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Sun 13 Mar, 2005 01:25 pm
March 12, 2005, 11:33PM
TAX BURDEN SHIFTS
Biggest tax breaks would go to the largest political donors
By R.G. RATCLIFFE
Copyright 2005 Houston Chronicle
AUSTIN -- A proposed $11 billion tax bill before the Texas House would create a new sales tax on bottled water, but the excise tax on beer, wine and liquor escapes any increase -- as it has since 1984.
A search of the Texas Ethics Commission database turns up no campaign contributions from Evian or Perrier, the nation's largest distributors of bottled water. But Texas' liquor industry donated $726,000 to Texas politicians in 2004 alone, with almost $300,000 of that coming from Houstonian John Nau, president of Silver Eagle Distributors LLP.
Suzii Paynter, a lobbyist for the Christian Life Commission of the Baptist General Convention of Texas, thinks water is being taxed in the bill because it does not have an army of lobbyists like the liquor industry and some other big businesses do.
"They (lobbyists) are some of the most highly paid whiners in the world," Paynter said. "Instead of trying to figure out how to make this system work for Texas and its kids and everybody sharing the burden of it, they see their job as whining about their industry."
Time and again in the House's proposed tax bill, which will be debated Monday, the largest political donors are the businesses that receive the biggest tax breaks or have their taxes left untouched. Some of the biggest industrial sector donors in the past two years and their proposed tax cuts are:
Finance, insurance and real estate -- $896.5 million a year in tax cuts; $7.3 million in political contributions.
Utilities and transportation -- $222.2 million in cuts; $6.1 million in donations.
Oil, gas and petrochemical -- $399 million in cuts; $5.1 million in donations.
People and companies' political committees in the biggest losing industries -- construction, services and trade -- also made millions of dollars in political donations but rarely in the concentrated amounts of the potential winners. They will pay $1.4 billion in increased state taxes.
"There are big donors that are taking a hit, but at least they had a seat at the table," said Craig McDonald of the advocacy organization Texans for Public Justice. "People earning less than $100,000 a year apparently had no seat at the table."
A legislative study of the tax bill found that people earning less than $100,000 a year would pay a combined $1.1 billion a year more in taxes while those earning higher wages would receive a $437 million annual tax cut.
The legislation would raise $11 billion in the next two years to finance a reduction in the state's public school property-tax rates and overhaul the state tax system to shift the tax burden from capital-intensive industries to services companies.
The final version of the legislation is still taking shape. The House adjourned Friday while negotiating language that would allow businesses a choice of filing under the existing franchise tax or under a proposed payroll-tax system.
Clearly in the bill, many businesses and homeowners will receive tax breaks while service businesses and consumers will get hit with tax increases.
The bottled water tax is seen as a tax on convenience water, but it also affects 1-gallon and 5-gallon containers that often are purchased by people who live in areas where water quality is poor.
Rick Donley, president of the Texas Beer Alliance, said interpreting winners and losers in a tax bill is not always easy. Nau's office referred the Chronicle to Donley for comment.
Donley said even though the excise tax on alcohol has not been increased, alcohol sales will be subject to a sales-tax increase, and establishments that sell alcoholic drinks likely would be taxed under the payroll tax.
"I just don't see where the alcoholic beverage industry is not paying its fair share," Donley said.
The current excise tax comes out to about a penny per beer. The proposed tax on bottled water is 7.2 percent of the sales price -- or about 7 cents on a $1 bottle of water.
The state's auto dealers could be among the groups hit by the bill.
The tax bill includes an increase in the sales tax on motor vehicles from 6.25 percent to 7.35 percent. Many auto dealers could be brought under a state payroll tax at a time when auto sales are sluggish and the profit margin low.
"It's the jobs tax that is going to hurt dealers and their employees," said Tom Blanton of the Texas Automobile Dealers Association.
Blanton said if dealers have to pay an extra tax on payroll they may have to lay people off, reduce benefits or make cuts in operational costs such as advertising.
