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Carter Wrenn posted on May 21, 2013 15:22
There’re a lot of clever politicians and smart politicians but there’re not many politicians with the courage to take a stand they know is unpopular.
The other day, baffled by the raft of tax reform plans floating around the State Legislature, I asked an economist to explain the virtues of ‘consumption taxes’ to me – and he did in a simple way even an economic illiterate like me can understand: He said, Income is good, investment is good, saving is good – so tax them less; spending (consumption) is not so good – so tax it more.
Senate Leader Phil Berger sees eye to eye with that economist and he means to reform North Carolina’s tax code to base it on ‘consumption taxes.’
Now, if you’re an average guy studying the tax code, it looks like an irrational muddle. But if you’re a politician studying that same tax code it doesn’t look so irrational at all – instead it looks like the labyrinthine result of legions of smart politicians, over years, carefully calculating which taxes they could raise without getting voted out of office.
For example, those politicians decided not to tax food because everybody eats. They decided not to tax prescription drugs because a lot of older people vote. The income tax code is ‘progressive’ because there’re fewer rich people than poor or middle class people. Farmers get the loopholes when they buy a tractor because rural politicians want to be friends with farmers.
The whole tax code, politically, is highly practical.
And that’s a problem Senator Berger ran into head-on. Because to cut taxes on income and savings, but to do it he had to raise taxes consumption. And to do that he had to close what my economist friend calls tax ‘loopholes.’
That’s logical. But it left Senator Berger facing a helluva fight. Because a senior citizen not paying sales taxes on his blood pressure medicine doesn’t see that as a ‘loophole.’ And neither do a whole welter of other groups who enjoy tax exemptions.
For instance, the Association of Realtors doesn’t see the home mortgage deduction as a loophole. And it doesn’t see switching to consumption taxes as a cure to the housing industry’s doldrums. So it’s running one ad saying folks will pay 25% in sales taxes (consumption taxes) when they buy a home and another ad with a young man saying, It’s wrong to take away my money for tax reform.
The Hospital Association doesn’t see exempting hospitals from paying sales taxes as a loophole either – so it’s weighed in, too, with an ad and website saying hospitals are fighting for their survival and closing their ‘loopholes’ is the worst kind of news for their patients.
And, of course, the Democrats don’t like Senator Berger’s plan – they let fly roaring his idea of tax reform is ‘regressive’ and will tax the rich less and the poor more.
So Senator Berger’s got a tiger by the tail. Before he’s done ‘closing loopholes’ there’s a fair chance he may be the most vilified elected official in North Carolina. But, anyway you look at it, you have to give Phil Berger credit: He’s no finger to the wind politician. People may be arguing for years whether he’s right or wrong – but, either way, you have to admit he’s got the rarest trait in politics: Courage.
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Gary Pearce posted on May 21, 2013 10:32
A veteran business lobbyist takes aim at both The N&O and the legislature – and makes a noteworthy point about how government in Raleigh today works – or doesn’t:
“The reality is that the influence of nearly all the usual political heavyweights -- not just BCBS -- has waned. Two factors contribute to this phenomenon. First, there's the arrogant, know-it-all attitude of most of the new crop of legislators who believe they're on a mission and don't have to listen to anybody. They make policy choices based on instinct and their personal experiences. They also believe that getting facts from a lobbyist somehow compromises their independence. This is a dangerous mindset when dealing with complex issues that are beyond the comprehension of most legislators.
“Second, ethics laws have created a unfortunate structural separation between those with knowledge and those who desperately need to know. It's harder than ever for lobbyists to share information, and the result is a poorly informed legislature that's making bad choices that are not limited to the insurance industry.”
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Gary Pearce posted on May 20, 2013 09:51
One word can say a lot. So it was with last week’s heated meeting between the Wake County commissioners and school board.
That “victory” was Senate passage of a bill taking control of building schools away from the Democratic-majority school board and giving it to the Republican-led commissioners.
First, Bryan was giving himself a lot of credit: “the victory we had.” Given the partisan lineup of the Senate, it wasn’t much of a contest.
