Newshoggers.com

The tax revolt of 2010 (cont...)

By Fester:

People are in pain right now. Twenty million homeowners are underwater, a systemic debt reduction effort is underway, the employment picture now just sucks instead of horrendously sucking, any productivity and compensation gains are getting eated up by health care premiums and energy prices have bounced back up after an easy first half of the year.

In November 2007, I thought one of the dynamics that we would be seeing in 2009 and 2010 would be a property tax revolt. Property owners in bubblicious areas would see their homes go underwater as values and the regional economy that was built on bubble building deflated, and these property owners would be in pain and in a political position to do something about some of their pain:

People who are stuck with mortgages and houses that they can not sell, refinance or service will be looking for help. They will be looking for refinancing deals, special breaks, holds on foreclosures, delays on credit reporting, and most significantly at the local level, assistance on minimizing the quasi-fixed costs. That means support for more heating and energy assistance, lobbying for lower insurance limits for flooding and hurricanes in disaster prone areas with the hope of either dodging the bullets, or shifting those costs to someone, somewhere else, and most importantly, constant and downwardly revising re-assessments without concurrent increases in millage rates...

Homes are the primary asset for most people, and right now homes are under systemic threat as a symptom of a greater problem. People want to make that pain go away without the costs of fixing the greater problems, and engaging in a local government financial death spiral and micro-local education arbitage seems like a decent short term fix, so we'll see a full scale tax revolt in 2010 or no later than 2012 as the last round of housing bubble junk Option ARM mortgage resets will be hitting in 2010/2011 --- what we are seeing now is just the tip of the iceberg

We have seen refinancing deals, special breaks, and holds on foreclosures as federal policy. These efforts have probably brought marginal relief but they have not addressed the systemic problem of way too much debt and not enough carrying capacity. Local governments are just starting to get slammed as the combination of a decent first half of FY 2009 on revenue collection and short term reserves have made the FY-09 budgets austere but not dramatically shrunked. Those reserves are no longer in place for most states as they face massive budget deficits. Balancing those state budgets will often mean school and local jurisdictions that rely on state funds will see a significant hole in their budget that can either be filled by new taxes or spending cuts.

Local taxing authorities will want to maintain assessed values from the bubble peak years and fight like hell against appeals for lower, closer to market values. Politically it is easier to have a low millage rate on an artificially high base than to have a high millage rate on an accurate base. The New York Times reports on this fight:

Homeowners across the country are challenging their property tax bills in droves as the value of their homes drop, threatening local governments with another big drain on their budgets....

The pain at the state level is trickling down to county and local governments. To compensate, about 10 percent of large counties are raising the tax rates associated with home values to minimize the revenue loss, the county association said....

The revenue losses are coming as homeowners prod towns for new assessments, and as municipalities conduct regular revaluations of their real estate. While declining residential values weigh heaviest on many governments, the value of commercial real estate is also sliding as businesses shut down and move out of storefronts or shopping malls....

Mr. Kramer, the assessor in Contra Costa County, said homeowners started swamping his office with requests for new assessments in December. As many as 500 people would call in one day. His voice mail message now begins: “If you’re calling to request an informal review of your property value due to the declining real estate market.”

Contra Costa has now reduced the recorded value of more than a third of the 350,000 privately owned properties in the county....

I still think that there is a significant political opening for demagogues who call for tax cuts uber alles as that will seem to alleviate some of the pain for a little while and when people are getting beaten down, a breather and a break is a very attractive promise.

