Senate Finance scoffs at ‘guns and ammo tax’


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we people gunThe members of the Senate Committee on Finance had already made up their minds to dismiss any potential value offered by the proposed legislation long before Senator Gayle Goldin, the bill’s prime sponsor, explained it.

Senate Bill 2318 would impose a 10% supplemental excise tax on firearms and ammunition to be distributed to city, town, or municipal police chiefs (or the highest ranking municipal official) for the purpose of grant funding of nonprofit organizations whose mission includes a commitment to reducing crime and violence.

Committee Vice Chairman Walter Felag (D-Bristol, Tiverton, Warren) made it clear he had little respect for the bill and it’s sponsor when he repeatedly said that every senator is entitled to a hearing of his or her bill, but that doesn’t mean anyone at the table supports it. He also chastised Senator Goldin, in absentia, for leaving the hearing after explaining the bill, in spite of the fact that half of the members of his own committee were absent to work on budget issues.

Out in force was the usual shoot ‘em if ya got ‘em crowd, including 2nd Amendment Coalition lobbyist and unemployment insurance attorney Frank Saccoccio, NRA lobbyist Darin Goens, talk-show radio host Daria Bruno, Cranston Mayor Allan Fung and relentlessly obnoxious member of the tin-foil hat press, Dan Bidondi.

Saccoccio started his testimony by positing that the most important part of any legislation is the language that is not there. I’m no lawyer but I am fairly certain that the most important part of legislative language is, more often than not, the language that is there. However, Saccoccio chose to focus on a list of hypothetical scenarios having nothing to do with the actual bill or its potential merits.

“What if the police chief chose to give the money to an organization that spent 10% on a billboard and 90% on administrative costs and taxpayers’ money was wasted? What if, in a state with such high unemployment, gun dealers were forced to go out of business because everyone purchased their guns in Massachusetts?”

Well, I suppose the displaced workers could go to work for the nonprofits who are spending so much money on their staff. But, unfortunately, logic did not have a seat at this table, in spite of the many vacant chairs.

NRA lobbyist, Goens, said that he’s seen, “literally thousands,” of gun control bills and that “this was in the top five of the worst he’d ever seen.” I, myself, am a lobbyist. I understand the craft. Hyperbole is not usually the friend of the lobbyist. Furthermore, I am willing to bet that Goens has used this very phrase on literally hundreds of the literally thousands of gun bills against which the NRA stands. He then went on to give the not-so-subtle impression that, even though he represents the NRA and not the gun manufacturers (wink, nudge), if the bill passed, gun manufacturers might just stop selling guns and ammo to security or law enforcement in Rhode Island. I wonder if he submitted written testimony or a ransom note.

Fung testified that he was the only candidate to stand up for Rhode Islander’s second amendment rights. He’s Alan Fung and he approves this message. Lock, Stock and Daria Bruno went so far as to call the bill blatantly racist because it disenfranchises poor people of color who most need guns for self-defense. I know. I’m dry heaving too. And Bidondi … well, he just yelled from the gallery at anyone who testified in favor of the bill.

And we few … we happy few. We band of brothers (and sisters) who testified in favor of the bill were raked over the coals by the members of the committee. We were cross-examined as if we were proposing a bill to seize and sacrifice the first born child of every family. Or tax their guns.

Senator David Bates (R-Barrington, Bristol), showing blatant disrespect for his fellow Senator Goldin, asked her whether we should have a knife tax too? Senator Goldin kept her composure. I would have pointed out that nobody has, to my knowledge, assassinated a president from a grassy knoll by throwing knives. Also, one very rarely hears of a drive-by knifing.

Providence Mayoral Candidate Brett Smiley, (for whose campaign, in the spirit of full disclosure, I consult) was questioned by Senator Edward O’Neill (I-Lincoln, North Providence, North Smithfield) about  whether Rhode Island should start taxing alcohol too? (Nobody tell Representative Malik he said that!) O’Neill went on to ask why legal gun purchases should be taxed when it is stolen guns that result in gun crimes. Smiley answered that every gun begins as a legal sale. Gun manufacturers do not manufacture guns for illegal sale. By taxing at the point of sale, funds could be collected. The point that Senator O’Neill refused to acknowledge was that funding streams for violent crime prevention was very difficult to come by if one only taxed stolen guns.

