"bitter" voters

I've been very disappointed by the press coverage of the recent brouhaha surrounding Obama calling certain voters bitter. When Obama's obviously extemporaneous remarks are interpreted in context it is abundantly clear that there is nothing to get worked up about. Here's what he said in San Francisco:
So, it depends on where you are, but I think it's fair to say that the places where we are going to have to do the most work are the places where people are most cynical about government. The people are mis-appre...they're misunderstanding why the demographics in our, in this contest have broken out as they are. Because everybody just ascribes it to 'white working-class don't wanna work -- don't wanna vote for the black guy.' That's...there were intimations of that in an article in the Sunday New York Times today - kind of implies that it's sort of a race thing.

Here's how it is: in a lot of these communities in big industrial states like Ohio and Pennsylvania, people have been beaten down so long. They feel so betrayed by government that when they hear a pitch that is premised on not being cynical about government, then a part of them just doesn't buy it. And when it's delivered by -- it's true that when it's delivered by a 46-year-old black man named Barack Obama, then that adds another layer of skepticism.

But -- so the questions you're most likely to get about me, 'Well, what is this guy going to do for me? What is the concrete thing?' What they wanna hear is so we'll give you talking points about what we're proposing -- to close tax loopholes, uh you know uh roll back the tax cuts for the top 1%, Obama's gonna give tax breaks to uh middle-class folks and we're gonna provide healthcare for every American.

But the truth is, is that, our challenge is to get people persuaded that we can make progress when there's not evidence of that in their daily lives. You go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. And it's not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.

Um, now these are in some communities, you know. I think what you'll find is, is that people of every background -- there are gonna be a mix of people, you can go in the toughest neighborhoods, you know working-class lunch-pail folks, you'll find Obama enthusiasts. And you can go into places where you think I'd be very strong and people will just be skeptical. The important thing is that you show up and you're doing what you're doing.

Obama subsequently clarified his intent speaking in Indiana:
People don't vote on economic issues because they don't expect anybody is going to help them. So people end up voting on issues like guns and are they going to have the right to bear arms. They vote on issues like gay marriage. They take refuge in their faith and their community, and their family, and the things they can count on. But they don't believe they can count on Washington.

What should be clear from these quotes is that Obama was saying that "working-class white voters" are rational, just not in the way many expected. Obama recognizes that this demographic has often voted on values rather than on economic issues. Rather than explaining their behavior in a way that makes it out to be irrational -- by attributing it to religious persuasion, intellectual deficit, or (in this election) racial bias -- Obama explains their behavior on the basis of a pessimistic induction about politician's campaign promises: "Many times before politicians have made campaign promises to improve our economic situation but have not delivered, so when a politician next makes a campaign promise to improve our economic situation we will not expect them to be upheld and consequently will not vote on the basis of that expectation; rather we will vote on the basis of a candidates values which we have better reason to think will be maintained." Much like behavioral economists, with whose work he is reported to be familiar, Obama is seeking rational explanations for seemingly irrational behavior, and attempting to transform those rational explanations into concrete (electoral) gains.

So there you have it, according to his opponents and many in the media, Obama has "insulted" voters by making them out to be rational!

Double Taxation & the NY "Amazon" Tax

As has been widely reported, NY state's latest budget includes a provision to extend sales tax to some online retailers, including Amazon.com. Retailers with at least $10,000 in NY sales, and which have sales "affiliates", will be considered businesses with a NY presence and hence required to assess state and local sales taxes on purchases by NY residents. (The current combined sales tax rate for NYC is 8.375%.) This is known as the "Amazon tax" because Amazon is one of the few major web retailers which does not already have a physical presence in NY (this reflects the general trend since the .com bust away from web-only retail strategies).

It is not yet known how Amazon will respond to this move. There are two obvious options: (1) to challenge NY's law in court as a violation of the Supreme Court's 1992 decision Quill vs. North Dakota; (2) to terminate sales affiliate relationships based in NY. The first option may not prove successful as the 1992 decision was based on the premise that complying with myriad local tax obligations across the country would put an undue burden on interstate commerce; today, however, IT has made compliance far easier, certainly for the likes of Amazon. (A more promising route, I believe, would be to challenge the law's $10,000 threshold; but, assuming an alternative test can be found, it is hard to imagine how Amazon would not meet it.) Should Amazon lose or choose not to pursue the first option, the second will be short-term only as other states are likely to quickly follow NY's lead.

As a consumer, though, my primary complaint with the new law is double taxation. Like most states, NY requires residents to pay a "use tax" on purchases made outside the state. NY includes a line on its standard tax forms for this tax and requires it be filled in. While doubtless many do not pay this tax, failing to do so puts the (non-)taxpayer at significant risk should she be audited. For those that do pay the tax, there are two methods: either to tediously calculate the actual tax owed on each and every out of state purchase, or to pay an estimated amount based on income, which is obviously the popular option. Here is where the double taxation concern comes in: under the new law the "use tax" has not been repealed -- nor, so far as I know, have the amounts used for the estimation method been adjusted -- so the honest taxpayer will continue to pay the "use tax", but her income (on the basis of which the amount of tax is estimated) is not diminished by those out of state purchases on which she did pay tax. Effectively she will be taxed twice on the same purchases. (This was already the case previously when purchasing from out of state retailers that do charge tax on items shipped to NY.)

The estimation method of paying the "use tax" also creates a perverse incentive: honest taxpayers reduce their marginal rate of taxation (for a given income) on out of state purchases by making more such purchases! For anyone who, like most NY residents, makes a substantial number of out of state purchases and uses the estimation method, the "use tax" regime actually encourages increased out of state purchasing, rather than establishing a level playing field for NY retailers. This effect is reduced as sales tax is levied by more out of state retailers, however the double taxation is then magnified.

Given these considerations, NY should either keep the "use tax" (at least for purchases over a suitably high threshold) and not require retailers to levy sales tax on purchases by NY residents, or the reverse. What the legislature should not do is, of course, exactly what they have done, maintain the "use tax" in full while extending the levy of sales tax by out of state retailers.

FOLLOWUP -- A nice article on related developments: Tax-free Internet shopping days could be numbered - CNET News.com


More on typography and design

First, thanks to Zev for pointing out another post on typography in the political campaigns, which points out how design and type choices reflect on the campaigns themselves:
I think the real story here is less about typography than it is about discipline. Political campaigns are the Brigadoon of branding. There’s a compressed amount of time to tell a candidate’s story before the race is over and the campaign vanishes. During that window, the campaign must make sure that everything it produces — everything it touches — delivers the candidate’s message in a meaningful way. No opportunity to amplify that story should be missed. The Obama people have used design to take that discipline to a whole new level.

On another note, the H&FJ blog points out the stunning new designs for British coinage:

Be sure to read their sad but humorous comparison with the new US five dollar notes.