by | ARTICLES, BLOG, BUSINESS, OBAMA, POLITICS, TAXES
As I read this recent article in the Wall Street Journal, “Sluggish Productivity Hampers Wage Gains” I mulled as to whether or not the Wall Street Journal had started a new satire section — but then it occurred to me that the author’s analysis of the current market was completely serious. Is he so clueless that he actually does not understand why there is “tepid productivity”?
The author, Greg Ip, cites 1) Faulty data may be partly to blame, 2) the severity of the financial crisis and recession and 3) weak business investment, but completely misses the elephant in the room: the meddling, anti-business policies of the current administration.
This administration has been exceedingly heavy-handed in its efforts to demonize businesses, while promising that businesses will be highly taxed and regulated. Whether it is labor regulation by the NRLB or environmental regulation by the EPA, government interference has been overreaching and restrictive.
Additionally, there have been huge increases in both criminal rules and regulations about what businesses are allowed and not allowed to do — from nitpicky labor rules, to dictating employee minutiae, to minimum wage requirements, all which restrict business hiring.
More unfortunately, Obama has provided the background for a litigation-friendly environment. If a larger, more financially stable company wants to steal something from a smaller company, they can sue them or just threaten with a costly legal battle. Likewise, “disparate impact” and IRS asset forfeiture are two practices which demonize business owners by merely suggesting wrongdoing — and put the burden of the business owners to prove their innocence.
And recently, the Obama Administration has decided to wage war on business inversions, by declaring companies who wish to move their headquarters abroad in order to stay competitive, to be “unpatriotic”, and “tax dodgers”, calling the perfectly legal process of inversion to be a “loophole”. Couple that with the fact that we have the highest corporate tax rate in the world and it’s no wonder that businesses struggle to survive.
Usually the Wall Street Journal is fairly en pointe. It’s hard to believe any editor would have let this article be published while utterly ignoring Obama’s detrimental business policies that have plagued the economy over the last 6 years — which is why something needed to be said.
by | ARTICLES, BLOG, ECONOMY, HYPOCRISY, OBAMA
Can you believe it — a bigger lie than “you can keep your doctor”?
President Obama’s comments regarding the gender pay gap and discrimination are as vicious a lie as his statements that you can keep your doctor. The idea that women earn $.77 for every $1.00 that men earn, for equal work, has never been true, never in the slightest.
That $.77 comparison is not for equal work. It strictly represents the reality that women, more often than men, work at jobs that are lower paying. The reason for such jobs might include school and family situations, flexibility of schedule, and their desires to be able to be use work secondarily for their needs for their families or a source of discretionary income.
There is actually no evidence of any discrimination for women doing the same work an being paid less. If the world of labor could indeed pay women less (23% less) for equal work, why isn’t virtually every company hiring only women as a means to curb costs and increase profit?
A more full and excellently written description was put forth in the WSJ on April 7th. It is a must read.
The most incredible thing about Obama’s statements is that Obama appears to have his own “pay gap disparity” at the White House (women earn $.88 cents per $1.00 for men). Interestingly, the White House takes great pains to discuss the discrimination variables that cause this disparity.
“An analysis of staff salaries done last fall by the conservative American Enterprise Institute found the president’s female aides were paid 88 cents for every dollar paid to men, about $65,000 to $73,729 annually. On Monday, Carney argued the comparison is based on aggregate wages that include the lowest salaries at the White House “which may or may not be — depending on the institution — filled by more women than men.”
He said men and women in equivalent roles at the White House earn the same amount and that 10 of 16 department heads are women, earning the top White House salary of $172,200″.
Here we have the Obama administration admitting that more women are in jobs that include the lowest salaries at the White House.
So, it is not gender discrimination at the White House, which is what Obama has tried to claim in his “$.77 cents” missive and new Executive Order. He wants to apply that label when discussing the “gender pay gap” to all other businesses (as a means to appeal to his female base), but then when the spotlight is shined on the White House pay scale, Obama retreats from that rhetoric.
