YouTube user SeventhDem uploaded this advertisement on October 10, 2008. It's from the American Federation of State, County, and Municipal Employees, or AFSCME.



I'm not going to lie, I was cringing all the way through this. It would have been fine if it wasn't for the cartoon Wall Street executives popping up all the time. Seriously, that's as bad as "Sour for Schauer." Come on, guys, you're embarrassing our side!

I think it's got the potential to be a fairly effective attack ad-- Wall Street isn't popular right now-- but it loses everything with the cartoons. Sorry, I just don't think it works.

That's my shallow take on it. What did you think?

Labels: 2008 Election, Advertising, AFSCME, Issues, Taxes, Tim Walberg

Not content to just fund Tim Walberg's attack ads, on October 7, 2008, the National Republican Congressional Committee released an attack ad of its own against Mark Schauer:



As the always-observant Chris Gautz points out, there's more than one side to the kicked-off-committee story:

More specifically than the ad states, Schauer was kicked off the Senate Campaign and Election Oversight Committee allegedly because he missed four meetings, all of which took place at locations around the state, where no voting was going to occur.

The Republican chairwoman, Sen. Michelle McManus booted Schauer, but not fellow Republican members of the committee who also missed a number of hearings.

The Democrats, and Schauer said this was a clearly partisan move, and retribution for action on the service tax.

Maybe I'm just a partisan Democrat, but I remember thinking at the time that it seemed like Senator McManus had other motives than just encouraging good attendance. But really, that line of attack strikes me as too inside-baseball to resonate with voters. When people are worried about jobs and losing their homes, "Mark Schauer is a troublemaker who got kicked off his committee" doesn't seem like it'll matter all that much to me.

You know, I can even see it going further the other way, too-- John McCain's popularity was partly from his "maverick" image, and getting kicked off your committee is one way to show your independence from the status quo. Maybe Tim Walberg should have tried harder to get kicked off of a committee...

But now I'm just getting silly. It's a creative ad, but I don't think it'll do anything other than reinforce the "largest tax increase" narrative. But if Mark Schauer's internal polling is to be believed, that's a narrative that's just not working. Schauer's taking the lead and is more trusted on taxes than Tim Walberg.

Labels: 2008 Election, Advertising, Issues, Mark Schauer, NRCC, Taxes, Tim Walberg

Here I was, thinking Republican endorsements and tonight's Siena Heights University candidate forum would be the only excitement. The Schauer campaign released a new poll:

BATTLE CREEK—A new internal poll released today by Myers Research & Strategic Services for congressional candidate Mark Schauer (D-Battle Creek) shows the state Senator leading incumbent Congressman Tim Walberg by ten points, 46 to 36 percent, outside the 4.4 percent margin of error.

“This new poll confirms that Mark’s record of working with businesses and fighting for jobs is resonating with voters,” said campaign manager B.J. Neidhardt. “This race will almost certainly tighten between now and Election Day, but Mark has always run like he’s ten points behind, and that’s exactly what he’ll continue to do.”

and

“Today, by a 28-point margin voters are more likely to blame unfair trade policies than taxes for Michigan’s economic situation, and across the board they favor Schauer on every economic issue,” said pollster Andrew Myers. “Make no mistake, this political environment is becoming dangerous for any Republican incumbent, particularly one whose connection to voters here is as tenuous as Walberg’s.”

Once again, it was through Myers Research & Strategic Services. It was conducted October 5 and 6, surveying 500 "likely voters." The partisan breakdown was 36 percent Democratic, 33 percent Republican, and 31 percent independent. The margin of error is 4.38 percent with a 95 percent confidence level.

Here are the reported results (Sept. 23-24 results in parentheses, where available):

Mark Schauer vs. Tim Walberg

Mark Schauer (D) - 46 (42)
Tim Walberg (R-inc.) - 36 (36)

Mark Schauer vs. Tim Walberg - Independents Only

Mark Schauer (D) - 39
Tim Walberg (R-inc.) - 27

Mark Schauer vs. Tim Walberg - Lansing Media Market Only

Mark Schauer (D) - 48
Tim Walberg (R-inc.) - 33

Trust On Taxes

Mark Schauer (D) - 37
Tim Walberg (R-inc.) - 30

Generic Congressional Ballot

Democrat - 44
Republican - 36

Barack Obama vs. John McCain

Barack Obama (D) - 50
John McCain (R) - 39

Walberg Job Performance

Positive (Good or Excellent) - 34 (34)
Negative (Fair or Poor) - 42 (46)

There's lots of good stuff in there for Mark Schauer.

Labels: 2008 Election, Mark Schauer, Poll, Taxes, Tim Walberg

It's the moment we've all been waiting for... the Club for Growth is on the air:

Washington – Today, the Club for Growth PAC begins running a TV ad on Mark Schauer’s tax record in Michigan’s Seventh Congressional District. The $175,000 ad buy will run on broadcast television in the Lansing market and on cable stations throughout the Seventh District.

Here's the ad:



... That's intellectually dishonest!

For instance, the poor lady who's worried about Mark Schauer raising her Social Security taxes doesn't tell you that Schauer only said he would support removing the $90,000 cap on payroll taxes. From the article they cite:

Schauer said in a conference call with reporters that he would be open to such proposals as raising the current cap on payroll taxes but would not be open to private accounts. He says private accounts would "weaken" the entire Social Security program. He said he'd be open to a "bi-partisan solution that makes adjustments to current Social Security."

Currently, only the first $90,000 you make is taxed for Social Security. That is, if you make $60,000 each year, all $60,000 is subject to the payroll tax. If you make $160,000 each year, then $90,000 is subject to the payroll tax and the other $70,000 is not. Removing that cap is generally considered a part of the solution to Social Security's long-term solvency, and the public supports it:

"Currently, people pay Social Security taxes only on the first $90,000 of their annual income. If it were necessary to keep the Social Security program paying benefits as it does now, would you favor or oppose increasing the amount of income that is subject to Social Security taxes?"

Favor Oppose Unsure
% % %
6/10-15/05 63 30 7

Admittedly, that's a poll from 2005-- it's the most recent one I could find. But I find it hard to believe there's been a dramatic shift since then.

I'm going to come back to some of the other tax claims some other time, I promise. My point here is just to highlight the way that the Club for Growth sometimes represents certain things differently than you or I would.

Let's remember, these are the people who trashed Republican Congressman Joe Schwarz as "a liberal" who would spend your money, kill your babies, and take away your guns. They're not very nice, and they've got a lot of money. And, of course, they've had a reliable vote in Tim Walberg.

The Schauer campaign has responded:

BATTLE CREEK—Today the extreme Washington D.C. special interest group Club for Growth began airing its first attack ad against congressional candidate Mark Schauer (D-Battle Creek).

"Club for Growth supports unfair trade deals and wants to privatize Social Security, and after Walberg admitted he was 'bought and paid for by them,' it's not surprising that the group is so desperate to save the seat they spent $1.1 million on two years ago," said Zack Pohl, spokesman for the Schauer campaign. "At a time when our country is facing the worst financial crisis since the Great Depression, Michigan can't afford two more years of the dangerous economic policies of Walberg and Club for Growth."

Background:

• According to Club for Growth's website, the group's agenda includes expanding free trade, deregulation and privatizing Social Security. [www.clubforgrowth.org/about.php]

• Walberg sticks up for those who ship our jobs overseas, and agreed that outsourcing has been "both necessary and good for the nation's economy." [Lansing State Journal, 4/27/04]

• In 2006, the Club spent $1.1 million to defeat moderate Republican Joe Schwarz and put Tim Walberg in Congress. [Club for Growth Press Release, 8/8/06; Ann Arbor News, 8/09/06]

• Walberg even admitted to the Jackson Citizen-Patriot he was "bought and paid for by them." [Jackson Citizen-Patriot, 7/23/06]

So what does this move mean?

It means that the Club for Growth thinks Tim Walberg is in trouble. They don't do incumbent protection, they go after "bad" Republicans and open seats. Spending $175,000 is probably just the beginning. Tim Walberg, despite all of the advantages of incumbency, can't win reelection on his own.

Labels: 2008 Election, Advertising, Club for Growth, Mark Schauer, Taxes, Tim Walberg

Catching Up... -- Fitzy

On September 19, 2008, the Democratic Congressional Campaign Committee released their first Walberg-specific television advertisement:



My initial reaction? "Finally, someone's talking about this stupid plan!" And I mean stupid. Astoundingly stupid.

I've had a quarrel with the "FairTax" for a while now, starting long before Walberg Watch. I want to talk a little bit about it, if you're interested. But first, here's the Walberg campaign response to the ad:

Dear Friends,

Just wanted you to be aware of a recent attack ad that has aired on behalf of Congressman Walberg's ultra-liberal opponent, Mark Schauer. The Democrat Congressional Campaign Committee (DCCC) has invested significant amounts of money in our district to go on the attack, and spread lies about Tim's record.

