billed as half-price film making in Iowa.  That is, incredibly, 50 percent of qualifying in-state film-making expenditures could be claimed as state income tax credits.  And even if you didn’t generate enough economic activity to use the credits, you could sell them on the secondary market to some other Iowa company that wanted to lower their state taxes.

It was a fiasco on three fronts. First, the grant of a fully-refundable credit on 50 percent of costs was fiscally unsustainable, legislatively irresponsible, and set the stage for the documented abuses that occurred. Second, Iowa does not have the population, talent, geography, climate, visual amenities, and the whole array of agglomerations that would support a meaningful and sustainable year-round film industry. It never will. And third, the creative economy, as in arts and entertainment, will not be a leading driver of the Iowa economy because they all had it backwards:  arts and entertainment clusters of the kind described by Mr. [Richard] Florida [author of The Rise of the Creative Class] are a result of other economic growth not the cause.

Iowa does not have a Hollywood, Nashville, Taos, Santa Fe, Austin, Memphis, or even Branson to build from.  Iowa is farms, biotechnology research and development, manufacturing, finance and insurance, health care, and universities.  Those are Iowa’s key industries, and the creative content of many of those industries is quite high.  They are full of biologists, agronomists, actuaries, mathematicians, chemists, engineers, computer scientists, and other physical, medical, and social scientists.  That is Iowa’s creative economy, and that is the portion of the state that will drive most job growth and innovation in the next decade.  It has art and cultural centers, but no art and cultural centers that are driving regional or statewide growth in other industries.

The film tax credit will end up costing Iowa taxpayers tens of millions of dollars. It’s a costly reminder that consensus ideas aren’t always good ideas.  

While you’re waiting for tonight’s election returns, check out the television commercial Governor Chet Culver’s campaign launched today:

Like the commercial Culver ran last month, this ad emphasizes that the governor cut spending and his own salary in order to balance the state budget during this recession without raising taxes. I think the ad is well-crafted in terms of script and visuals, but like Bleeding Heartland users IowaVoter and dricey, I am concerned when Democrats rely heavily on Republican anti-tax messaging. Culver may be reinforcing conservative frames and limiting his future policy options if he does win re-election.

Kathie Obradovich highlighted another potential problem not long ago:

Gov. Chet Culver vowed to balance the state budget without raising taxes. And yet a third or more of Iowa school districts might end up raising property taxes as a direct result of the cut to state school aid ordered by Culver.

Is the governor breaking his promise? Well, no. And yes.

When Culver talks about avoiding a tax increase, he really means income and sales taxes – the two major revenue streams for the state. He’s referring to tax increases that he would have to sign into law. In that sense, he hasn’t raised taxes.

But he acknowledges that property taxes are a concern. Culver says he’ll ask the Legislature next year to require school districts to use their cash reserves before raising taxes.

Republicans are already blaming Democrats for the property tax increases many Iowans will experience next year. Their outrage is hypocritical, because the state cuts affecting education and local governments would have been far more severe if not for the federal stimulus bill, which included aid to state governments. Of course, Republicans denounced the stimulus package and bashed Culver for using these federal funds for their intended purpose: to help backfill the 2009 budget.

In any event, Democrats should be wary about staking next year’s campaign on “we didn’t raise your taxes during this recession.” That won’t be a comforting message to Iowans who have to pay a larger property tax bill in September 2010.

With the economic recession continuing to drag down tax revenues, the 2010 budget that the Iowa Legislature approved in April is likely to require significant adjustments.

In June the Legislative Council agreed to cut more than 10 percent from the Legislature’s budget in 2010. The cost-saving measures “include a pay freeze for all legislative employees, reducing travel budgets, and cutting back next year’s legislative session by 10 days.”

A State Government Reorganization Commission will look for other ways to cut spending next year. It will be interesting to compare that commission’s proposals with the kind of cuts Iowa Republicans have been advocating. During the last legislative session, Republicans called for $300 million in spending cuts, but I have been unable to find a link to a document with details about that proposal. (Note: I’ll have more to say in a future post about the state budget reforms Iowa Republicans proposed yesterday.)

After the jump I’ve posted some links and analysis related to the budget constraints facing Iowa and just about every other state right now.

Three Republicans who may run for governor attended a June 15 event in Boone featuring Ed Failor, leader of Iowans for Tax Relief. During a typical Republican speech about how Democrats are wrecking the country, Failor went beyond boilerplate rhetoric and likened Democratic economic policies to events in Nazi Germany in 1933.

Iowa Democratic Party leaders want to know whether State Representative Chris Rants, State Senator Jerry Behn, and Secretary of Agriculture Bill Northey agree with Failor’s analogy. After the jump I’ve posted an action alert asking Iowa Democrats to contact Behn, Rants and Northey to ask them if they agree with Failor’s remarks, and if not, why they didn’t speak up at the time.

The Boone News Republican followed up on the story today and posted a longer excerpt from Failor’s speech. I’ve posted that after the jump as well, though from where I’m sitting the larger context doesn’t make him look any less unhinged.

I doubt any Republican will distance himself from Failor. Iowans for Tax Relief and its members could be helpful during next year’s gubernatorial primary. Speaking to the Boone Times Republican, Behn dismissed the incident as much ado about nothing. Failor’s in no mood to apologize either:

“I was very careful to say that I like Pat Murphy, he is a good guy,” Failor said.

When you have a political disagreement with a “good guy” you like, do you say he is “behaving as a jack-booted Nazi”? Neither do I.

Failor added that he completely stands by his statement. He said that previous examples of political parties that succeed in taking too much power never end up being successful, or good for a country’s well-being.

