Category Archives: taxes

A tax gift, if we want it

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The U. S. Supreme Court has shown it can change its mind and a new ruling that lets states collect sales taxes from out-of-state internet retailers gives Missouri government a new opportunity as well as some new issues to confront.

All reasons for NOT collecting taxes on out-of-state internet sales seem to have been eliminated by the court’s narrow decision to throw out a 1992 ruling saying out-of-state internet merchants would not have to collect state sales taxes and pay them to the purchaser’s state unless the company had a substantial presence in a state.

That ruling in the early days of internet commerce put brick and mortar businesses in Missouri and other states at a disadvantage and they’ve been aggravated for years that the legislature hasn’t corrected the problem.  The legislature has said its hands have been tied by the 1992 ruling.

The ropes are off now.  We’ll be interested to see if state leaders next year call for passage of a law requiring collection of that sales tax.  There is no doubt the state could use the money.

The legislation will not be easy to write although the court ruling does provide some hints about what will work.

It would not be surprising to hear some voices claim—as they have in the past—that imposing sales taxes on internet merchants would be a tax increase on purchasers and therefore not something the state should lay upon the shoulders of taxpayers who have avoided sales taxes on certain purchases up to now.  We’ll have to see if that lame argument still has any legs in a state that continues to rank in various studies in the lower third of all states for overall tax burden.

The court ruling makes it harder to justify saying, “We’re pro business” while maintaining a sales tax policy that puts our home-town merchants at a sales disadvantage to businesses that exist on our computer screens.

And where do we get the idea that the computers on our desks or in our pockets are not some kind of a “physical presence” in our state? Let’s be honest and admit that the internet long ago became more a physical presence in our lives than Wal-Mart. We don’t have to drive across town to buy something on the internet, after all.

Checking out through Paypal is no different from checking out at the local counter.  The buyer doesn’t  physically stick a credit card into a slot at a cash register with Paypal.  But internet merchants do have a cash register right in front of us—the computer that is a very real physical presence. My brick and mortar house becomes an internet merchant’s physical presence in my town and my state every time I check out with Paypal or some similar system.  (Ohio tried to address the issue with a law saying the use of cookies on consumer’s computers by internet retailers constitutes a “presence.” The retailers are fighting the idea in court.)

The danger, as some might see it, to requiring sales taxes to be collected on internet purchases is that state revenue might increase to the point that some lawmakers will decide to once again ease the overall tax burden on Missourians again.

That idea is getting pretty old. And shaky.

Political commentator Josh Barro, a former staffer at the Tax Foundation (considered a conservative think tank) who contributes to Business Insider, observes in a new article that the court decision reminds states of the Constitution’s Commerce Clause that says states cannot unduly burden or discriminate against businesses from other states.

South Dakota, which brought the lawsuit, avoids that pitfall by providing those retailers with computer software that makes it easier for them to pay sales taxes.  It does not require those retailers to deal with the state and every political subdivision within it that charges sales taxes.  The money goes to a central state agency.  Our Department of Revenue, which collects sales taxes collected by our local businesses and then sends proper amounts to local governments, would fill that role with internet sales taxes.

Missouri has not joined the twenty-or-so states that have signed on to the Streamlined Sales and Use Tax Agreement.  Those states have agreed to some common rules dealing with their sales taxes.  This ruling might encourage a new legislature (The 2019 General Assembly will have new leadership and several dozen new members) to take a new look at the SSUTA as it considers what to do to capitalize on the ruling.

One of Barro’s former colleagues at the Tax Foundation, Joe Henchman, says, “If you want to be absolutely sure that your statute is valid under these rules, you should try to emulate South Dakota as much as possible.”  So that’s a starting point.

Barro makes an important observation that some Missouri leaders seem to have been going against for some time: “It is important for a tax system to be adequate—that is, revenues should grow on pace with the economy, so the government can keep pace with the demand for services as the economy grows.”

He notes tax-free purchases from internet retailers distorts the behavior of purchasers by encouraging them to buy online when they otherwise would buy at a local store, thus reducing local tax collections and that means “the government either has to cut back on services or it has to raise taxes on something else.”   The resulting erosion of sales tax income at the state level has put a heavier burden on property taxes and “taxpayers have revolted against increases in this inflexible tax, voting to impose caps that have in some states kept revenue growth well below economic growth.”

Add to that the penchant government has to lower various taxes under the philosophy that lower taxes will mean more jobs that will stimulate the economy and you can get a state that reduces services that industries and employers would like to see before they commit to creating jobs.

So Missouri has an opportunity because of the court ruling.

Justice Anthony Kennedy, writing for the majority in the Supreme Court decision, estimates the ruling could mean eight to thirty-three Billion dollars in annual tax revenues for the states.  The federal Government Accountability Office thinks Missouri’s share would be $180-275-million a year in state and local sales taxes.

Missouri could do a lot with that amount of money at the state and local levels.  Except—

We have the crippling Hancock Amendments.

Those parts of our state constitution put a ceiling on how much new taxes can be collected without a statewide vote.  State Auditor Nicole Galloway, a little more than a year ago, estimated that taxes at the statewide level could not increase by more than $94-million without such a vote. We’re not sure how much of the figure from the GAO would go to the state and how much would go into local government revenue accounts, but Hancock appears to put a cloud over the issue at the state level.

Before the passage of what was called Hancock II, the state had to make refunds to income tax payers if state revenue growth exceeded the original Hancock limits. The state did make those refunds for a couple of years before adopting the first of a series of tax cuts to make sure the state did not to go to the inconvenience of mailing out checks.  The state hasn’t come close to hitting the refund threshold since Hancock II. In fact, Auditor Galloway says Missouri is four BILLION dollars under that limit now.

Will voters support the new authority given Missouri by the U. S. Supreme Court to collect more than $94-million in internet sales taxes?  Will collecting six or seven or eight cents per dollar from an out-of-state internet seller increase state revenue so much that a statewide vote will be required, giving Missourians a chance to reject the proposal?  The GAO and the state auditor have put forth figures indicating that vote might be needed.

