On Taxes, Part I

The first in a short series on tax policy.

Progressive Taxation Overall
Some progressives believe that every single tax must be progressive. Instead, progressivity is more properly measured by an examination of overall taxes rather than each tax separately. In other words, regressive taxes—such as the gas tax or car registration tax—are fine as long as the overall system remains progressive.

Federal Taxes Should be the Most Progressive
The ability of many businesses and individuals to move pits states and localities against one another in terms of the tax burden. While not all businesses can easily change locale, others may choose where to locate based at least partly on state and local taxes. In contrast, it’s harder for many businesses to escape the United States even in our increasingly globalized economy.

Even Flat Taxes Can be Progressive
If you have a flat tax rate of 5% that only kicks in after the first $50,000 in income, the percentage of total income paid will vary dramatically based on income. People who earn less than $50,000 will pay nothing, while people who earn $70,000 will pay $1000 (5% of the $20,000 above $50,000) or 1.4% of total income. In contrast, people with incomes of $120,000 will pay $3500, or 2.9% of income. Someone with an enviable income of $1,000,000 per year would pay $47,500, or 4.75%.

In the years when Maryland became the wealthiest state in the country, we had a very flat tax that was not at all progressive because the top marginal rate kicked in with only a few thousand dollars of income. Today, we have gone in the opposite direction with progressive taxation with a variety of marginal rates.

Broad Based is Best
The temptation to encourage or to discourage different activities through the tax code is great. But loopholes or variation in tax rates are economically distortive and make the code more complex. Broad based taxes also spread the pain of taxation across different businesses and fields of economic activities.

Externalities are the Exception
The key exception to broad based taxes should be when economic activity dumps costs unfairly on the public sphere. Pollution is the key example as polluters dump the cost of cleaning up their mess on everyone else. As a result, levies on these sorts of activities can help discourage them or pay for cleaning up the mess at time even if broad-based taxation should remain fundamental.

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MoCo District 5 Forum Tonight

Democratic Candidates Forum for Montgomery County Council
District 5

Sponsored by
The Greater Silver Spring Democratic Club

Date:  Tuesday, May 27, 2014 at 7:30 PM
Place:  Takoma Park Middle School
7311 Piney Branch Road


Proudly Co-Sponsored by the following Democratic Clubs:

Women’s Democratic Club of Montgomery County, Montgomery County Young Democrats, Hispanic Democratic Club, African-American Democratic Club of Montgomery County, District 18 Democratic Breakfast Club, District 20 Democratic Breakfast Club, Montgomery County Green Democrats

Candidates Appearing:
Christopher Barclay, Evan Glass, Tom Hucker, Terrill North, Jeffrey Thames

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The WaPo Endorses

The Washington Post endorsed in Montgomery County Council races on Monday. The endorsements reflect their usual view that county unions have too much power, spending needs to be cut, and that MoCo needs to be more pro-business.

In the at-large races, the Post preferred all four incumbents, viewing Vivian Malloy’s candidacy as not “viable” and Beth Daly as “dead wrong” and attacked her as wanting to slow “the county’s already anemic rate of growth” as “misguided.”

Most interesting are the endorsements in the district races. The District 1 race is viewed less through the lens of unions and spending and more through general capability and personality:

In District 1, Roger Berliner, who is seeking a third term, is vastly superior to Duchy Trachtenberg. Mr. Berliner, an environmental lawyer, is respected on the council for his command of environmental issues and superb constituent service. By contrast, Ms. Trachtenberg, who lost her at-large seat in the election four years ago, was widely regarded as disorganized, unfocused, polarizing and inattentive to constituents.

Wow.

In Districts 3 and 5, the WaPo rejected the candidates most identified with the unions–Ryan Spiegel in District 3 as well as Tom Hucker and Chris Barclay in District 5. Among the other candidates, the Post promoted Tom Moore in District 3 and Evan Glass in District 5.

The Post lauds Moore as “a champion for open government and affordable housing.” Evan Glass is described as:

pragmatic and deeply committed to the community, where he’s been an effective advocate for affordable housing. He’s the sort of independent-minded candidate who could make an important mark on the council and help rebrand Montgomery as a more welcoming place for employers.

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North Response to Luedtke Post

I received the following response from Terrill North to Del. Eric Luedtke’s post about the needs of the northern end of Montgomery County Council District 5. Like Evan Glass, he is a candidate for this open council seat.

