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Who’s Tax and Spend Now?

Noticeably absent from the Bush campaign name-calling arsenal is the old and effective labeling of Democrats like Kerry “tax and spend” liberals. The Republicans seem to be reduced to using “Massachusetts” to describe, in code, the unattractive qualities of the presumed Democratic nominee. Could that be because in addition to running record deficits, they don’t want too much of a spotlight on the Bush tax policy?

In this week’s BusinessWeek cover story, Howard Glecksman writes an eye-opening piece on how the AMT, or alternative minimum tax, is capturing more and more middle-to-upper middle class taxpayers (3 million in 2003), who are frequently paying as much as ten to twenty percent more in taxes than the old fashioned way, and for whom the much-blustered Bush tax cuts are meaningless.

First, a lot more people are going to be finding out this spring that the tax cut they thought this Administration had delivered for them is about as real as WMDs. Further, like the propaganda around the rationale for war, the Administration knew that while they were trumpeting “giving the taxpayer back his money,” the real strategy all along was to keep middle and upper middle income payers paying. As Glecksman notes, “Even in 2001 and 2003, lawmakers quietly counted on billions in new AMT revenues while passing the Bush tax bills. ‘It was conscious,’ insists John Buckley, Democratic tax counsel for the House Ways & Means Committee. ‘It was deliberate.’”

Also, as the BusinessWeek article points out, the taxpayers at the very tippy top of the food chain are not usually subject to the AMT, but are benefiting hugely from the cut on capital gains. Like other parts of the Bush tax strategy, the AMT is a regressive tax that hits middle income payers harder as a percentage of income.

Last, tax payers who pay large state and local taxes, like those in New York, California or where I live, New Jersey, are more likely to pay the AMT. Which might explain why the Administration has not put the muscle into fixing the problems with the AMT that it has for helping plutocrats in states where they like the voters better. (Evelyn Keyes)

posted by Jerry Bowles 2:58 PM

The Numbers Racket

Write this down someplace. The White House predicted today that the economy will create 2.6 million new jobs this year. Last year, the Bushies forecast 1.7 million new jobs but the economy actually lost 53,000 jobs, bringing the total number of jobs lost since Bush took office to 2.2 million.

posted by Jerry Bowles 1:09 PM

Napalm in the Morning

With Kerry adding three more decisive wins over the weekend, it may appear a bit churlish of Dean and Edwards and Clark to insist on hanging in there as long as they have, at least, a theorectical chance. But, there are strategic benefits to prolonging the battle. For one thing, a hotly contested "race" allows the Democrats to steal the media spotlight from Shrub. For another, it has energized Democrats who have been showing up for meetings and voting in record numbers. Is that victory I smell?

posted by Jerry Bowles 9:46 AM

Can digital democracy bridge the digital divide?

Jerry’s mention of the Pew study in his post below offers a yardstick to measure how much the retail political marketplace responds to digital democracy. It’s Adam and Melissa, Tom and Caitlin, Sam and Arlene. It isn’t Joe Bob and Sissy or Juan and Maria or Jamal and Lakeesha. Tran and Ming and Lakshimi are too busy studying to get 800 on their SAT math scores to bother. Willie felt intimidated by computers so he dropped out of school and sells crack down on South Parkway in Memphis. Skinhead Gunther rolls into Denver each weekend from his hooch near Glenwood Springs, Colorado to sell speed made by his home-schooled buddies; they downloaded the recipe off the internet…

Howard Dean took digital democracy through the ether barrier and made one huge ether boom. It was like the early Bell X-1 rocket plane flown by Chuck Yeager and Scott Crossfield. It went like hell but had a very basic guidance system. Tough to control. Nobody was sure where it would land. What it might hit or damage.

The part that nobody, and I suspect not even Dean himself expected, was the toll that the shock and buffeting would take on him as he became the first politician on the planet to break the barrier. Instead of having smooth sailing on the other side, as a “front runner” he became a casualty of his own success. The media ganged up on him. Fellow candidates ganged up on him. The Boston Globe’s Tom Oliphant put on his critical parent hat and took Dean to task for “not growing up.” And he put them in their place by refusing to do interviews.

What is happening to Howard Dean is the same thing that happened to Col. Billy Mitchell during the 1920s when he rolled out his vision of American air power. The same thing that happened to Col. George Patton when he rolled out his vision of maneuver warfare using tanks on a battlefield instead of cavalry. The same sort of sniping that took place between Banting and Best over the discovery of insulin. The same sort of sniping that went down between Luc Montagnier and Robert Gallo over who “discovered” AIDS. The Animal Planet component of our culture drives us to vilify our innovators with extreme obedience rituals.

While the Pew data indicate that an elite tranche of American society is drawn to digital democracy they don’t mention that the old media is threatened by it. The political class is exploiting it like a NASCAR driver, slipstreaming Dean in his Trippi-Neel Special and slinging around him to get to the finish line first.

