More Taxes for Rank and File, Less for Wealthy and Walmart

Speaker of the House Philip Gunn and Lt. Gov. Tate Reeves have decided to shift Mississippi’s tax burden – less on income and businesses, more on users.

“Because I think everybody ought to have skin in the game,” explained Gunn.

Hmmm.

It appears as though the Speaker has bought into the notion that many poor Mississippians don’t pay state taxes.

If this were true, of course, proposals to expand user taxes wouldn’t do anything to address the problem. That’s because Mississippi user taxes are already quite expansive. Nearly 50% of all taxes going into the state’s general fund already come from user taxes.

Sales taxes, the biggest percentage of general fund money at 38.2%, are user taxes. Hard to imagine any folks not having skin in the sales tax game. Quite a few likely participate in sin taxes too (gambling, alcohol, and tobacco taxes) which account for another 6.7% of revenue. Then there are auto tag fees, highway patrol charges, and other use taxes that bring in 4.7% of revenue. All that totals 49.6% of general fund revenues.

Reeves’ and Gunn’s choice expert from the Tax Foundation has recommended expanding sales taxes to include drugs and fuel plus services provided by physicians, lawyers, veterinarians, beauticians, and more. She also suggested eliminating sales tax holidays and raising tobacco and gaming taxes.

That sounds like a lot of additional taxes for average Mississippi “users” who are taxed enough already, not a way to get others to have more skin in the game.

Oh, and that doesn’t count fuel taxes, which all car and truck drivers pay. These are user taxes that do not go into the general fund, but generate about 15% as much revenue as sales taxes. The tax expert wants to put a sales tax on fuel. Then, we can once again pay sales taxes on federal fuel taxes. We eliminated taxing taxes in 1987.

If you consider the following, you begin to wonder why they really want to shift the tax burden.

Mississippi already has one of the nation’s lower state and local tax burdens, ranking 41st out of 50, according to data published by that same Tax Foundation. More foundation data shows Mississippi has the 2nd best State-Local Tax Burden as a Percent of Income. Then there’s data reported by the Clarion-Ledger showing the effective state and local tax rate for poor Mississippians is already twice that for wealthy Mississippians, 10.4% to 5.3%.

As for business taxes, consider what the paper’s Geoff Pender wrote, “Trying to shift more of that (business) tax burden onto rank-and-file Mississippians, in the near term, will wallop them.”

What this proposed tax shift really seems to be about is to let wealthy Mississippians and businesses (sources of most political contributors) have less skin in the tax game.

While pleasing some, shifting more state taxes on to rank and file “users” will upset more, especially when they realize they have to pay more taxes so Walmart and out-of-state conglomerates can pay less.

Posted in Politics | Leave a comment

Appointments Will Tell If Trump Can Deliver

Haley Barbour was right. “People wanted to shoot Washington the bird,” he said recently at the MEC Hobnob. “They thought Donald Trump was the biggest, most magnificent middle finger they could find.”

For many, that’s all that mattered. If Trump delivers on any campaign promises, well, that will just be icing on the cake.

Others are expecting lots of icing. And that’s where the President-elect will be challenged. Talking and proposing are one thing. Getting results is quite another.

Ronald Reagan understood that. So he mixed solid getter-doners into his cabinet and staff along with the requisite political appointees.

Harvard-educated veteran Casper Weinberger had vast government experience as head of the Federal Trade, director of the Office of Management and Budget, and Secretary of Health, Education, and Welfare before Reagan appointed him Secretary of Defense.

Harvard-educated veteran Donald Regan served as chairman of CEO of Merrill Lynch and vice chairman of the New York Stock Exchange before Reagan appointed him Secretary of the Treasury.

Yale educated veteran and quality guru Malcolm Baldridge was chairman and chief executive officer of Scovill, Inc. before Reagan appointed him Secretary of Commerce.

Princeton-education veteran James A. Baker was a highly effective political organizer who practiced law and served as Undersecretary of Commerce before Regan chose him as Chief of Staff. Of course Baker subsequently served as Secretary of the Treasury under Reagan and Secretary of State under George H.W. Bush.

Names floated so far to be on Trump’s cabinet don’t stack up with Reagan’s choices. Only RNC chairman Reince Priebus as Trump’s Chief of Staff appears to rise to that level.

The good news is that Trump’s transition team includes a group team of serious people looking at key issues. Politico.com reported Mike Rogers is looking at national security, David Malpass at economic issues, Ken Blackwell at domestic issues, and Keith Kellogg at defense.

Rogers, a veteran and former FBI Special Agent, retired after seven terms in the House where he served as Chairman of the House Committee on Intelligence.

Malpass served as Deputy Assistant Treasury Secretary under Reagan, Deputy Assistant Secretary of State under President George H. W. Bush, and Chief Economist at Bear Stearns.

