Marco Rubio vs Marco Rubio

Marco Rubio was once the biggest fan of increasing sales taxes to offset the property taxcuts.

“It’s the fairest tax out there. Because you determine based upon how much you have,” Rubio said at a Wednesday news conference. “Sales tax, everyone decides how much they’re going to pay, based on what they decide to buy. If you buy a Bentley, you’re going to pay us more than if you buy an Audi. Or a — well, an Audi is pretty expensive right? A Hyundai. Or like the Prius. I guess that’s pretty expensive, too.”

Major conservative anti-tax advocate Grover Norquist and Florida Senator Mike Haridopolos have come out against the sales tax increase. Rubio now calls the sales tax increase "a potential recipe for disaster." It is fascinating how conservatives follow Norquist like sheep. Rubio is an economic illiterate and he will back down the moment one of the most powerful conservatives in America comes out against his plan. A true profile in courage.

The Sales Tax Increase

The St. Petersburg Times reports a Quinnipiac University poll shows only 48 percent of Floridians support a one cent sales tax increase meant to offset $8-billion cut from property taxes. The idea has come under criticism for money that will be lost from education funding. Under problem is that sales taxes are not a stable tax base. If people are making less money they will purchase less things. Florida has always had this problem with it's current tax system.

The sales tax loopholes is a matter the Republican legislature refuses to address. Corporations can avoid paying state taxes on property sales by filing as a corporate sale.

Phillips Point in West Palm Beach, PGA National Resort & Spa in Palm Beach Gardens, Fort Lauderdale's Las Olas Centre — all are officially recorded as selling for $10 in recent months.

In truth, these trophy properties fetched $200 million, $170 million and $230.9 million, respectively.

So why the tiny sale prices in public records? Taxes.

Florida House Speaker Marco Rubio has long been pushing for the sales tax increase to lower property taxes. Hysterically, Republicans in the Florida Senate are against the idea because they fear they would have to eliminate corporate sales tax loopholes in order to make up for loss revenue.

Haridopolos is in line to become Senate president in 2010, and likely would be at the forefront of having to find the replacement revenue. He's among a group of Florida lawmakers who have signed a pledge not to raise taxes.

Haridopolos' math works like this: To avoid raising taxes, legislators would have to eliminate the largest sales tax exemptions other than the sacred ones for groceries, rent and prescription drugs.

The remaining exemptions include the value of trade-ins toward new car purchases, government supply purchases, the purchase of fuel by utilities and for metered water.

"You will start to tax items that are not currently taxed. By any definition, that's a tax increase," Haridopolos said. He said he has written three letters to the tax commission over the past two weeks but has received no reply.

I don't know whether to laugh or cry at Rubio's and Haridopolos's economic stupidity.

In other news: the legislature is making drastic cuts to the Department of Children & Families.

But Thursday, in his latest role as Secretary of the Department of Children & Families, Butterworth met his match: an intransigent Legislature that is pursuing what he called the equivalent of taking out a ''contract on kids,'' with a budget that ''destroys'' the public safety net by cutting programs deeply rather than tapping the state's $1.3 billion emergency fund, or close corporate-tax loopholes.

''In my 40 years in public service, this is the worst year I've ever seen, the meanest I've ever seen,'' Butterworth told The Miami Herald as the House was completing debate on its $65 billion budget proposal.

Sacrifices must be made to keep football stadium skyboxes tax exempt.

Rubio Pushes Again For Sales Tax Increase

Marco Rubio will once again get to push his horrible sales tax increase. The Florida House Speaker believes in trickle down economics.

"I was raised on other people's leftover money," Rubio, 35, said on the Jim DeFede Show, whose station WINZ-AM 940 identifies itself as the "resource for progressive talk radio." "When people spent their money, they spent it in the places where my parents worked."

He went on: "And I'm telling you that this property tax cut will create $6-billion in disposable income. And what that means in real terms is that people who now mow their lawns will hire someone to do it. ... People who now maintain their own pools will hire someone to do it. ... And that helps the working class. ...

Rubio's comments angered listeners of the Jim Defede Show. One caller destroyed Rubio's bogus economic rhetoric.

"Most working-class people are just struggling to survive and their solution is the most regressive form of tax there is? This is unbelievable. Trickle-down economics was disproven. ... I work my tail off every day just to make ends meet, and if they raise the sales tax, that's going to be coming directly out of every little bit that I earn. It's just going to make it even more expensive to live here, not less."

The previous and current sales tax increase plan is to make up for the loss in property tax revenue. The new proposal would cut property taxes by an estimated 25 percent. The downside is there will be a loss in $6 billion of revenue. Not that Rubio is worried about that.

“If there’s something that’s ridiculous that’s on there we should look at it and talk about it. I just don’t think we should be obsessed with constantly looking for revenue sources, when in fact we have a structural spending problem in government and many of the sources they out line really wouldn’t generate enough money.”

