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October 31, 2011

Yet More of Your Taxes for the Arts

Last Thursday, October 27, we growled about the long-term plan the Arlington County Commission for the Arts dreamed-up to spend your hard-earned tax dollars. Even before it had a chance to see the light of day, the Arlington County Board approved an award of $435,000 at its October 18 recess meeting “for fabrication and installation” of the “artwork Echo” at Penrose Square.

The details are in agenda item 28.B.(October 18 agenda available here, and item 28.B. here (requires Adobe)). The Manager’s report to the Board describes the artwork this way:

“The artwork consists of two granite monoliths, placed 30’ apart. Each will have a parabola carved into it; when someone speaks into one sculpture, listeners standing at the other will hear the voice clearly and can have a conversation. The artwork is inspired by the significant role that Arlington’s Three Sisters Radio Towers, formerly located on the nearby Navy Annex property, played in the development of the nation’s trans-Atlantic communication capabilities.

“Fabrication of the artwork is expected to begin in November 2011 and will take about six months to complete and install. The installation of Echo will be coordinated with the overall construction of Penrose Square.  Both pieces of Echo (2 granite monoliths) will be built as Phase 1 of Penrose Square.”

The Manager asserts: “The artwork will help create a vibrant, public square that serves as a meeting and gathering spot in the Corridor’s new urban fabric.” Here's the “fiscal impact” from the report (capitalization in the original):

“Funding for this Art and Engineering Design Services Contract was authorized from the FY2011 to FY2016 CIP in the Community Conservation category and identified in the COLUMBIA PIKE INITIATIVE A REVITALIZATION PLAN–UPDATE 2005 and the Public Art Master Plan.

“The funds are available in the account numbered:  313.438200.72106.PSP.0000.0000.”

You can see what the artist has in mind from page 3 of the Manager’s report (requires Adobe). To repeat what we have said many times, i.e., that it’s not the art we object to, but rather that taxpayers are paying for it based upon the wishes of a selected special interest.

October 29, 2011

Latest Info on Property Taxes

On May 19, 2011, we growled about new property tax burden information published by the Tax Foundation (Fiscal Fact No. 269). Based upon date from the U.S. Census Bureau, Joseph Henchman of the Tax Foundation provides the latest news on property taxes at their Tax Policy Blog:

“While other tax revenue sources for state and local governments have been sluggish in the economic downturn, property taxes continue to be strong revenue collectors. This is driven in part by local governments' ability to increase rates even as assessed values drop.”

In a chart he notes the following average annual change in state and local tax revenues by type of tax for the years 2007-2011:

  • All State and Local Taxes -- +1.7%
  • Individual Income Tax -- +0.1%
  • Corporate Income Tax -- -4.7%
  • Property Tax -- +5.0%
  • Sales/Gross Receipts Tax -- +0.1%
  • Gasoline Tax -- +1.5%
  • Cigarette -- 3.5%
  • Alcohol Taxes -- +2.8%
  • Car Taxes & Drivers License Fees -- +2.7%

With Arlington County’s audited, annual financial report due out in December, it will be interesting to see how Arlington County compares for the five-year period 2007-2011. The following chart is posted at the Tax Policy Blog.

October 28, 2011

The 10 Richest Celebrities Supporting ‘Occupy Wall Street’

Tom Lifson, editor and publisher of American Thinker. provides a list today of the 10 richest celebrities who are supporting the ‘Occupy Wall Street’ protesters. Their collective net worth exceeds $1.2 billion, and ranges from Yoko Ono ($500 million) to former Speaker of the House of Representatives Nancy Pelosi ($35.5 million). His source is the blog, Celebrity Net Worth. Lifson describes the article as “highly amusing.”

The most curious celebrity, however, is #8 Michael Moore ($50 million) because Moore denies his wealth in a video of an interview with CNN’s Piers Morgan that has gone viral. According to Noel Sheppard at NewsBusters on Wednesday, here’s the relevant portion of the transcript:

“MORGAN: You're not in if 1 percent?

“MOORE: Of course I'm not. How can I be in the 1 percent?“

"MORGAN: Because you're worth millions.

“MOORE: No, that's not true. Listen, I do really well. I do well. But what's the point, though? Isn't that --”

DiscovertheNetworks.org has a more extensive history of Michael Moore here, virtually all that never makes it into the Left Stream Media.

If you are having trouble accessing the NewsBusters website, try viewing the video at Breitbart TV, Townhall.com, or You Tube. DiscovertheNetworks.org has a history of the organizer, Kalle Lasn, a lifelong 'student of revolution," behind Occupy Wall Street while Jacob Laksin, writing at FrontPageMag.com, suggests the protesters are wearing out their welcome. At American Thinker on October 17, 2011, J.R. Dunn compares Occupy Wall Street and the 1968 Chicago riots.

HT Mark Levin Show

October 27, 2011

More Taxes for the Arts?

On Tuesday, ARLnow reported, “The Arlington (County) Commission for the Arts has released the final version of its report for a long-term plan, called “Arlington Arts 2030.” The report outlines recommendations for supporting the arts in Arlington over the next 20 years, replacing the previous plan that was in place since the 1990s.”

The Arlington Sun Gazette had the following to say: “More grant funding, new and improved facilities and a separate county department are among recommendations to County Board members by a task force that for two years has been looking at the state of performing and visual arts in Arlington.” The newspaper’s Scott McCaffrey cited the following proposals:

  • "Increase the overall county government budget for arts grants, and focus the funds on organizations with an Arlington-centric focus.
  • "Restore funding for “challenge grants” that couple tax dollars with moneys raised by performing-arts troupes.
  • "Create a capital-improvement fund for renovations to existing arts facilities and to plan for future facilities.
  • "Set aside an amount equivalent to 2 percent of the county’s every-other-year bond package for public art.
  • "Commit more resources to marketing the arts.
  • "Adopt public-art guidelines."

By the way, a search of the report (requires Adobe) at the link provided at the ARLnow story found  exactly 100 instances of a $ sign in the report’s 104 pages. ARLnow also has links to several stories, including one with residents sounding off on the Arlington arts proposal.

Isn’t it great what liberals/progressives want to do with your money? There’s nothing wrong with funding the arts as long as its voluntarily done by individuals, e.g., when purchasing a ticket to an event, but why do the elite think their ideas are better than yours and mine? Sheesh!

October 26, 2011

October Pooper . . . er Porker of the Month Named

For the record: “Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.”

In a press release, Citizens Against Government Waste (CAGW) has named “Rep. Rosa L. DeLauro (D-Conn.) its October Pooper – er, Porker of the Month for proposing the putrid Diaper Investment and Aid to Promote Economic Recovery Act (DIAPER). The bill would amend the Child Care and Development Block Grant Act of 1990 to include diapers among the items that may be purchased with the grants.”

Here’s the details from CAGW’s press release:

“Rep. DeLauro certainly qualifies as the diaper diva of Capitol Hill. On October 7, 2011, in an attempt to elevate diapers to a level of national significance that they clearly do not deserve, Rep. DeLauro issued a press release stating that “No family should have to choose between buying diapers for their child or buying groceries.” Rep. DeLauro added that she “applaud[s] the work of Joanne Goldblum, who has been operating a Diaper Bank in Connecticut for years now, and whose good work has served as the inspiration for this legislation.”

“However, Ms. Goldblum and her diaper bank have done more than just inspire.  In the fiscal year 2009 Labor, Health and Human Services Appropriations Act, Rep. DeLauro disposed of $133,000 in taxpayer money with an earmark to the diaper bank.

