A Simple and Wrong Interpretation of Tax Payers and Government Spending

Crows in November

Crows in November

Minneapolis attorney Gregg J. Cavanagh weighed in on the politics of government spending, complaining that we live in an “allocation nation,” one in which most don’t pay their fair share.  It is a problem, he argues, because tax payers don’t understand the problem, especially the inefficiencies, and Democrats are eager to capitalize on that.  Republican wisdom and leadership, however, can set us on a more efficient and just course.

While Cavanagh has some stats correct, his overall analysis is wrong and his conclusions misleading and simple-minded.

Cavanagh suggests — based on total annual federal, state, and local tax expenditures exceeding $6.6 trillion — that anyone paying less than $54,000 in annual taxes is enjoying a subsidy from other tax payers.  These numbers represent the proportion of the total of annual government spending and I suppose Cavanagh is right in that regard when he says  “a majority of American households do not pay anywhere near their pro rata share of government spending.”

Right off the top we have problems with Cavanagh’s pro rata analysis.  When measuring who pays what in taxes against what they receive in government spending, the amounts vary greatly depending on where you live.  Just looking at Federal spending and measuring benefit based on what state a person lives, someone living in Texas receives a greater “subsidy” than a person living in New York.

But let’s stick with Cavanagh’s numbers — in the end they don’t matter much anyway — he is critical of this apparent subside because he seems to think that households receive at least $54,000 of direct government benefit they would not otherwise receive if it were not for the “tremendous inefficiencies” of government programs.

Cavanagh’s argument goes off track early and often, primarily by conflating all government spending into one pot and then correlating it directly to household support.  He tells us, for example, that “about 52 percent of American households receive benefits from one or more government programs” to expose these so-called spending inefficiencies.  That argument is misleading.

Let’s look at Federal spending.   In fiscal 2013 the Federal Government spent over $3.5 trillion.  About half of that spending went toward Medicare, Medicaid, and Social Security.    Keep in mind that a full third of federal tax revenues come from Social Security taxes, which are capped; it is supposed to be a fully-funded obligation.  However, over the years, political issues have muddled the funding of these programs.  These should be benefits paid to tax payers who have contributed via taxes to the budgets for these services.  There’s nothing wrong in that.

Another 18% of Federal spending pays for defense and about 30% goes toward other mandatory spending, everything from education, food assistance, environment, energy, infrastructure, transportation, and other necessary business of the government.

Continue reading

GOP Candidate Jeff Johnson and the Middle Class

Jeff Johnson

Jeff Johnson

Republican gubernatorial candidate Jeff Johnson had a “oops” moment when he stumbled over a question that most beauty pageant contestants could handle with ease.  Johnson is campaigning on a pledge to work for the middle class, but when asked how he would define middle class he answered “I have no clue.”

Some people have come to his defense arguing that what “middle class” means is different from person to person depending on one’s situation.

That isn’t much of a defense, especially for someone who pretends to champion the middle class.  Inherent in that campaign promise should be some idea of what he supports.  Not having a clue raises a number of questions, not least of them is whether or not he really has any ideas at all.

Johnson’s Tea Party beliefs — anti-union, anti-government, anti-minimum wage, among others — are not positions that benefit the middle class.  For that matter they really are not strong positions for anyone, regardless of class.  Those are his beliefs.  In a campaign when Minnesota is on the right track, abandoning the good work that is helping Minnesota will be a tough sell.  Whatever Jeff Johnson might decide defines the middle class, his ideas a wrong in any case.

A Tea Party Republican is not what Minnesota needs.

jeff-johnson-policies

Supreme Court Upholds Texas Strict Voter ID Law

United States Supreme CourtIt requires a very poor parsing of the Second Amendment, but let’s pretend that the Second Amendment does indeed guarantee an individual right to own guns.  Doesn’t the Constitution also guarantee individuals the right to vote?  The Voter’s Right Act was meant to remove any questions, but apparently questions remain.

In the case of guns, Republicans mostly argue against any regulation of gun ownership, including laws requiring ID to purchase firearms.  This opposition is part of the party’s political platform.  Republicans view this as an attack on the right to own fire arms.

They seem to have no problem whatsoever when we similarly attack the right to vote.  In this case, voting is treated more like a privilege than a right.  The reason for the GOP attack on voting rights is unclear, but it seems to be justified by the ruse of fraud.

There is no fraud, at least non in any meaningful sense, statistically or otherwise.  It is a clear and present non-issue.

The matter of guns, on the other hand…well a quick scan of this weekend’s news shows a number of gun crimes and death.  It happens every hour in this country, 24/7 without stop.  Here there is a clear and very present danger to the rights of people to enjoy their security, freedom, and the pursuit of happiness.  Where’s the outrage?

Apparently outrage and stupidity are incompatible.

Clearly what this country needs once and for all is a simple constitution amendment guaranteeing the right to vote for all.  (Don’t hold your breath.)

But let’s go back to the disgrace that is our Supreme Court.  To say that the institution is a partisan mess is being kind.  Several justices get away with their crimes because voters are too ignorant to understand the partisan abuse these justice inflict upon the laws and rights of the American public.  These are not justices, these are partisan pawns at best, ruthless hacks at worse.  (I judge hacks.  These men know what they are doing.)

