David Herbst makes a heartfelt plea in a recent opinion piece for reforming the tax code. Unfortunately, sincerity is no substitute for accuracy.

Herbst is Montana director of Americans for Prosperity, and his evidence appears to rely on a nine-page report issued in July by a deputy director of AFP and an analyst for Freedom Partners. Both groups are funded by the Koch Brothers, conservative activists who must have been delighted to find they could get the results they wanted if they were willing to pay for them.

A few minutes spent reading the AFP report exposes the rigor that went into its production. Serious reports about the federal tax system are full of qualifiers and caveats; AFP allows for no such pussyfooting. Its evidence is highly selective and quite misleading.

Herbst opens his column with a “history lesson” that consists of just two factual assertions purporting to demonstrate that “cutting taxes creates jobs and puts more money in your pocket.” The first is that tax cuts under President John F. Kennedy in the 1960s created 9.3 million jobs. The second is that tax cuts under President Ronald Reagan in 1981 raised per capita disposable income by $2,715.

The AFP report provides a crucial detail that Herbst omits: Both statistics cover the first five years after the cuts were enacted. That means the Kennedy tax cuts basically matched the length of the Johnson administration, when job growth on an annual percentage basis was 3.9 percent, the highest in the post-World War II era.

But that growth vanished when Johnson left office. Job growth didn’t hit 3 percent a year again until the Carter administration, and it hasn’t hit 3 percent since, despite dramatic tax cuts under Reagan. The closest it came was under President Bill Clinton, following a pair of tax increases.

The wage picture is even less persuasive. Reagan was elected in 1980. From 1979 to 2013, wages for the top 1 percent of income earners grew 138 percent. Wages for the bottom 90 percent grew just 15 percent.

 

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Indeed, a 2012 report by the nonpartisan Congressional Research Service found no clear relationship between cutting top tax rates and economic growth. “However,” the report found, “the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.” After Senate Republicans complained, the CRS withdrew the report.

 

A 2014 report by the Brookings Institution found no relationship between taxes and growth rates. From 1870 to 1912, the report notes, federal tax revenues were just 3 percent of Gross Domestic Product, and GDP per capita grew at a rate of 2.2 percent a year. In 1913, the Constitution was amended to allow a federal income tax, and that was followed in short order by two world wars, the Great Depression, and the whole vast expansion of the welfare state. From 1947 to 1999, the highest marginal income tax rate averaged 66 percent, federal revenues averaged 18 percent of GDP – and annual GDP growth was 2.2 percent a year.

Carefully designed tax cuts can increase revenues, the Brookings Institution found, but only if they are accompanied by spending cuts, and only if those spending cuts target expenses that don’t contribute to growth. AFP’s blunderbuss approach doesn’t seem to qualify.

Worse than Herbst’s analysis are his AFP-endorsed solutions. First, he wants to “eliminate the unfair special favors and handouts that rig the economy in favor of the powerful and well-connected.”

Pretty hard to argue with that. Tax deductions and exemptions are called “tax expenditures,” and a 2012 Congressional Research Service report found more than 200 of them in the tax code. Lots of flab there.

But just 20 tax expenditures account for nearly 90 percent of the revenues, and some of those expenditures are quite popular with people who aren’t powerful or well-connected – the mortgage interest and property tax deductions, for example.

Suppose you have two childless couples each earning $50,000 a year. They should pay the same taxes, right? But suppose one of them is hit one year by a crippling $25,000 medical bill. Think they should get a tax break? You have just endorsed a tax expenditure.

Herbst also favors a cut in what he calls the highest corporate tax rate in the industrialized world. He probably knows, but fails to mention, that various tax provisions reduce the rate for most corporations enough to greatly lower what they actually pay, and many corporations pay no taxes at all.

Finally, Herbst wants to reduce the number of income brackets, a change that would mean almost nothing to the average taxpayer. Those of us who insist on filling out our own returns know that the hard part of paying taxes is figuring out income and itemizing deductions. Once that work is done, we get the actual tax from a tax table. Even if there were a hundred tax brackets, our work would be no harder.

As one professor of law and business put it, “The number of brackets has an almost imperceptible effect on the complexity of tax law as it is lived by the individual taxpayer. … The call for fewer tax brackets in every case has as its real motive lowering the tax burden on the highest-income Americans, not making life simpler for the middle class.”

