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February 28, 2013

A Thought about Greed and Economic Growth

"You can’t grow the economy by taking money out of the economy. Yet that’s the president’s plan, and it’s leading us down a dangerous path. First, the greed of Wall Street crippled our economy, and now, President Obama’s Government Greed is threatening to drown our economy."

~ Bobby Jindal, Governor of Loiusiana

HT His Op-Ed on National Review Online

February 27, 2013

More Waste of Taxpayers Dollars

In an online story posted  at the Washington Examiner today, Michal Conger writes that "(f)ailures in managing federal property (are) costing taxpayers billions." Specifically, she says:

"Inefficiency, inaccuracy and underuse in managing federal property costs taxpayers at least $1.6 billion each year. That is the troubling conclusion of a report the House Subcommittee on Government Operations addressed today in its first-ever hearing.

"Though real property management may seem “boring,” underused and inefficiently managed property is important because of how much money it wastes, said subcommittee chairman John Mica.

“Americans have a right to know how their money Washington has taken from them — how it is spent, and that it is well-spent,” Mica said at a hearing titled “Failures in Managing Federal Real Property: Billions in Losses.”

"The issue has been listed high on the Government Accountability Office’s high-risk series for 10 years now, despite several efforts to fix inefficient systems across the government. The issue is especially pressing with sequestration looming and the federal debt approaching $17 trillion, Mica said."

Although $1.6 billion isn't especially significant when compared to an annual budget of $3.6 trillion or deficits of $1 trillion, even more troubling is that "persistent problems have landed property management failures a spot on the GAO’s high-risk list for the past 10 years," writes Conger.

When is a government bureaucrat going to be fired for wasting $1.6 billion of hard-earned taxpayer money? Taxpayers would like to know.

February 26, 2013

Mistakes -- Private vs. Government

One of the key differences between mistakes that we make in our own lives and mistakes made by governments is that bad consequences force us to correct our own mistakes.

"But government officials cannot admit to making a mistake without jeopardizing their whole careers."

~ Thomas Sowell

HT His February 26 Column at Investor's Business Daily

February 25, 2013

Federal Spending Up $822.90 Per American Since 2008

Terry Jeffry, of CNS News reported last Friday that using U.S. Treasury and Census Bureau data and after adjusting for inflation, "per capita federal spending went up $822.90 from fiscal 2008 to fiscal 2012."

Per household, that amounts to $2,437.64.

Here's a more detailed look at how he arrived at the numbers:

"On April 1, 2008 (the midpoint in the federal fiscal year which ends on Sept. 30), there were 303,381,938 people in the United States, according to the U.S. Census Bureau, and on April 1, 2012 there were 313,336,712.

"The $3,176,376,470,000 that the federal government spent in fiscal 2008 equaled $10,469.89 for each of the 303,381,938 people who lived in the United States that year. The $3,538,446,000,000 the federal government spent in fiscal 2012 equaled $11,292.79 for each of the 313,336,712 people who lived in the United States that year. (emphasis  added)

"Thus from fiscal 2008 to fiscal 2012 inflation-adjusted federal spending per person increased by $822.90.

"That means that over the past four years, the federal government has increased its spending on average by about another $206 each year for every man, woman and child in the country."

In case you were wondering if the United States has a "revenue problem" or a "spending problem," you weren't paying attention or you must be either a liberal or a progressive. This time read Jeffrey's entire article!

February 24, 2013

Arlington County's Real Estate Tax Rate Headed Past $1?

The Arlington Sun Gazette's Scott McCaffrey reported today the county's real estate tax rate is "likely to rise above $1 for first time in a decade." According to McCaffrey's online report:

"Arlington’s residential real estate tax rate could bump up higher than $1 per $100 assessed valuation for the first time since 2001, after County Board members compromised Feb. 23 to advertise a rate 5 cents higher than last year’s.

"The 5-cent increase in the advertised tax rate was 1.8 cents more than sought by County Manager Barbara Donnellan, who has proposed a record $1.07 billion fiscal 2014 budget.

"With only four County Board members on the dais – Chris Zimmerman being ill with the flu – the meeting appeared for a time headed to a standoff between board members Mary Hynes and Jay Fisette, who wanted to advertise a 4-cent rise in the tax rate, and Libby Garvey and chairman Walter Tejada, who wanted a 6-cent hike.

"In the end, they split the difference. “Five [cents] is a very good compromise between four and six,” Garvey said."

The County Manager recommended a 3.2 cents per $100 of assessed value increase in the real estate tax rate as part of her proposed FY 2014 budget, which she presented on Saturday. The 6 cents increased may well have been a response by the two Board members to the recommendation of the so-called progressive group known as Arlington New Directions Coallition (ANDC) -- see "letter from the public" posted on the Board's agenda item 20.A. of its February 23, 2013 meeting. You can watch or listen to yesterday Board meeting through access at this page. The press release issued after the Board's meeting yesterday is here.

We growled about the Manager's proposed budget after she briefed the Board last week, and we expect to be growling a lot more after an initial look at the budget document itself.