“DIAPER leaves no doubt that the U.S. is moving ever closer to becoming a ‘Nanny State,’” said CAGW President Tom Schatz. “It is another example of the mission creep within federal programs that gives taxpayers a bad rash. Even as the Joint Special Committee on Deficit Reduction is holding hearings on how to cut $1.2 trillion from this bloated federal budget and wrangle some control over spiraling government spending, members like Rep. DeLauro are still trying to load on more spending and more debt.  On behalf of taxpayers, we think this bill is, well…just offal. It should be left on the congressional compost heap.”

CAGW’s Tom Schatz is absolutely correct in referencing the ‘Nanny State.’ However, if American taxpayers have to indeed pay for diapers, then it’s likely we’ve already stepped into the ‘Nanny State.’

And hey Grand Poohbah DeLauro, rather than phrasing that question as “diapers vs. groceries,” shouldn't you be asking why families are having babies if they can’t afford diapers? Wake-up diaper diva, and smell the poop!

Taxpayers wishing to provide Rep. Rosa DeLauro with their thoughts about her DIAPER bill can tell her or her staff at (202) 225-3661.

UPDATE (10/27/11):

Yesterday, Rush Limbaugh had fun with the declaration of Diaper Need Awareness Day by Connecticut's Gov. Dan Malloy, asking, "How long is it gonna be before a bunch of geezers in nursing homes are gonna be demanding free diapers?" He includes links to two stories, including one to a Human Events story.

Fox News published a story on Tuesday that was categories as "highly cited" noted that:

"Even without federal funds, low-income parents can access free diapers in multiple ways. Early Head Start, a federally funded program that helps children in low-income families, already offers free diapers and formula.

"Companies like Huggies and Pampers also offer rewards programs that allow consumers to accumulate points for coupons for free diapers. Parents can also register with diaper companies on their websites to receive free diapers, get free ones from the local hospital or rely on free sample packages of diapers that are given away on a regular basis."

The Meridien Record Journal reports on the "diaper bank" and one food pantry that distributes diapers, saying:

"Families on food stamps cannot use their vouchers for diapers, which can cost $100 or more per month, said Janet Alfano, acting executive director of the New Haven Diaper Bank. The bank, supported by donations from private foundations and state and federal grants, gives out 220,000 diapers per month to 66 agencies in the greater New Haven area, Hartford, Bridgeport and Middlesex County.

"We know it won't eliminate the need for us, but any move in that direction is helpful," she said. "It's not a full supply, it's about a quarter of the supply."

"Master's Manna, a food pantry in Wallingford, is one of the agencies that received diapers from the New Haven bank, and business is brisk: there are 182 children who get 45 diapers per month there, with 32 children on a waiting list, said Director Cheryl Bedore."

Finally, the Judicial Watch blog describes the entire affair as "a case of public assistance gone mad."

UPDATE (10/27/11): In addition to the great character below, James Taranto of the Wall Street Journal, concludes his Best of the Web this way:

"Maybe Obama should take it one step further and ask Congress to create a new cabinet-level Department of Infant Care to provide free diapers to all Americans. (Would that include the elderly? Depends.) It would certainly resonate with his 2008 campaign theme of "change."

 

UPDATE )11/2/11): On October 21, CNS News provided a few new infobits (e.g., Rep. DeLauro saying, “One in five mothers have had to skip an obligation and stay home with their child because of a lack of diapers. Losing out on daycare makes it even harder for parents to put in a full day’s work.”). In addition, there's an almost five-minute audio clip from Rush Limbaugh.

October 25, 2011

More Plundering of Taxpayers

In the Washington Times today, Jim McElhatton writes the State Department purchased $70,000 worth of President Obama’s 1995 memoir, Dreams from My Father.” The books were purchased as “Christmas gratuities and (for) stocking ‘key libraries around the world.” McElhatton continues:

“The U.S. Embassy in Egypt, for instance, spent $28,636 in August 2009 for copies of Mr. Obama's best-selling 1995 memoir. Six weeks earlier, the embassy had placed another order for the same book for more than $9,000, federal purchasing records show.

“About the same time, halfway around the world, the U.S. Embassy in South Korea had the same idea and spent more than $6,000 for copies of “Dreams from My Father.”

"One month later, the U.S. Embassy in Jakarta, Indonesia, spent more than $3,800 for hardcover copies of the Indonesian version of Mr. Obama's “The Audacity of Hope,” records show.

“A review of the expenditures in a federal database did not reveal any examples of State Department purchases of books by former Presidents George W. Bush or Bill Clinton. The purchases of Mr. Obama's literary work mostly, but not always, took place in the months after Mr. Obama captured the White House.”

The Times reporter also included comments by a representative of Citizens Against Government Waste (CAGW) questioning the State Department’s purchases, as well as comments from a State Department bureaucrat attempting to justify their plunder of America’s taxpayers.

“Leslie Paige, a spokeswoman for Citizens Against Government Waste, a watchdog group, said if the federal government is looking to cut costs, eliminating purchases of Mr. Obama's books is a good place to start.

“It's inappropriate for U.S. taxpayer dollars to be spent on this,” she said. “This sounds like propaganda.”

“But State Department spokesman Noel Clay said the book purchases followed regular government procurement rules. He said diplomats have long used books as a way to help broker talks on important foreign-policy matters.”

Granted that $70,000 will not make even a serious dent in the $1.3 trillion budget deficit, but if the government potentates are wasting $70,000, what chance is there of their eliminating the “big ticket” items needed to eliminate the budget deficit?

HT Mark Levin Show.

October 24, 2011

Spending, Not Tax Revenues, is the Problem

In this article (requires Adobe) from the Cato Journal, Andrew Young started off with the following Ronald Reagan quotation from 1980:

“[My opponent] tells us that first we’ve got to reduce spending before we can reduce taxes. Well, if you’ve got a kid that’s extravagant, you can lecture him all you want to about his extravagance. Or you can cut his allowance and achieve the same end much quicker.”

For a visual version of that quotation, let’s turn to the Heritage Foundation’s FY 2011 budget chart book. According to the chart below on the responsibility of runaway spending for future deficits, Heritage explains:

“The main driver behind long-term deficits is government spending—not low revenues. While revenue will surpass its historical average of 18.0 percent of GDP by 2021, spending will shoot past its historical average of 20.3 percent, reaching 26.4 percent in the same year.”

 

On October 2, 2011, we growled that Congress' so-called Super Deficit Committee should forget about raising taxes and "cut the spending" instead. The chart above does nothing but put a spotlight on the inability of Congress to do its job.

October 23, 2011

Wasting More of Your Tax Dollars?

Writing in the Washington Times on Tuesday, Stephen Dinan wrote about a “man living as an ‘adult baby’” being “cleared of Social Security fraud.” Here’s how Dinan begins:

“The California man who lives part of his life as an “adult baby” and collects Social Security disability payments says the federal agency has cleared him of wrongdoing and will continue sending checks.

“Stanley Thornton Jr. now wants an apology from Sen. Tom Coburn, the Oklahoma Republican who called for the benefit review because the investigation disrupted the final months of life for his roommate Sandra Dias, who playacted as his mother, spoon-feeding him and helping him into his baby clothes until her death in July.

“We recently reviewed the evidence in your Social Security disability claim and find that your disability is continuing,” the agency said in an August letter that Mr. Thornton posted on the website he maintains to document his adult baby lifestyle.

“Mr. Thornton first gained prominence after he appeared on a reality television show and later after Mr. Coburn asked for the Social Security Administration to investigate him. The lawmaker questioned why he was receiving taxpayer-funded Supplemental Security Income (SSI) payments, commonly called disability checks, given the woodworking skills he demonstrated in May on the National Geographic channel television show, ‘Taboo.’”

