This page includes posts from
February 13-26, 2005 in the usual reverse
order. Each posting on the home page is perma-linked to these
February 26, 2005
The Washington Post ran an interesting story today by Joe Stephens about one of the dozens of sacred cows that are now at risk under current tax reform proposals.
It’s also a good example of the daunting task facing any Administration seeking to promote any wide-ranging effort to amend the federal income tax.
As the story reports, the Land Trust Alliance and its member entities are leading the charge against the Committee’s proposal to impose deep cuts in the current deductibility for conservation easements and similar land/building protection devices. The Alliance’s web site includes an assortment of suggested activities for their supporters to lobby Congress to turn back the proposed reform. It also links to the JCT report, the index of takes three and a half single-spaced pages to suggest almost 70 significant alterations to the IRS Code, with the easement changes being just one of them.
The Alliance helpfully provides fact sheets, sample letter texts, and other familiar lobbying devices for their fellow conservationists to use in preserving their tax privileges.
I’ll bet if I spent most of today looking on the Internet, I could find similar lobbying efforts underway by the current beneficiaries of nearly every one of the tax code provisions suggested for reform in the Joint Committee on Taxation report.
Nonetheless, what I found most intriguing about all these endeavors is what is usually missing from them—a detailed alternative proposal that would address the concerns raised by the Committee’s report about the abuses of the current system.
For example, the Alliance’s Fact Sheet takes up most of its space discussing the benefits of conservation easements and the dire consequences of cutting their deductibility by two-thirds.
Here is the entire text from the Fact Sheet describing the Alliance’s suggested alternative reform:
With all due respect, that’s pretty thin gruel.
As a genuine response to the real abuses of the easement system, it’s right up there with the usual “If you elect me, I’ll go down there and cut out the waste, fraud, and abuse.”
We all know how well those promises are kept.
Personally, I don’t have a huge policy problem with using the tax code to promote conservation easements and other land or historic preservation efforts. Once the decision is made to use tax law to further other public policy goals in addition to raising revenue, these social goods are as appropriate for this purpose as many others.
But when folks don’t like someone else’s proposed reform efforts, especially after a documented history of misuses of the current system, it’s not enough to oppose the blunderbuss approach those others may suggest, and weakly note your support for the idea of correcting past abuses.
Come up with your own, detailed reform measures, and push as hard for them as you push to preserve what you can of your existing privileges.
It would make it so much easier to take you seriously if you did.
February 24, 2005
Folks who are looking for a way to reduce the impact of billboards in their communities should plan for a sightseeing trip to Brentwood, Tennessee.
Today the Sixth Circuit Court of Appeals upheld the city's sign ordinance, which placed significant restrictions on the height and size limits for these frequently unpopular advertising structures.
The 1999 ordinance limited the sign faces to a total of 120 square feet. In addition, the billboard height restriction (including the poles) was set at 6 feet.
In other words, a billboard meeting both conditions could be 20 feet wide, 6 feet tall, and flush with the ground.
Naturally, billboard owners were highly displeased, and sued the town. Brentwood deleted another part of the ordinance shortly after the suit was filed, but continued to defend the height and size restrictions. Among other defenses, the town pointed to the purpose and findings section of the sign ordinance, which included this passage:
The District Court ruled in favor of the plaintiffs, but the Sixth Circuit panel reversed the lower court holdings, largely on the basis that the wrong level of scrutiny had been applied to its review of the ordinance.
Using a less-restrictive standard of review of the local government's actions, the panel noted that the ordinance drafters had kept themselves well within the bounds of First Amendment law:
The panel then reviewed Supreme Court and prior Sixth Circuit cases concerning the proper level of analysis to be used in determining when a government's actions in regulating speech are within the limits of the First Amendment. Under these precedents, the panel ruled that the town's regulations should be upheld:
Considering the potential impact of this ruling, I wouldn't be terribly surprised if the billboard industry tried to have this decision reversed by the Supreme Court.
If enough towns and cities adopted the Brentwood size and height restrictions, this could produce a drastic change in the current national viewscape. It could also cause some ripple effects among the companies that depend on billboards for a significant share of their total income--for example, Clear Channel.
February 23, 2005
In some respects, the administrative law system in this country is based upon the assumption that agencies will generally make the right decision the first time they are given the chance to do so. Permit, license, and other decisions are typically one-shot arrangements, where the applicant files one time and the agency makes the call based on that initial record.
Most state and federal agencies give a party an opportunity to make a limited appeal from an adverse agency decision, but that reflects a policy choice and not a fundamental requirement of American law. There’s no absolute right to a second chance.
A Seventh Circuit decision issued yesterday about an Indiana horse racing case reminds us of this basic principle of administrative law.