February 23, 2013

Global Warming and Those 'Nasty' Facts

In a editorial post this weekend at Investor's Business Daily, they write:

"For every scary piece of data held up by alarmists as proof of man-made global warming, it seems a bit of contrary evidence is uncovered — and, of course, is ignored. Let's see what Antarctica is telling us.

"The professional fearmongers are predicting that Arctic sea ice will soon be gone during the warmer months of the year. This is supposed to worry us into action that "fights" global warming.

"But then there's the fact, which we noted last week, that the Arctic's sea ice gain from the record low of summer 2012 is a record of its own.

"We reported that we're in only the third winter in history in which more than 10 million square kilometers of new ice has formed in the Arctic.

"We also mentioned that the Antarctic is nearing 450 days of uninterrupted above-normal ice.

"That was last week. And this is this week: Antarctic sea ice is on an upward slope. Real Science, a science website, says it "has been increasing at a rate of half a million square kilometers per year.

"If this alarming trend continues, the planet will be completely covered with Antarctic ice in 1,000 years," said Real Science, using University of Illinois data to map out the trend and reach its conclusion. "The Australian coral reefs will freeze to death in less than 300 years."

"We don't think Real Science expects Earth to be fully covered with Antarctic ice in 1,000 years. But it is a fine, though maybe somewhat snarky, response to Al Gore wildly claiming in his movie "An Inconvenient Truth" that sea levels will rise 20 feet due to global warming."

But it's not just the growing ice at the polar caps. With a HT to Climate Deport, we learn from the Global Warming Policy Foundation that "the global temperature standstill" has gained the support of Dr. Rajenda Pachauri, chair of the United Nations' Intergovernmental Panel on Climate Change (IPCC), who "acknowledged the reality of the post-1997 standstill in global average temperatures." According to a post at their blog yesterday:

"The GWPF has been highlighting the global warming standstill for many years against fervent denial by climate activists. Recently, Nasa’s James Hansen also recognised that global temperatures have not risen for more than a decade.

“Even though the scientific case for the standstill is secure, and well represented in peer-reviewed scientific literature, it will surely help the climate debate now that the IPCC chairman has confirmed its existence,” said Dr David Whitehouse, the GWPF’s science editor.

"The post-1997 global annual average temperature standstill is one of the most important aspects of current climate science. Its recognition by the chair of the IPCC means there is now growing pressure that this empirical fact will receive full analysis in the forthcoming AR5 report.

"The GWPF points out that Dr Pachauri’s assertion that it will take a temperature standstill of “30-40 years at least” to affect theories of man-made global warming is without a scientific basis. “The 17-year standstill already strains climate models, and if it continues for much longer it will demonstrate that the climate models on which the IPCC has based its assumptions are inadequate,” Dr Whitehouse said."

How will the global warmists try to frighten us about next?

For more about climate models and their limitations, see chapter 1 of the 2011 interim report of the Nongovernmental International Panel on Climate Change (NIPCC) here. Marc Morano provides a "point-by-point rebuttal to the President's global warming claims" during his recent State of the Union speech here.

February 22, 2013

A Thought on Property Rights

"(Economist Armen) Alchian had his largest impact on the economic analysis of property rights. Most of his work in this area can be summed up in one sentence: You tell me the rules and I'll tell you what outcomes to expect.

"In their textbook, for example, Alchian and (William R.) Allen ask why the organizers of the Rose Bowl refuse to sell tickets to the highest bidders and, instead, give up wealth by underpricing the tickets. Their answer is that the people who make the decision on the prices don't have property rights in the tickets, so the wealth that is given up by underpricing wouldn't have accrued to them anyway. But the decision makers can give underpriced tickets to their friends and associates.

"Thomas Hazlett, former chief economist at the Federal Communications Commission and now a professor at George Mason University Law School, used this same line of reasoning to explain why Michigan Congressman John Dingell blocked the FCC's early attempts to auction off the electromagnetic spectrum and, instead, favored giving it away. Auctioning would have reduced Mr. Dingell's power."

~ David R. Henderson

HT Op-ed, Wall Street Journal, February 20, 2013

February 21, 2013

2012 Porker of the Year Nominees Announced

Yesterday, Citizens Against Government Waste (CAGW), which was founded in 1984 by industrialist J. Peter Grace announced the six nominees to become its 2012 Porker of the Year. The six candidates to become the dubious Porker of the Year for 2012 include:

  • Sen. Debbie Stabenow (D-Michigan)
  • Rep. Mike Rogers (R-Alabama)
  • New York City Mayor Michael Bloomberg
  • House Agriculture Committee Chairman Frank Lucas (R-Oklahoma) and Ranking Member Collin Peterson (D-Minnesota)
  • Illinois Governor Pat Quinn (D)
  • Rep. Elijah Cummings (D-Maryland)

The explanation for their nomination is in yesterday's press release.

You can vote for the 2012 Porker of the Year at this CAGW webpage. Then become a voice against government waste by becoming a member of Citizens Against Government Waste here.

February 20, 2013

Arlington County Taxpayers Get Overview of FY 2014 Budget

Arlington County Manager, Barbara Donnellan, provided County Board members an overview of the FY 2014 budget this afternoon. Here’s is the important stuff from the county’s press release:

“Citing the need to close a $22 million budget gap in Fiscal Year 2014, Arlington County Manager Barbara Donnellan today previewed for the County Board a proposed balanced $1.073 billion budget that calls for a mix of service cuts and a 3.2 cent real property tax rate increase.

