Sexism is alive and well

On Friday, April 25, 2008 there appeared two articles, side by side, on the front page of the Providence Journal's Rhode Island section.

One article was about David McCullough's talk at Bryant University. Just imagine if the reporter had written something like:

McCullough, who has won Pulitzer Prizes for his biographies of presidents Harry Truman and John Adams, has snow white hair and was wearing a brown single breasted suit, blue tie and grey shirt and wing tipped shoes, told his audience, "When you examine their lives you find a common thread."

The other article covered Lorraine Bracco's talk at the Westin about her depression, a serious topic indeed. In this description your reporter writes:

"...she realized that she was suffering from a deep depression. "The vortex had a hold on me," said the actress, who has shoulder-length brown hair, and wore a tailored charcoal-colored pantsuit and spike heeled open-toed sandals.

How demeaning and insulting to women and the message.

Cut minimum wages to help low wage earners.

A very seductive article by Adam Schaeffer on the Sunday Providence Journal's Commentary page, "Minimum wage hikes depress job growth".

Among his conclusions based on his data analysis are:

1. These [hikes] hurt those most in need of work,
2. Mandated wage hikes produce corresponding reduction in employment for black young adults and teens.
3. Lower employment rates.

The logic and supporting statistics are persuasive. However, there's this from from "themiddleclass.org"

Contrary to the stereotype of the minimum wage worker as a teenager with nothing to purchase but junk food and movie tickets, the typical minimum wage worker is an adult providing more than half of his or her family’s total earnings. According to the Economic Policy Institute, nearly half of families with a worker who would benefit from a minimum wage increase rely on that worker’s pay as the family’s only source of earnings.

I have to wonder if the Mr. Schaeffer believes that lowering the minimum wage would be good for low income workers and those most in need of work.

How about lowering it to less than $5.15, $5.00, $4.50? Good times ahead for the low wage worker. Right.

Fair and Sane Property Taxes are possible

Can there be anyone left who doesn't understand that Rhode Island is in deep financial trouble? The Governor made it very plain in his State of the State address that in broad terms, we need to (1) cut expenses, (2) find added revenue, and (3) avoid raising taxes. All are reasonable goals.

How about a specific property tax plan to

1. attract business,
2. reduce the pressure on homeowners to leave because of high property taxes and
3. allow Rhode Island to adhere to its own Constitutional obligation to insure that "the burdens of the state are fairly distributed among its citizens"?

The idea? That no property owners, commercial or residential, shall receive a property tax increase greater than 4% in any one year. One might be tempted to think we already have accomplished this with the soon to be 4% cap on the local tax levy. Not so. There is no limit on the tax increase any property owner can receive as long as we require taxes based on periodic revaluations be applied to all tax payers every third year.

I am convinced that a 4% property tax limit would make our state a magnet for business to locate here, not only in their own self interest, but in the interest of their employees who might need to re-locate here. Maybe Rhode Island will no longer be the least business friendly state in the union.

Businesses would be able to take advantage of this limit as they prepare budgets instead of the very unpleasant (average) 37% tax increase received by three quarters of commercial property owners this past year long after their budgets were in place.

But it's not just about business. Homeowners whose property values have risen to the point that some must choose between paying their taxes or changing their life styles, or worse, selling their homes, would never happen again. And that assumes they could even sell their home in this awful housing market.

The R.I.G.H.T. plan will assure that every property owner will never receive more than a 4% property tax increase, that every property owner will pay his or her fair share. A new owner's initial tax bill will reflect true market value using a rate based on a revaluation, just as we do today.

At last, Rhode Island, The State of Fair and Sane Property Taxes. Sounds good.

For more see our website http://righttax.org

TIC
The Independent Columnist
Wednesday, December 11, 2007
With apologies to "the Onion"

Property taxes finally received the attention it deserves on Smith Hill. The Rhode Island legislature is considering a bill to re-evaluate this ancient tax system after months of debate in committee. Sources close to Senate and House majority leaders have released documents to this "reporter" on the condition of anonymity that suggest that lawmakers see nothing wrong with the 250 year old system in current use and are reluctant to make changes.

Under the traditional ad valorem tax system tax payers pay taxes to their town based on the market value of the property they own. The rate used to determine each tax bill depends on (1) the amount of the tax levy and (2) the total market value of the tax base, or all community property that is taxable.

