Radioactive Communist Zombies

Federal Workers Are Overpaid Says CBO

Tax season is upon us (I'm still awaiting some 1099s) but as you're making out your tax forms and calculating what you owe, I'm sure you're glad to know your tax dollars are going to over-pay federal workers.

Federal workers are overpaid?  Yes, says the Congressional Budget Office (CBO).  You know, the CBO, the arbiter of all things bipartisan.  According to the CBO, if you have a high school degree you can make 36% more in wages and benefits working for Uncle Sugar.  And if you have a college education, you can make 18% more working for the government.  The only level where working for the federal government is not a good plan is if you have a doctorate or professional degree (a lot of those doctorates are probably working for universities making too much).

So why should those who's wages are paid through taxes make more than those who pay the taxes?  I don't know.  Seems something is wrong here.

Is Rick Santorum's Tax Plan Too Radical?

Did you even know RIck Santorum had a tax plan?

According to Kevin A. Hassett writing at National Review Online, Santorum has a tax plan that has problems.  In fact, the conservative Tax Foundation gave it a D+ grade.  Why?

The good news is that much of Santorum’s plan is centered on lowering taxes. The bad news is that much of his tax relief is either welfare in disguise or social engineering.

And trying to have a populist appeal, I would add.

So what's the problem?

All that has much to recommend it, but Santorum would also triple the personal exemption for dependent children while maintaining the earned-income tax credit and the child tax credit. This move would radically reduce the percentage of taxpayers paying any federal income tax whatsoever. Since he would retain most of the other major individual tax deductions, complexity would not be reduced, but revenue would be radically lower.

Making it a lose-lose proposition.  And his corporate tax plan, while cutting the tax rate (a good thing) gives so many breaks to "manufacturers" that it would invite fraud while distorting the tax code further.  Yes, we'd all like to see more manufacturing but any economist worth his salt will tell you that manufacturing needs to be done where it's most efficient, and that may not be in the U.S.

(Am I beating up on Santorum too much?   Nothing like the Obama attack machine will.)

Santorum's individual tax plan favors families too much at the expense of everyone else.  His corporate tax plan favors manufacturing at the expense of other businesses.  And it reduces revenue at a time of massive deficits.  We need a neutral, flat, broad tax that is fair to all, not pro-family and pro-manufacturing social engineering.

Cradle to the Grave Entitlement

Watch this:

The Payroll Tax Cut

I am about to amaze and astound my readers (both of them) when I come out against a tax cut.  The payroll tax cut that President Obama wants to extend may be popular but it's bad policy.  As someone (may have been Romney) said, whose Social Security are you going to reduce to pay for it?  We have massive unfunded liabilities in this nation.  Extending the payroll tax cut without entitlement reform will simply increase those unfunded liabilities.  We're lowering a tax today so that our children can pay it tomorrow, with interest.

Now, how do I square that with the fact I'm for pretty much any income tax cut?  Well, one, I hate poor people and they pay more of their income in payroll taxes.  Well, no, that's not true.  The problem is payroll taxes go to pay "mandatory" spending while income taxes go to pay both mandatory and discretionary spending.  I'd love to see payroll taxes cut for poorer (and all) Americans (the Earned Income Credit of the income tax was designed to be a partial refund on payroll taxes for low-income households) as part of over-all entitlement reform.  But until we get that reform, we need to try to pay our bills as we go and not suffle them off on our children and grandchildren (with interest).

Income tax cuts can also mean deficit spending (although if you stimulate the economy, they can bring in more actual revenue as happened after the Reagan tax cuts of the 1980s).  The problem now is we are spending way to much on everything (including defense).  We need to cut back the spending.

In addition, it has been shown that increasing income taxes leads to more spending since politicians will spend more if there's more revenue.  Payroll taxes, which are supposed to fund specific programs, don't seem to have that same affect.

It's funny to watch Obama, the biggest spending president on record, push for this tax cut that he thinks will gain him votes and he can use against the Republicans next year.  I swear everything he does is for partisan political gain (or to destroy America, which is the same thing).

So, there you have it, I have come out against a tax cut.  You may now pick yourself off the floor and dust yourself off. 

It's the Spending, Stupid!

Why are we (and by "we" I mean the United States government) broke?  Why is something like 40 cents of every dollar the government spends borrowed?  Because taxes are too low?  No!  Because spending is too damn high.

Look at the following (scary-ass chart) from the good folks at Heritage (click for a larger size):

Since 1960 government revenue has been about 18% of GDP, no matter the tax rate.  What affects revenue the most is the economy, stupid.  What about the Bush tax cuts for the wealthy (well, evey one, but that's not demagoguery enough for the left and their pals in the media)?  After the Bush tax cuts when the economy was humming along fine for a year or so circa 2007, revenue exceeded the average, including years when the top tax rate was over 70%.

