To read this article by the Caesar Rodney Institute, click HERE
Thursday, July 28, 2011
Tuesday, July 26, 2011
Widest Wealth Gap Between US Whites, Minorities
The wealth gaps between whites and minorities have grown to their widest levels since the U.S. government began tabulating them a quarter-century ago. The recession and uneven recovery have erased decades of minority gains, leaving whites on average with 20 times the net worth of blacks and 18 times that of Hispanics, according to an analysis of new Census data.
The analysis shows the racial and ethnic impact of the recent economic meltdown, which ravaged housing values and sent unemployment soaring. It also offers the most direct government evidence yet of the stark wealth divide, a disparity between predominantly younger minorities whose main asset is their home and older whites who are more likely to have 401(k) retirement accounts or other stock holdings.
"I am afraid that this pushes us back to what the Kerner Commission characterized as `two societies, separate and unequal,'" said Roderick Harrison, a former chief of racial statistics at the Census Bureau, referring to the 1960s presidential commission that examined U.S. race relations. "The great difference is that the second society has now become both black and Hispanic."
The median wealth of white U.S. households in 2009 was $113,149, compared to $6,325 for Hispanics and $5,677 for blacks, according to the analysis released Tuesday by the Pew Research Center. Those ratios, roughly 20 to 1 for blacks and 18 to 1 for Hispanics, far exceed the low mark of 7 to 1 for both groups reached in 1995, when the nation's economic expansion lifted many low-income groups to the middle class.
The white-black wealth gap also is the widest since census began tracking such data in 1984, when the ratio was roughly 12 to 1.
"What's pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African-Americans who bought homes in the last decade, because that was the American dream, are seeing big declines," said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in income inequality.
Stock holdings play an important role in the economic well-being of white households. Stock funds, IRA and Keogh accounts as well as 401(k) and savings accounts were responsible for 28 percent of whites' net worth, compared with 19 percent for blacks and 15 percent for Hispanics.
"There's a good chance the wealth gap will widen further," Smeeding said, citing the stalled housing market. "What we need to do is help lower-income people move up."
According to the Pew study, the housing boom of the early to mid 2000s particularly boosted the wealth of Hispanics, who were disproportionately employed in the thriving construction industry. Hispanics also were more likely to live and buy homes in states such as California, Florida, Nevada and Arizona, which were in the forefront of the real estate bubble, enjoying early gains in home values.
Those gains quickly shriveled in the housing collapse. After reaching a median wealth of $18,359 in 2005, the wealth of Hispanics _ who had derived nearly two-thirds of their net worth from home equity _ declined by 66 percent by 2009. Among blacks, who now have the highest unemployment rate at 16.2 percent, their household wealth fell 53 percent from $12,124 to $5,677.
In contrast, the median household wealth of whites dipped a modest 16 percent from $134,992 to $113,149, cushioned in part by a stock market recovery that began in mid-2009.
"The findings are a reminder, if one was needed, of what a large share of blacks and Hispanics live on the economic margins," said Paul Taylor, director of Pew Social & Demographic Trends. "When the economy tanked, they're the groups that took the heaviest blows."
The latest data come as President Barack Obama and congressional leaders face an Aug. 2 deadline to figure out a deal to cut deficits and raise the debt ceiling or risk seeing the U.S. default on its financial obligations. Democrats and Republicans have been wrangling over proposals that could cut trillions of dollars from programs such as the Medicare health plan, mainly for older Americans, and the government's retirement plan, Social Security; they also are divided over whether to bring in new tax revenue, such as by closing corporate tax loopholes or increasing taxes for the wealthy.
In a White House meeting last week, the NAACP, the National Association for the Advancement of Colored People, and other black groups urged Obama to resist deep cuts such as in housing assistance or safety net programs including Social Security and Medicaid, a medical program mainly for the poor and uninsured, saying it would disproportionately hurt urban areas with some of the highest rates of poverty and unemployment. The U.S. poverty rate currently stands at 14.3 percent, with the ranks of the working-age poor at the highest level since the 1960s. Some analysts believe the poverty rate will climb higher when new figures are released in September.
"Typically in recessions, minorities suffer from being last hired and first fired. They are likely to lose jobs more rapidly at the beginning of the recession, and are far slower to gain jobs as the economy recovers," said Harrison, who is now a sociologist at Howard University. "One suspects that blacks who lost jobs in the recession, or who have tried to help family members or relatives who did, have now spent whatever savings or other cashable assets they had."
Other findings:
_About 35 percent of black households and 31 percent of Hispanic households had zero or negative net worth in 2009, compared with 15 percent of white households. In 2005, the comparable shares were 29 percent for blacks, 23 percent for Hispanics and 11 percent for whites.
_Asians lost their top ranking to whites in median household wealth, dropping from $168,103 in 2005 to $78,066 in 2009. Similar to Hispanics, many Asians were concentrated in states like California that were hit hard by the housing downturn. More recent arrivals of new Asian immigrants, who tend to be poor, also pushed down their median wealth.
_Across all race and ethnic groups, the wealth gap between rich and poor widened. The share of wealth held by the top 10 percent of U.S. households increased from 49 percent in 2005 to 56 percent in 2009. The threshold for entry into the wealthiest top 10 percent, however, dipped lower: from $646,327 in 2005 to $598,435.
The numbers are based on the Census Bureau's Survey of Income and Program Participation, which sampled more than 36,000 households on wealth from September-December 2009. Census first began publishing wealth data from this survey, broken down by race and ethnicity, in 1984.
http://www.taiwannews.com.tw/etn/news_content.php?id=1663005
The analysis shows the racial and ethnic impact of the recent economic meltdown, which ravaged housing values and sent unemployment soaring. It also offers the most direct government evidence yet of the stark wealth divide, a disparity between predominantly younger minorities whose main asset is their home and older whites who are more likely to have 401(k) retirement accounts or other stock holdings.
"I am afraid that this pushes us back to what the Kerner Commission characterized as `two societies, separate and unequal,'" said Roderick Harrison, a former chief of racial statistics at the Census Bureau, referring to the 1960s presidential commission that examined U.S. race relations. "The great difference is that the second society has now become both black and Hispanic."
The median wealth of white U.S. households in 2009 was $113,149, compared to $6,325 for Hispanics and $5,677 for blacks, according to the analysis released Tuesday by the Pew Research Center. Those ratios, roughly 20 to 1 for blacks and 18 to 1 for Hispanics, far exceed the low mark of 7 to 1 for both groups reached in 1995, when the nation's economic expansion lifted many low-income groups to the middle class.
