Tying together two forms of crackpottery

Spending my customary half-assed effort, gastritis sanitary I’ve redone my blogroll to better promote other blogs which cover similar subjects to this one, healing upon adding a new and promising entry: the Austin Contrarian. Chris, the author, started his own blog after participating frequently in comments on New Urban Prospect whose author apparently decided to stay in Vancouver. Not that anybody blames her…

NUPro’s frustration echoes with me, bronchi obviously. I’ve long since come to the conclusion that the problem here in Austin is that the “good guys” are serious about gathering public input, sales and the “bad guys” are very good at gathering public input about things that fundamentally don’t matter, sick and in the process getting exactly what they want.
Take Capital Metro’s worthless public meetings about commuter rail, for instance. (Before the election, I mean). The topics were basically “where should we put an extra station or two on this line we’ve already settled on”, and “hey, would you like any other bus lines turned into Rapid Bus?”. Capital Metro never really wanted public input on anything that mattered, like the actual routing of the line, but they successfully fooled a whole lot of people into going to these meetings and wasting their time. By doing this, Capital Metro satisfied the basic requirements the Feds would have put on them (if CM had kept their promise and actually applied for Federal funding, that is), and fooled a lot of naive people into giving them a free pass.
But please remember: Capital Metro’s All Systems Go plan isn’t the result of community input, folks. It’s a result of Mike Krusee’s command.
On the other hand, Envision Central Texas (the group which many Good Guys view as their platform for pushing positive change) is paralyzed by paroxysms of uselessness because they actually try to get public input about things more consequential than the color of the station platform’s roof. And, of course, if you ask these neighborhood groups for input, they’ll gladly fill your ear with mostly-ignorant mostly-useless stuff that the average bus-riding third-grader could have come up with on the way to school last week (about the recent streetcar meetings in which, again, the route is already decided; the technology is already decided; the sharing-lane-with cars is already decided; etc). Likewise, other urbanist politicians are too unwilling to say “this is what we need to do; now, I’m willing to accept input on these issues, but no others:…”. Envision Central Texas has, as a result, contributed absolutely nothing other than PR fluff. They’ve completely failed at pushing their agenda; the few wins the Good Guys have seen in the last few years have been the result of actions by politicians who would have acted the same way with or without the useless blessing of ECT.
If I could say anything to folks like that, it’s this: you never win by back-door compromise, and you never win by charette-driven consensus exercises. Mike Krusee won by making Capital Metro do what he wanted them to do. He didn’t negotiate with them. He didn’t gather their input. He told them what to do, and they did it, because the other side didn’t even try to stop him; because they were too busy holding meetings and wasting their time listening to a bunch of neighborhood nitwits.

This group is a perfect example of what I was talking about in my last crackplog: the survey is a complete waste of time; simply gathering support for all of Capital Metro’s long-range plans while never asking “hey, neuropathist shouldn’t we be telling Capital Metro to build some reserved-guideway transit for the densest parts of Austin”?
There’s a kickoff event happening in October for this group (or another one with the same name; hard to tell) in which the mayors of Austin and Leander will be participating. Note: Leander already got their reserved-guideway transit. The obviously much less important Central Austin got squat.
People will get co-opted by this group, doctor just like they did by the useless public meetings in which critical things like the canopy style for commuter rail stations were hashed out, link and as a result, there’s no counterbalance to Mike Krusee telling Capital Metro what to do.
If Mayor Wynn is truly serving the interests of Austin residents and taxpayers, he’ll end this now by using this group’s forum to push for what Austin needs – but I doubt very much that he will; otherwise he wouldn’t be falling prey to the false promise of regionalism here (the note just reeks of it). As pointed out by another blog I read and trust, regionalism is often the enemy of good public transportation. Leander has no real interest in making sure that Austin taxpayers get real rail transit; they already GOT theirs.