We have had about two decades of leadership telling voters their taxes are too high. We’ve seen voters who travel to the polls on increasingly bad roads that go across increasingly crumbling bridges refuse to support gas tax increases to make their journey smoother and safer. And the legislature has taken steps year after year to reduce the state’s financial ability to “keep pace with the demand for services as the economy grows.”

The court has presented Missouri with a gift.  Will Missourians decide to leave it unopened?

(You can read Josh Barro’s article at https://amp.businessinsider.com/supreme-court-wayfair-internet-sales-tax-decision-good-for-consumers-2018-6)

Keeping their own money

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There’s nothing wrong, really, with letting taxpayers keep more of their money.  And there’s something to the idea that letting taxpayers spend more of their own money generates a better economy.

Let’s open a discussion on this topic because, as in much of government, things are seldom as simple as they seem. The question today focuses on WHEN many taxpayers can spend more of their own money to fuel a growing economy and whether some steps seem to run counter to that goal.

There’s an overlooked segment of the economy that seems to this amateur economist  disadvantaged by the way the idea is carried out.  We mention them, not because we particularly disagree that more tax reductions are needed but because some people might become even more disadvantaged when the state lets them keep more of their own money.. We invite your participation in this discussion (there should be a box at the bottom of this entry for your comments).

We’ll be mixing some apples, oranges, pears, and peaches in our comparisons but we’ll excuse ourselves to suggest a point.

Here’s one of many places to start the discussion.

Any discussion of the size of government has to involve what government’s role should be.  Our United States Constitution says it is “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,” general wording that leaves plenty of room for definition, discussion, and disagreement—and there HAS been plenty of all of that in the 230 years or so since those words were written.

Let’s narrow our focus to “promote the general welfare.”  Most of us at this meeting probably would agree that one of the major factors in achieving this goal is education.  Thomas Jefferson told Littleton Walter Tazewell in 1805 that “every member of society” should be able “to read, to judge, and to vote understandingly on what is passing.”  From such sentiments by Jefferson and others emerged the concept of an education system open to everybody, financially underwritten by everybody for the common good.

Our Missouri Constitution requires a certain minimum percentage of state tax collections to be set aside for elementary and secondary education.  However, there is no requirement for support of higher education and the state’s commitment to higher-ed has dwindled markedly.

A 2015 report by the State Higher Education Executive Officers Association found that since the 2008 recession, state and local funding per fulltime college student had declined almost 28 percent at a time when enrollment had increased by 20 percent.  Missouri, at that time, was found to be twenty percent below the national average in per-student funding.  State funding for higher education has taken some hits since then as anticipated tax collections have fallen below anticipated levels because of withholdings and vetoes to keep our state budget balanced.

Those actions do not necessarily mean that state government has become anti-higher education. The higher education budget is a huge pot of money and when it is necessary to make significant general funding reductions, those responsible for balancing the budget look at the biggest pots of money to make the biggest impact.  They can’t, for example, cut spending by $200-million by making big cuts in agencies with total budgets of $20-million.

So higher education becomes one of the usual targets.

And that means the institutions have to charge students more for their educations, bringing us to the nub of our observation. The Federal Reserve System says student debt has become the second largest kind of debt in the country.  The Institute for College Access & Success thinks fifty-seven percent of Missouri college graduates in 2016 left school with an average student debt of $27,532.   The same organization said the average debt of new college graduates increased at double the inflation rate between 2004-2014.

We’ve seen figures from the University of Missouri-Columbia saying forty-nine percent of incoming students take out loans averaging $7,059 per student to get through their freshman year.  The figure includes both private and federally-backed loans. And the loan amounts pile up on each other each year until graduation or drop-out.

There are those who wonder if the return on investment makes that student debt worthwhile.  Some of those students just walk away from paying off the debt. Of the 5,465 UMC students who began paying off their college debts after graduating in 2013, 4.2% had defaulted on their loans just three years later.  That’s lower than the national average but not something to be especially proud of.

Since we’re talking about education, we looked at the average salary for Missouri teachers.  Indeed.com put out an updated list on January 3.  The state requires school districts to pay salaries of at least $25,000.  The average elementary teacher salary in this survey was $36,847 which the survey said was twenty percent below the national average.

If the average elementary teacher salary is a little shy of $37,000 (before taxes and retirement withholdings) and the average college student debt is $27,532, it seems pretty clear that the economic impact of these teachers is severely reduced. They cannot fully contribute to the economy because their disposable income is reduced for many years by debt payments.

A Missouri State Teachers Association study for 2015-16 says the state requires districts to pay teachers with a master’s degree and ten years of experience at least $33,0001.  The average maximum salary in this study for a teacher with a master’s plus ten years’ experience was $48, 873.

We think we have the figures straight. Feel free to correct us if we have confused ourselves.  But if we were a teacher with a $27,000 student debt we’d have to seriously consider whether we want to borrow even more money to get an advanced degree that would increase our average salary only $11,000 with ten years experience—-at a time when we also might be starting a family that someday will want to go to college.

Or should we give up on a profession we might love (and you better love, really love, being a teacher to walk into a classroom of twenty children from all economic and social conditions every morning and try to teach them “to read, to judge, and to vote understandingly on what is passing.”) and go sell insurance or real estate or something with much less stress but much better benefits?

We’ve drifted away from our point. But here it is: Teachers—and other college graduates who come into the real world saddled with a lot of college debts—cannot be a significant part of economic growth as long as significant parts of their incomes pay off the debts they incurred because tax reductions have led to less broad public support for “the general welfare” of the state.  “Their own money” cannot be spent in a consumer-driven economy because it is spent to pay for the higher education that is increasingly needed in our changing world but is suffering from declining public financial support caused to a great degree by a desire to let Missourians keep more of their own money.

Irony is an incongruity between what result is expected and what the actual result is. This situation seems to fit that definition.

We’ve seen a news story that some of our lawmakers are studying college affordability.  Their job is not an easy one, especially when it is politically popular to limit resources that might alleviate the problem they want to address.  But it’s good that they are looking into these issues including the degree to which new efforts to let people keep their own money are to a significant degree counterproductive for thousands of others.

We wish them well in their difficult task.

Capitol credit

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State Senate leader Ron Richard has had a goal for the State Capitol for a long time and he’s hoping his last year in the legislature is the year that goal is reached.  And it should be.