The white-black wealth gap also is the widest since census began tracking such data in 1984, when the ratio was roughly 12 to 1.
"What's pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African-Americans who bought homes in the last decade, because that was the American dream, are seeing big declines," said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in income inequality.
Stock holdings play an important role in the economic well-being of white households. Stock funds, IRA and Keogh accounts as well as 401(k) and savings accounts were responsible for 28 percent of whites' net worth, compared with 19 percent for blacks and 15 percent for Hispanics.
"There's a good chance the wealth gap will widen further," Smeeding said, citing the stalled housing market. "What we need to do is help lower-income people move up."
According to the Pew study, the housing boom of the early to mid 2000s particularly boosted the wealth of Hispanics, who were disproportionately employed in the thriving construction industry. Hispanics also were more likely to live and buy homes in states such as California, Florida, Nevada and Arizona, which were in the forefront of the real estate bubble, enjoying early gains in home values.
Those gains quickly shriveled in the housing collapse. After reaching a median wealth of $18,359 in 2005, the wealth of Hispanics _ who had derived nearly two-thirds of their net worth from home equity _ declined by 66 percent by 2009. Among blacks, who now have the highest unemployment rate at 16.2 percent, their household wealth fell 53 percent from $12,124 to $5,677.
In contrast, the median household wealth of whites dipped a modest 16 percent from $134,992 to $113,149, cushioned in part by a stock market recovery that began in mid-2009.
"The findings are a reminder, if one was needed, of what a large share of blacks and Hispanics live on the economic margins," said Paul Taylor, director of Pew Social & Demographic Trends. "When the economy tanked, they're the groups that took the heaviest blows."
The latest data come as President Barack Obama and congressional leaders face an Aug. 2 deadline to figure out a deal to cut deficits and raise the debt ceiling or risk seeing the U.S. default on its financial obligations. Democrats and Republicans have been wrangling over proposals that could cut trillions of dollars from programs such as the Medicare health plan, mainly for older Americans, and the government's retirement plan, Social Security; they also are divided over whether to bring in new tax revenue, such as by closing corporate tax loopholes or increasing taxes for the wealthy.
In a White House meeting last week, the NAACP, the National Association for the Advancement of Colored People, and other black groups urged Obama to resist deep cuts such as in housing assistance or safety net programs including Social Security and Medicaid, a medical program mainly for the poor and uninsured, saying it would disproportionately hurt urban areas with some of the highest rates of poverty and unemployment. The U.S. poverty rate currently stands at 14.3 percent, with the ranks of the working-age poor at the highest level since the 1960s. Some analysts believe the poverty rate will climb higher when new figures are released in September.
"Typically in recessions, minorities suffer from being last hired and first fired. They are likely to lose jobs more rapidly at the beginning of the recession, and are far slower to gain jobs as the economy recovers," said Harrison, who is now a sociologist at Howard University. "One suspects that blacks who lost jobs in the recession, or who have tried to help family members or relatives who did, have now spent whatever savings or other cashable assets they had."
Other findings:
_About 35 percent of black households and 31 percent of Hispanic households had zero or negative net worth in 2009, compared with 15 percent of white households. In 2005, the comparable shares were 29 percent for blacks, 23 percent for Hispanics and 11 percent for whites.
_Asians lost their top ranking to whites in median household wealth, dropping from $168,103 in 2005 to $78,066 in 2009. Similar to Hispanics, many Asians were concentrated in states like California that were hit hard by the housing downturn. More recent arrivals of new Asian immigrants, who tend to be poor, also pushed down their median wealth.
_Across all race and ethnic groups, the wealth gap between rich and poor widened. The share of wealth held by the top 10 percent of U.S. households increased from 49 percent in 2005 to 56 percent in 2009. The threshold for entry into the wealthiest top 10 percent, however, dipped lower: from $646,327 in 2005 to $598,435.
The numbers are based on the Census Bureau's Survey of Income and Program Participation, which sampled more than 36,000 households on wealth from September-December 2009. Census first began publishing wealth data from this survey, broken down by race and ethnicity, in 1984.
http://www.taiwannews.com.tw/etn/news_content.php?id=1663005
AP-GfK Poll: Worries about debt rising once again
WASHINGTON (AP) -- Just last fall, Americans were feeling better about their personal finances. Now they're starting to worry more about how they'll pay off debts as they feel the nation's economic recovery wobbling.
With Congress deadlocked over how to deal with the national debt, household debt is causing stress for nearly half the country, according to a new Associated Press-GfK poll. One in five adults worries about debt most or all of the time. If they bought something on a credit card in the past month, more than a third say they won't pay it off when the bill comes.
The increased stress represents a reversal from last fall's AP-GfK poll, which found increasing confidence about personal finances. Debt-related stress is up 17 percent from that November survey, bumping such worries back up to levels seen in 2009 and in the spring of last year.
"It's not that our debt is huge. It's just hard to make it, month to month," said Theresa Telford, 45, a teacher's aide raising four kids with her husband, a sheriff's deputy. "It seems like everything is going up, but wages aren't going up."
Telford is also nervous because she's watched so many people lose their jobs in her small town of Davenport, Wash., and some of her friends still can't find work. Although the recession officially ended in June 2009, Americans display little faith in a recovery hobbled by grinding unemployment, slow economic growth, volatile gasoline and food prices and political feuding over how to stem the skyrocketing national debt. Consumer confidence fell to a seven-month low in June in the Conference Board's survey.
"We're starting to be fearful again that things may fall apart," said Paul J. Lavrakas, a research psychologist and AP consultant who analyzed the survey. Lavrakas and other researchers have found that debt can be bad for the health as well as the wallet. Those suffering the most anxiety over their debt are at risk for stress-related illnesses, such as ulcers, depression or heart attacks.
The poll found that households earning more than $75,000 had the biggest increase in debt-related stress since November. But stress levels continue to be highest within the most vulnerable groups: households that have lost jobs, people with family incomes below $20,000, single parents, and adults without high school diplomas. Married moms and adults under 30 years old showed significantly more anxiety than in the fall.
In all, more than 40 million Americans are feeling serious stress over the money they owe, whether it's for credit cards, mortgages, car loans or other debts, the poll indicates.
It's a tough period for high school dance instructor James J. Moran of Shelton, Conn. He doesn't get paid during summer break, except for the occasional dancing or acting jobs he lands.
"For three months I scrape by and I can only afford to make the minimum payments on my credit cards," said Moran, who owes more than $5,000 on his cards and about $14,000 in student loans. "I put more toward the debts when I can, but when I can't that's when I really worry."
