Tax Bites & Tasty Morsels

Federal employees earn, on average, $123,049 for salary and benefits, according to a recent Department of Commerce study. Meanwhile, private workers’ average compensation is $61,051. As federal workers double down on their private counterparts’ earnings, funded by our tax dollars, we are beginning to face the unpleasant reality that we live in a federal fiefdom.

When government workers can retire at age 50, (as do many peace officers), with retirement incomes equal to or greater than their working income, (many in excess of $150,000 per year) while private industry employees must work until age 62 just to collect Social Security, there is something very wrong in Oz.

Educators are another bunch whose retirements we ordinary citizens sponsor. One former Superintendent of Education for Placer County, Ca. receives a pension of $170,785 yearly. These outrageous pensions at the expense of the taxpayer are simply unsustainable.

Taxpayers, who fork out the money to support such luxurious and unsustainable pensions, are the peasant serfs, while government workers are the vassals and state and federal legislatures, along with Obama share the title of “feudal lord”.

Cost of Government Day: The average American worked the first 231 days of 2010 (more than 63 percent of the year) to pay for the cost of their respective state, local, and federal governments. This was 8 days later than 2009 and 32 days, (a full month) longer than 2008. This leaves a mere four and half months for Americans to provide for their own family expenses.
Something’s got to give.

With so many taxpayers unemployed and tax revenues in serious decline, I wouldn’t be counting on my pension if I were one of those vassals or feudal lords.

No one talks “tax” better than Arthur Laffer, and he succinctly states all the reasons why tax increases are nearly always a bad idea in his latest WSJ column, ” The Soak-the-Rich Catch 22 “.

Laffer details the historical truth about tax cuts and tax increases and their effect on the economy. He uses real economic data from the IRS to dispel the popular myth that tax cuts reduce government revenue, while tax increases pad the coffers. It’s pretty simple: cut taxes and tax receipts rise from high income earners. Raise taxes on the wealthy, and tax receipts skip town.

According to Laffer (and almost any rational person), higher taxes on the rich, in particular, result in fewer jobs, reduced output, decreased sales, and, oh yes, lower tax revenues! This is a road map to poverty.

Conversely, lower tax burdens propel the economy through private sector job creation, increased sales, consumer confidence, and augmented government tax receipts. This is a road map for prosperity.

If only we could get the government out of our way, we could get on with the business of running an effective and efficient economy.

If the city of Bell, California is an example of how taxpayer dollars are spent across the nation, it’s no wonder we have a deficit problem.

When the city manager of a town of 40,000 inhabitants earns nearly $800,000 in annual salary, while his assistant earns $376,000, the police chief $457,000 and the city council members upwards of $100,000 each, there is trouble in paradise.  You can’t even tax folks enough to keep up with these personnel costs, let alone  the costs of all the other necessary city upkeep and maintenance. Out of an annual $22 million budget, salaries like these take quite a toll on regular taxpaying citizens just trying to survive in a tough economy.

The city manager was on target to earn annual salary increases of 12 percent each of the next three years, and reportedly has been getting regular raises since being hired in 1993 at a starting salary of $72,000.

In Bell (situated on the outskirts of Los Angeles), roughly 17 percent of the citizens live in poverty. It is a bitter pill to swallow to see employees at City Hall bring in such unrealistically inflated salaries. This is why the Bell Association to Stop the Abuse (BASTA, meaning “enough” in Spanish) has spoken out. BASTA has threatened to recall the entire city council if members do not agree to slash their pay or resign.

Fortunately, Bell’s three top dogs all resigned, but what might this say about other cities and the lack of transparency? It is truly mind-boggling to see how citizens’ tax dollars are spent.