SFBG Radio: The message of Wisconsin

|
(44)

Today Johnny talks to Johnny Venom from Chicago about the story behind what's happening in Wisconsin. Listen after the jump.

Wisconsin by endorsements2010

Comments

The defenders of the top 1%'s owning over a third of the country's wealth and not being taxed on same will blow a head gasket over this.

Despite they themselves being nowhere near that top 1%.

The ass-licker mentality of today's Republican is mind boggling.

Posted by guest on Feb. 19, 2011 @ 8:21 pm

Thank the powers that be, that we have Johnny Wendell covering a point in history requiring his iconic journalistic focus and savvy... We got the right dude at the right time... I'm listenin'....

Posted by Johnny's got the savvy energy to get after this story... on Feb. 19, 2011 @ 10:39 pm

Then he would have backed off on the current legislation when the union reps finally agreed to most of the concessions dealing with healthcare costs and pension payments. If he were sincere about fixing the budget, he would have clawed back the tax cuts, many of which were only recently enacted to steal business from Illinois (which had recently raised it's own taxes to attempt to meet a budget shortfall). There is no denying that there is going to be some cuts. But what we have here is politics masquerading as fiduciary responsibility.

Posted by Johnny Venom on Feb. 19, 2011 @ 11:13 pm

not really...isn't this all about the money/i.e. the budget? Aren't folks energized to protest for three days straight because they see this legislation as taking money out of their pockets. Don't people simply equate a loss of bargaining power with a loss of money? These folks have all the right in the world to protest but usually when people say "it's not about the money"- it's about the money...Seems the only strong argument would be to make a case that there is no deficit.

(My undertanding is the tax cut issue is in the subsequent budget not the current deficit they are trying to bridge..)

Posted by Guest on Feb. 19, 2011 @ 11:58 pm

Ultimately, yes, you're right it is about the money. But there is more going on here than just that. Once again, if it was purely about fiscal issues, then the collective bargaining prohibitions would be dropped given that the unions have agreed to concessions.

As for the tax cuts, according to the Legislative Fiscal Bureau (Wisconsin's version of the OMB), they report that it was the special legislation like Special Senate Bill 2 that pushed in tax related provisions for Health Savings Accounts, Assembly Bill 3 that dealt with tax deductions for businesses relocating, and Assembly Bill 7 which was tax exclusions for new employees. All this was passed in light of the recent fiscal strains put onto the budget due to Medicaid appropriations that had to be made.

The last two were pushed through immediately after Illinois raised their taxes, in hopes of poaching businesses from their southern neighbor. It was these pieces of legislation, following the Medicaid financing, that finally pushed the current budget from a $121.4 million surplus to a $137 million dollar deficit.

I will say this though for Governor Walker, he is right to include next year's budget figures into the discussion. I wish others would as well. But the current focus is on the budget at hand. Wisconsin's fiscal year doesn't correctly align with their electoral system, Walker took office and managed to get those tax cuts into law. Those cuts will also rollover into the next budget. But he knew this, knowing that the Medicaid increases were going to be a heavy weight on the budget.

You aren't going to fix a $3.8 billion dollar hole simply by prohibiting collective bargaining. There are tax cuts in that budget that are simply not affordable. I'm not saying not to cut things, just that if there's a list for the chopping block, those tax cuts would be my first victims.

Posted by Johnny Venom on Feb. 20, 2011 @ 8:54 am

Did the businesses that Walker was targeting from Illinois agree to move to Wisconsin if their taxes were cut?

If not, it's a useless giveaway at the expense of Wisconsin's taxpayers, who will have to make up the difference.

Posted by guest on Feb. 20, 2011 @ 9:21 am

But so far I haven't heard of any major firms moving north, though I think I remember reading an antique mall that was on the state line moving over. The fact is, despite Walker's recent tax cuts, his top marginal income tax rate is 7.5% while ours is 5%. Wisconsin hasn't been the only one that has attempted to woo away our businesses, others have been trying for decades. Some have left, just not for Wisconsin. Most of our businesses are either mom and pop businesses where income is pass-thru (hence our northern neighbor's higher income taxes somewhat cancelling out his cuts in corporate income taxes), while other businesses like manufacturing are hard to move. We still have a lot of plants here that make stuff, many still owned by families through generations, it's kinda hard to move those.