Blackwell served as undersecretary in the Department of Housing and Urban Development President George H. W. Bush and as Mayor of Cincinnati, Ohio State Treasurer and Ohio Secretary of State.

Keith Kellogg, Lt. General U.S. Army (retired), served as chief of staff for the 82nd Airborne Division during Operation Desert Shield/Desert Storm, and as director of command, control, communications and computers for the Joint Chiefs of Staff. After retirement in 2003 he served as chief operations officer for the Coalition Provisional Authority in Iraq and as a senior official at several defense contractors.

Hopefully, as these experienced leaders look at the issues they will also get to suggest appointees. They would recommend solid getter-doners, not sycophants.

His appointments will tell if Trump can deliver like Reagan or not.

Posted in Politics | Leave a comment

State Economy Struggles to Hit Half the National Growth Rate

“State economists lower forecast for remainder of year,” read the Mississippi Business Journal headline on October 27th. “Mississippi’s state economists have pulled back on an already-weak economic forecast for the rest of 2016, projecting that the state’s economy will grow only 1.5 percent instead of the 1.6 percent previously predicted,” said the story.

“U.S. economy roars back, grew at 2.9% in third quarter,” read the Wall Street Journal headline on October 30th. “It was the strongest quarterly reading in two years after three straight quarters of sub-2% growth,” said the story.

Hmmm.

Our leaders in Jackson like to blame Mississippi’s weak economy on the “Obama economy.” Looks like the Obama economy did okay outside of Mississippi. But none of this has much relevance to Mississippi’s economic situation.

The simple fact is that Mississippi’s economy underperforms because, over time, our income and employment have been stagnant, eroding our economic engines in many communities.

In August Bloomberg.com reported Mississippi had the greatest drop in real median household income among all 50 states from 1999 to 2014. It was down a whopping 23.1%. (Real median household income is adjusted for inflation.)

More recently, real median household income has flatlined.  It was $40,061 in 2010 and slightly up at $40,593 in 2015.

Similarly, total employment was basically flat. In 2010 employment averaged 1,170,900 vs. 1,189,700 for 2015, a meagre 1.6% total increase over five years.

Oh, but Gov. Phil Bryant in August told the Vicksburg Post that nearly 50,000 Mississippians were working today that did not have jobs in 2011.

Well, not exactly. In August 2016, the Mississippi Department of Employment Security reported the number of employed Mississippians was 1,197,800. In August 2011, the department reported the number of employed Mississippians was 1,204,100.  Uh, that’s a 6,300 drop.

Now, those figures are the true measure of the number of Mississippians working.

However, if you look at the number of people employed in Mississippi in non-agricultural jobs, i.e., business and government, whether residents of Mississippi, Alabama, Tennessee, Louisiana or elsewhere, there were 1,141,600 employed in August 2016 vs. 1,088,800 in August 2011.  That difference is 52,800 to the good.

So, between 2011 and 2016, an additional 50,000 people were working in Mississippi, but they either weren’t Mississippians or, less likely, they had transitioned from farm jobs to business or government jobs.

And that hits at the crux of the problem.  We need lots more Mississippi residents with jobs and better incomes.

Now comes a new study from the Mississippi State Extension Service showing 57 counties in Mississippi lost population from 2014 to 2015. Negative net migration, as it is called, is a negative economic indicator. People move to booming places, but away from stagnant places.

In the same vein, those employment reports mentioned above showed Mississippi’s total labor force decreased by 65,000 from August 2011 to August 2016.

Hmmm.

Flatlined income and employment. Population and labor force declining. Not surprising most politicians look to place blame elsewhere. An extraordinary few might own it and fix it.

Posted in Politics | Leave a comment

University President Terms Getting Shorter

Jackson State University President Carolyn Meyers becomes the latest university president to leave prematurely. She announced her resignation following disclosure of financial problems at the university.

Once university presidents seemed to hold office forever. As a new Kirk Fordice appointee to the IHL Board in 1992, I was awed by the tenure of Walter Washington, 25 years as president at Alcorn State University, Kent Wyatt, 24 years at Delta State University, and Aubrey Lucas, 21 years at the University of Southern Mississippi after four years at Delta State.

Their tenures as presidents were not uncommon. Jacob Reddix served 27 years at Jackson State University, Charles Hogarth 25 years at Mississippi University for Women, John Davis Williams 22 years at the University of Mississippi, and James Herbert White 21 years at Mississippi Valley State University.

When these stalwarts began to retire, presidential tenures started to decline. Robert Khayat served 14 years at Ole Miss, Don Zacharias 12 years at MSU, Clyda Rent 12 years at MUW, Clinton Bristow 11 years at ASU, William Sutton 10 years at MVSU, Ron Mason 10 years at JSU, and John Hilpert 10 years at DSU.