Rep. Pete Gallego, D-Alpine, said he thinks auto dealers became an easy target in the tax debate because of politics.
The normally Republican-leaning auto dealers organization in 2002 supported Democrat Tony Sanchez for governor because the group was angry at Gov. Rick Perry for two vetoes he made in 2001. Gallego said he thinks that made it easier for the House Republican leadership to tax auto sales.
"You pay the tax whether you're a Democrat or a Republican. So everybody's paying for politics," Gallego said.
The biggest winners in the bill are the capital-intensive industries, particularly petrochemical companies. They probably will benefit from proposed changes in the business tax. But more importantly, like homeowners, they will see a substantial property-tax cut.
These companies have been paying a substantial share of the state's business taxes because they are covered by the state franchise tax while many service industry firms and partnerships are not.
Because most tax records are private, determining the impact on specific companies is difficult.
But in the property-rich school district of Deer Park, the Shell Oil Co. refinery would save at least $4.8 million a year on its school property taxes. Currently, those taxes on the refinery, which is valued at $1.3 billion, exceed $24 million a year.
The company also would likely see major cuts in its business tax but increases in its sales taxes.
Shell spokeswoman Habiba Ewing said it is too early to tell what the tax bill's impact will be on the company.
Supporters of the tax bill say it will improve the state's economy by reducing taxes on capital to spur investment.
"We haven't built a new oil refinery in Texas since the '70s," said John Gormley, communications director of the Texas Association of Realtors.
"If we're going to be competitive and remain competitive in the 21st century, we need to grow and relocate to Texas more capital-intensive employers like Shell," he said.
"Those blue-collar jobs are some of the best-paying blue-collar jobs in the state."
A study by Comptroller Carole Keeton Strayhorn said the tax bill would create 48,000 jobs in Texas by 2007 because of new investment.
"Ultimately, businesses don't pay the tax," Gormley said. "It's paid for by the consumer. So when you buy gasoline, you're paying property taxes on Shell's plant in Deer Park."
It all boils down to the fact that we have in the US the best legislators that money can buy.
It's not only state legislators. In San Jose, at least, it seems they've been pandering to the highest donors.
As it always has been I suspect.
c.i., I'm actually moving out of the state of California soon. Something I never thought I would do. Have you ever thought about that?
N.Y.'s 1st-class
junket junkies
Reps sure have fun gathering, uh, facts
By DOUGLAS FEIDEN
DAILY NEWS STAFF WRITER
WASHINGTON - Rep. Eliot Engel has whisked his wife to first-class resorts in San Juan and Las Vegas, Wyoming and Florida - and barely spent a nickel.
The Bronx Democrat escorted his 23-year-old daughter on a $5,300 junket to New Orleans - and took his teenage son to Seattle and London and Jerusalem, gratis.
He even scored an $8,000 freebie for his 83-year-old mother, who joined him for nine balmy days at the Bellagio in Vegas and another hot spot in La Jolla, Calif.
Who comped him on travel over the past five years? Mostly special-interest groups with a stake in legislation the nine-term congressman votes on.
Jet-setters in the state's congressional delegation have taken hundreds of free trips worth millions of dollars to some of the most enchanted and exotic lands on Earth, from the South of France to the South Pole.
With loved ones in tow, they've been winging to Caribbean playpens in the dead of winter, Mediterranean hideaways in the dog days of summer and Vegas casinos all year round.
Leading the pack is Rep. Gregory Meeks (D-Queens), who has taken more trips than the other 12 members of the city's delegation, and Rep. Maurice Hinchey (D-Catskills), who has clocked more miles than the other 28 members of the state's delegation.
The pols say they're performing their official duties by going on "fact-finding trips" with sponsors who educate them about vital matters.
"I go to learn and study and hear all sides of the issues and then make a decision," Engel told the Daily News.
"I don't go to play golf, I don't go to swim, I go because it's important that different industries hear different views from members of Congress."