Second, the comment betrays an underlying theme in this legislature. It’s not about good public policy. It’s not about good ideas. It’s not even about ideological consistency.
It’s about payback. Political revenge. It’s about: “We’re going to undo everything Democrats did, just because we can.”
Wake County voters will have a chance to ponder whether Republicans are putting their party’s interest above the public interest. What does Bryan’s quote tell them?
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Gary Pearce posted on May 16, 2013 15:17
A TAPster and long-time legislative lobbyist notes that, in politics, you must sometimes rise above principle:
“A pair of current debates in the General Assembly – when studied together – demonstrate that lofty political principles and high-minded ideals are quickly abandoned when they conflict with the reality of local politics.
“Tesla, the maker of electric autos, is tangled in a scrum to determine if it can sell its high-end vehicles directly to NC consumers rather than through dealerships. This fundamental free-market issue, which ought to resonate with free-market, less-government Republicans, is opposed by auto dealers, of course. Tesla’s plan to sell cars directly to consumers will make dealers irrelevant and obsolete.
“Who will win the fight? Local auto dealers, of course. They’ve played the political game at the local level for decades, collectively and individually contributing plenty of money (and perhaps a car or two) to legislators, who will happily allow government to continue to pick winners and losers in this business. Tesla probably has contributed nothing. End of game.
“Meanwhile, some legislators want to end the state’s renewable energy program because, in their view, the program injects government into the free market system and determines winners and losers in this industry. The free-market theory of this argument – and what looked like a legislative slam-dunk – is being confronted by a solar industry with enough employees and projects around the state that local legislators are spooked about pulling the plug. The renewable industry isn’t capable of making political contributions and its voice is largely unheard now that its Democrat champions are out of power, but local payrolls and investments trump free market theory every day.
“These choices make legislators look confused and disingenuous when they’re simply reacting to the oldest axiom in the business: all politics is local.”
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Gary Pearce posted on May 15, 2013 09:55
You can easily flick aside a Republican witch hunt on Benghazi. After all, they’ve been at it since Mitt Romney popped off the first day.
You can manage a controversy about the IRS targeting Tea Party groups – so long as, unlike Nixon, the White House wasn’t involved.
But your Justice Department subpoenaed AP reporters’ phone records? Now you’ve got a real problem.
Now you’ve made reporters and editors mad. Now they’ll plunge into an orgy of Nixon comparisons and “second-term jinx” stories. Now they’ll cover all the congressional investigations and hearings into all of the above.
This too, you can manage. But you may have to chop off some heads. And you must keep calm and carry on.
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Gary Pearce posted on May 14, 2013 08:58
Americans have a fine tradition of demonstrating, protesting, sitting-in and getting arrested when their government does something they don’t like. And we always have a great debate about whether the tactics help or hurt.
Do they? Look at what we’ve seen over the years: suffragettes, civil rights, anti-Vietnam, gay rights. And the Tea Party, whose protests took a different form but were the same loud and visible outpouring of discontent.
In the end, their causes all won – or at least their protests presaged later success at the ballot box or in public policy.
So don’t dismiss the Moral Mondays that seem to be gathering steam in Raleigh.
No, they won’t affect the Republican majority. The protests may, instead, just spur the legislature on to even more draconian actions.
And, no, demonstrating and getting arrested may not suit everyone’s personal preferences. (“I just don’t look good in an orange jumpsuit,” said one sympathizer. Not every young person needs or wants an arrest on their record, no matter how well-intended.)
But the tactics get attention. Like front-page, evening news attention. They get people wondering what the fuss is about. They bring a tighter focus on what the legislature is doing.
Most of all, they tell us where the passion is in today’s politics. And passion often is a prelude to progress.
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Gary Pearce posted on May 13, 2013 09:28
When the Raleigh City Council abruptly and mysteriously fired City Manager Russell Allen, you knew there had to be some major urban policy matter involved. Yep: parking places.
Now, politicians will put up with a lot. You can attack them, smear them, call them names, criticize their ideas and vote against them. That’s all part of the game. But you’ve got a war on your hands if you mess with two things: their offices and their parking places.