The news isn't all bleak. Although it ticked upward, the Debt Stress Index based on the AP-GfK poll came in at 29.2, still within the range considered moderately low. Most people say they are handling their credit cards well in lean times.
Nine out of 10 people with credit cards say they trust themselves to handle debt. Most say they use credit cards because they're more convenient than cash. About half say they charge only what they can afford to pay for at the end of the month.
"Am I going off and buying things right now? No," said Donald Doane, 53, of Duluth, Minn. Doane said he carries "a little debt but nothing I can't handle" on a low-interest credit card that he reserves for emergencies and big purchases.
A salesman for Savories Catering in Duluth, Minn., Doane tracks the economy by how much his customers spend on wedding receptions and office parties. "People are spending," he said, "it's just that they're being more frugal."
Americans have been borrowing less and saving more in response to the Great Recession and its aftermath. Credit card borrowing increased in May, only the second monthly gain since August 2008, according to the Federal Reserve's latest figures. The total is still down 18.5 percent from its peak in August 2008.
The AP-GfK poll put median credit card debt in June at $800, the same as in November. Average debt was down slightly from November at $3,200. About four in 10 people surveyed owe more than $1,000 in credit card debt. One in every 10 owes $10,000 or more.
Lavrakas said the poll provides a snapshot of the typical American who's seriously stressed by debt: a working parent, in his or her 30s or early 40s, who doesn't have a high school diploma and is raising a family on household income of less than $20,000.
Those reporting the highest stress levels were more likely than others to say they had debt due to medical bills, that their financial situation was "very poor," that they charge things they know they cannot pay off when the bill comes and that they don't trust themselves to manage their credit cards. They are pessimistic about the future, both because of their personal finances and the nation's.
"The most stressed people are at the lower financial tiers, and that's just the reality of their life," Lavrakas said. "The optimism that some of them may have had last fall didn't pan out. They've sunk into being pessimistic and they have good reason to be."
Troy Clawson, a disabled former construction worker in Felsenthal, Ark., said he has been worrying more about his debts - his mortgage and car payments, medical bills for himself and his wife, and store credit cards at Wal-Mart and an auto repair shop.
So Clawson, 60, is trying to be more cautious and avoid pulling out his credit cards. "I don't really like to," he said, "but sometimes it's necessary when you're in a bind."
The AP-GfK poll was conducted June 16-20 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cell phone interviews with 1,001 adults nationwide, including 715 who have credit cards. Results for the full sample have a margin of sampling error of plus or minus 4.1 percentage points.
http://hosted.ap.org/dynamic/stories/U/US_AP_GFK_POLL_STRESSING_OVER_DEBT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-07-25-14-04-39
With Congress deadlocked over how to deal with the national debt, household debt is causing stress for nearly half the country, according to a new Associated Press-GfK poll. One in five adults worries about debt most or all of the time. If they bought something on a credit card in the past month, more than a third say they won't pay it off when the bill comes.
The increased stress represents a reversal from last fall's AP-GfK poll, which found increasing confidence about personal finances. Debt-related stress is up 17 percent from that November survey, bumping such worries back up to levels seen in 2009 and in the spring of last year.
"It's not that our debt is huge. It's just hard to make it, month to month," said Theresa Telford, 45, a teacher's aide raising four kids with her husband, a sheriff's deputy. "It seems like everything is going up, but wages aren't going up."
Telford is also nervous because she's watched so many people lose their jobs in her small town of Davenport, Wash., and some of her friends still can't find work. Although the recession officially ended in June 2009, Americans display little faith in a recovery hobbled by grinding unemployment, slow economic growth, volatile gasoline and food prices and political feuding over how to stem the skyrocketing national debt. Consumer confidence fell to a seven-month low in June in the Conference Board's survey.
"We're starting to be fearful again that things may fall apart," said Paul J. Lavrakas, a research psychologist and AP consultant who analyzed the survey. Lavrakas and other researchers have found that debt can be bad for the health as well as the wallet. Those suffering the most anxiety over their debt are at risk for stress-related illnesses, such as ulcers, depression or heart attacks.
The poll found that households earning more than $75,000 had the biggest increase in debt-related stress since November. But stress levels continue to be highest within the most vulnerable groups: households that have lost jobs, people with family incomes below $20,000, single parents, and adults without high school diplomas. Married moms and adults under 30 years old showed significantly more anxiety than in the fall.
In all, more than 40 million Americans are feeling serious stress over the money they owe, whether it's for credit cards, mortgages, car loans or other debts, the poll indicates.
It's a tough period for high school dance instructor James J. Moran of Shelton, Conn. He doesn't get paid during summer break, except for the occasional dancing or acting jobs he lands.
"For three months I scrape by and I can only afford to make the minimum payments on my credit cards," said Moran, who owes more than $5,000 on his cards and about $14,000 in student loans. "I put more toward the debts when I can, but when I can't that's when I really worry."
The news isn't all bleak. Although it ticked upward, the Debt Stress Index based on the AP-GfK poll came in at 29.2, still within the range considered moderately low. Most people say they are handling their credit cards well in lean times.
Nine out of 10 people with credit cards say they trust themselves to handle debt. Most say they use credit cards because they're more convenient than cash. About half say they charge only what they can afford to pay for at the end of the month.
"Am I going off and buying things right now? No," said Donald Doane, 53, of Duluth, Minn. Doane said he carries "a little debt but nothing I can't handle" on a low-interest credit card that he reserves for emergencies and big purchases.
A salesman for Savories Catering in Duluth, Minn., Doane tracks the economy by how much his customers spend on wedding receptions and office parties. "People are spending," he said, "it's just that they're being more frugal."
Americans have been borrowing less and saving more in response to the Great Recession and its aftermath. Credit card borrowing increased in May, only the second monthly gain since August 2008, according to the Federal Reserve's latest figures. The total is still down 18.5 percent from its peak in August 2008.
The AP-GfK poll put median credit card debt in June at $800, the same as in November. Average debt was down slightly from November at $3,200. About four in 10 people surveyed owe more than $1,000 in credit card debt. One in every 10 owes $10,000 or more.
Lavrakas said the poll provides a snapshot of the typical American who's seriously stressed by debt: a working parent, in his or her 30s or early 40s, who doesn't have a high school diploma and is raising a family on household income of less than $20,000.
Those reporting the highest stress levels were more likely than others to say they had debt due to medical bills, that their financial situation was "very poor," that they charge things they know they cannot pay off when the bill comes and that they don't trust themselves to manage their credit cards. They are pessimistic about the future, both because of their personal finances and the nation's.
"The most stressed people are at the lower financial tiers, and that's just the reality of their life," Lavrakas said. "The optimism that some of them may have had last fall didn't pan out. They've sunk into being pessimistic and they have good reason to be."
