Tax cuts and jobs?

Since I said this yesterday:

I guess I better use the space for something besides music reviews, analysis of baseball trades, and other non-political items.

As many of you who know my site probably also know, the House put forth its initial proposal for what is being called the Tax Cuts and Jobs Act. (President Trump would have preferred the Cuts Cuts Cuts Act himself, though.) So most of the argument and commentary seems to be on whether this does enough for individual taxpayers – naturally, Democrats revert to their age-old “tax cuts for the rich” saw while some Republicans fret about losing particular deductions.

But I want to address two things in this post. First, I want to try and step into the shoes of a small business owner because part of the bill title is “that three-letter word, J-O-B-S” (with apologies to Joe Biden) and they are the ones who create most of them – including the ones I have now.

I’m not going to get into actual dollars and cents here because this is more of a philosophical argument. Each year business owners hand a share of their revenues off to various branches of government for a host of reasons, but the one item that perhaps draws the most blood, sweat, and tears is that federal tax return they (or, more likely, their accountants) fill out each year. Thus, the idea of both lowering rates and making things simpler works positively in two ways: a little more money to invest in the business for new hires, capital improvements, or expansion (people in my line of work perk up their ears at the latter) and a little more time to enjoy life or improve the business plan. They may not need to give that accountant quite so much, but, alas, there are winners and losers in life. (However, the day we find out H&R Block is lobbying against a tax reform proposal is the day we’ll know we have the right formula.)

The common perception from the Left is that every business owner is a fat cat member of the 1% who pays his employees less than minimum wage, skimps on benefits, and hoards his profits to spend on his fancy car and yacht – Ebenezer Scrooge personified. I don’t know about you but I haven’t met one like that yet, although I will note my previous employer went out and got a BMW i8 complete with vanity plate (and installed the charger in our parking lot) thanks to a series of very successful businesses. But that came after years of long days and lots of hard work, so I wasn’t going to complain because he had aptitude, drive, and a range of talents I didn’t.

By the same token, it’s not unknown for my current employer to be at the office or meeting clients late into the evenings or on the weekends – I know because I used to work in there at those times myself (on top of my full-time job) in order to seize the opportunity I was presented to get back into his firm. Ambitious people laugh at a 40-hour work week, and the overriding question that is being answered to an extent by the Tax Cuts and Jobs Act is whether they should be rewarded for those efforts or forced to hand over the excess to government to redistribute to the less ambitious.

After all, hopefully there comes a point in the life of a business where the boss can’t do it all himself (or herself.) Adding people, though, brings a whole new world of complexity to the tasks so the rewards should be maximized and risks minimized in order to encourage even more hiring when business dictates. If the government takes a pinch less maybe the additional economic activity will make up for it in time.

This brings me to my second point: whose money is it anyway?

Consider the average dollar, which is representative of an intrinsic value. There’s an old joke where someone leaves a $100 bill on a hotel counter while he inspects a room and it quickly makes the rounds paying off various debts up and down the street before the customer decides the room isn’t satisfactory and takes back the Benjamin, which seconds before had paid off the last debt owed to the hotel clerk. Everyone had a value assigned to the cash although the overall transaction was a wash.

When a worker makes a dollar, it’s a tradeoff: even at minimum wage, it’s about eight minutes of his labor in return for a dollar’s wage. In a successful business, the employee performed more in the way of value to the company than the pay but the rate of pay was still acceptable to the employee. (On top of that you have benefits, but for the purpose of this argument I’ll concentrate on pay.) My full time employer bills me out at a rate that is supposed to cover the wage, benefits, and overhead so in return I have work to do. My writing employer gives me an assignment on Thursday night and expects a turnover for the following morning. As long as this is done profitably for both parties, everything is cool – the problems occur when labor costs begin to outweigh value added. (For an example, consider why you are faced with a kiosk instead of a live person in some fast food restaurants – human order takers didn’t add a lot of value if they were inaccurate, grouchy, not feeling well, or disorganized, especially at the $15 an hour for which they were pining.)

Now think about a dollar spent in taxes, where the tradeoff is completely different. There are a number of vital services these taxes pay for, especially at a local level where the business receives its public safety protection, maintenance for the roads, portions of the utility infrastructure, and various other items which vary based on the jurisdiction.

Unfortunately, the higher up the taxation food chain you go, the more likely you’ll find these tax dollars aren’t creating value. Oftentimes these entities will act as a pass-through, returning tax dollars to the state or local jurisdiction after keeping a cut for themselves and necessitating the employment of a grant writer on a local level. It’s making a pencil-pusher rich, but that’s not really adding to society like a guy out working on an oil rig, writing computer code, or burning the midnight oil trying to figure out how to please her engineering client. Even worse, that dollar may be paying the bureaucrat who’s writing the rule that will do the business in at the behest of a lobbyist bought and paid for by some special interest.

By keeping dollars in the more productive and efficient private sector, not only does lowering taxes help increase GDP but it also provides the incentive for people to work harder. I’ve often cited Atlas Shrugged as one of my favorite books, not because it’s a feelgood story but because I see it as an absolute indicator of where our nation could be headed under the government we’ve put in place. If working harder has no reward, then why do it?

We have a long way to go before we see tax reform, if it even comes about at all because Republicans in Congress aren’t completely sold on the package. (I thought the GOP was supposed to be the party that supported lower taxes – didn’t you?) But the argument shouldn’t be who wins and loses financially – it should be about whether we believe it’s our money we’re getting for our labor or if we feel we just get to use that which is benevolently granted to us by government.

Some skin in the game

Even though he won the coveted monoblogue endorsement, I wasn’t really trying to make this an all-Bobby Jindal all the time site. Surely he’s spending hundreds if not thousands of dollars weekly on his own internet presence so Bobby doesn’t really need my help with making and sharing news.