The fact is, Illinois is basically a more frigged version of California, we have the financial and physical infrastructure for both big and small businesses. See, what Walker would love is for a major medium sized business that says grosses $100 million/yr to get up and move. Well so far that really hasn't happened. None of the services industry that caters to state and municipal concerns are going to leave because we have a residency clause for most contracts. The big industrial plants take years and frankly it costs a TON to make such a move. We have an awesome transportation grid here for moving goods, be it still cattle or even petroleum or goods coming from....wait for it....the Ports of LA or Long Beach. Like you guys, we got the goods too, only we have really crappy weather for 6 months out of the year. I'm sure as hell sure someone who has to deal with cold lake front weather now isn't going to move up North where it gets just as bad.

On the other hand.....Illinois isn't lying down and dropping dead either. We've been making moves to poach their green jobs, especially wind turbines, since Walker said "nyet" to such things. And like you guys, we went after money for high speed rail that our neighbors didn't want. Hell, we're going after solar panels too...imagine that for my cold state!

Posted by Johnny Venom on Feb. 20, 2011 @ 10:54 am

..."The last two were pushed through immediately after Illinois raised their taxes, in hopes of poaching businesses from their southern neighbor. It was these pieces of legislation, following the Medicaid financing, that finally pushed the current budget from a $121.4 million surplus to a $137 million dollar deficit."

This was a false claim pushed by Rachel Maddow- from Politifact:

'Meanwhile, what about Maddow’s claim -- also repeated across the liberal blogosphere -- that Walker’s tax-cut bills approved in January are responsible for the $137 million deficit?

Lang’s fiscal bureau report and news accounts addressed that issue as well.

The tax cuts will cost the state a projected $140 million in tax revenue -- but not until the next two-year budget, from July 2011 to June 2013. The cuts are not even in effect yet, so they cannot be part of the current problem.'

http://www.politifact.com/wisconsin/statements/2011/feb/18/rachel-maddow...

Posted by Guest on Feb. 20, 2011 @ 11:10 am

"The advocacy group Common Cause has found evidence that Clarence Thomas’ office appears to have lied about his participation in a retreat hosted by the Koch brothers, three years ago, and that Thomas appears to be concealing a gift from the oil billionaires, due to the conflict of interest it suggests. It now appears Thomas reported his appearance at the event, at which his office said he “made a brief stop-by”, as an all-expenses-paid four-day trip to Palm Springs..."

"In the case of Clarence Thomas, he may be in some trouble. Although Supreme Court justices hold their positions for life, illegal activity may be grounds for impeachment. If Thomas failed to report the free trip as a gift, or lied to cover up his connection to the Koch brothers, or to withhold information from the IRS, it could nullify the Citizens United ruling and put Thomas at risk of prosecution, for corruption and abuse of office."

http://www.casavaria.com/cafesentido/2011/02/19/7749/clarence-thomas-par...

Posted by Guest on Feb. 20, 2011 @ 11:29 am

When I'm wrong, I'll admit to it openly, and here, mystery Guest person, I stand corrected with regards to the affects of the tax breaks and the current deficit. Though, for the record, I did include Medicaid into my reasoning...something I believe Maddow did not do.

Saying that, it still stands that the tax cuts will cost $140 million. Are you willing to admit that this isn't helping in the multi-billion dollar deficit issue? So far the biennial budget is looking at a $3.6 million dollar shortfall, and eliminating that $140 million dollar cut is $140 million in the red that Wisconsin wouldn't have to worry about.

Posted by Johnny Venom on Feb. 20, 2011 @ 1:29 pm

"Saying that, it still stands that the tax cuts will cost $140 million. Are you willing to admit that this isn't helping in the multi-billion dollar deficit issue?"

But I don't think we know the answer yet...Yes, if this tax incentive does not draw new businesses from neighboring states then it is a drain on the budget. However, if it does draw neighboring businesses (I believe that is the purpose), then it could be a net plus/revenue generator for the budget. Let's hope there is some form of metric in place to measure its efficacy...

It's a little like the Twitter debate we are having here in SF...why give Twitter a tax break...?

Posted by Guest on Feb. 20, 2011 @ 2:19 pm

Wish I could have seen the expression on Jeff Adachi's face when he realized he was a sock puppet for the Koch Bros. ha ha. That is, if he has realized it yet....

Posted by Guest on Feb. 20, 2011 @ 10:52 am

I hear the Koch brothers were behind the DROP program, that collective "bargaining" agreement Newsom signed with police and fire, the City's decision to give lifetime health care to employees after five years of service, the $170 million bonus the City paid to retirees after the pension fund lost four billion dollars, millions in "sick" day payouts, the "premium pay" scam, pension spiking, bogus disability claims, not enforcing the Charter requirements for police and fire to increase their pension contributions, overtime abuse, Muni absentee rate, Muni operators not contributing to their pensions etc...talented guys those Koch brothers. Makes me feel better knowing we can blame them.