According to Mr. Dinan, “SSI is run by Social Security and pays benefits to aged, blind and disabled people who have little or no income. The funds are paid out of general taxpayer revenues, not from payroll taxes.”  Dinan does provide the following “good” news about the ‘adult baby’:

“He said he doesn’t spend much of his disability checks on his adult baby lifestyle, having bought many items earlier when he was working as a security guard. Some of his toys were Christmas gifts, and some of his other baby paraphernalia was bought with money he made by recycling bottles and cans.”

A Fox News story last week included the following:

“Coburn spokesman John Hart said it appears the individual has been cleared by the Social Security Administration, but that Coburn continues to pursue "not only this case but thousands of other cases of potential disability fraud."

"There exists in America today a disability industrial complex that allows judges, physicians and non-disabled Americans to exploit the good intentions of politicians for their own personal financial gain," he said in an email to FoxNews.com.

“Though Thornton complained on his site that Coburn "couldn't even so much as say sorry for all the trouble he caused," Hart said the apology should come from Congress for poor oversight of the program.

“Dr. Coburn believes Congress should apologize to the American people for failing to provide adequate oversight over our disability programs. This case highlights the need for comprehensive reform in order better define who is eligible to receive disability benefits. We need to hold accountable not only adult babies but the politicians and bureaucrats who coddle them," he said.”

Although SSI and SSDI are processed by the Social Security Administration, Wikipedia explains that one of the basic differences is that “SSI is funded from the U.S. Treasury general funds” while SSDI “is a payroll tax-funded, federal insurance program.” For further information about the differences between the two programs, visit the U.S. Social Security Administration’s website.

Also last week, McClatchy Newspapers posted an in-depth analysis of the federal disability program. asserting:

“The leading safety-net program for America's disabled workers is in a financial death spiral in the aftermath of the Great Recession.

“The sour economy, weak eligibility standards and a wave of aging baby boomers are driving an explosive increase in the number of injured workers who get disability benefits through the Social Security Disability Insurance program.

“At the current growth rate, the SSDI trust fund, which pays for benefits, won't have enough money to meet its obligations in 2018.”

The Kansas City Star has the story posted today, but without the excellent “profile of disabled workers” that appears below.

At the American Enterprise Institute’s EnterpriseBlog, Matthew McKillip says that “(a)dult baby is a symptom of a broken Social Security system. adding he hopes the case “will be the giant straw that causes a policy breakthrough in our failing disability system.” McKillip writes:

“While Thornton’s unique case is sure to stir outrage, of greater consequence is the SSDI system that he is drawing benefits from. The SSDI is both a fiscal and functional disaster: it is on pace for insolvency in 2017 and it discourages workers from returning to work through an ill-conceived incentive system. Austerity measures that aim to trim “adult babies” and others who can work off the disability rolls is at best a short-term fix. President Reagan attempted it in the early eighties but, as AEI Adjunct Scholar Richard Burkhauser explains, his efforts “were extremely controversial and resulted in a backlash that ended up making both SSDI eligibility criteria less strict and removing someone already on the rolls nearly impossible.” Cuts alone will only delay the reality that policy, not fraud or health conditions, is the root cause of the disability system’s failure.”

The solution, according to Mr. McKillip, "is a serious conversation about what should be happening at the onset of a worker's disability." His blogging includes a link to a blog written  by an Atlantic senior business editor who writes that “our Social Security Disability Insurance program is a mess.”

Whether it's SSI or SSDI, Dr. Coburn is correct when he says that Congress owes the American people an apology for failing to provide adequate oversight over the disability programs.


 

October 22, 2011

Your Tax Dollars Wasted Again

Mark Robyn writes at the Tax Foundation’s Tax Policy Blog that “(a) recent report by the Taxpayer Inspector General for Tax Administration (TIGTA) found that the 2.1 million tax filers claimed $3.2 billion in erroneous higher education tax credits for tax year 2009. Specifically, the tax credit studied was the American Opportunity Tax Credit a partially refundable tax credit worth up to $4,000.”

He adds “(t)he credit was created by the American Recovery and Reinvestment Act as the more generous successor to the Hope Credit. The report notes that over the 4-year life of the credit the potential amount of erroneous payments could reach nearly $13 billion.”

The report placed tax filers into four categories:

  • Students who did not attend an educational institution: 1.7 million taxpayers; 63% prepared by a paid preparer; potential erroneous credits -- $2.57 billion.
  • Students attending less than half-time or were graduate students: 361,000 taxpayers; projected erroneous credits --$550 million.
  • Students allowed as dependents on another taxpayer's return: almost 64 thousand; 51% prepared by a paid preparer; erroneous credits -- $$88.4 million.
  • Prisoners (incarcerated all year) claiming dependent students: 250 taxpayers; 24% prepared by a paid preparer; erroneous credits almost $256,000.

As usual, it’s taxpayers whose pockets are picked. Sheesh!

The TaxProf Blog has links to press coverage, including the Washington Post, Washington Times, and Associated Press.

October 21, 2011

Taxpayers Loan Money To Build Cars. Where?

ABC News reported yesterday that “an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.” ABC News added:

“The loan to Fisker is part of a $1 billion bet the Energy Department has made in two politically connected California-based electric carmakers producing sporty -- and pricey -- cutting-edge autos. Fisker Automotive, backed by a powerhouse venture capital firm whose partners include former Vice President Al Gore, predicts it will eventually be churning out tens of thousands of electric sports sedans at the shuttered GM factory it bought in Delaware. And Tesla Motors, whose prime backers include PayPal mogul Elon Musk and Google co-founders Larry Page and Sergey Brin, says it will do the same in a massive facility tooling up in Silicon Valley.”

The news report points out “(a) key question, experts and investigators say, is whether another Solyndra is in the offing. The response:

“In interviews, executives with Tesla and Fisker said comparisons to Solyndra are unfounded. Each said the government's investments will ultimately pay off by supporting a fleet of electric cars that will ease the nation's dependence on fuel and benefit the environment.

"It's absolutely a worthwhile risk," said Diarmuid O'Connell, vice president of corporate and business development for Tesla Motors. "I absolutely believe it was a good bet for American taxpayers." Tesla has said its mass production of the sedan will ultimately lead to profitability.”

The article includes a link to “the Energy Department’s defense of the auto loan program.”

In its weekend editorial about the Fisker loan, Green Energy's Bad Karma, Investor's Business Daily calls it a "boondoggle," and concludes:

"The road to national bankruptcy is being paved by this administration with its crony capitalism, and we are being driven into the ditch with an electric car."

The real question, however, should be why government is choosing winners and losers with taxpayer dollars. That is not how a capitalist, free market system should operate.

UPDATE (10/22/11): In a blog entry today, American Thinker takes note of a Washington Post story (link provided) "about the failures that have marred Fisker's founding," e.g., the company co-founder admitting that "yes, we did have some delays . . . But this is completely different. You can't compare at all."

October 20, 2011

‘Misery Index’ Highest Since 1983

Young people today will not likely remember the misery index, which Democratic candidate Jimmy Carter cited frequently during the 1976 presidential campaign. According to Wikipedia:

“The misery index is an economic indicator, created by economist Arthur Okun, and found by adding the unemployment rate to the inflation rate. It is assumed that both a higher rate of unemployment and a worsening of inflation create economic and social costs for a country. It is often incorrectly attributed to Harvard economist Robert Barro in the 1970s, due to the Barro Misery Index that additionally includes GDP and the bank rate.

“A 2001 paper looking at large-scale surveys in Europe and the United States concluded that the basic misery index underweights the unhappiness caused by joblessness: "the estimates suggest that people would trade off a 1-percentage-point increase in the unemployment rate for a 1.7-percentage-point increase in the inflation rate."