Below is a press release we issued that explains the truth. Please feel free to share this with any friends who may have questions.

Thank you all for your support - let's all keep working toward victory in November!


Best,


Justin Roebuck

Campaign Manager

(Thanks to the friend who passed that along to me...)

I want to stop right there for a moment and remind Justin that it's actually the Democratic Congressional Campaign Committee, not the "Democrat" Congressional Campaign Committee. It just sounds dumb when you don't use the right word.

Yeah, that's a minor complaint, but it bugs me, and that's the reason that people like Tim Walberg do that. Just remember, every time you call it the "Democrat Party," an English major cries out in pain.

Moving on...

Jackson, MI- Today, Mark Schauer's Washington DC friends, the Democratic Congressional Campaign Committee, kicked off their massive television ad blitz by attacking Congressman Walberg for supporting the Fair Tax proposal, H.R. 25. The ad claims Congressman Walberg supports a new 23 percent sales tax, but the ad fails to mention the Fair Tax proposal would repeal the federal income tax, payroll tax, capital gains tax, corporate income tax, and death tax, and junk the tax code, shutdown the IRS, and be a net tax cut.

"It's not surprising Mark Schauer's Washington DC supporters would attack Tim Walberg for fighting to junk the tax code, shutdown the IRS, and reduce the tax burden on Michigan families and small businesses. While Mark Schauer was the deciding vote for the largest tax increase in Michigan history, Tim Walberg is fighting against higher taxes and for the families of Michigan," stated Justin Roebuck, campaign manager.

Background:

Details on the Fair Tax, H.R. 25, the proposal the DCCC uses in the ad:

This is from a detailed study on the Fair Tax entitled “Taxing Sales under the FairTax – What Rate Works?” published by several well-known economists, including a Research Associate from The National Bureau of Economic Research.

[Link]

Key takeaways:

Repeals a myriad of taxes and replaces them with a simple single rate consumption tax - “As specified in Congressional bill H.R. 25/S. 25, the FairTax is a proposal to replace the federal personal income tax, corporate income tax, payroll (FICA) tax, capital gains, alternative minimum, self-employment, and estate and gifts taxes with a single-rate federal retail sales tax. The FairTax also provides a prebate to each household based on its demographic composition. The prebate is set to ensure that households pay no taxes net on spending up to the poverty level.” (page 2)

Net tax cut - “Revenues from the FairTax at a 23% tax rate, plus other federal revenues, are estimated to yield $3,209 billion which is $76 billion less than current CBO spending projections for 2007… ensuring real revenue neutrality at the federal level… implies a rate of 23.82%.” (page 2)

The press release then goes on to talk about Schauer as supposedly voting for the largest tax increase in the history of humanity. That's for a different post to debunk. Right now, let's talk about the "FairTax."

I'll concede a few points to Congressman Walberg-- the DCCC ad wasn't totally fair. If enacted, the "FairTax" would replace all other federal taxes you pay now. So, no more income tax, no more gas tax, no more business taxes, no more Social Security payroll tax. Instead, everything would be covered in a 23 percent sales tax on everything that you buy. Advocates say that prices wouldn't actually increase, because, no longer having to pay taxes while producing goods or services, businesses would lower their own prices and it would all balance out.

Sounds nice, right? Well, no. I'd like to give a few reasons for why this is a bad idea. This is by no means a comprehensive list.

For starters, it's not a 23 percent sales tax. That number is the result of mildly creative mathematics. Michigan's current sales tax, 6 percent on most items, takes the pre-tax price of the product, calculates 6 percent, and adds that on for the post-tax price. In other words, if a business sets a price at $1.00, tax is 6 percent, and the price you pay is $1.06. It's pretty straightforward.

That's not how the "FairTax" people calculate it. Instead, they get their 23 percent figure by deciding that 23 percent of the item's price will be tax.

As the Washington Post explains:

First, the 23 percent figure is disingenuous. If the current price of a widget is $1, a 30-cent sales tax would be added at the register under the FairTax. Because 30 cents is 23 percent of $1.30, backers of the tax claim that the tax rate is 23 percent.

So, it's not a 23 percent sales tax, it's a 30 percent sales tax. The DCCC ad was wrong. It might seem like a minor point, but it matters.

The Post continues:

The Presidents' Advisory Panel on Tax Reform -- that's President Bush's tax panel -- calculated that the rate would have to be at least 34 percent, not 30 percent, "and likely higher over time if the base erodes, creating incentives for significant tax evasion." Brookings Institution economist William Gale puts the rate at 44 percent -- and his calculation doesn't take into account cheating, for which there would be ample incentive.

(Emphasis added.)

So, now we're up to 34 to 44 percent federal sales tax. Add in Michigan's 6 percent sales tax, and we're looking at a 36 percent sales tax at the minimum and up to a 50 percent sales tax. That's a big increase in prices.

Except, that's not the whole story. Currently, Michigan's state sales tax is not levied on certain items, like food or prescription drugs. This would not be the case for the new Walberg tax, which would be applied to everything. Prices will go up.

And here's where a lot of "FairTax" advocates get angry. They say that prices won't go up, because of the savings businesses experience, not having to pay taxes earlier in the process. The idea is that certain taxes, like business and Social Security taxes, are embedded in the cost of your goods. Since these costs will be eliminated for the businesses, their prices will be lowered, so the new 34 to 44 percent sales tax won't have a real impact.

Setting aside for a moment the question of whether businesses would actually lower their prices to reflect changes in the tax code, FactCheck.org pretty decently refutes this argument:

A bit of critical analysis shows that this cannot be right. The FairTax is revenue-neutral. That means that for every tax dollar collected under the current system, the FairTax has to collect a dollar. If the FairTax exactly equaled embedded taxes, then it could not possibly be revenue-neutral, since embedded taxes do not take into account personal income or estate taxes. The FairTax rate would have to be high enough to replace embedded taxes plus income and estate taxes.

Chris Edwards, the Cato Institute's director of tax policy studies, points out that prices do not really matter; corporate, payroll, income and estate taxes currently generate approximately $2.4 trillion, and a revenue-neutral FairTax would still require that taxpayers pony up $2.4 trillion. Nor is it clear that the 22 percent embedded tax figure is particularly meaningful. David Burton, chief economist of the Americans for Fair Taxation, calls it "simplistic" to think that the entire cost of corporate taxes is borne by consumers. Cato's Edwards suggests that while consumers do pay at least part of the costs, producers also bear some of the burden. That is, employees pay part of the costs of hidden taxes (in the form of lower wages), and corporate shareholders pay another portion (in the form of lower returns on their investments).

So, the prices you pay will be higher.

Then comes the question of whether this makes any sense from the government's perspective. The only way the math works out is if the government pays itself the tax whenever it makes purchases... which gets a little messy. As the Boston Globe explains:

Governments must also pay. The FairTax would apply to all government purchases at every level. Only education spending is exempted.

States would have to pay 30 percent more on every highway and bridge they build, local governments would have to pay 30 percent more for police and fire protection, and even the federal government would have to pay the tax to itself when it buys weapons and ammunition for troops.

Taxes would have to be increased at the state and local level to pay the FairTax to the federal government. The FairTax rate would also have to be higher to pay for the additional federal spending it will require. However, FairTax supporters exclude this higher spending from their calculations. The 23 percent rate is designed only to be revenue-neutral, not spending neutral. Thus the federal deficit would either rise by more than $200 billion per year or spending would have to be cut by this much.

Hm. So, not only would this potentially be a 44 percent sales tax, and not only would prices rise, but local and state taxes will also increase in order for local and state government to afford paying new taxes to the federal government. And then the federal taxes-- now just the "FairTax"-- will have to be increased in order to afford paying... taxes... to... the federal government.

I don't know about you, but I'm starting to lose faith in Congressman Walberg's idea.

But then comes the "prebate." It's the magical addition to the "FairTax" that makes it okay for poor people. Basically, every month, every family in America would get a certain amount of money, calculated based on the size of your family. That check from the government would be enough so that families below the poverty line wouldn't be overburdened by the sales tax. How much would this cost? FactCheck.org:

Sometimes sales taxes are called regressive, meaning that the poorest pay higher rates than the wealthy. Strictly speaking, sales taxes are flat, since everyone pays the same rate. But because the poor tend to spend a high percentage of their income on basic consumer goods such as food and clothing, sales taxes do require the poor to pay a higher percentage of their income in taxes.

The FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a "prebate," which Edwards calculates to be about $5,600 annually. The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending. Americans for Fair Taxation disputes the Treasury Department numbers, claiming that the actual cost would be closer to $485 billion per year. The Treasury Department has so far refused to release its methodology, making it difficult to determine whose estimate is correct.