Lucy's Football

By Fester:

Ian Welsh has the outline of the Senate Finance Committee’s health insurance plan. The shorter version of the short version is that it sucks. Here is the short version of the plan:

1) Lower the medicaid coverage rate from 150% to 100% of the Federal poverty line, 133% for kids and pregnant women (once you have the baby, too bad for you)

2) Subsidies stop at 300% of the poverty line (was 400%)

3) No Public Option mentioned

4) Insurance exchanges at the State level

5) Must buy insurance unless it costs more than 15% of your income

6) A fine if you don’t buy insurance unless you’re below the Federal poverty line

For the most part, as Walker discusses, this is actually identical to or slightly worse than the plan put forward by America’s Health Insurance Plans (AHIP). Yes, worse than the insurance industry’s plan. Remarkable. Baucus is really earning his campaign donations these days…. Without a public option, the insurance companies will have no check on their prices, let alone pressure to actually reduce them. Because people will be forced to buy bad insurance, they’ll hate the plan, and because “reform” has been passed, we’ll have to wait another 10 or 12 years for another shot....

Tim at Balloon Juice is very curious why Obama is not actively selling a strong public option proposal.

Watching Democrats try to fix health care I see a photo negative of the Bush years. Here is an issue with obvious urgency. Setting aside our shameful infant mortality rate, uninsured rate and other statistics, medical bills are by far the leading cause of personal bankruptcies. Insurer misconducy wrecks lives every day in every city in America. The right options are obvious and relatively few in number. Huge majorities support doing the right thing.

Even self-interest is similarly one sided. Remember how much Republicans invested in realigning the destroying Social Security? Imagine if they had an issue that would realign the country in their favor and instead of huge majorities violently hating it, most Americans strongly supported what they wanted to do. Republican strategists would give two of their first three kids for a shot at an issue with this much going for it....

I hear that Obama supports the public option. That would mean more if it felt even a little more urgent than his idea that we should have a college football playoff series.

Belaboring the obvious, people who care about what they’re doing normally enter negotiations with some firm goal in mind. Most would agree that it is moronic to make negotiating itself the point.

Many others, including Steve have noted that if a major and effective health financing reform bill passed with either a pathway to de facto single payer for baseline care or at least a strong public option, major fundraising avenues will be closed off to some of the current veto points in the Senate and the House. I think that is part of the problem with the Democrats.

However, I would like to get a little more cynical for a moment. What if healthcare reform is to Democrats what abortion and anti-feminism is to Republicans in that both are seem by significant portions of their respective bases as high salience issues that are best served by never fully addressing? Gotta keep the activists in line and ready to donate and phone bank for two more incremental steps in the 'right' direction instead of attempting to systemically change the constraints of power and the political process.

Tim is right that an effective public plan option would be a system changer that would effectively tilt the political playing field to Democrats for at least a generation or two in much the same way that Social Security and Medicare are high salience, high effectiveness boundary conditions for Democrats to lean on. However the Democrats who would benefit from these changes are not neccessarily the Democrats who are currently in power or more importantly, currently occupying critical blocking positions. So reform that can shave off several points of GDP on health expenditures, improve coverage and re-align US politics is not a winning solution for the key set of stakeholders; instead their winning solution is to do just enough to avoid overwhelming political costs and pressure.

G-20 Economic Displacement

By Fester
At the end of May, I was skeptical that the G-20 would provide a significant net boost of regional economic activity in Pittsburgh because the combination of a massive security bubble, low local value-add to the goods and services that will be consumed by the summit goers and significant displacement would occur:

So the combination of typical activity displacement, opportunity cost and massive security disruptions will make most probable estimates of economic impact be far less than the hopes of local officials...

Hotel reservations will be gobbled up by summit attendees but they will be displacing normal business travellers as well as any other potential conventions that could have been occurring at the same time. ...

Downtown will be massively disrupted.... It is likely that many downtown businesses will not be open during the summit. Normal spending will not occur, and it may be replaced to some degree by summit spending

The Post-Gazette is reporting that these disruptions are already occurring as they tell the story of a disrupted wedding and throw in a couple of other useful hooks as well:

plans for a Sept. 25 wedding at the Sheraton Station Square wilted faster than a fragile boutonniere.

While the hotel staff at first told the Bethel Park couple that the gathering here of 20 world leaders on Thursday and Friday, Sept. 24 and 25,would not affect their Big Day, the two learned the following week that their guests would be subject to background checks and security checkpoints....

