Friday, March 30, 2007

Heritage Foundation -- Tax Increase

I got an email from my mother this morning linking to a YouTube video of "Heritage in Focus", these are short 2 minute episodes about various current issues. Some might call these videos "propaganda," but this one was fun, my cousin is the announcer in this episode.

I agree quite strongly with the Heritage Foundation on this subject. Surprisingly, under George W. Bush revenues in the US Treasury have reached some of the highest highs in recent decades and it has happened without tax hikes. (Apology -- this is information I heard during a tax practitioner conference and I don't recall (or am too lazy to) recall the sources) It would appear that one of the largest contributing factors in increasing revenues is one of the strongest efforts in history to give the Internal Revenue Service the needed resources to close the tax gap. The Democratic party rhetoric that the Bush tax cuts were only for the wealthy is very misleading, I have seen a vast majority of my client-taxpayers, and I would argue most people have, benefited under the tax cuts enacted during the past 6 years. Make the Bush tax cuts permanent!

Update: I received some criticism on this post, and I wrote as if I had nothing but praise for the Bush Administration fiscal management of our nation. Federal spending by Bush and the formerly GOP Congress has been inexcusably high especially on earmarks and nonessential, entitlement, non-defense programs. However, I disagree that tax cuts are the problem. If we would have had a GOP congress that would have stuck the fiscal conservatism GOP'ers claim to embrace (low taxes and low federal spending) the current debt/deficit situation could be much different. If congress and the President reigned in non-essential spending (I believe) a balanced budget would occur.

I have at times in my life believed in Santa Claus so why not believe Congress and the President can stop its addiction to over-spending.

I hope that lowers the critically high propaganda levels of this post. I posted this more because I thought it was neat that my cousin was in the video.

Wednesday, March 28, 2007

Rocky V. Hannity -- Celebrity Deathmatch: Blowhard Brawl

Blowhard Brawl is on !!!!

Despite my disdain for Rocky Anderson, I think within ten minutes he will leave Hannity in the dust. I don't say this because I feel Rocky is right or that I feel that Bush should be impeached, I just don't think that Hannity will be able to handle a verbal assault that he can't hang up on with his patented "Get off the phone, you big dope!" recording.

May 4th
8:00 PM

Vouchers -- Attorney General says "Voucher Vote Will Not Effect Program"

Attorney General Mark Shurtleff has issued the Attorney General's opinion on whether HB 174 would be sufficient to keep the voucher plan in force if HB 148 is voted down through referendum. It seems that HB 174 will keep the voucher program active with or without HB 148. I'm not sure what this will mean regarding a possible voucher vote, a few days ago in a SLTrib article the Governor eluded that he would honor the result of a referendum induced vote with a qualifier regarding the opinion of Attorney General Shurtleff. With a voucher affirming opinion in hand, I wonder if the Governor's commitment to the will of the voters will waiver.

I had found an article that I wanted to introduce that presented some very logical arguments against vouchers made by Emily at Utah Amicus. Emily brought up very strong points about availability and cost effectiveness of voucher schools around the state:

"Vouchers are promoted as the solution to overcrowded schools. To relieve this pressure, there would need to be enough affordable private schools in Utah to absorb the demand for private schools that voucher supporters claim exists. But Utah doesn't enjoy a large number of private schools - let alone affordable ones.

A Google search of private schools in Utah shows Cedar City has exactly one private school listed on With 16 students (all from out of state) it is a school for "at risk youth." Under the voucher law a school must have at least 40 students to qualify and at least one of the student's parents must live in Utah.

In Washington County, five schools are listed. The majority of these schools are for "at risk teenagers" whose parents live out of the state. There is neither significant demand for private schools in our region nor much capacity to relieve pressure on the public school system.

Baker claims that with vouchers, private schools will be "affordable to all Utah parents." It is not clear whether vouchers will lower the price of a private education enough to entice parents away from public schools, especially when the majority of Utah parents are happy with them.

According to the National Association of Independent Schools, the median tuition for its member private schools is $14,000. The maximum a low-income family could expect to receive under Utah's voucher legislation is $3,000. Assuming Utah's few private schools could approach the national median tuition, it is hard to accept Baker's claim that all parents in Utah could afford to send their children to a private school even if they wanted to."

I appreciate her points, (a) given that vouchers will be given only to students whose families are on the lower end of the income spectrum, a large number of those who are the intended beneficiaries of vouchers scholarships may still be priced out of private schools. (b) Even if private schools were affordable, Utah's established private schools likely don't have the capacity to accept enough voucher students to make a substantial dent in large class sizes. This is very true, as Emily stated regarding Washington county, there are a handful and a majority are schools for at-risk teens which (as I understand HB148) may not be qualifying vouchers schools due to this line in HB 148:

(3) The following are not eligible to enroll scholarship students:

186 (c) a residential treatment facility licensed by the state.