CNBC reported today the “unofficial gauge of human misery in the United States rose last month to a 28-year high as Americans struggled with rising inflation and high unemployment. CNBC added:

“The misery index — which is simply the sum of the country's inflation and unemployment rates — rose to 13.0, pushed up by higher price data the government reported on Wednesday.

“The data underscores the extent that Americans continue to suffer even two years after a deep recession ended, with a weak economic recovery imperiling President Barack Obama's hopes of winning reelection next year.

[ . . . ]

“But in 1984 an improving economy probably helped President Ronald Reagan win reelection.

“This year, the index has risen more than 2 points.”

Anyone want to take a guess what the ‘misery index’ will be on November 1,2012? An especially relevant question since CNBC writes that “many economists expect some respite in coming months, driven by softer inflation. By the way, the Wikipedia entry provides an interesting table of the misery index during each presidential term since 1948.

UPDATE (10/20/11): Yesterday, US News & World Report posted a story saying that "the number of underemployed workers rose for the third consecutive month."

UDATE (10/22/11): Randall Hoven has an article yesterday at American Thinker in which he takes us "back to 1969." For those old enough, he provides a number of historical markers. In addition, he reminds us just how much smaller the federal government really was, writing:

"In 1960 there was no Department of Education. No Department of Energy. No Department of Housing and Urban Development. No Department of Transportation. No Department of Veterans Affairs. No Drug Czar. No Environmental Protection Agency. No Occupational Safety and Health Administration. No Medicare. No Medicaid. No Department of Homeland Security."

Also, US News & World Report wrote last week about the most recent Federal Reserve "beige book," which is  issed eight times each year using "anecdotal evidence from the nation's 12 Federal Reserve districts to summarize recent economic conditions." Here's the summary from the news magazine:

"Overall, says the report, "economic activity continued to expand in September, although many Districts described the pace of growth as 'modest' or 'slight.'" Broadly speaking, the report indicates that one area of improvement is consumer spending, which was up slightly in September, helped by increases in auto sales in most districts. Likewise, manufacturing and transportation also saw increased activity. Meanwhile, real estate and construction remained weak nationwide, with flat or declining house prices nationwide, and the finance industry continues to flag. And the job market remains little changed, with firms in industries like manufacturing, transportation, and energy reporting a lack of adequately qualified or skilled labor."

October 19, 2011

What do Corporations Pay in Income Tax?

A Special Report from the Tax Foundation (No. 194, September 2011) provides a helpful picture of corporate income taxes. It begins introducing the subject this way:

“A number of recent news stories and think tank reports have drawn attention to the amount of income taxes paid by large corporations. For example, a recent report by Citizens for Tax Justice claimed that the financial statements of 12 large companies showed that eight paid no federal corporate income taxes between 2008 and 2010, and as a group, their effective federal corporate rate was -1.5 percent.  Similar news stories by the New York Times have focused on the ability of a few large companies, particularly General Electric, to take advantage of various credits and deductions in the corporate tax code.

“To many Americans, such reports are an indication that the tax code is riddled with preferences that allow large corporations to avoid "paying their fair share" of taxes. To be sure, the corporate tax code—like the individual tax code—is complicated by too many credits and deductions that benefit a narrow set of taxpayers at the expense of the many. But as if often the case in tax discussions, anecdotes do not tell the whole story.”

The entire report (available here in Adobe format) includes a number of useful charts. The five “key findings” in the report by William McBride are these:

  1. While the corporate tax code—like the individual tax code—is complicated by too many credits and deductions that benefit a narrow set of taxpayers at the expense of the many, recent reports of large corporations avoiding their "fair share" of taxes are misleading.
  2. IRS data on millions of actual corporate tax returns shows that the effective U.S. federal corporate tax rate has averaged 26 percent between 1994 and 2008.
  3. The effective U.S. federal corporate tax rate differs considerably across sectors, but much of this variance is explained by the mixture of U.S. and foreign income, foreign taxes paid, and foreign tax credits claimed, which merely prevents double taxation of foreign profits.
  4. Foreign taxes explain most of the difference between U.S. statutory and effective rates. The overall effective corporate income tax rate on the worldwide income of U.S. corporations, inclusive of foreign taxes paid on foreign income, is between 32.1 and 33 percent, which is close to the statutory rate of 35 percent.
  5. The largest corporations pay the lion's share of taxes. In 2008, the 1,937 largest companies were responsible for 68 percent of corporate tax revenue.
A far different picture than you get from the Left and the Left Stream Media, isn't it? If you liked this special report from the Tax Foundation, support their efforts.

October 18, 2011

Austerity in DC? Not in Your Wildest Dreams!

Last Saturday, we growled about the federal government’s $1.30 trillion deficit for FY 2011. Now comes even worse news. At Investor’s Business Daily today, John Merline writes that with spending up 5% this year, any claims we’re living in an “age of budget austerity” is nothing but a myth. Mr. Merline writes:

“When Republicans took control of the House in January, they pledged to make deep cuts in federal spending, and in April they succeeded in passing a bill advertised as cutting $38 billion from fiscal 2011's budget. Then in August, they pushed for a deal to cut an additional $2.4 trillion over the next decade.

[ . . .]

“In fact, in the first nine months of this year, federal spending was $120 billion higher than in the same period in 2010, the data show. That's an increase of almost 5%. And deficits during this time were $23.5 billion higher.

“These spending hikes haven't stopped many analysts from claiming that the country is in an age of budget austerity, one that's hurting economic growth.”

Merline also says, “Nor does the claim that state governments sharply cut spending stand up well to closer scrutiny.” The following chart is from his article.


In addition, at the National Taxpayers Union blog, Government Bytes, Brandon Greife confirms much if not all of what Merline concluded. Before citing a Wall Street Journal editorial, Greife writes:

“If you’ve spent time listening to liberals and progressives over the past year you were no doubt inundated with the message that Washington can’t afford to keep cutting. If we cut any more spending, we’ll not only endanger the recovery, but we’ll put millions of Americans who rely on the government at risk…or so the argument goes.

“In March for instance, Senate Democratic Whip Dick Durbin declared during the budget debate that “to go any further [than $10 billion in cuts] is to push more kids out of school, to stifle innovation which small businesses and large alike need to create more jobs, and it stops the investment in infrastructure which kills good paying jobs.”

“He’s not alone. It’s a line that has been tweaked and recycled by liberal politicians in nearly every budget debate Washington has faced this year.

“The trouble is there haven’t been any cuts. At least in the way that average Americans would define them.”

Here is the U.S. Treasury Department press release that provides the “data released by the Treasury Department on Friday” that was referenced by John Merline -- a lengthy “joint statement” from Treasury and OMB. A lot of information to digest and process. In addition to the IBD chart above, here is another helpful chart that is from the Journal story.

 

October 17, 2011

That Good Ol' Main Stream Media

An e-mail today from Tea Party Express wonders if anyone has "noticed the media’s new obsession with the Occupy Wall Street movement? Yes, the same movement that has launched a smear campaign against capitalism and Tea Party principles - it is a pathetically perfect fit. However, we cannot stand silent as protestors demand more government spending and demonize the Tea Party movement."

Their Facebook wall today points to a NewsBusters story from October 13, 2011, reporting that while the media cheer the "Wall Street Occupiers," they jeered Tea Partiers. Here's how Geoffrey Dickens, Deputy Research Director at the Media Research Center, begins his report:

"The Occupy Wall Street protestors have received overwhelmingly positive coverage from the Big Three (ABC, CBS, NBC) news networks, as they used their airtime to publicize and promote the aggressively leftist movement. In just the first eleven days of October, ABC, CBS and NBC flooded their morning and evening newscasts with a whopping 33 full stories or interview segments on the protesters. This was a far cry from the greeting the Tea Party received from the Big Three as that conservative protest movement was initially ignored (only 13 total stories in all of 2009) and then reviled.