David,

I’m glad Del. Luedtke is paying attention, but as the unnamed candidate he mentioned canvassing the area I’d like to add a few details.

I began talking with my neighbors in Burtonsville “officially” in 2010 when I led Impact Silver Spring’s efforts knocking on over 4500 doors and meeting with community leaders examining local needs.

Residents told us they wanted:

·         constructive activities for the youth, and
·         better job opportunities for adults.

That year (with seed money from Councilmember Navarro), we expanded Impact’s afterschool program (then serving 60-90 kids in Long Branch) to East County (now serving over 400 youth primarily in East County).  This year, we worked with a coalition of stakeholders to launch the first workforce development program serving East County (so local residents could benefit from job opportunities coming with the FDA Science Center).  We are also currently working to bring Montgomery College continuing education programs to the East County Regional Services Center.

I’m already enacting the plan for East County based on resident concerns.

As a candidate, spending a lot of time in East County is second nature to me because most of my in-laws live there; I’ve been hearing their concerns without asking since long before 2010!  Since my campaign kick-off at Cuba de Ayer on Route 198 in February, I have been actively engaging Burtonsville voters (and non-voters).  I will be in White Oak this weekend meeting with 230 families from another multi-cultural youth program I work with, structuring a summer day camp featuring sports, meals, and academics (modeled on the program I saved from Bush Administration cuts in 2007 as a Hill staffer).  That’s after judging an oratorical contest for East County youth that morning (1st annual competition of MoCo youth in the Baltimore Urban Debate League).

I will disagree with Eric about one thing, I don’t think East County is ignored.  The key, however, is that residents need to vote!  The precinct at Greencastle Elementary had an 8% turnout in the 2010 local primary, compared to 40% at Takoma Park Elementary.   I spoke at a D14 Democratic Club forum last week where the only Burtonsville residents in attendance were candidates for central committee.  The more folks vote, the more quickly issues will be addressed.

I develop institutions that improve the lives of District Five residents wherever they live.  I put as much effort into establishing a workforce development program in East County as securing over $1 million for stormwater mitigation in Takoma Park.  Best of both worlds!

Regards,
Terrill

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MCEA Final MoCo Endorsements

From the Washington Post:

The union representing Montgomery County’s 12,000 teachers rounded out its list of County Council endorsements Wednesday for the June 24 Democratic primary, retaining its 2010 recommendations of Roger Berliner (D-Potomac-Bethesda), Craig Rice (D-Upcounty), Nancy Navarro (D-Midcounty), Marc Elrich (D-At Large) and Hans Riemer (D-At-Large) but dropping George Leventhal (D-At-Large).

The endorsement by the Montgomery County Education Association (MCEA) is one of the most coveted because it comes with a spot on the Apple Ballot, which is mailed to Democratic voters and distributed at the polls.

The announcement follows earlier endorsements of candidates for open council seats: Ryan Spiegel in District 3 (Rockville-Gaithersburg) and Board of Education member Christopher Barclay in District 5 (Silver Spring-East County). The union has also endorsed County Executive Isiah Leggett for a third term.

Ryan Spiegel and Marc Elrich seem to be sweeping up the labor endorsements. This is a nice one for Roger Berliner as the government employee unions are lining up behind Duchy Trachtenberg. Hans Riemer must also be pleased after losing support from other county unions.

Nancy Floreen has never been the labor candidate so probably isn’t too perturbed or worried about it. But being dropped from the Apple is new for George Leventhal who has also been frozen out by MCGEO, FOP, and the AFL-CIO.

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Barclay on Expenses Scandal

Statement from Christopher Barclay Regarding
Board of Education Expenses

Rockville, M.D. – (May 22, 2014) Christopher Barclay released the following statement today:

“I would like to express regret using a Board of Education-issued credit card for personal use. Though I made sure to repay the board after any personal expense, I agree that this should not be an accepted practice. There has been an active debate regarding the Board of Education’s expense policy and when expenses for school board business are appropriate. I welcome that debate. I support the existing task force recently put together by my colleague and Board of Education President Phil Kauffman to review how the board manages its expense policy. I believe the Montgomery County Council has avoided the use of county-issued credit cards all together and I would support the school board considering the possibility of a similar approach.  

