2 posts tagged “clinton”
The candidates (and PotUS) have filed their taxes, so we can indulge in a bit of ethics checking by comparing the amount that they paid to the amount that they "should" have paid [1]. The numbers are somewhat interesting:
- Filed: Joint
- Income: $719,274
- Taxes paid: $22,1635
- Effective tax rate: 31%
- Nominal taxes owed: $230820
- Percentage of nominal taxes paid: 96%
- File: Single
- Income: $405,409
- Taxes paid: $84,460
- Effective tax rate: 21%
- Nominal taxes owed: $120,967
- Percentage of nominal taxes paid: 70%
- Filed: Joint
- Income: $ 20,400,000
- Taxes paid: $5,100,000
- Effective tax rate: 25%
- Nominal taxes owed: $7,119,074
- Percentage of nominal taxes paid: 72%
- Filed: Joint
- Income: $4,200,000
- Taxes paid: $1,400,000
- Effective tax rate: 33%
- Nominal taxes owed: $1,449,074
- Percentage of nominal taxes paid: 97%
The
candidates all paid less than the average tax rate [2] for their 2007
taxes. McCain is the greatest tax cheat/smartest taxpayer, laying out
just 70% of the what the tables say he should owe. Clinton comes a
close second, paying just 72% of the nominal amount. Both Bush and
Obama paid nearly the full amount.
As with all things political, you can look at this two ways. Either McCain and Clinton are smart enough to find the deductions hidden in the tax code, so they should be praised and voted for. Or Bush and Obama are honest enough to only take those deductions that they know they have earned, which means that they should be praised and voted for. Of the two sets, the latter is probably closer to what the typical American pays [3].
In either case, it is interesting food for thought.
John
[1] "Should" meaning that they only have the standard deductions and only earned income. If Bush had earned his $719,274 as capital gains on stocks, then he would have been liable for only about half of what he paid in taxes as the current capital gains rate is 15%.
[2] Calculated using Moneychimp.
The average rate is the actual rate at which you pay taxes, as opposed
to the "marginal rate" which is the rate at which your highest level of
income is taxed. If you earned $100,000 last year, your first $7825 was
taxed at 10%, the next $24,025 would be taxed at 15%, the next $45,250
would be taxed at 25%, and the remaining $22,900 would be taxed at 28%,
so that the average rate would only be 22% even though the marginal
rate was 28%. Clear as mud, no? S'why CPAs make the big bucks... In
general, the higher your income, the closer you should come to paying
the marginal rate.
[3] How many of you have $125,461 in itemized deductions?
Last week, Noddy challenged me to write an essay on Civil Servants to parallel hers. Unfortunately, I came down with a cold, and so could not post it until today. I hope she will forgive the delay and that you will enjoy both posts.
"In a mature society, civil servant is semantically equal to civil master.”
Like all good satirists, Heinlein was telling a lie by the most effective method – he told the truth [1]. When he wrote those words in 1973, “big government” consisted of 14,139,000 civil servants (not counting the military); today, that number has risen to 21,039,000 [2,3]. And the reach of government has expanded past even Orwell’s wildest imaginings [4].Robert A. Heinlein
How has this happened? Not all at once, and not in large steps. Instead, it has been a thousand little creeping changes [5], imperceptible and innocuous as the rising tide. First, a strong central bureaucracy was developed. Then paralegislative powers were allocated to these unelected groups. Then the rights and privileges of the bureaucrats were strengthened and the ability of the average citizen to fight back was restricted. Soon after, the civil servants began passing laws and regulations that applied to everyone except themselves. Finally, they discovered that vast amounts of cash were floating around in hopes of “influencing” legislation.
Let’s take a look at each of these steps, and see where we went wrong and what we can do to fix things.
I. A strong central bureaucracy was developed.
No government can exist without a bureaucracy; it serves as a flywheel [6], keeping each new set of politicians from overstepping their bounds. And, generally speaking, the stronger the bureaucracy, the better it performs this function. However, there are two fundamental problems with this:
Because the bureaucracy is under the control of the Executive Branch, the senior members of each department (and many of the minor ones as well) “serve at the pleasure of the President”. Thus, if the President were to wake up one day and decide to fire everyone in the government whose first name began with “A”, it would be perfectly legal for him to do so [7]. Not necessarily smart, but definitely legal.
- The bureaucracy is almost entirely under the direct control of the Executive Branch, and
- The bureaucracy is not made up of disinterested parties; it is made up of people.
This becomes a problem when a President decides that factors other than those specifically related to the job at hand should be considered in decisions [8]. For example, when he (or his minions) decide that reports on climate change should be altered to reflect a political belief rather than scientific fact. Or when he (or his minions) decide that information on condom usage should be deleted from a government site on STDs. When this happens, the bureaucracy no longer serves the people; it serves a party.
And because the bureaucracy is made up of people who would like to continue working for the government (at least until they can get a job as a lobbyist), they get the message very quickly. “If you want to keep your job, work for the party in power” leads to a government of the party, by the party, and for the party. It was bad when FDR did it, it was bad when Boss Tweed did it, and it is still bad. Patronage means that our money is wasted paying for someone else’s political favors instead of building our nation.
