Douglas was practically sputtering with hackneyed, anti-Democrat talking points on VPR last night at the news that – after urging from the left going all the way back to the Brigham decision – Gaye Symington and other leading Democrats were actually considering an income tax to fund education. The words that cause the sputtering? Symington (from VPR – emphasis added):
“I think when you're looking at a proposal that eliminates the statewide property tax and with it the confusion of the CLA and has the potential to more clearly connect what Vermonters pay in school taxes to what they spend per pupil, I think there's a lot to be gained by making this change.”
Republicans sounded apoplectic, but all Douglas had to fall back on was an insulting generalized, anti-Dem attack:
“I don't think anyone believes that the architects of Act 60 are going to simply transfer liability from one tax to another.
And Rep. Joyce Errecart (R-Shelburne) went for the other canard: fear –
I think it would be just devastating to Vermont's economy
It's GOP orthodoxy to oppose income-based taxes, even though it represents a common sense approach to most people. Republicans believe they stifle economic growth more than other taxes, such as property taxes, sales taxes, etc. The truth is, of course, its clearly easier to make an income tax progressive and based on the ability to pay – which makes it more difficult for Republicans to eke out rhetorical advantage in debates and protect their upper income constituency.
The conversation is an important one to have, though, not just as a matter of good policy, but for the positioning it provides for the 2008 elections – as well as the long-term psychology of Democratic lawmakers (more on all this below the fold)…
First, consider what is being discussed. From the Times Argus:
The proposal being considered by members of the House Ways and Means Committee would only change “homestead” property taxes on primary residences. Other land, houses owned by nonresidents and business property, would continue to be taxed under the property tax system.
That leaves several thorny issues to be worked out before the proposal would be considered by the full House Ways and Means Committee or the General Assembly at large.
One is a mechanism to prevent renters from paying taxes on their income in addition to covering property taxes on their homes through rent. Renters could conceivably get a credit for rent they pay or be exempt from the income tax, said Rep. Shap Smith, D-Morrisville, chair of the subcommittee.
The important principle is that education taxes should be based on people's ability to pay them, Smith said. “People do not believe the property tax does that,” he said. “People are sitting on land that has an immense amount of value but their incomes haven't changed.”
Smith is no wild-eyed lefty, and his support is indicitive of the wide range of support the proposal could have. Even more so is the support from Republicans such as Rep. Bud Otterman (R-Topsham) from VPR again:
It more nearly is assessed on the basis of ability to pay than any of our other taxes. I would say I don't think property tax is based on ability to pay. In fact, I think it's quite regressive, especially in the lower income brackets
Obviously. And it's nice to see that some Republicans aren't so mired in GOP hegemony to see that. Douglas's response to Otterman is to treat him as he treats Democrats – by belittling him as a dupe or a Democratic stooge, in order to reframe the debate where he is more comfortable (from the Times Argus):
“This is a Democrat majority and a Democrat idea,” insisted Jason Gibbs, spokesman for Douglas. “Unfortunately, they have co-opted” any Republicans who support the idea, Gibbs said.
Policy aside, this proposal has tremendous potential to reframe what Douglas has made the cornerstone of his rhetoric in a way that favors Democrats. Dems get mired in convoluted explanations of convoluted policies so often, it's become routine. What is often absurd is that the convoluted policies often serve to rhetorically or bureaucratically circle the more obvious, simple answers. For years, proponents of decoupling statewide education funding from the often financially arbitrary and regressive property tax have been assured that, with all the income sensitivity provisions, the statewide property tax already had many of the qualities of an income tax, so why change?
Of course that also begs the question, why not?
I think the reason for that has been in large part some bad psychology on the part of Democrats. We have allowed ourselves to be beat up so long and so relentlessly by the GOP and the media on fiscal issues, that many Dems (especially self-dubbed moderates) have internalized that criticism. They feel drawn to progressive policies and lean towards a general Keynesian economic perspective, but when they get into positions of power, they doubt themselves.
I think there is some sort of hegemonic, media-driven neurosis that says the closer you are to laissez-faire economics, the more of a grown-up you are. Dems who have internalized this nonsense are easily cowed when they start creeping towards economic progressivism by a few “tut-tuts” from the pundits or from Republicans. They craft convoluted ways to get to many of the same places that straightforward policies would get you to more quickly, efficiently, and more reasonably because they feel comfortable hiding in the minutaea of complex policies. They can then reinforce this pattern by patting themselves on the back for being the only people expert enough to truly understand the policies.
Poppycock (or bullshit if you prefer).
It has always seemed to me that the reason we haven't had this discussion sooner, is it hits this very wall of liberal self-loathing. It also explains why so many discussions like this have to seemingly be validated by the agreement of at least some Republicans, such as Otterman. As far as the media is concerned, that makes it “Grown up” to talk about. Unfortunately, many Democrats feel the same way.
It also explains why ideas like this can often come from Republicans like Otterman, as they're not clouding their perspective with self-loathing.
But here we are, the discussion is on the table – put there squarely by head Democratic wonk Gaye Symington herself. This is a very, very good sign.
Hopefully they'll throw into it with both feet. If they're simply dipping their toes in to test the water, they'll snap them back at the tried-and-true castigations of the Governor, rather than look less than grown up.
If they take the plunge, though, they'll quickly find that saying “eliminate the statewide property tax” and “tax only those that can afford it based on how much money they make” are a lot more resonant on the stump than trying to explain the nuances of convoluted tax policy (or worse, not even trying and instead simply saying “trust me”).
And its that prospect that's got the Governor apoplectic.