“When you try to find an example of one party, normally by election and fairly, taking over means of production, it never works out well,” Failor said. “I stand by that, if you are a student of history you will know there is no example of that where it didn’t go terribly wrong eventually. And, in many cases, it started with the best of intentions.”

Can’t say that I’m too impressed by Failor as a “student of history.”

Only three states (Iowa, Louisiana and Alabama) allow citizens to deduct their federal tax payments on their state income tax returns. Yet to Failor, Democratic efforts to make our tax code more like laws in 47 other states is tantamount to “taking over means of production.” Ejecting people who were disrupting a public hearing from the legislative chamber is comparable to how Nazis treated their political opponents.

I don’t pretend to understand the psychological need to elevate a dispute over tax policy into some heroic struggle against dictatorship. I doubt dire warnings about fascism (or Marxism, depending on your paranoid mood) are going to scare Iowans back into electing Republicans.

Share any relevant thoughts in this thread.

Last week Jane Hamsher wrote a good piece at FireDogLake about Newt Gingrich’s big spending on private planes. She noted that Gingrich’s organization American Solutions paid $3,360,346 to Moby Dick Airways, which charters private planes, during 2008 alone. American Solutions raised a total of $25,489,668 last year, and donations below $200 made up $7,343,986 of that amount.

Hamsher asked a good question:

On their contributions page, it says “American Solutions is here to serve as your voice in the political process.” Did the people who gave this money think they were donating so Newt and Company could jet around on private planes?

I’m pretty sure they didn’t, because last night I received a fundraising call from American Solutions. As I always do when I am a respondent for any political survey, I grabbed a pen and took notes, which you’ll find after the jump.

I saw on Bob Vander Plaats’ Twitter feed that Mike Huckabee spoke today at a South Carolina rally organized by Americans for Fair Taxation.

Of the many bad economic policy ideas Republicans have floated in recent years, the so-called “fair tax” has to be one of the worst. However, Huckabee’s embrace of the “fair tax” was a key factor in his surge of support among Iowa Republicans during the summer of 2007. It was one of the few issues that distinguished Huckabee from a crowded field of social conservatives.

If Huckabee does run for president again in 2012, it looks as if he’ll be running on the same economic platform. Will the “fair tax” become widely popular among Republicans outside Iowa by then? Your guess is as good as mine.

This thread is for any comments about Huckabee or tax policy. I would love to see some polling data on the Iowans who caucused for Huckabee last year. Are they committed to sticking with him if he runs again, or would they keep their minds open for Sarah Palin or perhaps some Republican who’s not well-known today? My impression from talking with a few Huckabee fans is that they still like him but would give serious consideration to the alternatives.

UPDATE: Iowa’s own Congressman Steve “10 Worst” King spoke at the same Fair Tax rally on Wednesday.

Today is the last day to file your federal income taxes, or file for an extension. Iowa state tax returns need to be postmarked by April 30.

Iowa PIRG has a petition you can sign on closing corporate tax loopholes, and a trivia question. Of the following 10 companies, which is the only one that has not set up an offshore subsidiary to avoid paying taxes?

* AIG

* American Express

* Bank of America

* Comcast

* Coca-Cola

* Dell

* Exxon-Mobil

* Home Depot

* Pepsi

* Pfizer

Click here for the answer. At that page I also learned that “In all, 83 of the 100 biggest corporations in America have set up off-shore tax shelters, costing the rest of us as much as $100 billion a year!”

The blogosphere is full of funny commentaries on the Republican astroturf campaign to hold “tea parties.” By “astroturf” I mean fake grassroots, organized by conservative interest groups and egged on by their allies at Fox News.

At Daily Kos, KingOneEye has the White House response to the “teabagging” efforts (excerpt):

I think the President will use tomorrow as a day to have an event here at the White House to signal the important steps in the economic recovery and reinvestment plan that cut taxes for 95 percent of working families in America, just as the President proposed doing; cuts in taxes and tax credits for the creation of clean energy jobs.

We’ll use tomorrow to highlight individual and instances in families that have seen their taxes cut and I think America can be — Americans will see more money in their pockets as a direct result of the Making Work Pay tax cut that the President both campaigned on and passed through Congress.

I’m with clammyc: The teabaggers should give up the services their taxes pay for if they believe we get nothing of value in return for our taxes.

Bonddad wants to know, Where were the teabag protests 8 years ago? Good question.

At Open Left, Chris Bowers cites recent Gallup polling, which shows that a solid majority of Americans think upper-income people pay less than their fair share in taxes.

It’s hard to know what’s going on with the Democratic proposal to overhaul Iowa’s tax system. Yesterday key lawmakers predicted it will pass this week, but the Des Moines Register quotes some Democratic back-benchers in the Iowa House today as saying the plan may be dead for this year. I hope we don’t need to add this to the list of good bills we can’t find 51 votes for out of our 56-member Iowa House Democratic caucus.

I haven’t been posting enough open threads lately, so say whatever’s on your mind in this thread–it doesn’t have to be related to tax policy.

UPDATE: I enjoyed Todd Beeton’s Tea Party Palooza linkfest.

With numerous studies linking soft drinks to rising rates of obesity and type 2 diabetes, especially in children, reducing consumption of sugary drinks would appear to have obvious benefits for public health. Limiting access to soft drinks at school has been shown to reduce children’s overall consumption of such beverages, and raising the price of soft drinks through new taxes would likely reduce consumption among adults too.

Iowa native Susan Neely will lead the opposition to policies aimed at getting Americans to drink less pop, soda or sugary juice and sports drinks. In the Sunday Des Moines Register, Philip Brasher profiled Neely, who has been president and chief executive of the American Beverage Association since 2005. I recommend reading his whole article, but I will comment on a few key points after the jump.