“The County is feeling the effect of the Base Realignment and Closure (BRAC) process, which has pushed office vacancy rates in Arlington to their highest level in years, Donnellan said. Flat property assessments, as well as ongoing economic uncertainty posed by the slow pace of the nation’s economic recovery, the threat of sequestration and deep federal spending cuts, pose ongoing challenges, she said.

“In addition, Arlington faces growing competition from the District and outer suburbs for commercial tenants, Donnellan said.

“To meet these challenges, the County Manager said, she followed County Board guidelines and proposed a combination of reduced services, the elimination of 46 staff positions and an increase in the real property tax rate to close the budget gap.”

Here are the “budget highlights” that were in the press release:

“Donnellan’s proposed budget would increase the tax and fee burden for the average Arlington household by 3.9% from $6,726 to $6,988, or about $22 a month ($262 a year). The proposed 3.2 cent tax rate increase includes 1.1 cents for schools and almost 0.5 cents to pay for new facilities. The remaining 1.6-cent increase will be used to maintain all other County services.

“Half of the proposed tax rate increase, Donnellan said, is attributable to the cost of new facilities and to increased enrollment in Arlington Public Schools. The proposed budget includes a transfer to Arlington Public Schools of $411.1 million, up $10.8 million, or 2.7% over FY 2013. Some $7.1 million of that, Donnellan said will fund a projected increase in student enrollment of 962.

“The proposed budget includes cuts in staffing for community policing, nursing care, camps and recreation, Donnellan said. In addition, some positions will be held vacant, “which may result in slower service times to residents and employees, and slower implementation of technology across the organization,” she said.

“The Manager included a merit step increase for County employees in her proposed budget, citing the County’s need to stay competitive in the region, and the increasing workload on remaining employees as cuts are made in staffing.”

On Saturday, the Board will be voting on a real estate tax rate to advertise, which the Board cannot exceed when they adopt the budget in April. Although the Manager expects to recommend raising the real estate tax rate by 3.2 cents per $100 of assessed value on Saturday, several of the Board's panjandrums seemed interested in advertising an even higher rate, e.g., an increase of 5.7 cents was bandied about, to give the Board "more flexibility." It's difficult, sometimes, to decide which is more out of control, the Arlington County Board or the U.S. Congress.

In addition to the press release, additional budget details are available, e.g., the Manager’s PowerPoint presentation as well as two “related items from the Manager’s proposed FY 2014 budget that will be formally presented to the panjandrums on the County Board on Saturday, February 24. Yesterday, the online ARLnow.com discussed the Manager's plans to recommend a 3.2 cent increase in the real estate tax rate, but also included a comparison of Arlington's real estate tax rate to others in Northern Virginia.

And save the evenings of Tuesday, March 26 and Thursday, March 28 for the public budget hearing and public tax rate hearing, respectively.

February 19, 2013

Cost-Benefit Analysis in Decision-Making

"Weighing benefits against costs is the way most people make decisions — and the way most businesses make decisions, if they want to stay in business. Only in government is any benefit, however small, considered to be worth any cost, however large."

~ Thomas Sowell

HT: John Hawkins at Townhall.com

February 18, 2013

Welfare is not Just for the Poor

At CNS News today, Terry Jeffrey writes, "The Congressional Budget Office released a report last week indicating that the federal government paid an average of $4,000 in means-tested benefits and refundable tax credits to Americans living in households with an average income of $35,500."

Jeffrey explains this by writing:

"The CBO analysis looked at the means-tested federal payments and refundable tax credits for 2006 because that was the most recent year for which all the relevant data was available.

"The CBO's overall report looked at the growth in federal spending on Medicaid, the low-income subsidy for the Medicare Part D prescription drug benefit, Supplemental Security Income, Temporary Assistance for Needy Families, the Supplemental Nutrition Assistance Program (food stamps), child nutrition programs, housing assistance programs, the Pell Grant Program, the refundable portion of the earned income tax credit, and the refundable portion of the child tax credit."

< . . . >

"The CBO projected that the cost of these federal wealth-transfer programs will continue to rise in the coming decade in part because of new federal health-care subsidies enacted in Obamacare—or the Affordable Care Act."

Jeffrey described the way that CBO decided which groups got how much, writing:

"In its analysis of who got how much from federal means-tested benefits programs in 2006, the CBO divided the nation’s households into income quintiles, earning average annual incomes of $9,600; $35,500; $61,600; $96,400; $271,000.

"CBO concluded that households in the second quintile, earning an average income of $35,500, received an average of $4,000 worth of benefits from federal means-tested programs.

"Households in the lowest quintile, earning an average income of $9,600, received an average of $8,800 worth of benefits from federal means-tested programs. Households in the third-highest quintile, earning an average income of $61,600, received an average of $1,600 in federal means-tested benefits. Household in the fourth highest quintile, earning an average income of $96,400, received an average of $800 worth of benefits from federal means-tested programs.

"Households in the top quintile, earning an average income of $271,000, received an average of $500 in benefits from federal means-tested programs."