The fact is, taxes are complicated because the world is complicated. One effort to cut through the clutter is the alternative minimum tax, which ensures that the richest Americans have to pay some reasonable tax no matter how many loopholes their lobbyists and tax attorneys find. You may have noticed that one rich American, President Trump, wants to get rid of that tax.

In reality, paying taxes has gotten easier, not harder, for most people. Most tax forms can now be downloaded in seconds from a home computer – no last-minute scurrying to the post office hoping to find a Schedule E. Cheap calculators and spreadsheets have eased the math pain. Expanded personal exemptions have reduced the need to itemize. For the millions of Americans who can file Form 1040-EZ, Herbst’s dream of being able to pay taxes on a form the size of a postcard is nearing reality.

If Herbst really wants meaningful reform, he should instead tackle Montana’s income tax. Not only are Montana taxpayers required to reproduce much of their federal data on the Montana form, they must work through a laundry list of tax credits, deductions and exemptions. Many taxpayers who don’t have to itemize their federal taxes have to itemize for Montana.

Moreover, married couples really ought to figure their Montana taxes twice because rates may be lower for those who file separately.

If Herbst wants to take on that nightmare, I’m on board. Otherwise, he’s just asking us to join him up on that Big Rock Candy Mountain, where they hung the jerk that invented work.

by David Crisp
LastBestNews.com

Steve Daines, the freshman U.S. senator from Montana who sits on the back-benchers’ back bench, got a rare taste of notoriety last week. He posted a video of his 15 seconds of fame on his Facebook page, so he must have been proud of it, but the episode showed Daines’ political weakness, not his strength.

Daines was presiding over the Senate when, in concert with Senate Majority Leader Mitch McConnell, he blocked Sen. Elizabeth Warren from finishing a speech against Sen. Jeff Sessions’ confirmation as attorney general. He and McConnell convicted Warren of violating Rule 19, which says that “no Senator in debate shall, directly or indirectly, by any form of words impute to another Senator or to other Senators any conduct or motive unworthy or unbecoming a Senator.”

Their decision to block Warren’s speech was upheld by a party-line vote of the Senate. A University of Miami political scientist could find evidence of only two similar votes in Senate history, the last in 1952.

What’s worse, Warren’s remarks weren’t aimed at Sessions in his capacity as a senator. They instead invoked accusations of racism that were used to deny Sessions a federal judge’s job back in 1986.

To have failed to reconsider those accusations at his new confirmation hearing would have been dereliction of the Senate’s duty. No matter how nice Warren might have tried to be about it, there is just no way to avoid imputing unworthy conduct to someone who lost a federal job because of racism.

Daines’ action drew more than 2,000 comments on his Facebook page. If you have the patience to read them all, perhaps you can find one praising his decision. I did not and could not.

Small protests against him went on in Montana, including one at his Missoula office, where members of the activist group Missoula Rises read aloud the letter from Coretta Scott King that Warren was quoting when she was ordered to sit down. Protesters tried to confront him at the Bozeman airport, but he walked away.

This is titillating but inconsequential stuff. Warren’s speech wasn’t going to change any votes. And the Senate rule is not a bad thing in itself. The elaborate courtesies senators extend to one another, insincere though they may be, serve a useful purpose.

We don’t want brawls breaking out in the Capitol, such as happened in South Africa’s parliament just last week. The daily virtual brawls in social media are bad enough; the U.S. Senate should set a better example.

 

 

By Roger Koopman, 
Oct. 26, 2016

Editor's Note: Here the incumbent Public Service Commissioner from Dist. 3 defends his record.

I have to admit that this has been a most unusual campaign.  There has been almost no discussion by my opponents on issues of substance.  Nor have they challenged of any of my positions or votes while serving on the PSC – something I would have welcomed talking about.