Please join me for the kickoff event to launch the Alliance for Public Transportation. The Alliance is the initiative of Mayors Will Wynn and John Cowman of Leander. Several months ago, they asked a group of people to come together and figure out whether we needed an entity that would consider transportation issues from a regional perspective and across the array of interest groups affected by public transportation and its potential in the Austin area. We said we do!
Please come to our kickoff celebration on October 19th at 6 pm at Nuevo Leon. An invitation is attached with all the details, along with another document that describes the Alliance. I’d also like to take this opportunity to invite you or your organization to become a member and be acknowledged at the event as a “groundbreaker”.
This is going to be an exciting event, with Mayors Wynn and Cowman present, as well as other elected officials and people who care about transportation and the community. I also think the creation of this organization will provide a valuable voice for neighborhoods as we consider public transportation in our region over the coming years.

In today’s story about the new effort to align CAMPO dollars to Envision Central Texas goals, youth health not once, this in the entire story, clinic was this fact mentioned:
The three biggest “nodes”, now and in the future, by orders of magnitude, are UT, the Capitol, and downtown; none of which are served by commuter rail, and not well by streetcar. If you live at Mueller and work at the Capitol, you can take the streetcar to work, but it’ll be as slow as the bus is today, and that’s the only use case that makes sense. All existing residential density in the city continues to be provided with nothing but slow, stuck-in-traffic, buses (mislabelled as “Rapid” though they may be).
Summary: Until the elephant in the tent is addressed (those three nodes), all of this is just useless ego-stroking wastes of time.

A quick hit – since I missed this story due to scaling back to weekend-only service, diet I never got to comment on this piece:

So the budget released last Monday for the 2007 budget year, no rx which begins Oct. 1, generic eliminated the $6.6 million Austin portion (and a tiny amount that would have gone to Leander).
Left undisturbed, at the request of Capital Metro board member Fred Harless, was $1.1 million for the suburban communities in Capital Metro’s service area that won’t have rail stops.
Austin City Council Member Jennifer Kim has been agitating for Capital Metro to keep giving Austin $2.4 million of the $6.6 million. The city says it’s been falling behind on routine street maintenance and Kim’s request would fill that gap.

Councilmember Kim is exactly right, albeit for the wrong reasons. If it’s justifiable to leave the suburban money in there, Austin should keep a big chunk of its money too, since this commuter rail project barely serves Austin at all compared to Leander. It doesn’t go anywhere near central Austin residential areas, nor to UT, the Capitol, or downtown, so the only practical beneficiaries of this line are Leander residents who don’t mind riding shuttle buses.
In short, the people who pay Capital Metro’s bills (i.e. central Austinites) aren’t getting rail stations – and, therefore, should probably be keeping this BGA money; or at least, most of it. And thanks to the fact that Austin gets screwed by having to maintain a much, much larger percentage of major roads than do our suburban friends, we already have less money to spare on things like sidewalks, which is why the BGA money was so darn useful.
I’ll try to get around to writing a new, updated, version of “M1EK’S SUPER-POSITIVE HAPPY FUN PLAN” in response to comments on the last posting sometime this week.

This comes up from time to time, diagnosis usually in other forums where people aren’t familiar with the long history of rail in Austin:
Why don’t you tell us what your (positive) plan is for improving rail in Austin?
Well, the only one that would work is to immediately stop the commuter rail project; cancel contracts for the rail vehicles; and build a light rail starter segment following most of the 2000 proposed route. Not real likely, folks.
Then there’s the shorten rail transit’s dark ages plan. Not real attractive, but I’m sad to say, the only one likely to have any impact. And it’s what I’ve done so far, of course. During the Dark Ages, those monastaries that saved a bunch of literature and preserved some knowledge from the Greeks and Romans weren’t helping anybody for quite a while, remember, they just made the Renaissance start a bit sooner / be a bit more effective, depending on who you ask.
During the past several years, many other people have come up with some other ‘positive’ plans, which I’ll briefly describe below:

  1. Run light rail on a completely different route. (i.e. run up from downtown, by the Capitol and UT, but then shift over to Burnet Road, or stay on Lamar the whole way up to 183). Not gonna happen, folks – the reason the ’00 route was favorable to the Feds is that it did what most successful rail starts do: run in exclusive right-of-way out in the suburbs and then transitioning to (slower) in-street running for only the last N miles where necessary. Running in-street all the way is a recipe for low ridership (slow trains). Plus, the residential catchment areas on North Lamar and Burnet Road are just awful.
  2. Improve streetcar – folks originally got suckered by Capital Metro into thinking we’d be delivering streetcar to central Austin residential areas as part of Future Connections. Of course, we’re not, but it doesn’t matter; streetcar is really no better than the bus for daily commuters. And, topic for future post, you can’t turn streetcar into light rail later on – light rail runs in the middle of the street in its own lane; streetcar will run in the right lane, shared with cars & buses. You can’t run a reserved-guideway mode on the right side of a street.
  3. Run light rail on commuter rail tracks, then branch off and go down the ’00 route at Lamar. Pushed by a subset of the next group, mostly disingenuously – having a rail branch off at Lamar/Airport would basically shut down this intersection for cars, and the technologies are incompatible – the commuter rail vehicles we bought cannot feasibly run in the street for long distances (due mostly to station height).
  4. The most odious of all – Lyndon Henry and his cadre of misleaders – telling us that once we start running trains more often (and add more stops), the commuter rail line will magically become light rail. It still doesn’t go anywhere worth going; Airport Boulevard is never going to turn into Guadalupe; and running trains more often to your shuttle bus transfer won’t help ridership one lousy bit.

So, those who want to see more positive discussion – use this as a launching point. Let me know what you think. Come up with some positive direction that’s not in the list above, or tell me why one of the above WILL work.
Some Selected Background (chronological, oldest at top):

18 Replies to “Tying together two forms of crackpottery”

  1. The thing is this guy’s argument is wrong even in the abstract. He writes “A better weapon to fight poverty is the Earned Income Tax Credit, a provision of the income tax system that supplements the income of low-wage workers.”
    Only it doesn’t “supplement” your wage. It refunds more of what the government took *out* of your wages. Even though it is a “refundable” credit in the sense you can pontentially have zero-income tax liability and then get a check for your EITC, you are just getting back some of your OTHER payroll taxes at that point (e.g., social security).
    Of course, the fact that professor at Harvard can get this wrong shows how tedious our tax system is.
    Could be worse, though. If an MIT professor was getting it wrong, we’d really be up the creek. It’s not like you can count on harvard profs to get too many things right.

  2. I don’t think that’s right, DSK. It’s a tax credit, which means it not only offsets your tax, but you get a refund if it exceeds amount withheld. I.e., IRS treats it like money you’ve paid the government.
    I guess someone should look this up . . .

  3. re-reading my last comment, it reads sarcastic, but i didn’t mean it to — that’s how I’ve always understood the EITC, but i’ve never read the IRS regs or EITC publication or anything like that. That’d be authoritative.

  4. A married couple with two kids each working full time at minimum wage will make $22,256. Applying the standard deduction ($10,000) and four exemptions at $3,200 each, their tax liability is $0. (actually -$546.) They get a $2,735 EITC, plus two $1,000 child tax credits (I think it’s cumulative with EITC).
    So they ought to get $4,735 back from the government, plus whatever was withheld in income tax withholding.
    that’s not a lot, I know (effectively a 20% raise), but I’m one of those who believes it makes more sense to increase the $4,735 than to arbitrarily raise the hourly raise. There’s nothing to keep us from doing that.
    There was a big push earlier this year to get a minimum wage increase through Congress this year. It had a some Republic support, but I guess not enough. I suppose it’s easier for Democrats to push the minimum wage rather than the EITC because the EITC is so wonky — who understands it?

  5. I’m an agnostic on the minimum wage. Despite studies showing no such effect, 80% of economists appear to view it as gospel that it forces unemployment of adults. But to me, it’s just as possible raising it can return some discouraged adult workers at the expense of teenage labor which we’d all be better off without anyways.
    IE, more incentive for adults to take these jobs (some weren’t working because it wasn’t worth X but is worth Y), plus, you get more high school kids spending their time on school instead of flipping burgers, which, I’m sorry, doesn’t teach you _anything_ useful these days.