If case you were wondering, someone earning $35,000 annually earns just under $17 per hour. The CBO report, available here, provides the background on the programs the CBO looked at. Briefly:

  • "The federal government devotes roughly one-sixth of its spending to 10 major means-tested programs and tax credits."
  • Excamples include Medicaid, low-income subsidy for Medicare Part D, supplemental security income, food stamps, and Pell grants.
  • "In 2012, federal spending on those programs and tax credits totaled $588 billion." For the record, Social Security and Medicare are not "means-tested programs" since "they are not limited to people with specific amounts of income or assets."
  • "Total federal spending on those 10 programs (adjusted to exclude the effects of inflation) rose more than tenfold -- or by an average of about 6 percent a year -- in the four decades since 1972 (when only half of the programs existed)."

If you don't regularly check the CNS News website, you're likely missing a wealth of useful information not covered by the so-called mainstream media. We've frequently growled about welfare spending, including February 10 and January 23, 2013 and December 16, December 14, December 9, and October 20, 2012.

February 17, 2013

Tea Party and the GOP Establishment

Yesterday, in Pajamas Media, Rick Moran asks whether the GOP establishment and the Tea Party are like "ships passing in the night." He begins his comparative analysis this way:

"Reading the responses to the president’s State of the Union speech by Senator Marco Rubio and Senator Rand Paul, one might be fooled into thinking that the regular Republican Party — represented by Rubio — and the Tea Party — represented by Paul — were in agreement on 90% of the issues facing the country.

"On the surface, there is much truth to that idea. But the differences between establishment Republicans and conservative activists go far beyond where each side stands on the issues of the day. The cleavage starts with differences in temperament, and extends to matters of the heart: passion, commitment, and feelings of resentment and betrayal that currently make a marriage between the two wings of the Republican Party impossible to achieve.

"There are also differences in vision . . . ."

Moran's two-page long analysis is worth reading in its entirety. He concludes it by writing:

"It is inaccurate to say the Tea Party is “anti-government,” although there is certainly a faction within the Tea Party that is. The establishment sees the Tea Party as wanting to put government in a strait jacket, limited in what it can do based on a severely restrictive view of the Constitution. The Tea Party believes the establishment, in embracing the basic idea of the welfare state, is little better than the Democratic Party — indeed, their favorite pejorative is to refer to pragmatists as “Democrat-lites” — and that a sharper and more pronounced distinction between the two parties is a key to victory at the polls. This includes the radical notion that Lyndon Johnson’s Great Society, as well as Franklin Roosevelt’s New Deal, should be rolled back — even eliminated.

"Those ships passing in the night are exchanging broadsides over the question of what the term “limited government” means in a modern 21st century, industrial democracy. Despite agreement on a wide range of issues, there will be no reconciliation as long as neither side is willing to alter their fundamental beliefs when it comes to Constitutional limits on government. Both sides believe in limits on government power. But the pragmatists recognize the reality that those limits should be broad enough to encompass those things a modern state must do; “keeping us safe, enforcing rules, and providing some security against the risks of modern life,” as Rubio put it. The other side sees a far more limited role for government and, to varying degrees, rejects the idea that government programs for the poor and government regulation of business are even constitutional.

"It hardly matters who is “right.” What’s important is that the competing visions of government’s role is keeping the two sides apart. And that is not likely to change anytime soon."

Pajamas Media is a great alternative to the 'mainstream media.'

February 16, 2013

Two Thoughst on War and Defense

"History teaches that war begins when governments believe the price of aggression is cheap."

~ Ronald Reagan

"Of the four wars in my lifetime, none came about because the U.S. was too strong."

~ Ronald Reagan

HT John Hawkins' list of "40 Best Quotes from Ronald Reagan" at Townhall.com

February 15, 2013

A Thought on America's Entitlement State

"It is a simple fact that the United States is becoming an entitlement state. The problem with this is not just that it is bankrupting the country. It is that the entitlement state is impoverishing the lives of the growing millions dependent on unearned resources. The good news is that we have a golden opportunity to rein in entitlements, for the first time in many years."

~ Arthur C. Brooks

HT His December 2012 Op-Ed in the Wall Street Journal

February 14, 2013

Local Option Income Tax Dies in Virginia House Committee

Last Saturday, we growled about SB 1313, which passed the Virginia State Senate on a 27-11 vote. We cited this story by the Arlington Sun Gazette's Scott McCaffrey. According to the General Assembly's legislative information system (LIS), the bill:

"Adds the City of Portsmouth to the list of localities authorized to impose a local income tax to generate revenue to be used for transportation purposes. The bill also removes the requirement that the local income tax be approved by a referendum and repeals the five-year sunset on the local income tax."

Yesterday, a House Finance subcommittee killed the bill on a 7-3 vote, according to the LIS. Here's a portion of the Sun Gazette's story, posted by Scott McCaffrey, today:

"The House of Delegates, which seldom looks kindly on giving localities any new taxing authority, on Feb. 13 summarily rejected a state Senate proposal that would have given Northern Virginia jurisdictions easy access to implementing a local income tax.