Troy Clawson, a disabled former construction worker in Felsenthal, Ark., said he has been worrying more about his debts - his mortgage and car payments, medical bills for himself and his wife, and store credit cards at Wal-Mart and an auto repair shop.
So Clawson, 60, is trying to be more cautious and avoid pulling out his credit cards. "I don't really like to," he said, "but sometimes it's necessary when you're in a bind."
The AP-GfK poll was conducted June 16-20 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cell phone interviews with 1,001 adults nationwide, including 715 who have credit cards. Results for the full sample have a margin of sampling error of plus or minus 4.1 percentage points.
http://hosted.ap.org/dynamic/stories/U/US_AP_GFK_POLL_STRESSING_OVER_DEBT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-07-25-14-04-39
MILLOY: Show us the bodies, EPA
The House will soon vote to (slightly) rein in the Obama Environmental Protection Agency. But this much-needed baby step by Congress will only happen if Republicans have the knowledge and muster the courage to withstand a final bare-knuckles assault by EPA’s enviro allies.
The House Appropriations Committee passed last week the fiscal 2012 EPA budget that would cut the agency’s budget by $1.7 billion - 18 percent - and delay for one year several of its new and/or planned regulatory programs targeting coal-fired electric utilities. It’s hardly landmark legislation but it’s a start.
Troubled by the agency’s high-cost-for-imaginary benefit programs covering emissions of greenhouse gases, mercury, sulfur dioxide and nitrous oxides, the committee’s bill calls for a timeout on the EPA’s rules pending a study of their impacts.
But the EPA and its allies aren’t taking such reasonableness lying down. Leading their pushback is the Environmental Defense Fund (EDF), which is making utility giant American Electric Power (AEP) the whipping boy example for Republicans and businesses that dare question - let alone rise against - EPA oppression.
The EDF is running a billboard and TV ad campaign accusing AEP and, by extension, anyone else that opposes EPA overregulation, of pushing a “dirty air bill” that will kill 17,000 people per year in the name of “polluter profits.”
The TV ad for this theme features a young girl in a hospital bed supposedly having an asthma attack. She’s wearing a nebulizer face mask and chest compression device that is rhythmically but disturbingly squeezing the child, giving the appearance that she is in severe respiratory distress, by implication from air pollution.
But like the EPA’s 17,000-lives-saved statistical fabrication, the ad is a fake.
If you look closely at the girl, as opposed to what is being done to her, she is, in fact, calmly sitting up in bed and not in any respiratory distress whatsoever. The ad is a total put-on. Moreover, asthma attacks aren’t treated with chest-compression devices, which are instead more typically used for cardiopulmonary resuscitation.
The apparent reason the EDF used the chest compression device in the commercial was to fabricate pulsating drama for its false message that efforts to rein in the EPA threaten children’s health.
Another EDF commercial features a sonogram of a fetus with beating heart and a voiceover that asserts, “The developing fetus and young children are thought to be disproportionately affected by mercury exposure. …” The voiceover then asks, “How many lives will be damaged? How many lives is OK?” by AEP’s effort to block EPA regulation.
But there is no evidence that ambient levels of mercury or mercury emissions from U.S. power plants have harmed anyone. In any event, nature is responsible for the vast majority of mercury emissions (70 percent), while U.S. power plants are responsible for less than 1 percent of global emissions.
So what can Republicans and industry do to defend themselves from these groundless and scurrilous attack ads?
To paraphrase cinematic sports agent Jerry McGuire, “Show me the bodies.”
While that may sound harsh, given that the EPA is about to kill hundreds of thousands of jobs and cost our crippled economy countless billions of dollars, Republicans must demand some sort of proof that the alleged harms are indeed happening.
The EPA says air pollution kills tens of thousands of people annually. This is on a par with traffic accident fatalities. While we can identify traffic accident victims, air pollution victims are unknown, unidentified and as far as anyone can tell, figments of EPA’s statistical imagination.
It ought not to be too much to ask the EPA to produce some tangible evidence that air pollution is causing actual harm to real people. The EPA should have to demonstrate that its ever-tightening air quality and emissions standards are producing actual benefits.
Consider that the EPA and its enviro-buddies are essentially accusing coal-fired utilities of killing and injuring hundreds of thousands of people annually. Have you ever wondered why there are no class-action lawsuits against utilities for billions of dollars in damages?
Apparently, even trial lawyers have no confidence that EPA science holds up to scrutiny.
In the past two weeks, EPA chief Lisa Jackson and the chairman of EPA’s clean air advisory committee have both indicated that there is no limit to EPA’s clean air regulatory authority. In the name of public health, for example, the EPA could regulate ground-level ozone to below naturally occurring levels without regard to cost.
That situation, as well as what the EPA is doing today, are not what Congress intended when it amended the Clean Air Act in 1970, 1977 and 1990. We can no longer afford the EPA’s clean air charade. The EPA has no clothes - if only congressional Republicans would open their eyes and notice.
http://www.washingtontimes.com/news/2011/jul/20/show-us-the-bodies-epa/?page=2
The House Appropriations Committee passed last week the fiscal 2012 EPA budget that would cut the agency’s budget by $1.7 billion - 18 percent - and delay for one year several of its new and/or planned regulatory programs targeting coal-fired electric utilities. It’s hardly landmark legislation but it’s a start.
Troubled by the agency’s high-cost-for-imaginary benefit programs covering emissions of greenhouse gases, mercury, sulfur dioxide and nitrous oxides, the committee’s bill calls for a timeout on the EPA’s rules pending a study of their impacts.
But the EPA and its allies aren’t taking such reasonableness lying down. Leading their pushback is the Environmental Defense Fund (EDF), which is making utility giant American Electric Power (AEP) the whipping boy example for Republicans and businesses that dare question - let alone rise against - EPA oppression.
The EDF is running a billboard and TV ad campaign accusing AEP and, by extension, anyone else that opposes EPA overregulation, of pushing a “dirty air bill” that will kill 17,000 people per year in the name of “polluter profits.”
The TV ad for this theme features a young girl in a hospital bed supposedly having an asthma attack. She’s wearing a nebulizer face mask and chest compression device that is rhythmically but disturbingly squeezing the child, giving the appearance that she is in severe respiratory distress, by implication from air pollution.
But like the EPA’s 17,000-lives-saved statistical fabrication, the ad is a fake.
If you look closely at the girl, as opposed to what is being done to her, she is, in fact, calmly sitting up in bed and not in any respiratory distress whatsoever. The ad is a total put-on. Moreover, asthma attacks aren’t treated with chest-compression devices, which are instead more typically used for cardiopulmonary resuscitation.