New owners are assured that the rate used to tax them on the market value of their purchase will be based on current market values for the entire tax base, thus avoiding the unfair practice of using older and usually lower valuations as the basis of the tax rate and applying the rate to new, current market values of new buyers’ property. Revaluations will be done every three years instead of every ten to fifteen years common prior to 2000. “This assures fair treatment for new buyers” said the House minority leader

The tax levy itself will become limited to annual increases of no more than 4% which is very good news to property owners. Of course, while the levy is limited to 4% increases there is no limit to the increase in any individual tax bill since the market determines the value of each property.

In fact some waterfront property owners in the Saunderstown area of North Kingstown this year have seen their taxes plummet 25 to 30% while others in the same neighborhood have received increases of 20 to 50%. When asked about this apparent breakdown of logic and fairness a prominent senator responded that "the market is the best judge and we should let it work".

We are told by several trusted sources that the sentiment on the Hill is that taxes based on market values is the best way to pay for local government even if it means that some will be forced to sell their homes.

When reminded that the market was responsible for the sub-prime debacle and that market prices might be artificial and innaccurate indicators of wealth the Speaker of the Senate said, "I don't know about that but you can be sure we will try to do everything possible to help our citizens, as we always have."

Senate leaders have assured us that the present system is in everyone’s best interest as it brings in fresh new faces to Rhode Island and is good for the real estate business. “We believe in tradition and this tradition is hundreds of years old” said the House majority leader in a leaked memo.

It's not a crime to hate.

Hate crime: A crime motivated by prejudice against a social group

Scapegoat: One that is made to bear the blame of others.

Racism and bigotry are arguably the most important issues facing America and perhaps the world. The energy misused because of them is energy that will not be used to address the major world problems such as hunger and disease.

Racism saps the strength of a nation, robs it of the contributions that might have been made by its victims. It is a blot on our society, a curse.

Is it any wonder then, that acts of racism are to be condemned and punished?

Enter the notion of a "hate crime".

I am very troubled by the idea that a person who commits a crime motivated by hate might be treated differently than another who commits the same act but for a different reason.

If I were killed by a gang member who, as part of an initiation had to murder someone, or by a white supremacist because I was black, or by a homophobe because I was gay, I'd be just as dead.

Are the last two crimes really 'worse' than the first one? Hate crime legislation suggests that indeed, the last two crimes must have harsher, or at least different punishments. I strongly disagree.

I believe that what is at work here is our collective guilt that in our society we can still see racism, bigotry and intolerance, and that we try to reduce our guilt by making the perpetrator of a 'hate crime' pay more dearly than if his crime were not motivated by hate.

Hate crime law creates, in effect, a scapegoat for our society's failings and demeans all the other victims of crimes that don't fall into that special category.

Hate crime legislation is dishonest and hypocritical and should be stopped.

Until we pass legislation to the contrary, it is not a crime to hate.

But maybe it's just me.

Are you an unwilling buyer?

Revaluation is a process by which the latest market values are applied to all property. (Market values = values resulting from the actions of a willing buyer and a willing seller.)

Prior to frequent revaluations, a person could buy a home at a high price and simply continue to pay taxes on an old, usually lower assessed value - clearly unfair to existing owners.

Simply reassessing that one property would be very unfair to the new buyer however, since the tax rate was based on those lower values and would be much too high when applied to a market value.

Revaluation attempts to solve this unfairness. By updating market values for the entire community and calculating a tax rate based on those market values the resulting tax is indeed fair to all new owners.

However, revaluations produce two classes of existing owners; those with higher taxes and those with lower taxes, typically a ratio of two to one. The two thirds who pay more taxes pay much more in total than the tax levy increase, the excess being used to offset the reductions given to the other one third.

[e.g. In 2004, North Kingstown owners of property over $5 million in value received reductions averaging 18%!]

The impact of revaluation can be devastating for many of the two thirds who become unwilling buyers, obliged to pay taxes as if they were willing and able to pay market price for their homes, the same as new owners.

Sadly, many people, often the most vulnerable, old and young, are being forced from their homes, not because community tax levies are rising too high and too fast, but because the real estate market has made them unwilling buyers!

Try this little exercise:

Ask your town manager what the percentage increase in the tax levy was the year after your last revaluation.