So, let's say $485 billion is the right number. For comparison purposes, the Social Security Administration expects to pay out about $660 billion this year. So, the "prebate" proposal isn't quite as big as Social Security, but it's getting up there. And here I was, thinking that Republicans didn't want to add extra spending on entitlement programs.

The Boston Globe points out another problem:

Although FairTax supporters tout the generosity of the rebate, it is extremely modest because it is based on the poverty level income - a figure that bears no relationship to the actual cost of living. As a consequence of the way the poverty rate is calculated, childless couples would get a monthly rebate of $391 per month, but a single mother with two children would only get $329 per month.

That doesn't seem very "fair" to me.

Supposing the "prebates" actually did make this a viable plan for those below the poverty line, how would the system effect the rest of us? Back once again to FactCheck.org:

With the prebate program in effect, those earning less than $15,000 per year would see their share of the federal tax burden drop from -0.7 percent to -6.3 percent. Of course, if the poorest Americans are paying less under the FairTax plan, then someone else pays more. As it turns out, according to the Treasury Department, “someone else” is everybody earning between $15,000 and $200,000 per year.

In other words, the net result of the "FairTax" is a middle-class tax increase and an upper-class tax cut.

But let's set all of that aside for a moment. If it makes it simpler, is it worth it? One of the main arguments in favor of the "FairTax" is that it would simplify the tax code, it would be easy to understand, and we could eliminate the IRS. The next, logical question then becomes: Who runs the massive "prebate" system? Who collects the sales tax in the first place? I've got to think a new bureaucracy on the scale of the Social Security Administration (or bigger) would be needed to make all of this work.

And there are more questions. What about charitable giving? Will people give as much if there's no tax incentive? What about tax credits that are used to stimulate certain parts of the economy, like alternative energy?

For that matter, what happens in economic times like we're facing now? If the federal government's primary source of income is a national sales tax, what happens if, in a recession, people just buy less stuff? Government revenues go down, arguably at a time when the government most needs resources to act to stimulate the economy (or bail out failing banks).

So, yes, Congressman Walberg, the DCCC ad didn't tell the whole story. Unfortunately, the whole story is much, much worse.

This is a stupid idea, and I'm embarrassed that my congressman supports it.

Labels: DCCC, Economy, National Sales Tax, Taxes, Tim Walberg

Catching Up... -- Fitzy

For quite a while now, I've written about how Mark Schauer's campaign has been using the internet in smart and innovative ways, as well as their strong outreach program with blogs and people like me. It's really very impressive, and they decided to use the medium yet again to respond to Tim Walberg's attack ads:

Truth Squad: Walberg Attacks Schauer Record of Helping Business - Released September 11, 2008 in response to Walberg's attack ad, "Jobs" (Coverage Here)



and

Truth Squad: Walberg Lies Again - Released September 17, 2008 in response to Walberg's attack ad, "Children's Future" (Coverage Here)



I like the format of these videos-- the true/false message is effective (and kind of funny), and, for the most part, they refute Walberg's attacks fairly well. (In some cases, it changes the subject, refocusing on Walberg's support for a 23 percent sales tax, but it does so smoothly and plausibly. It's certainly a better segue than Walberg's pornography to taxes transition.) It's a good use of video and it offers a point-by-point response.

Next time, I think some low, ominous piano chords might fit well when refuting Walberg's claims, to make the contrast with the hopeful music at the end more clear. But that's just me nitpicking. They're good videos.

The problem is, these things don't work as television commercials. They go out over the supporter e-mail list and are seen by YouTube wanderers, but that's about it. And as of writing this, each video has between 600 and 700 views on YouTube. That's still more than double the number of views Walberg's attack ads have on YouTube (Man, they're really bad at this!), but it's nothing compared to how many will see Walberg's ads on television.

That's where you come in. If you hear someone comment on Walberg's ads, send them these videos. Make sure the people you know see the other side of the story. These won't be viral YouTube sensations, no, but they have the potential to change a few minds.

I'm guessing that we're going to see a lot more of these videos between now and November. I'll be posting them to the Schauer media page on Walberg Watch as they're released.

Labels: 2008 Election, Advertising, Economy, Mark Schauer, National Sales Tax, Taxes, Tim Walberg

Catching Up... -- Fitzy

Congressman Tim Walberg released his third campaign advertisement on September 17, 2008. The ad is harsh-- a mother appears on camera and tells us about the horrors of Mark Schauer. And yet, something seems odd to me about the ad:



Maybe it's just me, but it seems like this ad is trying to do to much. It ties together two attacks on Mark Schauer-- that he supposedly supports high taxes and that he supposedly supports sending pornography to children-- but those two attacks really don't fit together well. The narrative connecting them, which is that Schauer supposedly puts children's futures in jeopardy, strikes me as contrived and unnatural. The first time I watched the ad, my response was, "Huh?"

Then again, the last line sticks, and if you're not paying close attention to the whole thing, the two attacks seem effective. Unfortunately, as is often the case, Walberg's attacks have a casual relationship with reality.

The Schauer campaign released a press release in response to the part about child pornography:

"This latest attack from Tim Walberg is another boldfaced lie from a floundering candidate. Mark Schauer has repeatedly and consistently voted to protect Michigan children, including supporting bills that prevent children from being exposed to pornography. The truth is that while Walberg has done nothing to save Michigan jobs, he will say or do anything to save his own."

SCHAUER HAS A CLEAR RECORD OF PROTECTING KIDS:

• Schauer voted in favor of a six-bill package in 1999 to strengthen the Sex Offenders Registration Act to protect kids from sex predators. [RC #571-576]

• That same year, he voted in favor of a bill to allow libraries to restrict use of the internet or computers from providing obscene or sexually explicit materials to minors. [PA 37, 1999, RC #232 and #491]

• In 2000, Schauer voted to pass HB 4327 so that minors would not be able to see or have access to pornography in stores.

• In 2002, Schauer co-sponsored and voted to pass legislation to strengthen child pornography laws and increase penalties for possession of child pornography. [HB 5296 & 5297, RC #981 and #982]

• This June, Schauer co-sponsored SB 1417, a bipartisan bill that would require public schools to develop programs designed to provide grade-level-appropriate instruction on internet safety for pupils in all grade levels. [SB 1417, 2008]
BACKGROUND ON SB 117:

• An analysis provided to legislators in 1999 by the non-partisan House Fiscal Agency before a vote ever took place on the bill in question explicitly stated, "The bill is almost certainly unconstitutional and will likely be struck down if enacted into law." [SB 117, 1999]

• In 2001, the Eastern District Federal Court for Michigan found that the law violated the First Amendment, and was ruled unconstitutional.

In other words, Schauer did vote against one bill, because it was flagrantly violating our constitutional rights, and would be struck down by the courts... which it was. But Schauer has a long record of voting for laws that can actually do something to protect children.

Congressman Walberg, it takes a special kind of sleaze to accuse your opponent of wanting to send pornography to children. That's dishonest, disgusting, and just stupid.

Labels: 2008 Election, Advertising, Mark Schauer, Taxes, Tim Walberg

This is going to get pretty nasty... From YouTube user SeventhDem:



This is Walberg's second television ad and, perhaps because of its negative tone, is not yet included on the Walberg for Congress YouTube channel. Here's the Schauer campaign response:

WALBERG ATTACK MACHINE LIES ABOUT SCHAUER RECORD OF HELPING SMALL BUSINESSES

Schauer has strong record of helping tool and die industry compete for jobs, while Walberg is making things worse

BATTLE CREEK-- Yesterday Congressman Tim Walberg's attack machine kicked into high gear with a new round of television commercials aimed at distorting Mark Schauer's record on support for local businesses. In the commercial, Mike Shirkey of Orbitform in Jackson says, "This plant, these jobs, our survival's in jeopardy."

"Mr. Shirkey, Mr. Walberg -- tell the truth. Because of Mark Schauer's hard work and dedication to his district, an MEDC report shows that Orbitform pays virtually no state or local taxes," said B.J. Neidhardt, Campaign Manager for Schauer for Congress. "The simple truth is that Mark has fought on behalf of tool and die companies like Orbitform, which have been hit hard by the unfair trade deals that Tim Walberg and George Bush have staunchly supported."

As the Democratic Vice Chair of the Committee on Commerce and Labor, Mark Schauer was instrumental in crafting the legislation to create tool and die renaissance recovery zone in 2003 (PA 266 of 2003, RC 649), and has supported every expansion of the bill since then (RC 155'06, RC 231'08, RC 712'05).

A press release sent out by the Michigan Economic Development Corporation (MEDC) in December 2005 reveals that Orbitform and nine other companies in Jackson County formed the Automation & Tooling Alliance of North America to receive the tax-free tool and die renaissance recovery zone designation. According to the release, "The zones allow companies to operate free of virtually all state and local taxes for up to 15 years, thus boosting their efforts to compete in the face of global competition."