Shortly after a horse named Chilly Peppa finished second in a harness race at Hoosier Park, the race stewards decided that the filly had violated the rules of the race. They slotted the horse into third place instead of second, which lowered her purse by $6,250.
Chilly Peppa’s owner asked the Indiana Horse Racing Commission to look at the case, but they chose not to do so. Under the Indiana statutes, their decision not to hear an appeal from the stewards’ ruling could have been brought to the state courts for review, but the owner didn’t avail himself of that opportunity. Instead, he filed in Federal Court under 42 U.S.C. Section 1983. He argued that the Commission’s practice of permitting only selective appeals was unconstitutional.
The Seventh Circuit missed a chance to tell Chilly Peppa’s owner that he had put the proverbial cart before the proverbial horse. Instead, they simply reminded the litigants that before one argued about the constitutional implications of permitting selective appeals, one first had to establish that there was a constitutional right to filing any appeals in the first place:
The panel then dismissed the case.
As the reference to the 1894 Supreme Court decision shows, this result should not have been all that surprising to the litigants. The case does make me wonder why the horse owner didn’t take advantage of the opportunity he had to make a similar claim to the Indiana courts. Reading between the lines, I think that may have been the other message that the Seventh Circuit was conveying.
Maybe he didn't like his odds.
February 22, 2005
Delaware State Treasurer Jack Markell continues to lead other Diamond State politicians in his willingness to use new tools to further his interests.
He's opened up his own blog.
If he keeps it updated on a regular basis, this should be prove to be a very smart move by a very smart guy.
The first few pieces are retreads from some releases Markell previously sent to a Democrat email list, but the most recent post shows promise. It discusses a recent speech given at the University of Delaware by Donna Brazile, a woman who deserves much respect, and also praises the listening tour being conducted across New Castle County by Chris Coons, the newly elected county executive. Markell reminds self-styled policy wonks that thinking great thoughts is fine, but finding out what regular folks are really concerned about is a much better use of their time.
I've added the site to the list of Blue Hen Bloggers on the home page, and will check it regularly. Anyone with an interest in Delaware politics should do the same.
February 21, 2005
A very good NYT article today about the Alternative Minimum Tax and its predicted application to an ever-widening crowd of federal income taxpayers left out an important definitional issue that should be addressed in any debate over this topic.
There are several references to “middle-income” and “middle class” throughout this lengthy report, which is focused on the effect of eliminating the deductibility of state and local taxes under the AMT rules, complete with a hint of conspiratorial intent by the current Republican congressional leadership:
Unfortunately, neither Rep. Maloney nor the NYT reporter ever really come out and state what they mean by “middle-income” or “middle class.”
I went to the Tax Policy Center website, noted by the NYT piece as a research organization whose work is generally accepted by all sides. In looking at the household income distribution data for 2003, defining the “middle” takes on real meaning.
For example, suppose I assume that “middle” means only those who are in the third quintile. For 2003 the household income ranges for that 20% runs from $34,001 at the bottom, to $54,453 at the limit, with the mean set at $43,588. If this is what Rep. Maloney meant by the “middle class,” then as explained by the NYT story, the AMT won’t reach that far except under rare conditions.
If I took a broader approach instead, and assumed that the term cut out only the bottom and top 20%, the range magnifies significantly. “Middle” would include every household earning from $17,985 to $86,868.
That seems a bit large to me, but the AMT could tap some folks at the high end of that “middle” depending on their individual circumstances, such as living in high-tax states like New York.
On the other hand, when I look at who actually pays federal income tax, it looks like the question of who’s in the middle is nowhere near as relevant. The Tax Policy Center’s data from the 2000 tax year shows that the top quintile paid 76.6% of the total individual income taxes. The group in the middle 20% paid about 6.9% of the same taxes, with the group in the middle 60% paying an underwhelming 23.7% of the total.
The NYT piece noted that the AMT is among the scheduled topics for discussion and study by the commission appointed by President Bush to review the tax code and make recommendations for changes. As the commission’s work continues toward the current July 31 deadline, I expect we’ll see similar stories about other aspects of the federal income tax system, most of which will be intended to push the debate in particular directions.
Nonetheless, it would help if the folks writing these articles made sure we all understood what they mean when they use generic terms like “middle class” or “upper income,” instead of leaving it to our imagination. As this example shows, carefully defining these phrases can help remind folks who’s paying these taxes now, and how that burden might shift under the various proposals we’re likely to see.
February 20, 2005
I posted my most recent golf book review this afternoon.
Roberta Isleib's Fairway to Heaven is the fourth book in the Cassie Burdette mystery series. The action this time takes place in and around Pinehurst, North Carolina, one of my favorite golf destinations.