Andrew Sliben, director of sales and marketing at the Sheraton Station Square, said his staff explained to the couple that the G-20 summit might interfere with their wedding, adding that it could take an hour to get up and down in an elevator because of security....

So the wedding was moved to another Friday at the hotel, Aug. 21...

While the same florist and photographer were still available on the new date, about 30 of their 150 intended guests were not -- including key relatives...

The G-20 summit in this case has cost the Pittsburgh regional economy between twenty and thirty out of town visitors with attendant hotel fees, car rentals, meals out, as well as some number of airline seats that will no longer be bought, as well degrading some utility from the prospective bride and groom. And this is not just the story of a single wedding getting displaced. The PG article notes that a medium size meeting for American Eagle, a locally headquartered company, will most likely take place in another city due to the G-20 instead of Pittsburgh.

Furthermore if Station Square is within the security perimeter, the disruption to Downtown will be far more significant than I had previously projected as I had projected a small perimeter of only a few hundred yards/a few blocks around the Convention Center would be heavily secured while it looks like a much larger region will be in the security zone.

Choking on the float

By Fester:

I want to riff on BJ's post concerning the high cost of poverty He is describing issues with bulk supplies on the Canadian Arctic frontier and how people manage those expenses:

in order to use the program on an individual basis, you basically need a credit card or another banking arrangement not available in many communities or to those in without steady income....

The issue here is that you’re facing a large up-front cost to save money over the rest of the year. Even some people who aren’t poor have difficulties with that one.

The end result of both methods is that you need money to save money....

The US Federal Tax code has a couple of these Catch-22s embedded in it. For instance, the Flexible Spending Account for dependent care is a nice benefit that can be worth several hundred dollars to people who can take advantage of it. My wife and I use it to partially subsidize the cost of day care for our daughter. The way the program works is that I deduct a portion of my paycheck which is directly deposited with a benefit management company. At the same time, we pay the daycare center upfront and get a reciept for this month's day care. I submit the reciept to the benefit management company and they send me a check in about five weeks. I pay a small monthly management fee. At the end of the year, I get to take the sum of the money that I have been reimbursed from the benefit management company off the top of my gross adjusted income.

For my wife and I, this system works. We'll get a larger tax refund next year. However there are two costs associated with this program. The first is the directly observed management fee. That is small, and if we were maxing out the total contribution limit (we are not), it would be roughly 5% of the incremental tax refund.

The bigger and the hidden cost is the float. This tax reduction system basically requires that my wife and I can initially pay an extra month worth of day care as we have to eat the float. In month 1, we pay the day care center the full fee, and the benefit management company a chunk of money, and when we write the check for month 2 at the day care center, we may or may not have recieved reimbursement for month 1 yet. Over the course of a year, if we maxed out on the program, this would cost us another 10% opportunity cost of the tax refund. We are still coming out ahead by a significant margin. Yet we can only do that because we can eat the float.

As BJ noted, this is a large up front cost to save money over the rest of the day care experience. That is tough to do when you either have limited cash flow, or limited access to credit or you can afford absolutely no variability in cash flow timing. A reimbursement check that shows up a week later than expected may be a catastrophic risk that deters people from participating in this program that saves individuals' money.

If the goal of this tax incentive is to lower the individually borne cost of overt market childcare with the dual objective of moving more children to higher quality programs AND increasing workforce participation, then a fairly minor switch in assigning the float risk would make this program much more attractive and effective for poorer people.

This change would be to cut out the benefit management company that is managing the reciept verification and reimbursement process and allow people to directly claim and itemize dependent care expenses on their 1040 at the end of the year. The IRS could insist on photocopies of the reciepts and provide some funding for minimal auditing of just that particular line item to minimize fraud costs. This system removes the float and transfers the verification risk directly to the federal government. It will also make it much easier for more people to participate in the program, and the new participants are likely to be poorer on average than current participants.

Now if the intent of this tax incentive is to curry favor with middle class taxpayers and create a legalized privatized service money and campaign laundering schema, the above recommendation is worthless.