The apparent reason the EDF used the chest compression device in the commercial was to fabricate pulsating drama for its false message that efforts to rein in the EPA threaten children’s health.
Another EDF commercial features a sonogram of a fetus with beating heart and a voiceover that asserts, “The developing fetus and young children are thought to be disproportionately affected by mercury exposure. …” The voiceover then asks, “How many lives will be damaged? How many lives is OK?” by AEP’s effort to block EPA regulation.
But there is no evidence that ambient levels of mercury or mercury emissions from U.S. power plants have harmed anyone. In any event, nature is responsible for the vast majority of mercury emissions (70 percent), while U.S. power plants are responsible for less than 1 percent of global emissions.
So what can Republicans and industry do to defend themselves from these groundless and scurrilous attack ads?
To paraphrase cinematic sports agent Jerry McGuire, “Show me the bodies.”
While that may sound harsh, given that the EPA is about to kill hundreds of thousands of jobs and cost our crippled economy countless billions of dollars, Republicans must demand some sort of proof that the alleged harms are indeed happening.
The EPA says air pollution kills tens of thousands of people annually. This is on a par with traffic accident fatalities. While we can identify traffic accident victims, air pollution victims are unknown, unidentified and as far as anyone can tell, figments of EPA’s statistical imagination.
It ought not to be too much to ask the EPA to produce some tangible evidence that air pollution is causing actual harm to real people. The EPA should have to demonstrate that its ever-tightening air quality and emissions standards are producing actual benefits.
Consider that the EPA and its enviro-buddies are essentially accusing coal-fired utilities of killing and injuring hundreds of thousands of people annually. Have you ever wondered why there are no class-action lawsuits against utilities for billions of dollars in damages?
Apparently, even trial lawyers have no confidence that EPA science holds up to scrutiny.
In the past two weeks, EPA chief Lisa Jackson and the chairman of EPA’s clean air advisory committee have both indicated that there is no limit to EPA’s clean air regulatory authority. In the name of public health, for example, the EPA could regulate ground-level ozone to below naturally occurring levels without regard to cost.
That situation, as well as what the EPA is doing today, are not what Congress intended when it amended the Clean Air Act in 1970, 1977 and 1990. We can no longer afford the EPA’s clean air charade. The EPA has no clothes - if only congressional Republicans would open their eyes and notice.
http://www.washingtontimes.com/news/2011/jul/20/show-us-the-bodies-epa/?page=2
Wednesday, July 20, 2011
How Even Scholars Missed 90 Years of Tax-Cut History
Second Of Three Parts
The arguments of the proponents and opponents of tax-rate reductions have been arguments about two fundamentally different things:
(1) The distribution of existing incomes and existing tax liabilities.
(2) Incentives to increase incomes by reducing tax rates, so as to get individuals and institutions to take their money out of tax shelters and invest it in the economy.
Proponents and opponents of tax-rate reductions not only had different arguments, they were arguments about very different things, and the two arguments largely went past each other untouched.
Empirical evidence on what happened to the economy in the wake of those tax cuts in four different administrations over a span of more than 80 years has also been largely ignored by those opposed to what they call "tax cuts for the rich."
Confusion between reducing tax rates on individuals and reducing tax revenues received by the government has run through much of these discussions over these years.
Famed historian Arthur M. Schlesinger Jr., for example, said that although Andrew Mellon, secretary of the treasury from 1921 to 1932, advocated balancing the budget and paying off the national debt, he "inconsistently" sought "reduction in tax rates."
Nor was Schlesinger the only highly regarded historian to perpetuate economic confusion between tax rates and tax revenues. Today, widely used textbooks by various well-known historians have continued to misstate what was advocated in the 1920s and what the actual consequences were.
According to the textbook "These United States" by Irwin Unger, Mellon, "a rich Pittsburgh industrialist," persuaded Congress to "reduce income tax rates at the upper-income levels while leaving those at the bottom untouched."
Thus "Mellon won further victories for his drive to shift more of the tax burden from the high-income earners to the middle and wage-earning classes."
But hard data show that, in fact, both the amount and the proportion of taxes paid by those whose net income was no higher than $25,000 went down between 1921 and 1929, while both the amount and the proportion of taxes paid by those whose net incomes were between $50,000 and $100,000 went up — and the amount and proportion of taxes paid by those whose net incomes were over $100,000 went up even more sharply.
Another widely used textbook, co-authorized by a number of distinguished historians, two of whom won Pulitzer Prizes, said of Mellon:
"It was better, he argued, to place the burden of taxes on lower-income groups" and that a "share of tax-free profits of the rich, Mellon reassured the country, would ultimately trickle down to the middle- and lower-income groups in the form of wages and salaries."
What Mellon actually said was that tax policy "must lessen, so far as possible, the burden of taxation on those least able to bear it." He therefore proposed sharper percentage cuts in tax rates at the lower-income levels — and that was done.
Mellon also proposed eliminating federal taxes on movie tickets, because such taxes were paid by "the great bulk of the people, whose main source of recreation is attending the movies in the neighborhood of their homes." In short, Mellon advocated the direct opposite of the policies attributed to him.
The very idea that profits "trickle down" to workers depicts the economic sequence of events in the opposite order from that in the real world. Workers must first be hired and paid before there is any output produced to sell for a profit, and independently of whether that output subsequently sells for a profit or at a loss.
With investments, whether they lead to a profit or a loss can often be determined only years later, and workers have to be paid in the meantime, rather than waiting for profits to "trickle down" to them.
The real effect of tax-rate reductions is to make the future prospects of profit look more favorable, leading to more current investments that generate more current economic activity and more jobs.
Those who attribute a trickle-down theory to others are attributing their own misconception to others — including a highly successful businessman like Andrew Mellon — as well as distorting both the arguments used and the hard facts about what actually happened after the recommended policies were put into effect.
There is no need to presume that the scholars who wrote these history textbooks were deliberately lying, in order to protect a vision. They may simply have relied on a peer consensus so widely held and so often repeated as to be seen as "well-known facts" requiring no serious re-examination.
The results show how unreliable peer consensus can be, even when it is a peer consensus of highly intellectual people, if those people share a very similar vision of the world and treat its conclusions as axioms rather than as hypotheses that need to be checked against facts.
These history textbooks may also reflect the economic illiteracy of even leading scholars outside the field of economics, who nevertheless insist on reaching conclusions on economic issues.
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=578785&p=1
The arguments of the proponents and opponents of tax-rate reductions have been arguments about two fundamentally different things:
(1) The distribution of existing incomes and existing tax liabilities.