Details about Governor Chet Culver’s proposed 2010 budget will come on Wednesday morning, but today the governor’s office announced plans to impose 6.5 percent spending reductions on 205 state programs in next year’s budget. According to the Des Moines Register,

“We’re not going to tax our way out of a tight budget,” [Culver] said. […]

Culver will continue to ask lawmakers not to raise taxes. His budget will propose no tax increases, according to a copy of the governor’s remarks provided before a speech at the Iowa Business Council’s annual meeting.

Culver would like to protect certain areas from the full effect of the 6.5 percent cut: public safety, workforce development, human services, disaster relief, the teacher quality program, and early childhood education.

He will recommend that $200 million from the state’s cash reserves be used during the next budget year.

Via e-mail I received this joint statement from Senate Majority Leader Mike Gronstal, Senate President Jack Kibbie, House Speaker Pat Murphy, and House Majority Leader Kevin McCarthy:

“In these tough economic times, we appreciate Governor Culver and Lt. Governor Judge taking another step to ensure a balanced state budget by releasing this proposal.

“Because of the deepening national recession, this year will be very tough for many Iowans.  While Iowans had little to do with the mismanagement, greed, and financial carelessness that is causing the worst national economic situation since the Great Depression, we will be sharing in the pain.

“In the coming weeks and months, we are committed to:

·        Listening to our constituents

·        Working with the Governor, Lt. Governor and Republican legislators, and

·        Passing a fiscally responsible state budget that attempts to protect the progress we’re making on creating good-paying jobs, improving student achievement and teacher quality, and ensuring affordable health care.”

As you can see, the Democratic statehouse leaders did not unconditionally endorse the governor’s proposal or the principle of relying solely on spending cuts and tapping reserve funds to balance the budget. Some statehouse leaders have advocated raising the gas tax to help pay for road works.

As I have written before, I think it would be a big mistake to rule out any tax increases for next year.

As a political sound bite, it’s appealing for a governor to say, “I balanced the budget without raising a single tax.” But seriously, does Culver believe that Iowa has no obsolete tax loopholes that cost the state far more than they benefit the economy? The Iowa Policy Project has identified “wasteful, secret subsidies to big companies through the tax code.” (pdf file) How about asking those companies to share in the sacrifices that need to be made in the coming year?

Borrowing money to pay for certain infrastructure projects is reasonable, but a modest gas tax increase could reduce Iowa’s debt burden in future years without much pain. There may be other tax increases that make sense, if the funds raised could be linked to specific spending priorities that create jobs.

Politically, it’s risky for any governor to raise taxes, but Culver should balance those considerations against the risk that large spending cuts could prolong the recession:

Almost every single economist agrees, the last thing we want to do in a recession is slash government spending. We want, in fact, to increase that spending so that it is a counter-cyclical force to a deteriorating economy. So the question, then, is how to most safely generate the revenue to maintain or increase that spending. By  “most safely” I mean how to raise the revenue in a way that will minimize any negative economic impact. And the answer comes from Joseph Stiglitz:

 

“[T]ax increases on higher-income families are the least damaging mechanism for closing state fiscal deficits in the short run. Reductions in government spending on goods and services, or reductions in transfer payments to lower-income families, are likely to be more damaging to the economy in the short run than tax increases focused on higher-income families.”

So, first and foremost, you don’t want dramatic spending cuts (beyond the usual rooting out of waste/fraud) and you don’t want to raise taxes on middle- and lower-income citizens who both need the money for necessities, and are the demographics that will most quickly spend money in a stimulative way. That leaves taxes on the super-rich, and Stiglitz – unlike anti-tax ideologues – has actual data to make his case.

For more information, see Budget Cuts or Tax Increases at the State Level:

Which is Preferable During an Economic Downturn?

I’m sure the Iowa Business Council will applaud Culver’s promise this evening to balance the budget with no tax hikes of any kind.

But economic considerations as well as basic fairness dictate that taxes should be on the table when the legislature drafts the 2010 budget. We should not let the fear of Republican-funded attack ads scare us away from sensible steps to increase revenues.

Iowa State Treasurer Mike Fitzgerald unveiled a new tax calculator tool this morning in a conference call with reporters. According to a statement from the Obama campaign in Iowa, the calculator  

allows Iowans to test just how much savings individuals and families can expect under both Barack Obama and John McCain’s proposed tax plans.  The calculator prompts users to enter their households’ specific data, and then calculates the difference under each candidate’s proposals.  See the calculator at: http://taxcut.barackobama.com/

[…]

Treasurer Fitzgerald, who has been Iowa’s state treasurer for 26 years, said, “Iowans deserve to know the facts about each candidates’ tax policies.  As the McCain campaign continues to launch false attacks on Barack Obama’s tax plan, this new tax calculator will help voters across the country see for themselves how the Obama-Biden economic plan will provide real tax relief to 95 percent of working families.  Our country faces challenging economic times, and we need steady leadership that will put money back in the pockets of middle class families, create new jobs, strengthen our small businesses and turn our economy around – that’s what we’ll get with Barack Obama as president.”

Barack Obama will give a tax cut to 95 percent of workers and their families, leading middle class families to face the lowest income tax rates in over 50 years. He will also eliminate income taxes for seniors making less than $50,000, and give struggling homeowners a mortgage tax worth 10 percent of the interest they pay on their mortgage.

On the other hand, McCain will put the corporate interests ahead of the middle class by giving $45 billion in tax breaks to the 200 largest corporations in America, including $4 billion in giveaways to oil companies that are already making record profits.  And while he’ll reward corporations that ship jobs overseas, he won’t give any tax relief at all to 101 million households.

I just used the calculator, plugging in my family’s details, and we save five times as much under the Obama tax plan as we do under the McCain tax plan.