"Where the Tea Party was met with skeptical claims of their motivations -- with some reporters claiming they were merely corporate backed puppets and others implying they were spurred on by their racist opposition to the first black president – the Occupy Wall Street crowd was depicted as an almost genial “grassroots” movement.

"While network reporters weren’t hesitant to describe the Tea Party as conservative, only once did a reporter attach even the “liberal” label to the overtly leftist Wall Street protestors.

"Network anchors like Brian Williams couldn’t be bothered with ideological labeling of the occupiers as he was, on the October 5 NBC Nightly News, too busy celebrating the arrival of the “massive protest movement” that “could well turn out to be the protest of this current era.”

"ABC’s Diane Sawyer was so excited she tripped herself up in hyperbole as she proclaimed, on the October 10 World News, that the movement had “spread to more than 250 American cities, more than a thousand countries – every continent but Antarctica.” (video) Sawyer would have to correct herself on a later edition of the program as she clarified it was “more than a thousand cities around the world – every continent but Antarctica.” – still a tremendous exaggeration."

The chart below is from Mr. Dickens' NewsBuster story:

Dickens concludes his reporting by writing:

"In the media’s coverage of the Wall Street occupiers and Tea Partiers, a clear tale of two different protests is seen. One that grew out of concern for out-of-control government spending was initially ignored and treated to catcalls of racism and thuggery by ABC, CBS and NBC. The other, a leftist movement screaming for an even more expansive government, that actually resulted in hundreds of arrests, was greeted by the Big Three networks with a tidal wave of coverage full of friendly talking heads."

The Arlington County Tea Party can be reached here.

October 16, 2011

EPA's Endangered Endangerment Finding

The Environmental Protection Agency’s “endangerment finding” is part of EPA’s efforts to control greenhouse gases without legislation from Congress. EPA’s endangerment webpage provides the following background:

“On April 2, 2007, in Massachusetts v. EPA, 549 U.S. 497 (2007), the Supreme Court found that greenhouse gases are air pollutants covered by the Clean Air Act. The Court held that the Administrator must determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision. In making these decisions, the Administrator is required to follow the language of section 202(a) of the Clean Air Act. The Supreme Court decision resulted from a petition for rulemaking under section 202(a) filed by more than a dozen environmental, renewable energy, and other organizations.

“On April 17, 2009, the Administrator signed proposed endangerment and cause or contribute findings for greenhouse gases under Section 202(a) of the Clean Air Act. EPA held a 60-day public comment period, which ended June 23, 2009, and received over 380,000 public comments. These included both written comments as well as testimony at two public hearings in Arlington, Virginia and Seattle, Washington. EPA carefully reviewed, considered, and incorporated public comments and has now issued these final Findings.”

Specifically, EPA believes that carbon dioxide and five other greenhouse gases “in the atmosphere threaten the public health and welfare of current and future generations.” After EPA first proposed its “endangerment finding,” U.S. Senator James Imhofe (R-Oklahoma) said on the Senate floor the Administration had in fact “set in motion a ticking time bomb with its release of an endangerment finding.” As Sen. Imhofe said in his floor speech:

“Any attempt to stretch the Clean Air Act to regulate these gases illustrates the game of Russian Roulette this Administration is playing with the American economy.”

Obviously, a lot has gone on since 2009, and my intent is not to provide that history. Rather the above is merely to provide some context for an article by atmospheric physicist S. Fred Singer, Professor Emeritus of Environmental Sciences at the University of Virginia and founding director of the US Weather Satellite Service, published yesterday at American Thinker (AT).

Dr. Singer is a member of one of the group’s that challenged the EPA’s endangerment finding in the DC Circuit Court of Appeals. Since his AT article is only two pages long, I won't repeat any of it here. The primary point, however, is that EPA’s science underlying the endangerment finding was faulty, and “is certainly inadequate to support the IPCC conclusion of anthropogenic global warming (AGW).”

Without the endangerment finding, EPA will be unable to regulate carbon dioxide. And America’s taxpayers will owe Dr. Singer and his colleagues who have opposed EPA’s endangerment finding a debt of gratitude. By the way, Dr. Singer's book, "Unstoppable Global Warming - Every 1500 Years," a NY Times best seller, is a great read if you want to know "the evidence for natural climate cycles of warming and cooling." Below is the book's cover.

Further information about the endangerment finding is here (Patrick Michael writing in Forbes), here (editorial, Richmond Times Dispatch), and here (Mario Lewis at GlobalWarming.org).

October 15, 2011

Federal Budget Deficit $1.30 Trillion for FY 2011

Forget how the MSM reports the deficit for the fiscal year ended September 30, 2011; here’s the abstract of the October 2011 monthly budget review from the Congressional Budget Office (CBO):

“CBO estimates that the federal budget deficit was about $1.30 trillion in fiscal year 2011, approximately the same dollar amount as the shortfall recorded in 2010. The 2011 deficit was equal to 8.6 percent of gross domestic product, CBO estimates, down from 8.9 percent in 2010 and 10.0 percent in 2009, but greater than in any other year since 1945. The estimated 2011 total reflects the shift of some payments from fiscal year 2012 into fiscal year 2011 (that is, from October to September, because October 1 fell on a weekend); without that shift, the deficit in 2011 would have been $1.27 trillion. CBO’s deficit estimate is based on data from the Daily Treasury Statements; the Treasury Department will report the actual deficit for fiscal year 2011 later this month.”

Bloomberg News reported yesterday it was the “third consecutive annual budget deficit in excess of $1 trillion.” The news report added “(t)he budget deficit for fiscal 2011 was 8.7 percent of gross domestic product, down from 9 percent in 2010.” What is difficult to understand, however, is the political elite’s inability or unwillingness to control or cut spending. As evidence, Bloomberg News reported:

“Spending rose 4.2 percent in fiscal 2011 from a year earlier to $3.6 trillion, according to the Treasury. Revenue climbed 6.5 percent to $2.3 trillion.”

The CBO explains that 4.2% increase in spending this way:

“Outlays ended the year 4.2 percent above 2010 amounts, CBO estimates. After adjusting for the effects of timing shifts, the rate of growth was 1.8 percent. Excluding adjustments recorded in the budget for the estimated cost of credit programs (mainly the Troubled Asset Relief Program), the government’s other outlays increased by less than one-half of one percent relative to spending in 2010.”

At St Louis Today, the Associated Press reported the cost of the deficits and all the added debt this way:

“For 2011, the government had to borrow 36 cents of every dollar it spent. The string of massive debts has made interest on that debt the fastest-growing budget category. For 2011, net interest payments rose 15.7 percent to $227 billion.” (emphasis added)

What a bunch of financial wizards we have on the other side of the Potomac? Sheesh!

October 14, 2011

Does Your 401(K) or IRA Have a Future?

In yesterday’s Investor’s Business Daily (IBD), John Merline asks whether “your 401(k) (is) safe from the tax man?” Merline says it is a “question that might be worth asking, as the congressional "supercommittee" scrambles to find $1.5 trillion in additional deficit cuts.” Here is the background, according to Merline:

“In September, the Senate Finance Committee held a little-noticed hearing that explored changes to retirement plans — principally employer-sponsored 401(k)s — that would in one way or another cut their tax deductions.

“The tax breaks' size makes them a tempting target for lawmakers. According to the White House budget office, tax exemptions for 401(k)s and IRAs will "cost" the government more than $436 billion over the next five years.”