But it seems as of late that Jindal is putting out stuff that’s, well, presidential. He grabbed the bully pulpit with his remarks on cultural decline the other day and now he has come out with a somewhat unique tax plan that makes the point people need to step up and take a little responsibility. Unlike many others in the race, Jindal believes that it’s a “terrible mistake” that nearly half of people pay no federal income tax. Instead, he proposes a modest 2% tax bracket for the lowest wage earners, with many others falling into a 10% bracket and the top bracket paying 25%.

Now that low top rate and the fact everyone pays will obviously get the Democrats and their class-envy allies screaming about tax cuts for the wealthy being paid for by everyone else. My advice to them: shut up. I’m tired of that rhetoric, particularly when we live in a nation where the top income earners pay far more in tax than their share of the overall wealth.

Even better from my perspective is that we’re not shooting for revenue-neutral here. No, this will bring less money to Washington so more stays in your pocket where it belongs. Jindal admits, “the only way to shrink the size and influence of Washington is to starve it.” Or, as I call it: an admirable start.

While this isn’t a substitute for the benefits of a consumption-based tax, Jindal makes an important nod in that direction by allowing tax-free savings accounts with contributions of up to $30,000 per year. If you can’t tax consumption, at least reward savings.

Winning my endorsement came not just because Bobby was well-versed in a conservative manner on the issues, but in large part because these positions are thought out and explained for the benefit of both the average voter and those who are interested in the wonkish side, like me. Compared to the Jindal campaign, too many others have the depth of a cookie sheet.

Finally, I want to play devil’s advocate for a moment. I can almost see the argument about how the states will have to step in and increase their budgetd because the federal government will have to cut out of necessity. This may be true – but wouldn’t you rather fight budgetary battles in Annapolis, Dover, or Sacramento than in Washington? Even after seven years, Jindal spends less money than his predecessor did. We praised Larry Hogan for only raising the budget by one percent, but imagine if he cut it nearly 10%.

We stand at a crossroads in this nation. Many seem to be conceding that our course is now just to do the best we can in hoping our freedom isn’t extinguished in one fell swoop, and seem to be happy with tamping on the brakes as we lurch toward a train wreck of our own making.

I look at things differently. People see Donald Trump as someone who would shake up the status quo, but I question his conservatism on a number of issues. He authored a tax plan which removes over half of taxpayers from the rolls, meaning the takers will always outvote the givers and the incentive to reduce government will be gone. In a nation formed on the principle of limited government, we retreat further and further from the ideal. Sooner or later we will be back where we started since Trump isn’t serious about addressing our runaway spending.

I spoke to my mom the other day, and I reminded her of what Washington is. Years ago we lived in a house where a colony of bees had taken residence under the porch. So my parents put out a piece of cardboard and spread a sticky substance on it – a couple days later it was full of bees. To me, Washington is that piece of cardboard and all that taxpayer money is the sticky stuff the bees flock to. The only differences are that we’re all stuck and we’re all being stung by that mass of bees that have taken up shop inside the Beltway.

It’s long past time to call in a beekeeper to put those worker bees in a more productive place. Bobby Jindal just might be that guy.

Competitive advantage

On Friday I received the latest update from Newt Gingrich in my e-mail box. Even though I don’t always agree with him as to tactics – and his Presidential campaign in 2012 went nowhere but to Salisbury University – the one thing you cannot take away from him is the 1994 Contract With America, signifying a Republican resurgence in the post-Reagan era. And you have to respect him for thinking years or decades forward, such as he did in this case.

His piece on Friday looked at the economic prowess of states which did not collect an income tax in comparison to those that did. It even cited some of the same Art Laffer data that unsuccessful gubernatorial candidate Charles Lollar used in his pitch to eliminate Maryland’s state income tax.

But the part which intrigued me came toward the end, when he wrote about the effort by Vince Haley, a State Senate candidate, to eventually eliminate Virginia’s state income tax. Certainly it doesn’t have a great chance of success in the near term with a Democratic governor, but one has to ask what the effects would be if the commonwealth made it all the way down that path – and how would it affect us?

For nearly four years, a significant part of the time of my outside job has been spent on the Eastern Shore of Virginia. I’ve been over most of that strip from Chincoteague to Cape Charles for some task or other, but if you just pay attention to the drive along U.S. 13 you can see that the ESV is not the wealthiest area, nor are many ingredients for prosperity present. Compared to Virginia’s 4% population growth as a whole, the two counties which make up the Eastern Shore are leaking population, with Northampton County (the more southern of the two, closer to the Norfolk region) dropping by 2 percent and Accomack County (closer to Maryland) holding almost steady, with an estimated decline of less than 20 people in a county of just over 33,000.

By way of comparison, the two combined are less than half the population of Wicomico County, and there are good reasons for that: their geographic isolation at the end of the Delmarva Peninsula and a lack of job opportunities outside of the Wallops Island NASA station. Locally, their slogan is “You’ll Love Our Nature” and that is one thing the area can boast given its coastlines on Chesapeake Bay and the Atlantic Ocean are often less than 20 miles apart and meet at its southern tip.

Elected officials of all stripes are trying to increase business at the Wallops Island complex as they see the potential of unmanned space flights from the facility, with the prospect of good-paying ancillary jobs the spaceport creates. But the benefit of not having an income tax would likely be an influx of well-to-do retirees and others with the disposable income residents of the ESV currently lack. It may even be a better attraction than coastal Delaware and its lack of a sales tax, since those outlets are a relatively easy drive away from the northern reaches of Virginia’s slice of the peninsula.