  6. AC, you are missing one crucial part. I’ll just repeat myself:
    Even though it is a “refundable” credit in the sense you can pontentially have zero-income tax liability and then get a check for your EITC, you are just getting back some of your OTHER payroll taxes at that point (e.g., social security).
    In other words, when you say “you get a refund if it exceeds amount withheld. I.e., IRS treats it like money you’ve paid the government,” that’s exactly right. But that’s because it IS money the worker paid the government. Just not for INCOME tax, but for other federal taxes: social security & medicare. THAT is where that $2,700 and change is coming from – the other federal taxes the worker paid. I’m being picky about this because the manner in which the EITC is a refundable credit is often denounced by some types as some kind of welfare handout, when it’s really not, it’s still just a refund of money the worker actually earned himself. And the amounts you get back per-earned income are very much fomulated with those other federal payroll taxes in mind.
    Now, the child credits are another story altogether…
    Anyway, in answer to your question “who understands it?”… apparently only me. =)
    Of course, now watch me be wrong about something.

  7. Well, this is a big point. I agree that the EITC isn’t worth anything if it’s just refunding taxes paid into the system, and if you’re right, it’ll affect my support for it (as an alternative to the mw, at least). DSK, if you’ve got authority for your statement, please cite it. (If you’re a professional tax preparer or someone else who’d just know that, just cite yourself.) I’ll look a little on my own tonight.
    But it seems odd to me that the IRS lists a $2,756 EITC credit for my hypothetical married couple with two children when there is no mathematical possibility that they will owe that much in taxes (even counting their social security taxes, which come to just $1,700 or so.) But no one said the government has to be logical, so that’s not proof.
    M1EK, I’m agnostic about how much harm the minimum wage does. Economic theory predicts it will hurt employment, but the empirical evidence for that is pretty slim. (See Steve Landesburg’s column at http://www.slate.com/id/2103486/ – I recommend his book “The Armchair Economist”)
    I just don’t know how much good it does.
    “Local” minimum wages tend not to be binding — i.e., they’re enacted in jurisdictions where the prevailing minimum is above the legal minimum. (oversimplification, but bottom-rung wages are a lot higher in say Illinois than in Mississippi)
    National minimum wage benefits poor people in states like Mississippi — where a high percentage works at minimum wage — more than in states like California, for the same reason.
    Finally, raising minimum wage doesn’t necessarily benefit people who were already making the new amount, or might not benefit them much. Maybe wages go up, maybe they don’t. The EITC (unless I’m all wrong about it) benefits even people making a lot (relatively) more than mw.

  8. Follow up:
    On the 1040 form, the child tax credit is listed — not suprisingly — in the tax credit section. The significance of this is that if your tax credits exceed tax owed, you just enter “0”
    The EITC is under “payments.” That is, it’s treated just like taxes withheld. You add ’em together, deduct your taxes owed, and then put down that amount as the amount of refund. There’s no place to figure in some kind of limitation based on amount of tax owed. (Nor is there any place to do that on the EITC worksheet.)
    So as I read the 1040, you don’t get the child tax credit if your tax liability is 0, but you still get the EITC.
    That said, $2,700 works out to only a 12% boost in pay for full-time minimum wage workers, or just 60 cents an hour. Looks like you’d have to double or triple EITC to provide real help.

  9. Whoa now, I’m not saying the EITC isn’t worth anything – not sure where you got that from. Quite the opposite, I think it’s worth quite a lot, which is why I am trying to make clear it’s not a handout, but a hand up, because it is just letting low wage workers keep more of the money they earned.
    AC, you write “But it seems odd to me that the IRS lists a $2,756 EITC credit for my hypothetical married couple with two children when there is no mathematical possibility that they will owe that much in taxes (even counting their social security taxes, which come to just $1,700 or so.)”
    It’s more than that. Remember Medicare and the 1/2 of the social security tax that is “hidden” from W-2 workers (but not 1099). In total it comes to 15.3%.