Posted by Guest on Feb. 20, 2011 @ 11:28 am

The next ballot measure needs to include a sworn statement that Sequoia Capital or whatever other conservative organization that funds it does not attend the Koch Bros. retreats or I'm automatically voting against.

Posted by Guest on Feb. 20, 2011 @ 12:05 pm

It is a plot by the Koch Bros., whose influence now extends all the way to the Supreme Court. When is enough enough?

"Justices Scalia And Thomas's Attendance At Koch Event Sparks Judicial Ethics Debate"

http://www.huffingtonpost.com/2010/10/20/scalia-thomas-koch-industries_n...

Posted by Guest on Feb. 20, 2011 @ 11:02 am

If Michael Mortiz, managing director of Sequoia Capital, would pay simply pay income taxes like everyone else, instead of taking it all as undertaxed capital gains, he could probably fill in any SF budget gap single handedly.

What makes this guy think he needs massive tax breaks to give him an incentive to work, but everyone else doesn't need incentives and can pay regular income tax?

How DARE he try to steal health care from the children of city workers!!!!!!!!!!!!!

His whole business model seems to hinge on defrauding the children of san francisco of health care.

Posted by Guest on Feb. 20, 2011 @ 12:46 pm

In addition to stealing health care from babies...! Funny how Wisconsin employees WITH CHILDREN agreed to contribute more for their health care and NO ONE is Wisky is whining hysterically about "stealing health care from children" like apparently we do in SF....Reality check folks....

Posted by Guest on Feb. 20, 2011 @ 1:15 pm

There must be a way for the City to tax the 'carried interest' of managing partners. If Moritz is callous enough to go after the health care of the children of city workers, city works might be able to go after the unpaid income taxes on people like Moritz.

Not only do they not pay income tax, they also do not pay medicare tax on most of of the income that is disguised as capital gains.

Posted by Guest on Feb. 20, 2011 @ 6:30 pm

"His whole business model seems to hinge on defrauding the children of san francisco of health care." Give me a break. Whoever posts this stuff is either stupid or misinformed. I've never met the guy, but I really doubt Moritz wakes up in the morning thinking how can I "steal health care from the children of city workers"?

Private workers pay for their dependents' health care. There is no reason city workers can't pay their own way, too.

Posted by The Commish on Feb. 20, 2011 @ 5:26 pm

Michael Moritz may be incensed that the children of city workers have health care, but I am incensed that this billionaire only pays social security tax on the first $106,000 of his tens of millions or how much he makes every year, enough to fund social security into INFINITY.

Is it too much to ask our billionaires that they just pay the same amount of tax as their secretaries and janitors in exchange for reaping the benefits of living in a free country like America???

Why do billionaires require massive tax breaks that bankrupt America in order to have the incentive to work??

Posted by Guest on Feb. 20, 2011 @ 1:12 pm

Do you know how much he pays in taxes, what his effective tax rate is, etc.? I don't and you don't, either. I've never met Moritz, and I'm sure the guy doesn't need defending, but you are just making stuff up.

Reading this nonsense makes me want to contribute to the next Prop B just so I can read silly, made-up stuff about me, too. It's so unpersuasive, yet good for a laugh.

Posted by The Commish on Feb. 20, 2011 @ 5:31 pm

If he is the managing partner of an equity fund he pays 15% long term capital gains even though he does not have money invested and at risk. In every other job that is called 'regular income'.

http://en.wikipedia.org/wiki/Carried_interest

Posted by Guest on Feb. 20, 2011 @ 6:52 pm

Lobby your congressman to change the tax laws then. You're barking up the wrong tree. This ostensibly is a discussion about public employees contributing more for their generous pension and health benefits to fix a budget crisis...Since these employees have already agreed to do so - maybe we should move on.

Posted by Guest on Feb. 20, 2011 @ 8:05 pm

If SF can have a city income tax, we have to make sure to include 'carried interest' as income so people like Moritz fully understand something....

Posted by Guest on Feb. 20, 2011 @ 8:27 pm

Your posts about Moritz are becoming sad. You seem strangely obsessed.