Those who try to promote the area probably realize that prospects for certain types of businesses wouldn’t be very good because the ESV lacks some of the infrastructure necessary for manufacturing. But if the area becomes advantageous in a financial sense thanks to an elimination of the income tax, it can become a playground of sorts for affluent retirees who would like to slow down and enjoy a more rural lifestyle, allowing the remainder of the residents to share in that wealth. On the other hand I can also understand where many ESV residents may object to eliminating the state income tax, especially if they receive Virginia’s version of the Earned Income Tax Credit they call the CLI.

If all this came to pass, though, Maryland would be left in the middle, suffering from having a sales tax-free state siphoning off its retail industry and an income tax-free state choking off its wealth. (Don’t forget that an income tax-free Virginia may have devastating effects on the capital region of Maryland, too.) Of course, we can work to eliminate both those issues but it would take a larger sea change in philosophy than Annapolis has the stomach for.

It may not be the golden ticket to prosperity, but given the slow decline of our Delmarva neighbors to the south a drastic measure like eliminating their income tax may be the only way to resuscitate the area.

Plans and schemes for jobs

One recurring theme of this site is my interest in the manufacturing sector, both nationally and regionally. I suppose the realization that much of what we buy is supplied by a nation which points missiles at us and holds trillions of our debt made me consider the need to think a little bit more about self-sufficiency.

In the generations of my 78-year-old father and my last living grandparent, who died at the ripe old age of 90, America built things. Many cite Detroit as an example of where we as a nation once were “makin’ Thunderbirds,” but we made a million other consumer products as well, all over the country. And while the Thunderbird hung on through 2005 – as did my late grandfather – many of those other manufacturers long since had abandoned us for greener pastures overseas where things could be made more cheaply and regulations weren’t nearly as strict. The latter had to be the reason that companies could spend huge amounts to ship products across the ocean in order to bring them back to our market – the market where, in many cases, these same products were once made in factories which sat shuttered and dormant.

That’s why I’m glad to see some of our gubernatorial candidates pay attention to this long-neglected sector. In doing some research for this piece, I found that just one on the Democrat side, Doug Gansler, is making an issue out of manufacturing and doing more than simply giving platitudes in addressing it. I must say some of these ideas are worth discussion and adaptation; unfortunately Doug takes the time to pander to a certain crowd in advocating for the self-defeating ideas of a higher minimum wage and additional mandated sick leave – these would only discourage manufacturers and businesses from locating in this state. Gansler doesn’t quite understand the concept of market forces with some of his proposals, but with some tweaking a few – particularly the apprentice program – could be workable as an expansion of vocational education.

On the other hand, the leader in this arena on the GOP side is Ron George. While he already had a good beginning as far as job creation goes, yesterday he expanded on his existing ideas of rebuilding manufacturing in Maryland – as he pointed out at our Lincoln Day Dinner, “I cannot cut welfare payments unless I have those entry-level, mid-level jobs.” This is what George proposes to do:

The technology and life sciences industries in Maryland have taken off in part because of significant tax credits and a Tech Services tax repeal. By trusting you to use your revenue to enhance your businesses and create jobs, Maryland has become one of the most successful regions in the country for IT, healthcare technology and biotechnology companies.

I’m proposing we make the same investment in attracting and rewarding new manufacturing firms for creating jobs in Maryland. As Governor:

I will lower the Total Effective Tax Rate of new capital-intensive manufacturing firms from today’s current rate of 31.9% to 20% by 2016.

In the short term, I will work with local and county governments to lower property tax rates and with the legislature to exempt equipment from the property tax of manufacturing firms.

By 2018, I will eliminate the business personal property tax, returning stability and certainty to the manufacturing industry.

This proposal is an investment in the perseverance and innovation of Maryland workers. We must bring manufacturing back to Maryland.

While there is an appeal to eliminating the income tax we have to bear in mind that, as currently constituted, revenues from the income tax make up 22 percent of the overall pie, while business taxes make up far less – eliminating them, one could argue, would create enough of a multiplier effect that the other taxes could eventually also be reduced (with prudent spending, of course.) Having to account for the loss of a 22 percent chunk of state revenue is the reason why all of the income tax proposals out there phase themselves in rather than eliminate the income tax in one bite. (Ever notice, though, that tax increases are rarely phased in?)

But there’s also a lot being left on the table through the short-sightedness of the current administration, and while Gansler and his cohorts on the Democratic side are (literally) tilting at windmills for job creation, we can conclusively show that one $3.8 billion project will help a portion of the state succeed long-term. Maryland was one of the first states studied in a new series of blog posts detailing the impact of the energy industry.

And while the API concedes the state isn’t a leader in the production of oil and natural gas, there’s nothing saying we can’t hold our own through a combination of Marcellus Shale exploration in the state’s panhandle, the prospect of more natural gas in the heretofore barely- or unexplored Taylorsville, Culpeper, Gettysburg, and Delmarva (!) Basins, and perhaps oil drilling offshore. Even the idea of testing the waters can have a positive economic impact on a particular area, and one major key in attracting industry is having inexpensive sources of energy. We hear a lot of complaints from industry about the cost of electricity in Maryland, but having more natural gas (and the power plants to use it) would be of assistance in drawing manufacturers.

Now if the candidates can put together a proposal of transportation structure improvements, one which includes an interstate-grade highway north from Salisbury to I-95 (with the cooperation of Delaware) and the completion of the originally envisioned I-97 across the Potomac to meet with I-95 near Richmond to save trucks from having to deal with congestion around Washington so goods could find their way to market much more easily, I’d really be a happy camper. But for now these will have to suffice.

Just as an aside, you just might be hearing a lot more from me on the subject. Stay tuned.

The tax man cometh

I was perusing a LOT of e-mail today because I had a short night and long day, and among the items I found was from this Rasmussen survey:

A new Rasmussen Reports national telephone survey conducted over the past weekend finds that 75% of American Adults have filed their income taxes, while another 13% expect to do so by today’s deadline. Five percent (5%) plan to get an extension.