Next, determine the percentage increase in your tax bill for that year.

If your tax bill increased more than the tax levy, all of the money you paid in excess of the tax levy increase was given to other tax payers in the form of their lower tax bills. This is not fair distribution.

Property taxes are supposed to represent our fair share of the tax burden. Instead, they're just a gamble.

Check out R.I.G.H.T.

Or maybe it's just me.

Patriotism and other stuff

Government is supposed to provide the services we can't provide for ourselves, like defending the country, maintaining roads, public education, public health etc.

How's it working?

We know for instance, that health care costs are skyrocketing. We in the U.S. spend more per capita than any other country in the world.

Unfortunately we also have at the same time millions of people with inadequate or no health coverage at all.

And America has slipped in overall quality of health care compared to other nations. The latest WHO ranking places us 37th worldwide, behind Oman, Colombia, Israel, Morocco, Chile and Costa Rica. France and Italy are first and second.

How would any company that wanted to be best, respond?

Would it raise employee salaries? hire more people? Obviously not, at least not in the real world. In the real world when customers feel they aren't getting their money's worth, or are treated badly, they take their business elsewhere. Businesses know this and will react effectively, or they will fail and close their doors.

But government isn't business, or in the real world, it seems.

Customers (taxpayers) can't take business elsewhere.

Nor can they can't refuse to pay.

And government can't close its doors.

Here in Rhode Island, public employees' compensation and benefits are among the highest in the country and greater than the private sector as well.

Legislators have the power to increase taxes to pay for services, whether overpriced, substandard, or even non-existent.

And it isn't just here in Rhode Island but in the nation as a whole. Which brings me to Patriotism.

For too many, patriotism means waving a flag and saying how much you love America. A flag on a car doesn't make the driver a patriot, especially when he flips a cigarette butt out the window. Talk is cheap and flag waving is easy, but they're no substitute for patriotism.

Patriotism means not cheating our fellow citizens, not dirtying our streets, nor dumping trash in our waters, nor cheating on taxes.

True patriotism encourages us to volunteer, to pick up litter when we see it, to respect every citizen; in short, living American values.

True patriotism means we're honest, and that when elected to office we know we are servants of the people and protectors of the Constitution.

Patriotism is actions not words, not slogans, not flags.

Years ago, when I practiced dentistry, the pressures of our practice sometimes seemed overwhelming and we dreaded the ring of the telephone. At such times I would remind myself and my staff that our patients didn't exist for us. We existed for them!

John Kennedy said it well in his inaugural address in 1961:

"… ask not what your country can do for you - ask what you can do for your country"

Elected officials, are you listening?

Or maybe it's just me.

Do Our Rights Come With Obligations?

There’s a lot of talk about rights today, in the newspapers, magazines, talk radio and on TV. For instance, Do we have a right to health care? Does the Supreme Court respect our right to free speech by siding with the school department in the “Bong Hits 4 Jesus” decision? Does the White House violate our right to privacy with its wire tapping policy?

Rights certainly are a cornerstone of our democracy. After the Constitution was ratified our founding fathers recognized that there needed to be some protections for the people from coercive or intrusive government behavior and they produced the first ten amendments to the Constitution - the Bill of Rights. And what masterpieces these two documents are. With them America has become the greatest, most powerful, freest country the world has ever seen.

When I was talking recently with a friend about whether all citizens have a right to health care [I believe we do] it occurred to me that we never discuss, along with our expected rights, whether citizens have obligations as well.

John Kennedy, in his inaugural address in 1961 famously said, “And so my fellow Americans: ask not what your country can do for you - ask what you can do for your country.” Inspiring words, yet today we hear nary a peep about obligations.

After 9/11 we were told to go shopping so the terrorists might know we are not intimidated by them. No mention of our obligations, our duties, our sacrifices. The idea of citizen responsibility, obligation, seems to have vanished.

As we approach July Fourth 2007 I’m proposing that from now on we make this ‘quaint’ concept part of every conversation about rights. For instance -

Right to Freedom from Hunger:

We provide soup kitchens, social service agencies, public assistance programs, such as food stamps to feed the poor. But do the recipients of these services, both government and private, have any obligations?

