There was a character on the popular TV program Hogan's Heroes
named Sgt Schultz. He was famous for "I know nothing!"
President Obama is claiming to be "agnostic" about new taxes on
the middle class. This is a curious use of the word. It comes from
two Greek words, "a" and "gnosis". The first is a negative of what
follows and means "without". The second means "to know" or "to
understand". Together they mean "without knowledge or
understanding." In other words "I know nothing!" about new taxes
on the middle class.
It will be interesting to see if the President signs a bill for new
taxes on the middle class while still claiming to be agnostic! The
dilemma is that he promised not to raise taxes on the middle class!
What would Joe Wilson have to say about that?
Monday, February 15, 2010
Sunday, February 14, 2010
Money and Education
Scholars have studied the relationship between per-student
spending and achievement test scores since the publication
of Equality of Educational Opportunity (a.k.a. "The Coleman
Report") in 1966. Sociologist James Coleman, its author,
concluded then that per-pupil spending does not have a
significant impact on student achievement scores. Economist
Erik Hanushek and others have subsequently replicated Coleman's
study and even extended it beyond U.S. borders. The finding
of over 30 years of research is clear: More money does not
equal better education. There are schools, states, and countries
that spend a great deal of money per pupil with poor results,
while others spend much less and do much better.
A recent story out of Kansas City, Missouri, illustrates the
truth of this as well as any. In 1985, a federal judge directed
the school district in that city to devise a "money-is-no-object"
educational plan to improve the achievement of black students
and encourage desegregation. As a result, Kansas City taxpayers
ended up spending more money per pupil annually, on a
cost-of-living adjusted basis, than taxpayers in any of the
country's 280 largest school districts. They paid for 15 new
schools, an Olympic-sized swimming pool with an underwater
viewing room, television and animation studios, a 25-acre wildlife
sanctuary, a zoo, a robotics lab, field trips to Mexico and Senegal,
and higher teacher salaries. The student-to-teacher ratio was the
lowest of any major school district in the nation at 13-to-1. By
the time the experiment ended in 1997, costs had mounted to
nearly $2 billion. Yet test scores did not rise, and there was even
less student integration than before the spending spree. In May
2000, the Missouri Board of Education officially removed
accreditation status from the district for failing to meet even one
of 11 performance standards! In short, we have all but exhausted
the rules-and resource-based approaches to education reform,
with little to show for our time and money. This leaves us with
the incentives-based approach. Merit pay for teachers is one form
this can take, but parental choice remains its centerpiece.
spending and achievement test scores since the publication
of Equality of Educational Opportunity (a.k.a. "The Coleman
Report") in 1966. Sociologist James Coleman, its author,
concluded then that per-pupil spending does not have a
significant impact on student achievement scores. Economist
Erik Hanushek and others have subsequently replicated Coleman's
study and even extended it beyond U.S. borders. The finding
of over 30 years of research is clear: More money does not
equal better education. There are schools, states, and countries
that spend a great deal of money per pupil with poor results,
while others spend much less and do much better.
A recent story out of Kansas City, Missouri, illustrates the
truth of this as well as any. In 1985, a federal judge directed
the school district in that city to devise a "money-is-no-object"
educational plan to improve the achievement of black students
and encourage desegregation. As a result, Kansas City taxpayers
ended up spending more money per pupil annually, on a
cost-of-living adjusted basis, than taxpayers in any of the
country's 280 largest school districts. They paid for 15 new
schools, an Olympic-sized swimming pool with an underwater
viewing room, television and animation studios, a 25-acre wildlife
sanctuary, a zoo, a robotics lab, field trips to Mexico and Senegal,
and higher teacher salaries. The student-to-teacher ratio was the
lowest of any major school district in the nation at 13-to-1. By
the time the experiment ended in 1997, costs had mounted to
nearly $2 billion. Yet test scores did not rise, and there was even
less student integration than before the spending spree. In May
2000, the Missouri Board of Education officially removed
accreditation status from the district for failing to meet even one
of 11 performance standards! In short, we have all but exhausted
the rules-and resource-based approaches to education reform,
with little to show for our time and money. This leaves us with
the incentives-based approach. Merit pay for teachers is one form
this can take, but parental choice remains its centerpiece.