Assessment food fight

By Fester:

The very big news for the very small community of Western Pennsylvania financial wonk bloggers (we meet monthly in the phone booth at the Monroeville Mall by the Dairy Queen --- plenty of space for new faces) this week is the Pennsylvania Supreme Court affirmed Judge Wettick's order that Allegheny County can not use the 2002 base year system for property taxes as that system is fraught with errors and violates the uniform taxation clause of the Pennsylvania Constitution. 

"[T]he Allegheny County scheme, which permits a single base year assessment to be used indefinitely, has resulted in significant disparities in the ratio of assessed value to current actual value in Allegheny County. The disparity is most often to the disadvantage of owners of properties in lower-value neighborhoods where property values often appreciate at a lower rate than in higher-value neighborhoods, if they appreciate at all."

The base year property assessment system was not declared unconstitutional as the Courts are kicking it to the Legislature to figure out how to fix things.  My bet is two fold:  First Harrisburg will attempt to duck the issue for as long as they can and then some more, secondly, whatever mangled compromise that no one claims credit for passes, it will be declared unconstitutional. 

So what does this mean.  On the very practical level, it means that Judge Wettick will be ordering a re-assessment of all property in the county.  New values will be calculated and new tax bills will be prepared.  And then the fights begin.

This is political dynamite as property owners (who are high propensity voters) do not like to see their assessed values increase as that means their taxes will increase without any other actions taken.  Pissed off voters make for very scared elected officials.  County Executive Dan Onorato is one of those very scared elected officials, especially as he is strongly rumored to be ready to run for the Democratic nomination for governor.  His angle would be the only candidate from Western Pennsylvania and as a pragmatic executive who did not raise taxes on old people during his time in office.  He has vowed to fight the re-assessment and delay it for as long as possible.

On the more pragmatic level, a reassessment within the next eighteen months blows a massive hole in the county budget.  The best guesstimates say a complete re-assessment will cost the county more than $30 million dollars in general revenue funds.  The county is effectively broke right now and it can not afford that type of payment without dramatic cuts in general revenue expenditures such as the police and courts.  The drink tax is a potential source of revenue if the County can get the Legislature to give it permission to raise the drink tax back to 10% from the current 7% and devote the increment to re-assessment.  If that proposal was approved,two years of incremental drink tax revenue would be sufficient to pay for the reassessment.  I would wager that the courts would allow for tri-annual or quadrennial re-assessments as constitutionally valid, so a smaller tax increment may be possible. 

The biggest story that has yet to be talked about is the impact that this ruling has on other counties in the region.  Most of Pennsylvania uses the base year system.  The surrounding suburban and exurban counties use the base year system.  Most of the counties have assessed no more than once in my lifetime.  This gives them a massive advantage on giving new development low assessment values instead of something approximating fair market value assessments, so it is an implicit subsidy from older. pre-assessment built-up properties to new properties.  Requiring regular re-assessment removes this implicit subsidy which should marginally help Allegheny County attract new retail and light office developments near the county lines. 

Be ready for one hell of a food fight on this issue over the next three years....

Deductions, definitions and tax simplification

By Fester:

Andrew Sullivan intentionally deludes himself into believing that the conservative movement’s incessant bitching about taxes is about tax complexity:

Why can we not harness some of the anti-tax energy out there into a coherent campaign for tax simplification: an end to loopholes, shelters and deductions, and a much simpler, more transparent tax code? That is surely a way in which the right can appeal again to the center.

We already have a fairly simple tax code for a decent chunk of the population. The 1040EZ is a simple document to fill out to figure out a refund at the end of the year. The easy segment of the tax code really only applies to people who only make wage income and not a whole lot of that, and do not own their own house, or have other major deductions. The problem with the tax code is not the brackets, but in defining which type of income is included, and then at what level of income is deductable and which rate(s) apply to specific forms of income.

