Public Money & Political Campaigns

[IBCoupe]

So, let's get next week started out right. On Monday, the Supreme Court will have an hour of oral argument over the constitutionality of public subsidization of political campaigns.

Just 14 months after deciding Citizens United, one of history’s most controversial rulings on campaign money, the Court is wading into the legally murky waters of publicly financed campaigns — that is, the direct transfer of taxpayer funds from the public treasury to candidates for elected office.

Few topics in political finance these days separate the pros and the antis more deeply than public subsidies. To those in favor, subsidies may be the last real hope for keeping the moneyed “special interests” from buying America’s elections. To those opposed, subsidies are the best invention yet for the government to choose up sides, helping favored candidates and stifling their opponents.

Making it harder to understand this constitutional debate is the fact that both sides claim that what is at stake for them is free speech, and each is claiming that the other side wants to curtail political speech. Poorer candidates are said to need subsidies so they can project their voices to the voters against rich rivals. Privately funded candidates are said to be driven to speak less so as not to trigger a taxpayer donation to their subsidized rivals.

And here's the law in question:

The subsidy system that the Justices are now ready to review was, in fact, believed to be a reform measure when Arizona’s voters narrowly approved it (by a 51-49 percent margin) in a statewide initiative in 1998. After a series of scandals over financing of state campaigns, resulting, among other woes, in criminal prosecution of two governors and a number of state legislators, voters went to the polls to vote on a measure titled the “Clean Elections Act.”

...

Under the Act, candidates for state offices can opt to seek public subsidies, but they do not pay for their campaigns entirely with public funds. They qualify for a subsidy by raising a specified amount in private donations, each of which can be no more than $5. And their campaigns can spend no more, in total, than ceilings provided by state law, and, once they start receiving subsidies, they cannot raise any more private funds. An initial subsidy is paid out of state funds, and the candidates are initially limited to spending only that amount.

Added to that — and this is the part of the Act directly under challenge in the new cases — is a “matching funds” provision, and the triggering mechanism that initiates that added feature. If a subsidized candidate has an opponent who is paying for his or her own campaign (“self-financed”), the subsidized candidate qualifies for an additional subsidy if the other candidates’ spending exceeds the amount of the initial subsidy. However, there is a ceiling on the amount of added subsidy: it can only be twice the initial subsidy amount, and 6 percent of an added subsidy is deducted to cover expenses.

The actual “trigger” for extra public funds can occur by either the spending of the self-financed candidate directly, or by independent groups that support that candidate if the amount such groups spend added to that of the candidate exceeds the initial subsidy amount. The system works for each self-financed candidate running against a subsidized candidate. If an independent group supports the subsidized candidate, no offset through a subsidy would go to the self-financed candidate.

And here's the full article: http://www.scotusblog.com/2011/03/argum ... lic-money/

[IBCoupe]

From the article, here's a sample of the challenging arguments:

...When they spend campaign money above the specified limit, they are “literally force[d]…to press a button on their computer that will trigger the payment of subsidies to the very participating candidates they oppose.” What they are then doing, it added, is helping to spread their opponents’ private political message as a consequence of their own free speech during the campaign. Their own labor and campaign resources are the trigger for aid to their rivals, it contended.

And, in summarizing its legal arguments, the brief began with a quotation from former Arizona Gov. Janet Napolitano, who had joked that she was “the only Democratic governor in the country for whom George Bush has held a fundraiser,” because an event for her opponent, with President Bush as the speaker, raised enough money that it triggered a $750,000 matching payout for Napolitano.

That, the brief summed up, is punishment, because it works as a deterrent on a non-subsidized candidate’s campaign. Being the instrument for “dissemination of ideas one opposes or abhors” is a severe condition on the right to run for office and spend money on campaign speech, the brief argued.

And here's a sample from the arguments for the AZ law:

[T]he Act was not designed to put candidates on an equal footing financially, but rather to assist candidates who are willing to run campaigns without relying upon the heavy money that previously had caused “a seamless interplay between fund-raising and lawmaking” — in essence, the kind of “quid pro quo corruption” that the Supreme Court has upheld as a rationale for restricting campaign money flows.

...

...The Arizona matching fund system, it contended, is simply a means of allocating public funds among candidates who seek them, in return for avoiding private fund-raising. Tying the amount to the overall flow of money in a given campaign, it contended, does not amount to a penalty on anyone.