This has been a teaching moment for me. As a member of the board for the past eight years, I have worked steadily to ensure that all students enrolled in Montgomery County Public Schools have access to quality education. In pursuit of this goal, I have approached my duty as a school board member as a full-time job. Expenses reimbursed by the county reflect time spent working as a member of the board including engaging parents and students in the community, sitting down with community leaders and attending conferences to learn best practices. I will continue to work with my colleagues to ensure a more transparent process in spending practices. I look forward to continuing to be the unwavering, dedicated advocate I am known for regarding real challenges facing our families particularly the achievement gap in our schools, income inequality, and access to equal opportunity to thrive in Montgomery County.”

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Glass Responds to Luedtke Post

I received the following from Evan Class, a candidate for the open District 5 Montgomery County Council seat in response to Eric Luedtke’s post earlier today on the problems facing the northern end of this district. I’d be happy to publish responses from other candidates too.

Dear David,

I just read Delegate Eric Luedtke’s post in which he shares his disappointment in the lack of concrete policy recommendations from the County Council’s 5th District candidates on issues affecting communities in East County.

I share Delegate Luedtke’s concerns, which is why one of my key priorities is the redevelopment and economic investment of White Oak and Burtonsville. My support for bringing economic justice to parts of the county that need jobs and amenities is the reason I published a detailed plan two weeks ago on my vision for expanding economic growth in our community. In addition to supporting economic progress, my plan also calls for creating new programs within the Department of Economic Development, providing the Office of Procurement with the independence it needs to function properly, and reforming our county’s liquor laws.

My plan can be accessed on my campaign website: http://www.evanglass.com/job_creation.

I invite Delegate Luedtke and your readers to review my plan and I welcome their input and partnership. I will continue to actively engage in an open dialogue with the business community, residents, nonprofit leaders and elected officials to address these important economic needs. If elected as the next Councilmember for the 5th District, I will commit my energy and resources to addressing the economic inequalities of the Eastern portion of Montgomery County.

Thank you,
Evan Glass

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Common Cause on Barclay Scandal

The following is a press release from Common Cause MD:

Common Cause Maryland calls for greater oversight of School Board expenditures

(Annapolis) – With two breaking stories in one week regarding expenditures by School Board members across Maryland, Common Cause Maryland calls for greater oversight and clearer policies by school boards regarding the use of taxpayer funds.

In Montgomery County, a Public Information Act discovered that school board member Chris Barclay made personal charges to the county-funded credit card. The documents also revealed meal expenses that did not follow school board procedures for authorization[1]. In Wicomico County, state auditors found school board members purchased gift cards using county credit cards, as well as several purchases made at a produce market owned by a school board member, raising questions of conflict of interest[2].

“These discoveries raise questions about both the strength of expenditure policies and the implementation of those policies,” said Jennifer Bevan-Dangel, Executive Director of Common Cause Maryland.  “School boards have to make the best use of very limited dollars. Lunches, gift cards, and personal charges on the county card hurt public trust and hurt the students that the board is supposed to serve.”

Common Cause calls on county School Boards to evaluate their spending policies and make sure they provide clear oversight for member expenditures and reimbursements. School boards should consider revoking credit cards and moving to a reimbursement system, as many county governments (including Montgomery County) have done.

Common Cause Maryland also noted the importance of the public information act in bringing these stories to light.

“Public access to government expenditures is a fundamental tool to ensure that officials are held to the highest standards. The Montgomery County story is a clear example of the importance of a well-functioning public information act that gives the public access to the information they need.”

# # #

Contact: Jennifer Bevan-Dangel, 410-303-7954, jbd@commoncause.org

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Verdict on the At-Large Debate

ALdebate

Moderator Charles Duffy with Vivian Malloy, Beth Daly, Marc Elrich, Nancy Floreen, George Leventhal, Hans Riemer, Robert Dyer, and Tim Willard

Last night’s debate at the 4H was unusually well attended–I guesstimated roughly 100 people–with many actual voters who came to hear the candidates. I live tweeted the debate @theseventhstate. The tweets give much of the blow-by-blow and there are some interesting tweets back.

Some Issues and Moments

Ben Ross. His book criticisms of owners of “single-family homes” trying to preserve their place in the pecking order along with “snob zoning and nimbyism” did not go down well. Probably wise in a county where most people live in single-family homes, as Nancy Floreen pointed out in her response.

