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Showing posts from March, 2011

Post Wisconsin: Republicans Negative, Democrats Positive in Describing Unions

Based on the media coverage of the last few weeks, one might imagine unions are on the rise in public opinion. Actually, I've found three polls since Friday showing quite the opposite is true. I've also found data that Democrats have dropped a percentage point or two on a general congressional ballot, while Republicans have remained steady. Republicans are about 1.5 percent ahead of Democrats, which doesn't mean much since some districts are very lopsided.
So, how bad are the perceptions of unions in general? According to Gallup this weekend: Republicans Negative, Democrats Positive in Describing Unions
Among all Americans, 38% have a negative image, 34% positive, and 17% neutral
Americans are slightly more likely to say something negative rather than positive when asked what word or phrase comes to mind when they think of "labor unions." By about a 3-to-1 ratio, Republicans have negative rather than positive things to say about labor unions. By better than 2 to 1, D…

Wealth Disparity, Myths, and Realistic Solutions

In a previous entry, The 90% Tax Rate Myth, I promised to discuss income inequality and offer actual solutions that don't involve merely "redistributing wealth" via taxes.

Michael Moore recently attempted to rally support for unions in Wisconsin with the following:
"Four hundred obscenely wealthy individuals, 400 little Mubaraks -- most of whom benefited in some way from the multi-trillion-dollar taxpayer bailout of 2008 -- now have more cash, stock and property than the assets of 155 million Americans combined."If you want one examination of this claim, which is accurate statistically, you can read PolitiFact's analysis. The story is posted as Michael Moore: 400 Americans Have the Wealth

Now, I want to go beyond the nonsense of Moore and some of his misleading implications.

You want shocking? Most of the super-rich were not born that way. According to a 2005 New York Times analysis, 60 percent of Americans move up or down one full income "quintile" e…

What’s Next in Wisconsin

Is President Obama worse than Wisconsin's Gov. Walker? Far from seeking to strengthen the hand of federal-employee unions, Barack Obama has sought to impose a two-year wage freeze on federal workers through the budget process. If the federal government had a bargaining law like the one Wisconsin has today, he would be unable to do that. Also consider this fact: [D]espite the howls coming from the left, Wisconsin’s new policies on public-employee relations will not be especially unusual. Only 26 states have laws that grant collective-bargaining privileges to substantially all public employees. For more, read: What’s Next in Wisconsin - By Josh Barro - The Corner - National Review Online
Economic reality doesn't seem to apply to government or public sector employees right now. Government (and government jobs) only exists with businesses, especially their owners and their employees. Without tax revenues from businesses, there are no government jobs. None. It's time for governmen…

The 90% Tax Rate Myth

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There is a "myth" that the economy of the United States chugged along at least in part due to higher taxes on the wealthy in the past. First, this myth, like so many about creating prosperity, ignores that U.S. growth came after two world wars wiped out most of our competitors. Second, the implication is that "the rich" were actually paying 90 percent taxes at some point in history. That's never been the case.

The U.S. tax system uses an "Effective Marginal Tax Rate" model. The EMTR is applied on ranges of earned taxable income. Each taxpayer pays roughly the same amount on his or her income within these ranges. According to the IRS, the EMTR schedule for 2011 is:

Tax RateIncome RangeTaxed10%$0 – $8,500$8,50015%$8,501 – $34,500$25,99925%$34,501 – $83,600$49,09928%$83,601 – $174,400$90,79933%$174,401 – $379,150$204,74935%Over $379,150N/A
Everyone paying income taxes pays the same 10% on his or her first $8,500. So, to calculate a person's "Comp…

Heavily Unionized, Still Stagnating

I recommend:
http://www.economist.com/blogs/democracyinamerica/2011/03/middle-class_stagnation

While the above is primarily a short summary of other columns and blogs, it makes a great point: Western nations with a widely unionized workforce are still experiencing increases in wage disparity between the top 20 and bottom 20 percent (upper and lower classes). The middle class (usually defined as the middle 40-60 percent) is stagnating, as well.
I've written on this blog about the "Superstar Effect" and income. See:
http://www.nytimes.com/2010/12/26/business/26excerpt.html
Also:
http://almostclassical.blogspot.com/2011/01/skills-and-value-concentration.html
The reality is that the marketplace is constantly changing. Technology has, for centuries, eliminated jobs and reduced the "value" of the lowest-level, least-specialized workers. Unions are not going to be able to offset the loss in value within some jobs. Quite bluntly, if there is any chance your job can be autom…