(2) Incentives to increase incomes by reducing tax rates, so as to get individuals and institutions to take their money out of tax shelters and invest it in the economy.
Proponents and opponents of tax-rate reductions not only had different arguments, they were arguments about very different things, and the two arguments largely went past each other untouched.
Empirical evidence on what happened to the economy in the wake of those tax cuts in four different administrations over a span of more than 80 years has also been largely ignored by those opposed to what they call "tax cuts for the rich."
Confusion between reducing tax rates on individuals and reducing tax revenues received by the government has run through much of these discussions over these years.
Famed historian Arthur M. Schlesinger Jr., for example, said that although Andrew Mellon, secretary of the treasury from 1921 to 1932, advocated balancing the budget and paying off the national debt, he "inconsistently" sought "reduction in tax rates."
Nor was Schlesinger the only highly regarded historian to perpetuate economic confusion between tax rates and tax revenues. Today, widely used textbooks by various well-known historians have continued to misstate what was advocated in the 1920s and what the actual consequences were.
According to the textbook "These United States" by Irwin Unger, Mellon, "a rich Pittsburgh industrialist," persuaded Congress to "reduce income tax rates at the upper-income levels while leaving those at the bottom untouched."
Thus "Mellon won further victories for his drive to shift more of the tax burden from the high-income earners to the middle and wage-earning classes."
But hard data show that, in fact, both the amount and the proportion of taxes paid by those whose net income was no higher than $25,000 went down between 1921 and 1929, while both the amount and the proportion of taxes paid by those whose net incomes were between $50,000 and $100,000 went up — and the amount and proportion of taxes paid by those whose net incomes were over $100,000 went up even more sharply.
Another widely used textbook, co-authorized by a number of distinguished historians, two of whom won Pulitzer Prizes, said of Mellon:
"It was better, he argued, to place the burden of taxes on lower-income groups" and that a "share of tax-free profits of the rich, Mellon reassured the country, would ultimately trickle down to the middle- and lower-income groups in the form of wages and salaries."
What Mellon actually said was that tax policy "must lessen, so far as possible, the burden of taxation on those least able to bear it." He therefore proposed sharper percentage cuts in tax rates at the lower-income levels — and that was done.
Mellon also proposed eliminating federal taxes on movie tickets, because such taxes were paid by "the great bulk of the people, whose main source of recreation is attending the movies in the neighborhood of their homes." In short, Mellon advocated the direct opposite of the policies attributed to him.
The very idea that profits "trickle down" to workers depicts the economic sequence of events in the opposite order from that in the real world. Workers must first be hired and paid before there is any output produced to sell for a profit, and independently of whether that output subsequently sells for a profit or at a loss.
With investments, whether they lead to a profit or a loss can often be determined only years later, and workers have to be paid in the meantime, rather than waiting for profits to "trickle down" to them.
The real effect of tax-rate reductions is to make the future prospects of profit look more favorable, leading to more current investments that generate more current economic activity and more jobs.
Those who attribute a trickle-down theory to others are attributing their own misconception to others — including a highly successful businessman like Andrew Mellon — as well as distorting both the arguments used and the hard facts about what actually happened after the recommended policies were put into effect.
There is no need to presume that the scholars who wrote these history textbooks were deliberately lying, in order to protect a vision. They may simply have relied on a peer consensus so widely held and so often repeated as to be seen as "well-known facts" requiring no serious re-examination.
The results show how unreliable peer consensus can be, even when it is a peer consensus of highly intellectual people, if those people share a very similar vision of the world and treat its conclusions as axioms rather than as hypotheses that need to be checked against facts.
These history textbooks may also reflect the economic illiteracy of even leading scholars outside the field of economics, who nevertheless insist on reaching conclusions on economic issues.
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=578785&p=1
Tuesday, July 19, 2011
Our Biggest Challenge And Highest Priority: JOBS
Tom Donohue
President and CEO, U.S. Chamber of Commerce
The 26 foot tall banner that stretches across the front of the U.S. Chamber of Commerce headquarters in Washington, D.C., spells out our nation’s biggest challenge and our highest priority in one word—J-O-B-S. That banner has served as a reminder to us and to all of Washington for nearly 15 months where our focus must be.
But over that same time period, we’ve seen the economy sputter. The June jobs report showed a discouraging rise in unemployment—9.2%. It’s more than 16% when you include part-timers who can’t find full-time work and those who have dropped out of the workforce altogether. A new survey released by the Chamber shows that 64% of small business executives say that they are not expecting to add to their payrolls in the next year. Another 12% plan to cut jobs.
That’s the bad news. The good news is that the fundamental can-do spirit of the American people hasn’t changed—neither has its free enterprise principles. We saw that firsthand at the Chamber’s second annual Jobs Summit on July 12, bringing together businesses large and small to brainstorm what it’s going to take to keep and create jobs and to turn around the economy.
The Chamber believes that stronger and faster economic growth is the best way to successfully put Americans back to work. For the past two years, however, we’ve treated the symptoms with few results. We must clear away government impediments and the resulting uncertainty that has strangled businesses, stifled our economy’s ability to grow, and slowed job creation. With government out of the way and the principles of free enterprise driving growth, we can deliver more customers for businesses, more revenues for government, and, most importantly, more jobs for Americans.
How do we do that? We must increase domestic energy production and reinvest in our nation’s crumbling transportation, energy, and water infrastructure. We must expand trade to send more American goods to customers across the globe, starting with ratification of free trade agreements with Colombia, Korea, and Panama. Regulatory burdens that hamstring American businesses must be eliminated so we can bring certainty back to the markets. And we must make long-term investments in our workforce, in our capital markets, and in technology innovations that will keep us globally competitive.
America has strong demographics, abundant natural resources, the world’s most productive workers, and a long history of picking ourselves up when we are down. We can do it again—and we must do it again to ensure our future prosperity.
President and CEO, U.S. Chamber of Commerce
The 26 foot tall banner that stretches across the front of the U.S. Chamber of Commerce headquarters in Washington, D.C., spells out our nation’s biggest challenge and our highest priority in one word—J-O-B-S. That banner has served as a reminder to us and to all of Washington for nearly 15 months where our focus must be.
But over that same time period, we’ve seen the economy sputter. The June jobs report showed a discouraging rise in unemployment—9.2%. It’s more than 16% when you include part-timers who can’t find full-time work and those who have dropped out of the workforce altogether. A new survey released by the Chamber shows that 64% of small business executives say that they are not expecting to add to their payrolls in the next year. Another 12% plan to cut jobs.