Rubio argues once again that the property taxcut will send people into a retail shopping frenzy. Incoming House Speaker Ray Sansom will inherit Florida's deficit. Fortunately, he appears to be aware that many sales tax exemptions need to be discontinued.

“They shouldn’t be off limits. Some of the tax exemptions have been there for years and years and we need to continually go out and measure the public benefit of these tax exemptions.”

Stadium skyboxes, Superbowl tickets, and limousines are tax exempt. These exemptions make the GOP base happy. There has been zero serious discussion from Charlie Crist about tax reform. These exemptions cost the state an estimated $12.3 billion. I don't know anyone that felt the trickle down effect from these tax loopholes.

Rubio Attempts Another Sales Tax Shift

Florida counties and municipalities increased property taxes because of tax cuts by Jeb Bush and the legislature that created less revenue for schools. Marco Rubio attempted to cut property taxes by creating one of the highest sales taxes in the country. He is now attempting to create a smaller version of that sales tax shift.

But after his speech, the House Policy and Budget Council voted to include a 1 cent sales tax increase in order to cut school property taxes by nearly $4-billion a year. The average property owners' tax bill would drop by 15 to 20 percent, Republicans said.

Rubio floated the idea earlier this year only to meet a roadblock in the Senate. Then, as now, senators view it as a tax increase, a regressive one at that.

It is a sales tax increase and will hurt poor people the most. Contrary to economic zenmasters such as Dennis Hastert and Grover Norquist, a national sales tax does not make up the differnce. Robert S. McIntyre broke down the bogus math of the Americans for Fair Taxation.

I was curious about how the group did its arithmetic, so I checked out its Web site--www.fairtax.org--and sent a note to the E-mail address to get further information about the group's calculations.

According to the group's figures, at 1995 levels a new sales tax would have to raise $1.36 trillion to replace all Federal income taxes, payroll taxes and estate and gift taxes. Under its plan, the group says, taxable spending would be $4.6 trillion (after accounting for rebates to partly protect lower-income families).So, $1.36 trillion divided by $4.6 trillion would be the required sales tax rate. Fine, except that $1.36 trillion divided by $4.6 trillion is not 23 percent. It's about 30 percent.

It turns out that the group's purported 23 percent tax rate is misleading and hypothetical. It came up with that number by dividing the sales tax by the cost of a purchase plus the tax. So if the tax on a $100 purchase is $30, the group prefers to call it a 23 percent "tax inclusive rate" ($30 divided by $130). Ever hear of computing a sales tax like that?

The fact that the group's sales tax, even by its own figures, entails a 30 percent tax rate is only the beginning of the math problems. The group's backup materials also assert that almost a third of its projected sales-tax revenue is supposed to come from taxes the Government will pay to itself. Build a road, pay yourself a tax. Buy some planes for the Air Force, pay yourself some more. And so on.

Unfortunately, that shell game won't work. Without these phantom governmental tax payments, the sales tax rate would have to jump to 42 percent to break even.

Conservative love sales taxes as the answer to all ails. Unfortunately, sales taxes by themselves can fund very little. Unless, people want to pay a nearly 50 percent tax for shopping items. How is that not regressive?

Bye Bye Sales Tax Pitch

That Marco Rubio victory is shortlived.

The most popular, a proposal to slash taxes an average of 19 percent for all property owners in the state and require deep cuts in government spending, won unanimous approval. The other plan, to ask voters to wipe out taxes on homestead property in exchange for a hike in sales taxes, was the preferred choice of House Speaker Marco Rubio but mustered only a party-line vote of 78-40.

Rubio's plan is likely dead in the Senate, where leaders say they have unanimous support for their bipartisan plan to scale back all property taxes 7.6 percent without raising sales taxes to do it.

The two chambers will begin to hash out the differences next week, after the Senate votes out its own plan Friday.

The sales tax would have increased inflation and hurt lower-income workers. This would not address the financial shortfall for building roads, schools and first responders. The Peer Review crowd backs the sales tax on cultural grounds. Not sound policy numbers. Since the writers there believe local governments are spending huge supluses they never had.

Peer Review believes in their political ideology like religion. Facts just get in the way of the gospel.

The political fallout, of the sales tax, would have been giving Rubio a huge political victory and sense of invincibility. Jeb was able to do so much damage because people were afraid to say no to him.

Sales Tax Passes House

Marco Rubio scored a political victory by passing his plan to abolish property taxes and increase the sales tax. The bill needed 90 votes to become a ballot amendment. The sales tax bill heads to a hostile Senate. The earliest voters can expect property tax relief from Rubio's plan is 2010.
A hollow victory.

Bricks and Mortars

It appears the Penny for Pinellas tax really was about bricks and mortars. Judging by the who gave to the political action committee Citizens for a Better Pinellas. The PAC paid for a phone banking campaign to urge citizens to vote to extend the tax.