As he should. Because the gender pay gap is truly a myth. And Obama’s own White House data and discussion prove it.
by | ARTICLES, POLITICS
Catching up on the WSJ, I came across an opinion piece by Ben Wattenberg, who surmised that the current entitlement crisis is one of demographics; that is, our fertility rates are not able to sustain payment obligations. Though generally the WSJ and the American Enterprise Institute — of which Mr. Wattenberg is a senior fellow — are good in their analyses, this argument is patently untrue.
A few days later, the WSJ ran a letter to the editor by a Mr. Walsh, who well summed up the problem with Wattenberg assertion.
Ben J. Wattenberg’s suggestion that the funding problems with Social Security are due to demographics is demonstrably false. A properly funded program of benefits works regardless of demographics if benefit amounts are not increased above what payments can support, and accumulated funds and related investment earnings are invested wisely and not diverted to other uses.
These basic conditions are at work in the private retirement sector, governed by Erisa, where demographics have had a relatively negligible effect on current funding levels. In the case of Social Security, the former condition has been routinely violated by politicians pandering for votes, while elimination of the latter condition was seen to by Lyndon Johnson (Mr. Wattenberg’s old boss) and the Democratic House and Senate at the time. Current entitlement practices lack basic and proper accounting for costs.
In short, we’ll have deficits in 2020 not because only because spending is too much, but also because their accounting methods allow them to record the costs incurred years prior (for instance in 2003) as expenses in 2020.
What Mr. Wattenberg is really saying is that the current shift in demographics has made it more difficult to tax current earners sufficiently to pay for the overpromised benefits of current beneficiaries and to compensate for government mismanagement.
I have written before on the crisis of Social Security and its lack of basic and valid accounting practices. Entitlement reform must consist of both fiscal restraint and acceptable and professional accounting.
by | ARTICLES, TAXES
A recent article in the WSJ discusses a newly-released report. Tax breaks, for all segments of the population, total more than $1 trillion. Such a staggering figure — roughly the size of the annual federal deficit budget — reinforces something I have stressed repeatedly: the need to overhaul the tax code.
However, the report also
citing political opposition, technical challenges and other reasons, said that “it may prove difficult to gain more than $100 billion to $150 billion in additional tax revenues” by eliminating tax breaks. That likely would leave little for reducing tax rates, perhaps only enough for one or two percentage points in the top individual rate, while maintaining the same level of revenue
The top ten tax breaks are:
by | ARTICLES, ECONOMY, OBAMACARE, POLITICS, TAXES
The WSJ had a fantastic piece today, reminding us of the new taxes yet to come, signed into law under Obama. And he wants MORE tax increases as part of this deficit negotiation?
Go read the full synopsis right now. Some of the additional taxes are listed below
• Starting in 2013, the bill adds an additional 0.9% to the 2.9% Medicare tax for singles who earn more than $200,000 and couples making more than $250,000.
• For first time, the bill also applies Medicare’s 2.9% payroll tax rate to investment income, including dividends, interest income and capital gains. Added to the 0.9% payroll surcharge, that means a 3.8-percentage point tax hike on “the rich.” Oh, and these new taxes aren’t indexed for inflation, so many middle-class families will soon be considered rich and pay the surcharge as their incomes rise past $250,000 due to tax-bracket creep. Remember how the Alternative Minimum Tax was supposed to apply only to a handful of millionaires?
Taxpayer cost over 10 years: $210 billion.
• Also starting in 2013 is a 2.3% excise tax on medical device manufacturers and importers. That’s estimated to raise $20 billion.
• Already underway this year is the new annual fee on “branded” drug makers and importers, which will raise $27 billion.
• Another $15.2 billion will come from raising the floor on allowable medical deductions to 10% of adjusted gross income from 7.5%.
• Starting in 2018, the bill imposes a whopping 40% “excise tax” on high-cost health insurance plans. Though it only applies to two years in the 2010-2019 window of ObamaCare’s original budget score, this tax would still raise $32 billion—and much more in future years.
• And don’t forget a new annual fee on health insurance providers starting in 2014 and estimated to raise $60 billion. This tax, like many others on this list, will be passed along to consumers in higher health-care costs.