Not only did Mark help craft the legislation to create the renaissance recovery zones for tool and die companies, but he also helped secure Orbitform's renaissance status through the MEDC in 2005. That year, he also actively lobbied the Jackson City Council on behalf of Orbitform's management to approve the company's tax-free designation on June 28, 2005.

"It's not surprising that Mr. Shirkey was willing to attack Mark in a campaign ad for Tim Walberg, considering that he and his family have donated over $8,500 to Walberg's campaign," said Neidhardt. "Earlier this summer the Jackson Citizen Patriot pointed out his use of inflammatory partisan rhetoric in official company messages, so you have to consider the messenger."

Background:

- On December 12, 2005, MEDC sent out a press release announcing tool and die renaissance recovery zone status for Orbitform, exempting them from "virtually all state and local taxes." [Link]

- Nearly ¾ of Tim Walberg's 2006 primary money came from Club for Growth, a group that lists expanding free trade as one of its main goals. [Ann Arbor News, 8/9/06]

- Mike Shirkey and members of his family have donated over $8,500 to Tim Walberg's campaign. [Link]

- According to a blog post on the Jackson Citizen Patriot website, a two-minute monologue from Mr. Shirkey attacking presidential candidate Barack Obama was available on company phones earlier this summer. [Link]

- A copy of Tim Walberg's attack ad can be found on YouTube. [Link]

# # #

That's a fairly effective response to the ad and to Mike Shirkey, but at some point, the Schauer campaign will need a good response to the "deciding vote for the largest tax increase in Michigan's history" nonsense. It is nonsense, too (and hopefully I'll get a chance to write more about it), but a short, memorable response to the claim would be helpful.

I am, however, surprised by an attack ad from the Walberg campaign this early. Normally, I would think they'd save this for October, and let their buddies at Freedom's Watch do the dirty work. This makes me think that the ad is mainly a response to the EPIC-MRA poll that came out last week. Recall:

Overall, would you say that things in the United States are generally headed in the right direction, or have things pretty seriously gotten off on the wrong track?

8% Right direction
78% Wrong track
14% Undecided/Don't know/Refused

[...]

How would you rate the job being done by Tim Walberg in the United States Congress-- would you give him a positive rating of excellent or pretty good, or a negative rating of just fair or poor?

TOTAL POSITIVE - 32%
TOTAL NEGATIVE - 43%

[...]

If the election for U.S. Congress were held today, would you vote for Mark Schauer the Democrat, Tim Walberg the Republican, Lynn Meadow of the Green Party, or Ken Proctor the Libertarian?

TOTAL WALBERG - 43%
TOTAL SCHAUER - 40%
TOTAL MEADOWS - 1%
TOTAL PROCTOR - 2%

Walberg's campaign is reacting to what looks like momentum for Mark Schauer. It seems to me that they're worried, and with good reason.

And, of course, remember that Mark Schauer hasn't gone on the air yet with his television ads. Walberg has been on the air since August 6th.

UPDATE: Sometime between when I first posted this and now, the Walberg campaign put up their ad on YouTube.

Labels: 2008 Election, Advertising, Economy, Mark Schauer, Taxes, Tim Walberg

I haven't been doing a great job here lately, but hopefully that'll change in the near future. After a couple of stressful weeks, I took a bit of a blogging vacation. But I'm back.

I'll have plenty of Walberg Voting Record updates coming up, but for now, here's some stuff that should be posts on their own. Instead of giving all the topics the time they deserve, I'm going to try to run through them all in this post.

____
The DCCC has been kind enough to put me on their press release e-mail list. Here's some of what they've been sending me lately.

Representative Tim Walberg Puts Big Oil Ahead of Middle Class Americans

‘Gas Prices Hit a Record High’ is a headline Americans are all too familiar with these days. Rather than join the bipartisan solution to lower energy prices and end America’s dependence on foreign oil, Representative Tim Walberg voted yet again for Big Oil.

“Hardworking Americans are being squeezed by skyrocketing gas prices, high health care costs, and increasing college costs. Rather than relieve Americans’ pain at the pump, Representative Tim Walberg voted to keep spending our tax dollars on subsidies and tax breaks for Big Oil making billions of dollars in profits,” said Jennifer Crider, Communications Director for the Democratic Congressional Campaign Committee. “Representative Walberg opposed a common sense, bipartisan energy plan that reduces America's dependence on foreign oil, lowers gas prices, and creates jobs.”

Background

· The Energy Independence and Security Act (H.R. 6) will take groundbreaking steps toward ensuring America’s energy independence and national security, including the first increase in vehicle fuel efficiency in a generation [H.R. 6, #1140, 12/6/07].

· The measure will increase the corporate average fuel economy (CAFE) standard for new cars and trucks to 35 miles per gallon by 2020. This is the first increase in the fuel economy standard by Congress since 1975 and will reduce American oil consumption by 1.1 million barrels per day (roughly half of our current oil imports from the Persian Gulf).

o According to the American Automobile Association, drivers in Michigan currently pay an average cost of $ 3.01 per gallon at the pump [http://www.fuelgaugereport.com/sbsavg.asp]. This increase to the fuel economy standard will and save America’s families between $700 and $1000 per year at the pump and reduce America’s output of greenhouse gases equal to taking 28 million of today's average cars and trucks off the road.

· The measure will repeal the Bush Administration’s tax breaks for Big Oil companies and invest those savings in renewable sources of energy.

· The bill is supported by a wide range of leading business, labor, and environmental advocacy groups including the Alliance of Automobile Manufacturers, The United Auto Workers, the Sierra Club, and the League of Conservation Voters.

and

Representative Tim Walberg Opposes Middle Class Tax Relief for 23 Million Americans

Late last night, Representative Tim Walberg voted to raise taxes on more than 23 million middle class families across America, including 771,200 Michigan taxpayers who will be hit by the Alternative Minimum Tax in 2007.

“Representative Tim Walberg voted to raise taxes on 771,200 hard working middle class families in Michigan already squeezed by expensive mortgages, growing credit card bills, and skyrocketing gas prices,” said Jennifer Crider, Communications Director for the Democratic Congressional Campaign Committee. “This holiday season, Representative Walberg has given middle class families a giant tax bill to look forward to. Clearly, Representative Walberg values rubber stamping President Bush more than the middle class families he represents.”

Background

* The Temporary Tax Relief Act (H.R. 3996) would cut taxes for 23 million middle-class Americans by providing them relief from the Alternative Minimum Tax (AMT). [H R 4351, #1153, 12/12/07].

* According to Citizens for Tax Justice, an estimated 771,200 taxpayer’s in Michigan will be hit by the Alternative Minimum Tax in 2007.

* Additionally, the Temporary Tax Relief Act will expand the Child Tax Credit to provide tax relief to 12 million families with children

* Middle class tax relief is paid for in this measure, rather than the Republican plan that leaves it to future generations to pay for tax cuts.

and

Representative Tim Walberg Voted Against Community Policing

Despite the FBI reporting that violent crime has increased for the first time in a decade, Representative Tim Walberg opposed giving law enforcement in Michigan the resources they need to fight crime in our communities.

“Even with violent crime on the rise, Representative Tim Walberg voted against giving police and prosecutors the vital resources they need to keep Michigan’s communities safe,” said Jennifer Crider, Communications Director of the Democratic Congressional Campaign Committee. “Keeping Michigan’s communities safe should be Representative Walberg’s highest priority, not Rubber Stamping President Bush’s proposed cuts to state and local law enforcement.”

Background

* The Consolidated Appropriations Bill includes $2.7 Billion to help state and local law enforcement fight crime and keep communities safe [H R 2764; Roll Call Vote 1171]

* The measure also rejects the President’s proposed 94% cut to the Community Oriented Policing Services (COPS) program and instead provides $587 million to fund COPS. This includes $20 million for the “COPS on the Beat” program, which hires more police officers and has not been funded since 2005.

· According to the FBI, violent crime in America increased in 2005 and 2006 for the first time in a decade. [LA Times; 12/19/06]

That's the DCCC's take on his votes. Perhaps biased? Maybe. But I am glad to see they're keeping the pressure on him as we approach November 2008.

____
Susan Demas has a column in a recent issue of the Battle Creek Enquirer that's kind of harsh on all fronts, criticizing both Congressman Tim Walberg and Michigan Senate Minority Leader Mark Schauer. It's worth reading, even for those of us that might not agree with everything she says. Francis Pepper mentioned the column in a post below, but I wanted to point out something from the last couple of paragraphs:

Both candidates play the part of the principled politician to the hilt - Walberg as the über-conservative, anti-abortion warrior and Schauer as the bright-eyed, progressive reformer.

In reality, modest Mark takes his marching orders from the governor and the reverend's soul is the property of Club for Growth.