...

A dominant theme of the [Justice] Department’s brief is that the Court should not apply a “strict scrutiny” standard of review, because that is appropriate only for a “severe burden” on free speech activity and, it argued, there is no such burden under Arizona’s approach. The absence of any direct restriction on candidate speech, the brief said, takes it outside of all prior strict-scrutiny cases, including Davis, upon which the challengers rely.

At most, it suggested, the working of the subsidy in Arizona may create a “disincentive” for self-financed candidates to engage fully in campaign speech, but that is a “strategic choice” about speaking that has never had a high level of First Amendment protection. Self-financed candidates in Arizona, it argued, “are not required to pay for, to disseminate, or to identify themselves with their opponents’ messages.”

The Justice Department has thrown its opinion into the mix because there are public financing schemes available for Presidential campaigns, and though no matching system like Arizona's has been created, Congress has considered it in the past.

[themadscientist]

I don't want public money paying for elections. Raise your own damned money. Raise it in complete transparency so you may be judged by who you choose to associate with. Deny corporations and groups from donating a penny and mandate that only the contributions of individual citizens with a paper trail will be legal. Problem solved.

QUIT PAYING FOR s*** WITH MY f*** MONEY!

[IBCoupe]

Deny corporations and groups from donating a penny and mandate that only the contributions of individual citizens with a paper trail will be legal.

I can't really argue with that, except to say that I think your faith in the ability of the population/media to properly investigate donations is a few notches greater than mine.

[themadscientist]

What faith? I have no faith in anything or anybody. You can lead a voter to truth, but you can't make them read. What we have now is a twisted web of intrigue and obfuscation that even people who are interested can't crack. I have a hard time judging those that were mildly interested from just walking away.

What I am suggesting is a simple, transparent system that shows unequivocally where the funding comes from. Those of us who care even a little can quickly process and spread the information to others. information is power and at the current time the American electorate is in possesion of precious little actionable information.

Remove PACs, get the unions and big business doners out of it and bring it down to simple individual donations with a paper trail. Politics is like magic. the heart of the trick is drawing your attention away from the sleight of hand the illusionist is doing. Campaigns are the scantily-clad assistant keeping your eyes off the trick, the money men lining the candidates pockets and keeping them at the front while candidates who may offer a better choice, but can't draw favor-seeking donors are drown out by big campaign money.

[bigbadberry3]

Damned if we do damned if we don't, and sadly it's in regards to the people who run the country.

[themadscientist]

No, I don't think so. Many voters are choosing "don't." They are choosing that by not voting at all or voting habitually, emotionally or in protest. If more people took the time to look closely at candidates from very early in the campaigns and maitain that same focus throughout we would start going in a better direction. The electorate is the problem, not the candidates. We are the power, we have just abstained or used it irresponsibly. We put those scumbags in power and it's our responsibility and task to remove them.

Those people that don't vote are as guilty because a voice unused is a voice not heard and it's not just that person that suffers for their silence, but all of us. It's a sad state of affairs when more people vote for American Idol than the American Presidency. That our leaders suck is easily understood when taken into context of the selection process. Garbage in, garbage out.

[stebo0728]

One part of the Fair Tax that some people dont like, is that ending the income tax ends the $3 contribution to campaigns. I've NEVER checked that box, but I wonder just how many people do for that to be a large source of campaign funds, and just how are they doled out anyway?

[themadscientist]

"The fair tax" is a regressive tax. I do not support the populist stunt. Anybody that does the math will realize the poor get hurt the most. Who misses 55 of their income more, a guy making $300,000, or the guy making $30,000? Who has more of their income sucked up by non-negotiable fixed expenses? Sure, one could argue that the richer person would have a better class of things, but they always have the option of cutting back a bit. The person on the low end of the scale will slam into an inescapable floor of housing, food, utilities and transportation costs that can't get any cheaper. I wish I could say I am surprised by how many people are for it, but Sarah Palin is still in my news cycle so it sort of makes sense in a sad way.

Don't get that excited lefties. Your stalwarts would tax free enterprise into extinction. You both scare me.