Since I did the taxes for both Kim and I over the weekend, I think I qualified in that 75 percent category. (Surprisingly, I didn’t get screwed but probably screwed myself by giving an interest-free loan to Uncle Sam.) But what I can’t figure out is the 8 percent who are unaccounted for – are those the people who pay estimated tax? Or, were these the people who don’t earn enough to have to file? Way back when I was in college I had that situation, only filing because I wanted the money from my backup withholding back. It may have only been $50 or $100, but it was my money. Otherwise, if 8 out of 100 aren’t filing, that seems like a whole lot of civil disobedience.

Yet while April 15 is the day of infamy when we pay our tribute to the Internal Revenue Service, the real day we’re relieved from this annual burden falls on April 28. That’s the day those of us working in the Free State since January 1 finally pay our debt to the federal and state governments, according to the Tax Foundation. (Those of you reading across the line in Delaware are relieved a little earlier, this Friday the 18th as a matter of fact. Go out and tip a 16 Mile or Dogfish Head to celebrate.) Meanwhile, the state where Anthony Brown was endorsed to lead doesn’t have Tax Freedom until May 9, so he would feel right at home there in Connecticut.

Naturally, the whole idea of filing a return is one of aligning what the government thinks you should owe (and takes out of your paycheck) with the actual amount due after all the calculations are done. They don’t really mind sending your money back – or adding a little extra to that amount if you qualify for the earned income credit – but heaven help you if you owe them more than a few hundred dollars. They’ll have the audacity to penalize you even more money then! Unfortunately, that doesn’t work both ways, but most people believe they’ve pulled one over on the feds if they get a few thousand dollars back. $5,000 looks great as a lump sum, but if people were smart they’d work it in such a way they get the extra $100 a week. (That’s not always possible, though – again, the government sets the withholding rules and I’m sure they’re not doing it for us to accrue a benefit.)

Many of us live our lives in order to avoid paying taxes one way or another. But wouldn’t be easier if the nation did what several states have already done and decided to live without an income tax? I think the FairTax is a pretty good idea myself and talk about it always peaks this time of year. While nothing can be done about until 2017, why not lay the groundwork for doing something more than talk?

Martin O’Malley’s (not-so) greatest hits – how about a new song?

Returning once again to a familiar role of thorn in the side and burr under the saddle, Change Maryland and Larry Hogan took the occasion of the final legislative session under Martin O’Malley to remind us of his underwhelming record of “accomplishments” over the last long eight years, wrapped up in one release. All we needed was the bow, as Change Maryland remarked that:

  • They broke promises to state workers by diverting $200,000,000 from pension funds to plug their budget gap.
  • They’ve eviscerated local arts funding to hike the film tax credit for Hollywood millionaires.
  • They raided the Transportation Trust Fund then raised gas taxes to pay for mass transit.
  • They hiked income taxes on families, small business and large employers.
  • They blew $125,000,000 of our tax dollars on a health exchange website that still doesn’t work and was never needed in the first place; today, more Marylanders lack health insurance than when O’Malley-Brown took office.
  • More than 73,000 residents have had their health insurance policies cancelled and tens of thousands more have seen massive increases in their premiums and deductibles.
  • They put the teacher union bosses that bankroll their political machine ahead of students, parents and classroom teachers.
  • They’ve badly mismanaged the education budget, as a result inner city schools are falling farther behind, state SAT scores are down and elementary school reading aptitude is flat. And, even the teacher union said their rollout of Common Core was a mismanaged “train wreck.”
  • Their job-destroying tax hikes on the so-called rich and small businesses – those individuals earning $100k or more – backfired, missing revenue projections.
  • Some entry level jobs will pay a little more but there will be fewer of them.
  • There’s a federal investigation into the Anthony Brown Health Exchange but state lawmakers aren’t issuing their findings until well after the primaries.
  • Thousands of employers are now “paying their fair share” in taxes albeit to Virginia and the Carolinas; about 6,500 companies have left Maryland taking with them more than 100,000 jobs.
  • Likewise, more than 31,000 Maryland residents left for more affordable states, taking $1.7 billion each year out of our economy; among these were thousands of seniors on fixed incomes who can no longer afford to retire near their families.
  • It costs you more when it rains and more again when you drive to the beach.

Describing the O’Malley era as one where, “(i)n nearly every quality of life measurement our state is worse off than it was seven years ago… even areas that showed modest improvement came at a horrendous financial cost due (to) Martin O’Malley and Anthony Brown’s mismanagement and one-party rule in Annapolis,” it’s clear that Hogan isn’t too enamored with the last seven years.

But while Hogan strives to “get the government off our backs and out of our pockets so we can grow the private sector, put people back to work and turn our economy around,” we’re more or less supposed to take his word for it. Obviously some of these items he complains about from the outside will be ones he may well find useful when he takes over the governor’s chair. For example, he (or anyone else for that matter) will have to figure out how to backfill the pension funds, live with the increasing minimum wage (which, for all his charms, he won’t be able to get the General Assembly Democrats to rescind), and roll back taxes and fees to previous levels yet keep the budget in balance. That aspect may actually be the easiest because he would set the budget. Unfortunately, we’re stuck with Obamacare for at least the first two years of anyone’s term, and probably longer.

However, I have a prediction for you. If the budget gets smaller – or even if it’s level-funded – you will hear a howling like you’ve never heard before from the special interests, press, and Democrats (but I repeat myself) who will be out marching in the streets against the heartless Republicans. Remember why we had a Special Session a couple years ago? It was because we passed a “doomsday budget” that was “only” $700 million higher than the previous one, and despite GOP objection we ended up raising spending another $500 million. Again, that was with a budget increase! Heaven help us if we actually proposed spending less money!