If this is true there is likely at no more than a couple of voucher eligible schools in Washington county, and none of these schools have a capacity large enough to accept more than a few hundred voucher receiving students.

Anyways, I haven't shifted my opinion regarding Utah's voucher law. Despite these arguments against vouchers, I think the problem of available seats in eligible private schools will be an issue only in the short-run and that many private schools will take on expansion to provide a greater number of available seats. I feel that although the price of private schools may be high for those receiving voucher scholarships, it is better to have the power given to taxpaying parents to have control over how their tax dollars are used to educate their children. Anti-voucher advocates argue that school choice has always existed, which is only a half truth. People have always been allowed to determine whether they would educate their children in public or private schools, but there has never been access to their tax dollars as funding to send their children to their schools of choice.

Thanks Emily, for providing some fresh reasonable arguments (fresh to me at least).

Saturday, March 24, 2007

The New Tax System -- Legislature Briefing

(Hattip The Senate Site) This just in. the legislature released a briefing of the effects of the tax reforms enacted in the last session.

The Utah Taxpayers Association also posted an updated analysis of what does tax reform mean to a family of four.

Take a look.

Vouchers -- To Vote and How to Vote

It appears that we are likely headed for a vote on vouchers. It appears that the governor and the legislature will honor the vote, despite the blunder of not putting both HB 174 and HB 148 on the referendum. The question becomes what issues should Utahn's consider when deciding how to vote on Utah's proposed voucher system. Utahns for Public Schools is the largest organization heading up the referendum opposing the voucher system, they believe that Utah's voucher system is merely a stepping stone try and abolish public schools in Utah. I had Craig Johnson, Utah Amicus contributor, and UFPS supporter visit Green Jello and he quoted some highly touted Christian conservatives, Republicans, the and even famous economist Milton Friedman as evidence for the voucher systems "real agenda".

Choice in Education, is the largest organization in support of Utah's voucher plans. They believe that vouchers will increase the quality of public and private education through the market forces. They have a section of their website devoted to dissuading individuals from signing the petition, the even are soliciting reported uses of public resources in contributing signatures.

So, the question is what is best for the school children of Utah? While I don't doubt that there are those like Milton Friedman who would like to see the public school system abolished, I don't believe that the Utah plan has the end of Utah public schools as its end goal. Despite, Mr Johnson's insistence that the Mitigation clause in the voucher proposal is "malarkey" I believe that Utah's voucher plan has been well studied and designed to be a value supplement to Utah's K-12 education system. Study the bills HB 148 and HB 174. The bills have provisions to make sure that voucher accepting private schools meet safety requirements, have educators that hold baccalaureate or higher degrees, and that these private schools have regular financial audits from Certified Public Accountants to ensure that ensure that state funds are not misappropriated. I don't see anything malicious against the public schools system in these pieces of legislation, and the rhetoric used by those opposed to the voucher plan is a little alarmist for the current situation.

There are many anti-voucher groups, who are employing scare tactics to solicit support for the referendum. I'm not saying Utahn's shouldn't vote on vouchers, but I encourage Utahns to seek the facts of the voucher legislation that the state legislature approved. I would encourage groups like Utahns for Public Schools and Choice in Education to keep the arguments to the actual legislation, rather than using smear campaigns based on quotes from dead economist, right wing pundits, ex-school administrators, former UEA presidents, and support newly found support of deceased ex-President Ronald Regan.

Wednesday, March 21, 2007

Rocky V. O'Reilly

Rocky and O'Reilly went at it last night. I think Hannity ought to watch this (and probably did) and avoid his debate with Rocky (which it appears he is still doing). I would argue that O'Reilly is a far more eloquant debator, and he didn't fair all that well against the rival blowhard.

However, I think this moment should be added to the mountain of evidence that Rocky should have quit being mayor years ago so he could go be the activists that he truely is.

Sunday, March 11, 2007

The New Tax System -- (Hat Tip: Utah Taxpayers Association, Tyler Farrer)

Thanks to Tyler Farrer reminding me of the Utah State Taxpayers Association Blog, The folks over at the UTA have provided a comprehensive outline of the new tax system. Here is the outline they provided:

"1. Utah’s previous top marginal rate of 7% (reduced to 6.98% for one year) will be replaced by a single rate of 5%. This will be the first time in recent memory, if ever, that Utah's individual income tax rate has been lower than the national average (currently 5.3%, non-weighted). However, a broader tax base will ensure that Utah's individual income tax burden as a percent of personal income will remain above the national average.