[stebo0728]

"The fair tax" is a regressive tax. I do not support the populist stunt. Anybody that does the math will realize the poor get hurt the most. Who misses 55 of their income more, a guy making $300,000, or the guy making $30,000? Who has more of their income sucked up by non-negotiable fixed expenses? Sure, one could argue that the richer person would have a better class of things, but they always have the option of cutting back a bit. The person on the low end of the scale will slam into an inescapable floor of housing, food, utilities and transportation costs that can't get any cheaper. I wish I could say I am surprised by how many people are for it, but Sarah Palin is still in my news cycle so it sort of makes sense in a sad way.

Don't get that excited lefties. Your stalwarts would tax free enterprise into extinction. You both scare me.

Google "FairTax prebate" and read a bit, the let me know if the above is still valid.

[IBCoupe]

Stebo, which types of expenditures are exempt from the FairTax? And who's more likely to spend their "prebate" on what now?

[stebo0728]

Doesnt matter, statistics tell you how much NECESSITIES will be purchased by a certain sized household. In order to remove tax responsibility for necessities, the prebate goes out. How a family spends the prebate doesnt matter, and we really dont need to care. If they decide to live a little more poverishly on food in order to buy a TV, well whatever, not our bag. Actually buy NOT taxing used items, expecially cars and homes, it makes it all the more accessible to the poverish, as they can buy the items tax free.

You might be misunderstanding me, under the FairTax, you dont exempt tax based on types of items, the only distinction is new or used. All types of items are taxed, and if they are necessity items, the prebate removes your tax on them until you buy more that month than necessary. I really dont understand whats so hard about understanding that. Its like trying to teach someone differential calculus, I mean it just makes perfect sense to me, but Ill be damned if I can get Bob to get it.

[IBCoupe]

I understand that you think and the prebate thinks that what you spend the probate on doesn't matter.

But that's exactly the criticism that's raised. When you're looking at percentages of incomes, it absolutely necessary to look at who buys what. If one person goes off and spends their prebate on bread and balogna, and another person goes and buys stock, you have said that their transactions will be treated differently. One person's prebate will be taxed, and another's won't.

And that's okay, if you've got a goal where that makes sense. If you don't, or if you're trying to fight an argument that says certain social demographics will be hit harder than others, you're going to have to do more than a handwave, telling me, "Oh, you just don't understand."

[stebo0728]

Do you not understand that they will have to buy necessities to live? Thats all the prebate is for, necessities that people will be hardpressed in not buying. Sure people are stupid sometimes and buy lottery tickets instead of bread, but thats beyond the scope. We've calculated what the prebate should be, sent it to you, its yours to do with as you please. If someone buys stock, its rare that they are buying it with prebate funds. BUT heres the thing. Do you get your boxers all up in a wad about what people now are spending their standard deduction on that they save on their income taxes? The standard deduction has the same function now, that the prebate would have under the FairTax. It removes tax liability on necessities. Wondering what people will spend it on looks a bit red, and smells a bit fishy.

[srellim234]

So, as stebo puts it, we need more bureaucracy to decide what we tax and how much of it the government will let you buy before it is taxed (sounds pretty socialist/government controlling to me). Companies will need to keep track of what's new and what isn't in their inventories creating more paperwork and regulatory oversight. Second hand stores, which currently sell both new and used items, have to maintain separate inventories. Companies who have inventory that is refurbished (example- Fry's Electronics, Amazon.com) have to keep track only for the purpose of deciding if it needs to be taxed (refurbed before initial sale- tax. refurb customer return- don't tax). Of course, stebo still doesn't see stocks, bonds, investments on Wall Street as taxable. That's because those items only apply to middle to upper class who can afford them and apparently deserve a pass on paying taxes in a fair proportion to others in the population.

Tax it all and lower the tax rate or don't tax it at all. Buy it, tax it. New or used shouldn't matter. The Fair Tax, as currently proposed, is just a way for the rich to attempt to plunder more of the nation's wealth from the poor and middle class. More complicated to implement than it is worth and most hurts those who can least afford it.

[stebo0728]

So, as stebo puts it, we need more bureaucracy to decide what we tax and how much of it the government will let you buy before it is taxed (sounds pretty socialist/government controlling to me).