February 20, 2005
I went down to the Ocean City Boat Show yesterday afternoon with my older brother and one of my buddies.
Judging from the parking and the crowd inside the huge convention center, it looked like the attendance was up significantly from last year.
When that many folks are looking seriously at making a discretionary purchase ranging $15,000 to $65,000 or so, I take that as a sign that the economy is definitely becoming healthier.
Either that, or there are a lot of people whose sense of proportion can be significantly impaired by the presence of very large toys.
February 18, 2005
Sometimes you don't have to travel to see someone great.
Sometimes someone great travels to you.
Thanks to the folks who put on the Rehoboth Beach Jazz Festival every fall, we're making plans to see the King, right here, this spring:
B. B. King, that is.
He's the opening act for the inaugural Blues at the Beach Festival, to be held June 5 at the Rehoboth Beach Convention Center.
The performance is a fundraiser for the local hospital's Diabetes Unit and the Juvenile Diabetes Research Foundation, so the ticket prices will be a tad steep.
Nonetheless, this kind of opportunity should not be missed. I'm saving now for the four of us.
February 17, 2005
Yesterday the First Circuit Court of Appeals upheld the decision by the Corps of Engineers to give a permit to a wind power company to do some experimenting in the Horseshoe Shoals of Nantucket Sound.
The data tower, yet to be built, is expected to provide valuable information about the feasibility of a proposed windmill farm involving 170 towers in a 26-square mile portion of the Shoals, with blade rotors reaching over 400 feet above the ocean.
Given the scale of this investment in renewable energy, a data tower like this is a critical part of the planning and implementation process.
That fact was not lost on the folks who don’t want to see any wind farms anywhere near Hyannis Port or Martha’s Vineyard. They appealed the Corps’ permit decision to the District Court, and again to the Circuit Court when they lost the first round.
One interesting argument raised in the appeal was based on the fact that the structure would sit on the Outer Continental Shelf (OCS), where the Federal government assumes total control. The anti-windmill folks suggested that the tower owner couldn’t prove it had a right to be there, and in the absence of any property rights to the site there was no basis to grant the permit.
The Circuit Court did not consider this to be a significant hurdle:
Much work remains before we will see any major wind farms off our shores, similar to those already in place off the coastline of Copenhagen, Denmark. It’s entirely possible, for example, that the data retrieved from this tower will fail to support the placement of a wind farm at this controversial location. Nonetheless, this decision is an important step toward finding out if the country is truly serious about exploring the potential for using wind power to meet some of our energy needs, unimpeded by folks who think the view from their beachfront cottages is a more important consideration.
Note: Here's a related post I wrote a while ago about a similar wind power proposal off the Delaware seashore, a few miles from home.
February 16, 2005
No blog essays tonight, thanks to a painful bit of dentistry involving filling two cavities and replacing a 30-year-old cap, followed by a board of directors meeting.
Just a short note to tell you that another blogger saw the lobster post of two days ago and had the same experience with the sponsored ad on Google that I did. He also had some additional fun with PETA and lobsters.
February 15, 2005
The unsurprising result issued this week in the Baltimore Sun litigation challenging Maryland Governor Ehrlich’s selective, official freeze-out of two of its staffers makes me wonder about the paper’s judgment.
Did they really think they were going to win?
If so, how?
Or were they going for a sympathetic response from the public?
If so, whatever gave them that idea?
I’m looking at this from the cold-eyed perspective of a government attorney with over 20 years’ experience in dealing with the press, so I know I’m not being fully objective here. Even so, the whole affair has more than a whiff of the slightly ridiculous about it.
The fact that Governor Ehrlich issued a formal memorandum directing public information officers and executive branch agencies not to talk to reporter David Nitkin or columnist Michael Olesker was itself an odd surprise.
Usually these things aren’t that organized, or so openly blatant. Press folks working for governments eventually know who among the press can be trusted and who cannot, and act accordingly. They usually don’t announce a freeze-out; it just happens. Sometimes it’s accompanied by a quiet word or two with an editor, explaining with a typically rueful tone that it’s just become impossible to work with a particular reporter. These conversations sometimes lead to assignment changes, especially if the newspaper feels it will be at a competitive disadvantage with other media outlets who continue to have access.
The smartest thing the Ehrlich administration did as part of their reaction to The Sun was to keep the cut-out as limited as it was. Nitkin and Olesker could continue to obtain documents under the Public Information Act, the same as any citizen. They could continue to attend open press briefings, watching and recording what anyone else could. They just can’t tap into the other sources of information that help provide context, other useful tidbits, and sometimes the occasional scoop.