Meyers made it almost six years at JSU as did Dan Jones at Ole Miss. Other recent terms were shorter, Chris Brown and George Ross two years at ASU; Robert Foglesong two years at MSU; David Potter three years at DSU; Charles Lee four years at MSU and Horace Fleming four years at USM; and Martha Saunders and Shelby Thames five years at USM.

For the most part, the shorter the tenure the more issues with the performance of the president.

What happened?  No one thing, but a confluence of things. The presidents’ jobs got more complex and demanding, particularly as fund-raising, political maneuvering, schmoozing, and board involvement became 24/7 demands.

In the old days, presidents were like kings with minimum board oversight. The whispered maxim of the extraordinary Walter Washington was “my way or the highway.” As society became more egalitarian, authoritarian leadership became less acceptable to faculty, students, and alumni. The IHL Board began to seek other qualities in candidates.

At the same time, governors began appointing more diverse individuals, some with agendas, to the board, making the board less like-minded about candidates.

National search firms became entrenched. Even in cases where strong internal candidates existed, search firms were hired to give the appearance seeking the best candidate. The board began to rely on these firms for recruitment, vetting, and ranking candidates. Presidential resumes became more important. What happened was search firms would attract excellent resumes but not always terrific candidates.

Then there was the growing influence of donors, alumni, faculty, and politicians as presidential search committees became more representative of different interests and more involved in the board’s selection process. Their favorites were not always the best choices.

Finally, it’s just hard to pick good presidents and even harder to be a good president over time.

Meanwhile, all eyes will be on JSU’s search.

Posted in Politics | Leave a comment

Individual Taxpayers Should be Wary of Tax Reform Schemes

Legislative leaders brought in an outside expert from the Tax Foundation to push the theory that Mississippi needs to make its business taxes more competitive. She argues lower business taxes, offset by higher user fees, property taxes and expanded sales taxes, will make Mississippi more competitive for business and jobs.

While this approach may make the state more business tax competitive, there is no evidence it will result in more business growth and jobs. Taxes are just one of the many factors businesses consider when looking to expand or open new locations. Market size, wealth, competition and growth prospects; workforce size, skills, wage levels, and future availability; transportation and utilities access and costs; quality of schools and other lifestyle amenities; incentives; and other factors are equally if not more important than business taxes.

Mississippi is already more competitive with its business taxes than it is in many of these other areas. The reality is our market size is small and wealth level is low. Our workforce availability is limited, our overall skill levels low, and our pipeline of future qualified workers from our schools needs improvement. Our transportation infrastructure is in crisis.

Indeed, Mississippi will end up worse off if overdone business tax cuts result in less money for workforce, schools, and transportation.  They need more funding, not less, if Mississippi is to become truly competitive.

Individual taxpayers should be especially wary. After all, who else will bear the tax load shifted off businesses?

While individual taxpayers would be losers from the tax expert’s recommended schemes, out-of-state corporations, not surprisingly, would be winners. While touting itself as an independent voice for prudent tax policy, the Tax Foundation’s annual report displays its increasing bias toward business. “Businesses Need Tax Reform” it proclaims, then touts its annual “State Business Tax Climate Index” and efforts to spur pro-business tax reform around the country. Individual tax equity is not touted.

Note, Mississippi’s corporate taxes already rank highly competitive on the business climate index at 12th.

As legislators struggle to cope with persistent revenue shortfalls and what to do about pending business tax cuts, they rummage anxiously for spending cuts.

Interestingly, the day after Mississippi Today reported legislators may take away the $9.4 million the Department of Health spends on tobacco control programs, the University of Mississippi Medical Center’s monthly Pediatric Update expressed alarm about tobacco’s impact on children.

“68,000 children living in our state may ultimately die prematurely from smoking and related health risks,” said the update. “The annual number of kids who become new daily smokers in Mississippi is nearly 4.5 times higher when compared to annual numbers for the United States as a whole. Data like this reinforces the need for interventions focused on prevention.”

Prevention is the primary goal of the Department of Health’s program.

Shortsighted cuts can have long-term consequences, as this one would have for children and children’s Medicaid, overdone business tax cuts would have for Mississippi’s overall competitiveness, and over-taxed individuals would have for future elections.

Posted in Politics | Leave a comment

Walmart Parking Lots Epitomize Decline of Safe Places

Where is your safe place? Do you have one? Should you have one?

These questions popped up as I read a story in The Commercial Dispatch. While the story was about universities providing emotionally safe places for students, it made me wonder about safe places for people of all ages in our communities.

Once upon a time in Mississippi, local law enforcement could make whole communities feel like safe places. Growing up in Canton in the 50’s and 60’s, I felt safe at home, walking across town to elementary school, and riding my bike to the far end of town to work a night shift at the shirt factory. The only time I recall feeling unsafe was when one or more local bullies decided to whip my scrawny, well, you know.