"A subcommittee of the House Committee on Finance voted 7-3 on Feb. 13 to reject a measure, patroned by state Sen. Walter Stosch (R-Glen Allen), that would have allowed individual jurisdictions in Northern Virginia to impose income taxes of up to 1 percent on residents without first obtaining consent in a referendum.

"The concept is not completely gone from possible enactment, however, as it could be resurrected as the House and Senate wrangle over details of a major transportation-funding package.

"Localities in the area have for more than 20 years had the authority to impose the tax, but are required to hold a plebiscite first. None has chosen to do so."

The vote was largely along party lines, but as  McCaffrey pointed out, "Del. Mark Keam (D-35th) joined all Republicans on the panel to kill it."

So, kudos to the Republican members of the Finance subcommittee and to Del Mark Keam (D-Fairfax) for joining with Republican members of the committee.

Tom Jackman of the Washington Post wrote about the bill on Tuesday at their State of NoVa blog, and included the following comments of Arlington County Board chairman Walter Tejada:

"Arlington’s Tejada was not exactly enthused by the idea, but he said, ”We’re following it intently. We’re always trying to find ways to fund transportation projects, and considering we were ranked number one in gridlock, any resources would be helpful.”

"Tejada said that “too many times the state has been passing the buck to us.” After the two Northern Virginia tax attempts failed, “ever since then we’ve been trying different things, and traffic’s not going anywhere. So we’re just going to monitor this closely.”

Guess the extra 12 1/2 cents per $100 of assessed value the Board extracts from commercial property owners for the Transportation Capital Fund isn't enough. According to the FY 2013 Adopted Budget, the Board is tapping the Fund for $24 million this fiscal year.

February 13, 2013

A Thought on the Distribution of Income and Wealth

"Within this framework of equal rules for all, the outcome of the market in terms of income and wealth is fair, for two fundamental reasons. The first is that people basically earn in the market the value of what they produce. Economists say more formally that wages equal the marginal productivity of labor . . . Every one of us can sing, but only Katy Perry has a string of number one hits that young people all over the world want to listen to over and over . . . Alex Rodriquez and LeBron James . . . They earn it, though talent, hard work, and performance.

"This is why it is even wrong to speak of the "distribution" of income and wealth. Income and wealth are not distributed. Income and wealth are produced, and in a fair society they come into the world attached to the rightful owner that produced them. As the late Harvard philosopher professor Robert Nozick wrote, "Whoever makes something having bought or contracted for all other held resources used in the process . . . is entitled to it. The situation is not of of something's getting made, and there being an open question of who is to get it." If income and wealth are not attached to the owner that produced them, they tend not to be created at all.

"Second, what is produced is not taken from anyone else. It is created by the worker. So the income and wealth that such production earns does not come at the expense of anyone else. It is created by the earner. The economy is not a fixed pie with slices being handed out . . . Each worker expands the pie, creating his own slices."

~ Stephen Moore, pages 7-8. "Who's the Fairest of Them All: The Truth About Opportunity, Taxes, and Wealth in America.

HT Barnes & Noble

February 12, 2013

Spending More. Always the Liberal Response?

"Finally, we come to the fiscal embarrassments confronting contemporary liberals. Again, Obamacare is wonderfully emblematic. President Obama's solution to the problem of two health care entitlement programs quickly going bankrupt -- Medicare and Medicaid -- is to add a third? Perhaps it is a stratagem . . . More likely it is simply the reflexive liberal solution to any social problem: spend more. From Karl Marx to John Rawls, if you'll excuse the juxtaposition, left-wing critics of capitalism have often paid it the supreme compliment of presuming it so productive an economic system that it has overcome permanently the problem of scarcity in human life."

~ Charles R. Kessler, page 233, "I am the Change: Barack Obama and the Crisis of Liberalism"

HT Barnes & Noble

February 11, 2013

Solving Tame vs. Solving Wicked Problems

" . . . Tame problems are the sorts of issues that are routinely addressed by scientists and engineers: sanitation, higher agricultural productivity, electrification. They aren't necessarily easy, but they can be clearly defined, relevant information can be gathered, and the effectiveness of proposed solutions can be tested. Solving such problems resulted in improved health and greater affluence, leaving the public and policymakers to focus on less tractable social and environmental problems—that is, wicked ones.

"The hallmark of a wicked problem is that the way an expert conceives of it determines the solutions she recommends. For example, Rittel and Webber observe, "'Crime in the streets' can be explained by not enough police, by too many criminals, by inadequate laws, too many police, cultural deprivation, deficient opportunity, too many guns, phrenologic aberrations, etc. Each of these offers a direction for attacking crime in the streets. Which one is right?" Forty years later, each theory still has its devotees."

~ Ronald Bailey

HT His "Do we live in a Post-Truth Era," Reason Magazine

February 10, 2013

A Thought on Poverty and the Welfare State

"In America today we have forty-five million Americans on food stamps at a cost of $75 billion. That is about one-in-seven Americans. It is nearly three times as many on the food dole as in 2000. But is the program lifting Americans out of poverty or keeping them there? As Charles Murray once put it, the tragedy of the $10 trillion welfare state is not how much it cost, but how little it bought."