So those we elect in 2014 need to be ready and be stiff of spine because those Annapolis fat cats are going to come after us. We threaten their existence on the government teat and they know it. Having a $125 million boondoggle of a health exchange isn’t helping, which is why that scandal is being swept under the rug just as fast as the broom can collect the dirt.

In this part of the state we have some opportunities to chip away at the Democrats’ overall advantage. We’ll have to wait until 2018 to win back the District 37A seat – which will be held for the time being by a woman who I predict will have the same reliably far-left voting record as her predecessor – but aside from that we can speak our piece by ejecting two members of the General Assembly who will occasionally vote the right way when they get the hall pass to do so, but can be replaced by two members who we know will stand up for our interests. We can confound the Democrats’ cynical redistricting ploys by elevating Mike McDermott to the Senate and getting the fresh new ideas of Maryland Municipal League president Carl Anderton, Jr. into the House of Delegates.

Changing the state means pulling our weight, and the Eastern Shore can do most of its part by leaving just one Democrat east of the Chesapeake for the next four years.

Media matters

David Craig is claiming to be the first to launch a series of radio ads touting his “glide path” tax plan, in which he exhorts Marylanders to “vote yourself a raise.” Give a listen to the one-minute version.

In the release which accompanies this video rendition of Craig’s ad, though, it notes that the spots are 30 seconds long. I’m not sure what portion of the long-form version they kept, but the ads are now supposedly running on two Baltimore radio stations, WBAL-AM and WCBM-AM. Obviously I don’t know what sort of buy they made, or how much they paid, but my guess is that they spent a little more than the $5 a spot Red Maryland Radio is charging – and presumably have a far larger audience, depending on placement. If they are on during Rush Limbaugh, yeah, that’s a big audience.

I like the touch of the female narrator, which will contrast with the mainly male hosts and attempt to soften Craig’s image. He already comes across as the grandfatherly type given his age and demeanor – that may compare favorably with the rock-star image our current governor has.

As Craig’s campaign points out:

This is the first, paid-media buy by any of the gubernatorial candidates and begins a month-long radio campaign that promotes a bold plan to lower taxes burden on hard-working families, and finally does something to keep Maryland citizens and businesses from moving out of state.

Ending the personal income tax is only one part of our plan to turn back the onslaught of insane new taxes and tax increases created over the past eight years by the O’Malley-Brown administration.

Obviously they also add:

And as always, to keep these radio ads running and ultimately change the ultra-liberal, one-party culture of Annapolis we will need your financial support.

All of the candidates are far short of the social media juggernaut which is Change Maryland – in comparison, David Craig is by far the piker with just 4,620 “likes.” But Craig used that Facebook platform today to talk finance:

It comes as no surprise that Maryland will see a decrease in projected revenues in FY15. The O’Malley/Brown administration through their failed economic policies have once again opted to kick the can down the road. Maryland’s working and middle-class have been asked to bear the burden of their mistakes for the last 7 years; as a result, many have fled the state because life in Maryland has become unaffordable.

Under our administration, Jeannie and I will provide real substantive tax relief for all Marylanders and balance our budget by ending uncontrolled spending. We will make Maryland affordable once again.

I suppose the key question which occurs to me is whether placing the state on a “glide path” will be enough relief for those beaten and battered Marylanders who are ready to throw in the towel and head for greener pastures. Craig’s idea isn’t quite as aggressive as the competing tax plan by Charles Lollar, who believes the additional sales tax and economic activity will make up the difference. So while they are waiting for a second term of David Craig, how many will go to those places which already feature all these tax advantages?

Whether it’s the competition or just getting more familiar with the levers of state government, it is encouraging to see David getting more bold with many of his ideas. Perhaps he can shake that moderate image enough to get through the GOP primary, and I’m sure that’s where the radio ads are aimed.

Dossier update number 1

Back in December, once I finished the original dossier series, I noted this would be an ongoing process. To that end, here are further statements made by the three contenders at the time, with the addition of items from Larry Hogan.

Each of these subcategories will be revisited, with changes in score noted.

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The 2014 monoblogue endorsement will be based on the following formula:

Election/campaign finance reform (3 points)

Larry Hogan: As a practical matter, seeking public financing made sense for Mr. Hogan, who entered the Republican primary race relatively late and was unlikely to raise as much privately as he may qualify for publicly. But he also noted that his decision ‘sends a great message’ about his grass-roots efforts. (Baltimore Sun, February 4, 2014)

Ron George has also talked about taking public financing, although he’s made no formal decision on the matter. He had no points anyway, nor will Hogan receive any.

Illegal immigration (5 points)

No candidates have made significant public pronouncements on the subject, so no changes and no points for Larry Hogan.

Dealing with Obamacare (7 points)

David Craig: Craig has previously called on O’Malley and Brown to stop wasting money and hindering access to health care and to promote direct enrollment options through insurance carriers and brokers. The Administration then took a modest step in that direction by working with insurance industry leaders to develop a telephone help line. (press release, February 10, 2014)

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Craig, the Republican gubernatorial candidate, said the O’Malley administration should instead be helping people get coverage directly through the insurers. He wants to reallocate $150 million, originally earmarked in part to market the problematic exchange, toward promoting alternative enrollment options.  (Fox News, January 7, 2014)

*

Craig’s proposal would seek an HHS waiver to re-program funds to launch a public awareness campaign informing consumers of their right to obtain health insurance directly through carriers. A complimentary awareness campaign would inform people of their rights to utilize Maryland insurance brokers who are licensed and experienced in helping individuals with health insurance. Utilizing call centers for those needing assistance with the website would remain in place. Craig, however, would re-examine the navigator model in which people having problems with the website must set appointments with temporary workers disbursed among several organizations.