Speaking as a liberal, I would love to see a vastly simplified tax code. My preferred tax code would still maintain progressive brackets, treat all income the same, and have large initial deductions/exemptions for the filing unit and then another reasonably large deduction per dependent. I would get rid of a significant chunk of the mortgage interest deduction, dependent day care deduction, HSA deductions etc. I would keep deductability for employer provider health insurance unless/until I am guaranteed 98% coverage through a government sponsored scheme. It would be a fairly simple tax code that rolls most of the advantages of the special tax treatments into the expanded standard deduction.

This plan would also raise the effective tax rates on the top few percent of the country by a significant margin unless there is a massive drop in the top marginal rates. The reason is that my plan treats all income equally. This means dividend income is taxed the same as wage income, and capital gains income is also treated the same way. Given the current distribution of income sources most Americans see only a small proportion of their income derived from these currently tax advantaged sources. However the top few percent of the country receive a disproportionally high proportion of their income from non-wage sources.

So tax simplification means the top few percent of the country would have to pay more taxes as the campaign would be an "end to loopholes, shelters and deductions, " which disproportionally are enjoyed by the top end of the income distribution. And movement conservatives can not tolerate that. Look at the fuss they have thrown up about the estate tax and Obama's intent to not modify current law as the tax code for the top bracket reverts back to its status in 2000.

Silly Sully......

The Republican's Real Problem

Commentary By Ron Beasley

The biggest problem the Republicans have right now is that their House and Senate members were chosen for blind obedience and are incapable of independent thought.  For the most part they are morons who mostly just embarrass themselves.  The first example we had today was the always entertaining Michele Bachmann who introduced a bill to prevent something that nobody was suggesting should happen. 

The madness continues as Michele Bachmann introduces legislation that “would bar the dollar from being replaced by any foreign currency.”

What the Chinese were proposing, of course, was to replace the dollar as the world’s reserve currency. I would take the view that a move away from near-exclusive reliance on the dollar is probably inevitable irrespective of what we do. But whether or not you agree with me about that, this isn’t something congress can ban—it’s a decision by foreign countries about what they do with their reserves.

But of course it didn't end there.  The Republican lawmakers set out to prove that Ms Bachmann wasn't the only moron who could make a complete fool of herself - they produced a budget that really wasn't a budget.

THE PARTY OF NO (IDEAS).... About nine years ago, then-Gov. George W. Bush was asked about his budget experience. Bush said he was proud of what he'd put together: "It's clearly a budget. It's got a lot of numbers in it."

Keep that quote in mind when considering the "budget" House Republicans unveiled this morning.

Stung by their stereotyping as the "party of no," House Republicans eagerly promoted the unveiling of their alternative to President Obama's budget today -- but when they finished speaking, reporters had one big question: Where's the actual budget? You know, the numbers that show deficit projections and discretionary spending?

There certainly was no hard budgetary data in the attractively designed 18-page packet that the House GOP handed out today, its blue cover emblazoned with an ambitious title: "The Republican Road to Recovery." When Minority Leader John Boehner (R-OH) was asked what his goal for deficit reduction would be -- President Obama aims to halve the nation's spending imbalance within five years -- Boehner responded simply: "To do better [than Obama]."

And that's really all we got. House GOP leaders held a press conference this morning to prove a) they could put together a budget; b) that they could be the "party of yes"; and c) that their agenda is about more than just saying the opposite of whatever President Obama wants.

Instead, they unveiled a "budget" with no numbers or even budget estimates, and spent most of the press conference criticizing the president.

But they did have a chart:

 

Not even all of the Republicans were impressed.

House Minority Whip Eric Cantor (R-Va.) and Rep. Paul Ryan (R-Wisc.) raised objections to an abbreviated alternative budget "blueprint" released today -- but were told by House Minority Leader John Boehner (R-Ohio) they needed to back the plan, according to several Republican sources.

The argument, coming a week before the full House and Senate are scheduled to vote on the budget, underscores the minority party's woes in a mounting unified opposition to President Obama's $3.6 trillion FY2010 budget proposal.

