F.A.C.T.S. = Functional Absurdities Contorted for Teacher Salaries

I originally posted this in response to Pat Crowley’s ranting on RIFuture. Since he’s published the same propaganda as a letter to the Providence Journal, I thought it worth bumping the post to the top.


It is sufficiently tedious to respond to “analysis” from the NEA’s Pat Crowley that, when it’s limited to RI Future, it’s hardly worth doing so. When one considers that he has a direct financial interest in his conclusions, the rest looks like the pure static that it is — meant to be hypnotic, but a mere annoyance when so poorly executed.
I’m the “lead spokesperson” for the “I Hate Rhode Islanders” crowd, according to him. See, Crowley goes right for the demagoguery: “Justin hates you! Fork over more money to the government.” Yup. I simply want my state to provide folks in my circumstances a fair shot at making a living. Crowley wants to raid taxpayers wallets to fund lavish salaries, benefits, and pensions for his clients (union teachers) and to stroke his ideological ego by forcing others to subsidize social programs. Pat may not hate Rhode Islanders, but the end results of his actions sure make his own emotions moot.
But anyway. To his points (if they can rightly be called that):

1/2 of 1% of total state spending goes towards the Family Independence Program (the results of all those poverty pimps is just a drop in the bucket)

The interesting thing about this ploy is that it shows that Pat, the unionist, is happy to play the cards of the local poverty industry. Happily, that makes this an easy response, because Anchor Rising contributors have been pointing out the spin of this trick for years. In a word, as our shared commenter Pragmatist puts it in a comment to Crowley’s post: “Care to cite the percentage of the state budget taken up by all of the human service programs? No, I didn’t think so.”

Rhode Island Ranks 23rd in the country for over all Tax burden according to the conservative Rhode Island Public Expenditure Council. Not 50th, not worst. But right in the middle.

As Pragmatist notes, Crowley links to an irrelevant source. Be that as it may, Andrew has looked into this particular instance of carefully chosen statistics in the past. The upshot is that Rhode Island is top 10 when state-to-state tax burdens are compared. It’s when one adds fees that we drop, and Andrew’s post notes that Rhode Island is toward the bottom in collecting fees for a variety of activities, such as hospital activity and solid waste management.
The reasons for this would take more detail than Crowley’s work merits, but comparing states on such things is problematic. For example, if (as Jeff Grybowski comments to Andrew’s post) the reason RI’s hospital fees don’t amount to much is because the state has only one (small) public hospital, then this particular statistic would be more at home in an expenditures, rather than revenue, analysis. With respect to sewerage, if a high percentage of properties have septic tanks, rather than public sewer, then what isn’t collected in public revenue is spent for private services.
I agree that fees ought to figure into a tax burden analysis, but one must review them carefully. If the tax burden is light on a particular service for which people pay anyway, then the fact that the check doesn’t go to the government is hardly a positive point. If the fee structure is such that middle class and above citizens end up paying the bulk of the government’s total collections, then that only contributes to my point, which was (lest we forget) that Rhode Island is driving out productive citizens in favor of unproductive ones.

The tax that hurts the average Rhode Islander the most, the property tax, needs to be changed but RIGHT WINGERS won’t let that happen. Why? Because it would take an increase in the income tax to offset the change. People in the highest income quintile with an average household income of $196,419 pay only 2.85% of their income on property tax. People in the Lowest bracket pay 8.1% of their income to the property tax.

Here Crowley goes for a classic non sequitur phrased in such a way as to make the careless reader believe that the wealthy are getting away with something. Note that he provides no source for his numbers. Note, too, that he gives the average income for the “highest income quintile,” but not for the lowest (and is that “bracket” a “quintile”?). It may surprise Crowley to hear that property taxes are based on the value of property, not on the owner’s income. The poor man pays the same tax that a rich man would pay for the same property. Generally speaking, the asset has the same value.
So, if an income tax increase were necessary to offset a property tax decrease (because, say, one refuses to allow expenditures on unionized public workers to stagnate, much less decrease), then the “lower bracket” would still have to pay a higher rate on their income than the “highest income quintile.” Otherwise, again, we’re exacerbating our corrosive progressiveness of taxation.

In 1979, the corporate income tax accounted for 10.4% of general revenue. In 2002, that dropped to 1.3%. Did it work? You be the judge

Commenter johnpaycheckri explains that “the tax law changed in 1986 so that most corporations became s-corps which means that the income of the s-corp was passed through to individual shareholders,” and that’s sufficient answer, as far as I’m concerned. For my part, the factoid is most remarkable because of the stark light that it shines on one plain reality: None of Crowley’s proclaimed “FACTS” does anything to refute my argument. People are leaving Rhode Island, especially people in the demographic that pays the majority of taxes, and folks with a vested interest in the system that is driving them away — Pat Crowley notable among them — are only tightening their grip on Rhode Island’s throat.

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Mike Cappelli
Mike Cappelli
16 years ago

Listening to Crowley is like listening to a two year old. And that is an insult to two year olds.