Richard loves the Capitol as the symbol of a state’s greatness and power, of its stability and beauty.  But he has watched as the Capitol has deteriorated during his almost sixteen-year career and how appropriations that have finally started providing some rehabilitation of the now century-old building are not nearly enough to get the job done.

He has seen the state struggle with meeting its budgetary responsibilities for education, health and mental health, social services—you name it.  And as the state has struggled to meet those responsibilities, the state’s greatest symbol has deteriorated.

Millions are being spent as a continuation of exterior restoration that has been underway for about three years.  Some critical problems in the basement have been attacked. But millions of dollars more are needed to do what needs to be done now and to meet the costs of ongoing expenses later.

Richard has been hoping to get a bill passed setting up a tax credit program that would encourage people and organizations to donate money to fix our Capitol.   He is the sponsor of one of two bills in the Missouri Senate addressing the problem.  While he could be putting the muscle of his position behind his own legislation he has decided to let Senator Dan Hegeman from the northwest Missouri community of Cosby carry the issue.  The bill already is out of committee and is ready for Senate debate. It started the week twenty-seventh on the debate list, a good position for early approval.

It’s Senate Bill 590 for those of you who keep score. It does two things.  It creates tax credits for people who donate to restoration and repair work at the Capitol complex, and it creates tax credits for those who want to contribute to restoration and repair work on other public buildings.

A lot of deep-pocket people and companies have representatives in the capitol hallways every day that Richard, Hegeman, and their colleagues on both side of the rotunda are meeting.  It would not be surprising if those hallway denizens carried word back to their employers that their workplace needs some help.  Some of the money raised can be used to increase general public awareness of the need for donations for which private citizen-donors would get credit on their state taxes.

Richard has several times shared this dream with your correspondent and it’s time the dream comes true.   Richard already has created a legacy as the only person in the almost-two century history of the state to serve as the leader of the House and the leader of the Senate.  But that accomplishment is more a legislative distinction.  Leaving behind a program that can raise money for the capitol’s upkeep is the more important thing.  It could be a legacy.

But times have changed a little since Ron Richard first established this goal.  Historic Tax Credits are not as popular as they once were.   The legislature established caps on those tax credits a few years ago—no more than an aggregate total of $140 million.  That cap drops to seventy-million dollars on July 1.  Local historic preservation organizations can point to buildings and districts in their communities that have benefitted from those tax credits.  Now, as the cap is cut in half, there could be two new causes trying to attract tax credit seekers.

Historic preservation tax credits aren’t very sexy.  Some lawmakers question whether they create enough new jobs to justify the reduction in state revenue that they produce.  Others with little interest in history might see little value in them to begin with.

But they ARE important.  They’re important for the towns where we live because they encourage us to think of how far we have come while making sites usable, even inhabitable.  They’re important for our capitol, a place intended to inspire those who visit and who serve there.  The fact that some who visit and who serve do not find the intended inspiration cannot be an excuse to let our capitol decline into a symbol of decisions not made, responsibilities not met, and needs not acknowledged.

Our capitol is better than that.  And the Richards dream and the Hegeman legislation is the best chance for our lawmakers to prove it so.   We hope they don’t miss the chance this year.

Waiting for the Nobel Prize

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Today we want to recognize an important first step in re-shaping economic thinking so significantly that reducing or eliminating the national debt could be done easily, a concept so brilliant that—if appropriately expanded—could merit international recognition.

The tax bill recently approved by the House of Representatives in Washington proposes to tax graduate student tuition waivers.  For those of us who never got far enough in our higher education to be offered those waivers or who came along before they were widespread in higher education, here’s how they work:

A University tells a student pursuing a master’s degree or a doctorate they will not have to pay tuition if they help teach or do research beneficial to the university.  The university pays those students a small stipend for their work so they can eat and pay their rent.

The House bill wants to consider the tuition waiver as income.   And to tax it.

It is a matter of considering money a person never has and does not spend as income and then levying an income tax on those never-had and unspent funds.   Think of the possibilities!

Paying a tax on the raise you did not get could provide millions of deficit-reducing dollars to the federal government.  Paying a tax on a stock dividend that did not materialize would add even more.  Considering the difference between what you wanted on a car trade-in and what the dealer gave you as income and taxing that amount would add to the deficit-reducing federal income.

Here’s one we thought of the other day when we went to Columbia where the gas price that day was nineteen cents less per gallon than the price in Jefferson City.  We used our grocery store gas rewards card to knock another forty cents a gallon off of the fuel we put in our tank.  Think how much the federal government could collect if it considered supermarket gas refunds as part of our personal income.

Soon the pre-holiday price reductions we are seeing in our stores will give way to the post-holiday sales prices.  If Congress were to take the simple step of taxing the hundreds of millions of dollars that are not spent because of those pre-and-post-holiday price reductions, the annual federal deficit could be eliminated and bites could be taken out of the total national debt.

The car companies are offering multi-thousand dollar incentives to clear their lots of 2017 models.  If Congress were to consider those price reductions as income and tax it, another important debt-reduction step could be taken.

Think of how much money is saved every single day by people who shop at the day-old bread counter at the grocery store.  It might seem like pennies for each loaf, but when applied nationally and for an entire year, taxing the savings on all of those loaves of day-old bread will add up to millions of dollars a year in tax collections.

Oh, and here’s a biggie.  An industry that decides to build a factory, a warehouse, or any other facility in a foreign country instead of in the United States because it can save millions of dollars in construction and operation costs:  If those savings were considered corporate income and taxed—even at the proposed lowered corporate tax rate—the economic benefit would be enormous.

And—oh, wait, there’s one more and it’s particularly appropriate at this time of year.  Further, it’s pretty comparable to the tuition waiver.   We are awash in online and catalog offers to provide customers with a benefit if the customer provides something of value to the merchant in return for which the merchant waives a fee or charge.  Give us money, says the merchant, and we will give you a sweater but we will waive the shipping charge.  Since the customer receives the benefit–a sweater—but spends no money to receive it, the shipping charge is thus income and can be taxed as such, just as a graduate student receives a benefit—an education—by providing something of value to the university (teaching or research assistance) but does not pay the equivalent of a “shipping charge” to get it and therefore faces paying income taxes on money never possessed or spent.