Thanks to the Great Recession, reciepts dropped a lot, down to 14.8% of GDP.  But at the same time the Pelosi Democrats started spending like drunkun Republicans.  Look at the rise in spending from 2000 to 2007.  That was the horrible increased spending you were all mad at the Republicans about.  Then look at the line after 2007.  Spending went from about 20.2% to 24.7% of GDP in a couple of spending-binge years.  That's why we're so much in debt and why deficit spending is growing fast.  That's why Obama and the Democrats have added more than $4 trillion to the national debt in just four years.  That is why we need to cut spending and cut it now!

Yes, it's the spending, stupid.  True, revenues dropped a lot.  But spending increased even more.

"Super Committee" Deadlocked on Taxing the "Rich"

What a surprise!  The so-called "super committee" that was supposed to hammer out a deficit-reduction plan (or else) is deadlocked.  And can you guess over what issue?  Raising taxes on the "rich," of course:

"Where the divide is right now is over taxes, and whether the wealthiest Americans should share in the sacrifices," said Washington Sen. Patty Murray, the Democratic co-chair of the panel.

Frankly, my dear, I don't give a damn.  I mean, the rich already sacrifice more than any other group in paying taxes.  And you want to bleed them dry. And most of the so-called "rich" are family businesses and taxing them at a higher rate will reduce job growth, that Democrats claim to care about.  As the GOP responded:

Michael Steel, a spokesman for House Speaker John Boehner, said Republicans had offered "a balanced, bipartisan plan - the fact that it was rejected makes it clear that Washington Democrats won't cut a dime in government spending without job-killing tax hikes."

In fact, they want to spend the "savings" from ending the Iraq and Afghanistan wars.

This outcome is no surprise.  It's a win-win for Democrats.  Either then get what they want out of the super committee, or they get what they want automatically (big cuts in defense).  That the Republicans agreed to this farce just shows how differently they think from Democrats.  They actually thought the Democrats would negotiate in good faith?

So it's flush the economy or flush national security.  But that's what happens when you put Democrats in charge, or allow weak-willed Republicans to "negotiate" with them.

(And it's interesting the Michael Steele is reduced to be a spokesman for Boehner)

Tale of Two Lines

I want to talk about two lines.  These lines represent data from the Department of Education website.  You nearly have to be a Ph.D in web searching to find the data, but it is there for anyone to access.

Here are the two lines.  I've normalized these so in 1990 they equal 100.  That allows you to see the magnitude each one has changed (click for a larger view):

One line is the average test scores for reading and math as tested by the NAEP for 17 year olds up to 2008 (the latest year I could find data).  The other is the average spent by states per student per year, adjusted for inflation, up to 2008 (again, the latest year I could find data).

Care to guess which line is which?  Well, here's the answer (click for a larger view):

Spending per child in public education has increased nearly 50% since 1989 after taking out inflation.  In 2008, it was $12,239 per student per year.  Meanwhile reading and math testing scores have remained flat.  So where is all our money going?

Think about it, $12,239 per student multiplied by 25 students in a classroom is $305,975.  So lets:

• Buy each kid a new laptop every year (about $25,000)
• Buy each kid $1,000 in books and materials every year ($25,000)
• Pay the teacher a very generous $150,000 in wages and benefits every year (especially for a 9-month-a-year job)
  

And you'd still have over $100,000 per classroom for everything else.  For a school of 20 classrooms, that's $2 million per year.

Where is all the money going?  It's obviously spending more money is not improving public education.

This is why I am an advocate of complete privatization of education in this country (well, in all countries).  Reduce taxes the amount government takes in to pay for education and let people buy it on the open market like they buy cars/food/computers.

Most people will spend less on educating their kids than they now pay in taxes to support public schools.  Schools, in order to stay in business will have to provide a good education at a reasonable price (just like any other business).  There would be no more debates on creationism/evolution or political indoctrination in public schools because parents could send kids to schools that teach what the parents want them to learn.  Freedom of choice, what a concept!

What could the government's role be in this?  One is to keep school honest by acting as a sort of education SEC, making sure schools report accurate results.  And two, government could provide vouchers for poor people who, even with their taxes cut significantly, couldn't afford private school (which I guarantee will cost less than $12,000 per year per student).

Silly Voter, Deficit Reduction is For Republicans

Remember the (unconstitutional) "supercommittee" that was supposed to come up with a deficit reduction plan?  Well, guess what, the Democrats on the committee want to . . . spend more money (Hat tip: The Corner).  According to The Hill:

Democrats on the supercommittee have proposed that the savings from the end of the wars in Iraq and Afghanistan be used to pay for a new stimulus package, according to a summary of the $2.3 trillion plan obtained by The Hill.