Why are the Grandees interested in your 401(K) or IRA savings? The answer, according to IBD, is “the current system has led to an explosion in retirement savings, with 401(k)s now holding about $4.7 trillion in assets and IRAs $4.9 trillion.” The primary “pro and con” seem to be:

“Critics say the existing system benefits mostly the rich. The liberal-leaning Tax Policy Center calculates that 80% of these tax "expenditures" go to the top 20% of earners. Such people "would almost certainly save for retirement even without tax incentives," said Karen Friedman, policy director at the Pension Rights Center.

“But Judy Miller of the American Society of Pension Professionals and Actuaries argues that the deduction's cost is wildly exaggerated. Adjust for the taxes paid when retirees withdraw money and the cost is cut in half.

“And, she says, the break is more progressive than some allege. Among other things, high earners who get a bigger tax break going in end up paying more in taxes when they take the money out.”

HT to the Mark Levin Show. He discussed this article at the beginning of the first hour of his October 13, 2011 radio show (audio available here).

October 13, 2011

Growth in Tourism Revenues Add to County Coffers

ARLnow.com reports today that Arlington County generates 13% of Virginia tourism revenues, based upon numbers from the Virginia Tourism Corporation. ARLnow.com’s reporting notes there are 43 hotels in the county.

Travel expenditures in Arlington County for 2010 were just under $2.5 billion, growing by 7.2% from 2009. Total expenditures, however, have not returned to the $2.53 billion seen in 2008.

Other Arlington County travel economic impacts in 2010 include employment of 23,164, down 0.3% from 2009, and payroll of $789.6 million, up 3.3%. In addition, state tax receipts were $81.1 million, up 4.0%, while local tax receipts were almost $72 million, up 4.5%.

We previously Growled this year (including January 31 and February 23) about the unwillingness of the Virginia General to pass legislation extending the transient occupancy tax to 2015. Consequently, local tax receipts for the fiscal years ending June 30, 2012 will be affected.

October 12, 2011

Growth in Spending: Faster Than a Speeding Bullet?

Yesterday, we Growled about U.S. Representative Connie Mack’s bill called the One Percent Spending Reduction Act of 2011 (H.R. 1848) and its companion bill introduced in the Senate (as S. 1316) by Sen. Mike Enzi (R-Wyoming). The bill would “prevent a fiscal crisis by enacting legislation to balance the Federal budget through reductions of discretionary and mandatory spending.”

Why is it necessary to “stop the spending,” or at least to slow it down to a manageable degree? Take a look at the chart below from the Heritage Foundation’s FY 2011 budget chart book. The chart shows that federal spending is growing faster than the growth in federal spending, and inflation-adjusted to 2010 dollars. Specifically:

“Since 1965, spending has risen constantly. Federal revenues have dropped recently due to the economic recession, but spending has reached a record high.”

As the warning you sometimes read in advertisement, don't try this at home.

October 11, 2011

The 1% Budget Reduction Act

You may have heard radio talk show host Sean Hannity talk about the One Percent Spending Reduction Act of 2011 (H.R. 1848), which was introduced in the U.S. House of Representatives by Rep. Connie Mack (R-Florida) or in the Senate (as S. 1316) by Sen. Mike Enzi (R-Wyoming).  The bill is featured in the latest Taxpayers Tab (Vol. 2, Issue 35) from the National Taxpayers Union Foundation (NTUF).

The bill would “prevent a fiscal crisis by enacting legislation to balance the Federal budget through reductions of discretionary and mandatory spending.”

NTUF notes the “Congressional Budget Office estimates that the budget deficit for the recently completed fiscal year will be $1.30 trillion. This is the third year in a row that the deficit has exceeded $1 trillion.” NTUF says says the bill would only result in annual savings of $33.5 billion, but it adds the bill:

“ . . . would balance the budget and reduce federal spending to 18 percent of GDP by imposing a one percent cut in both discretionary and mandatory spending for each of the next six fiscal years. If Congress and the President fail to agree on the cuts necessary to meet the bill's spending targets, an across-the-board spending cut would trim expenditures by one percent.

“NTUF estimates that the legislation would save $67.0 billion over a two-year period. This is a two-year estimate rather than the typical five-year estimate. Under BillTally's methodology, NTUF calculates a two-year savings for such spending limit bills because NTUF is skeptical that Congress will abide by the cuts for an extended period of time.”

More information about NTUF and the National Taxpayers Union, click here. Previous issues of Taxpayers Tab are available here.

October 10, 2011

Quote of the Day

New York City's "Empire State Building, then the tallest building in the world, was put up in eighteen months during a depression -- because the head of General Motors wanted to show the head of Chrysler that he could build something that went higher than the Chrysler Building. Three-quarters of a century later, the biggest thing either man's successor had created was a mountain of unsustainable losses -- and both GM and Chrysler were now owned and controlled by government and unions."

~ Mark Steyn

Source: Page 41, "After America: Get Ready for Armageddon," Regnery Press

October 09, 2011

Green Jobs. A National Scandal?, Part IV

At National Review Online on Friday, Deroy Murdock writes that with more bankruptcies to come, so-called green jobs are a national scandal. Moreover, it goes beyond the $500 million government “loan” to Solyndra. Murdock lists over a half-dozen “green bankrupcies” that involve taxpayers money.

We’ve growled about these so-called “green” jobs several times recently -- September 19, September 24, and October 7, 2011.

At Master Resource last week, the authors of a report, The Dirty Secret Behind Clean Jobs (requires Adobe), summarize the results of their report for the Cascade Policy Institute. According to Sibilla and Wynn, not only is the definition of “green jobs,” but the “green job subsidies are based on flawed economic principles.” They also say the “assumptions for job growth are inaccurate or downright false.” Their conclusion:

“Clean jobs have a dirty secret: They will not put Americans back to work. And they leave Americans as consumers and taxpayers poorer. Timeless economics and current facts (think Solyndra) reach the same verdict.”

While at Master Resource, a search for “green job” will get you more details. And at the Heritage Foundation’s blog, The Foundry, September 30, 2011, there’s an interesting discussion of the warning’s on “green jobs” made by the top economic advisers in the White House. An article at Canada Free Press concludes with:

“It would be far more honest for green-job supporters to say that they are not increasing overall employment but just creating what in their minds are “right” jobs in the place of “wrong” ones. That would replace a half-truth with a fuller truth.

"But are so-called green energy jobs really right when consumers continually chose oil, gas, and coal? This issue is a separate one, but its answer cements the case against government picking energy winners and losers in a free society.”

Finally, Brad Plummer has an interesting chart at the Washington Post’s Wonkblog that shows “the top 15 job sectors of green job growth.”

But, as Sibilla and Wynn comment, who knew transit workers labored in a green industry, or that bureaucrats responsible for regulation and compliance were green workers. Sheesh!

UPDATE (10/20/11): Tait Trussell has an article at Front Page Magazine today that includes quotations from Sen. Charles Grassley's letters to DoL Secretary Hilda Solis and several working definitions from Vice-President Biden's Middle Class Task Force.

October 08, 2011

Comments on Yesterday's Jobs Report

In the second edition of his book, “The Secrets of Economic Indicators,” Bernard Baumohl says the monthly jobs report, published the first Friday of each month, is “(t)he most eagerly awaited news on the economy.” According to Baumohl, “No single economic indicator can jolt the stock and bond markets as much as the jobs report,” and the unemployment rate is the centerpiece of the jobs report.

Technically referred to as “the employment situation,” here is the introductory paragraph according to yesterday’s news release from the Bureau of Labor Statistics, U.S. Department of Labor (DoL):

“Nonfarm payroll employment edged up by 103,000 in September, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. The increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August. In September, job gains occurred in professional and business services, health care, and construction. Government employment continued to trend down.”

