Learning to Love Taxes


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Instead of bemoaning Tax Day, we ought to celebrate it as a national holiday. It’s the day we chip in to pay for the services we all rely on to live our lives.

After all, who among us doesn’t benefit from taxes? Anyone who drives certainly does. Anyone who likes to spend a hot summer day at the beach does too. We’ve triumphed in wars due in no small part to outspending our enemies. And find me the person who thinks the United States would be better off if it didn’t have public schools and I’ll show you someone who doesn’t understand how the world works.

Here in Rhode Island, we have a particular problem with seeing taxes as a good thing. Consider this: a bill that would inject $40 million into our public schools is known as the meals tax because it would add $2 to every $100 dinner at a restaurant or 40 cents to every $20 lunch or breakfast. Why doesn’t the media call this the education investment bill? Similarly, a bill that infuse our health department with $45 million is called the soda tax because it would add a penny onto every ounce of sugary beverage.

Elizabeth Warren, Senate candidate in Massachusetts, once famously said of taxes: “You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.”

But despite the preponderance of evidence showing that taxes are, in fact, a good thing, Americans still love little more than to complain about their contribution.

Though I think this outlook is inherently bad for society, I can understand why people feel this way. For one, the United States was literally founded on the idea of paying lower taxes. Your high school history teacher may have told you it was all about freedom and democracy, but it was just as much about not ponying up to throne. Thus, it has become ingrained in our cultural understanding that taxes are bad, and if you don’t begrudge them you must, therefore, be opposed to freedom.

But, in truth, and most rational people will agree, that taxes are good. Some, fiscal conservatives in particular, just think we pay too much of them. In other words, they want to pay taxes for the services they use, but not for the services they don’t.

However, there is a fundamental flaw in this line of reasoning and it can be summed up as simply as the old saying, “a chain is only as strong as its weakest link.”

We’re actually seeing this play out live in Rhode Island right now. Our underfunded urban areas giving the entire state a bad name from coast to coast. In fact, just last week, Colin Kane, testifying before the Senate Finance Committee, said investors are afraid to invest in Rhode Island bonds because of the situation in Central Falls.

And just think how much better off our state would be if all school districts were as wealthy as East Greenwich and Barrington – this state would be cranking out job creators like nobody’s business!

One of the most important takeaways from the Occupy movement is that when society becomes inequitable, as it has increasingly become, people will take to the streets. The more inequity there is, the more people will take to the streets. Trust me, the very last thing the affluent class wants is for the lower and middle class folks to be taking to the streets. Indeed, most social service programs were instituted to insulate the job creators rather than to coddle to the job seekers.

Hating taxes is a completely outdated notion that may have worked when our country was still growing and flush with natural resources. But now that neither of those things are necessarily true anymore, we need to start seeing taxes as the societal good that they are.

So the next time you safely drive to the beach while your kids are on summer recess, you can say to yourself: but for our collective contributions, I wouldn’t have it nearly so good.

Equal Pay for Equal Work Still Elusive for Women


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April 17 is Equal Pay Day, a date that symbolizes how far beyond the end of 2011 and into the year 2012 women must work to earn what men earned in 2011.  Equal Pay Day was established by the National Committee on Pay Equity in 1996 to raise awareness of the persistent gender wage gap in the United States.  According to NCPE, the wage gap has narrowed about 15 percentage points during the last 23 years. At this rate of change, the Institute for Women’s Policy Research estimates that it will take 50 years to close the wage gap.

How are women faring in Rhode Island? According to the National Partnership for Women & Families, the median pay for a woman working full time in RI is $40,532 per year, while the median yearly pay for a man is $50,567. This means that women in RI earn 80 cents for every dollar paid to men, slightly higher than the national average of 77 cents. (There is evidence to suggest that our narrower wage gap is due to an erosion in men’s earnings, not an improvement in women’s.) However, women of color in RI experience significantly higher disparities. African American women working full time earn 65 cents for every dollar earned by men, and Latinas earn 47 cents for every dollar. Taken in total, full-time working women in RI lose approximately $1.5 billion dollars each year due to the wage gap.

At the same time, women in RI are increasingly responsible for providing for their families. There are 54,655 households in RI headed by women, and more than 25% live below the federal poverty level.

Why is there a wage gap? The wage gap exists, in large part, because of what economists call occupational segregation. More than half of all women work in sales, clerical and service jobs, and studies have shown that when women dominate an occupation it pays less.

While some of the wage gap can be explained by what some might call ‘personal choices,’ according to a Government Accountability Office study, the wage gap persists even when work patterns and education are taken into account. Interestingly, women with children are paid 2.5% less than women without children, while men with children experience a boost of 2.1% over men without children. In addition, women are paid less than men across industries. And, interestingly, even though women are attending institutions of higher education in record numbers, women with professional degrees are paid 67 cents for every dollar earned by men with professional degrees. Even more shocking, women with doctoral degrees are paid less than men with master’s degrees, and women with master’s degrees earn less than men with bachelor’s degrees.