BRT System. Beth Daly and Marc Elrich were clearly enthusiastic about the BRT system proposed by Marc. Hans Riemer and Nancy Floreen were more skeptical wanting to see how the Corridor Cities Transitway goes–and thus pushing the idea off into the distant future. George Leventhal agreed and questioned whether people would ride buses even in dedicated lanes. Nancy Floreen also expressed concern about the cost, though Marc Elrich pointed out that is far cheaper per mile to build than the Purple Line.

Ride-On Buses. Vivian Malloy said that people had lost confidence in the service and wanted greater frequency and dependability especially in bad weather. Marc Elrich said people don’t want to use the buses because they’re stuck in traffic. Hans Riemer disagreed with this “myopic” view and touted his getting five additional buses for the system into the budget.

Chevy Chase Lake. Marc Elrich called the failure to listen to civic associations a “travesty,” a position supported by Beth Daly. Hans Riemer pointed out that the Council had reduced the height of a tall building and called the result a good compromise, though the Planning Board had already increased density over the proposal advocated by Staff led by Rollin Stanley.

Taxes. All agreed that that the property and income tax should not go up. Marc Elrich and Beth Daly proposed studying taxation of commercial property (but not residential) owners who would benefit from nearby transit to pay for it on the model of what already is in place in Northern Virginia. Hans Riemer pointed out at that county taxes are the lowest in real terms in a decade.

Purple Line Trail and the Wisconsin Ave. Tunnel. All agreed that the county should pay for it. George Leventhal was clearest in directly stating “we have to spend what it takes.” Robert Dyer argued that we’re required to rebuild it under Maryland law. Marc Elrich said “it’s the least we have to do.” Hans Riemer said it would have to occur with the redevelopment of the APEX building but Marc Elrich expressed concern that the building’s owners are “holding us up” for  more money on top of the greatly increased density that they’ve already received.

Sparks. George Leventhal provided most of the moments with heat and light. At one point, he interrupted Marc Elrich to try unsuccessfully to interrogate him on his Purple Line position. He upbraided moderator Charles Duffy for asking questions on how to solve problems with incompatible bases in fact. Reading a letter praising him from a constituent for solving a problem engendered a noisy, negative reaction from the crowd.

The Importance of Demeanor

The debate reminded me that it is just as important how a candidate says something as what they say. In the 2000 presidential election, the first presidential debate between Gore and Bush became a textbook case. Gore clearly was stronger on the facts but sounded patronizing, sighed a lot when Bush spoke, and often answered the last question instead of the one posed.

Bush, while clearly not the most knowledgeable, was the one people who weren’t hard core Democrats liked. For many, he was the one who gave a sense of a solid character who you would have enjoyed getting to know. Gore did so badly that his advisers made him watch the popular SNL parody in the hope that he’d learn something.

Candidate Reviews

Tim Willard raised important issues regarding climate change but was the Debbie Downer of the debate due to his consistently pessimistic demeanor and failure to offer concrete proposals about how to address these problems locally. Still, great to be offered alternatives in one-party Montgomery.

Robert Dyer utterly surprised me because this Republican is probably more left wing than many of the Democrats. Running as a dark horse candidate also freed him to make many out of the box statements, such as calling for a bridge over the Potomac, castigating the Council for paying for transit projects we don’t need but failing to fund the ones we do, and saying that the Council should make developers pay and stop overdeveloping Bethesda.

Vivian Malloy had a personality that just made you want to vote for her as she is a nice, warm person who clearly cares about the county and its problems. More specifics on how to address important issues she raised, such as affordable housing, would have enhanced her good presentation.

Beth Daly projected both confidence, an unusual knowledge of the issues for a challenger, and had a can-do positive attitude that contrasted with fellow challenger Tim Willard’s negativity. She projected well her past involvement in issues like Ten Mile Creek and an eagerness to get to work. Clearly allied with Marc Elrich, she was a candidate that people liked.

Nancy Floreen came across as calm, thoughtful and knowledgeable who understood the complexities of the issues faced by the Council. Put another way, she came across as an experienced, trustworthy set of hands. More detailed responses would have been welcome despite the complicated nature of many issues, though she clearly has a mastery of many facts.

George Leventhal. One person said to me after the debate: “If you wrote down what George said and read it, it would come across as a perfectly reasonable argument but George always sounds angry.” A disastrous performance.

Hans Riemer. Hard not to like a guy who tweets back at you even as he engages in the debate. Still optimistic but perhaps a bit more careworn after four years on the Council, Hans did a good job of touting specific concrete legislative achievements.