The Los Angeles Times notes that while employers boosted hiring in September, “the pace was sluggish as the economy was stuck in low gear.” It added that an “estimated 125,000” new jobs are “needed to keep pace with a growing population, let alone reduce the ranks” of unemployed Americans. According to the Washington Post, “The jobs crisis isn’t getting worse. But it isn’t getting much better, either.”

The Wall Street Journal, however, took a gloomier tack in saying that “data can’t mask a dour labor situation,” saying the jobs report “may stave off recession fears for the moment.” The also wrote the “U.S. labor market is starting to calcify,” providing a chart showing the “average number of weeks unemployed” has climbed above 40 weeks after getting no higher than 20 weeks in two previous upturns. (See the WSJ chart below)

A Wall Street Journal editorial compared the jobs situation “28 years apart.” They wrote:

“As it happens, the biggest one-month jobs gain in American history was at exactly this juncture of the Reagan Presidency, after another deep recession. In September 1983, coming out of the 1981-82 downturn, American employers added 1.1 million workers to their payrolls, the acceleration point for a seven-year expansion that created some 17 million new jobs.

“The difference between then and now isn't the magnitude of the recessions but the policies the U.S. pursued to restore growth. In the Reagan expansion, spending and tax rates were cut, regulations were eased, and government was in retreat. Today, we've had a spending and regulatory boom, the threat of higher tax rates, and a general antibusiness political climate. Policies have consequences.”

Finally, in a WebMemo on Friday, James Sherk, senior policy analyst at the Heritage Foundation, says the report contains "a few hopeful signs," and concludes saying Congress should “resist the urge for empty action.” He wrote:

“ . . . Congress should resist the urge to “do something” about the economy and should instead ensure that what it does is constructive. Passing a third stimulus bill would increase the debt burden and fail as completely as the past two stimulus packages did. Congress should instead work to improve the business climate and remove barriers to business success.”

Data for the jobs report comes from DoL's household survey. Since wages and salaries are the primary source of household income, "the more they buy and propel the economy forward," as Baumohl says. And, the stronger the economy, the more tax rates can be cut.

October 07, 2011

Green Jobs? Government Boondoggle!

The Poughkeepsie Journal reported this week that a federal “green jobs” program, funded with 'stimulus' money, has failed to produce (HT Sen. Tom Coburn’s (R-Oklahoma) ‘Washington Waste’). The newspaper began their reporting:

“A $500 million green jobs program has placed only 8,035 people in new jobs through June 30 instead of the 79,654 targeted, according to an inspector general's report.

"The report by the inspector general for the Labor Department recommends that $327.3 million still unspent be refunded because of the program's ‘limited performance.’”

Here is how the Inspector General put it in the highlights to the September 2011 report, “Slow Pace Placing Workers into Jobs Jeopardizes Employment Goals of the Green Jobs Program” (Report No. 18-11-004--3-390, dated September 30, 2011):

“Of the $500 million provided, ETA retained $9.9 million for services such as program administration and technical assistance, and awarded $490.1 million as follows: $435.4 million for three training programs, $48.9 million for labor market information, and $5.8 million to develop capacity for training programs. Grantees have reported expending $162.8 million (33 percent) of the amounts awarded, with about 73 percent of the grant time having elapsed. As of June 30, 2011, $327.3 million remained unexpended. Moreover, the rate of training grant expenditures for the most recent period has decreased.

ETA and grantees have reported achieving limited performance targets for serving and placing workers. Grantees have reported serving 52,762 (42 percent) of the targeted 124,893 participants with 61 percent of training grant periods having elapsed and have reported placing 8,035 participants (10 percent) into employment out of the target of 79,854 participants. The rates at which grantees are achieving their performance goals have been increasing. However, with 61 percent of the training grant periods elapsed and only 10 percent of participants entered employment, there is no evidence that grantees will effectively use the funds and deliver targeted employment outcomes by the end of the grant periods.”

Rick Manning of Americans for Limited Government writes at The Hill’s pundits blog:

"Quite simply, the Labor Department’s green jobs training program is just one more example of the Obama administration spending taxpayer money in pursuit of its green ideological agenda, rather than pursuing real, sustainable job growth.

“Doubters are not surprised by the colossal failure of the entire Obama green agenda, and its disastrous impact on the 14 million unemployed. Unfortunately, after three years of selling economic quackery, there is no evidence that Team Obama is even considering a change in direction.”

Not surprisingly, the New York Times reported on October 4, 2011: “Labor officials disagreed with the findings . . . .”

UPDATE (10/9/11): An Associated Press article on the DoL IG's report says:

"Another problem the report highlighted is that workers who completed training and were placed in green jobs have had trouble retaining their posts. Of the 8,035 workers placed, only 1,336 — or 2 percent of the overall target — have held those jobs for at least six months."

October 06, 2011

Taxpayers, Hoaxes, and the Cost of Dependency

In his latest column today at National Review Online, Thomas Sowell explains how ‘hunger’ hoaxes are “part of the larger poverty hoax.” According to Dr. Sowell:

“Those who see social problems as requiring high-minded people like themselves to come down from their Olympian heights to impose their superior wisdom on the rest of us, down in the valley, are behind such things as the hunger hoax, which is part of the larger poverty hoax.”

This is another one of Dr. Sowell’s “must read” columns. He concludes by saying:

“Those who believe in an expansive, nanny-state government need a large number of people in “poverty” to justify their programs. They also need a large number of people dependent on government to provide the votes needed to keep the big nanny state going.

“Politicians, welfare-state bureaucrats, and others have incentives to create or perpetuate hoaxes, whether about poverty in general or hunger in particular. The high cost to taxpayers is exceeded by the even higher cost of lost opportunities for fulfillment by those who succumb to the lure of a stagnant life of dependency.”

Remember this column by Thomas Sowell the next time the New York Times or Washington Post publishes another story about poverty or hunger.

October 05, 2011

Quote of the Day

"The lifetime professional legislative class boasts of its "experience." Experience of what? Of spending beyond not their means but ours. The Emirs of Incumbistan have presided over an explosion of government, an avalanche of debt, and the looting of America's future."

~ Mark Steyn

Source: Page 79, "After America: Get Ready for Armageddon."

October 04, 2011

Do the Rich Pay Their “Fair Share?”

As most taxpayers know, “The president spends a lot of time talking about the fairness of the tax code, and the notion that people making over $1 million should not pay lower taxes than the middle class,” according to a paper, Share of Total Income Taxes Paid by Millionaires, published last week by the Mercatus Center. In the paper, written by senior research fellow Veronique de Rugy, she says the real question is “Do the rich pay their fair share in taxes?”

She plumbs the date from the Internal Revenue Service’s Statistics of Income “to show the number of U.S. millionaires (people and households earning $1 million or more as reported by the IRS) and their relative contributions in paid income taxes.” According to Dr. deRugy:

“In 2009 alone, millionaires made up 0.1 percent, or just fewer than 240 thousand of the 140 million tax returns filed that year. Despite their small demographic imprint, the magnitude of their contribution in paid taxes is hard to overlook. Over the past ten years, millionaires have paid 17 to 28 percent of total income tax returns per year.

“The 233,435 taxpayers who reported earning seven digits or more in 2009 brought in a total of $702.2 billion, received $77.2 billion in personal exemptions and total deductions, and paid 25 percent ($174.4 billion) of their income in taxes. Also, the top 1 percent of income earners pay 38 percent of income taxes and earn 20 percent of income, which is highly progressive.

“The returns filed in 2009 reflect income from 2008, the depths of the recession and financial crisis. The data remarkably show that although millionaires were not exempt from economic hardship, with a loss of 160,000 reported millionaires in 2008 and 2009 alone, millionaires still consistently paid an overall 20 percent share.”