As for the vexing issue of low-income individuals seeking subsidies, Craig supports U.S. Sens. Ben Cardin and Barbara Mikulski’s proposal to HHS to enable a direct data hub allowing people to obtain financial assistance without going through an exchange. (citybizlist, January 7, 2014)

Charles Lollar: Lollar advocates making hospital costs “much more transparent” by posting the prices. “Until we control the costs we’re not going to get our arms around the health care issue.”

“I’m all for a moratorium on the Affordable Care Act.” (Fox 45 debate, January 16, 2014)

I had previously chided Craig for not offering up solutions (although he had done a nice job identifying the problems) but I’m not sure I like much of the approach he’s taking besides the idea about promoting alternative enrollment options. I’ll give him 1.5 points, up from none.

Lollar seems to have a better idea as far as approach, although it’s still very vague. The moratorium alone, though, is worth 2 points (he had none as well.)

Larry Hogan hasn’t addressed this, so no points.

Energy policy (8 points)

No candidates have made significant public pronouncements on the subject, so no changes and no points for Larry Hogan.

Education (9 points)

Ron George: He acknowledged that a repeal of Common Core “ain’t going to happen in the state” of Maryland. But he argues for putting the educational focus back on what he calls a “local locus of control” rather than a one size fits all federal mandate. George also believes it is important to teach entrepreneurship and financial literacy in schools in an effort to help minorities and low-income Marylanders understand how to be successful in a free enterprise system. (In The Capital, January 15, 2014)

Charles Lollar: Lollar wants to stress internships for high schoolers, with the help of corporations. (Fox 45 debate, January 16, 2014)

Let me talk about Ron George first. It’s interesting that he has gone from “I intend to fight it with all my energy” in September to “(repeal) ain’t going to happen” just four months later. I have a problem with that change of heart because if you’re elected as governor you have an automatic bully pulpit.

Look at how we were saddled with gay marriage. It didn’t happen until Martin O’Malley decided to burnish his 2016 credentials and made it an issue in 2012 (with an assist from Barack Obama, who needed the gay vote.) If you want to get rid of Common Core, you browbeat the legislators who oppose you until you get your way. So I took him down from 4 points to 3.

On the other hand, I think Lollar’s idea is pretty good so I bumped him from six points to seven.

Second Amendment (11 points)

David Craig on Rodricks show tells Dan Yes I SUPPORT concealed carry! (Facebook page, February 10, 2014)

Larry Hogan is a strong supporter of the Second Amendment and is opposed to SB 281. He will work to keep guns away from criminals and the mentally ill. Hogan supports tougher mandatory sentencing for criminals who commit crimes with a gun, but he is against taking away the rights of law abiding citizens. (Facebook page)

I added a half-point to David Craig (from 8 to 8.5) for the clarification. Conversely, I think Hogan’s canned response is somewhat wishy-washy and political. He may be opposed to SB281, but will he repeal it? The time for opposition is over – the word is “repeal.” So he gets 4 points of 11.

War on Rural Maryland (12 points)

Charles Lollar: Leadership in Annapolis needs to craft a regional solution to this problem that requires all states that pollute the Bay to “pay their fair share” to keep it clean. We must not allow legislators in Annapolis to “hurt Maryland first” by bankrupting hard-working farmers with a “Chicken Tax” and putting the future of Maryland’s number one economic industry at risk. (press release, February 5, 2014)

Lollar picks up a half-point for this, from 5 points to 5.5 points. It’s pretty easy to oppose the chicken tax but Lollar did it quite forcefully.

Role of government (13 points)

Larry Hogan: Job one will be to get the government off our backs and out of our pockets so we can grow the private sector, put people back to work and turn our economy around.

Every decision Larry Hogan makes as governor will be put to a simple test – Will this law or action make it easier for families and small businesses to stay in Maryland and will it make more families and businesses want to come to Maryland?

If something comes across Hogan’s desk as governor that doesn’t pass this test, he’ll veto it. (campaign website)

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We’ve got to be able to run the government, provide the services that are important and necessary to people as efficiently and cost-effectively as possible, so it’s not like let’s lop off this department or stop providing these services – I think it’s just looking at zero-based budgeting and doing outside audits of every state agency and saying how do we use those tax dollars more effectively.

I think we need to focus on – these aren’t Republican problems or Democrat problems, these are serious problems that our state has. We’ve got to reach across the aisle and work together between the parties to come up with common-sense solutions to solve these things. (NewsTalk with Bruce DePuyt, January 21, 2014)

Charles Lollar: A government should serve its citizens, not burden them. It must also provide for citizens truly in need without trapping them in an endless cycle of dependency on government programs that erode their self confidence, human dignity, and a chance to live the American dream.

The answer is not to grow bigger government.

The answer is to empower people with the skills and opportunity to grow a better future for themselves, and not allow government to stand in the way of these goals. (Facebook page, January 12, 2014)

Okay, as far as Larry Hogan is concerned, I get it. You want to work with Democrats. Good luck with that, because we will likely have four years of gridlock unless the voters of Maryland come to their collective senses and elect a Republican majority in the General Assembly. You will have a LOT of vetoes otherwise.

I have yet to be convinced there is such a thing as a broad centrist coalition, since to me all it means is we walk further away from truly being a Free State rather than sprint headlong as we are now. But I will allow 4 of 13 points for the smell test and the zero-based budgeting.

Lollar loses one point for that answer, from 6 to 5. Where is it government’s role to provide for those truly in need? Shouldn’t that be more of a function of the faith-based community? The very definition of government standing in the way is to have government programs one can become dependent on – to me the continuing spiral of unemployment benefit extensions is a perfect example.