But wait, there's more.  How much would you pay for more failed Keynesian economics:

The [Democrat] plan includes $200 billion in defense cuts and slashes $200 billion from other discretionary spending. It raises $650 billion in new federal revenue by setting in motion an overhaul of the tax code, and generates $1 trillion in total revenue.

Considering that the budget has gone up by almost $1 trillion since Obama took office, you'd think they could find more than 20% of that to cut in discretionary spending.  (And I love how cuts in defense are "cuts" and cuts in discretionary spending are "slashes.")

The bad news is, if the supercommittee fails, there's automatically huge slashes in defense spending.  So the Democrats can hold that over the Republicans' collective head.  And as the brilliant Veronique de Rugy points out, Democrats have a history of taking money that is raised that is supposed to go to deficit reduction and instead spending it . . . and more.

As Newt said in one of the GOP debates, the "supercommittee" was a "stupid" idea.  And it is looking more and more like Newt is right . . . again.

Occupy Movement Has a Demand!

The "Occupy" movement has been going on for about 6 weeks now (by my reckoning) and seems to have survived the first of the cold weather.  But some are saying it's on the verge of collapsing under the weight of the rapes, public indecency, assaults, drug dealing, defecating on a police car, and general anti-American tone of the whole movement. And while there have been lists of demands posted around the internet, none have been "official" (although all have been laughable).

But today Big Government is reporting the the Occupy and union nexus has come up with a demand.  And you'll never guess what it is.  It's a world-wide tax!  It's called "The Robin Hood Tax" (clever name, that):

Occupy Wall Street protesters also are being bused in from New York by National Nurses United (NNU) — yet another example of the evolving relationship between labor and the protesters that have targeted the financial sector.

Karen Higgins, co-president of the NNU, told The Hill that instituting a financial transactions tax could help fund social programs that are under threat.

“This is actually the first step to do something concrete and beneficial and not harm others by taking money out of social programs that help people survive,” Higgins said. “It is only reasonable that Wall Street contributes its fair share.”

(Emphasis original in the above.)

First of all, the whole myth of Robin Hood is wrong.  Robin Hood didn't steal from the rich and give to the poor.  He stole from the government and gave to the poor because in those days, the only way to get rich was to be a government.  But leaving that aside, a world-wide tax on financial transactions would be the worst thing for a (we hope) recovering economy.  Want to invest your IRA or 401(k): oops, there's a tax to be paid.

And, those "social programs" tend to gain lives of their owns and grow to exceed any tax revenues set aside for them.  That's okay, we just need a world-wide income tax, then.  But only on the "rich" (at first).

What do unions get out of this?  They get to be the public sector unions to run the social programs, thus getting more dues to put into Democrat campaign coffers.

Man, makes you wonder if there really is a international communist conpiracy.  Oh yeah, there was.  Maybe they're trying to bring it back!

Perry Comes Out for Flat Tax; Entitlement Reform

I've made it no secret I like Texas Governor Rick Perry, despite his lackluster debate performances and his occasional slips from orthodox conservatism.  Today Perry came out with hints of his economic plans (Hat Tip: Instapundit).  From The Weekly Standard blog:

In a brief speech this morning at the Western Republican Conference, Texas governor Rick Perry announced that in six days he would reveal an “economic pro-growth package that will create growth” and encourage investment in America. The plan will involve major tax reform, entitlement reform, a balanced budget amendment to the Constitution, an abolishment of earmarks, and a recommitment to energy exploration in the United States.

“Our long term growth requires a fundamental tax reform,” Perry said. Therefore, his plan “starts with scrapping the three million words of the current tax code—starting over with something simple: a flat tax.”

This is great!  It's about a month late since Cain has grabbed the momentum with his 9-9-9 plan.  I like Cain, too.  But unless you embed the 9-9-9 plan in the Constitution (very difficult to do), a future Congress/president could make it the 25-25-25 plan.

But back to Perry, he hasn't released specifics but this makes it sound as if he knows how to get the economy moving again.  I would also like to see regulatory reform of not just the energy markets.  But, as I've said, don't let the perfect be the enemy of the good.

One area Perry is vulnerable is Social Security.  He rightly called it a Ponzi scheme (except this Ponzi scheme forces you to participate).  This morning I saw an ad from AARP, the gist of which is "Don't cut our benefits or we'll vote you out of office."  This is their first shot across the bow of entitlement reform.  (The AARP seems to think being over 62 automatically entitles you to your grandchildren's wealth.)  Entitlement reform has to happen and the sooner the better.  The only question is, who is going to have to sacrifice, the person getting free money and health care, or the person paying for it (i.e., the workers).