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View Diary: When do tax breaks constitute taxpayer funding? When it's convenient. (95 comments)

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  •  However real Arizonans are being harmed (2+ / 0-)
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    DRo, SingerInTheChoir

    by this decision as AZ legislators slash education and human service funding and drown the AZ government in a tax credit bathtub.

    The author of this tax credit :

    Representative Steve Yarbrough owns the largest STO in Arizona, the Arizona Christian School Tuition Organization. Yarbrough's organization took in over $11.4 million of tax credit money in 2007, over 21% of all tuition tax credit dollars collected statewide.

       * As Executive Director of ACSTO, Yarbrough receives an annual salary of about $96,000. The tax form says the salary is compensation for 40 hours work per week. I suppose it's possible for him to work full time as Exec Director of ACSTO and still maintain his duties as a legislator. But it wouldn't give him a whole lot of time to do anything else.
        * Yarbrough is also a working lawyer, and under the title of Steven P. Yarbrough, PC, he gets paid by ACSTO, which lists its legal fees at about $60,000 per year. There's no breakdown of the legal fees on the tax form, so there's no way for me to know whether or not the entire $60,000 is spent on Yarbrough's legal services. It does seem strange, though, that the Executive Director working 40 hours a week puts on another hat and pays himself extra to offer legal counsel.
        * Beginning in 2006, by far the biggest charge to ACSTO is "Processing Expenses": $363,620 in 2006 and $426,895 in 2007. In 2005, Processing Expenses are listed as only $24,440. Before 2005, there is no specific listing for the service. Interestingly, on October 21, 2005, Yarbrough incorporated a new business, HY Processing, LLC. The corporation is listed on ACSTO's tax return in 2006 and 2007, and the description of services in 2007 is, "Processing of scholarship requests and grants. Payments of guaranteed payments." Because the new six figure processing charges begin at the same time HY Processing is first listed on ACSTO's return, I'm guessing there is a direct connection, and most or all of the processing costs are flowing from ACSTO to HY Processing.

    As always, follow the money.

    •  SCOTUS decisions are rarely (1+ / 0-)
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      about only the parties in front of them.  Important as the issues seem to the actual parties to the case, in most cases, the decision is usually much, much more important for the bigger principle decided than for the actual parties before the Court.  

      In other words, Brown v. Board of Education was not about whether a handful of children could attend a particular school in Topeka.  

      When a case like this comes to the SCOTUS, they are usually more concerned with the principle.  Here, the principle is whether a deduction/exemption/credit is a "subsidy" as Justice Kagan says, or the government simply "declining to take the public's money" as Kennedy would frame it.  Important as the issue may seem to some in Arizona, the SCOTUS is more often focused on the principle, as that typically has far, far more importance in the long run.

      If the people of Arizona disagree with these tax credits, they still have recourse, and that is to elect different representatives.  After all, the STO's are simply a matter of law, and that law is passed by the elected representatives.    

      I'm not saying the SCOTUS decision is right or wrong -- that depends on how you view the fundamental issue of whether a deduction/exemption/credit is, or is not, a governmental "expenditure."  

      •  Current SCOTUS decisions (0+ / 0-)

        are extremely ideological, with much to do with the impact on larger principles.

        •  Yes, ideological (1+ / 0-)
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          but more in line with the ideological principle involved than the identity of the party.   In other words, conservative justices usually follow the Gideological principle rather than the identity of the party.  Bush v. Gore may be the one striking exception, but in that case, both sides departed from their typical ideology in writing opinions.  That's an exception that demonstrates the undeniable fact that the SCOTUS is, and always has been, a political institution.  

          That is why (in my opinion) all those who think that the SCOTUS will uphold the Health Care Bill "because it helps insurance companies" are completely missing the point.  The overriding ideological principle there is the conservative view that the Constitution limits the power of Congress to those powers enumerated in the Constitution, and that the Commerce Clause power cannot be read so broadly as to give Congress the power to do anything it wants.  That's the ideology that will drive that decision (if I had to predict) regardless of the fact that it will financially benefit certain corporations.  I certainly think that will be the view of Scalia, Alito, Thomas, and Roberts.  

          The wild card in that decision will be, as usual, Justice Kennedy.

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