Think of the incredible benefits this economic philosophy of turning unspent dollars into taxable income could provide if applied widely, assuming the federal government doesn’t just increase spending to or beyond the amount of additional funds it would collect.  Congress could wipe out the national deficit and it could provide billions of dollars that could trickle down throughout America in programs and services beneficial to the poor, the hungry, the sick.

And to graduate students.

We’ll be watching for next year’s announcement of the Nobel Prize for Economics to see if this great advance is deservedly rewarded.

Notes from the road: Solving a great musical mystery

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(Boston)—The locals warn out-of-towners to forget about trying to drive in historic downtown Boston.  Traffic is terrible. Roundabouts are hopelessly confusing.  The old streets are narrow and leave strangers bewildered.  Better, they say, to stay in the suburbs and ride the subway into the heart of the city or catch a Gray-Line Tours bus if you want to see the many historic sites in one day.

Those who choose to ride the subway buy fare cards that are inserted into slots that open the gates to the platforms.  The fare cards are known as “Charlie Cards” (which you might want to remember for a trivia contest sometime).  They’re called Charlie Cards in memory of the hapless, trapped, subway rider named Charlie who became world-famous, thanks to a 1949 campaign song for a progressive mayoral candidate who campaigned against the city’s complicated subway fares which included an “exit fare,” a way to increase the taxes without changing the fare collection system at the start of the trip.  The Kingston Trio made it a hit song in 1959.

It tells the story of Charlie, who paid his dime at the Kendall Square Station then changed lines so he could reach Jamaica Plain, a place founded three centuries earlier by Puritans looking for land to farm and eventually became one of America’s first streetcar suburbs. But when he got to “JP,” as local folks call it, he did not have the extra nickel to pay his exit fare, dooming him to roam beneath the streets of Boston forever because “he couldn’t get off of that train.” His devoted wife went each day at the Scollay Square Station (pronounced “Scully” by the natives) and waited for the train to slow down enough that she could pass him a sandwich through an open window. At least, that’s how the song tells the story.

One of America’s great mysteries is why she never gave him a nickel when she gave him the sandwich.

We have done some historical research on that issue because it has bothered us, too, for decades.  We think we have uncovered the entire story in the microfilm room of the Beacon Hill Metropolitan Library, which is a short distance from the former Bull & Finch Pub that is now called “Cheers” because it was the prototype for Sam Malone’s tavern in the television show; its entrance was featured in the show’s opening.  The story found in the records of the Beacon Hill Democrat-Challenger, a long-dead newspaper, turns out to be a rather sordid matter.  But it does have a happy ending because Charlie, in real life, did get off of that train.

Charles J. Faneuil was a descendant of Peter Faneuil, the merchant who in 1740 built a market house that became the centerpiece of the early Boston independence movement.  Despite his historic family name, Charles was a middle-class bookkeeper for a suburban department store.  He was a solid and dutiful husband who left each morning and came home each night from his apparently dead-end office job that paid him enough to keep food on the table and a two-year old car in the driveway.

Mrs. Charles J. Faneuil, born Ann Revere Adams, was a descendant of two early Boston families whose “old money” was spent several generations previous to her marriage to Charles.  They had three children, Samuel Adams Faneuil, Betsy Ross Faneuil, and James Otis Faneuil.  Ann was a housewife but longed to be part of Boston’s upper social strata made up of descendants whose “old money” still existed and had multiplied because it was not squandered by previous generations. She yearned to be part of the kind of organizations that would refer to her as “Mrs. Charles Faneuil” instead of “Ann Faneuil,” as her friends did in the Tuesday Evening Mahjong Society.  In time she came to see her husband as an adequate provider but someone who would never give her a chance to live her dream.

The first public indication that the domestic life of Mr. and Mrs. Charles J. Faneuil was not all peaches and cream (and sandwiches handed through subway car windows) is the notice that Mrs. Faneuil had filed for divorce, charging desertion and abandonment of family.  She claimed Charlie had willfully absented himself from the family home by intentionally taking only a dime with him when he left for work that morning, knowing that he would need another nickel not only to get to work but would need another dime and a nickel to ride the subway back home that evening.  She suggested in her filing that Charlie did so because he had become enamored of one Theodora Williams, whose friends called her “Teddy,” a fellow rider on the subway. And she claimed that Teddy did not loan her husband a nickel, either, because she didn’t want him to leave the train so she could make sure he would be there for her.

The case was filed for Mrs. Faneuil by Quincy Kennedy Kerry, the Faneuil family attorney, whose main reason for representing the family was his attraction to Ann Revere Adams Faneuil. When he had heard of Charlie’s predicament, he had visited Ann to express his sympathy and found her surprisingly willing to accept it, not knowing that she—weary of being a simple housewife and child-raiser—had fantasized about what life would have been like if she had married a lawyer many years ago, instead of good old steady Charlie, and how nice it would be to dine at the club, wear elegant clothes, and travel to beautiful places that lawyers like to visit.

Charlie learned of the action when he read about it in a discarded copy of the Democrat- Challenger that he found on a seat in his subway car after the morning rush hour.  The news stunned him.  He did not know Teddy although he thought she was a fellow passenger during baseball season when she rode the train to Fenway Park. Teddy worked at the will-call window of the ticket booth.  They had hardly spoken other than an occasional “good morning” when she took a seat across from him. In fact, she had shown no interest in having a conversation.

That’s when it also dawned on him that divorce was a reason why Ann never put a nickel in the sandwich bag and, further, never put an additional fifteen cents in it so he could get home.  He had many times regretted not grabbing some extra change from the dish on the table by his front door as he left that fateful morning and had been grateful that he found the dime that he had left in the pocket the last time he wore those pants. Not until he got aboard the train did he discover there was not a nickel in that pocket, too. He would have said something to Ann during the sandwich deliveries, but she always timed her delivery so it happened as the train began to move again, leaving no time for discussion.