Monday, February 8, 2010
The Truth About the Fair Tax
Thanks to all of you who are getting refunds this year.
We taxpayers appreciate the interest-free use of your money!
If you had not over-paid your taxes, then the Treasury
Department would have had to issue debt instruments and pay
interest.
The income tax - as you know - is taken out before
you get it. The Fair Tax is different. You decide when you
will pay it. There is no April 15 or IRS or 16th Amendment.
There are no tax forms or deadlines. If you are paid
$3,000/month, then your pay will be $3,000 (minus the state's
tax if not FL, TX, etc).
You still have to pay taxes - some things never change! When
you decide to buy something new, you will pay a 23% sales tax
in addition to the purchase price. That sounds really bad,
and critics only talk about this aspect. What they fail to
tell you is the Fair Tax replaces the Federal income tax, FICA
Social Security and FICA Medicare. Corporations will pay
nothing! If you have a poverty-level income, then you will pay
no tax at all, and you may get money back if you are frugal.
The Fair Tax will encourage saving and discourage wasteful
spending. The "rich" will continue to pay most of the tax.
What is the prebate? If your poverty-level income is
$36,000/year, then the Federal government will send you a monthly
check for $690 or $8280/year. If you spend less than $36,000,
then you will receive more than you are taxed. Every taxpayer
gets a check - even Bill Gates!
Look at a hypothetical example for a family of 4 with an income of
$36,000/year, and assume that the poverty level for a family of 4
is $36,000. Also assume no state income tax. The family paycheck
each month will be $3,000. The prebate check will be $690 each
month. The family has $3,690/month to spend. Assume they spend
$3,690/month including the sales tax. Their tax burden is $0.
What if they only spend $2,000 + 23% ($2,460)? They will still
get $3,690/month, so they will have $1,230 to save or invest.
What if they spend $4,000 + 23% ($4,920)? They will have to take
$1,230 from savings to make up the difference.
The current system actually encourages waste. The poor may have
trouble affording a car and the tax on it. They are forced to shop
for groceries and necessities at high-priced "convenience stores."
The Fair Tax will encourage frugality and savings.
Note that the 23% sales tax is only on NEW items. There is no tax
on used goods.
Politicians do not like the Fair Tax. Much of their power comes
from bribing us to do things their way. We subsidize the Real
Estate industry with mortgage tax deductions and first-time home
buyer tax credits. We subsidize the auto industry with
"Cash-for-Clunkers" tax credits. The list goes on for thousands
of pages of IRS code. We structure our lives according to the IRS
code - much of it not voted on by the people's representatives in
Congress.
We taxpayers appreciate the interest-free use of your money!
If you had not over-paid your taxes, then the Treasury
Department would have had to issue debt instruments and pay
interest.
The income tax - as you know - is taken out before
you get it. The Fair Tax is different. You decide when you
will pay it. There is no April 15 or IRS or 16th Amendment.
There are no tax forms or deadlines. If you are paid
$3,000/month, then your pay will be $3,000 (minus the state's
tax if not FL, TX, etc).
You still have to pay taxes - some things never change! When
you decide to buy something new, you will pay a 23% sales tax
in addition to the purchase price. That sounds really bad,
and critics only talk about this aspect. What they fail to
tell you is the Fair Tax replaces the Federal income tax, FICA
Social Security and FICA Medicare. Corporations will pay
nothing! If you have a poverty-level income, then you will pay
no tax at all, and you may get money back if you are frugal.
The Fair Tax will encourage saving and discourage wasteful
spending. The "rich" will continue to pay most of the tax.
What is the prebate? If your poverty-level income is
$36,000/year, then the Federal government will send you a monthly
check for $690 or $8280/year. If you spend less than $36,000,
then you will receive more than you are taxed. Every taxpayer
gets a check - even Bill Gates!
