Friday, May 31, 2013

Paying the wealthy on the backs of poor and middle-class families

The North Carolina legislature is now considering three different tax schemes that each increase taxes on poor and middle-class families while lowering taxes for corporations and the wealthiest families.

All three plans would expand the sales tax base and increase tax revenues from consumption. This would increase taxes for everyone but would disproportionately affect poor and middle-class households because they spend a higher proportion of their income on consumption.

All three plans lower taxes on corporate profits. Currently NC's corporate tax rate is close to the median for the country, and the proportion of tax revenue that comes from corporate income is similarly near the middle for the country.

All three plans also adopt flat proportional taxes on personal income that slash tax rates for households that receive more than $100,000 but also make changes that could make more of lower-income and elderly households' income taxable.

Two of the plans also eliminate taxes on multi-million dollar estates. Those same two plans would also require further cuts to government services, which would fall disproportionately on the poor.

Poor and middle-class households have suffered the most from the economic downturn. The Pew Research Center reports that from 2009 to 2011, households in the top 7 percent of the wealth distribution saw their wealth increase by 28 percent, while all other households saw their wealth decline by 4 percent. The Census Bureau reports that the share of income going to the top 20 percent of households passed 51 percent in 2011, up from about 50 percent at the start of the recession. Increasing the tax burden for poor and middle-income households compounds this misery.

Any tax reform is going to increase taxes for some people while reducing them for others. However, there are ways to reform and simplify taxes that are less harmful to the poor. For example, an expansion of the sales tax base could be coupled reductions in the sales tax rate. Reductions in personal income tax deductions and exemptions could be coupled with reductions in all rates, leaving the progressivity of income taxes in place.

Friday, May 10, 2013

NC Republicans hurting most to benefit a few

You have to ask yourself, who exactly does North Carolina's Republican legislature represent? They certainly don't represent the majority of NC households, if their grossly misnamed Tax Fairness Act is any guide.

The News & Observer got its hands on an analysis by the the legislature's Fiscal Research Division, which shows that even though the plan will reduce revenues overall, it will nevertheless result in higher taxes for most NC households.
The majority of taxpayers likely would see a tax increase after the plan is fully implemented, according to early long-term projections from legislative fiscal researchers who analyzed the potential legislation – not a tax break as Senate Republican leaders suggested when announcing the plan this week.

A taxpayer with a federal adjusted gross income below $51,000 could pay an average $100 to $200 more in the 2017 tax year. Based on current tax brackets, 2.3 million taxpayers would fit that category, according to the analysis, while 1.8 million taxpayers could expect an average $300 to $3,000 tax cut that year.
Enormous tax cuts for the wealthy few will be financed by higher taxes and slashed protections for the middle- and low-income majority.

Put simply, Sen. Phil Berger and the Republicans have simply stopped caring about who is hurt by their reactionary rampage through Raleigh.

Friday, May 3, 2013

What a difference a month makes

Last month's moaning and groaning about slowing job growth will and should be quickly forgotten. The latest national jobs report shows that the job market continues to improve.

This morning the Bureau of Labor Statistics (BLS) made its preliminary estimate that non-farm jobs increased by 165,000 in April on a seasonally-adjusted basis. As importantly, the BLS also reported that last month's preliminary estimate of job growth (the source of the aforementioned moaning and groaning) undershot the mark by 50,000 jobs -- instead of adding 88,000 jobs in March, the BLS now estimates that the U.S. gained 138,000 jobs. The BLS revised February's growth number even more from 268,000 to 332,000. The figures for March and April are still subject to revision, so there's a good chance that the final growth figures will be stronger still.

The headline seasonally-adjusted unemployment rate continued to inch down, reaching 7.5 percent. The most encouraging thing in the unemployment figures was that the lower unemployment rate resulted from growth in both the number of workers and the number of people in the labor force.

The economy is still battling strong headwinds, especially from the expiration of stimulus tax breaks and the decrease in spending from the sequester. Some of these headwinds show up in the job numbers themselves. Overall job growth occurred despite the loss of 11,000 public sector jobs last month. Overall, the public sector has shed 89,000 jobs since last year.

It's gratifying that the rest of the job market continues to plod forward, even under such trying circumstances.

Wednesday, May 1, 2013

Another accidental shooting

CNN is reporting another accidental shooting tragedy.
A Kentucky mother stepped outside of her home just for a few minutes, but it was long enough for her 5-year-old son to accidentally shoot his 2-year-old sister with the .22-caliber rifle he got for his birthday, state officials said.

Little Caroline Starks died Tuesday in Burkesville, in southern Kentucky, according to Cumberland County Coroner Gary White.

"The little Crickett rifle is a single-shot rifle and it has a child safety," White said of the weapon. "It's just a tragic situation."
It's hard to comprehend how a rifle, even the "little" Crickett rifle, would be appropriate for a 5-year-old. But Crickett marketing materials (pictures are shown below) encourage putting guns in the hands of even younger children.

The company also has testimonials that encourage giving the guns to small children. Two examples
Thank you for supporting the next generation of recreational shooters. My 4 1/2 year old daughter thought the "pink one" was far superior to a black synthetic stock,who am i to argue? I never would have thought that a pink rifle would be sitting in the rack in the gun room.

Just wanted to drop you a note, to let you know what a great product you offer. I just recently bought two Crickett .22's, one pink and one black. They are exceptionally accurate, and just the right size for my 5 and 7 year olds. They are awesome and we couldn't be happier. Thanks So Much!!!!!"