Instead, I have one opponent (Ms. Cooper) who insults my integrity, saying I have a “cozy” relationship with NorthWestern Energy, because I apparently accepted a small, fully reported donation from their employee PAC 12 years ago as a candidate for legislature.  Cooper claims to be the only honest candidate in the race, because she refuses PAC donations.  Yet when the Montana Conservation Voters PAC gave her a sizable in-kind donation in the form of a professional campaign school (valued at $225 over the minimal registration fee), she showed no intention of reporting it.  Indeed, when MCV did the right thing, informing her that it was an in-kind PAC donation, Cooper went ballistic, filing a complaint against MCV with the Commissioner of Political Practices.  This “honest” candidate clearly wanted to completely hide the donation from public disclosure.

Then there is Rep. Noonan, whose main charge against me is that I am (in his words) “a dangerous deregulator.”  He’s not specific, so I have no idea what he’s talking about, because the Public Service Commission has no authority to deregulate anything.  The deregulation of Montana Power was done by the legislature, and I opposed it at the time.  If he’s referring to my commission votes allowing competition in passenger service (UBER) and approving consumer choice in garbage collection where monopoly now exists, I’m guilty as charged!  But I hardly consider that dangerous.  Apparently Pat does, since he voted against the popular UBER bill in the House.

For those who are confused by all of this, let me offer a straightforward description of my first term on the PSC.  In every way and at every opportunity, I stood for the consumers of this state.  I approached my work as a firm and fair regulator, always keeping the rate-payers’ interests forefront in my mind.  On many key issues and key votes, I provided bold leadershjp in defense of the consumer, opposing sizeable rate hikes that previous commissions would have passively approved.     

The PSC has been doing a very good job, resulting in residential electricity rates that in real, inflation-adjusted terms, have risen just 2.6% for NWE in the past four years, and declined 2% for MDU.  (Ms. Cooper’s assertion that rates have increased 15% is pure, politically-driven rubbish.)  Meanwhile, gas rates have declined for those utilities during that period, 21% and 17% respectively. Yet there is much work left to be done, as we face both the challenges and the exciting opportunities that lie before us.  Utility regulation needs a major overhaul, with more incentive-based, risk-sharing approaches replacing the old paradigm of passing through to the customer every risk, cost and operational mistake.       

As we face these critical issues that so greatly impact our families, our communities and our economy, I would be deeply honored to serve you for another four years on the PSC.

Roger Koopman

Public Service Commissioner, District 3

August 4, 2016
Opinion
by Josh Manning
This story first appeared at MTCowgirl.com
 
 
Several months ago, I tied a suicide bombing in Iraq to the belief system among some of the new militia movement in the West. What I left out in that account, and that has now roared to the forefront of the moment, is the American soldier who died in that attack. His name was Humayun Khan, an Army Captain at the time, who gave his life to save so many others. That he, and his immediate family, end up inexorably tied into this bizarre Presidential cycle has taught me a lot about what leadership means in this moment.
 
I served with Captain Khan in Iraq. He was an officer in a mechanized infantry division, the First Infantry Division (aka the “Big Red One”) and was not in the infantry but rather an ordinance officer in another part of the unit meant for support personnel. In 2004, the Third Brigade Combat Team of the division deployed to Baqubah, Iraq and we took pride in our collective name, The Dukes of Diyala. It was, and still is, a restive province about an hour north of Baghdad with a population evenly divided among Sunni, Shia, and Kurdish Iraqis. Captain Khan, like the thousand or so rest of us stationed at FOB Warhorse, survived near daily mortar and rocket attacks along with the occasion car bombing at the gates.
 
I did not know him well because those of us with access to national secrets kept to ourselves and people seemed frightened of what we may know. But like anyone else in the unit, I would have done what I could to keep him safe. Captain Khan died on my 30th birthday, the same day I took the step to becoming a non-commissioned officer.
 
Like any of us, he pulled gate guard. One of my good friends was on duty that day, who was a specialist at the time (E-4 for military-minded folks). So normally on gate guard, the specialist is the one who deals with weird things while the officer-in-charge communicates or directs traffic. But not Captain Khan. He approached a rapidly approaching car because it was out of the norm.
 
He took those steps forward then it exploded. It was early morning, maybe around 8 a.m. I remember the sound of fighter jets dropping bombs on the date trees outside the base against those who launched for mortar and rocket crews and the sound on that June morning was louder. Just a massive, MASSIVE, explosion. There were chunks of engine block that flew over people walking to their duty stations on base. It was a major attack. Captain Khan, again a Muslim soldier, took the brunt of that hit for everyone at the gate. The killer was a Muslim too. Stop for a moment and consider this very important moment—an American Muslim soldier protected his fellow Americans, some Jewish like me, from the chaotic and indiscriminate deaths at the hands of a Muslim suicide bomber from another Arabic land. Captain Khan stepped up when many of us would have stepped back.
 