Is there anything that can be done to help close the gender gap? Actually, there’s a lot:

Ask Congress to strengthen US laws to ensure gender equity in employment. The Lilly Ledbetter Fair Pay Act of 2009 was an important step toward making it easier for women to challenge unequal pay.  But the next step is to pass the Paycheck Fairness Act, which would expand the scope of the Equal Pay Act of 1963 and the Fair Labor Standards Act for the purpose of addressing income disparities between men and women.

Support programs that promote non-traditional career paths for girls. Programs such as Grrl Tech, run by Tech Collaborative right here in Rhode Island, work collaboratively with educational institutions to promote science and technology with high school girls from around the state with the express purpose of increasing participation in STEM (Science, Technology, Engineering and Mathematics) career fields.

Support programs designed to get more women into non-traditional jobs.  Over ten years ago, the Rhode Island Commission on Women (recently de-funded) identified the need to move women, particular low-income women, into non-traditional jobs. They noted, for example, that a secretary made, on average, $26,000 while an electrician made $62,000.  Rhode Island needs to invest in efforts to get more women into higher paying jobs.

Eliminate gender rating in the health insurance industry. Women already earn significantly less than men, but, in the individual and small group market, have to pay significantly more than men because being a woman is treated as a pre-existing condition. A bill before the General Assembly would make gender rating illegal, whether or not the Supreme Court upholds national health care reform.

Increase the minimum wage.  According to the National Women’s Law Center, women make up nearly two-thirds of minimum wage workers in the United States.  The RI General Assembly is considering a proposal to increase the minimum wage from $7.40 per hour (established in 2007) to $7.75 per hour. Lest some think that increasing our minimum wage will make us less competitive, remember that the minimum wage is $8 per hour in Massachusetts and $8.25 per hour in Connecticut.

Carolyn Mark is president of the Rhode Island Chapter of the National Organization for Women (RI NOW). Melody Drnach is a RI NOW board member, past RI NOW president and VP Action for NOW in Washington, D.C. 

Whitehouse Says Buffett Rule Will Be Back


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Sen. Sheldon Whitehouse has said all along that it would likely take several votes before Democrats could break the hold that Wall Street special interests hold over their republican counterparts and such seems like the fate for the Buffet Rule, which was successfully filibustered Monday on its first vote on the Senate floor.

“I’ll keep fighting to make the Buffett Rule law,” he said in a statement issued yesterday afternoon. “Although we were unable to break the Republican filibuster, a majority of the United States Senate has gone on the record in favor of greater fairness in our tax code.”

Here’s a video of Whitehouse speaking on the Senate floor yesterday:

Prior to the vote, Whitehouse had made a practice of mentioning that oftentimes legislation that would hurt Wall Street special interests needs to come back to the floor several times before Republican Senators will do right by the American people instead of corporate campaign backers.

“We tried to go to the Wall Street reform bill in the Senate and Republicans filibustered it,” Whitehouse told me recently. Majority Leader “Harry [Reid] found a way to call it up again and we lost again. Then Harry figured out a way to call it up again and we lost again. It was either fourth or fifth time it was scheduled for a vote, and we were going to stay up all night to bring attention to this, and at that point the minority leader came in to our leader, Harry Reid, and said, ‘I give up. My guys are getting killed, they are getting phone calls at home. We’re throwing in the towel, you can go to this bill.’ And that was a really clear sign that you can have special interest obstruction that can stop progress on a bill not once, not twice but four times and still in end prevail.”

The Buffett Rule needed 60 votes to break the Republican filibuster and received only 51. Sen. Mark Pryor was the only Democrat to vote against the proposal and Sen. Susan Collins of Maine was the only Republican to vote for it.

Defending American Schools from ‘Reformers’


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Central High School in Providence (via providenceschools.blogspot.com)

It was interesting to me to learn about the article by Paul Farhi in the American Journalism Review called “Flunking the Test“, which blows apart typical reporting on education as essentially taking so-called “reformers” views at face value.

Mr. Farhi points out that not only is the idea of an “crisis in education” false, (recalling arguments advanced at the implementation of the current public school system and the end of the common school system that had previously existed), but that in fact, American schools are doing better than ever on most relevant statistics. Mr. Farhi puts it best:

Some schools are having a difficult time educating children – particularly children who are impoverished, speak a language other than English, move frequently or arrive at the school door neglected, abused or chronically ill. But many pieces of this complex mosaic are quite positive. First data point: American elementary and middle school students have improved their performance on the Trends in International Mathematics and Science Study every four years since the tests began in 1995; they are above the international average in all categories and within a few percentage points of the global leaders (something that few news reports mention). Second data point: The number of Americans with at least some college education has soared over the past 70 years, from 10 percent in 1940 to 56 percent today, even as the population has tripled and the nation has grown vastly more diverse. All told, America’s long-term achievements in education are nothing short of stunning.