Look at a hypothetical example for a family of 4 with an income of
$36,000/year, and assume that the poverty level for a family of 4
is $36,000. Also assume no state income tax. The family paycheck
each month will be $3,000. The prebate check will be $690 each
month. The family has $3,690/month to spend. Assume they spend
$3,690/month including the sales tax. Their tax burden is $0.
What if they only spend $2,000 + 23% ($2,460)? They will still
get $3,690/month, so they will have $1,230 to save or invest.
What if they spend $4,000 + 23% ($4,920)? They will have to take
$1,230 from savings to make up the difference.
The current system actually encourages waste. The poor may have
trouble affording a car and the tax on it. They are forced to shop
for groceries and necessities at high-priced "convenience stores."
The Fair Tax will encourage frugality and savings.
Note that the 23% sales tax is only on NEW items. There is no tax
on used goods.
Politicians do not like the Fair Tax. Much of their power comes
from bribing us to do things their way. We subsidize the Real
Estate industry with mortgage tax deductions and first-time home
buyer tax credits. We subsidize the auto industry with
"Cash-for-Clunkers" tax credits. The list goes on for thousands
of pages of IRS code. We structure our lives according to the IRS
code - much of it not voted on by the people's representatives in
Congress.
Monday, February 1, 2010
4th Quarter GDP Numbers
The news for the 4th Quarter was great! 5.7%! Remember that
the previous quarter was originally 3.5% and then was revised
down twice to 2.2%.
The Obama Administration was quick to take credit for the
positive numbers. The problem is that the Clinton and Bush
Administrations, Congress and the Federal Reserve are
responsible for creating the loose money, poorly-regulated
environment which induced "fat-cat bankers" to take greater
risks. The truly foolish politicians and money folks have
taken their bribes, fat fees and bonuses and have departed the
crime scene. The Obama Administration was simply at the right
place at the right time - in office when the recovery happened.
Unemployment is still at 10% primarily because of the uncertainty
created by the POTUS and his Congress. Employers are waiting to
see if tax, energy and health reform legislation will pass. If
they are charged a 5.4% surcharge, energy taxes and forced to pay
health insurance for all employees, then they will be reluctant
to hire - especially since minimum wages have already increased
$.70/hr. The mandatory wage increase costs $1,456/employee/yr or
$145,600/yr for every 100 employees. The surcharge costs $54,000
per $million profit. Expenses for "cap and trade" and Obamacare
could be much more! Ev Dirksen would say "a $10K expense here
and a $10K expense there, and suddenly your profit is a loss!"
The Federal Government says that they need $3.83 trillion of
taxpayer dollars for FY2011. That should keep them comfortable -
and gain lots of bribes - with their already above-average salaries.
the previous quarter was originally 3.5% and then was revised
down twice to 2.2%.
The Obama Administration was quick to take credit for the
positive numbers. The problem is that the Clinton and Bush
Administrations, Congress and the Federal Reserve are
responsible for creating the loose money, poorly-regulated
environment which induced "fat-cat bankers" to take greater
risks. The truly foolish politicians and money folks have
taken their bribes, fat fees and bonuses and have departed the
crime scene. The Obama Administration was simply at the right
place at the right time - in office when the recovery happened.
Unemployment is still at 10% primarily because of the uncertainty
created by the POTUS and his Congress. Employers are waiting to
see if tax, energy and health reform legislation will pass. If
they are charged a 5.4% surcharge, energy taxes and forced to pay
health insurance for all employees, then they will be reluctant
to hire - especially since minimum wages have already increased
$.70/hr. The mandatory wage increase costs $1,456/employee/yr or
$145,600/yr for every 100 employees. The surcharge costs $54,000
per $million profit. Expenses for "cap and trade" and Obamacare
could be much more! Ev Dirksen would say "a $10K expense here
and a $10K expense there, and suddenly your profit is a loss!"
The Federal Government says that they need $3.83 trillion of
taxpayer dollars for FY2011. That should keep them comfortable -
and gain lots of bribes - with their already above-average salaries.
Subscribe to:
Posts (Atom)