He adds, "If you do this job right, it takes an inordinate amount of time away from your loved ones, so I try to balance the work by spending extra time with family whenever I can."
But critics question how much of the people's business really gets done on white-sand beaches and at mountaintop resorts where interested parties wine and dine captive lawmakers.
"A fact-finding trip is just another word for a lobbying trip with a beach or a ski slope or a golf course thrown in," said Larry Noble, executive director of the watchdog Center for Responsive Politics.
Adds Danielle Brian, who heads the Project on Government Oversight, "A pleasant environment with spouses and children sounds a lot like a free vacation to sway members of Congress."
Even elected officials who defend the trips acknowledge the huge recreational opportunities available in places like Jackson Hole, Wyo., and Pebble Beach, Calif., two magnets for legislators.
That's where Rep. Jerrold Nadler traveled with his wife, Joyce, courtesy of the Association of American Railroads, on a pair of trips costing $5,500 and $6,600, respectively.
The West Side Democrat serves on the House railroad subcommittee, and says one reason he went was to urge trade group execs to change their position on regulatory issues.
After morning work sessions, Nadler says, members typically get the afternoons off to frolic: "You can play golf or go skiing, or horseback riding - or even alligator hunting for all I know, though I don't do those things."
At one such railroad retreat, at the Grand Teton Lodge in Wyoming, Nadler and Engel took a brief lesson in how to hit a golf ball. Famously unathletic, the men quickly abandoned the quest.
In addition to the rail group, Engel and his wife, Patricia, were feted by the National Association of Broadcasters; his mother SeRoy was comped by the Consumer Electronics Show; his daughter by a cable and telecom group and his son by the American Sugar Alliance.
The alliance represents sugarcane and sugar beet farmers and refiners. There is a sugar refinery in the Yonkers portion of Engel's district. The groups - which fly him to places like the Turnberry Isle Resort in Aventura, Fla., and the Semiahmoo Resort on the border between Washington State and Canada - typically have a stake in the work of the Energy and Commerce Committee, where Engel sits, or its telecommunications subcommittee.
He often votes against their interests. Still, a perception problem exists, says Rachel Leon, executive director of Common Cause/New York.
"Corporate interests are paying for cozy, cushy travel at the same time they have business before his committee," she said. "Are they going to expect to get for what they gave?"
The biggest problem, says Tom Schatz, president of Citizens Against Government Waste, is a lack of accountability: "The taxpayer is seldom told when a trip is scheduled, or why, and rarely hears about the results."
Consider several freebies that Rep. Charles Rangel took to the Dominican Republic:
Sponsored by the PuntaCana Beach Resort in 2001, American Airlines in 2002 and the Dominican/American Roundtable in 2003, the trips were all to Punta Cana - and it turns out that's where the Harlem Democrat owns a vacation condo.
That creates the appearance, says Noble, that business interests are paying to fly Rangel to a destination of his choice as a way to curry favor with an influential member.
Rangel dismisses this. He says he went to promote tourism, deliver a speech and help launch American Airline's maiden flight to Punta Cana:
"The question is, 'Did I go there to take a vacation or did I go there to work?' Unfortunately, I went there to work." Since most pols don't publicize their journeys, The News set out to do so, examining financial disclosure statements and back issues of the Congressional Record and descending into a sub-basement in the Cannon House Building to review the past five years of travel disclosure documents.
Meet the Junket Junkies of American politics:
Rep. Gregory Meeks.
Claim to fame: He's No. 1 in the city delegation in travel. He also leads in winter trips to warm-weather climes and has taken the most costly privately paid trip.
Since 2000, Meeks has taken 37 trips - 30 privately funded and seven government-paid - costing some $150,000.
He has traveled to Jamaica in December. January has found him on a $6,600 trip to Barbados and on a $8,200 jaunt to St. Lucia and Antigua. February has taken him to Venezuela and Honolulu.