But wait, some of my liberal friends will yelp. You can't be saying Schauer would be as bad as the congressman.

Policy-wise, Schauer would certainly be a step up if he could manage to pen press releases without lying about snaring money for the Battle Creek airport that he voted against.

What I find revolting is that both men swim the sewage of politics and don't retch - they actually seem to feed off the stench.

It's still early enough for other candidates to jump in. Lord knows, we deserve better.

While acknowledging that Schauer would be a better congressman, it's more than obvious that Demas wants a third alternative. Is she talking about Sharon Renier? I can't speak for her, but I'm guessing probably not. Is there another candidate that Demas is hoping will jump into the race?

____
That question brings me to former Congressman Joe Schwarz. He had a fascinating interview with Jack Lessenberry on WGTE's "Deadline Now" program, and I've wanted to write about that for a while now. I even went so far as to get a copy of the interview from the very friendly folks at WGTE (Toledo, Ohio's public broadcasting station), though the interview is now available online (you've got to scroll down the page a bit to the October 19 broadcast).

The whole thing is worth watching, but I want to look at one exchange in particular. In the interview, Lessenberry asks Schwarz whether he'll run again, and Schwarz says:

I don't know yet, it's one of the things that I've decided not to decide. It is a purposeful choice, not to decide. What candidates do at this stage of the game is go out there and vie for name recognition. I don't perceive myself as having name recognition problems in the 7th Congressional District, first. And secondly, quite frankly, the mechanism by which the Congress operates is seniority and whether you're a junior member of either the majority or the minority in the U.S. Congress, you're not pulling a lot of strength. Decisions are made by committee chairs, ranking members, senior members, so the status of a junior member, especially a junior member of the minority party, whichever party that may be after 2008, isn't going to be much.

Schwarz then continues to talk about the things he would like to still work on in the committees he served on, but says that while it was a privilege to serve in the House, "it's not the be all and end all."

It's always dangerous to read too much into statements like this, because politicians can and do change their minds (as they should). But to me, I'd say that right now, I don't think Schwarz will run. If that's who Susan Demas and others are looking toward as a viable third option, it doesn't look like it'll happen.

It looks like Jack Lessenberry reached about the same conclusion I did. If you watch the end of the program, he offers his own commentary, in which he compares Joe Schwarz to Al Gore. Both, he explains, are politicians who lost close elections and then went on to do a great deal of good work outside of elected office.

As for me, I thought I'd throw in my own thoughts on Joe Schwarz. If Schwarz were to challenge Tim Walberg and win the Republican nomination, I would not vote for him, I would vote for the Democratic nominee. If Schwarz were to run as an independent against Walberg and a Democrat like Mark Schauer, I would not vote for him, I would vote for Schauer. If Schwarz were to run for the Democratic nomination, I probably would not vote for him in the primary.

Why? Because, despite the lies Walberg espoused, Joe Schwarz is a conservative man. He and I disagree on countless issues, and if he ran as a Democrat, he'd certainly not represent the progressive wing of the Democratic Party. But he's a thoughtful, honest conservative, and there's absolutely nothing wrong with that. I have nothing but respect for him, even when we disagree, because hearing him speak, you can tell that he truly believes the things he says, and he's thought them through.

Of course, maybe I'm just easily fooled by politicians that look and sound genuine. After speaking with Mark Schauer, I was left with the impression that he was a genuine, hard-working progressive reformer, but according to Susan Demas, that's not true. Interesting.

____
And now, the last item is a challenge for all of you loyal Walberg Watch readers. About six months ago, I got a new computer, and discovered Windows Movie Maker was pre-installed on it. Now, it's not much compared to the high-quality video production software available, but to a novice like me, this is new and exciting.

After a while, I started making some videos related to Tim Walberg. Not so much attack ads as informative videos, showcasing some of Walberg's votes and finer moments (like, drilling for oil in the Great Lakes, or "Iraq is as safe as Detroit"). But they're a little dry... Before they can go on YouTube, they need background music!

That's where you come in. I can't just stick in music from my own collection because that runs into copyright violations. I may, in fact, be the only YouTube user that cares about that, but nevertheless, I want to avoid phone calls from lawyers. Does anyone know of a good resource where I can get high-quality, public domain audio recordings? MP3 files would be best.

I hope everyone's holiday season is off to a good start.

Labels: 2008 Speculation, Community Policing, DCCC, Energy, Issues, Joe Schwarz, Mark Schauer, Oil, Taxes, Tim Walberg

As I continue to try to catch up with the Walberg Voting Record...

On October 10, 2007, the House of Representatives voted on HR 3056, the Tax Collection Responsibility Act of 2007. A summary of the bill may be found here.

From my read of it, it looks like most of the bill is filled with simple, fairly uncontroversial reforms. For instance:
Since the U.S. Virgin Islands is an American possession (obviously), this seems to make sense. I'm sure there are arguments for and against, but I've got to think that this wasn't too controversial a move.

Other portions of the bill included increasing taxes on American expatriates who renounce their citizenship (apparently, that's an issue) and increasing penalties on individuals and companies that file incorrect information or fail to file certain forms.

The controversial bit of the bill comes here:
At first glance, this doesn't make sense. We want our government to collect its taxes, and debt collection agencies could help to squeeze the money out of folks trying to cheat the system. Right?

Well, Speaker Nancy Pelosi's website explains why that hasn't worked out very well:

Repeals IRS authority to enter into private debt collection contracts. The provision would repeal the 2004 provisions that give the IRS’s authority to enter into contracts with private companies to collect federal income taxes. Numerous cases have been identified that illustrate taxpayer harassment, abusive calling, and violations of taxpayer rights, the Fair Debt Collection Act, and taxpayer return disclosure protections. For example, one elderly couple was called 150 times, including five times a day, asking for a taxpayer. Within the first five calls, the debt collector knew that the taxpayer did not reside at the home. Calls continued for 27 more days with 1-7 calls per day. Other cases involve people in nursing homes, those serving in Iraq, innocent spouses and those subject to identity theft. The Federal Trade Commission has 130 complaints likely to involve the private tax debt contractors, and the Taxpayer Advocate has many more. With bipartisan support, the House has twice passed legislation to stop the private collection of federal taxes, most recently in the Roth amendment to the fiscal year 2007 Treasury Appropriations bill.

A blog called taxgirl has more, from a 2006 post:

Obstensibly, the idea for this move towards privatization is to save taxpayer dollars. However, IRS officials claim that the move will actually be more expensive (up to 8 times moreso) and will result in fewer dollars collected (approximately 5 times less). The net difference to taxpayers? A projected $1.1 billion collection from private companies versus $87 billion from IRS revenue officers - if only they could hire more revenue officers. However, despite the economics, which are undisputed, Congress has refused to allow IRS to hire more revenue officers.

So, private collection companies cost us more money and harass innocent people. It's probably best if we not give them any more contracts.

Now, since I don't know much about tax law, there's a chance that I might have missed some key element of the bill, or misrepresented something. If so, please speak up in the comments and educate me.

Until then, I'll go ahead and conclude that for the most part, it was probably a reasonable and fair piece of legislation.

Most of the House of Representatives seems to have agreed with me, too, because the bill passed, by a vote of 232 to 173.

Congressman Tim Walberg voted No.

I know that Congressman Walberg doesn't like the IRS and would rather replace all other taxes with a 23 percent sales tax. But besides that, is there a reason he voted against this bill?

Labels: 110th Congress, Issues, Taxes, Tim Walberg, Walberg Voting Record

Ordinarily, I stay away from blogging about state government. It's not the focus of this blog, and there are already a lot of smarter, more talented people covering it on other websites. But it's certainly worth mentioning on this blog. Why?

For starters, one of the Democratic candidates, Mark Schauer, is a key player as minority leader in the Michigan Senate. But I'm not planning to spend much time talking about his role in the negotiations and (hopefully) the final budget except for how it relates to the 7th District race.

That's Senator Schauer. It's his job to work on this problem, so it's not worth blogging about on this website. Tim Walberg is a different story. It's not really his job to participate in state government, so I was surprised when I saw this:

Washington, Sep 20 - U.S. Congressman Tim Walberg (R-MI) and four other members of the Michigan Congressional delegation stood with Republican leaders in the Michigan Legislature today against Gov. Granholm’s plan to raise taxes on all Michiganders.

Joining Walberg in signing a letter to Senate Majority Leader Mike Bishop and House Republican Leader Craig DeRoche are Rep. Joe Knollenberg, Rep. Thad McCotter, Rep. Fred Upton, and Rep. Mike Rogers.

“We can build a better, brighter future in Michigan and return our great state to prosperity,” Walberg said. “We just need the courage and determination to cut waste and instill fiscal discipline. Instead of using good stewardship and being responsible with taxpayer dollars, the Governor is attempting to ‘invest’ by divesting money from hard-working taxpayers.”

