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*Opinions expressed here may or may not reflect the views of the Fernley Republican Women. Blog posts should not be considered an endorsement from the FRW.

Biden: Wealthy Should Pay Their Fair Share of Taxes

10/20/2021

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​President Joe Biden has whispered into public microphones a few times recently that the wealthy should “pay their fair share” of federal taxes.
And what share would that be, Mr. President?
Of course, he doesn’t say what it should be.  Nor even gives a hint of what their shares are now.  That’s normal, though.  When people say the rich should pay their fair share, they really mean we should increase taxes on those folks regardless of what their rates now are.
So, I’ll provide facts and data on those rates, as I’ve done in the past.  The Tax Foundation (TF), using the official statistics from the Internal Revenue Service, has published the key data for 2018, the latest year for which tax data are available.  TF summarizes: “the U.S. individual income tax continued to be progressive, borne primarily by the highest income earners.”
As the details show, that’s an understatement.  The individual income tax was highly progressive by 2001 and has gotten distinctly more so this century.  Even after the 2017 tax cuts passed by President Donald Trump and Congress in 2017, “average tax rates fell across every income group.”  And proportionately, they fell more for the lower income groups than the higher ones.
Here are the specifics.  The top one percent of earners (those earning more than $540,009 adjusted gross income) paid 33.2 percent of total taxes in 2001, but that rose to 40.1 percent, its highest level this century, in 2018.  The proportion paid by folks between one percent and ten percent of income earners rose slightly.  However, all folks below that top ten percent paid less of the total than the top decile each of those 17 years.  In fact, the amount paid by the bottom half of income earners (earning less than $43,614) declined most: from 4.9 percent to 2.9 percent.
The tax share paid by the top one percent of earners, 40.1 percent, exceeded greatly the share paid by the bottom 90 percent combined, 28.6 percent.  And the top one percent paid a 25.4 percent average income tax rate, while the bottom 50 percent paid one-seventh that rate, 3.4 percent.  Across the scale, as income increases, the tax rate paid increases substantially.
Now, what was that, Mr. President, about people paying their fair share?  Warren Buffet may trumpet (brag or complain) that he pays a lower rate than his secretary, but that’s only an anecdote.  When you look at the full range of data, Mr. Buffet’s story is highly unrepresentative of the central facts.
Perhaps someone will answer that the rich have taken an ever greater share of income and that caused their tax contributions to rise.  As explained below, that’s not true, either, because the income share of the top one percent has fluctuated with business cycles.  The high point for the income of the top one percent of earners as a share of the total was in 2007, at nearly 23 percent.
In 2018, rich folks’ share of income fell to 20.9 percent from 21 percent the year before.  But their share of federal income taxes in that same year rose from 38.5 percent to 41 percent.  So, even the Trump tax cuts were highly progressive, contrary to claims of their opponents.
In sum, the rich – the top ten percent by income – paid 71.4 percent of total taxes, while everybody else – the bottom 90 percent, including the upper middle class – paid only 28.6 percent.  Thus, the rich ten percent of the population paid 22.5 times as much of the total tax bill each as the bottom 90 percent of earners.  Is 22.5-to-1 fair?
Two final points.  The level of per-capita government transfer payments, as a share of U.S. median personal income, is nearly three times as high now as in 1974.  Taxing the rich has led to very high subsidies for many others.
Second, as summarized in a recent extensive analysis by Scott Lincicome, “Whether it’s income, ‘labor share,’ or wealth, numerous studies by respected academics rebut the scary headlines and beltway conventional wisdom about rampant inequality in the United States. … the increase in inequality since the Good Old Days … has been, at best, non-existent and at worst, moderate …”
Ron Knecht is a Nevada Policy Research Institute Senior Policy Fellow, President of the Nevada Wins PAC, and former State Controller and higher education Regent.  RonKnecht@aol.com.
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Progressivism, the Administrative State & the Public Interest

10/12/2021

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As Ben Franklin left the Constitutional Convention on September 17, 1787, he was asked what kind of government we would have.  “A Republic,” he replied, “if you can keep it.”
The Founders addressed that and other challenges by establishing checks and balances among three branches of the federal government and between it and the states.
The Constitution’s fostering of the rule of law, individual liberties, economic freedom and other important protections for human flourishing withstood a number of assaults, including the Civil War, for nearly 100 years.  Then, from Otto von Bismarck’s Germany, came progressivism.
It first took root here with the 1883 Pendleton Act, which provided that some federal jobs be awarded based on merit and their employees be selected via competitive exams.  It also made unlawful the firing or demotion for political reasons of employees covered by the act – ending half a century of the political “spoils” system.  Now, civil service covers most federal employees.
All that seemed perfectly reasonable at first, as so many reforms do.
With the rise of labor unions, public employees suggested they should be able to collectively bargain for pay and terms.  But in 1937, President Franklin Roosevelt, a strong supporter of organized labor, drew the line.  He said collective bargaining had “insurmountable limitations when applied to public personnel management.”  Employee groups can’t be considered equals for collective bargaining to the People as a whole, represented by Congress.
In 1960, two percent of state and local employees had collective bargaining; it was 63 percent by 2010.  Now in many states, public employee unions are the tail that wags the policy dog, especially via election contributions.  The public interest is subordinated to this special interest that is as predatory on the public, liberty and growth as it’s allowed by politicians to be.
Back to 1887: progressives created the Interstate Commerce Act to federally regulate railroads’ monopolistic practices, followed by anti-trust law.  Public utility regulation began to replace legislative acts at the federal, state and local levels, reaching transportation, telecommunication, energy, water services and others.  At all three levels, environmental, public health and safety, labor, financial, economic and other regulation has proliferated right up to the present.
Again, it all seemed so reasonable at first.  However, a massive body of rigorous academic literature has documented the capture of regulators to serve the purposes of regulated firms and their investor and labor special interests at the expense of the public and consumer interests and to the disadvantage of new firms, technologies and innovations.
All this delegation of governmental power to mostly unelected political bodies has been termed the modern administrative (or regulatory) state.  With the approval often of courts, these agencies have developed what are called quasi-legislative and quasi-judicial powers – exercising the power of law without legislative action, executive concurrence or even much judicial oversight.
Today’s federal Environmental Protection Agency even seeks to regulate home building by owners of properties where minor mud puddles appear after rains, even though the mudflats have no direct connection to the navigable waters of the United States.  And some state governors mandate Covid-19 shots capriciously.  (I’ve had my two jabs and recommend them for you too.)
As this massive complex of bureaucracies has metastasized, it has diminished economic growth and freedom and thus, arguably, human flourishing and aggregate wellbeing.  And we are all cramped daily by administrative state.  But wait!  There’s more.
Sixty years ago, stakeholder analysis was developed to describe relationships of private firms and governments to special interests affected by their policies and practices.  Soon, this morphed into “stakeholder theory,” which posits that firms owe duties to stakeholders comparable to their basic fiduciary duties to investors.  It holds governments owe duties to special interests comparable to those owed to the citizenry as a whole, taxpayers and the public interest.
So now, among legions of examples, we have oppressive occupational licensing requirements, free speech suppression, tax-hiking prevailing wage laws, government-sanctioned racial discrimination and very uneconomic domestic shipping regulations.  It well may be the cumulative effect of all this has become unbearable to people and untenable for normal commerce.
Ron Knecht is a Nevada Policy Research Institute Senior Policy Fellow and former state controller, higher education regent, senior economist, college teacher and legislator.  Contact: RonKnecht@aol.com. ​
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How Liberals Think v. Conservatives and the Rest of Us