Donors to CFBP.

Tampa Bay Builders Association: $25,000

Suncoast Utility Contractors Association: $40,000

Johnson, Pope, Bokor, Ruppel & Burns, P.A.: $1,000

Jack Latvala Inc. $1,000

Florida Tax Debate

What needed to be said to the Republicans in the Florida legislature.

A lobbyist for the Florida League of Cities chided lawmakers for helping to contribute to rising property taxes by forcing local school districts to contribute more in order to access state money. A Broward County commissioner asked them if they’d lobby Congress to end the homeland security mandates that followed Sept. 11, 2001, and suggested that local governments might respond to the property-tax cuts by creating new user fees – such as charging people when they borrow books from the library. Even a representative of AARP warned that the retiree organization had “serious concerns” about the measure.

Florida's per-pupil spending has been a disgrace. What Democrats are proposing is what I have already pitched such as ridding corporate tax loopholes. Republicans are pushing hard to ram this through with no debate.

“Procrastination equals inaction,” said Rep. Carl Domino, R-Jupiter. “We need to do something. There’s a demand for relief.”

Republicans are far from confident about the idea. They immediately attacked economist Hank Fishkind's report. What Fishkind had to say didn't fit their ideology. The report put the blame for the property tax nightmare where it belongs.

Property taxes in Florida are collected exclusively by local governments, school boards, special districts and water management district. The State of Florida is precluded from collecting ad valorem taxes. Article VII Section 1(a) of the Florida Constitution makes this clear. “(a) No tax shall be levied except in pursuance of law. No state ad valorem taxes shall be levied upon real estate or tangible personal property. All other forms of taxation shall be preempted to the state except as provided by general law [emphasis added].”

However, the State of Florida does in fact force the collection of property taxes by local school districts, if those districts wish to participate in the Florida Education Funding Program (“FEFP”). In fact, all 67 of Florida’s school districts participate, in part because they also receive very substantial state funds (primarily from the sales tax) by participating. Chapter 1011.71(1), FS sets out the requirements for districts to impose property taxes to meet the requirement of the “required local effort”.

The report conflicts with the conservative narrative that local governments are overfunded.

There is no evidence that Florida counties proliferated staff since 2000 based on our survey of six representative counties used in the LGCI. Figure E7 shows their increases in population growth compared to increases in full-time equivalent (“FTE”) staff. Taken as a whole, these counties had a population increase of 12% compared to a 7% gain in FTE staff. The smaller rural counties had relatively higher increases in staff compared to the more urban counties. As communities become more urbanized, there are higher demands for government services. The more urbanized areas have already made the transition allowing them to capture economies of scale unavailable to the more rural counties.

The data demonstrate that County expenditures were driven higher since 1999 primarily by population growth and cost inflation. There is no evidence that counties proliferated staff or were extravagantly spending.

Jeb Bush and the legislature were notorious for underfunding schools for tax cuts. All that happened was screwing up Florida's tax system and underfunding schools. Florida is headed in that same direction again.

Jeb left the Governor's mansion without calling a special session to solve the property tax problem. A true profile in courage.

Crumbs

House Speaker Marco Rubio is having a hard time selling his sales tax increase. He described working class people living off "other people's leftover money." Rubio is pumping the long discredited trickle down economics theory. Rubio's statement proves how much of an economic illiterate he is. How are citizens going to have more disposable income with an increased sales tax? People will not due their patriotic duty of shopping of merchandise cost more. Trickle down economics reminds me of this passage from the New Testament.

Yet the dogs eat of the crumbs which fall from their masters' table.

What the sales tax increase will do to the poor and working class is offer less crumbs.

He who denied Lazarus crumbs is now denied Lazarus' comfort.

Two callers to the Jim Defede Show took exception with Rubio's comment.

"The working people are what built this country," said a caller named Cliff. "We didn't live off handouts, which is what he's suggesting. ... It's a typical Republican (attitude), looking down their noses at the average guy."

Robert, another caller, took issue with increasing the sales tax.

"Most working-class people are just struggling to survive and their solution is the most regressive form of tax there is? This is unbelievable. Trickle-down economics was disproven. ... I work my tail off every day just to make ends meet, and if they raise the sales tax, that's going to be coming directly out of every little bit that I earn. It's just going to make it even more expensive to live here, not less."

Economics Profeesor Jonathan Hamilton has the best quote.

"It's also going to trickle down to Mercedes dealers," said Jonathan Hamilton, chairman of the University of Florida's economics department. "Maybe Mr. Rubio has a very well-calculated story about where people are going to spend their tax savings. But to say they'll spend it on low-income workers is a stretch."

Rubio is off to a hell of a start. A lemon is a lemon. No matter how Rubio tries to pitch it.