Are there troubles? Of course. But the reality is that in large part, our schools are not failing. The virtual destruction of the existing American education system (required if 100% proficiency in reading comprehension and mathematics are not met by a school by 2014, a fact which remains as long as No Child Left Behind stays in place), would essentially throw out the very policies that have made American education so successful.

Critics will point out that there are schools that are doing poorly. This is true, but as Mr. Farhi points out, these are mostly in areas where there are high rates of poverty and low rates of English. School vouchers, eliminating bad teachers by replacing them with Teach For America’s untrained novices (it takes roughly two years for a teacher to get into the swing of things, but TFA’s program lasts exactly two years), charter schools; all of these reforms fail to take aim at the structural problem here: poverty limits how well our children learn.

Now, Mr. Farhi makes clear that schools are often their own worst enemies here: many school systems prevent reporters from talking to teachers or students or viewing how classes work. As a result, reporters rely on sources like advocates, administrators, labor leaders, etc., for their sources. We’re not learning directly how things work from the sources in the trenches, something which empowers the message of education reformers while weakening the message of educators.

In Rhode Island, we can see the trouble here. The pattern of well-off triumphing over poor-off holds true, even according to charter school advocacy group RI-CAN’s report cards. Virtually all of the “best” schools are from well-off schools districts; Barrington, East Greenwich, Little Compton, etc. All of the “worst” are from Providence and Central Falls, metropolitan areas with high levels of poverty and large numbers of Spanish-speaking residents. The sole exception is Classical High School (my alma mater), which attracts students from well-off areas in Providence and the best students from impoverished areas of the capital city (or at least those who can pass the test).

Mr. Farhi points out that nearly 37% of Americans say their own children’s schools are deserving of an “A”. Looking to other schools, the numbers drop precipitously, only 1% of Americans would rate the nation’s school system that way. So, essentially, we’re happy with own schools (though they might need slight improvement), but disappointed with everyone else’s schools. Either Americans are collectively deluded as to the state of their own schools (a possibility not borne out by data showing improvement), or else media coverage has failed to properly scrutinize the overblown “crisis” in American schools that’s been advanced by well-off elites in America (many of whom never attended public schools).

In this age of austerity, it is unlikely we will provide the actual solution necessary to educational success in all our schools: fighting poverty. Instead, as poverty increases the gap between rich and poor schools will grow worse. Few schools are equipped to handle this problem. Some charter schools are, but only rarely. The wholesale charterization of the American school system is not only poorly thought out, it’s against the thinking that created the idea of the charter school: that they would act as education laboratories where public schools could not. Pathfinders for new ways of teaching.

A noble goal which has been perverted. Our choice is stark. Either we face the trouble that this country is well aware of, economic inequality that is spiraling out of control; or alternatively we can lose everything that has made this country the beacon of world achievement.

RI Progress Report: Tax Day, Central Falls, Callista Gingrich


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Happy Tax Day, says Ted Nesi. Meanwhile, our own Tom Sgouros uses the occasion to report that the Tax Foundation says Rhode Islanders have the second lowest tax burden in the region.

Speaking of Tax Day, this from Ocean State Action: “Years of misguided tax policy that benefit Rhode Island’s highest income earners have starved our state of revenue, leading to budget deficits, cuts to cities and towns and critical programs like services for the developmentally disabled, higher college tuition rates, and massive hikes to property and car taxes. This six year experiment in trickle-down economics has failed, and it is time to restore fairness to our tax structure by asking everyone to pay their fair share. The Miller Cimini Tax Equity bill will generate $131 million in revenue to invest in education, repairing our roads and bridges and ensuring to services for the most vulnerable Rhode Islanders are restored.”

They are hosting a rally today to “call on the General Assembly to end the Carcieri tax breaks for our top earners and rebuild Rhode Island through investment not cuts” today at Network RI in Pawtucket, 175 Main St., at 4 p.m.

Offshore tax havens used by the uber-affluent and corporations are costing Rhode Island more than $450 million in lost revenue annually. That’s more than we saved on pension reform last year!

Callista Gingrich, Newt’s wife, will be at Caprice in East Greenwich tonight. Her husband, people keep saying, is still running for president.

The Central Falls School District must be breathing a sigh of relief given that it will be the state Dept. of Education rather than receiver Bob Flanders who will be charged with taking over the district. It doesn’t mean there won’t be haircuts, it just means they won’t be as obnoxious.

Five banks control 56 percent of the U.S. economy, reports Bloomberg via PBN. Conversely, two economists are largely responsible for the tax equity craze sweeping the nation.

It’s true! There is one part of the local economy that is doing quite well: exports.

The United States may be a great place to have a job, but it’s a terrible place to be out of work … 30 countries have better unemployment benefits than we do.

This page may be updated throughout the day. Click HERE for an archive of the RI Progress Report.