The overwhelming arguments revolved (and revolved, and revolved) around a premise that this was a tax that punished law abiding citizens, simply executing their second amendment rights, rather than addressing the real issue, which is criminals who steal guns. However, my own testimony addressed the fact that this did not infringe upon anyone’s right to keep and bear arms. It merely requires that those who make the choice to do so also invest in a responsible future. Taxes are not punitive. Taxes are a civic responsibility and an investment in community.

I was given a fair amount of eye rolling when I listed just a few incidents from the past three days, involving a 70-year old Ohio woman accidentally shot by her husband of 50 years; a three year old in Arizona who accidentally shot his 1 ½ year old brother fatally in the head; a 10-year-old in Texas, who accidentally shot his 4-year-old cousin in the leg. All of these tragedies made possible by legally purchased firearms. Perhaps a funding stream, at the discretion of law enforcement leadership, could be dedicated to educating the public on responsible gun ownership. Or, would that too be considered an infringement on one’s right to keep and bear arms?

This bill has, for all intents and purposes, died in committee. But it is an excellent idea. Take the bill out of judiciary and make it a tax issue before finance. Do not control guns. Rather, fund nonviolence at the legal point of sale. Yet, the Dan Bidondi mentality seems to have permeated the General Assembly. The Senate, anyway, did not entertain the potential for trying something different to achieve a better result. Instead they simply cried “Why do you want to punish law abiding citizens? Why do you hate the second amendment?” I, for one, don’t. I want to honor the preamble to the Constitution, which includes the phrase: “promote the general welfare.”

Mayor Taveras and PVD City Council abandon working mothers


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DSC_8287Upon being elected Mayor of Providence in 2010, Angel Taveras, “speaking at the state Democratic Party gathering at the Biltmore, thanked his mother, Amparo ‘Milagro’ Ovalles, a Dominican immigrant who had raised him and his two immediate siblings largely on her own while working at local factories.”

Speaking of his mother, Taveras said, “Her example taught me that, through hard work and perseverance, anything is possible, and most importantly, that there are no insurmountable challenges,” adding in yet another interview, “I feel really blessed in many, many ways. My mother sacrificed a lot, and emphasized education so that my sister and I can live the American Dream.”

DSC_8378Everyone in Providence has heard the story of Mayor Taveras. He grew up poor, supported by his mother, a product of the Providence public school system. he later graduated Harvard and Georgetown University, to become the first Hispanic mayor of Providence at the age of forty. He routinely gives much of the credit for his success to his mother.

Even as recently as Tuesday night Taveras was playing this familiar tune. “Taveras talked of growing up poor in Providence — how his mother had his Easter Sunday suit put on layaway at Ann & Hope. ‘I tell you that,’ he said, because ‘you want to know who your governor is going to stand with when things get tough … working families.’”

DSC_8231Why is it then, when given a chance to actually stand with working families, Taveras skulked away and left them standing alone?

Last night, nearly one hundred hard working women, many of them supporting children in circumstances not too different from those endured by the Mayor’s mother, were left wondering why the Mayor and the City Council had abandoned them. Last night was supposed to be a meeting of the Providence Ordinance Committee to discuss the proposed $15 minimum wage for hotel workers. Working women secured childcare or brought their kids with them. They skipped meals, skipped overtime and traveled to the City Hall on foot, on buses or in carpools, only to find out that the Ordinance Committee meeting had been abruptly cancelled.

DSC_8182Those City Councillors who would face their constituents in the lobby of the City Hall seemed at a loss to explain the cancellation. Mayor Taveras had indicated to Channel 12 news that he wanted the measure held for further study, but as far as I can tell, the Mayor does not have the power or authority to cancel City Council meetings, though obviously he can exert enormous pressure if he has to. Rumors were flying that Committee Chair, Councillor Seth Yurdin, was being lobbied by hotel and/or mayoral interests, or that he had broken his foot in a fortuitous (for Mayor Taveras and the hotel owners) accident.

DSC_8191With memories of Angel Taveras’s biography in my mind, I couldn’t help but see in the bored faces of the children present in the halls of Providence City Hall the potential for them to be the Mayor of Providence themselves a few decades hence. I wondered what their story would be, and if they would remember Mayor Taveras as the kind of politician who stuck up for them when they were in need, or sold them out for the chance to be governor.