"I have a very large Caribbean constituency," Meeks said. "My constituents demand that I go. They come into my office and want to know, 'Have you been to Jamaica?' and 'Have you been Guyana?' It's called doing my job."
Usually on board for the ride is his wife, Simone-Marie. And when Meeks last year took an 11-day, $17,200 trip to India, he brought his 20-year-old daughter Ebony.
Rep. Anthony Weiner (D-Brooklyn).
Claim to fame: He took the longest and most expensive taxpayer-paid trip to the coldest and windiest place on the planet - Antarctica.
As part of a 13-member Science Committee delegation in 2003, his oversight mission was to determine if taxpayer funds were being wisely spent on key research projects.
But taxpayers wound up shelling out more than $350,000 for the nine-day, 12,500-mile marathon via military jet - from Andrews Air Force Base to the South Pole with a layover in California, an overnight in Hawaii, a refueling in Fiji, an overnight in New Zealand and two flights to barren icecaps.
"I would have been happy to take a commercial jet," Weiner quipped. "But you can't get there on Antarctic Air."
The mayoral candidate posed with other polar explorers decked out in a massive red parka with a fleece inner jacket, a hooded head scarf, black overalls, a hat with ear flaps, black sunglasses and heavy-duty bunny boots, the modern version of an Eskimo mukluk. "No one can accuse me of taking a warm-weather junket," said Weiner.
Rep. Joseph Crowley (D-Queens).
Claim to fame: He took the delegation's longest trip on record, a 13-day, $8,900 getaway to India and Bangladesh sponsored by an Indian trade group.
"Every trip I take has a connection with my district," he said, adding that he represents the largest Bangladeshi and second-largest Indian communities in America.
Crowley has taken his wife, Kasey, on freebies to India, New Orleans and the Dominican Republic.
"She's my partner not only in marriage, but in everything I do, and I think my constituents would understand that," he said.
Rep. Maurice Hinchey.
Claim to fame: He holds the state record for globetrotting on the cuff - 27 trips costing private groups $157,000 over the past five years.
Nonprofits and think tanks like the Aspen Institute pay for most of his travel. And what an itinerary:
The Four Seasons in Punta Mita, Mexico. Liechtenstein twice, Prague twice, Havana twice. Sumptuous retreats in Morocco and Madrid, Budapest and Helsinki, Tunisia and Cancun, Italy and Vancouver, Shanghai and Grand Cayman Island.
"It's good for members to travel out of the country and see what's going on in the rest of the world," Hinchey said. "It's not good to operate in a vacuum."
Besides, even in the great playgrounds of the globe, he frequently works on local issues, he says. Hinchey cites a seven-day, $6,000 trip he took to Rome in 2003, sponsored by the Aspen Institute, for a high-powered conference on the global environment.
"We talked about the New York City watershed, and the reservoirs in my district, and the 10 to 12 million people, most of them New Yorkers, who are dependent on our water supply," he said. "It was a working conference."
How is that for pigs feeding at the trough
Lady J, No, I've always let my wife "pick our home," because during my career, she was the one that sacrificed for my job. I was ready to move out of Silicon Valley after I retired in 1998, but my wife loves it here; with her friends and family. I'm one of those strange blokes that makes friends easily, and don't have problems with friends. As for family, mine lives in Sacramento, Elk Grove and Lodi. We don't see each other that frequently anymore, although we've tried to plan a regular Sunday Brunch for a few years now.
I think I am about to lose my lunch.
somebody's gonna have to call 911 for me....
c.i.! My folks live in Elk Grove.
As does my nephew and his family. I grew up in Half Moon Bay. My folks still have their home there as well and both of my brothers are still on the coast. I moved to Santa Rosa from the Bay Area about 23 years ago and now its even getting too big for me!
You can take the girl out of the country, but you can't take the country out of the girl.
I'm dialing c.i.....wanna share an ambulance?
Or we can just meet at Stanford and share a room.
Sharing a room can be an a whole new experience.
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