Where in the hell did that come from? What bureaucracy is needed to say "if its new tax it, if its used dont". Your actually removing the government from the equation, the government doesnt have to keep track. If a new purchase comes through the line, theres a tax on it, otherwise theres nothing for the government to be concerned about. Where does your extra bureaucracy come from?

Companies will need to keep track of what's new and what isn't in their inventories creating more paperwork and regulatory oversight. Second hand stores, which currently sell both new and used items, have to maintain separate inventories. Companies who have inventory that is refurbished (example- Fry's Electronics, Amazon.com) have to keep track only for the purpose of deciding if it needs to be taxed (refurbed before initial sale- tax. refurb customer return- don't tax).

Wait what? They dont already do this? Dangerous, thats bad business. You always have separate inventory entries for new and refurbished/used items. Then you just set up a taxable/non-taxable flag for each item, if its taxable, set the flag to true, collect tax, if its not, set it to false, skip the tax. Whats hard about that? What part of that isnt Inventory 101?

Of course, stebo still doesn't see stocks, bonds, investments on Wall Street as taxable. That's because those items only apply to middle to upper class who can afford them and apparently deserve a pass on paying taxes in a fair proportion to others in the population.

Actually I hadnt gotten around to responding to that point of yours. I can see merit in taxing the tangible stock, as a good. But then in doing so can you also tax the service of the guy doing your trading? Perhaps, I'll noodle that around a bit more. But I still dont see merit in taxing each trade, as the trade itself is the tool of the service. Tax the quantitive stock, tax the trading service fees, but leave the trades alone.

Tax it all and lower the tax rate or don't tax it at all. Buy it, tax it. New or used shouldn't matter. The Fair Tax, as currently proposed, is just a way for the rich to attempt to plunder more of the nation's wealth from the poor and middle class. More complicated to implement than it is worth and most hurts those who can least afford it.

I will admit, its an interesting point you an IB have brought up here, but I still see a pronounced difference between new and used goods, and I still dont see an effective way of tracking used transactions, and as such I dont see why we should even bother. But more so I still dont consider re-taxing a good as appropriate. I suppose if you wanted to tax used items, you could possibly lower the tax rate a bit, and include any "brick and mortar" sale. I must also clarify, I consider internet sales to be "brick and mortar" now, and they should be taxed also. Basically any sale that you can track, tax it, BUT, it still remains that I dont like the idea of re-taxing goods.

[srellim234]

For someone who is already assuming and accusing people of cheating the system on used goods, you sure put a lot of faith in businesses to make the proper distinctions between new and used and pay the tax accordingly without any government oversight to back it up. Lot easier to tax it all, new or used. Total sales x tax% = amount sent to government.

Not to mention that for someone who doesn't like the poor of this country living at the teat of government you propose having the government send a "prebate" to every single person in America!

[srellim234]

This thread has to be one of the great hijacks. Anyone remember what the OP was about and care to discuss?

[IBCoupe]

Issue before the Supreme Court:
Does the First Amendment prohibit a state from giving additional money to a candidate who accepts state funding for his or her campaign whenever his or her opponent, having refused public funding, spends more than a certain amount on the campaign?

I say: "No." The only argument in favor of that believe is that the law disincentivizes the free spending of money on your political campaign because a you effectively finance your publicly-financed opponent by spending a bunch of money over your opponent's limit.

Seems to me that the State isn't stopping you from doing anything. It's not limiting your ability to say what you want to say. It's just part of the context within which you have to consider what you want to say. Like shouting, "I enjoy sex with small, furry animals" in a public square, there will be ramifications. This is no different just because an act of law helps to create some of the ramifications.

[srellim234]

I agree with you, IB. I don't believe it's a First Amendment issue.

[IBCoupe]

But the five "conservative" Justices might disagree.

[stebo0728]

Well I'm all for limiting campaign funds anyway necessary, heck I'd even be just fine abolishing ads and mailers. If people want to find out where you stand on an issue, come to the town halls or the meet and greets, and find out the hard way, and if you're too lazy to do that, just dont vote, you'd be doing us a service as such

[IBCoupe]

There's a thought that the Court might take a hard turn and actually eliminate public financing, for all intents and purposes.

But I'm pretty sure a ban on advertisement would be a clear violation of the First Amendment.

[stebo0728]

Ya you're right, I just hate the ads ....

[IBCoupe]

I figured.