~ Stephen Moore, page 11, "Who's the Fairest of Them All?"

HT Barnes & Noble

February 09, 2013

A Higher Local Income Tax for Arlington Taxpayers?

Gordon J. Tucker was correct when he said, "No man's life, liberty, or property are safe while the legislature is in session." (See "liberty" at Wikipdeia)

For evidence, let's turn to the Virginia General Assembly. Yesterday, Scott McCaffrey reported in the Arlington Sun Gazette that a "bill would give localities ability to levy income taxes without referendums." He begins the story by writing:

"Is it a back-door attempt at a tax increase, or the best way to help fund transportation improvements across the region?

"That could be the question if the House of Delegates goes along with a state Senate proposal giving Northern Virginia localities the ability to impose a local income tax without first going to voters for permission.

"The measure, tucked into an unrelated tax measure patroned by state Sen. Walter Stosch (R-Virginia Beach), passed the state Senate 27-11 on the last day before “crossover,” when bills in each house have to be sent to the other house.

"Stosch’s measure ostensibly is designed to add the city of Norfolk to the list of localities across Virginia allowed to impose a local income tax (up to 1 percent) to generate revenue for transportation purposes. But the bill also removes the requirement that Northern Virginia localities hold referendums before the tax can be imposed." (emphasis added)

McCaffrey continues by noting how the current law was arrived at, and that no referendums have been held in any of the jurisdictions authorized to do so. He also noted that state Sen. Chap Petersen (D-Fairfax/Vienna) "blasted" the legislation, which was "wrong for Fairfax, wrong for transportation." McCaffrey also noted the following quote by Sen. Petersen, noting he was "the only Northern Virginia senator to vote against it."

This bill represents the worst possible deal for the Northern Virginia taxpayer." (emphasis added)

The bill in question is SB 1313 with Sen. Stosch it's chief patron. The "summary as introduced" is:

"Local income tax. Adds the City of Portsmouth to the list of localities authorized to impose a local income tax to generate revenue to be used for transportation purposes. The bill also removes the requirement that the local income tax be approved by a referendum and repeals the five-year sunset on the local income tax." (emphasis added)

As McCaffrey reported, the bill passed the Senate by a 27-11 vote. You can find the "yeas" and "nays" here.

To express your outrage that SB 1313 will delete the referendum requirement for the local income tax, you can find contact information for Senators Debbin, Favola and Howell here, and for Delegates Brink, Krupicka, Lopez and Park here. Or, you can find all of 'Arlington's elected officials" at Arlington County's website.

February 08, 2013

Life is Good for Government Workers

The American Enterprise Institute's columnist-blogger, James Pethokoukis, wrote yesterday that "(t)he unemployment rate for government workers is 4.2%," but 8.6% for private sector workers. He goes on to say:

"AEI’s Aparna Mathur makes the case that a shrinking government sector, even if it drags down GDP data and job numbers, is exactly the correct public policy goal right now. Growing the private sector needs to be the focus. We need to shift resources away from the unproductive public sector toward the more productive private sector. As she notes: “As of January, the unemployment rate for those classified as government workers by the Bureau of Labor Statistics is only 4.2%, compared to 8.6% unemployment in the private sector.”

Pethokoukis includes the following chart in his blog post:

To keep-up with the daily economic news, his posts at AEI-ideas.org are very helpful.

February 07, 2013

Full Spending Ahead for Arlington County Board?

On Tuesday evening, the Arlington County Board appeared before delegates of the county's Civic Federation. One particularly interesting question was asked by Burt Bostwick, who asked "whether the county government should declare a moratorium on new capital projects until it could maintain all its current ones," according to press coverage by Scott McCaffrey of the Arlington Sun Gazette.

According to McCaffrey, the Board's response included the following:

"County Board members are disinclined to slow down the pace of new capital spending, in part because a combination of low interest rates and a competitive construction market make those projects cheaper than they might ever again be.

“We have the best bond ratings – we borrow money at the lowest possible rate on the planet. Now is not the time to stop investing in the future of the community,” County Board Vice Chairman Jay Fisette said during a Feb. 5 presentation to the Arlington County Civic Federation."

McCaffrey also wrote, "Acknowledging that maintenance had been ignored for a number of years, County Board members said the game of catch-up was progressing smoothly." (emphasis added) He also reported:

“The board is being pretty aggressive at taking care of what we have,” board member Mary Hynes said. “I don’t think a moratorium is necessarily the right thing.”

That said, it sure sounds as if our spendthrift County Board masterminds have a significant real estate tax rate increase in mind. Sheesh! And don't you like how the Board's liberals like to spend our tax dollars while calling it investment?

February 06, 2013

The Compassion of the Arlington County Board

The year-to-year "municipal cost index" computed by American City & County magazine grew over the past year by 1.6%.

But the masterminds on the  Arlington County Board thought the performance of their three appointees -- the County Manager, County Attorney, and County Clerk -- deserved more, according to a story in last Thursday's Washington Post. According to the story, reported by Patricia Sullivan:

"Three top Arlington County employees were awarded raises of 5 percent and 10 percent, pushing their compensation to the second-highest among Northern Virginia jurisdictions.