I could write a long, boring post about how it's highly unlikely the City could impose a city income tax (even under Weekes v. City of Oakland, which Tim Redmond likes to cite), how any such tax would be challenged in court for years in any event, how the chance the CA Supreme Court in its present makeup would uphold Weekes is probably pretty low, how your carried interest analysis is mistaken, and how it all probably wouldn't matter in any event, because his income wouldn't be attributed to San Francisco.

Please focus. It's a San Francisco problem--we have significant unfunded pension/benefit liabilities. It's a specific problem. Blaming Moritz, or any other billionaire, or any other rich guy for society's "big" macroeconomic problems isn't really productive.

Posted by The Commish on Feb. 20, 2011 @ 10:03 pm

That is all.

Posted by Ian Waters on Feb. 21, 2011 @ 2:10 am

Thanks for your tax advice.

Posted by Guest on Feb. 21, 2011 @ 8:13 am

"Local government usually collect property taxes but may also collect sales taxes and income taxes."

http://en.wikipedia.org/wiki/Taxation_in_the_United_States#Income.2C_sal...

Posted by Guest on Feb. 21, 2011 @ 8:33 am

Read California Revenue & Taxation Code section 17041.5. In California, local governments can't impose income taxes. The Weekes case carved out an exception (a "license fee"), but it is of questionable validity today.

We live in California, not Wikipedia-land.

Posted by The Commish on Feb. 21, 2011 @ 11:07 am

A city tax in San Francisco is completely doable if the only thing stopping it is a state tax law.

If he wants to do business somewhere besides San Francisco good riddance.

A tax on carried interest would only follow him where ever he went.

Posted by Guest on Feb. 21, 2011 @ 11:39 am

Local laws can't trump those pesky state laws.

Posted by The Commish on Feb. 21, 2011 @ 1:34 pm

Change the state law. It happens.

Posted by Guest on Feb. 21, 2011 @ 2:41 pm

You should start lobbying to have it changed. The law has only been on the book for decades. And given how the state wants all revenue going to the state these days to solve the budget crisis, I'm sure it might be a challenge to convince our state legislators and/or the voters to change the law so the city can divert some of that revenue to itself. But you make it sound so easy, I'm sure you could do it!

Posted by Guest on Feb. 21, 2011 @ 7:47 pm

Ha ha ha ha!!!

Federal tax deductions for residential real estate have been on the books for decades, too.

Posted by Guest on Feb. 21, 2011 @ 9:24 pm

After Mr. Moritz retires his monthly Social Security benefit check will be about the same as every other worker making the maximum yearly contribution. If he were to pay more into Social Security he most likely would expect a bigger monthly check during his retirement years. I'm thinking that Mr. Moritz pays a lot of money in taxes, much much more than his janitors and secretaries.
If fairness is what is wanted in our system of income taxation than the only fair alternative is a flat tax with absolutely no deductions allowed.

Posted by Guest on Feb. 21, 2011 @ 2:10 am

Think what ever you want.

"Buffett blasts system that lets him pay less tax than secretary"

http://www.timesonline.co.uk/tol/money/tax/article1996735.ece

"Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner.

"Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter."

Posted by Guest on Feb. 21, 2011 @ 8:18 am

If everyone paid the same Percentage (flat tax) you could achieve tax fairness. The secretary would pay less, and Mr. Buffett would pay more, a lot more. But still,
Mr. Buffett currently may pay taxes at a lower percentage than his secretary but he damn sure pays a lot more in tax dollars. I'll bet that if you were to ask Warren Buffett how much income tax he pays he couldn't tell you. Why would he care?

Posted by Guest on Feb. 21, 2011 @ 11:59 am

I don't know about Warren Buffet, but Steve Schwarzman cares a LOT.

Steve Schwarzman On Tax Increases: "It's Like When Hitler Invaded Poland"

http://www.businessinsider.com/steve-schwarzman-taxes-hitler-invaded-pol...

"Word of mouth says that Blackstone founder Steve Schwarzman got suddenly very passionate when talking about tax hikes in July.

He was speaking to board members of a nonprofit organization when, apparently, Schwarzman started comparing the proposal to increase taxes on private equity firms to the conditions in Nazi Germany."