DSC_8175The parents of these children, 80% of whom are women and who all work exceedingly hard at their jobs, are being abused right now with long hours, low pay and crushing poverty. They and their children suffer the effects of economic uncertainty and the never ending stress of making ends meet. Just the act of agitating for better working conditions seems to have cost many of them their jobs.

It is within the power of Mayor Angel Taveras and Providence City Council members like Seth Yurdin to improve the lives of these women and lift them out of poverty, but they are avoiding their duty and appeasing monied interests by using shady tricks and delaying tactics rather than holding a straight up vote. This kind of back room dealing, where secret lobbying, money and political designs count for more than the efforts of organized citizens agitating for justice is shameful.

This measure deserves a straight up vote, and that vote needed to happen yesterday.

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Councillor Carmen Castillo confronts Councillor Sam Zurier
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Councillors Wilbur Jennings Jr and Carmen Castillo
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Councillor Kevin Jackson supports the measure

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Don’t cut sales tax based on flawed economic model


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tax-cut-fairyA few months ago, I wrote about the intellectual bankruptcy of the economic model called STAMP, for State Tax Analysis Modeling Program, created by the Beacon Hill Institute (BHI), and beloved of the Rhode Island Center for Freedom and Apple Pie (CFAP). The good folks at the CFAP have been heavily promoting some of the results of this model, that predict that Rhode Island will enjoy a tremendous economic boom if only we would eliminate our sales tax.

As I detailed in that article, the RI STAMP model is flawed not only by a host of questionable assumptions, but also the laughable attempt to obscure those assumptions under an absurdly over-complicated presentation of the relevant equations. Really, there is no reason to do what they do except as a conceptual bulwark against reporters who are easily cowed by that sort of thing.

Now comes the Institute for Taxation and Economic Policy (ITEP) to say the same thing as me. In an epic takedown (summary here, report here), they cite STAMP’s many assumptions that either cannot be justified by the research literature or are completely contradicted by that literature or by experience. They further point out that the STAMP model accounts for almost no possible economic benefit of public spending, such as, say, educated children or good roads. The STAMP model also contains little help in estimating the actual rates of change due to new tax policies, allowing them to

“… mask the fact that some tax plans they believe would be economically beneficial are guaranteed to shrink the economy in the short-term.”

ITEP concludes that from this alone,

“STAMP analyses are of no use in informing the debate over what will be necessary to balance the state’s budget in the wake of a major tax change.”

There is plenty more, such as STAMP’s implicit assumption of full employment (!) and the assumption that households spend money in more or less similar ways to governments. (How many police officers did you employ last year?)

I am gratified by the validation of my review of this model, but really, the damning evidence is right in BHI’s own footnotes. That’s where, just to pick one example, the STAMP designers tell us they assume that all rich people — you know, the ones who have expensive houses and extensive business and social ties to their community — are more likely to move to another state for financial reasons than poor people, who frequently own nothing and have no such ties.

Of course that’s not how it reads. The actual text talks about elasticities and the sensitivity of participation rates, but that’s what it means, once you wade through the verbiage.

In an email responding to the ITEP analysis, Justin Katz, of the CFAP, said they think the appropriate response is to average their results with model results they like less.

“…[T]he Center has long maintained that it is an opportunity for policymakers that they have such divergent models. As we recommended in our recent brief, the General Assembly should take advantage of the two projections as a high-end and a low-end and implement the elimination or reduction of the sales tax with plans to adjust down or up as the monthly results become apparent.”

This, of course, is not the way it’s done. When the clown honks his little horn and says the sky at noon is inky black, the proper response is laughter, not to average his views with yours.

There are two ways people analyze mathematical models. One way involves detailed examination of the assumptions used to generate it. The STAMP model fails this test in spectacular fashion, according to me, and now according to ITEP. The other way is to validate the model against past events. That is, a model good at predicting the future should be good at predicting things that have already happened. If a model can predict 2014 results from 2013 data then it makes sense to use it to predict what will happen in 2015.

We have cut taxes several times in the past 20 years. There were the Almond income tax cuts of 1997-2002, the capital gains cuts passed in 2001, the flat tax passed in 2006, and several smaller cuts. When the CFAP can show us that their STAMP model would have accurately predicted what actually did happen — and that the same model predicts what they say about future tax changes — only then will it be useful to listen to their results. Until then, nothing but laughter from me, and hopefully everyone else they honk their little horn at.