The impact of digital democracy is limited because you need to pay to play. Access depends on whether you can afford to own a computer or some other interactive device that connects to the internet. Not the latest Game Boy. And therein lies the problem.

In spite of Al Gore’s campaign to bridge the digital divide and provide computer access to economically disadvantaged adults and school kids, the “digital divide money” started drying up during the second Clinton term and evaporated when the Bush crew took over the White House.

Even with the price of computers going down and cheap internet access, the high cost of participating, in effect, is a “poll tax” on digital democracy. Should government subsidize digital democracy by revitalizing the programs designed to bridge the “digital divide?“

Then there are cultural preferences that the politically correct would rather avoid. Game Boy and X-Box are more important to more people than MeetUp… Every member of a clica who buys sub-woofers, a chrome 8” chain steering wheel and California wheels that cost a total of $8,000 (not including interest) could buy 25 Compaq computers for kids in Boyle Heights. Doing neighborhood stuff like this is where the drug lords in Colombia get it right.

Democracy is becoming unaffordable. We can’t even afford to provide voters with receipts for their electronic votes. Electronic voting systems are not secure and owned by private companies with not-so-hidden agendas.

Most Americans can’t afford to pay the “poll tax” to participate in digital democracy. Facing the biggest budget deficit in history, it isn’t clear whether America’s political class and their special interest backers want to cross the rubicon on this one. The GOP certainly doesn't.

posted by Groom 4:37 AM

The Internet Does Not Scale/
The Internet Is Not Random

The Internet is a peculiarly self-obsessed, inwardly-looking little world so it’s hardly surprising that the spectacular real world crash of the cyberworld’s first serious presidential campaign should lead to much weeping and wailing and gnashing of teeth. At this very moment, Web Gods like Doc Searls and Joi Ito and Dan Gillmour are gathering atop Mt. Berners-Lee (aka the O’Reilly ETech Conference in San Diego), where they are determined to figure out why what we thought we knew about politics before Iowa has not been confirmed by the facts on the ground.

The simple answer, I suspect, is that those of us who spend an unhealthy amount of time using the Internet are not as numerous, smart, or powerful as we thought we were. The more complicated answer is that the Internet is not an accurate model of the real world because it still lacks the scale and diversity to be a reliable predictor of real life behavior. In other words:

The Internet Does Not Scale

For all the talk of participative democracy, the number of people who use the Internet as a primary and regular source of political information is tiny (13%), compared to those who get their political news and information from television. Local TV news (42%), cable news networks (38%), and nightly network news (35%) are still the overwhelming sources of political information for people who also use the Internet, according to the latest Pew Internet & America Life survey.

Even the 13% number is deceptive, I suspect, since it no doubt includes users who simply scan the headlines at portals like Netscape and Yahoo and AOL and consider that “getting political news.” The number of people who regularly visit candidates’ sites, read political blogs, donate to candidates or read political columnists online is probably much smaller. But let’s assume--as Pew reports-- that 69 million American adults go online daily and that 13% of those users do look for political news and information, that’s still only about 9 million people or roughly 2.6% of the American population. How many of those people are actual voters or activists is another open question.

But, you say, opinion pollsters use much smaller samples to produce reliable results. That’s where a second idea comes into play:

The Internet is Not Random

Pew’s latest survey found that the most active and politically engaged Internet users are more liberal than conservative, more Democratic than Republican, and more likely to oppose President Bush than support him. The general profile of these Internet users is that they are relatively more likely to be men, in their 30s and 40s, relatively well-to-do, well educated, suburban, and secular in their outlook. Dean supporters were found to be all of the above, only more so. Calling 1,500 Americans at random is a considerably more reliable barometer of the political winds than asking several million affluent white Internet users with master’s degrees what they think.

Pew has repeatedly found in its research that those with higher income and education levels are much more likely to be Internet users. On the opposite pole, African-Americans and seniors—two of the most solid cornerstones of Democratic support--are among the least likely to go online. These are people who don’t know or care that Joe Trippi is an open-source kind of guy or which candidate raised the most money online. They don’t even know who Joe Trippi is. But, It turns out they’re just as fed up with Bush as those of us who do; they just didn’t share our enthusiasm for Dean simply because he got to the right positions first. Those farmers in Iowa and New Hampshire who climbed into their long-underwear and four-buckle arctic boots with cow dung on the heels and went out and heard the candidates live took a long look at our boy, Dean, and decided he was not the strongest choice to rid the nation of the plague of the House of Bush.

The lesson of the Dean campaign is that while the American Internet political movement is not yet big or representative or mature enough to play kingmaker, it can already successfully field and fund a candidate who will have a real impact in defining the issues of the election--rather than letting lobbyists or warmongers define them for us. That is a huge achievement and one that we ought to be proud of.

posted by Jerry Bowles 12:18 AM