There’s also a short web ad on the tax calculator page, which highlights the key facts about the Obama and McCain tax proposals.

It’s nice to see a Democratic candidate going on offense when it comes to tax policy.

Over at the Washington Monthly’s Political Animal blog, Hilzoy had a great comment on news that John McCain may soon propose “economic measures aimed directly at the middle class” such as “tax cuts — perhaps temporary — for capital gains and dividends”:

Because what everyone is really worried about right now is how they’ll manage to pay the taxes on their massive capital gains.

The biggest surprise for me this year is how poor a campaign McCain has run since locking up the Republican nomination.

This is an open thread on the dumbest policy idea or campaign tactic McCain has come up with in recent months.

Although McCain had no great options for VP, in my opinion, I still think picking Sarah Palin was one of his biggest mistakes.

UPDATE: The New York Times reports,

Despite signals that Senator John McCain would have new prescriptions for the economic crisis after a weekend of meetings, his campaign said Sunday that Mr. McCain, the Republican presidential nominee, would not have any more proposals this week unless developments call for some.

There’s a winning message!

Everyone who doesn’t think that current developments call for some economic policy proposals, please raise your hands.

Great ad, “Zero,” released by Barack Obama’s campaign less than 12 hours after the presidential debate:

The Democratic political blogs seemed to think Obama’s best moment of the debate was when he pounded John McCain on being wrong about Iraq.

I liked that clip, but I think this ad is very smart, because the economy is a bigger issue for most voters than Iraq.

At fivethirtyeight.com, Nate Silver analyzes last night’s snap polls and explains why the snap polls and focus groups showed an advantage to Obama:

TPM has the internals of the CNN poll of debate-watchers, which had Obama winning overall by a margin of 51-38. The poll suggests that Obama is opening up a gap on connectedness, while closing a gap on readiness.

Specifically, by a 62-32 margin, voters thought that Obama was “more in touch with the needs and problems of people like you”. This is a gap that has no doubt grown because of the financial crisis of recent days. But it also grew because Obama was actually speaking to middle class voters. Per the transcript, McCain never once mentioned the phrase “middle class” (Obama did so three times). And Obama’s eye contact was directly with the camera, i.e. the voters at home. McCain seemed to be speaking literally to the people in the room in Mississippi, but figuratively to the punditry. It is no surprise that a small majority of pundits seemed to have thought that McCain won, even when the polls indicated otherwise; the pundits were his target audience.

[…]

McCain’s essential problem is that his fundamental strength – his experience — is specifically not viewed by voters as carrying over to the economy. And the economy is pretty much all that voters care about these days.

EDIT: The CBS poll of undecideds has more confirmatory detail. Obama went from a +18 on “understanding your needs and problems” before the debate to a +56 (!) afterward. And he went from a -9 on “prepared to be president” to a +21.

Click the link, because Silver’s piece is worth your time.

Speaking of the pundits who were McCain’s target audience, the Des Moines Register’s David Yepsen thought McCain won the debate.  

On September 16, the House of Representatives approved the Comprehensive American Energy Security and Consumer Protection Act. The vote split 236 to 189, mostly along partisan lines. Iowa Representatives Bruce Braley, Dave Loebsack and Leonard Boswell all voted with the Democratic majority in favor of the bill. Tom Latham and Steve King voted with most Republicans against the bill.

You can read the bill summary here.

In essence, this legislation was designed to give Democrats cover on the offshore oil drilling issue. The Democratic majority caved by allowing for more drilling between 50 and 100 miles of the shore. This will do nothing to reduce our reliance on foreign oil or lower the cost of gas, but it will give Democratic incumbents a response as Republican candidates hammer them on how we need to “drill here, drill now.”

To give Democrats cover for caving on offshore drilling, the bill also contains lots of good things, like renewed tax credits for wind and solar power, more investment in public transportation, better energy-efficiency standards, a federal renewable electricity standard (which would require 15 percent of electricity generated in the U.S. to come from renewable sources by 2020). In addition, it would end tax subsidies for large oil and gas companies and ban the export of Alaskan oil.

The Oil Drum blog noted,

It is not too surprising that the oil and gas industry is not in favor of the legislation. The legislation provides for a whole host of benefits, and a big piece of the cost would be paid for by new taxes on oil and gas companies. The off-shore drilling provision could best be described as window dressing.

Unfortunately, these benefits will not happen, because Republicans don’t need to pass a compromise energy bill in order to clear the way for more offshore drilling.

They can just wait for the current ban on offshore drilling to expire on September 30. In past years, Democrats in Congress have fought to extend the ban on offshore drilling, but House Speaker Nancy Pelosi knew she did not have the votes to accomplish that this year. So, the bill will die in the Senate:

The bill faces a very uncertain future. The Senate is set to take up three separate energy bills, which differ sharply from the House measure. The White House issued a veto threat Tuesday, saying the House bill “purports to open access to American energy sources while in reality taking actions to stifle development.”

Senate Republicans may choose to block action on any energy bill and allow the moratorium to expire on Sept. 30. If the drilling ban lapses, the Bush administration could begin the process of preparing oil and gas lease sales in new areas as close as 3 miles offshore.

Pelosi and others talked about their big victory in getting this bill through the House, but that so-called victory won’t amount to much besides allowing Democratic incumbents to tell constituents they voted for offshore drilling.

The hypocrisy of Republicans on this issue is even worse.

Remember when a bunch of House Republicans demanded a special Congressional session this summer to deal with energy policy? Remember when Republican delegates to the GOP national convention chanted, “Drill, baby, drill!”

The Republican majority proved that they are not in favor of a comprehensive energy policy that would reduce oil consumption, promote renewable energy, and take tax breaks away from companies posting record profits this year.