Teddy learned about the divorce filing when she heard some of the other girls in the ticket office chattering among themselves that same morning.  “Charlie who?” she wondered.  She also wondered if it might be the strange guy she sometimes saw in the subway who always wore the same increasingly rumpled suit and, in fact, seemed to smell bad in the few times she had been forced to sit across from him.  His hair was much too long and his scraggly beard had not filled out well in the weeks—or was it months?—since she had first noticed him.

Charlie also worried that he had lost his job because of his growing list of absences. His mood darkened in the next few days, likely driven by increasing hunger and his deepening concern about his job, to the point that he was thinking of leaving the train without benefit of nickel by throwing himself onto the tracks from the rear car and lying there until the next train ended his misery.

But that was when conductor H. W. Longfellow (his friends called him “Hank”) noticed Charlie’s state and took the steps that saved his life.  Charlie and Hank had formed something of a bond on the long low-passenger hours during the day shift when Longfellow worked. Longfellow, feeling some responsibility for Charlie’s situation because he was the conductor who told him “one more nickel” arranged for Evangeline’s Pizza to deliver one of its specialties to Charlie each day at the Scollay Square Station, a savvy move for Evangeline’s because the story of Charlie was starting to gain some public attention and Evangeline’s got some great public promotional value out of being Charlie’s food supplier. Longfellow also brought a pillow and some blankets from home for Charlie to use at night to sleep with at least a little comfort. Longfellow has come in for some criticism because in all the time Charlie was trapped on the train, Longfellow did not loan him a nickel.  But it was strictly against MTA policy for conductors to give nickels to passengers who claimed to have “forgotten” to bring one from home. The authority knew that it soon would be dealing with hundreds of “forgetful” passengers if it let its conductors loan nickels or even to let a passenger promise repayment on the next trip.  Employees who showed such kindness had been known to be kindly excused from their jobs, a circumstance Longfellow could not risk because he had a wife and family, too.

But Hank had something else that became important in the long run.  Hank knew a lawyer.

Hugh Louis Dewey was an ambulance-chasing attorney whose grandson, Hugh III, became nationally famous as the busy attorney for two Italian brothers who ran a car-repair shop in suburban Cambridge where they purportedly “fixed” cars they had never seen after diagnosing the problems during a telephone call without consulting maintenance manuals. When Huey Louie Dewey, as he was known in the office on Harvard Square, got involved, the case really got juicy.

Dewey could have paid Charlie’s exit fare to get his client off the train but he advised Charlie to continue to ride while Dewey called the local press and arranged for some sympathetic news coverage. Charlie’s story took up two full pages of the Sunday feature section of The Democrat-Challenger, including pictures of Charlie with his now-long hair and beard and later, clean shaven, trimmed, and wearing a new suit—all of this provided by Dewey to show the man Charlie had become since his wife took up with the family lawyer and stopped providing nickel-free daily sandwiches and then showing him as the man he once was and could be again.

Dewey hit Mrs. Faneuil AND lawyer Kerry with an alienation of affection suit and, since Mrs. Faneuil didn’t have any money, asked for substantial damages from Kerry, whose law firm was one of the upper-crust firms in the city.  If it had been in Memphis, and if John Grisham had been writing novels when all of this was going on, Kerry’s law firm would have been the prototype for a best-selling novel.

And Charlie DID get off of that train. He did not, in fact, “ride forever beneath the streets of Boston,” nor was he “the man who never returned.”  Folk song stories, one must remember, are just stories, not history.

Dewey eventually provided the nickel for Charlie to pay the exit fee a week after the big newspaper article. He was put up in a motel while he waited for the lawsuits to work their way through the courts and while he looked for a new job.  His friend, Longfellow, convinced his MTA bosses to hire Charles J. Faneuil temporarily as the company’s first passenger-relations agent. The move garnered some positive publicity for Charlie and the as well as a modest income so he didn’t have to live on Evangeline’s pizza anymore. It also scored some public relations points for the MTA, which had been pilloried by the Democrat-Challenger, and avoided a lawsuit threatened by Dewey alleging Charlie’s continued presence in the subway constituted a form of kidnapping and the exit tax was a form of ransom.

Dewey also rushed to Fenway Park to meet with Teddy Williams and sign her up for a separate lawsuit accusing Ann and lawyer Kerry of libel.  She also wanted damages for pain and suffering caused by extensive office gossip.

It took about eighteen months for all of this to work itself out.  Charlie did not contest the divorce although he did fight Ann’s efforts to get alimony and child custody.  The judge ruled that Charlie had not abandoned Ann. In fact, the judge said, Ann—by ending the sandwich supply runs—had abandoned Charlie and in doing so had endangered his health. Therefore, said the judge, she was an unfit parent and the children were given to Charlie.  She was allowed to keep their house into which Quincy Kennedy Kerry moved after a respectful interval.  He, however, turned out to be only a member of his law firm and not one of the top partners whose memberships at exclusive clubs were picked up by the firm.

Teddy Williams settled out of court for ten-thousand dollars and a public apology from Ann and Quincy.  She and her partner, Dorothea “Dix” Hancock, used the money to open what became a successful wedding cake business in the Back Bay area.

By the time H. W. Longfellow retired from the Metropolitan Transit Authority, the MTA of folk song fame, had become the Massachusetts Bay Transit Authority.

And Charlie?  He left his job at the MTA when the suburban department store gladly rehired him as an assistant manager, thinking it could capitalize on his notoriety.  He was the store manager when he retired.  The three children grew up to be good citizens and showed no scars of the split-up of the family. By then Charlie had married a widowed high school social studies teacher, had slipped from public view, and was living quietly in a middle-class Boston neighborhood. He refused to take part in the changes at the MTA. “I’m so tired of hearing that damned song,” he once confided to his wife.

On December 4, 2006, the MBTA ended its exit fares and began using “Charlie Cards.”

That afternoon, two elderly men got their cards from a machine and used them to go through the gate to the platform. Charlie Faneuil and Hank Longfellow took a ride to the Harvard Square Station.  Nobody noticed them.   No newspaper photographers were there.  Nobody wrote about them in the next day’s newspaper.  When they got off the train, they caught a cab for a short ride to 73 Hamilton Street, a place known as the Good News Garage, where a couple if Italian guys claimed to have fixed Charlie’s car, a 1960s Dodge Dart. It had 21,294 miles on the odometer, not many miles for a car so old.