10/5/2021

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President Ronald Reagan said the problem with liberals is less the things they don’t know and more the things they “know” that aren’t so.  A recent opinion piece in the Reno newspaper illustrates his point perfectly, plus reasons liberals and progressives are so wrong about so much.
Jim Hightower, journalist, progressive Democrat activist and former elected Texas Agriculture Commissioner, wrote, “for decades, national and state lawmakers have flaunted their ignorance of what makes a good society by stupidly shortchanging our investment in our youngest minds.”
Nowhere in that column does he provide any real evidence, let alone numbers, to show education and childcare are underfunded in the U.S.  Note also another habit of so many liberals, Democrats, progressives and journalists: bashing by labeling, also without evidence, anyone who disagrees with them as stupid, ill-intentioned and “deplorable.”
He adds, “At the same time, corporate and government policymakers have intentionally rigged our economic and political systems to hold down workers’ incomes even while their living expenses rise.”  He continues in this vein, with wholly unsupported, false claims and hateful vituperation.  For example, he labels our present practices on childcare and education as “we don’t care” policies.
Ultimately, he advocates that childcare be wholly the province of government subsidy or direct provision based on a very limited World War II program that subsidized pre-school childcare for the Rosie the Riveter families.  Apparently, he, other Democrats and progressives think the raising of children can’t be left to mere parents but must be handled by government and away-from-home institutions.
Another day, I’ll address what a failure that approach has been.  For now, let’s focus on the funding of K-12 education.
I addressed education in 2019 in my last Controller’s Annual Report, using data that’s still the latest available.  Referring to international data on student achievement and spending, I noted the U.S. spent $12,176 per student per year, or fourth most in the world, but ranked 23rd among 79 nations in achievement.
Compared to our $12,176 per student, Japan, the top achieving nation, spent only $9,934, or 82 percent as much.  The next four achievement-ranking countries were Estonia ($6,991, or 57 percent), Canada ($10, 440, or 86 percent), Finland ($9,779, or 80 percent) and Korea ($10,030, or 82 percent).  The average for 34 advanced economies was $9,302, or 76 percent.
Further, we spent $8.32 per scoring point in the rankings while then top five countries spent between $4.44 and $6.65, with $6.30 as the average for the 34 advanced countries.  In short, we spend a lot and get little from our primarily government-run schools.  So, the problem is not spending, but instead the performance of our schools.
Other data compiled by NPRI show that American real (inflation-adjusted) total education spending has soared 192 percent since the 1970s, but mathematics achievement has risen only two percent and reading only 0.7 percent.  Further spending per state per student has long shown little to no statistical correlation with student achievement.
The dominance of labor unions in educational policy and spending, especially among Democrats, is a major cause of our educational failure, because their interests conflict with those of students, parents, taxpayers and the public.  This is demonstrated by the fact the real cost per pupil rose 256 percent from 1970 to 2018, driven mainly by per-pupil increases of 252 percent in non-teaching staff (especially the diversity bureaucracy and other administrators) and 157 percent in number of teachers. 
Nevada student achievement lags that in nearby comparable states that spend less than we do, too.  Over 100 Clark County schools have for years received failing grades from the state.  Yet, school officials claim the district hasn’t had a single ineffective principal or administrator for at least the last four years!
Thus, the increases in spending and number of staff (mainly union members) per pupil have not significantly improved student achievement.  But they have benefited the providers in education and throughout the public sector.  Real and popular reforms work, including parental choice, high quality teachers, technology-assisted learning, performance pay for teachers and real accountability.  But unions oppose them.
Liberals, Democrats, progressives and unions live on narratives, memes, false assertions and hate-driven attacks against those who disagree.  Not facts and data.
Ron Knecht is a Senior Policy Fellow at the Nevada Policy Research Institute (NPRI) and formerly State Controller, a higher education Regent, Senior Economist, college teacher and Assemblyman.  Contact him at RonKnecht@aol.com.  ​
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