Congressman Walberg certainly has a right to speak out on these issues. But I'm a little distressed when he takes the opportunity to reject compromise and push a hard-line anti-tax message that could lead to a government shutdown.

Make no mistake, Walberg isn't speaking on behalf of the downtrodden taxpayer. He's urging his fellow Republicans to reject compromise and embrace a government shutdown. Even if the Democrats in the state government caved to all of their demands, it would still mean drastically reduced services. Either way, Tim Walberg is pushing for a government that does either less or nothing.

Anyone with any sense of fiscal responsibility would recognize that sometimes, every once in a while, a tax increase is necessary to maintain services.

Former Congressman Joe Schwarz gets it:

The current income tax rate is 3.9 percent. Many Democrats want to set the rate at 4.6 or higher, while Republicans don't want to go any higher than 4.3 percent.

The difference between the two proposals means millions of dollars more for the state treasury and higher tax bills for the typical Michigan family.

Calls for a budget solution are coming from all sides of the political spectrum. Late last week, 28 former Republican lawmakers sent a joint letter to current GOP lawmakers, urging them to compromise.

Among the signers were former Senate majority leaders Ken Sikkema of Wyoming and Dan DeGrow of Port Huron; former House Speaker Paul Hillegonds, then of Holland; and longtime senators Harry Gast of St. Joseph, Joe Schwarz of Battle Creek, George McManus of Traverse City and William Sederburg, then of East Lansing.

"We believe that while the solution does not involve taxing our way to solvency, it cannot involve only budgetary cuts," the letter read. "Wise stewardship requires a prudent mix of structural reforms to streamline government, budget cuts to focus government on essential state services and additional revenue to equip the State to carry out its important responsibilities."

(Emphasis added.)

Once again, Walberg and Schwarz have found themselves in a battle for the soul of the Republican Party. To Schwarz, the top priority is having a government that works efficiently on behalf of its citizens. To Walberg, the top priority is following Club for Growth orders and cutting taxes, without considering how it might affect people's lives.

At the end of the week, the state government will begin to shut down. State employees won't show up for work, Secretary of State offices will close, schools won't be able to function. We really, really don't want this to happen. But Walberg does.

I wonder if he'll still get his pension checks from the state of Michigan if the government shuts down. Anyone know the answer?

Labels: Joe Schwarz, Mark Schauer, Taxes, Tim Walberg

The House of Representatives recently addressed two related pieces of legislation. I'll cover them in one post.

First up is HR 3221, the "New Direction for Energy Independence, National Security, and Consumer Protection Act." It wins the prize for having the longest title I've seen lately, but it looks like it does a lot of good things. It's self-description:

Moving the United States toward greater energy independence and security, developing innovative new technologies, reducing carbon emissions, creating green jobs, protecting consumers, increasing clean renewable energy production, and modernizing our energy infrastructure.

I'll admit, I haven't read the bill, but you can feel free to do so. It's 700 pages long. From a Washington Post editorial:

We've lauded the good things in this bill before. The investments in renewable energy, the incentives for manufacturers to make and for taxpayers to purchase appliances and vehicles that "push the boundaries of efficiency," and the federal government leading by example in the drive to cut carbon emissions are all good. What's especially good are the funds made available to demonstrate the commercial viability of carbon capture and sequestration. The United States sits atop the world's largest reserves of coal, a chief source of greenhouse gases. Finding a way to pump and lock the heat-trapping gas underground would not only be an enormous environmental breakthrough, but it would also be a technological advance that could then be sold overseas, particularly to China, which is overtaking the United States as the world's largest emitter of carbon dioxide.

The Post notes, however, that fuel efficiency standards are not increased, calling that omission the bill's major flaw.

HR 3221 passed, 241 to 172.

Now, will the self-proclaimed environmentalist Congressman Tim Walberg support this bill?

Well, no. Tim Walberg voted No. Michigan Republicans Vern Ehlers, Joe Knollenberg, and Fred Upton joined a united Democratic delegation in support of the bill.

With that bill passed, the House then addressed HR 2776, the "Renewable Energy and Energy Conservation Tax Act of 2007." Having passed the first bill, this one will provide the funding.

Think Tim Walberg will support this one?

Democrats moved forward with their energy tax bill (HR 2776) despite concerns from oil-state Democrats upset about treatment of the oil and gas industry. The $16.1 billion package would raise taxes on the oil and gas industry and redirect the proceeds to tax breaks for renewable energy sources; no amendments to the tax portion will be considered Saturday.

The bill passed, 221 to 189.

Tim Walberg predictably voted No. All of Michigan's Republicans opposed the second bill, while all Michigan Democrats supported it (minus Congresswoman Kilpatrick, who did not vote).

Meanwhile, as is so often the case, the White House has threatened to veto the legislation.

Labels: 110th Congress, Energy, Environment, Global Warming, Issues, Oil, Taxes, Tim Walberg, Walberg Voting Record

TCS Daily-- formerly "Technology Central Station"-- is a website which comments on "Technology, Commerce, [and] Society." It was started by the lobbying group DCI, which has close political ties to the Republican Party. TCS Daily has been criticized for its conservative bias in the past.

So it's no surprise that Congressman Tim Walberg would want to do an interview with TCS Daily. And it's even less of a surprise that they'd talk about Walberg's favorite subject, that fictitious tax increase Walberg says Democrats support.

Here's what does surprise me, though. For as much as he talks about taxes, Walberg doesn't seem very comfortable talking about them, even with other conservatives. See, on question after question, he dodges the substance of the issue. He doesn't answer the questions. Take a look:

Schulz: Why were the tax cuts that were passed in 2001 and 2003 not made permanent when they were enacted?

Rep. Walberg: They should have been enacted as a permanent part of the tax code, and I will fight to make them permanent.

Note that he doesn't answer the "why," especially since it was Republicans that passed them.

Schulz: Supply-siders argue that tax cuts prompt growth that can offset the revenue losses due to rate cuts. Given the way taxes can influence growth, how do we know what the optimal level of taxation should be?

Rep. Walberg: The average taxpayer filing a 1040 spends 30 hours filling out a tax return and more than six in ten Americans now hire someone to help prepare their tax returns every year. The hundreds of billions of dollars spent each year complying with the federal tax code could be used more efficiently by families and small businesses to grow the nation's economy and create jobs. I support tax reform that will make the tax code simpler and stop the billions of wasted hours spent by Americans just to comply with a burdensome and overly-complex tax code.

Question: How do we know what the tax rate should be? Answer: The tax code is too complicated.

Schulz: What do you make of recent proposals to increase taxes on private equity firms by taxing the so-called 'carried interest'? Would your legislation address that?

Rep.Walberg: The Tax Increase Prevention Act would simply make permanent the tax relief from 2001 and 2003. I support restraining federal spending and have pledged not to raise taxes.

What do you think of taxing "carried interest"? Walberg doesn't have an opinion, except that you shouldn't raise taxes.

Schulz: How are we going to tackle the looming shortfall in entitlement payments, in particular in Medicare, without tax increases?

Rep. Walberg: If you look across the ocean to Europe, massive tax-and-spend policies in countries like France and Germany have led to anemic job creation and stagnant economies. France recently elected a new President based largely on his pledge to cut taxes, balance the French budget and get its economy moving again. Economic growth, increased prosperity and making the tough decisions on needed reforms to restrain entitlement spending are the keys to tackling the upcoming demographic issues related to entitlement spending. The last thing the American people need is higher taxes that will make our nation less prosperous.

How do we handle entitlements? Blame France.

I mean, really, this is pathetic. Congressman Walberg, this is supposed to be your area of expertise! You talk so much about cutting taxes, I'd think you knew the tax code inside and out! But when you're handed easy questions from a conservative and for a conservative audience, all you've got are the same tired talking points. You don't even bother to give real answers.

Sad.

Labels: 110th Congress, Issues, Taxes, Tim Walberg

So, when an elected official lies to me, it ticks me off. When he does it over and over and over, in constituent meetings and in the media, I get really upset.

It's not bad enough that Congressman Tim Walberg wrote an op-ed in the Battle Creek Enquirer complaining about a fictitious tax increase. Now he's got to take his message to the national (conservative) media through Human Events.

Just to recap, for those that haven't been following this and don't want to click through the links above... In March, the Democratic Congress passed a budget plan for fiscal year 2008 which sets spending estimates for future appropriations bills and makes revenue predictions for future years. Those predictions are made based on current tax law-- not fantasy laws Tim Walberg wishes existed-- and include surpluses for late next decade. How does this happen? Well, President Bush's first-term tax cuts included expiration dates (2010) after which tax rates would return to pre-cut levels (as written by a Republican-controlled House of Representatives). Since no laws have been passed yet to change those expiration dates, revenue predictions take this into account.