Are food stamps also “Twinkie” stamps? Or should recipients of food stamps have an obligation to use them as intended? Is there an obligation to know basic nutrition, to know that cigarettes and alcohol are not in any food group? Should repeated failure to observe these obligations jeopardize eligibility for assistance?

Right to Health Care:

When the poor are insured by Medicaid as their ‘right’, should there be an obligation associated with that right?

Do people who exercise their right to free medical care have an obligation to stop smoking? to avoid becoming obese? to exercise, or at least try a little?

Right to Free and Fair Elections:

The right to vote is perhaps the most important right of all conferred upon us by the Constitution. Do we have any obligations as we exercise this right?

Should the right to vote be accompanied by an obligation to understand the issues on the ballot? To be at least familiar with the candidates and their positions on issues? To be able to read and understand English? Should these be a prerequisite for voting?

I realize that some of these questions are controversial and such obligations or requirements have been abused in the past.

But when concern for our personal 'rights' blinds us to personal obligations, society risks a downward spiral from which it might never return. There must be a balance between the two.

If this awakens in us the idea that as American citizens, we have obligations to our fellow citizens and our country, we might once again become the nation President Kennedy spoke to on Friday, January 20, 1961.

But Maybe It's Just Me.

What I Learned From a Stone Wall

It happens every spring; my stone wall shows the ravages of the winter – stones out of place or on the ground, looking like my grandson's smile with his missing front teeth. But unlike my grandson, whose teeth will grow back, my wall needs attention, removing loose debris, and carefully refitting the fallen stones. I do this each year. And each year the stones fall out again.

A New England winter is hard on stone walls. Ice forms between the stones, acting like crowbars prying them loose. The ground itself heaves as the frost descends into the soil with advancing winter, and heaves again as frost retreats with spring.

I completed the wall myself after the workman who started it left unexpectedly. I assumed my inexperience that was the main reason for the annual repair ritual as I'm no wall expert. Is the wall doomed to endless repair?

This year I was determined to find out if I could do better and I removed all of the stones in the worst areas. I found that there wasn't a proper footing under the first course of stones; they were placed on uneven, slanted soil. A stone wall, or for that matter any structure, even a government, needs a proper foundation. Without one, whatever follows, no matter how pretty on the surface, is bound to deteriorate with time. Though a poor foundation is unseen, its effect is not if only we are willing to see.

The parallel to my stone wall is obvious.

Laws should benefit society as a whole. With time, new challenges arise and we have little choice but to respond to them with new legislation, and the 'wall' gets bigger (not necessarily better). The number and variety of laws, regulations, ordinances and rules has become staggering.

Yet no one seems to question whether the foundation itself might no longer be right for the task.

Perhaps the most common and stubborn issue confronting us is money. Cities and towns perennially either don't have enough or they spend too much, often both. Rhode Island isn't unique in this, although we are pretty near the top in property taxes nationwide.

Most other states today have surpluses which can be used to help municipalities pay bills and reduce property taxes, but not Rhode Island. This year threatens to be painful for both our communities and our state. The discrepancy between expenses and revenues is critical and needs to be addressed, like "stones" that need to be replaced immediately.

The General Assembly has made significant progress over the years, limiting tax levy growth. In 1986 a 5.5% limit was instituted and in 2006 that limit was modified such that it shall decrease .25% annually until it reaches 4% in 2012. A 4% limit is certainly not unreasonable considering Massachusetts has had a 2.5% growth limit since 1980 and has done reasonably well. Remember when Massachusetts was called "Taxachusetts?"

But in Massachusetts or Rhode Island, no matter how low a tax levy limit is, even at 0%, there is no limit on the growth of any individual's tax bill. This may sound like a contradiction, a paradox, but it is a fact. The reason is Revaluation.

Can the very foundation of our property tax system - Property owners pay taxes according to the most recent market value of their property - be contributing to the problem?

Imagine a community where the town council and management, with the assistance of dedicated and committed public employees, create a budget with a 4% increase in the tax levy. With no revaluation, everyone will pay 4% more taxes than the year before and the bills would get paid. A 4% levy increase will increase everyone’s taxes by 4%.

Revaluations are necessary however, to insure that new owners pay their fair share using a tax rate that does not discriminate against them. Therefore someone who’s assessed into a $500, 000 home must pay the same taxes as someone able to pay $500, 000 for a similar home, often producing incredible tax increases for current owners.