Not only that, some Republicans tried to pass a motion to adjourn to block passage of this bill.

I totally agree with this statement from Sierra Club Executive Director Carl Pope:

Today, Republicans in the House were given a chance to pull America out of its energy crisis, and they refused. Majority leadership reached across the aisle to offer a package that includes both clean energy provisions and expanded offshore drilling. But supporters of Big Oil dug their heels in, refusing to support a truly comprehensive energy package because it did not do enough to help the oil industry and instead attempted a stunt to force a drill-only approach.

If House Republicans were honestly interested in clean energy, consumer protection, or a crackdown on ethics at federal agencies, they would have supported this package wholeheartedly. Instead, they fought it, proving beyond a doubt that their single, narrow aim is to increase profits for the oil industry.

For months, they have held up clean energy legislation, instead calling for a drill-only policy which will do nothing to lower gas prices, protect consumers, or solve our energy crisis. They have continued to demand that we open more of our nation’s coasts and public lands to drilling, which will lock us into a future of dependence on oil. They have maneuvered to undermine any bill that doesn’t put the oil industry first and hardworking Americans last.

With their latest failed trick, many Republicans in the House confirmed without a doubt that they will not be satisfied until the oil industry has an even tighter grip on our economy.

The full text of Pope’s statement is after the jump.

Though I find this whole episode depressing, it should motivate us to elect Barack Obama and more and better Democrats to Congress. Doing so won’t necessarily bring us a perfect energy policy, but we will certainly see some improvement on the charade we have now.

The Rebuild Iowa Advisory Commission will release its final report next week, but the task forces working on various aspects of flood recovery released their recommendations on Monday. Click the link to read the Des Moines Register’s brief summaries of about 30 different recommendations, or click here for a 267-page pdf file containing all the reports from the task forces.

According to the Register, several members of the Rebuild Iowa Commission say a special session of the legislature is warranted to address flood recovery and reconstruction needs. House Majority Leader Kevin McCarthy said there is a 50-50 chance of that happening.

I imagine that legislators in tough campaigns wouldn’t want to come to Des Moines for a special session, but these needs are urgent, and I don’t think they can all be put off until January. If there is no special session, I’m afraid the legislature will do little during the 2009 regular session besides consider responses to the flooding.

Whenever legislators meet to evaluate flood relief and reconstruction measures, I hope they will keep in mind the Iowa Fiscal Partnership’s sound advice.

The leadership also needs to make sure environmental considerations do not get short-changed, as they were during the selection of Rebuild Iowa task force members.

Via the Cedar Rapids Gazette on Wednesday, I learned about the Iowa Fiscal Partnership and its analysis of potential policy responses to this summer’s flooding in Iowa.

The Iowa Fiscal Partnership is a joint budget and tax policy analysis initiative of two nonpartisan, nonprofit  organizations, the Iowa Policy Project in Mount Vernon/Iowa City and the Child & Family Policy Center in Des  Moines.

The partnership issued reports this week that are worth reading, which are available here. One argues that “Tax policy is likely to fail as an efficient or effective response to Iowa’s flooding disaster and moves to rebuild.”

“As this report shows, property tax cuts may seem to be an easy choice, but their help to individual  property owners will be marginal in many cases, and they will be poorly targeted and waste resources  that can be better used in other ways,” Elias said.

  Elias said property-tax changes are not timely because they don?t get resources quickly into the hands  of flood victims most in need of help, and not targeted well, noting renters in particular probably would  receive no help.

 “Tax policy should not be the first choice for policy responses, and there are serious questions of whether it  should wind up as part of the mix at all,” Osterberg added.

A press release summarizing the findings of that report is after the jump.

Other research of the Iowa Fiscal Partnership goes over the principles that should guide our response to the flooding:

 David Osterberg, executive director of the IPP, said the Cedar Rapids data point to the need for  state policy makers to chart flood responses based on principles similar to those accepted for economic  stimulus. One of the two reports sets out those principles as guidelines for flood response.

  “Policies must be timely, targeted and transitional,” Osterberg said. “They have to be implemented  when they can effectively help, they have to be able to reach those most directly affected and in need of  assistance, and they need to be temporary with time-specific goals.

  “Everyone involved in the ongoing and coming policy discussion needs to recognize the validity of a  principles-based response, developed on the experiences of other states that have coped with disasters. This  approach not only will best serve Iowa residents, but help us to provide a good example for the future.”

I hope the legislature will consider these recommendations when lawmakers address flood relief and reconstruction in the next session. I predict that the Republican Party will push tax cuts as the centerpiece of flood relief.

Last weekend I wrote that Des Moines City Council member Chris Coleman should have disclosed his business relationship with Ed Boesen before voting to approve an urban renewal district encompassing part of Beaverdale. Boesen was an investor in a development project for Rice field, which could qualify for tax breaks because of the urban renewal area.

Coleman initially said he saw no need to disclose his business relationship with Boesen, because the “CoBo” partnership had supposedly ended years ago.

But in an interview with the Des Moines Register, Coleman now says Boesen owed him $20,000 at the time of the key City Council votes:

Coleman today acknowledged Boesen owed him money even as the councilman voted three times in 2007 in support of Boesen’s Rice Development Partners $11.6 million Beaverdale project.

“I don’t think that the appearance of a conflict (of interests) means there is a conflict,” Coleman told the Register today. “It is two different things. I didn’t in any way feel that it was in any way tied to the Rice project.”

Coleman also acknowledged to the Register that he had a second business relationship with Boesen, in addition to a partnership called CoBo Investments that was formed in 1998.

Coleman sold a Beaverdale home on 49th Street to a Boesen-managed company in January – two months after the final vote on Rice Development Partners’ project – for nearly twice the current assessed value of the property.