That’s the bad news. The good news is that the fundamental can-do spirit of the American people hasn’t changed—neither has its free enterprise principles. We saw that firsthand at the Chamber’s second annual Jobs Summit on July 12, bringing together businesses large and small to brainstorm what it’s going to take to keep and create jobs and to turn around the economy.
The Chamber believes that stronger and faster economic growth is the best way to successfully put Americans back to work. For the past two years, however, we’ve treated the symptoms with few results. We must clear away government impediments and the resulting uncertainty that has strangled businesses, stifled our economy’s ability to grow, and slowed job creation. With government out of the way and the principles of free enterprise driving growth, we can deliver more customers for businesses, more revenues for government, and, most importantly, more jobs for Americans.
How do we do that? We must increase domestic energy production and reinvest in our nation’s crumbling transportation, energy, and water infrastructure. We must expand trade to send more American goods to customers across the globe, starting with ratification of free trade agreements with Colombia, Korea, and Panama. Regulatory burdens that hamstring American businesses must be eliminated so we can bring certainty back to the markets. And we must make long-term investments in our workforce, in our capital markets, and in technology innovations that will keep us globally competitive.
America has strong demographics, abundant natural resources, the world’s most productive workers, and a long history of picking ourselves up when we are down. We can do it again—and we must do it again to ensure our future prosperity.
Modern Poverty Includes AC and Xbox
When Americans think of poverty, we tend to picture people who can’t adequately shelter, clothe, and feed themselves or their families.
When the Census Bureau defines “poverty,” though, it winds up painting more than 40 million Americans — one in seven — as “poor.”
Census officials continue to grossly exaggerate the numbers of the poor, creating a false picture in the public mind of widespread material deprivation, writes Heritage Foundation senior research fellow Robert Rector in a new paper.
“Most news stories on poverty feature homeless families, people living in crumbling shacks, or lines of the downtrodden eating in soup kitchens,” Rector says. “The actual living conditions of America’s poor are far different from these images.”
Congress is tying itself in knots figuring out how to cut spending and bring down a $14 trillion national debt. Lawmakers might well take a much closer look at the nearly a trillion dollars spent each year on welfare even though many recipients aren’t what the typical American would recognize as poor and in need of government assistance.
What is poverty? Americans might well be surprised to learn from other government data that the overwhelming majority of those defined as “poor” by the Census Bureau were well-housed and adequately fed even in the recession year 2009. About 4 percent of them did temporarily become homeless.
Data from the Department of Energy and other agencies show that the average poor family, as defined by Census officials:
● Lives in a home that is in good repair, not crowded, and equipped with air conditioning, clothes washer and dryer, and cable or satellite TV service.
● Prepares meals in a kitchen with a refrigerator, coffee maker and microwave as well as oven and stove.
● Enjoys two color TVs, a DVD player, VCR and — if children are there — an Xbox, PlayStation, or other video game system.
● Had enough money in the past year to meet essential needs, including adequate food and medical care.
Rather than report such detailed surveys, Rector and co-author Rachel Sheffield write, the media “amplified” the Census Bureau’s annual misrepresentation of poverty over the past 40 years. News reports routinely suggest that poor Americans typically are homeless and hungry — and U.S. foes and rivals such as Iran, China, and Russia are delighted to report the same.
“Regrettably, most discussions of poverty in the U.S. rely on sensationalism, exaggeration, and misinformation,” Rector says. “But an effective anti-poverty policy must be based on an accurate assessment of actual living conditions and the causes of deprivation.”
http://www.nationalreview.com/corner/272081/modern-poverty-includes-ac-and-xbox-ken-mcintyre
When the Census Bureau defines “poverty,” though, it winds up painting more than 40 million Americans — one in seven — as “poor.”
Census officials continue to grossly exaggerate the numbers of the poor, creating a false picture in the public mind of widespread material deprivation, writes Heritage Foundation senior research fellow Robert Rector in a new paper.
“Most news stories on poverty feature homeless families, people living in crumbling shacks, or lines of the downtrodden eating in soup kitchens,” Rector says. “The actual living conditions of America’s poor are far different from these images.”
Congress is tying itself in knots figuring out how to cut spending and bring down a $14 trillion national debt. Lawmakers might well take a much closer look at the nearly a trillion dollars spent each year on welfare even though many recipients aren’t what the typical American would recognize as poor and in need of government assistance.
What is poverty? Americans might well be surprised to learn from other government data that the overwhelming majority of those defined as “poor” by the Census Bureau were well-housed and adequately fed even in the recession year 2009. About 4 percent of them did temporarily become homeless.
Data from the Department of Energy and other agencies show that the average poor family, as defined by Census officials:
● Lives in a home that is in good repair, not crowded, and equipped with air conditioning, clothes washer and dryer, and cable or satellite TV service.
● Prepares meals in a kitchen with a refrigerator, coffee maker and microwave as well as oven and stove.
● Enjoys two color TVs, a DVD player, VCR and — if children are there — an Xbox, PlayStation, or other video game system.
● Had enough money in the past year to meet essential needs, including adequate food and medical care.
Rather than report such detailed surveys, Rector and co-author Rachel Sheffield write, the media “amplified” the Census Bureau’s annual misrepresentation of poverty over the past 40 years. News reports routinely suggest that poor Americans typically are homeless and hungry — and U.S. foes and rivals such as Iran, China, and Russia are delighted to report the same.
“Regrettably, most discussions of poverty in the U.S. rely on sensationalism, exaggeration, and misinformation,” Rector says. “But an effective anti-poverty policy must be based on an accurate assessment of actual living conditions and the causes of deprivation.”
http://www.nationalreview.com/corner/272081/modern-poverty-includes-ac-and-xbox-ken-mcintyre
Spending will kill, not save, our recovery
Voters are right to think our addiction to federal deficit spending is killing our economy. A thorough new study from Carmen Reinhart of the University of Maryland and Kenneth Rogoff of Harvard University takes a look at the relationships among rising debt, inflation and economic growth for 44 developed and developing countries. The findings bode poorly for a spending-crazy Washington.
From 1946 through 2009, growth of developed countries (including the United States) stood at an annual rate of just shy of 4 percent when debt was no greater than 30 percent of gross domestic product. The picture gets bleaker for those countries holding debt above 30 but below 90 percent -- economic growth slowed down but still hovered around 3 percent to 3.5 percent per year. When debt rose to over 90 percent of GDP, average growth went negative. Reinhart and Rogoff found that when this worst-case scenario occurs in the U.S., economic growth rates go negative and the inflation rate goes to above 5.5 percent. According to the Heritage Foundation's Bill Beach, the International Monetary Fund and the Congressional Budget Office both predict U.S. sovereign debt is fast approaching 100 percent of GDP.