Greg
Greg
16 years ago

I don’t even pay attention to him anymore. He’s lost any credibility and your decision to still acknowledge his existence only validates him in his tiny mind.

John
John
16 years ago

True enough about Pat. But the End Game is well underway — note Bill Murphy’s raising both “pension obligation bonds” and proceeds from sales and leases of state owned assets to his proposal to restructure public sector pension plans (e.g., defined contribution plans for younger workers).
In this game, the poverty crowd are willing accomplices who may or may not end up with nothing to show for it but thank you postcards from Florida from their union friends.
Ultimately, Pat is a sideshow (or diversion) in this larger game.

Will
Will
16 years ago

Let me start with a compliment of Pat … Pat is a “professional” … a professional lier. He’ll twist and distort statistics to fit his predetermined conclusions. As such a professional, he’s very good at his “job.”
He’s obviously not to be taken seriously. I doubt his colleagues at the NEA are proud of his antics. I’m not even sure he wants to be taken seriously. He’s just a professional protagonist looking for the cheap thrill to get attention. It’s childish.
If you are looking for an objective analysis of caloric and nutritional content of jar of cookies, you don’t ask the cookie monster. He’s got his hand in the cookie jar so deep, (you finish the analogy).

johnpaycheck
johnpaycheck
16 years ago

we are now just beginning to see the vortex of the perfect storm form. peopel have absolutely no clue what is happenning in ri. its the perfect storm..
huge strucutral deficit in the ri economy. fixing it in 08 with one time fixes wont help in 09.
poor economic climate- no decent jobs
increase in prop taxes- no more state aid increases to city and town.. huge cuts in school programs and higher property taxes
the downward spiral continues and wil feed on itself.
the best case scenario will be a huge mess for atleast the next 3-4 years and it still wont be fixed

chuckR
chuckR
16 years ago

Regarding fees – about 1/6 or my mortgage payment goes to paying off a deep well and fairly expensive septic system. I also pay to have my garbage collected. Then there is the cost of running a 220V well pump and paying for mandatory septic system inspections and BTW the well pumps only last 10 years. These fees don’t go to any municipality or other organ of the state, but any comparison of in-state property tax fairness has to include these. In my case, they increase the effective property tax by 40%. Disclaimer: I regret to say that I am not in the top income quintile.

George
George
16 years ago

Crowley posted a link on RI Future to a stupid math game that he seems to think is some ingenious way of predicting the next president.
It’s obviously math that’s rigged to work for graduates of the the RI public education system he’s so proud of.

Chalkdust
Chalkdust
16 years ago

The “stupid” math game is from the American Mathematical Society, which is based in Providence. They’re a pretty smart bunch, George….Ph.D.s and such.
What makes you think it’s “rigged”?
Besides, it’s not about predicting the president, but showing how different voting methods can produce different results. There are links to essays that explain in depth. It’s quite interesting.

Mike Cappelli
Mike Cappelli
16 years ago

Dealing with crackpots like Crowley and the NEA is like dealing with the Palestinians – you don’t.
You don’t listen to them, negotiate with them, or try to reason with them.
You need to eliminate them. Then you can make some progress.

chalkdust
chalkdust
16 years ago

Sometimes I read AR and think that it really is the voice of the average Rhode Islander. I may disagree with the analysis of the facts, but don’t question the values.
Sometimes I read here and wonder if somebody isn’t being paid off, because I can see no other reasonable explanation for the conclusions reached. This is one of the latter occasions.
Justin’s characterization of the property tax, below, is so misleading as to make me suspect bad faith:
“The poor man pays the same tax that a rich man would pay for the same property. Generally speaking, the asset has the same value.”
If a $300K earner owns a $300K house, with a $15/100K prop. tax rate, she pays 1.5% of her income per year.
If a $70K earner owns a $300K house, with the same tax rate, he pays 6.43% of his income.
The value of the asset is the same, the tax rate is the same, and even the amount paid is the same, but the relative impact is obviously very different. Property taxes are regressive: for the same property value, they chew up a greater percentage of the income of the middle class than the upper class.
Even this ignores the effect of property values that inflate much faster than income, which has been the case in RI, and the effect of retirees and other people on fixed incomes.
Property taxes are much worse for the middle class than income taxes. I would like to know, therefore, how the above analysis of the property tax can be reconciled with a concern for the middle class.

Justin Katz
16 years ago

You know what reeks of bad faith, Chalkdust? Implying that I’m paid off to argue in bad faith when my opponent in the debate is a union executive, especially when you go on to point out that everything I write is true. I’m working too damned hard and losing too damned much to tolerate calculated insinuations from anonymous commenters. The leeches and vampires of this state have an entire infrastructure (much of it financed with public money) to churn out and promote misleading research, and the independent blogger currently months from the threat of losing his house must be on somebody’s payroll. Unbelievable.
The point is that Crowley favors property tax reform because he sees a switch to income tax as tantamount to an increase of taxes on the wealthy in favor of the less wealthy. My argument — made again and again, from different angles — is that the people who would bear the brunt of this change are:
1. Already paying the greater part of the state’s taxes.
2. Already fleeing the state by the thousands per year.
The people who are going to be pinched are families like mine: folks who just want to get by, work hard, maybe watch their lives become incrementally easier, and who don’t have the resources to up and leave.