Job creation and transportation (14 points)

David Craig: I think that each individual county should establish its own minimum wage. It just makes sense that local officials make laws and the State doesn’t simply dictate what should be done. (Facebook page, February 11, 2014)

Ron George: We must focus on expanding opportunities for entrepreneurs and technical training for our unemployed to protect and grow our middle class for generations to come. (Press release, January 23, 2014)

Charles Lollar: Of course we want better opportunities, better modes of transportation – a diverse collection of different ways to get back and forth to work. Liveable, workable, playable communities where you can actually live, work, and play in the same place and have a legitimate conversation with yourself in the morning whether to walk or drive your bike to work and get there on time.

I think (the Purple Line) is absolutely doable. The question is – is it affordable? If it is, let’s push forward. (2014 gubernatorial candidate transportation forum, February 18, 2014)

The idea David Craig has is a good one, and would have raised him a full point if he had allowed counties to do away with the minimum wage altogether. Yes, this would be a fight with the federal government but it’s a Tenth Amendment fight worth having. I’ll give him a half-point so he goes from 9 to 9.5 points.

Ron George already had a very solid approach, so there wasn’t a lot of room for imporovement there. The statement is a little bit generic.

Suddenly, though, I think Charles Lollar caught his populist, pandering disease at an inopportune time. I know Red Maryland nailed him for one statement (which brought this gem to my attention) but I remembered that Lollar was opposed to the Purple Line last September – now he says it’s “absolutely doable”? He wasn’t pushing the bus alternative in front of that crowd.

And the phrase he was looking for insofar as “livable…communities” is (so-called) Smart Growth. Don’t encourage the idiots, Charles. I took off three points, from 7 to 4.

Hogan misses out on this category so far.

Fiscal conservatism/taxation (15 points)

David Craig: Under Craig’s plan, tax brackets would be lowered across the board to 4.25 percent as of 2016. Couples now pay a basic rate of 4.75 percent on most of their income. Wealthier Marylanders pay a higher percentage on a sliding scale that tops out at 5.5 percent on income above $300,000.

Craig said he would couple that with an increase in the personal exemption from $3,200 to $5,000. He said that will provide relief to middle-class that would help offset the face that the greatest benefits under his plan would go to the higher income brackets, which would see the highest percentage drop.

In the second phase, Craig said he will call for a further reduction to a maximum rate of 3 percent — with a bump in the exemption to $6,000.

Craig said a third phase in his plan, which would come sometime in what he hopes will be his second term, would eliminate the tax entirely. He said his proposal would not affect county piggyback income taxes, which the state would continue to collect.

According to Craig, elimination of the income tax would put Maryland in the company of nine states that have no income tax, including Texas, Florida and Tennessee. (Baltimore Sun, February 18, 2014)

Ron George: When asked what policies he will put in place to foster job creation, George said lowering the corporate tax rate is a necessary first step. “We have to lower the corporate tax rate,” he said. “I would like to get it down to 5.75 percent and I think that sends a strong message out there that we’re open for business.” This, he argues, will help bring businesses back to Maryland thereby expanding the tax base and creating more revenue for the state. (In The Capital, January 15, 2014)

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In addition to the expansion of jobs, George is planning on cutting income tax by 10 percent, building a tax base in Baltimore, and putting in place what he is calling the “Buy Maryland Program.”

In this program, if Maryland residents itemize purchases over $100 on their tax returns, then they will receive 20 percent back. That way, George said, people will have a lump sum in the spring that they can then use for a down payment on a house or car. (Easton Star-Democrat, January 9. 2014)

Larry Hogan: When Hogan is governor, we’ll repeal the rain tax. That’s one change you can count on.

Charles Lollar: Our plan is to take a look at every regulation out there – all 74 of them. We want to peel this thing back. People are tired, here in Maryland, with this bait-and-switch tax scheme. So we’re going to compose independent audits annually. We’ll determine how the monies are collected, how they’re being spent, and whether this spending demonstrates an efficiency of how we use taxpayer money. And this audit will be published online…In addition, I am not going to sign any tax bill that’s void of an enforceable lockbox provision. (Bill Bennett Show, January 23, 2014)

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In addition, Lollar pointed out on the Fox45 debate that this would be all taxes, not just the ones passed under Martin O’Malley.

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In a fundraiser with economist and advisor Arthur Laffer, he supported the Lollar idea for eliminating the state’s income tax but gave no details. (Press release, January 28, 2014)

David Craig followed the lead of another with his tax plan, but the timing is a little more specific. I think it’s a great idea, though, and he seems to have the understanding that, because he controls the budget, that the idea is doable. He gained three points from 11 to 14 with one (somewhat) bold move.

Ron George is restating previously noted material, so there’s no bold moves there.

Larry Hogan will repeal the rain tax. That’s a start, but really it’s only an entry-level gambit in this race so he gets just 5 points.

Charles Lollar was first to the post with the idea to eliminate the income tax, but hasn’t elaborated on the details. But because he was so close to the maximum point total already with 14, I could only bump him up to 14.5 because I think eliminating the income tax is a splendid idea.

Intangibles:

Larry Hogan: Phony political spin, questionable donations, cronyism, and backroom deals pervade the current culture in Annapolis. We need more transparency in our government, more truthfulness and tougher ethics and disclosure laws that will begin to clean up the mess in Annapolis and restore integrity to our state capital. (campaign website)

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It’s time to engage every citizen who wants to get involved in the policy process. Policymaking should not be left exclusively in the hands of an oligarchy of anointed Annapolis lobbyists and lawmakers. (Capital Gazette, January 17, 2014)

Charles Lollar: First and foremost, I would do all I can to get rid of comments like the one I just heard. It’s unfortunate, but I do take a bit of offense to that because the idea that all Republicans think the same way is probably about as similar as all blacks thinking the same way – it’s not true – or all whites thinking the same way, it’s not true. I want to be the best governor of Maryland I can be – not the best Republican governor I can be, and not the best Democrat governor I can be, I want to be the best Maryland governor I can be.