The chart below is from Dr. deRugy’s paper:

Thanks, Dr. deRugy, for the facts.

October 03, 2011

Quote of the Day

"The most vital element in a dynamic society is the space the citizen has to live life to his fullest potential. Big Government encroaches on this space unceasingly. Under the acronyms uncountable, we have devolved from republican self-government to a micro-regulated nursery."

~ Mark Steyn

Source: pages 85-86, "After America: Get Ready for Armageddon."

October 02, 2011

Hey Supercommittee, Cut the Spending!

With HT’s to American Thinker and Big Government, we learn that Reuters reported yesterday that “Democrats want tax hikes to be the first item negotiated in "super committee" deficit-reduction talks, trying to force Republicans to confront an issue at the heart of this year's budget fights, sources told Reuters.” A bit of background from the Reuters report:

“The panel has the task of finding ways of cutting the deficit by at least $1.2 trillion over 10 years. If it fails to agree on a plan by November 23, automatic spending cuts will be triggered, beginning in 2013.

“If Democrats hold firm to their demand for taxes to be discussed first, that could make it hard for the committee to make the tight November deadline. Congress is due to vote on the panel's recommendations by December 23.”

The story is based almost entirely on anonymous sources, both Republican and Democratic. Here’s more from Reuters:

“Budget and tax specialists in the private sector are predicting arduous negotiations that could end with a partial deal at best in which the committee agrees on some savings, with the balance achieved by the automatic spending cuts.

“Failure by the committee to agree on a comprehensive deficit reduction deal could lead to a further downgrade of the stellar government credit rating, a move that in turn could damage a global economy struggling to right itself after a deep recession."

Although there may be no agreement on what gets “negotiated first,” it makes sense to pick the “lowest fruit” first -- a job that has already been done.

Two groups with “widely divergent views on many tax and fiscal issues . . . have joined forces to identify federal programs that both Republican and Democratic lawmakers should recognize as wasteful and inefficient uses of taxpayer dollars.” In this National Taxpayers Union September 15, 2011 press release (read the US PIRG’s press release if you prefer), we learn of “a new study . . . by the U.S. Public Interest Research Group (U.S. PIRG) and the National Taxpayers Union (NTU),” which “provides the panel with a great place to start: more than $1 trillion of spending cuts with appeal from across the political spectrum.” Here’s a very brief summary of the 54 “specific cuts in federal spending” advocated in the U.S. PIRG/NTU study:

  • 214.9 billion in savings from eliminating wasteful subsidies to agribusiness and other corporations
  • $428.8 billion in savings from ending low-priority or unnecessary military programs
  • $232.3 billion in savings from improvements to program execution and government operations
  • $132.1 billion in savings from reforms to major entitlement programs

Here is what the co-authors have to say about the study:

  • Andrew Moylan, Vice President of Government Affairs for the National Taxpayers Union: “Though it gets drowned out by the din of Washington’s partisan rancor, there is actually a large amount of agreement between watchdog groups both right and left about where the waste is in the budget. We hope this report can aid the Super Committee in the difficult task of repairing the federal balance sheet by giving them suggestions with widespread support.”
  • Dan Smith, U.S. PIRG Tax and Budget Associate: “In an effort to address the deficit, we too often forget to differentiate between the good and the bad; between public priorities and special interest handouts . . . “These recommendations correct years of insider lobbying that has benefited narrow interests allowing room either for investment in valued programs or deficit reduction.”

The Supercommittee may even be able to complete their work far in advance of their November 23 deadline since a third watchdog group -- Taxpayers for Common Sense (TCS) -- has put together a 35-page report of $1.53 trillion in “Super Cuts for the Super Committee." In addition they have compiled over $200 billion in “More Common Sense Cuts” by “eliminating potential future spending that may not be included in the baseline.”

As Rick Moran blogged at American Thinker today:

“Consider: Over the next 10 years the federal government will spend over $40 trillion. The idea that there is not $1.2 trillion out of that mind boggling sum to cut without raising taxes a dime is beyond belief. There is probably 5 times that amount that could be cut without raising taxes - if we had a congress and political parties with the spine to do it.”

Read the entire 18-page report “Toward Common Ground: Bridging the Political Divide with Deficit Reduction Recommendations for the Super Committee” (requires Adobe) from U.S. PIRG and NTU. Then contact the Joint Select Committee on Deficit Reduction (use their “contact form”) to send the 12 members your suggestions of what they can do to reduce the deficit. They even promise to “incorporate your guidance in their work.” Tell them to start with the US PIRG/NTU spending cuts, and then continue with the TCS "super cuts" and "more cuts."


October 01, 2011

$91 Million for School Losing Accreditation?

That’s a distinct possibility based upon a report in yesterday’s Washington Examiner. Recall that on June 9, 2011, the Arlington Public Schools held the groundbreaking ceremony for the new Wakefield High School that is budgeted to cost $91.1 million. However, the Examiner reported:

“An Arlington high school is in danger of losing its state accreditation because not enough students are graduating or at least completing GEDs.

“Wakefield High School failed to receive "full accreditation" status -- achieved by every other Arlington County public school -- because only 77 percent of the class of 2011 graduated or otherwise completed high school.

“Instead, Wakefield was "accredited with warning." If the next two classes can't make steep gains, Wakefield will no longer be in good standing with Virginia.

"There are deficiencies within that school that need to be addressed," said Charles Pyle, a spokesman for the Virginia Department of Education . . . .”

The Wakefield High School principal told the Examiner “he is ‘absolutely’ concerned,” and to “shore up the completion rate,” Wilmore “said he is looking at special programs for next summer and already identifying students with attendance issues.”

A news release from the Virginia Department of Education noted that “new graduation & completion index impacts high school accreditation.” Further background on high schools include:

“The percentage of fully accredited high schools dropped to 86 percent, compared with 99 percent last year, as the Board of Education introduced a "graduation and completion index” as a new accountability factor for high schools, in addition to student achievement on state tests.

"Whenever standards are raised, there are schools that require time to meet the new expectations,” Superintendent of Public Instruction Patricia I. Wright said. "The fact that 86 percent of high schools already meet or exceed the standard for graduation and completion speaks to the efforts of educators and administrators to raise graduation rates.”

“The index system awards full credit for students who earn a board-recognized diploma and partial credit for students who earn GEDs and local credentials, as well as for students who are still enrolled and expected to return for a fifth year of high school. High schools must have a graduation and completion index of at least 85 for full accreditation.

"Holding high schools accountable for outcomes encourages early interventions before students are at risk of dropping out," Board of Education President Eleanor B. Saslaw said. "It is a critical component of the board’s effort to ensure that Virginia graduates are college-and-career ready."

“In 30 provisionally accredited high schools, achievement in English, mathematics, history and science met state standards, and graduation was within five points of the 85-point benchmark. Ten of the 11 high schools accredited with warning for 2011-2012 are warned solely because of graduation and completion indices below this year’s 80-point benchmark for provisional accreditation. Provisional accreditation will not be available after 2015-2016.”

To see how the School Board and senior management prepared to avoid the risk of Wakefield losing accreditation, taxpayers are encouraged to peruse Wakefield's school improvement plan and school management plan (available here at the "school plans" webpage). Information about the purpose, membership, and procedures for the school plan advisory committee is available here (requires Adobe).

What a concept? $91 million for the new Wakefield High School, but the new school is in risk of not being accredited by the Commonwealth when it opens for the 2014-2015 school year. How’s that for a school system that spends $17,322 per pupil -- almost 65% over the national average of $10,499 per pupil?