Tim Walberg says that this is, in fact, the largest tax increase in American history, and that the mean old Democrats snuck it by everyone except him. I say that the Democrats in Congress are merely guilty of having good math skills.

This brings us to today...

Walberg opens his latest article talking about a New York Times article he read stating that many states were finding that, because of recent economic growth, tax revenues were higher than expected. That's pretty cool, though Michigan is not a state lucky enough to be facing that sort of issue.

Where he loses me, however, is when he claims that this development is because of the tax cuts passed in President Bush's first term. Walberg writes:

"More than 40 states have found themselves with more money than they planned... states are looking to give relief to taxpayers who have long been howling about property taxes, and to pay back areas that states have been robbing to balance previous budgets..."

[...]

Because tax relief passed by Congress in 2001 and 2003 is working, states are much more likely to take fiscally responsible moves and tighten their belts instead of hiking taxes. States that were once in recession are now brimming with tax revenue.

Walberg uses the same poor logic so often used by politicians: Post hoc, ergo propter hoc, or "after it, therefore because of it." Yes, many state governments are getting this extra boost thanks to economic prosperity, and yes, Congress did pass some tax cuts prior to that. But that doesn't prove a cause-and-effect relationship.

Could the tax cuts have had a positive impact? Maybe, maybe not. But Walberg offers no evidence, and just saying it doesn't make it so.

Later in the article, Walberg writes:

Unfortunately, Democrats in Congress are choosing to ignore advancements made possible by the 2001 and 2003 tax cuts.

In their most recent budget bill, House Democrats sought to enact a $400 billion tax increase that will cripple current progress in our economy.

Stop right there! I've just got to remind everyone, the Democrats did NOT pass a $400 billion tax increase! They passed a budget plan that makes predictions, and doesn't raise taxes.

If a $400 billion tax increase was ever passed, it was passed when the Republicans in Congress made their tax cuts expire in 2010. The Democrats are just working with the law as it currently reads.

Anyway, I'll let him continue.

Should Democrats follow through on their budget promises, the American people will face the following:

A $500 per child tax increase
A 55% Death Tax
A 13% tax hike for many small businesses
A 33% tax hike on capital gains
A 164% tax hike on dividends

Five million low-income families who currently pay no income tax will be hit with a tax bill

I'll trust his numbers here, but I'd love for someone to check them. But assuming he's right, let's remember, this is what would happen if absolutely no action is taken between now and 2010.

Let's be realistic here. This isn't what will actually happen.

Some of those taxes will return to their previous rates, but a lot of them-- especially any of the ones targeted at low- and middle-income Americans-- are the sort that Democrats would support. In fact, they might lower those taxes even further, positioning themselves as champions of the working middle class, while letting the tax giveaways to the top income earners (those most able to pay) expire. Revenue predictions don't always predict political realities.

Congressman Walbegr's answer, of course, is the bill he's apparently introducing this week, the "Tax Increase Prevention Act". It would make all the tax cuts permanent.

One of the things Tim Walberg doesn't seem to understand is that it doesn't have to be a binary choice of extending the cuts or not. Some cuts-- the ones that work, the ones that target those that need it-- can be extended and made permanent, while other cuts-- the ones targeted at the richest Americans who don't really need tax cuts-- can be allowed to expire. Rather than falsely accusing the Democrats of raising taxes, Walberg ought to be looking and which cuts worked and which didn't, and he should decide which ones are worth keeping. That's a logical, sensible way of doing it.

Logic and sense... imagine that.

Of course, let's also remember that this whole thing is a made up issue that Walberg is trying to exploit. The cuts won't expire until 2010, and the Democrats aren't making them do that, they just haven't addressed the issue yet (which makes sense, 'cause they've got a couple of years to do it). In their budget plan predictions, they just made estimates based on everything we know now. They don't subscribe to the "if we believe it, it might be true" philosophy.

Walberg's real dispute isn't with Democrats that want to raise taxes. It's with budget plans that use good math and current tax laws.

Poor guy. Even his pocket calculator has turned against him.

Labels: 110th Congress, Budget, Taxes, Tim Walberg

Congressman Tim Walberg wrote an op-ed piece for the Battle Creek Enquirer that appeared in the May 16, 2007 issue of the newspaper. He took up the issue of taxation and the Democratic budget plan for fiscal year 2008-- a plan he has repeatedly misrepresented as "the biggest tax increase in American history."

In his piece for the Enquirer, Congressman Walberg is absolutely wrong on all counts.

If you have a moment, I'd like to take you through it step by step. Walberg opens with this:

In his budget message to Congress in January of 1963, President John F. Kennedy wrote, "Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased - not a reduced - flow of revenues to the federal government."

Perhaps it's time to remind the new leadership in the U.S. House of Representatives of President Kennedy's exemplary fiscal insight imparted to Congress years ago.

Well, yes. President Kennedy did, indeed, push for a tax cut as part of his "New Frontier" program. But it's more complicated than that.

When Kennedy took office, the highest income tax rate was 91 percent, applied to the richest Americans. He felt that this rate was stunningly high, and in order to help the economy, it was cut by Kennedy to 70 percent. For purposes of comparison, the rate applied to the highest incomes today-- the very richest of the rich corporate executives-- is just 35 percent.

But that's not all. Kennedy's tax cuts were very different from those of George W. Bush or Ronald Reagan or Timothy Walberg. David Greenberg wrote a fascinating piece for Slate.com three years ago. He says:

So, was Kennedy really a forerunner to Reagan and Bush? Or are supply-siders just cynically appropriating his aura? The Republicans are right, up to a point. Kennedy did push tax cuts, and his plan, which passed in February 1964, three months after his death, did help spur economic growth. But they're wrong to see the tax reduction as a supply-side cut, like Reagan's and Bush's; it was a demand-side cut. "The Revenue Act of 1964 was aimed at the demand, rather than the supply, side of the economy," said Arthur Okun, one of Kennedy's economic advisers.

This distinction, taught in Economics 101, seldom makes it into the Washington sound-bite wars. A demand-side cut rests on the Keynesian theory that public consumption spurs economic activity. Government puts money in people's hands, as a temporary measure, so that they'll spend it. A supply-side cut sees business investment as the key to growth. Government gives money to businesses and wealthy individuals to invest, ultimately benefiting all Americans. Back in the early 1960s, tax cutting was as contentious as it is today, but it was liberal demand-siders who were calling for the cuts and generating the controversy.

In other words, the cuts Kennedy advocated were just as massive as President Bush's cuts, which Tim Walberg supports. But it's not so much the size as it is the target. Kennedy and Walberg have economic outlooks that are polar opposites.

Liberals don't think all tax cuts are bad. We just think that tax cuts ought to be directed in a way that benefits as many individual taxpayers as possible.

Of course, if Walberg is quoting Kennedy, maybe he'd be willing to support some of Kennedy's other ideas. The "New Frontier" included action on civil rights, raising the minimum wage, revitalizing cities (instead of comparing them to war zones), and other left-leaning causes.

But all that was just Congressman Walberg's introduction. Let's continue further into his op-ed piece.

In March, House leadership introduced and passed a budget proposal that represents the largest tax increase in American history, nearly $400 billion over the next five years.

First of all, no. Saying that the budget proposal passed in March "represents the largest tax increase in American history... over the next five years" is a clever way of avoiding the truth at best, and an outright lie at worst.

As I wrote before, the budget proposal Walberg refers to doesn't raise anyone's taxes. Toward the beginning of the year, Congress passes its plan for spending in the next fiscal year, and then follows that plan with specific appropriations bills. The bill passed by House Democrats says nothing about increasing or decreasing taxes. So where does Walberg get his numbers?

When a Republican-led House of Representatives passed President Bush's first term tax cuts, they included in them expiration dates-- most of them will end after 2010. The issue of whether or not they should be or will be extended was not addressed in the budget plan.

But when the budget bill made long-term projections, it assumed that the current laws would be carried out as written. That is, it assumed that the tax cuts will expire, as they were intended to, and as they will if Congress chooses not to extend them. That, by the way, would result in a federal budget surplus late next decade, after years of massive deficits.

So what does all that mean? It means that Tim Walberg says that a bill that doesn't say anything about raising taxes, and doesn't mention an issue that won't come up for three years, is, in fact, the largest tax increase in American history. Huh.

But sure, let's humor him. Suppose this really is a tax increase. What would happen? Well, Walberg tries to inform us.

A recent Heritage Foundation study

Wait! I've got to stop him right there. Let's take just a quick glance at the Heritage Foundation. It's a conservative think-tank, which focuses on publishing its findings in short papers rather than massive books, in order to appeal to members of Congress with the "briefcase test"-- if it doesn't fit in the briefcase, they won't read it.