II. Paralegislative powers were allocated to these unelected groups.
Patronage and political belief substituting for fact are bad enough, but there is something worse. Increasingly, legislators are deferring the hard choices to government and quasi-governmental groups. The Congress will pass laws such as the Clean Air Act, and then leave it to agencies such as the EPA to decide what parts they will enforce. Perhaps the most egregious example of this is the Taft-Sherman Anti-trust Act, which the Department of Justice used to bring Microsoft to court for misuse of their monopoly [9]. Despite the numerous legal successes against Microsoft and the prospect of a massive judgment against them, the Department of Justice reached a settlement that changed nothing – right after the new administration had taken over. Other examples include the treatment of oil companies and exemption of many groups from “onerous” environmental regulations.
Selective application is just one problem arising from this Pandora’s Box. Another is the difficulty in finding the regulations – and who to ask about them. In Miami, you must get the proper permits to do something as simple as changing the sliding glass doors on your home and risk a major fine for doing this without proper approval – and a licensed contractor. (Don’t even ask about opening a business; the list of forms is enough to induce catatonia.)
And then there is the very real problem that laws can be repealed, but regulations are forever (at least until the bureaucrats change their minds) [10]. As a result, something that was OK last week can be unlawful this week – and the bureaucracies place the burden of finding out about the changes on YOU. And, as any lawyer will tell you, ignorance of the law is not exculpatory; in other words, just because they didn’t tell you that hugging other people would result in jail time doesn’t mean that you can get away with it. It is the ultimate game of “Gotcha!” – and we’re it.
The consequences are not just abstract. One example of how this impacts the average family is in college costs. Did you ever wonder why it now takes most people five years to get a degree? It is because colleges have begun rewriting the requirements for graduation every three years; thus, the students are forced to take classes that were not required when they began [11]. This costs them an extra year in college, on average, and brings in an extra $10,000 per student for the university. At a university with 20,000 students, that an extra $50,000,000 each year, taken from student pocketbooks to support public school bureaucrats.
III. The rights and privileges of the bureaucrats were strengthened and the ability of the average citizen to fight back was restricted.
Though the senior management of government can be changed by a whim of the President, the central bureaucracy is less mutable. And the average citizen has no recourse at all when a bureaucrat targets him, especially if the civil servant’s actions are all passive [12]. It is exceptionally hard for a citizen to get a civil servant fired. Every year, there are horror stories of how IRS agents have abused their power over average citizen; similar accounts of abuse by police officers and Department of Homeland Safety personnel. Though physical abuse is perhaps the most horrific, these civil servants are also abusing our pocketbooks through waste, fraud, identity theft, and "asset forfeiture" that assumes you are guilty until proven innocent beyond a shadow of a doubt.
IV. The civil servants began passing laws and regulations that applied to everyone except themselves.
This should come as no surprise; as Lord Acton noted, “Power tends to corrupt; absolute power corrupts absolutely”. Give a group power to make the rules and immunity from being held accountable for their acts, and they will soon begin deciding that they are above the law. Only, because politicians know the value of appearance, they will make exceptions to the law so that they can claim to be following the legal requirements with a straight face.
What laws are civil servants exempt from? Essentially all of them. Members of Congress are not subject to OSHA regulations, to sexual discrimination claims, to copyright protections – heck, they didn’t even pay Social Security taxes until 1984 [13]! Some politicians are even shifting their stance from side to side to avoid complying with the laws and regulations put out by their brethren.
As a result, they are insulated from the effects of their laws. If you don’t have to worry about where your next meal is coming from, it is very easy to suggest that others eat cake when they have no bread. But if you are trying to make ends meet, even the slightest change in the system can shift you from prosperity to poverty [14].
V. The civil servants discovered that there was money in them thar bills.
Though corruption in government dates back at least to Hammurabi [15], it is only in the past few years that it has become big business. For centuries, legislators have been wined, dined, and bribed; however, today things have become institutionalized to an extent not seen since the days of Boss Tweed. For example, consider Fred Thompson, widely considered as the most likely dark-horse Republican Presidential candidate. He went from being a senator to being a lobbyist to being an actor – and now wants to become president. He is hardly alone. Civil servants regularly become lobbyists and lobbyists regularly go to work as staff for elected officials.
Public officials put up with it (heck, encourage it) because it means big money to them. In Pennsylvania, it meant an average of $1,400,000 per state senator. Imagine what the bids are for members of the US Congress! As for the office of the President, we already know what it goes for: a night in the Lincoln Bedroom sold for $100,000 under President G. W. Bush. Of course, he’s a piker compared to the Vice President, who gets an estimated $2,000,000 per year from his former oil company [16].