That’s because, of course, Charlie rode the MTA.

(photo credits: MBTA, etsy.com)

Notes from the road—August, 2017

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(Anywhere, Indiana)—When we fueled up in Terre Haute a few days ago, we paid ten cents more than we would have paid on June 30.   That’s because Indiana increased its fuel tax by ten cents a gallon on July 1.

It’s nice to see that the people of Indiana, a state many of us would consider pretty conservative, have increased their gas tax for their transportation system.  By a dime.  That’s more than Missourians have considered for more than half of the lifetime of today’s youngest voters.  Missouri has another committee that is going to talk about the issue.  Again.  It’s been only a few years since a special committee spent weeks talking about state transportation funding before failing to convince voters to support its idea.  We talk.  Indiana builds.

(Wakeeney, Kansas)—This shrinking Kansas farming community is four counties east of the Colorado border, a motel stop on Interstate 70 where the Motel 6 is a decent place for travelers headed home from Denver and its environs—or wanting to rest after the long miles from Missouri.

Your chronicler of the current scene had just finished his motel breakfast, was looking at the rack of promotional brochures for the deepest hand-dug well and the biggest ball of twine and other more impressive Kansas attractions (we LIKE Kansas, by the way) when we heard someone call our name.

Somebody knew us at the Motel 6 in Wakeeney, Kansas, for crying out loud!

It was Paul Woody, a young man who was a member of Governor Bob Holden’s staff and then was a policy and communications advisor for House Democrats. He’d left Jefferson City in 2005, gone to law school, run unsuccessfully for state rep a couple of times, and now is a lawyer in St. Charles.  He and his family were headed home from a visit to the mountains.

Wakeeney, Kansas!!!!

(Somewhere, Indiana)—We bought a couple of lottery tickets in Indiana.  Buying lottery tickets isn’t something we do every week.  We only buy them when the jackpots coincide with our level of greed. We wonder how many folks think their luck will change if they change the place they buy their tickets.

Hasn’t worked for us, either.

But we figured a major change of location such as Indiana was worth the, uh, gamble.  As we were boring out way across Illinois, the thought occurred that buying a winning ticket in Indiana would mean that we would pay a bunch of taxes there, not in Missouri.  We’d help support Indiana institutions and services, not ours.   We debated whether buying the ticket in Indiana was irresponsible, that as a Missourian we owed it to our home state to support ITS institutions and services.  But Guilt had quit hitchhiking by the time we reached Effingham.

And the good news, we guess, is that we have learned we won’t be paying millions of dollars in taxes in Indiana anyway.

(Somewhere, northern Illinois)—A reminder that sports is the toy department of life, and not as serious as we want to make them sometimes, comes in the story of Steve Bartman.

The Chicago Cubs have given a World Series champion’s ring to Bartman, a lifelong Cubs fan. Not one of those things like the Cardinals are handing out to the first x-thousand fans coming through the gates now and then.  This is the real thing, so big he might have to use his left hand to raise his right hand for shaking purposes in social settings.

Who is this Bartman guy?   Just the one who might have cost the Cubs a National League pennant fourteen years ago, the then-young fellow who reached for a foul ball during the 2003 playoffs, leading to umpires ruling he had interfered with the right of a Cubs fielder to make a catch.  The Cubs after that lost the lead and their chance to play in the World Series.  Cubs fans—much as Cardinals fans still turn purple at the mention of Don Denkinger’s name—have never forgotten what he did.  He got death threats.  He became the object of long-term ridicule.

Now, the owners of the Cubs say it’s past time to forgive and forget. “While no gesture can fully lift the public burden he has endured for more than a decade, we felt it was important Steve knows he has been and continues to be fully embraced by this organization,” said a team statement.

Bartman released a statement in response saying he was “deeply moved and sincerely grateful” for the recognition.  “I am relieved and hopeful that the saga of the 2003 foul ball incident surrounding my family and me is finally over,” he said.

And then he continued with thoughts that speak beyond the playing field: “I humbly receive the ring….as an important reminder for how we should treat each other in today’s society.  My hope is that we all can learn from my experience to view sports as entertainment and prevent harsh scapegoating, and to challenge the media and opportunistic profiteers to conduct business ethically by respecting personal privacy rights and not exploit any individual to advance their own self-interest or economic gain.”

The Cubs have done something classy for Steve Bartman.  Don Denkinger is 81 now, these thirty-two years after Cardinals fans started speaking his name in derision.

In both instances—Bartman and Denkinger—their actions are not what caused the Cubs or the Cardinals to lose.  The Cubs failed to make the plays to win their game.  The Cardinals disintegrated in the next game.  The Cubs have said it’s time to quit whining about a fan who wanted to catch a foul ball.  We wonder if the Cardinals and their reputedly best fans in baseball  will ever do something to say it’s time to quit ridiculing Don Denkinger.

Increase our taxes

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We are a retired family living on a more-or-less fixed income.  We hope our taxes go up next year.  In fact, we’re going to give our permission in a few days for them to go up regardless of what happens to our income.

Jefferson City needs voter permission to raise the money for a loooonnnnnng overdue second high school and the school district wants people like us and our neighbors to approve a higher tax levy.  This household is unanimously in favor of the idea.

We don’t have any kids attending the schools of Jefferson City.  We haven’t been to a school play or a school concert or to a school football or basketball game in years, probably decades.  Haven’t been to a PTA meeting for even longer, probably.  We do go into one of the public school system’s buildings three or four times a year for the city concert association events but that’s about it.

So we have no personal connection to a school system that wants to increase our property tax bill by a pretty good amount.   But we want the system to do it.

We took a pile of income tax information, over which Nancy had agonized for countless hours, to our accountant a few days ago.  We’ll learn the damage before long.  Naturally, we wish we could keep that money but when we come down to it, we don’t mind paying taxes—because we understand what they buy.  We just hope the people we elect to distribute those funds do so in a responsible manner that benefits the general public. We confess there are times when we think those people could do a better job by putting more emphasis on the word “general”  but we haven’t met anyone yet who has come up with a better system than the present one for making sure all of us share the Biblical and the democratic responsibilities to each other.