Unfortunately, this-- combined with a decidedly conservative bias-- can lead to some inaccurate, incomplete, and misleading information. They're very close to the Bush Administration, and the money comes primarily from big corporations and rich donors. They're the folks that started TownHall.com, at which Walberg wrote an essay earlier this year. (For more information, try here, here, here, and here.)

In other words, take everything the Heritage Foundation says with a grain of salt.

But I'll let Congressman Walberg continue...

A recent Heritage Foundation study revealed this plan would raise taxes by $3,019 for each person in Michigan's 7th Congressional District.

Additionally, the Heritage study revealed this tax increase would cause 2,272 job losses in south-central Michigan and cost the 7th District's economy $207,000,000.

Right. So, each and every one of us is going to have to pay an extra $3,019? I don't know, that doesn't sound quite right. So I checked out the numbers Walberg is quoting (scroll down for Michigan). What the column actually says is "Average Tax Increase Per Taxpayer," not "for each person." The more you make, the more your taxes would go up. The less you make, the less they'd go up. So Walberg is at the very least guilty of misrepresenting the figure for political scare tactics.

By the way, it's worth noting that even the Heritage Foundation study Walberg cites admits that the Democratic budget proposal isn't actually a tax increase. It says:

Again, the budget resolution does not contain a detailed tax plan. However, the resolution also is silent on the most important tax policy change since 2001: the expiration of the tax law changes from 2001 through 2004 over the next four years. This paper presents estimates of the potential impact that allowing the Bush tax cuts to expire would have on Americans.

So who loses the most from this mythical tax increase? Well, since it would be the expiration of the Bush tax cuts, we have to look at who the biggest winners were. The Center on Budget and Policy Priorities (admittedly, using data from a progressive think tank) gives us this table:

Table 3
Distribution of Tax-Cut Benefits in 2004 (reflects tax cuts enacted since 2001)
Income Class	Average tax cut	% increase in after-tax income	% share of tax cut
Middle 20 percent	$647	2.3%	8.9%
Top one percent	$34,992	5.3%	24.2%
Over $1 million	$123,592	6.4%	15.3%
Source: Urban-Brookings Tax Policy Center

In other words, it's not ordinary, middle-class residents of Michigan's 7th District that would end up paying more, if this were actually a major tax increase. Instead, it's the very top that would pay more, the folks that can actually afford to pay more. (By the way, the CBPP analysis I got that table from does a pretty good job of explaining why the Bush tax cuts Walberg loves so much have not actually helped the economy.)

Walberg's op-ed isn't finished, though. He continues...

As I visit with manufacturers in Battle Creek, farmers in Homer and constituents at a coffee shop in Marshall, I hear the same common theme: Taxes are too high and government should get off our back so Michigan can prosper again.

I admit, I probably don't talk to nearly as many farmers in Homer or manufacturers in Battle Creek as Congressman Walberg does. Still, the folks I talk to do grumble about taxes. But that's not the big complaint they have.

In fact, nationwide, "Taxes are too high and government should get off our back" doesn't seem to be the major complaint. Here are two recent polls:

Gallup Poll. April 23-26, 2007. N=1,007 adults nationwide, drawn from Gallup's household panel, which was originally recruited through random selection methods. MoE ± 4.
					.
"In your view, what one or two issues should be the top priorities for the President and Congress to deal with at this time?" Open-ended. Multiple responses accepted.
					.
			%
	Situation in Iraq/War		66
	Poor health care/Cost of health care		20
	Economy in general		14
	Immigration/Illegal aliens		14
	Fuel/Oil prices/Energy crisis		7
	Environment/Pollution		5
	National security		4
	Education/Poor education/Access to educ.		4
	Terrorism		4
	Federal deficit/Federal debt		3
	Social Security		3
	Other		22
	Unsure		1

CBS News Poll. April 9-12, 2007. N=994 adults nationwide. MoE ± 3.
				.
"What do you think is the most important problem facing this country today?" Open-ended
				.
		%
	War in Iraq	36
	Economy/Jobs	9
	Immigration	5
	Health care	5
	Foreign policy	4
	Terrorism (general)	4
	Gas/Heating oil crisis	3
	President Bush	3
	Other	26
	Unsure	5

Those were both open-ended questions, meaning that the survey reader did not offer any choices. That's important-- it means no one was led on or encouraged to mention any issues. These are the things that are important to most Americans. "High taxes" isn't on either list.

But those are national polls. Anything about Michigan? Well, this isn't exactly the same issue, but it's significant. With the current budget crisis Michigan faces, Governor Granholm wants to increase taxes, combined with cuts in spending. An EPIC/MRA poll found that 70 percent of Michigan voters supported a tax increase of some level. There is no enormous anti-tax movement in Michigan or nationwide.

You ever get the feeling that maybe, politicians like Walberg hear what they want to hear?

But Walberg has more to say.

The budget plan put forward by House leadership embraces a "spend now, reform later" mentality and is an insult to Michigan families and small-business owners.

As all of you well know, a large federal tax increase is the last thing we need in Michigan.

"Spend now, reform later"? Really? This, from the man who opposed spending reforms back in January? See, Tim Walberg says he supports fiscal discipline, but I get the feeling that's a lie. If he really supported responsible spending, he would have voted for the PAYGO rules, which state that any new spending must have some revenue source behind it-- in other words, don't spend more than you have in your wallet. Instead, Walberg voted No.

So, House leadership or a congressman that distorts the issue. Who's really insulting Michigan families?

A recent analysis by economist David Littman of the Mackinac Center compared Michigan's per capita income to the national average and revealed the state reached its lowest level in 75 years in 2005.

Times are tough in our state, and taxpayers in south-central Michigan are making difficult choices every day to ensure their family budgets are balanced. They are doing so by cutting spending and having fiscal discipline.

It's time we make these same common-sense choices on a federal level, without raising taxes.

The Mackinac Center is Michigan's Heritage Foundation, providing the data for every conservative politician's assertions. I couldn't find the Littman analysis Walberg cites, but this section may, in fact, be the most truthful of Walberg's op-ed. Times really are tough in Michigan, and no one can deny that. Cutting unnecessary spending is always part of the budget solution.

However, it's a dangerous thing for a politician to vow never to increase taxes. To anyone not blinded by conservative ideology, it's clear that there are times when it is appropriate to raise taxes.

Of course, all this would matter more if the Democratic budget plan were a tax increase, but it's not.

Next comes the part of the op-ed where Walberg leaps into legislative action, listing the steps he believes will help.

The tax relief passed by Congress from 2001 to 2004 is set to expire, and Congress needs to make tax relief permanent for hard-working American families and implement common-sense policies for the future.

We also must work to eliminate government waste, make certain taxpayer dollars go to meaningful programs and leave resources directly with the people. I support legislation that would give the president line-item veto authority to go through spending bills and eliminate pork-barrel earmarks.

Another top Congressional priority should be the passage of a balanced budget that does not raise taxes. I have co-sponsored legislation, H.J.RES.1, that would amend the U.S. Constitution to require a balanced budget each year.

By passing these common sense reforms, Congress can ease the heavy tax burden America's families already face and help get our economy moving.

I think it's pretty clear that the 2001 and 2004 Bush tax cuts don't really help "hard-working families" all that much, but I'll let it slide. Walberg's main thesis is, of course, that the budget plan ought to have included extensions of those tax cuts.

That's his belief, and, while I disagree, it's an honest disagreement. What bothers me more is the dishonest way in which he frames the issue. I find that insulting.

As far as the Balanced Budget Amendment, I'll say that I'm always hesitant to amend the Constitution, but I don't know enough about the issue to take a stance. I will say that a balanced budget would be easier to achieve with those PAYGO rules Walberg voted against.

And then, there's wasteful spending. Congressman, eliminating pork-barrel earmarks is a good start, but is there anything else you'd like to see cut? This is a serious question, and if any Walberg staffers are reading this, I'd love to get a serious response. What programs or departments would Congressman Walberg like to see eliminated? After all, with a massive deficit and even larger national debt, it'd be great if we could spend a lot less (and maybe even cut some taxes).

This week Congress is scheduled to vote on the conference version of House leadership's budget proposal.

My message to House leadership during the debate on this final proposal will be simple: Leave more resources with the hard-working people and small businesses that make our communities strong, and no more tax increases.

That version passed, 214-209. Needless to say, Congressman Tim Walberg voted No. Of course, as I've reminded you repeatedly throughout this post, no taxes were actually raised.

By making tax cuts permanent and putting our fiscal house in order, this Congress can go a long way in restoring the trust of the American people and build a better, brighter future for our country.

And that's the end of the piece.

After reading what Walberg has to say, how many of you feel like your trust has been restored?

That's all I've got tonight. Thanks for reading all the way to the end.

Labels: 110th Congress, Budget, Heritage Foundation, Mackinac Center, Taxes, Tim Walberg, Walberg Voting Record