Ryan, the ranking Republican on the budget committee, plans to introduce a detailed substitute amendment for the Democrats' spending plan next Wednesday -- and still intends to do so.

But he and Cantor were reportedly told by Boehner and Republican Conference Chairman Mike Pence (R-Ind.) they needed to move more quickly to counter Democrats' charge they were becoming the "Party of No," according to House GOP staffers.

The 19-page document, prepared by Pence's office, was distributed two days after  President Obama criticized Republicans for trashing his detail-crammed 142-page budget outline without producing a credible alternative.

“In his egocentric rush to get on camera, Mike Pence threw the rest of the Conference under the bus, specifically Paul Ryan, whose staff has been working night and day for weeks to develop a substantive budget plan," said a GOP aide heavily involved in budget strategy. 

"I hope his camera time was gratifying enough to justify erasing the weeks of hard work by dozens of Republicans to put forth serious ideas," the person added.

So they Obama said they had no ideas so they had to show the world that they did.  Instead they showed the world that Obama was right.

Taxes, progressivity and marriage economies of scale

By Fester:

 

One of the little peculiarities in the federal tax code that benefit me is the doubling of all exemptions and credits for married couples.  The reason why I am puzzled on this matter is the conflict between diminishing marginal utility, progressive taxes and economies of scale when one assumes that most(almost all) married couples live together and thus can share in economies of scale on certain large quasi-fixed costs. 

 

I’m riffing on this issue as Andrew Biggs is looking at living choices of Social Security recipients and notes the economy of scale argument:

 

Now, some pretty random thoughts: While there's certainly some merit to this, independent living does not come without a cost. Using a standard method for calculating economies of scale in household size, adding an additional adult to a household consisting of two parents and two children increases total household costs by less than half as much as it would cost that person to live alone.

 

This makes a lot of sense.  My family life provides some easy examples.   And let us assume that each of us had the same income that we currently make now.   We live together which allows us to share the same kitchen appliances and their operating costs, share a single bathroom and share a car. Making meals and usable left-over portions is easy as cooking for two people is simpler than cooking for one and eating only three meals of the same thing is much easier storage and taste monotony wise than eating six meals of the same thing during a week.   If we were to maintain roughly the same standard of living as non-living together adults, we would be consuming two sets of kitchen appliances (with attendant operating costs), two bathrooms and most likely two cars. 

 

As a married couple living together, we have a solid standard of living.  If we were not living together, that cushion would not be present.  Our individual and aggregate standard of living would decline despite having the same income.  

 

From a progressive tax policy perspective, the typical goal is to tax lower utility dollars at a higher rate than high utility dollars.  This is why there is a decent size standard exemption and personal deduction.  Those first several thousand dollars are assumed to have very high utility as they keep people from starving to death.  The $287,000^th dollar earned is taxed at a significantly higher rate because it is a less individually valuable dollar than the 20,000^th dollar earned. 

 

So if we assume that most married couples live together, and most living together situations produce significant economies of scale that allow for higher standards of living, why on progressive tax policy grounds are those marginal married dollars being so favored compared to single dollars?

 

I understand the political argument --- voters tend to be higher income than non-voters and voters have a higher probability of being married than the general adult population so draft policies that favor the electorate instead of the general population.  But this is still one of those little quirks in the tax code that mildly irks me. 

Elites and the value of fear

By Fester:
I'm sharping the tines on my pitchfork. I have no policy or political problem against sharply punitive taxes on companies that are effectively but not de jure nationalized. They fucked up, so they should not be rewarded for fucking up.

I am not alone in doing that. And I am one of the luckier ones; I have a good education, an affordable house and I have had plenty of opportunities and option space to run with. My family has not been hit hard by the real estate bust, nor are my parents and in-laws critically exposed by the 401(K) bust. They still have the ability to retire without eating cat-food or move to their children’s household(s).