And companies pay those bucks because there are direct benefits. Look at Halliburton – it has mismanaged highly profitable no-bid contracts in Iraq, gotten billions in drilling subsidies, and continues to do business in Iran despite a long-standing ban on US corporate involvement there! Then there’s the cell phone companies, who lobby to prevent you from being able to move that iPhone from ATT over to T-Mobile. And the pharmaceutical companies that lobby to keep prices high and to prevent importing less expensive alternatives. And the agricultural lobbies that keep the price of sugar and milk higher than they would be in a free market. Name an industry, and they’ve got a lobbyist who is more interested in their bottom line than in your best interests.
What can we do?
There are some simple things that we can do to remind the servants that they work for us, and not the other way around.
First, and foremost, tell them when they do something that you don’t like. Call, write, and for God’s sake VISIT them if you are in DC. Or when they are in their home office. Come in large groups to remind them that it was your votes that put them into place. Think this doesn’t work? Remember the “Moral Majority”? That was exactly the battle plant that they followed to get their agenda through.
Second, whenever you get one of those form letters asking you to contribute to the party [17], only give money if the group has supported your interests. If they haven’t, then send them back a letter in that postage-paid envelope explaining that you won’t support them because they did something that you disagree with. And send another copy to the civil servants who are supposed to represent you.
Finally, pay attention [18]. There are too damn many yellow dog Democrats and red elephant Republicans out there. If your party isn’t supporting the legislation that you want and is passing laws that you find odious, then change parties. And don’t limit yourself to the “Big Two”. Remember the Bull Moose Party? Or the Reform Party? Both of these groups split off from the existing parties and had a sizeable effect on the elections; as a result, they terrified the parties into at least a modicum of reform. It may be time (and past) to give those civil servants yet another wake-up call – that we’re mad as hell, and we’re not going to take this anymore!
John
[1] As Mark Twain (another noted satirist) pointed out, there are three ways of telling a lie:
The last is the most powerful, as once folks have found out you told the truth and been called liar for it, they will be less likely to disbelieve you – which means that you can then tell the most amazing whoppers without fear of being caught.i) Contradict the truth
ii) Tell part of the truth
iii) Tell the whole truth
[2] Data from the US Census Bureau Compendium of Public Employment
[3] As a percentage of the labor pool, the value is actually lower than it was in 1973; it is now just 14.6% of the total workforce, down from 16.6% in 1973. However, the powers of these groups have expanded considerably so that more power rests in fewer hands.
[4] We’re talking Animal Farm meets 1984 here.
[5] Think about the story of the frog and the boiling water.
[6] When it isn’t a millstone, that is.
[7] This is where the firing of the US Attorneys was right; Bush did have the right to fire the attorneys. What he didn’t have the right to do was to fire them specifically because of their political party (as an earlier Supreme Court decision had established; amusingly, Branti v. Finkel was a case where Republicans had been fired by a Democrat). And trying to cover it up was just stupid.
[8] Are there times when this is necessary? Yes – when national security is at stake. But such cases should be limited and rare, not used to conceal every act of an executive and his underlings. And the need for such security should be something that can be proven in a court of law, not merely asserted by a group that has a proven track record of lying to cover up their misdeeds (i.e., all politicans).
[9] This is another one of those widely misunderstood bits in American law. There is no law against having a monopoly, only against using it to prevent others from competing. If I were to start up a new airline that used suborbital shuttles to move people faster than before, and drove every other airline into bankruptcy, there would be no law against it in the US. But if I then used my market dominance to prevent another suborbital shuttle business from starting, then it would be unlawful. Where Microsoft has walked on the wild side of legality has not been by creating a standard, but by preventing others from using it by forcing them into bankruptcy or by changing the standards without notice.
[10] The question of having too damn many laws on the books will be dealt with in another sermon.
[11] I speak from experience on this one. I had to fight to graduate under the rules that were in place when I started, even though the student manual clearly stated that those were the rules that would govern!
[12] This is because of John’s Law of Bureaucracy: “You are never punished for saying no.” Saying that a citizen cannot have something (even if it is something that the citizen has a legal right to, such as information and 911 aid) is a passive act that is, at best, overcautious; thus, it is difficult to prove malice and even harder to get redress. The corollary is: "You can be punished for saying yes." Given these two alternatives, guess which one most bureaucrats select?
[13] Perhaps this explains why they are so gay about spending Social Security funds instead of putting them into an interest-bearing account (or, God forbid, a single, large, passively-managed stock fund that would have increased the funds by more than 13000% {$100 to $13444.39} since the start of the SSA). Had they done this simple and obvious thing, then there would be no "Social Security crisis".
[14] Or, as Mr. Micawber would say, "Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
[15] There is an apocryphal account in cuneiform stating “Received of Larsa, 500 goats for changes in codex, signed Hammy-baby”.
[16] Halliburton once made $200,000,000 under Cheney’s direction by acquiring a company with an over-funded pension plan, converting the pension plan to “cash balance” and putting an absurdly low value on the balance, transferring the “excess” money to Halliburton’s coffers, then spinning off the company sans plan.
[17] Which would be unlawful for just about any other group – yet another example of a law that politicians want you to follow but can’t be bothered to obey themselves.
[18] Yes, this takes time that you could spend watching American Idol Rewind. But nobody ever said that progress was easy.