2. The new system will not have tax brackets.

3. Moderate progressivity will be maintained by offering non-refundable credits that are phased out as income increases.

4. Credits are phased out at a rate of 1.3 cents per dollar of adjusted gross income in excess of $24,000 for married households and $12,000 for singles. Since the credits are completely phased out at high income levels, Utah’s new system will be a 5% flat tax for high income households.

5. Taxpayers will be able to choose a non-refundable credit based on either 6% of the federal standard deduction (approximately $10,900 in TY2008) or 6% of federal itemized deductions (excluding Utah income taxes paid).

6. Taxpayers will be able to claim non-refundable credits for each household member equal to 4.5% of the federal personal exemption (or 6% of 75% of the federal personal exemption). The federal personal exemption will be about $3,500 in TY2008.

7. Existing credits such as historic preservation, renewable energy, and several others that appear on the TC-40S form and are reported on lines 20 and 30 of the TC-40 will not be impacted by these changes."

I am pretty pleased with the new tax structure. The legislature has provided a solid tax cut using a flat tax structure. I'm pretty confident that a large majority will benefit from the proposed legislation. I spent time to make a comparative spreadsheet on Google Documents -- Give it a try at Flat Tax Vs. Regular Tax.

Friday, March 09, 2007

The New Tax System

State income taxation is one of the biggest issues that Green Jello has focused on. After the recent session, I feel almost completely in the dark as to what to expect next tax year.

I know the duel plan was dropped and the flat tax system was modified with some credits for charitable giving, mortgage interest, and dependency exemptions. These developments sound very encouraging that the legislature may have found a way to make the tax cut beneficial for all Utahns at all income levels. However, I have been completely unsuccessful at finding actual numbers on how these credit will work.

If anyone has any links to hard numbers on how the tax credits are written please let me know about it. As an empiricist accountant, running on faith is an annoying proposition. Nonetheless, I'm excited to have the taxpayer-minded legislature in office that we now have.

Thursday, March 08, 2007

Hannity v. Rocky -- The Showdown

This morning I heard it reported that Hannity and Rocky Anderson were going to go the rounds on Fox News, and so I tuned in to his show curious as to whether there would be a debate on the radio. A caller in SLC called in saying that KSL reported the debate was cancelled and Anderson claimed that Hannity was Chicken (seriously the call was almost this sophmoric) and Hannity metaphorically took the dare and annonced that he wants to set up a debate with Rocky in SLC for local charities.

This debate deserves a nickname, i.e Rumble in the Jungle, Blowhard Brawl. Nonetheless, I think I would buy this ticket.

Vouchers - Utahns for Public Schools Anti-Voucher Referendum

Over at Politicopia, Steve Urquhart and voucher foes are going the rounds about HB 148 (Education Vouchers). This a debate I missed out on during the legislative session (my blogging hiatas). The arguements against vouchers provided by Utahns Against Public School is akin to conspirocy theory at best, Mr Johnson argues that "vouchers are a stepping-stone on a path to eliminate all of our public schools," and that "the late Milton Friedman, Paul Mero of the Sutherland Institute, and Ed Crane, President of the Cato Institute, outline a clear plan to destroy public education."

It seems like those proposing this referendum are as a commenter noted, " 'Utahns for Public Schools consists of a number of groups including the UEA, Utah School Boards Association, NAACP, Utah PTA and individual citizens.' Their spokesperson is Pat Rusk, former UEA President. So, it is just a business deal. These aren't concerned parents, they are administrators who feel threatened by the new law." I fail to see how offering a choice of education plans, and schools, could be a negative thing. As for the conspirists argument that "vouchers are a stepping-stone on a path to eliminate all of our public schools" that is a broad and unfounded generalization. Judging from the '06-07 appropriations for vouchers, it doesn't appear that the legislature has any intention of voucher funding ever coming close to overtaking public school funding. From studies cited on Politicopia, there is strong evidence that competition from voucher school sytems has done much to improve public schools.

The strongest reason I have for supporting vouchers is this -- as a parent I feel that I know how best to educate my child. It is a fair handed move to allow taxpayers to have an opportunity to have choice in how their tax dollars are spent. Public schools are an important part of our society and will always remain the central piece of the education system, but public schools have taken there central role for granted and by creating competition between public and private schools will do wonders to increase innovation and improve education in the public school system.

Join the debate at Politcopia