Progressing to present time, we find local law enforcement in many communities overwhelmed and unable to provide such preventive security.

Perhaps nothing epitomizes the decline of safe places more than Walmart parking lots.

From a Bloomberg Businessweek story in August: “More than 200 violent crimes, including attempted kidnappings and multiple stabbings, shootings, and murders, have occurred at the nation’s 4,500 Walmarts this year, or about one a day.”

From a Mississippi TV station news story: “Police have filed charges against one person involved in a shooting incident that happened at the … Walmart midnight Tuesday. Four possible suspects in the shooting have been detained.”

As a result, more and more mothers, fearing for their safety, now scan Walmart parking lots and carry pepper spray or guns to head off attacks.

From a Mississippi “Community Watch” Facebook page: “White male tall skinny. Wearing work boots blue jeans and navy/black hooded jacket with it on his head. He approach (sic) me walking to my truck with (my baby) in my arms asleep. I already had my keys out. When I saw him when I walked out of Walmart he was close to the grocery side entrance walking across the parking lot. I had already spotted him as suspicious while walking out. By the time I got to my truck he was literally about 10 steps from me and my baby. When I pulled my gun out he turned away and walked on by.”

The Bloomberg story cited a senior police officer who can’t believe that a multi-billion dollar corporation isn’t doing more to stop crime. Instead, he said, it offloads the job to the police at taxpayers’ expense.

If wealthy Walmart can’t/won’t provide safe places for its shoppers, what are persistently robbed quick stops supposed to do? Or citizens facing drive-by shootings and home invasions?

Most communities are too financially strapped to beef up police presence enough to keep all shopping areas and neighborhoods safe places.

This is just one case where home rule would give communities options to address growing problems. Unfortunately, lawmakers in Jackson regularly spurn mayors’ requests for such flexibility.

As for safe places, in more and more communities you’re on your own.

Posted in Politics | Leave a comment

Congress Should Be Ready to Impeach Whoever Wins

Pogo Possum, the anti-hero of Okefenokee Swamp made famous through the satire of cartoonist Walt Kelly, once said, “We have met the enemy and he is us.”

How true is that with regard to the presidential candidates we picked?

In its 34 years USA Today has never taken sides in a presidential election. This year it felt compelled to speak out, calling Donald Trump “unfit for the presidency.”

“Whether through indifference or ignorance,” the newspaper wrote, “Trump has betrayed fundamental commitments made by all presidents since the end of World War II. These commitments include unwavering support for NATO allies, steadfast opposition to Russian aggression, and the absolute certainty that the United States will make good on its debts. He has expressed troubling admiration for authoritarian leaders and scant regard for constitutional protections.”  It also called him erratic, ill-equipped to be commander-in-chief, a serial liar, coarse, reckless, and one who traffics in prejudice.

“Whatever you do,” the newspaper urged, “resist the siren song of a dangerous demagogue. By all means vote, just not for Donald Trump.”

While the newspaper’s editorial board was unanimous about Trump’s unfitness, members were mixed on Hillary Clinton, so did not endorse her.

Colin Powell, former Secretary of State under George W. Bush and Chairman of the Joint Chiefs of Staff under George H.W. Bush, described Clinton as having “unbridled ambition, greedy, not transformational.” He also called Trump a “national disgrace.”

Following Trump’s irrational 3 a.m. and 5 a.m. tweets about a former Miss Universe, lifelong Republican Michael Chertoff had had enough. The former committee counsel who helped lead the Republican charge against the Clintons over the “Whitewater scandal” and served as Secretary of Homeland Security under President George W. Bush, told Bloomberg.com that Trump lacks the temperament and knowledge base to be President; he cannot control his impulses.

How could we come to this?

The bottom line is we let the two major parties lead us into a choice between two deplorable, polarizing candidates at a time the nation needs strong, unifying leadership. And, they expect us to buy into their corrupt processes and go along with whoever wins.

Many conscientious Republicans and Democrats are thinking what a fed up Pogo once said, “I is been pushed aroun’ EE-nuf!”

Folks, there’s lots more to life than Republicans vs. Democrats. So, we don’t have to play the parties’ deceitful game and be our own enemy. We can choose to put our country ahead of bad politics.

One way to do this is to overthrow the bad choices the parties have given us. We should let our Representatives and Senators know we want them to be ready to impeach and convict whoever wins in November.

No doubt majority congressional Republicans will be itching to impeach Clinton. They should be just as ready to take down Trump.

The sad reality is that either of the dull but solid vice presidential candidates, Mike Pence and Tim Kaine, would be preferable to “bigmouth” Trump or “mizzus” Clinton.

Posted in Politics | Leave a comment