Somebody has to pay for the things we expect government to do for us and we’re okay with putting our financial drop into the big bucket that finances more things for us that we can count. And education is one of the biggest benefits.

We’ve lived in Jefferson City nigh on to half a century—a statement that amazes us every time we recall the things we ‘ve seen and done—and we can’t recall a time when somebody wasn’t saying, “Jefferson City needs a second high school.”   Actually, Jefferson City already has a half-dozen or so public and parochial high schools including the high school program at the Algoa prison, a high school for about fifteen severely disabled students, and a Christian academy with about five students in grades ten through twelve.

In our household we think it’s important that children have opportunities to learn.  Not just classroom subjects, but the things they can learn through band, and science clubs, and school newspapers, and sports, and debate clubs, and other things that add to the creation of a thinking, active, inquisitive life that is to come.   We think a better future can be incubated when all of the eggs are not jammed into one basket.

And it’s the future we’re talking about here, a more learned society in a world that increasingly demands educated people who understanding that learning and life have to go together if hopes for a free humankind are to progress.   A second high school in our town will increase opportunities for our grandchildren’s generation to have a better chance to make that idealized future a materialized future.

We know that we write from the standpoint of ones who can afford to pay these higher taxes, knowing that there are many who feel they cannot.  We wish we had an answer for them for some of them are our friends.  We, and they, are left with leaving others who are in policy positions who have the knowledge to ease those concerns to recognize them and act on them.

Regardless of our economic standings, the thing we CANNOT afford is ignorance.  Ignorance is one of the greatest enemies of a democracy.  It is one of the first tools of the despot.  The control of learning and the limitations placed on it and on the circulation of public learning are trademarks of the societies we identify geographically and often culturally as threats to our way of life.  A visit to a nation governed by those who know ignorance equates to power and control is a sobering experience.

We’ve been there.  We’ve seen it.  We know that the American system of public education is one of our greatest protections.  We’ll be glad to pay more taxes to make that system better in our town.

We in this household are products of public education from our first days in a classroom to our last days in graduate schools.  We benefitted because our parents and grandparents paid the taxes that helped shape us as, we hope, good and responsible citizens.  We’ll be glad to pay some higher taxes so other generations will have a better chance to defeat ignorance and all of the perils it presents.

It’s okay if our taxes go up next year, even if they go up by a pretty good amount. In our household we think that the Preamble to the United States Constitution is not only a statement of the virtues we want in government, but is also a commitment by We the People to work through that government to “establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity,”

Promotion of the general welfare cannot be done in a climate that impedes an escape from ignorance.  We will pay higher taxes because we wish to help create a climate that better serves the future general welfare of our city, our state, and our country.

Notes from a quiet street—VII /2016

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—random observations not worth the effort to type hundreds and hundreds of words.  Several dozen, though.

—

We have made a slight correction in our earlier entry (September 27) about this being a historic election to reflect that both candidates for governor are divorced, rather than just one as we originally noted, making this election even more noteworthy as the first that matches two divorced candidates for the office (although one has remarried)

—

The Tax Foundation says Missouri has the nation’s 15th most favorable business tax climate. The only one of our surrounding states with a better ranking is Tennessee.  Kansas ranks 22, Illinois 23, Nebraska 25, Oklahoma 31, Kentucky 34, Arkansas 38, Iowa 40.

We’ve been listening to candidates critical of Missouri’s slow economic growth (Business Insider said earlier this year we had the tenth worst economy in the country and the Federal Bureau of Labor Statistics said we were the 14th worst state for economic growth.) and promise that they would generate more jobs if we could just cut taxes on business even more.

Hmmmm.  How could our economy be doing so poorly after legislative policy-makers have made this state so business-tax friendly?

They might maintain, as some have maintained, that the silver bullet is Right-to-Work. The Business Insider rankings list non-RTW states with the first and third best economies (DC is in between).  Eight of the top 15 states are non-RTW (including DC), and 15 of the top 24 are non-RTW states.  And it says nine of the bottom eleven states ARE Right-to-work.

Rankings, of course, are what you make of them.

—–

A lot of critical words have been written about Donald Trump and his apparent avoidance of taxes and his proclamation that failing to pay taxes makes him smart.  Is it not fair to recognize he was only taking advantages of tax law provisions that allowed him to escape taxes.  He is hardly the first businessman or woman to have accountants smart enough to do that.  It is politically profitable to jump all over Trump and what many perceive as his arrogance on the subject.  Unfortunately it does not appear to be politically profitable for those in Washington and in our state capitols to change them. Hillary Clinton says she will do it, though.

We will wait for the second debate to see if Trump will close his own loopholes to show his solidity with the common people or if Mrs. Clinton will explain how she’ll do it without the blessing of Congress.

—

As long as we’re watching the Official Political Bizarre Meter needle move into uncharted territory, we note the legislative session is now just three months away.  We have seen some pretty bizarre circumstances in four decades-plus of watching our lawmakers but having one House member serving with another member who, she says, raped her would move the needle pretty close to the peg.

—–

If voters approve the campaign contribution limit proposal on the ballot in November, there is likely to be a legal challenge.  Regardless of the outcome of the lawsuit, the approval by voters should send a message to a legislature that has made special efforts to avoid the issue.  We will learn how deaf the General Assembly can be to such a message if it passes and the court challenge is successful.

—

The state Supreme Court has ruled that a company that sells frozen meals to airlines is not entitled to a refund of sales taxes it paid under protest.   The ruling certainly raised our eyebrows.

We had no idea until now that those pretzels had been frozen.

—-

A lot more work is going to get down around the house by Missouri baseball fans this October because both of our teams failed to make the playoffs. But the darkness of the baseball parks in St. Louis and Kansas City serves to remind us that baseball is a human endeavor.  Players age. Muscles pull.  Bones break.  Tendons tear.

Major League Baseball is divided into seasons to remind us that disappointment is temporary and hope is eternal.

——

Speaking of Chicago where “hope” is pronounced “Cubs”:   We had a reason to look up the 1966 White Sox records the other day.  The leading pitcher that year is still part of the game although not in person. Tommy John is 73 now.  He won 124 games before the surgery; 164 after it in a 26-year career. Wonder if some statistician has added up the Won-Loss records after all the TJ surgeries done through the years.