So if I'm one of the luckier ones of my generation and I am sharpening my pitchfork and looking on eBAY for a good deal on tar and feathers, what is happening to the people who had their knees taken out despite buying into the American Dream?

Felix Salmon speculates a bit on this:

In the other corner are the real people, the angry people, the unemployed people -- and with them their elected representatives in Congress. They're not interested in such distinctions any more, they're not interested in what's fair or what's sensible. They saw their real wages stagnate for decades as the orgy of plutocratic self-congratulation reached obscene levels only to keep on growing. All they ever had was the American Dream: the idea that they, too, might one day become dynastically wealthy and join the overclass.
Now, of course, that dream is shattered -- and, what's worse, it turns out that very overclass is responsible for the working classes' own present straits. While the talking heads in New York and Washington throw around their millions and billions and trillions before commuting home to their comfortable middle-class-and-better lifestyles, the rest of the country is mad as hell, and ain't gonna take it any more. They're not interested in constructive solutions or in leveraging private capital or in the sanctity of contracts: fuck that shit. Those days are over. They want to see jail time, confiscatory policies, and worse.

The most dangerous revolutionary groups are not the desperately poor --- just surviving till next week is enough of a challenge, but the class of people whose toes were through the door to ‘success’ and elite membership when that door slams shut on them , dislocating a couple of toes, and breaking a few bones in the foot. They are the ones who have something to lose, the resources to organize themselves and the capacity to sustain an effort. Right now there are quite a few people who thought that they had a chance to get ahead and that door is being slammed in their face.

Nothing radical will happen this year, but if there is a continued belief that the American elites are hyper-insulated and are still able to manipulate the political system to loot, then radicalism will emerge. I don’t know if that radicalism will be popular support for 90% marginal tax rates on incomes of more than a million dollars or systems disruptions attempts to destroy the wealthy’s sources of wealth. But that radicalism will emerge unless their is some re-alignment of interests, incentives and public communication between the American elites, and at least the middle-middle and upper middle classes.

This is where the value of fear should come into play, as fear is a wonderful motivator of change.

Pointless Barriers of Access

By Fester:

One of the common assumptions among Democrats of pretty much all stripes is that government is capable of doing providing public value and that it should do good.  Now defining "good" is another fight for another set of posts, but this is a shared platform value for almost all Democrats.  In Pittsburgh one of the 'good' things has long been to give older home owners (and thus primary voters) a break on their property taxes.

However that break on their property taxes is not taken up by all eligible individuals.  Evidently eligible homeowners must apply for the tax break and then re-apply for it every year.  The city is able to look at county real estate and death records to determine if an individual has died or if a particular deed has been transferred.  Despite this capability, the city still requires a re-application.  That might be changing, but it is sparking a nasty debate in City Council:

From the Post-Gazette:

Councilman Patrick Dowd's plan, tentatively approved Wednesday, to allow 50-and-older homeowners to keep property tax breaks without reapplying yearly, as they must now....

That figure is based on Finance Department estimates that 4,000 more seniors would get about $300 off their tax bills under Mr. Dowd's proposal.

Allegheny County lets seniors keep their property tax break without reapplying yearly....

"We are living in times when every penny counts to the city and its citizens," Mr. Dowd said. "These seniors are the most vulnerable. That we would demand that they fill out a form every year ... is unacceptable."

Re-applying for a tax break based on conditions that are easily verifiable and seldom change (people don't get younger) is a barrier to access that most likely disproportionally falls upon the less connected, the less advantaged and the less familiar with the political and policy process.

Removing those barriers to access should be a no-brainer on equity and self-preservation grounds.  Democrats since they believe that government is valuable have an obligation to make government work.  We can not politically afford for people to "DMV" the entire government and write off any claim of potential change as mere rhetoric that is not backed by any display of possibility.  The Republican Party can get away with that, as they are attempting to do exactly that with Iraq, Katrina and finances because they don't, ideologically speaking, care about government except as a looting opportunity.  Democrats ideologically don't have that luxury.

So get the little things right.