But Coleman said he did not receive all of his proceeds from the sale of the house on 49th Street or from the 2005 duplex sale by CoBo Investments because Boesen did not fully pay him for either transaction.

Let me spell out to Coleman why there was a conflict of interest. If someone owes you money, you might have an interest in helping that person make a profit on some other project, because that might increase the chance that you’d get paid back.

In addition, it looks very bad for Boesen to be buying property from a City Council member shortly after the Beaverdale votes, especially for twice the assessed value of that property.

The fact that Coleman never received the full proceeds from the house sale makes no difference. Presumably he was expecting to receive that money.

This situation warrants further investigation.

Boesen’s death last month has been ruled a suicide. Several creditors are suing his estate. It is not clear whether his business partners will be able to go ahead with the Rice field project.

Following up on my earlier post on the best way to combat John McCain’s demagoguery, the Sierra Club put out a great release today:

FOR IMMEDIATE RELEASE: August 1, 2008

Contact: Kristina Johnson, 415.977.5619

            Josh Dorner, 202.675.2384

                         Oops, He Did It Again!

                  McCain Prefers Own Rhetoric to Facts,

                   Actual Experts on Offshore Drilling

Washington, D.C.–In Florida today, Senator John McCain said he was

convinced offshore drilling would yield immediate oil-despite hard data to

the contrary from experts like the federal government’s Energy Information

Administration.

According to the EIA, it would take 7-10 years for oil to come online from

new drilling, and twenty years to reach peak production. And, as the New

York Times recently noted, because of a recent shortage in drilling

equipment, it could likely take even longer.

But McCain said:

“…So I disagree with those experts and I’ve talked to the actual people

that do the work, that are in the business that say within months and

certainly within a very short time, we could have additional oil supply for

this nation. So we ought to drill now.” (Video HERE)

        Statement of Sierra Club Political Director Cathy Duvall

“Senator McCain may ‘disagree with the experts,’ but that doesn’t make the

facts go away. New offshore drilling simply won’t provide any oil for

roughly a decade. And even then, the Bush administration itself admits that

drilling will do absolutely nothing to lower gas prices today, tomorrow, or

even two decades from now.

“Oil companies aren’t interested in lowering gas prices. Keeping supply

tight and oil prices high keeps Big Oil rolling in record profits. The oil

companies are spending almost ten times more-a full 55 percent of their

record profits-on stock buybacks and dividends than they are on

exploration.  This drives up the price of their shares, their profits, and

the paychecks of their executives.

“This episode is eerily reminiscent of Senator McCain’s insistence that his

misguided ‘gas tax holiday’ would benefit consumers and not simply add to

Big Oil’s record profits.  McCain and his aides continue to insist that the

230 leading economists — including 4 Nobel Prize winners — who denounced

his plan are simply wrong.

“We’re in an energy crisis.  Americans do need short-term help to offset

the cost of gas, and Senator Obama has a plan to give it to them. He has

proposed a $1,000 refund check paid for by taxing Big Oil’s record profits

that would offer us immediate relief. That’s something new drilling won’t

do, no matter what John McCain says.”

                                  # # #

I like this better than the MoveOn “gimmick” ad (which you can view in the earlier post). In addition to pointing out why McCain is wrong on this issue, it links his proposal to what big oil companies want and profit from. Also, the Sierra Club statement has a healthy dose of ridicule, which McCain deserves.

All that’s missing is a line about how we don’t need a third term of a presidency in the pocket of Big Oil. I’m with Dansac on the need to repeat “McCain is Bush’s third term” as often as possible.

Meanwhile, Obama took several steps in the right direction at a town hall meeting in Florida today. He is calling for a $1,000 tax rebate for low and middle-income families. A windfall profits tax on oil companies would pay for the rebates.

The Illinois senator also revamped his proposal for a $50 billion economic stimulus plan to include $25 billion to replenish the highway trust fund and pay for infrastructure improvements that he said could save up to 1 million endangered jobs.

“With job losses mounting, prices rising, increased turbulence in our financial system, a growing credit crunch, we need to do more,” Obama said at a town hall meeting in St. Petersburg, Florida.

The proposals came as the government announced the U.S. unemployment rate hit its highest level in four years with another 51,000 non-farm jobs lost in July, bringing job losses for the year to 463,000.

“Do you think you can afford another four years of the same failed economic policies?” Obama asked, accusing McCain of embracing President George W. Bush’s economic approach.

Let McCain explain why he and the Republican Party refuse to consider a windfall tax on oil companies that are reporting record profits this year.

Iowa businesses in areas affected by recent flooding will have an extra month this summer to remit withholding, unemployment and sales tax for activity from April 1 to June 30. The floods cut off cash flow for many businesses, and the extension is intended to give them time to secure Small Business Administration or other loans before they have to make tax payments.

More details are in the press release from State Representative Tyler Olson, which is after the jump. Olson is a first-term incumbent in House district 38, which includes parts of Cedar Rapids. He requested the extension after being contacted by a business owner.  

One thing I’ve never understood is why a smart guy like Tom Vilsack put the full weight of his administration’s political capital behind the Iowa Values Fund.

As Jason Hancock discusses in this story at Iowa Independent, the impact of that fund on jobs created and retained in Iowa has been questionable:

Colin Gordon, senior research consultant with the Iowa Policy Project, said the fear many critics of the Values Fund have is that once contracts expire and companies have received their last payment, the jobs that were created will disappear.

[…]

Companies make location decisions based on infrastructure needs, available workforce, skill level of the workforce and amenities, to name just a few reasons, Gordon said.