Marc Elrich just excels at these events, probably because as a former teacher he knows how to explain complex problems in ways that people can understand. Probably the winner of the debate with the audience and I’m not just saying that because I support him. His commitment to poor and working people combined with his community focus seemed a winning formula.

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MoCo County Council District 5 and Its Forgotten Northern End

This is a guest post by Del. Eric Luedtke. Eric represents District 14 (Montgomery) in the House of Delegates.

For years now, literally years, there has been a shopping center in Montgomery County sitting almost entirely empty, only a few stores open, fronting a large expanse of empty blacktop fit only for tumbleweed. The shopping center can only be called suburban blight, something Montgomery County residents aren’t exactly used to. It’s not the sort of thing you expect to happen in a county with as much affluence as ours. Except it has, in Burtonsville, where I live. The shopping center’s slow decline was the result of a combination of difficult economic factors and a large corporation (Giant Foods) who clearly cares more about playing economic hardball than doing right by the community.

Ask anyone in Burtonsville about it and they’ll tell you something revealing about their perception of the politics of our county: if this were elsewhere, it wouldn’t have happened. There would have been a sense of urgency. There would have been a plan from the beginning to do something about the decline of the commercial core of a major Montgomery County community. Or about the incredible imbalance of jobs and housing in the Route 29 corridor. Or the lack of amenities. Or the nightmare that is Route 29 during the morning rush. But there hasn’t been much of a sense of urgency. Instead, we’ve seen what might be described as benign neglect. Lots of people in county government chafe at that assessment, and people in other parts of the county also complain about their needs not being met. But if the measure of success is results, we just haven’t seen the results we need.

I don’t mean to say the county has done nothing. A number of our councilmembers have done their best to help move things forward. But in no way have efforts to address the challenges of the upper 29 corridor been close to what we’ve seen elsewhere. For whatever reason, buried deep in the power dynamics of our county, or because of the challenges of outreach in an unincorporated community, residents of Burtonsville, Fairland, and White Oak just don’t feel like they are being heard.

Witness the White Oak Science Sector Master Plan, which has been under debate between the Council and Planning Commission for months now. As residents demanded more jobs and amenities, county planners with the encouragement of councilmembers responded by developing a new plan for the area around the FDA campus which would include mixed-use development. It would be a new economic anchor for the county, and would give east county residents the kind of walkable core community that other parts of the county have had long since. And yet, its future is in doubt.

The plan is being squeezed from two ends by traffic issues. From the north, hordes of Howard County commuters clog up 29. In the south, some residents of the communities around four corners have been opposing any new development because they are concerned about more traffic. And there are some members of the Council who seem likely to vote to weaken the White Oak plan to appease these folks, applying so strict a traffic test that bringing any substantial new jobs or amenities to the area would be virtually impossible. In other words, our residents could be robbed of the jobs and amenities they’re demanding because of out-of-county commuters and the opposition of a community that already has good access to jobs and amenities. It’s a difficult pill for many of us to swallow.

Enter the District 5 Council candidates. This district, newly redrawn following the census, encompasses the entire 29 corridor from the DC line to the Howard County line. Five candidates are running. None are from our end of the district. All are focusing their efforts in the southern end, where more of the votes lie. As far as I know, only one of them has been actively knocking on doors in Fairland or Burtonsville. Once again, our forgotten corner of the county seems to be an afterthought.

It’s frustrating to the whole community, and to me in particular. I know and respect each of the candidates, and I’ve spoken to each of them extensively about the needs north of Randolph Road. I’ve given driving tours of the community to some of them. I’ve sat down over lunch at Cuba de Ayer in Burtonsville to pitch them on more focused economic development strategies. I’ve emphasized the importance of the proposed Route 29 BRT line to relieving congestion and allowing any development to occur. But they aren’t showing up to talk to upper 29 voters. And if you check out the issue platforms on their websites, what you’ll see are generalities rather than the real plans we would like to see for how to resolve our issues.

Our residents deserve a councilmember who understands their issues, who will fight to resolve them, and who is committed to actively listening to them. None of the District 5 council candidates has yet demonstrated that commitment. Perhaps they will during the May 28 candidate’s forum being held at 7:00 PM at the East County Regional Services Center. But until that happens, my endorsement, let alone my vote, remains firmly in the undecided column. And I know many of my neighbors feel exactly the same way.

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