Posted by Guest on Feb. 21, 2011 @ 12:39 pm

"January 2010: Steven Schwarzman's publicly declared New Year's wish for New York was not to help the poor or improve transportation or fund education, but to "create a tax regime for foreign citizens domiciled in the city to have it comparable to the tax treatment of similar people in London. What happens in London is that foreigners, other than Americans, don't pay taxes there in any degree and don't pay taxes in their own home country either, so it's basically a tax-free zone."

http://gawker.com/#!5614777/steve-schwarzman-pr-nightmare

Posted by Guest on Feb. 21, 2011 @ 12:44 pm

One stat tracks the disappearance of America's -- collectively bargaining -- middle class:

US median wage (the average person's) wage, 1968: $12.50/hr
US median wage (the average person's) wage, 2008: $15.00/hr
http://www.stateofworkingamerica.org/charts/view/201

During the same span average income doubled from $14,000/hr to $28,000/yr!
http://www.census.gov/hhes/www/income/data/historical/people/P01AR_2009.xls
******
The federal minimum wage is now $3/hr below what it was in 1968:

Federal minimum wage 1968: ($1.60/hr nominally) $10.15/hr
Federal Minimum wage, 2011: $7.25/hr
http://www.minneapolisfed.org/

Doubling the federal minimum wage might add only 3% to the cost of living -- that is how little money goes to the bottom.
Doubling the federal minimum wage (to today's median wage) would add how much to the price of housing, health care, transportation, clothing, electronics? A Big Mac could go up 33% (fast food being by far the biggest labor user) -- but half the country would get a raise!
I worked out 2% inflation from $7.25 to $$12.50 here: http://ontodayspagelinks.blogspot.com/2008/08/3-cost-of-gdp-output-and-i...
******
Today America is being fought over by two elites. The liberal elite wants to tear up the social fabric (TSA invasiveness) while the conservative elite wants to tear up the economy (tax cuts for the rich-to-deregulated banks-to-borrowers who can't pay back). When I was a kid (67 years old now) the liberals healed the social fabric while the conservatives guarded the economy.

When I was a kid the average person still counted because unions gave us economic and political leverage: as much organization as any special interest and the majority of votes.

This is not the time for Wisconsin to disband the last bastion of American labor, government unions.

Posted by Denis Drew on Feb. 20, 2011 @ 1:59 pm

http://www.nytimes.com/2011/02/21/world/asia/21china.html?_r=1&hp

The internet might just be the great equalizer everywhere--the end of the natural order brought on by social media.

Posted by guest on Feb. 20, 2011 @ 8:49 pm

The labor fight in Wisconsin is far from over and it’s spreading to states like Ohio, Oklahoma and Indiana where protests protecting public -- and private -- sector employee unions have erupted. The labor disputes have become less about money, and more about the rights of employees to unionize.

Ohio Gov. John Kasich's plan to eliminate the collective bargaining rights of public workers fueled protests in the Columbus statehouse yesterday and will likely do so again today. In Oklahoma, state workers are on the offensive as lawmakers there have made pension reform a top priority, but have made no formal proposals. And in Indiana, the labor fight is over bill in the state legislature that would end a law requiring private-sector workers to pay dues and belong to a union that bargains on their behalf.

Posted by Wally on Feb. 22, 2011 @ 1:02 pm

Though it's heartening to see unions taking radical action, I think it is also worth noting that they are fighting on the stark defense (i.e. for their very survival) which can be interpreted as a failure in itself. I've yet to see unions start aggressively taking radical action to EXPAND on their rights. For instance, when was the last time anyone broached the subject of repealing the Taft-Hartley Act. The only person I know of who did this was Ralph Nader during his presidential campaigns.

Posted by Matt Stewart on Feb. 23, 2011 @ 4:26 pm

Most of the media coverage has focused on Walker’s attempts to strip Wisconsin public workers of their right to collective bargaining. However, in a recent op-ed in the NY Times, economist Paul Krugman exposes the larger corporate agenda, which aims to dismantle the healthcare programs, environmental regulations and laws which protect Wisconsin’s middle and working class~

"What’s happening in Wisconsin is, instead, a power grab — an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy. And the power grab goes beyond union-busting. The bill in question is 144 pages long, and there are some extraordinary things hidden deep inside.

For example, the bill includes language that would allow officials appointed by the governor to make sweeping cuts in health coverage for low-income families without having to go through the normal legislative process.

And then there’s this: “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).”

What’s that about? The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.”

If this sounds to you like a perfect setup for cronyism and profiteering — remember those missing billions in Iraq? — you’re not alone. Indeed, there are enough suspicious minds out there that Koch Industries, owned by the billionaire brothers who are playing such a large role in Mr. Walker’s anti-union push, felt compelled to issue a denial that it’s interested in purchasing any of those power plants. Are you reassured?"

http://www.nytimes.com/2011/02/25/opinion/25krugman.html?_r=1&src=me&ref...

Posted by Lisa Pelletier on Feb. 28, 2011 @ 6:05 pm