He had joined the Army to do anything than what he was doing at the gate that day. None of us considered those extra duties when we joined, but he, like every other soldier, went forward and did what he or she was supposed to do. On that day, he did even more than he needed to do. There are people alive today who owe their lives to him. No one from the Dukes of Diyala has forgotten that.
 
It was the first memorial service, or at least the first that I went to, for one of our dead. It was the usual mass formation where they call out the name, “Captain Khan, Captain Khan, Captain Humayun Khan” where no one answers and it just chills your soul. Out front is his rifle, boots, and name tag for all to see.
So when I heard his father speak all these years later, everything came back up. I thought it would end there. Who in their right mind would go up against all Captain Khan did and who would demean the parents that raised him to act in such a noble way?
 
Yet here we are. This election cycle has been anything but normal and we are all expected to just adjust to it that way. But that is not the right formula. Some things are beyond the pale and, again, demeaning the name of an American officer who gave his life to save countless others and the family who raised him is not the actions of a patriot. In the past few days, the Republican candidate for President has done just that. His surrogates have done the same and said even worse things in some cases.
 
Some thing are supposed to transgress politics. Many of my fellow Dukes of Diyala are staunch Republicans and have posted some awful memes about Democrats. Nonetheless, when Captain Khan’s family spoke up at the Democratic convention, we collectively went silent for awhile then talked about how wonderful it was to hear from his father and mother.
 
Bringing it back home, we have a Congressman who has run his entire campaign on the idea that he is an honorable officer. As an elite Navy SEAL (has he ever mentioned that before?), Congressman Ryan Zinke has a taller order than most to stand up for the military and its members. As someone who used his rank and privilege to gain public office, he should be out there at the forefront to defend the service of anyone who took the pledge for their nation.
 
After a few days, he posted a vague statement to his personal Facebook page but that’s it. Apparently in today’s world a U.S Congressman quietly posts to Facebook and calls that a media release. He did not actually call out the presidential candidate he has endorsed other than to say both the candidate and Hillary Clinton should apologize for offending the military and their families. I am not sure what the congressman is accusing Mrs. Clinton of having done. Then the rest of the post is about saving military lives when he has endorsed a candidate who wants to torture again, is easily prodded into taking overly aggressive actions, and has a national security team around him that spouts conspiracy theories. Sounds like a future of peace and prosperity, right?
 
So we will still wait for Congressman Zinke, for any Montana Republican, to say or write something in opposition to their candidate for the nation’s highest office because maybe that will tame him a bit more. But they will not because they want to ride this same wave through November. As Don Pogreba has so well outlined at Intelligent Discontent, the congressman has been absent from his duty and has fallen into this trap. He has left his fellow soldiers, airmen, sailors, and Marines behind. The Montana GOP is acting in the same role, especially those who went to their convention with smiles on their faces.
 
It is easy to fall in line and take the safest way out. Congressman Zinke has spoken out for this Presidential candidate of hate, he has appeared by his side, and made appeals to be his closest surrogate. At a moment when even some in the same party have spoken out against this new phase of the campaign to belittle a fallen soldier and his family, some have stepped forward. But Montana’s Congressman, Senator Daines, and every other Republican running for office have either not commented or threatened to cancel their endorsements.

So let me say something for the other party, the Democrats that are supposedly against the military and patriotism (you said as much on the Montana legislative floor in 2015, Representative Art Wittich, who also was front and center at the GOP convention to show his support). You do not own this nation, its flag, or service to this country. I, we, do not own it either. But let it be known that no matter what their underlying beliefs, we do not attack or belittle the service of dead Americans or their families. Any of you who support or defend the actions and beliefs of the Republican candidate for President of the United States lack a moral center. It is as simple as that. Remember this on that second Tuesday in November 2016.
 
Manning is military veteran, and state civil rights investigator who lives in Helena. Follow him on Twitter @joshuamanning23.