A Republican plan to extend tax cuts for the rich would add more than $36 billion to the federal deficit next year -- and transfer the bulk of that cash into the pockets of the nation's millionaires, according to a congressional analysis released Wednesday...
"...[S]tate and local government employees earn less total compensation than their private sector counterparts with similar education, training, and work experience."
Big headlines come across my desk each morning, but none more sensational than this one from Wednesday: “Bloated public sector needs a crash diet” (The Examiner). As I skimmed the article, I read: “While much of the private sector has laid off workers, frozen pay and cut capital investment, public sector employees have lived high on the tax-fattened hog.” This editorial is just one of many causing a stir about public compensation as the recession tightens its grip. The most infamous story came from Bell, California, where the city of 37,000 paid several top employees egregious salaries, including $800,000 to the chief administrative officer. While this kind of abuse is out of the ordinary, it does raise a fair question about public compensation.
In a series of articles, USA Today (most recently on August 10, 2010) similarly asserts that public sector employees are overcompensated compared with their private sector counterparts. Their analysis compares the salaries of similar occupations in each sector, accountants to accountants, for example. While this approach may seem logical, a new report, commissioned by the Center for State and Local Government Excellence (CSLGE) and the National Institute on Retirement Security, declares that the reality is that 80 percent of private positions do not have direct public sector equivalents.
For the 20 percent of occupations that allow comparison, then, USA Today relays only the raw salary differences that suggest higher earnings for state and local workers. This means that their analysis fails to factor in other qualifying factors of comparison between employees, like education level, years of experience, training, and skill sets. So while both USA Today and the new CSLGE report confirm that public employees do, in fact, earn more on average than private sector workers, the public sector workforce earns this higher average salary because the average employee is better educated and has more experience. Once these factors are included in compensation calculations, the latter explains that state and local government employees earn less total compensation than their private sector counterparts with similar education, training, and work experience.
In fact, the CSLGE report discovered that state and local sector employees are twice as likely as their private sector counterparts to have a college or advanced degree. The major driver in this pattern is that government workers have jobs that demand more education, like teachers, university professors, nurses, and social workers. In other words, state and local government employees earn less than they would if they took their skills to the private sector.
How much less?...With benefits factored in, state and local employees still earned an average of nearly 7 percent and 7.4 percent less, respectively...
The lights are going out all over America — literally. Colorado Springs has made headlines with its desperate attempt to save money by turning off a third of its streetlights, but similar things are either happening or being contemplated across the nation, from Philadelphia to Fresno.
Meanwhile, a country that once amazed the world with its visionary investments in transportation, from the Erie Canal to the Interstate Highway System, is now in the process of unpaving itself: in a number of states, local governments are breaking up roads they can no longer afford to maintain, and returning them to gravel.
And a nation that once prized education — that was among the first to provide basic schooling to all its children — is now cutting back. Teachers are being laid off; programs are being canceled; in Hawaii, the school year itself is being drastically shortened. And all signs point to even more cuts ahead.
We’re told that we have no choice, that basic government functions — essential services that have been provided for generations — are no longer affordable. And it’s true that state and local governments, hit hard by the recession, are cash-strapped. But they wouldn’t be quite as cash-strapped if their politicians were willing to consider at least some tax increases...
CNN and CNBC are reporting a story about a group of German millionaires who are volunteering to pay an additional 10% in income taxes for 10 years to help the German government meet its budget needs in a time of austerity.
The movement, known as the Club of the Wealthy, was formed in 2009 and now 51 German millionaires have written a letter to German Chancellor Angela Merkel proposing their idea. It would not actually be voluntary - the idea is to have the government impose a temporary 10% charge on income. It's unclear whether the proposal has much support among the broader circle of Germany's élite - there are 800,000 German millionaires, so if only 51 have signed the letter after a year's efforts, that may signal its lack of support. But the movement is gaining momentum and is underpinned by Germany's longstanding social democracy framework...
Hedge fund managers make billions but pay lower tax rates than teachers. Hard to believe, right? Congress is considering fixing the loophole, but Wall Street is pushing back hard.
On May 6, 2010 at Logan Elementary in San Diego, David Lagstein of ACCE announced a report (below) about corporations that avoid property taxes in California.
"[I]n virtually every county in the state, the share of the property tax borne by residential property has increased since the passage of Proposition 13 in 1978, while the share of the property tax borne by non-residential property has decreased..."
Our new report documents the county-by-county shift in the property-tax away from commercial property to residential property in part 1, and in part 2 shows how many major properties fail to pay their fair share of property tax...
1. In virtually every county, commercial property is paying a far smaller share of the property tax since Proposition 13 passed in 1978.
2. Commercial property is able to exploit huge loopholes in the law to avoid reassessment upon change in ownership.
The first part of the report, “Who Pays the Property Tax” provides county-by-county data on the changing shares of the property tax between residential and non-residential property. It is based in part on newly-discovered county survey data reported over many years to the Board of Equalization (BOE) which to our knowledge has never before been examined and utilized, and in part on data provided by county assessors, some of whom have substantial records going back in time.
The data is consistent throughout the state: in virtually every county in the state, the share of the property tax borne by residential property has increased since the passage of Proposition 13 in 1978, while the share of the property tax borne by non-residential property has decreased.
Some examples: ...Contra Costa County, the residential share of the property tax went from 48% to 73% ...Santa Clara, the residential share went from 50% to 64%, despite massive industrial/commercial growth ...Los Angeles, it went from 53% to 69% ...Orange, it went from 59% to 72%
A Maryland nurse accomplished two rare feats in her battle with the Internal Revenue Service: She defended herself against the agency's lawyers and won, and she got a ruling that could help tens of thousands of students deduct the cost of an M.B.A. degree on their taxes.
The U.S. Tax Court handed Lori Singleton-Clarke her victory last month, saying the 47-year-old Bryantown, Md., woman had properly deducted nearly $15,000 in business school tuition. The Tax Court ruling should make it easier for many other professionals to deduct the expense of a Master in Business Administration degree.
The IRS's rules on deducting work-related tuition are complicated and onerous, ultimately preventing most students from deducting their tuition. But this case clarifies the rules and will likely lead to more taxpayers taking the deduction, tax experts say.
Few taxpayers decide to go toe to toe with the IRS as Ms. Singleton-Clarke did, arguing her case without a lawyer. For good reason: In 2009, individuals won only about 10% of about 300 such cases, according to data from Tax Analysts. Ms. Singleton-Clarke fought her case in Tax Court, a venue where taxpayers don't have to pay the contested tax before going to trial...