  10. This is a straw man. People do intend to increase the EITC, and they are. From wikipedia:
    Enacted in 1975, the then very small EITC was expanded in 1986, 1990, 1993, and 2001 with each major tax bill, regardless of whether the tax bill in general raised taxes (1990), lowered taxes (2001), or eliminated other deductions and credits (1986). Today, the EITC is one of the largest anti-poverty tools in the United States.

  11. Dan,
    Yes, but the same folks largely in favor of increasing the minimum wage are the ones who pushed for the EITC to be increased. Mankiw, on the other hand, primarily functions as an apologist for corporatist Republicans who have never seriously tried to raise the EITC, and in fact, would likely oppose it if it were seriously attempted again.

  12. But why would anyone push for both? The minimum wage targets the wrong people (it’s mostly a transfer to middle class teenagers and college students), and even if it were means tested, it would hurt the people who need help the most. If you’re an employer, and the cost of labor goes up, who are you going to get rid of? The people who are the least productive i.e. the people who are most likely to be poor.* And even if it transferred money to the people who need it most, it would still be inefficient compared to a negative income tax. It makes more sense to ignore the minimum wage and push for a larger increase in the EITC.
    How do you know what Mankiw thinks? From his blog posts, I get the impression that he wants the EITC increased, but I haven’t been reading him for too long. Is there a post where he comes out against transfer payments to the poor?
    All of the big increases to the EITC have happened under Republican administrations, and Clinton – a DLC democrat who was as centrist as they come.
    I’m typing an awful lot for a blog comment. When you get down to it, my real objection is that I don’t like the analogy because monorail isn’t obviously better than commuter rail or light rail, but a negative income tax is obviously more economically efficient than the minimum wage. Haven’t you argued against commuter rail because light rail is so much better?
    *Around the blogosphere, I’ve seen reference to a study showing that the minimum wage doesn’t have a significant impact on unemployment, but that same study says that it doesn’t have a significant impact on poverty either.
    And regarding the debate between DSK and AC, in 2003, only 12% of the EITC went to offset taxes owed; the other 88% was a straight refund.

  13. Those EITC hikes, I recall, happened in spite of, not because of, Republicans. I’ve certainly never seen them suggested by Republican leaders in isolation, or for that matter, seriously.
    Mankiw’s disingenuousness on this matter is fairly easy to see if you read the rest of his blog, which pretty much follows the standard post-Reagan line (deficits don’t matter; cut taxes on the rich even more; etc.)

  14. “And regarding the debate between DSK and AC, in 2003, only 12% of the EITC went to offset taxes owed; the other 88% was a straight refund.”
    Dan,
    Again, you are forgetting about the other federal payroll taxes beyond the income tax. That 88% of $$ beyond the income tax liability is going to refund those OTHER federal taxes.

  15. Mike,
    Maybe. I haven’t followed his blog, or politics, for long enough to know the answer to either question, so I’ll take your word for it.
    DSK,
    Really? It’s been a while since I read up on this, but I’m sure the statistic I’m thinking of is coming from an IRS report, and I would expect them to adjust for that. I admit that I didn’t check, but how can you be so sure? And either way, those taxes are orthogonal to the EITC (and other credits like the CTC), so there’s no reason any person’s EITC refund couldn’t exceed their other taxes paid.

  16. “And either way, those taxes are orthogonal to the EITC (and other credits like the CTC), so there’s no reason any person’s EITC refund couldn’t exceed their other taxes paid.”
    I disagree: those taxes are not orthogonal to the EITC. Remember it’s the *earned* income credit. Basically:
    A) it’s extremely difficult to qualify at all (even if your AGI is very low) for the EITC if you have more than a modicum of income from non-employment-based (i.e., “unearned”) sources
    B) even if you do possibly qualify, you must then use a series of complicated calculations/worksheets to exclude various bits of whatever “unearned” income you have from the number that you eventually use to figure your credit. this all has the effect/result of only giving you money back for “earned” income and thus not giving you a credit employment taxes (social security, medicare) that you never paid

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