"County Manager Barbara Donnellan will make $252,918 this year. County Attorney Stephen MacIsaac will make $211,341 with $30,218 in deferred compensation. Both received 5 percent ­raises.

"County Clerk Hope Halleck received a 10 percent raise, to $102,895 from $93,541."

The story gets worse, however. Sullivan writes:

"The Arlington County Board unanimously and without comment approved the raises in the last 45 seconds of an abbreviated meeting Tuesday night. Board Chairman J. Walter Tejada (D) announced a vote on amendments to the officials’ employment contracts but did not spell out what those amendments were. The documents were made public Wednesday after a Washington Post inquiry." (emphasis added)

If you think the story can't get worse, you'd be wrong. Sullivan also reports, "The salaries were set after officials conducted a comparison with pay rates in Fairfax and Prince William counties and the city of Alexandria," but notes that "Fairfax County Board of Supervisors, after evaluating its executives, decided not to give any raises to its top officials 'because of fiscal conditions.'"

There's more, though. As we growled on November 17, 2012, the county is expecting a budget shortfall of $50 million, divided roughly half-and-half between the county and schools.

Sullivan provides salaries for the three positions in Arlington's Northern Virginia neighbors. The Arlington salaries are within the 'same ballpark," but recall the difference in populations. And for the record, the County Manager's and the County Attorney's salaries exceed the federal executive schedule salaries (Schedule 5).

But then, perhaps this is all explained by their being masterminds, and we aren't.

February 05, 2013

A Thought on the Federal Reserve System

"The Federal Reserve was supposed to prevent shocks to the economy that can come from drastic inflation or deflation, and reduce the dangers that can come from widespread bank failures. These are all good goals. But what is the Fed's track record?

"In the hundred years before there was a Federal Reserve System, inflation was less than half of what it became in the hundred years after the Fed was founded. The biggest deflation in the history of the country came after the Fed was founded, and that deflation contributed to the Great Depression of the 1930s. As for bank failures, they reached levels unheard of before there was a Federal Reserve System.

"Like so many "progressives," then and now, Woodrow Wilson seemed to think that, if those who made government decisions had no financial interest in those decisions, then they could be trusted to wield their powers in the public interest.

"But the enormous power wielded by the unelected leaders of the Fed over the economy, unchecked by the constraints of the market, has repeatedly turned out to be more than human beings can handle."

~ Thomas Sowell

HT His "Prophets and Losses" Column at Townhall.com

February 04, 2013

Taxes, Rising Gas Princes: What's Next? More Taxes!

We've growled most recently last week about the so-called 'fiscal cliff' during which 'taxes for the rich' were raised. Now we learned today from CNBC that consumers are "taking financial hit" from higher gas prices.

But that doesn't seem to be good enough for President Obama. According to CNS News today, "President Obama has said all along he isn't done raising taxes on wealthy Americans, and he said it again in an interview that aired on CBS during the Super Bowl." The CNS News report then continued:

"A month after signing a bill that raised tax rates on families making $450,000 or more (and individuals making $400,000-plus), the president said he now wants to close "loopholes."

"'I don't think the issue right now is raising rates," Obama said. The goal now is to find "smart spending cuts," "reduce health care costs," and "close loopholes and deductions."

"If you combine those things together, then we can not only reduce our deficit, but we can continue to invest in things like education and reserach and development that are going to help us grow," Obama told CBS's Scott Pelley.

"There is no dobut we need additional revenue coupled with smart spending reductions in order to bring down our deficit. And we can do it in a gradual way so that it doesn't have a huge impact," he added.

"Obama twice drew distinctions between "average Americans" and rich people who "take advantage" of perfectly legal tax rules."

CNS News then went on to note that "Obama has the support of Senate Majority Leader Harry Reid (D-Nev)," and noted his appearance on a TV news show saying any future deals "would have to include new revenue (more taxes)." The CNS news report includes a video of a portion of the President being interviewed by CBS' Scott Pelley.

How much more of this class warfare can taxpayers take?

HT Mark Levin Show for the CNS News article.

February 03, 2013

Today is Centennial of Federal Income Tax

At the Tax Foundation's Tax Policy Blog on Friday, Richard Morrison reminds us that today "marks the 100th anniversary of the ratification of the 16th Amendment." And as a press release from Americans for Tax Reform (ATR) points out, passage of the 16th Amendment "enabled the establishment of the U.S. federal income tax."

Morrison's post includes links to s USA op-ed that mentions how "tax burdens and distributions have changed dramatically" and to a Tax Foundation history of individual income tax rates from 1913 to 2013.

The ATR press release has a side-by-side comparison of the 1913 and 2013 income tax, including for example:

  • Top Tax Bracket -- 1913, 7%; 2013, 39.6%.
  • Total Tax Revenues (today's dollars) -- 1913, $16.6 billion; 2013, $2.7 trillion.
  • Total Pages in Tax Code -- 1913, 400 pages; 2013, 73,954 pages.