Our rights are being robbed by the very men appointed to protect them.  They have names:  Scalia, Thomas, Alito, and chief cheat Roberts with too-often Kennedy joining to endorse the bastardized court.  Kennedy is a weak coward.  The others disgrace their oath.

Pay attention to the partisan hypocrisy.  If you have any sense of true justice and constitution rights, you’ll keep these corrupt people out of power.  And it all starts with stopping the Republican Party.

Scott Walker Wants to Govern Minnesota Too!

Scott Walker

Scott Walker…or is it Jeff Johnson?

Republican candidate for Minnesota Governor, Jeff Johnson, famously announced that he plans to “go all Scott Walker on Minnesota.”  Not only does that sound rather thuggish — a poor choice of words, perhaps? — but it isn’t at all inspiring.

Is Jeff Johnson merely a puppet or does he have ideas of his own?

Being patient and nice when dealing with empty men like this is no easy task.  These people ask you to trust them to manage your state.  Their ideas matter.

One is tempted to use an apt word like “idiot” and move on.  But out of respect for the office of the governor and for a sense of political decorum, I won’t call Johnson an idiot, as much as that description might fit.  I simply won’t.

Voters, on the other hand, if you support a candidate like Johnson, what are you thinking?  Politics being what they are today tend to attract the crazy fringe, especially the tea-drunk conservative right, to public campaigns.  These interests do not align with your interests and perhaps there is no better proof than Jeff Johnson modeling on Scott Walker.

Continue reading

Microsoft Satya Nadella Explains Achievement in the United States

Satya Nadella, CEO of Microsoft, is catching heat for telling women they should not ask for raises, but trust Karma.  Let me explain why that makes sense and why Nadella is a fool for saying so.

Most CEOs are who they are out of chance.  Talent and perseverance have something to do with what they achieved, but only so much.  Reaching the top is mostly about timing and luck.  They are at the door when it opens…over and over again.  Nothing more special than that.

Of course he is sexist in calling out only women on this fact about corporate achievement in America — real workers struggle at the expense of the lucky — but maybe Satya Nadella, unlike so many other CEOs who have little more than shit for brains, has inadvertently exposed an important fact about corporate success in America.  It isn’t what you do or ask for that matters, it is karma.

Nadella’s mistake, of course, is saying anything at all.  His comment proves he is a fool.  He doesn’t understand his own faith and fortune.  But in that, at least, there is something honest.

 

Jeff Johnson Thinks Minnesota Doesn’t Need a Gasoline Tax Because…

In last night’s debate with Governor Mark Dayton and Hannah Nicollet in Moorhead, Minnesota, Jeff Johnson ridiculed Dayton for tackling our transportation problem head on.  Dayton supports an increase in the gasoline tax, a tax that, in real terms, has changed very little over the years.  Johnson said it was “nuts” to think we had to raise taxes again to “have enough money to fill potholes.”

Really?   If we don’t raise taxes, where is the money coming from?  Ask Johnson…Exactly where would he find the money to make up a $6.5 billion shortfall in transportation funding?

It is this magical thinking on the part of the GOP — one that does not understand that repairs, maintenance, and expansion of roads and services costs money — that gets us in trouble when Republicans steer the state’s fiscal agenda.

No one disagrees that our roads are in terrible shape and quickly getting worse.  This is the result of decades of underfunding our transportation system.  Underfunding, not over taxing, is the problem.  Poor roads and congested highways hurt commerce and add costs to daily activities.  If we really want to capitalize on our economic opportunities, we need to invest in the infrastructure that will support that activity.

Dayton gets it.  Johnson — and Hannah Nicollet, too — don’t get it.

(NB…In 1975 a gallon of gas cost 59 cents and  the tax was 9 cents a gallon.  That’s a 15% tax on the cost per gallon.  In 2014, the average cost per gallon as been around $3.39 and the tax is 28 cents a gallon.   That is an 8% tax on a gallon of gas, a little less than half of what it was in 1975.)

Wealth and Income Inequality is a Political Choice in the United States

This is not the solution.

This is not the solution.

The American economy is creating trillions of dollars in new wealth and yet for most Americans that wealth means nothing.  They enjoy little if any of it.  But someone might tell you that those people did not create the wealth.  We are so confused by the rhetoric of the so-called “job creators” that we seem to think that the people who own and finance business create wealth.  This is a myth that has been exposed as a greedy and dangerous lie for decades.  Unfortunately, many of us still embrace it.

Economies, not people, create jobs.  Middle- and lower-income individuals and families are a key part of a job-creating economy.  If demand does not exist in the economy, not even the most economically naive “job creator” will build a widget factory to sell things people don’t want or cannot buy.

Things like tax breaks and other incentives only work if that break will give a meaningful advantage in an otherwise equally competitive market.  However in the best of cases, incentives are offered as an act of desperation or in response to economic extortion.  In worst case — and more typically — these breaks are given as a matter of ideological preference, regardless of how misguided.

While the lion’s share of this poor policy comes from the poor leadership and policies of America’s Republican party, a wing of the well-to-do Democratic elite (sometimes mistakenly called center-left Democrats) push for these asset hoarding policies.  These are dangerously destructive political decisions that are causing deep and extended damage to our economy and our social order.

Continue reading