And I’m sick and tired – no matter where I go or who says it, I attack it the same – of people using partisan politics, skin color and gender, to separate us from real solutions that are at hand. (Purple Line Forum, February 18, 2014)

I’m not quoting him on anything here, but because he’s been the most open and responsive candidate to me I added one point to Ron George’s intangibles.

For Hogan’s part, I agree with the sentiments for the most part. But they are belied by the way his campaign is conducted – missing opportunities to discuss issues with fellow candidates and instead uttering many of the same campaign mantras in one-on-one interviews with generally friendly questioners. It’s not enough of a change from the current culture he decries, and until I start seeing and hearing answers on issues above and beyond the Change Maryland mantra, I have to deduct two points for intangibles.

Charles Lollar, though, has really cleaned up his campaign, and the statement I included is apt because he was responding to Democrat criticism. So he went from a -3 score to a wash – his campaign isn’t firing on all cylinders yet but it is improving.

If you’ve been keeping track, well, more power to you. But unlike other bloggers, I’m not ready to make a choice yet because there’s still a lot of information I’d like to have before making my choice.

What I can tell you is that David Craig and Ron George seem to have an edge over Charles Lollar, with Larry Hogan far behind simply because he’s not addressed many of my key issues yet. His is a one-note samba so far. It turns out that the Craig tax plan has now vaulted him slightly ahead of Ron George – very surprising because my initial perception was that David was the most moderate of the four candidates.

But above all, my main complaint is with the Larry Hogan campaign. Stop skipping debates where everyone else shows up! You may have 40,000 Democrats and unaffiliateds in Change Maryland, but there’s one problem with that: they get no Republican primary vote and you probably won’t win with 40,000 votes (assuming all Change Maryland ‘likes’ = Hogan supporters, a very dubious assumption.)

So my plan is to revisit this sometime in April, with perhaps a final decision in early June. I don’t think an early endorsement will do me a lot of good here because no candidate is standing out in this race.

Grasping at straws

Over the weekend Montgomery County Republicans held their annual convention and as part of the proceedings they held a straw poll of 2014 gubernatorial candidates. It fell to the winner to deliver the results.

Charles Lollar was declared the decisive winner of a straw poll taken of Montgomery County Republican activists and Central Committee members at the annual Republican county convention held (Saturday) in Gaithersburg, Maryland. Lollar won with 40% of the vote, followed by Ron George (24%), Larry Hogan (23%), and David Craig (13%). Hogan was the only gubernatorial candidate not in attendance.

(snip)

“Every time our critics count the Lollar campaign out, our supporters count us in. These results demonstrate the solid grassroots support we have, not only in Montgomery County, but all across the state.”

“The people who voted in the MCGOP convention straw poll have sent a clear message across Maryland: when given a choice, they want Charles Lollar to be the next governor of this state. I am extremely grateful for their confidence and support and look forward to continuing to surprise those who underestimate us.”

Granted, we went through a 2012 campaign where one of the contenders won straw poll after straw poll but generally failed to crack double-digits when actual voters spoke. Nor is there any escaping the fact Lollar started the year with less than $6,000 in the bank – an amount Anthony Brown probably gets in his sleep from a special interest donor. Even the idea of eliminating a revenue source worth $8.5 billion to the state raised eyebrows at “Maryland’s premier blog of conservative and Republican politics,” where they cited a disbelieving Washington Post.

But, out of all the states. at least Maryland’s governor has the whip hand in making this happen because he writes the budget. It’s also worth pointing out the lack of specifics; for example, if the tax is phased out over four years the state need only cut $2-3 billion in spending annually and increased economic activity would make up some of the difference. As I note below, there’s not a whole lot of specifics yet on what any of the candidates will do when they assess the state’s financial situation.

Yet there’s a guy out there who has made the runup to his campaign all about the number of tax increases enacted by the current governor. So where was he Saturday? Wait, we have that answer:

Hogan was the only gubernatorial candidate not in attendance.

Interesting – wasn’t there a lot of scuttlebutt a few months ago about another candidate missing a number of key events? Are those crickets I’m hearing now?

I can understand skipping the January 16 Republican debate (to which Hogan was invited) because he wasn’t officially a candidate, but Larry also passed on the Second Amendment rally in Annapolis (as did Lollar, but Charles spoke to the 2013 rendition.) It just seems to me a strange pattern of behavior for a guy trying to establish a GOP campaign. Yet Hogan’s biggest supporters even mocked Lollar’s straw poll victory as a highlight of a “thoroughly hapless” campaign. It is what it is: obviously they’re not charter members of the Charles Lollar fan club.

Now I’m not here to question Larry’s sincerity, but I would feel a little better if GOP voters could base our decision on more specifics on priorities than just the easy promise to repeal the rain tax and to take public financing. (In Hogan’s radio interview with Jackie Wellfonder last week his decision to accept public financing was the prime topic of discussion, which I found disappointing.) Maybe Larry won’t be into the social issues, but I still would love to know how he stands on the Second Amendment, budgetary priorities, dealing with illegal aliens, educational choice, and so forth. All of his cohorts have answered at least some of the tough questions, so I can’t give Larry a pass just because he has a social media network of 77,000 people.

Originally I was going to do an update to my dossiers around the first of February, but I think it’s prudent to hold off until after the filing deadline just to make sure Lollar and Ron George are still in the race, and hopefully to get a little more information out of Larry Hogan.

And now for something completely different: Today I’m filing for re-election to the Wicomico County Republican Central Committee, so last night (if you didn’t notice) I put my authority line back in place. I’ll be on the June 24 ballot.