“It does not follow – just because a firm pockets money from the Values Fund – that the Fund can claim credit for all the jobs and investment that come afterward,” Gordon said. “We have no way of knowing whether Values Funds money actually attracts these firms. Certainly the academic research on this question is unequivocal that firms make location decisions based on local suppliers, customers and workers. No one turns down subsidies or tax breaks being thrown at them, but these are rarely the keys to investment and location decisions.”

Competition is fierce among states, IDED’s Bjornson said, and if Iowa doesn’t pony up, other Midwestern states will.

Swenson called this a “race to the bottom,” with Midwestern states trying to beat their neighbors but only making matters worse.

“Infrastructure, amenities, education, it all suffers, and thus, the Midwest becomes a less desirable place to do business,” he said. “The Midwest, including Iowa, is doing more damage to itself than anything else.”

Hundreds of millions of dollars have been doled out by the Values Fund, Swenson said, but Iowa has still grown at only one-third the rate the rest of the nation has. In 1982 Iowans made 92 percent of the national average for earnings per job. Today that figure stands at 78 percent.

[…]

Gordon said IDED can point to a few scattered success stories, but in the end the true impact of the Values Fund is murky at best.

“It diverts money from improving the things that truly matter to companies, and that hurts Iowa in the long haul,” he said. “These incentives are a short-term, politically easy fix to a much bigger problem. If you ask a business, and they answer honestly, they will say these incentives make very little difference to their final decision of where to locate.”

Count me among those who think the Values Fund is glorified corporate welfare. In some cases corporations didn’t even need to promise to create new jobs to receive money–they just had to promise not to decrease their current number of employees. But in an economic downturn, I don’t think those promises will make much difference.

Look at Lennox International. The slowdown in home construction has to be brutal for that manufacturer of heaters and air conditioners. Not surprisingly, the company will lay off 150 people in Marshalltown this August and 100 more people there next year. The Values Fund promised Lennox $6.6 million in forgivable loans in 2006, but it looks like Iowa taxpayers aren’t going to receive good value for that money.

We needed more leadership from Governor Vilsack on other economic policy issues, but he seemed to focus way too much on the Values Fund.

If anyone has any educated guesses or inside knowledge about why Vilsack believed so strongly in the Values Fund, please post a comment or send me an e-mail about it. It’s a real puzzle to me. A policy wonk like Vilsack should have been aware of research indicating that these state and local incentives are not major factors driving employment figures.

This week Governor Culver signed into law a bill that establishes a statewide 1-cent sales tax for school infrastructure. That tax will replace the local-option sales tax for school infrastructure, which has been adopted in all 99 counties.

The problem with the local-option sales tax has been that school districts in counties with a large retail base get much more funding per student than school districts in counties without many local retail options. Why should students in Warren County have to learn in crumbling schools because there are more shopping options in Polk and Dallas counties?

A few years back there was an uproar in Des Moines when it emerged that the school district didn’t have enough money to fix up all the schools. Partly that was due to poor budgeting, but the explosion of big-box retail in Dallas County played a role as well, because fewer local-option sales tax dollars were staying in Polk County.

Des Moines’ alternative weekly Cityview doesn’t like the new law. They may be right that the motivation for passing it was to make sure voters wouldn’t be able to ditch the extra penny sales tax. The old law forced counties to get voters to renew the local-option sales tax every ten years, and many people think Polk County voters would have rejected any proposal to renew the local-option tax approved in 1999.

The new statewide sales tax won’t expire until 2029.

Cityview is also troubled by the move away from “local control,” but here I am 100 percent with IowaVoter:

This crazy local-option sales tax was created in a previous Republican-run legislature.  It siphons money from counties with little retail trade to counties with larger trade, such as Polk county.  It sounds like something rural Republicans should have opposed, but they always go for regressive taxes.  The local control aspect took the burden off them, too.

Thank Democrats for partly fixing this folly.  The tax is still regressive but now it will give rural areas a fair shake.  Republicans lost control of the legislature for a reason.  Democrats should not shrink from the burden of correcting old errors, even if Republicans drag their feet.

Cityview doesn’t seem to get how the current system operates and is bothered that the new law

expects taxpayers in Des Moines, for example, to bail out crumbling schools in Sioux City or Davenport or some other place where we have no say in how our money is being spent. It isn’t that Iowans shouldn’t bond together to help one another, but it should be left to local taxpayers to vote on how their money is spent as a way to keep school districts in line – not a group of bureaucrats.

But of course, the current system gives people in the majority of Iowa’s counties little more than the illusion of local control. Whether or not they approve a local-option sales tax in their own county, they still end up pumping money into school districts located in other counties–and neither they nor their local school boards have any say in how that money is spent.

Students should not be punished for living in a county without many retail options.

The Iowa Citizen Action Network sent out this action alert on Wednesday:

ECONOMIC RECOVERY THAT INVESTS IN  AMERICA

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

This year Iowa Citizen Action Network (ICAN) has been talking about the need to invest in Iowa by expanding health care coverage for  kids, and our

state legislature has taken bold steps to meet this need in the coming years. Now as Iowans continue to struggle with a whole host of economic issues including health care, foreclosures, unemployment, and the rising cost of gas and food; We must tell Congress to take bold action to invest in  America .

America is now in a recession. The economy has lost 296,000 private sector jobs in the past quarter.  Unemployment claims have surged upwards to a four-week average of 376,000. And many Americans are still in jobs, but with reduced hours. Now things are getting a lot worse.

Together we can ensure that Congress passes a package that provides a shared recovery and an economy that works for all of us.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

URGE YOUR REPRESENTATIVE AND SENATORS TO DO

MORE TO REVERSE THE RECESSION

Congress is currently discussing a growth package that would stimulate the economy and provide relief for low-to-moderate-income people. It’s up to us to make sure their proposals succeed in reversing the impact of the recession for ordinary Iowans.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

CALL TODAY — YOU CAN MAKE THE DIFFERENCE!!!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Time is of the essence: the House and Senate leaders are discussing what should be included in an economic recovery package that can invest in the people who are most impacted by the recession.  That’s why we need to call our representatives right now and tell them to vote to help people recover from the recession.