With revaluations, property values change; some homes might increase a great deal in value, some homes or businesses might increase very little in value. Because of this, after a typical revaluation, 2/3 of property owners will get tax increases. But since the remaining one third will pay lower taxes, the amount of anyone’s increase over 4% will not be paid to the town but is used to make up for those lower tax bills.

In other words, the 4% limit imposed by the General Assembly applies to everyone together but to no one individually. Some people have seen their tax bills DOUBLE.

Can we tax new owners fairly, as we do now, and at the same time, avoid those huge increases for the majority of property owners? Can the foundation of our property tax structure be fixed? Yes and Yes.

There is a way to create a foundation for a more fair distribution of property taxes for everyone, new owners and existing owners alike, a way that provides the revenue required by the budget, and limits growth in property taxes, not only for the town as a whole but for every individual taxpayer as well, both residential and commercial. Visit http://righttax.org to learn more.

By limiting the growth in the tax levy alone we've merely replaced some “stones in a wall” with a faulty foundation. Such a wall will need repairs again and again. By the way, it's not just property taxes that get superficial or cosmetic fixes. It's the way most things seem to get done.

I'm rebuilding my stone wall this year, starting with a proper foundation, finally. It will be a lot of work but it's the RIGHT thing to do.

Property Tax Roulette.

Catherine Orloff's commentary on property taxes in the Providence Journal recently was, for me, like a tasty worm on a hook.

I just had to bite.

There is much to be said in support of Ms Orloff's position, that the property tax is the better way to fund tax levies and especially education. Her discussion of the differences between income taxes and property taxes regarding fairness and progressivity however missed what I believe are the most important considerations. Also, the summary offers no solution when she states, "The property tax is not perfect, it can be improved, but it is more open and democratic than most if not all other taxes...".

In my view an income tax is far more fair than a property tax. The fundamental principle of income taxes is that one pays according one's ability to pay - more income, more taxes. If all the loopholes could be plugged so that none of the tax lawyers could wriggle their clients out of their fair share, it still has one fatal flaw that makes it second best for funding local government: it is not dependable.

When local governments commit to providing services and enter into contracts with municipal unions they need to be able to pay for them. If tax levies were funded by income taxes (or sales taxes) and the anticipated revenue fails to satisfy the need, towns would be left with deficits. Deficits are expensive as borrowing costs money.

The property tax on the other hand is predictable and dependable. If a town needs $75 million dollars to fund its tax levy it will get $75 million dollars in property taxes. Period. This is critical to a town's being able to pay for what it needs without the nasty surprises that a slipping economy can bring, should income taxes or sales taxes dip. In case anyone needs proof, note that the state which depends primarily on income and sales taxes, will need to fund an anticipated $360 million dollar deficit over the next few years. What if our towns faced these deficits?

The real problem with property taxes is that they are not distributed in a fair manner. Ms Orloff states that "...since real estate ownership is closely associated with wealth...the property tax is quite progressive." Sorry to disagree. Real estate is associated with wealth at just one point in time, when a buyer makes a decision to purchase a property. At that time the decision depends on the new owner's ability to pay the down payment, the mortgage payments and the property taxes. In short, can she afford it?

Over time, the down payment obviously doesn't change, the mortgage payments remain constant and the owner's income may change but not usually dramatically. Yet property revaluations produce huge tax swings, wildly upward for thousands of owners and downward for thousands as well. Those property tax payments no longer reflect an owner's wealth, or even the changing needs of the tax levy, but merely the fickle and unpredictable gamble we call the real estate market.

Can we preserve the reliability of the property tax, so necessary for the fiscal health of our cities, and at the same time fix this very unfair distribution produced by the swings in the real estate market? Absolutely we can. Rep. John Loughlin II is trying to introduce legislation that will do just that. It is modeled on the principles introduced on the righttax.org website, such that new owners pay a fair tax precisely as they do now and existing owners are protected by the limits on the growth of the tax levy. He deserves your help.

I doubt that the property tax, in Ms Orloff's words "...is one of the major reasons for the economic and the political greatness of America." but at least it shouldn't be the reason for folks' losing their homes when revaluations distribute tax increases and decreases no better than a throw of the dice, or a spin of the roulette wheel. 

Hey, but maybe that's just me.