——

We were listening to the radio the other night and heard an announcer promoting an upcoming European cruise on the Dunooby River.

A couple of seconds later when it sank in, your observant listener about drove off the road.

Dunooby, spelled D-a-n-u-b-e.

—–

But let us not be too critical of the young announcer.  Remember that we live in a state that has towns like Versails and New MADrud.

Spring break

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This is the traditional time to assess how the General Assembly is doing and is likely to do this year.  Spring break for lawmakers always produces proclamations from the majority party that things are going well and proclamations from the minority party that the legislature has failed to do its job.

Both sides are right.  And they’ll be right in May, too.

The heady enthusiasm of January has worn off and the slogging through a muddy legislative battlefield is in full slog.  Some trench warfare has developed.  Some verbal bombs have burst in the air.  It’s about eight weeks before adjournment (seven when the legislature returns on Tuesday).  Eight loooonnnnnng weeks.

The rush to pass meaningful ethics laws has lost momentum.  Photo Voter ID and the latest efforts to make a legal medical procedure too difficult to obtain are a game in process.  The state budget and its accompanying intimidation, sandbagging, and sniping festival still has a lot of innings to play.

The majority leader of the Senate says people are working together, “for the most part.”  Ah, but that other part promises to enliven these last seven weeks.  Seven weeks is a long time to slow a slog to a crawl but nothing is unexpected in the General Assembly these days.

It’s a campaign year so don’t look for anything significant in the field of campaign reform to happen.  It’s a campaign year so do look for the majority party to do all it can to satisfy its base so it can keep its supermajority.  Look for the minority party to try to appeal to its base by stopping the majority from appealing to its base. The pressure to satisfy both sides only increases from here on.

Every session creates interesting bed fellows and this one has just created one. In this case, it’s one special interest trying to find a comfortable place under the covers for itself.

The Missouri Chamber of Commerce, which has fought efforts to pass laws banning businesses from firing people because they are gay, is now opposed to a proposed constitutional amendment protecting those of its members who don’t want to sell things to gay people—because the amendment would be bad for business.  What an interesting conundrum for the majority party: Do you side with the state’s biggest business organization that traditionally favors your party or do you side with the evangelical voting bloc that has embraced your party?  It’s the House’s problem now.

And the legislative dance floor has the potential for some other interesting moves in the last seven weeks.  Perhaps some will be humming Chubby Checker’s great hit as they twist their way around the issue of transportation funding.  One idea would keep the Highway Patrol from using gas tax money to enforce laws on the highways by having the patrol’s funding come out of general tax collections which already are inadequate for numerous programs and services, most glaringly education, and which some legislators want to reduce even further with tax cuts.

This long-time observer always had the feeling that the legislature should leave when Daylight Savings Time arrives.  Being cooped up at the Capitol while the days are dark and cold is okay.  But, oh man! When there’s warm temperatures and daylight and the session drones on and on for seven more weeks—that’s cruel and unusual punishment.

But we know how it will turn out. The majority party will proclaim this a great session.  The minority party will maintain it was a disaster.

And then they’ll go home for a longer break.

Equal pay for equal work

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We were thumbing through a Reader’s Digest while waiting for a doctor’s appointment the other day and came across an article that might let Missouri Republicans and Missouri Democrats reach an agreement on one of the big issues that separates them—paying women the same salary as men for doing comparable work.

Studies year after year show women earn twenty to thirty percent less than men for doing the same kind of thing.   The Onion published a story about a year ago showing how one company has resolved the issue without being forced to do so by activist judges or over-reaching federal bureaucrats.

The story reported that Northstar Solutions of Seattle had begun paying men and women 78% of what they should be earning.  The article describes Northstar as “a progressive company” and quotes CEO Jack Stargell saying, “We’ve always believed that employees who contribute the same level of hard work for the same duties should earn the same meager fraction of a reasonable wage, regardless of whether they are men or women.”  The company reviews the salaries annually to make sure they don’t get out of whack.  Stargell says, “Sex is simply not a determining factor in how we view our workers; they’re all disposable quantities that deserve an identical amount of disrespect and lack of recognition.”

Yes, yes, yes, we know The Onion is a satirical weekly paper, not a real newspaper.  But it might be onto something that could draw together the great minds and the differing philosophies of government that divide the Missouri legislature now.

The legislature could pass equal pay for equal work, which the few surviving liberals want, and it could mandate that companies pay men the same wages that women earn for doing their same jobs, which could satisfy demands from the business interests that pour money into conservative coffers.**

Let’s face it, if businesses had government approval to pay men 22% less than they’re paying them now, the profitability of Missouri companies would jump and Missouri could truly become the magnet attracting new businesses that conservatives want it to be.  And we all know, because the business interests have convinced conservatives that this is true, that the businesses would take those large windfalls and use them to create MORE 78% jobs.  And that would be incredible news to jobless Missourians whose unemployment benefits have been significantly reduced by those same legislators.

AND things could get even better if the next proposed income tax cut is approved.  Lower taxes on lower wages mean even less money for state services, programs, and infrastructure, advancing the drive to “right size” government.  Observers who have been critical of Missouri’s politics would be hard-pressed to deny after all of this that Missouri is not a progressive state.

A lot of people make the mistake of dismissing The Onion as just a satirical publication.  Maybe Missouri legislators should look to it as kind of a guidebook to state prosperity and political harmony.

There’s one more thing to note about this issue.  Missouri already has a law that mandates equal pay for men and women performing equal work.  But it applies to only a select few.

21.140. Each senator and representative shall receive from the treasury an annual salary of eighteen thousand seventy-eight dollars plus any salary adjustment provided pursuant to section 105.005.

The most recent figure we’ve seen puts the basic equal adjusted salary for each man and woman in the General Assembly at $35,915 a year plus a per diem, mileage, and full state health benefits.  Men and women in this select group also can equally qualify for a pension after working six years.

The 78% plan of Northstar Solutions is not necessary in their case.

**The law probably should exclude CEOs from its provisions so that they can receive multi-million dollar bonuses for improving the company’s bottom line.  Female CEOs also could get bonuses but only 78% as much as the male CEOs.