Call Your U.S. Representative toll free 1-888-460-0813* on May 7, or 1-202-224-3121 any other day. Both reach the capitol switchboard.

Call right now and urge Sen. Harkin, Sen. Grassley, and your representative to vote for recession relief for low-to-moderate income people. Find your Rep. at: www.house.gov.

Too often Congress loads these emergency stimulus packages with corporate tax breaks and gimmicky gestures toward working people, so I appreciate ICAN’s efforts to move these deliberations in the right direction.

Elected officials and policy advocates are getting increasingly annoyed by Hillary Clinton’s decision to make this nominating contest about her really bad proposal to suspend the gas tax this summer and pay for it with a windfall tax on oil companies.

Today Tom Harkin weighed in on the issue, telling reporters that Congress will not take up this proposal. Even if the gas tax holiday were enacted, Harkin suggested, consumers would not benefit much, and the Iowa Department of Transportation would lose about $75 million in revenues to rebuild infrastructure.

Friends of the Earth Action, which supported John Edwards for president and had been sitting out the campaign since he left the race, today endorsed Barack Obama, largely because of the gas tax issue:

“We endorse Senator Obama because we believe he is the best candidate for the environment,” said Friends of the Earth Action President Brent Blackwelder.  “The ‘gas tax holiday’ debate is a defining moment in the presidential race.  The two other candidates responded with sham solutions that won’t ease pain at the pump, but Senator Obama refused to play that typical Washington game.  Instead, Obama called for real solutions that would make transportation more affordable and curb global warming.  He showed the courage and candor we expect from a president.”

Friends of the Earth Action ran radio and television ads on behalf of Edwards in the early-voting states, and the group is now running this ad supporting Obama:

As I’ve said many times, I would vote for either Obama or Clinton in the general and have no strong preference between the two. I would hate to see Hillary gain the inside track for the nomination through this kind of political posturing, though. It’s such a bad idea on so many levels.

Obama appears to be feeling the heat on this issue. A few days ago his campaign put out a television ad calling the gas tax holiday a “bogus” idea that would just help big oil companies (click the link to view that ad). However, his closing ad in Indiana and North Carolina moves away from that issue to a more general message:

Meanwhile, Clinton seems to think she has hit pay dirt, and has made the gas tax the focus of her closing ad in the states that will vote tomorrow:

For a laugh, I highly recommend this diary by Matt Stoller, CONFIDENTIAL/URGENT POLITICAL PROPOSAL, which skewers Hillary’s proposal on the gas tax by presenting it in the format of those scam e-mails promising to make you rich.

Please put up your predictions for the Indiana and North Carolina primaries in the comments. I say these results will be mirror images of each other: Obama will win NC 55-45, and Hillary will win Indiana by the same margin.

David Yepsen has a pretty good column in Sunday’s Des Moines Register: Stimulus deal might do harm. A one-time tax rebate didn’t fix the economy when Gerald Ford was president, and it won’t fix the economy now.

Yepsen doesn’t mention some of the other things wrong with this package–namely, that the Republicans got the “business incentives” they were looking for, while Democrats “dropped calls for increases in food stamps and an extension of unemployment compensation”.

To his credit, John Edwards denounced this charade: “This is another example of Washington deserting working people and the middle class.”

I am not aware of any statement from Hillary Clinton or Barack Obama criticizing the bogus “stimulus package.”

The job creation plan Edwards announced last month would actually stimulate the economy.

Clinton and Obama have also released economic stimulus packages, and my impression is that Clinton’s is a little better than Obama’s. But neither of them seems willing to call out their fellow members of he Congressional club for agreeing to George Bush’s sham.

Although Edwards is not going to win the Democratic nomination, I want him to stay in the race as long as he is speaking truths that Obama and Clinton avoid.

When I see that David Yepsen has written another column about Iowans being over-taxed, I usually don’t get past the first couple of paragraphs. These columns show up a few times a year, whenever Yepsen gets hold of a press release from some right-wing think tank. I figure, I know what he’s going to say without reading the whole piece.

But fortunately, West Des Moines resident John Norwood actually read Yepsen’s latest column on the subject (link no longer available on the free portion of the Register website) and put together a devastating rebuttal that appeared in the Des Moines Register’s Sunday edition:

David Yepsen’s April 17 column once again beats the drum that somehow Iowa’s state and local tax burden is driving our state to ruin (“Lighten Growing Tax Burden”). We’re a state with the 18th-highest tax burden in the nation.

Having grown up in Massachusetts and later having lived 10 years in the San Francisco Bay area, two of the country’s most expensive areas, I have trouble reconciling my personal experience with the conclusions of the Tax Foundation that Yepsen cites.

Even if we take the Tax Foundation report as gospel, the chart presented next to Yepsen’s column notes that there is really very little difference between the 44th most-taxed state, which is South Dakota at 9 percent, and Iowa, which comes in 18th at 11 percent.

The variance in state rates is actually pretty narrow across most of the distribution. Move to Missouri, save 0.9 percent and you’re in the driver’s seat at 34th.

How many Iowans, who have access to superior education and other community services, are ready to leave for South Dakota or Missouri for that 1 percent to 2 percent difference? There’s an old saw, Yepsen, “You get what you pay for.”

Iowa is doing pretty well, if you ask me.

– John Norwood,

West Des Moines.

The idea that anyone is deciding where to live based on a 1 or 2 percent difference in tax rates is laughable. Thanks to the letter-writer for spelling out why.