chalkdust
chalkdust
16 years ago

I was expressing my dismay because your position on the property tax is, in my view, anti-middle class. I still believe that. My intent was to goad, not to offend. However, if you are offended, I’ll remind you that many hard-working people of this state are offended by the continued and casual dismissal of them as “leeches and vampires.” I know quite a few of them. They are distinctly middle class. They have bills and families. They struggle to make ends meet and I promise you that most are not so well off as you imagine. Some are lazy and some are stupid, but most of them work very hard, are good people, and honestly want to do good. As a group, they are not better or worse than any other. The reflexive contempt and distain for them is quite unfair. I did not say that “everything you write is true”. It is not. You say that the property tax treats rich and middle class alike. That’s not true. Property taxes are essentially flat taxes, and have all the wealth-favoring properties of other flat taxes. As for Crowley, I could not care less whether or why he wants property tax reform. His views are irrelevant to me. Reform is the right thing at the right time, no matter who supports it. Property tax reform will only increase the middle class tax burden if income taxes already favor the wealthy and disfavor the middle class, as they now do. But that’s only because we’ve rolled back the taxes on the very wealthy. Therefore, we should reform the property tax and restore the cap gains tax and reform the income tax so that the best-off at least pay the same percentage of their income that the middle class does. (Hint: they currently… Read more »

Ragin' Rhode Islander
Ragin' Rhode Islander
16 years ago

–The point is that Crowley favors property tax reform because he sees a switch to income tax as tantamount to an increase of taxes on the wealthy in favor of the less wealthy.
The only reason that Crowley / NEA favor “property tax reform” is because they realize that they’ve milked it for all it’s worth, and the only way they can keep their gravy train growing is to (further) tap the income tax stream.
(I said “further” tap the income tax stream because already a big hunk of it is diverted to the urban centers for “education aid” where it goes straight into NEA pay and benefits.)
As occurred with the Lottery, don’t expect any property tax relief even if there is a “reform” of the school aid formula. There’s no way that they can increase the income tax enough to satisfy the teachers (and other) unions, for they’re insatiable.

Justin Katz
16 years ago

Perhaps we’re thinking of different individuals as counting among my “leeches and vampires.” One of the tragedies of the system is that many of the hosts, so to speak, self-identify with the aforementioned.
I did not say “that the property tax treats rich and middle class alike.” I said that “property taxes are based on the value of property, not on the owner’s income.” The regressiveness of that fact is certainly something to consider when designing a tax regime, but when your position is that new or increased taxes on those who already pay the most and generally do the most to bolster the economy should be off the table, as mine is, the time is not right for addressing regressiveness. As it happens, I don’t have “a position” on property taxes, except that they ought to go down, in keeping with the drop in public expenditures.
I think you’re mistaken to characterize the property tax as a “flat tax,” considered in terms of income, though. I don’t believe there are any rich folks in my neighborhood: most of them live in the more expensive houses in the more expensive parts of the state (some with multiple properties). In that sense, property tax is inherently progressive.
Thank you for the donation. I’ll get my fingerprinting kit ready.

Monique
Editor
16 years ago

“Therefore, we should reform the property tax and restore the cap gains tax and reform the income tax so that the best-off at least pay the same percentage of their income that the middle class does”
I don’t stipulate the latter. But the bigger issue, Chalkdust, is: where do we station the machine guns? Let’s see, Westerly, Woonsocket, East Providence, Pawtucket, West Greenwich. All of the border towns. “Get ready. Here comes a Lexis leading a U-Haul truck.” ‘Cause at the rate you and Paul Moura’s committee are going, that’s the only way we’re going to keep people in this state.
Unlike the former East Germany and present day North Korea, in the US, one’s state of residency is a matter of choice. We want corporations (i.e., employers) and people with higher incomes to choose to move and stay here. You propose to continue driving them out by “improving” our ranking as fourth highest taxed.

chuckR
chuckR
16 years ago

Excellent, Monique.
The resistance to property tax reform and income tax reform arises in part due to fears of the tyranny of the majority. I left Providence after 15 years as a taxpayer and homeowner – my voice wasn’t heard, my vote wasted. What would now be termed property tax and income tax reform would extend that tyranny to my much smaller community, where I feel my voice is now heard. I’m closing on a house in Florida next week and it wouldn’t be hard to make that a primary residence. ‘Property and income tax reform’ would benefit me if I weren’t paying RI income taxes, right? Nonetheless, I’m agin’ it because given the situation in RI, its just the wrong move at the wrong time. Fix the inefficiency (and yes, the corruption too), bring gov’t worker wages and benefits into line with the private sector, make the state more financially attractive to value producing jobs in the private sector – then we’ll talk.
chalkdust – care to enlighten us on income tax payments by income level? Federally, the top 5% pay 57% of the total. Whats RI’s percentage? You can start here: http://tinyurl.com/yujrp5

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