In a March 18, 2005 prepared statement for the President's Advisory Panel on Tax Reform, the National Taxpayers Union's Pete Sepp said:

"Since adoption of the 16th Amendment to the U.S. Constitution over 90 years ago, federal tax revenues of all kinds have increased by roughly 175,000 percent. Given this trend, it is understandable that many taxpayers believe they are still giving over far too much of their hard-earned money to the federal government. By most measurements, they will continue to do so – according to the Bush Administration’s FY 2006 budget, federal revenues are projected to consume a progressively larger share of the nation’s economic output (GDP), from 16.3 percent in 2004 to 17.7 percent in 2010."

Finally, researchers at the Library of Congress compiled both Internet and print resources and include this short overview:

"If, in the midst of sorting receipts and studying the latest changes in the US income tax laws, you suddenly wonder "What is the origin of this annual ritual in the weeks leading up to April 15th?" here are some places you can go for answers.

"The origin of the income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913; however, its history actually goes back even further. During the Civil War Congress passed the Revenue Act of 1861 which included a tax on personal incomes to help pay war expenses. The tax was repealed ten years later. However, in 1894 Congress enacted a flat rate Federal income tax, which was ruled unconstitutional the following year by the U.S. Supreme Court because it was a direct tax not apportioned according to the population of each state. The 16th amendment, ratified in 1913, removed this objection by allowing the Federal government to tax the income of individuals without regard to the population of each State. For additional information on taxation in the United States, see the section on taxes on the web site of the U.S. Department of the Treasury."

At Townhall.com, blogger Heather Ginsberg quips about the tax brackets in the ATR press release, "Is it just me, or does this show something is a little off? Oh yeah, remember that part where liberals think the rich need to pay their fair share! Look at our top tax bracket, who on earth would have thought one hundred years ago we would be asking almost half of Americans to pay even more in taxes?"

Now, won't knowing this little of the history of the federal income tax make it easier to complete your tax return in April?

February 02, 2013

The Health of Arlington’s Commercial Corridors

Two weeks ago, on January 20, we growled about the 2013 real estate property assessments, which had just been released, asking whether the numbers portend a real estate tax increase. We noted the county determined that single-family residential values were up 1.0%, but commercial property values were flat in comparison to 2012.

Yesterday, Scott McCaffrey reported in an online Arlington Sun Gazette story that leaders of two so-called business improvement districts are taking a “long-term view of office-vacancy rates” in Arlington’s commercial corridors. According to McCaffrey:

“Arlington’s ballooning office-vacancy rate presents challenges, leaders of two of the county’s business-improvement districts say, but they are not insurmountable.

“It’s a very challenging time across Arlington and across the region,” acknowledged Angie Fox, president and CEO of the  Crystal City Business Improvement District, or BID. “It’s not going to turn around tomorrow.”

“It has been Crystal City that has seen the biggest increase in vacancy rates among Arlington’s commercial corridors. The rate rose from 13 percent in the fourth quarter of 2011 to 22.9 percent in the fourth quarter of 2012, according to Arlington Economic Development figures, taking it from among the lowest to the highest in the county.”

McCaffrey notes the federal government’s BRAC relocation initiative “has led to the departure of big tenants from Crystal City in recent years.” He also notes the following changes in vacancy rates in several of Arlington’s commercial corridors:

  • Overall County -- increased from 11.5% in 2011’s fourth quarter to 16.3% in 2012’s fourth quarter.
  • Crystal City -- grew from 13.0% in 2011 to 22.9% in 2012.
  • Rosslyn -- 13.4% in 2011 to 16.8% in 2012.

By comparison, vacancy rates in Northern Virginia as a whole increased from 14,6% to 15.7% for the comparable period, according to the January 2013 “economic indicators" published by the county’s economic development department. The vacancy rate in the Clarendon/Courthouse corridor did improve slightly, decreasing from 12.0% to 11.2%.

The department’s report lists a broad range of indicators such as office square foot absorption data, hotel occupancy rates, and air traffic operations.

Since the county government budget "grows" 6 - 7% a year, you can see that with little or no growth in real estate values, the County Board can only achieve that 6% growth in revenues by increasing the real estate tax rates. And since commercial property can only increase in value if there is demand for the property, there will be increasing pressure on residential property to carry the largest burden of real estate property taxes.

February 01, 2013

Your Taxes Well-Spent at Sewage Plant

In an online story yesterday in the Arlington Sun Gazette, Scott McCaffrey reports:

"The county government’s Water Pollution Control Plant hit a new record low in releasing nitrogen back into the water stream in December – something hailed by the county manager as “a remarkable achievement.”

"The discharge rate of 0.54 milligrams of nitrogen per liter for the month was less than one-fifth the amount allowed under the facility’s operating permit, and was a fraction of the 19.6 milligrams per liter that was being released in the 1980s."

If you're new to Arlington, McCaffrey provides the historical context:

"The wastewater-treatment facility, located on South Glebe Road near Crystal City, has undergone a rehabilitation project costing nearly $570 million in recent years. While the plant is allowed to release nitrogen back into the water stream at a rate of 3 milligrams per liter, its releases throughout 2012 never exceeded 1 milligram, Donnellan said.

"The plant processes about 30 million gallons of wastewater per day, with about 80 percent coming from Arlington and the remainder from Alexandria, Falls Church and Fairfax County. The original facility dated to the 1930s."

So, kudos to management and staff of the sewage plant for a job well-done.