This, of course, is why they were so annoyed at the new edict, a point that wasn’t lost on the judge, either:
Looks to me like some folks were just given a short, sharp object lesson on the First Amendment and how far it doesn’t go. Perhaps some of the calmer heads in the newspaper management will now be in a position to suggest ways to restore their reporters’ lost privileges.
And maybe now Nitkin and Olesker will understand that privileges are what they lost.
February 14, 2005
This announcement runs counter to the animal rights organization's efforts to use guilt as a means of denying our human nature as omnivores.
Thus far PETA's arguments aren't convincing.
Here is former anatomy professor Brian O'Connor's take on this issue:
I also liked the pithy way another scientist put it:
It's premature at best to think that PETA's plans to steer us away from lobster and other seafood will be significantly impeded by careful study and analysis. After all, no amount of facts can displace a strongly held emotion.
On the other hand, the story fit perfectly with our Valentine's Day dinner plans this evening.
We thoroughly enjoyed our steamed lobster tails from the folks at Afishionado, with butter and lemon.
I also deeply appreciated the sponsored link on Google that appeared when I looked up "lobster pain":
This sort of thing is just one of life's little ironies, isn't it?
February 13, 2005
As long-time readers of this site know, we are band parents.
This not only means that we have attended wretched football games where the highlights were limited to the halftime show. It also means that we frequently buy poinsettias, grapefruit, and oranges in mass quantities. After all, fundraising is just something that comes with band parentage.
We still have several oranges and grapefruit kept cold in our garage since the Christmastime deliveries. This afternoon I figured out a way to use a couple citrus in a dinner dish. My test subjects approved, so here’s the recipe.
Cut the oranges in half and juice them to make about 1¼ cups of orange juice. Add to the orange juice enough wine to bring the combination to 1½ cups total.
Zest the orange peel to make about 1 tablespoon, and set aside.
In a large sauté pan, melt the butter in the olive oil over medium-low heat, and lightly brown the seasoned chicken pieces for about 6 minutes total.
Add to the pan the orange juice/wine mixture, mustard, pepper, and orange zest, and simmer uncovered over low heat for about 10 minutes, reducing the sauce.
Just before serving, remove from heat and stir in the grated cheese.
It went well with microwaved potatoes with green onions.
February 13, 2005
Lost in America is one of my favorite Albert Brooks movies.
The 1985 comedy classic features Brooks and Julie Hagerty as a pair of yuppies who decide to cash in their assets, buy a Winnebago, and travel the country, while holding what Brooks calls their “nest egg” in reserve.
Hilarious disaster soon follows, especially after Hagerty becomes caught up in gambling in Las Vegas, and blows through all their savings.
There’s a bit more than dark menace in Brooks’ reaction to Hagerty’s violation of the nest egg principle.
Al Mascitti is a columnist for the News-Journal. His response to the recent Chancery Court decision about New Castle County’s surplus reminded me quite a bit of Brooks and Hagerty.
He says County Executive Chris Coons is being told by many taxpayers that
As for what should happen thereafter, Mascitti has his own suggestion:
That’s a good idea. Under most conditions, a 20% set-aside should be more than enough for most contingencies.
The real question is in how to keep the kitty limited to this amount, and no more.
In Colorado, for example, direct rebates to the taxpayers are required. That seems a bit too simple, and fraught with its own risks.
I think one good way to keep the nest egg at 20% would be to dedicate any surplus above that amount to be the first dollars applied to the next year’s budget. In other words, the revenue estimates for budgeting should always be set at 120% of the expected expenditures for that fiscal year. Limiting any surplus beyond that amount to a single year’s carryover should not be especially disruptive. Once that cash is applied to the next succeeding fiscal year, then the county’s property tax rates and fee structures would be amended to achieve the 120% revenue stream.
That approach should prevent any more anomalies like the huge nest egg that built up during the last administration, while providing enough of a cushion to keep any rate or fee changes from being too drastic from one year to the next.
Mascitti noted that the county’s current fiscal year is in the red to the tune of $9 million or so. The county also projects further deficits in the next few years. Tapping the current surplus for these deficits will certainly use up some of this extra cash, but the fact remains that this kitty is huge compared to the county’s total budget.
Under these circumstances some kind of rebate makes sense, but not the whole shebang. I’d prefer to see a partial give-back, along with a multi-year staged arrangement bringing the remaining surplus down to the eventual 20% threshold.
At least then everybody will know what will happen to the nest egg, without blowing it all in a single year.
Official small print disclaimer: This is, after all, a personal web site. Any opinions or comments I express here are my own, and don't necessarily reflect the official position of my work as a government attorney or any of my clients.
That fact may become obvious later on, but it needs to be said here anyway.
© Frederick H. Schranck 2002-2005