According to the N&O story by Colin Campbell, frustrations had built up for months among some “councilors,” as they call themselves. (When I was a cub reporter back in the dark ages, we called them “councilmen” and “councilwomen.” I guess “councilors” sounds somewhat British, lofty even.)
The “councilors,” like all politicians, thought they could do the professionals’ jobs best – and the manager’s job best of all.
The final straw apparently came when Allen didn’t respond quickly and forcefully enough to Councilor Randall Stagner’s complaint about people parking in the Councilors’ Reserved Parking Spaces.
Clearly, this was an outrage. Allen should have dropped everything. He should have personally addressed the matter. Failing to do so, he was invited to find a parking place in another city.
We trust that the new manager will get the message. How can Raleigh hope to be a truly world-class city if citizens feel free to park in City Councilors’ parking spaces?
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Gary Pearce posted on May 10, 2013 14:33
As a wise Raleigh vet observed over breakfast, the plan won’t pass. Too many special interests gored, too many lobbyists working and too much campaign money in play.
So don’t worry about how you’ll do under the plan. (Generally, if you don’t need a tax cut, you’d get one. If you and your family could desperately use some relief, you’d pay more taxes.)
Mainly, the proposal gives Berger a chance to tell Republican primary voters, “I proposed the biggest tax cut in North Carolina history.” And maybe: “Thom Tillis stopped it.”
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Gary Pearce posted on May 09, 2013 14:48
A group of Democrats was decrying the blizzard of bad bills they see from the legislature: cutting education, attacking renewable energy, making it harder for teens to get health care, loosening gun restraints, on and on. They were talking about what could be done to slow down the storm or persuade Governor McCrory to exercise some judgment.
Then one gray-haired veteran threw up his hands in mock horror: “Don’t stop ‘em.” They looked at him like he was crazy. He said, “Seriously. Let them go wild. Don’t do anything to slow them down. In fact, do everything you can to make them go even farther.”
By now they were sure he was crazy. But he was thinking ahead, to next year’s elections:
“The worse it gets, the more good people will be inspired to run. The more good people will work for them and contribute to them. The more the voters will look a new direction. And the better we’ll do next year.”
He’s crazy like a fox.
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Gary Pearce posted on May 08, 2013 13:51
This week’s headlines tell a tale of the priorities and problems of North Carolina’s top three Republicans.
Governor McCrory, like all new governors, is focused on getting his cronies into state jobs and frustrated that he can’t fire current state employees fast enough. (A TAPster noted that McCrory’s off-with-their-heads story came out on State Employee Appreciation Day. Nice timing, Guv!) Unfortunately for him, state employees are skilled at exacting their revenge on Governors.
McCrory’s big story this week – his drill-baby-drill visit to Texas – was overshadowed by Senator Berger’s tax reform package. That’s not the first time Berger has upstaged the Governor; the last time was on education reform. Coincidence? (No, there are no coincidences in politics.)
Predictably, the House and the Governor will be happy to let Berger walk out onto the tax limb, and eager to saw it off. Already, Berger had to back off his ambitious plan to abolish income taxes.
Tillis, for his part, was warning his Republican flock about overreaching just as they were overreaching on guns. One young TAPster noted: “Great. More guns at bars, college campuses and sporting events – the places where I spend 90 percent of my time.”
It took the Big Three less than four months to start stepping on each other’s toes. They obviously learned from the Democrats.
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Carter Wrenn
Gary Pearce
The Charlotte Observer says: “Carter Wrenn and Gary Pearce don’t see eye-to-eye on many issues. But they both love North Carolina and know its politics inside and out.”
Carter is a Republican.
Gary is a Democrat.
They met in 1984, during the epic U.S. Senate battle between Jesse Helms and Jim Hunt. Carter worked for Helms and Gary, for Hunt.
Years later, they became friends. They even worked together on some nonpolitical clients.
They enjoy talking about politics. So they started this blog in 2005.
They’re still talking. And they invite you to join the conversation.
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