Tax and Budget Reform

PSN has noted in previous Dispatches, these credits are costly, favor out-of-state workers, offer minimal to no returns, do not create permanent jobs, and place an excessive burden on taxpayers in a time of economic uncertainty.  The Massachusetts Department of Revenue recently determined that in twelve states that administer a film tax credit, the return is extremely meager-- finding that states were only getting back "$.0.07 to $.0.28 per dollar of tax credit granted."

This week marks the one-year anniversary of the passage of the American Recovery and Reinvestment Act (ARRA).  The annual report by the White House task force monitoring the impact of ARRA funds, led by Vice-President Joe Biden, finds that up to 2.4 million jobs have been created or saved in both the public and private sector as a result of federal recovery efforts. 

How do we know the Recovery Act is working?

Over 70 members of the House of Representatives vociferously opposed ARRA, but returned to their home districts to take credit for job creation, investments in infrastructure and the green economy, and spending on critical community needs.  Many of these same lawmakers requested further federal funds for projects in their states.

In the State of the Union speech, President Barack Obama stated, "...jobs must be our number-one focus in 2010, and that's why I'm calling for a new jobs bill." With the fiscal crisis forcing states to layoff hundreds of thousands of teachers, nurses and police officers, the need for more federal job creation and state fiscal relief support is clear.  And there is substantial momentum building around this issue in the states.

How are Arizona's right-wing legislators responding to the state's most severe fiscal crisis since the Great Depression?

Massive corporate income tax cuts, of course.

Last Tuesday, Oregonians overwhelmingly approved two ballot initiatives that ratified legislative action last year to increase high-end personal income and corporate taxes.  The failure of the anti-tax movement in Oregon is one more in a long stream of right-wing initiatives rejected by voters at the ballot box.  In fact, progressive revenue generation as part of a balanced approach to addressing state deficits has been popular with both voters and legislatures for years.  This Dispatch will provide both the facts and messages to debunk opposition to smart revenue options, while outlining a few of the best revenue approaches to filling budget holes.

Portending a sharp increase in corporate political spending, the Supreme Court has ruled (Citizens United v. FEC) that corporations enjoy the same speech rights of citizens when it comes to advocating the election or defeating political candidates. Elected officials, including U.S. President Barack Obama, have denounced the ruling as striking at the heart of our democracy by putting corporations on an equal footing with real people when it comes to basic constitutional rights.

Gridlock.  Slow fulfillment of promises of change in D.C.  A health care bill so compromised that even supporters are unhappy with many details. Frustration with D.C. seemed to be the clearest message from Massachusetts voters on Tuesday. But what can we expect other than gridlock and resistance when a 59-seat super-majority in the U.S. Senate is insufficient to pass serious legislation?  Or when monied interests in D.C. buy off support to block serious reforms on financial regulations, health care and climate change legislation? This is why bold, progressive leadership in the states matters. 

In a meeting with Texas officials last week, Kevin Concannon, Under Secretary of Food, Nutrition, and Consumer Services at the United States Department of Agriculture (USDA), claimed that there had been a drastic reduction in the timeliness and accuracy of food stamp provisions in the state following the implementation of a privatized system.  In fact, Texas now has the worst performing food stamp program in the entire country.

As this Dispatch will highlight, the first step is to fund jobs that support long-term economic competitiveness, notably by investing in people and physical infrastructure.  While the economic climate for profit-making business opportunities is more limited, investments in education, health care, transit and energy efficiency can create immediate jobs while strengthening building blocks for long-term growth.