From the Senator's Desk . . .
October 23, 2008
What happens when Joe the Plumber meets Grover Norquist? What happens is this—Joe’s kids pay more to go to college, pay more in taxes and can't get a break.
Written by Senator Eliot Shapleigh, www.shapleigh.org
"The Real Joe the Plumber Meets the Real Grover Norquist"
(Updated February 2009)
What happens when Joe the Plumber meets Grover Norquist? What happens is this—Joe’s kids pay more to go to college and Joe pays more in taxes. Joe, welcome to Grover’s Tub.
Joe the Plumber is of course John McCain’s small business prototype—a hard working, self employed Ohioan who makes $47,930 a year for his hard work and sacrifice. While we now know that McCain's Joe the Plumber isn't a plumber after all and doesn't pay his taxes, we also know that a real Joe needs a real plan for the future.
A real Joe the Plumber, like many Texans, wants the best for their children. He makes a few hundred dollars a week, pays a quarter of that on a home note, wakes up early to get to work, and makes the hard decisions every day to keep a small business going. During the course of every day, the real Joe decides what jobs get done when, what happens when credit dries up, and how to keep a family warm when the heater goes out.
His wife works another job to make ends meet—she’s a teacher in a local high school. One of his children plays football; another marches in the band.
Back in 2003, the real Joe took a Texas size hit. Back in the halls of Austin, state leaders pulled a fast one on Joe—and he never knew it.
Grover Norquist is the guy up in DC who is famous for saying, "Our goal is to shrink government to the size where we can drown it in a bathtub"—only he never told Joe that his kids were headed to Grover’s tub.
Since 1917, Texas has had an estate tax. The estate tax started during World War I, an era when the US government needed money to fight a war. Back then, Texas millionaires paid their taxes as patriotic Americans, to support their country when she needed them the most. By 2002, under the system, Texas millionaires delivered over $334 million to the Texas treasury—to support our highway system, and universities like UT and Texas A&M.
Then came Grover Norquist.
The heart of the Grover Norquist philosophy is tax cuts. But what most Americans don’t know is that those tax cuts go mostly to the rich. Under Bush’s tax cuts of 2001 and 2003, the average millionaire saved $120,000, while the poorest 20 percent saved $20 in 2007. During the Bush—Perry years, the rich got richer faster than at anytime in American history since the Gilded Age of the 1920’s.
Click here to view larger image.
So how do tax cuts work in Texas? In 2005, under Rick Perry's "property tax reductions" proposal, the wealthiest 10 percent would have received $331 million tax reduction, while the poorest 10 percent would have seen an $88 million tax increase. Grover’s tax cuts are money in the bank for the same guys who then fund the next campaign to deliver the next tax cut.
Later, in 2006, during the school finance debacle in Austin, the initial Republican plan to "solve" the school finance challenge cut taxes by $920 million for everyone making more than $104,000 and hiked taxes by $10.8 million on everyone making less than $33,000. Do you see a pattern here?
In the 2004 presidential campaign of George Bush's top contributors included Merrill Lynch, UBS Americas, Goldman Sachs, Lehman Brothers, Bear Stearns, Wachovia Corp, and JP Morgan Chase & Co—each at the epicenter of the global financial meltdown.
Later, in October 2008, when Hank Paulson cut up the bank bailout, he allocated $125 billion to the nation’s nine biggest banks. Who were included on Hank's list? The Treasury bought $25 billion in preferred stock in Bank America, including Merrill Lynch; $25 billion in J.P. Morgan Chase; $25 billion in Citigroup; between $20 and $425 billion in Wells Fargo; $10 billion in Goldman; $10 billion in Morgan Stanley; $3 billion in Bank of New York Mellon; and $2 billion in State Streets.
How does all this affect Joe’s four kids? Well, in 2003, Grover’s disciples began phasing out the collection of the estate tax in Texas. In 2002, $334 million that used to come into the Texas Treasury to support UT and TAMU stopped. Instead, those same disciples decided that "tuition de-regulation" was the way to go and unelected Regents—many of whom are millionaires who will benefit from estate tax cuts—then made the decision to hike tuition, books and fees by as much as 73%.
What was the end result?
By fall 2009, a few short years later, total academic charges at UTEP will have been hiked by 73 percent. Between 2003 and 2007, total tuition is up 86 percent at UT-Austin. At Texas A& M in College Station that number is 70 percent.
Here’s the bottom line—dollar for dollar tax cuts for the wealthiest Texans were paid with tuition hikes on Texas university students. So for schools, Joe now pays more, and for college, much more.For more and more Texas families, college is now a distant dream.
For the real Joe the Plumber, Grover’s tub is a tough place to be.
Eliot Shapleigh
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