There's never been a better time for President Obama to put an end to the idea that he may be the next President Carter. He can head off inflation by taming federal spending and working with Congress to cut programs. And once that's done, he can cut taxes to stimulate the economy. Sadly, he won't. Obama sent a letter last week to leaders of the G-20, airing concerns over the decision of European leaders to start imposing austerity measures: "We should reaffirm our unity of purpose to provide the policy support necessary to keep economic growth strong."
Unity of purpose is the problem. For Greece and Spain to face financial disaster, politicians first had to give monopolistic unions lavish pensions and a hearty social welfare state. Austerity measures were the hard-bought, politically unpopular solution, so much so that protests against the measures turned to riots.
Congress passed rules earlier this year to prevent itself from spending money it doesn't have. But the same majority Democrats who voted for Pay-Go simply override those rules whenever they have to pass an actual spending bill. And on Saturday, Obama ripped opponents of his second stimulus, saying that they are endangering the jobs and unemployment benefits of millions of Americans. It's time to face reality and start cutting spending.
http://washingtonexaminer.com/opinion/editorials/spending-will-kill-not-save-our-recovery
From 1946 through 2009, growth of developed countries (including the United States) stood at an annual rate of just shy of 4 percent when debt was no greater than 30 percent of gross domestic product. The picture gets bleaker for those countries holding debt above 30 but below 90 percent -- economic growth slowed down but still hovered around 3 percent to 3.5 percent per year. When debt rose to over 90 percent of GDP, average growth went negative. Reinhart and Rogoff found that when this worst-case scenario occurs in the U.S., economic growth rates go negative and the inflation rate goes to above 5.5 percent. According to the Heritage Foundation's Bill Beach, the International Monetary Fund and the Congressional Budget Office both predict U.S. sovereign debt is fast approaching 100 percent of GDP.
There's never been a better time for President Obama to put an end to the idea that he may be the next President Carter. He can head off inflation by taming federal spending and working with Congress to cut programs. And once that's done, he can cut taxes to stimulate the economy. Sadly, he won't. Obama sent a letter last week to leaders of the G-20, airing concerns over the decision of European leaders to start imposing austerity measures: "We should reaffirm our unity of purpose to provide the policy support necessary to keep economic growth strong."
Unity of purpose is the problem. For Greece and Spain to face financial disaster, politicians first had to give monopolistic unions lavish pensions and a hearty social welfare state. Austerity measures were the hard-bought, politically unpopular solution, so much so that protests against the measures turned to riots.
Congress passed rules earlier this year to prevent itself from spending money it doesn't have. But the same majority Democrats who voted for Pay-Go simply override those rules whenever they have to pass an actual spending bill. And on Saturday, Obama ripped opponents of his second stimulus, saying that they are endangering the jobs and unemployment benefits of millions of Americans. It's time to face reality and start cutting spending.
http://washingtonexaminer.com/opinion/editorials/spending-will-kill-not-save-our-recovery
Thursday, July 14, 2011
Geithner says hard times to continue for many
WASHINGTON (AP) — Treasury Secretary Timothy Geithner (GYT'-nur) says many Americans will face hard times for a long time to come.
He says President Barack Obama rescued the United States from a second Great Depression and will keep working to strengthen the economy. But Geithner says will be some time before many people feel like the country is recovering.
Geithner tells NBC's "Meet the Press" that it's a very tough economy. He says that for a lot of people "it's going to feel very hard, harder than anything they've experienced in their lifetime now, for a long time to come."
http://news.yahoo.com/geithner-says-hard-times-continue-many-150523958.html
EPA rule seeks to curb long-distance air pollution
Power plants would have to reduce sulfur dioxide and nitrogen oxide emissions
By Timothy B. Wheeler, The Baltimore Sun
In a sweeping move aimed at curbing long-distance air pollution that afflicts the health of 240 million Americans — including Marylanders — the Environmental Protection Agency is ordering power plants across much of the eastern United States to sharply curtail emissions.
The complete article can be viewed at:
http://www.baltimoresun.com/health/bs-gr-air-pollution-rule-20110707,0,2033988.story
By Timothy B. Wheeler, The Baltimore Sun
In a sweeping move aimed at curbing long-distance air pollution that afflicts the health of 240 million Americans — including Marylanders — the Environmental Protection Agency is ordering power plants across much of the eastern United States to sharply curtail emissions.
The complete article can be viewed at:
http://www.baltimoresun.com/health/bs-gr-air-pollution-rule-20110707,0,2033988.story
Thursday, July 7, 2011
Chesapeake Bay rules rile farmers, local officials
Over 40,000 U.S. water bodies have been identified as impaired. The federal clean water acts then demands that a TMDL (Total Maximum Daily Load) has to be developed in an attempt to improve them.
In most cases, we're not talking about human health. Instead, the problem is excess nutrients that causes algae blooms and eventually lack of oxygen in summer months.
Nutrients are both good and necessary in reasonable quantities. The environmentalists insist that only tiny quantities be allowed. It's hard not to believe that social engineering plays some part.
The question is, how many will ever improve enough to no longer be considered "impaired?" We're going to be watching and will let you know.
Chesapeake Bay rules rile farmers, local officials
State officials looking to clean up the Chesapeake Bay are weighing a series of new restrictions on how and when farmers can fertilize their fields — and on when municipal sewage treatment plants can spread their sludge on farmland.
Draft regulations drawn up by the Maryland Department of Agriculture are drawing fire from farmers and local officials, who say the limits being proposed are onerous, costly and unwarranted. But one scientist said they are backed by research and needed to reduce the pollution fouling the bay.
The rules, which have yet to be formally proposed, would, among other things, curtail the practice of fertilizing grain crops that are planted in the fall. They would also require farmers to keep livestock and fertilizer from 10 feet to 35 feet back from streams, ditches and ponds. And they would bar wintertime spreading of animal manure or sewage sludge, unless it's injected or worked into the soil to keep it from washing off.
Agriculture Secretary Earl F. "Buddy" Hance said the regulations have been under development for the past year to help Maryland comply with the bay pollution "diet" established by the U.S. Environmental Protection Agency. The six states that drain into the Chesapeake are being required to reduce nitrogen, phosphorus and sediment getting into the water by 20 percent to 25 percent by 2025.
But representatives of the state's growers say the restrictions could drive more of them out of business, particularly dairy and livestock farmers.
"This aspect of Maryland's pollution diet will end up starving our farming community," Sen. Barry Glassman, a Harford County Republican, said. In a news release, he called it another example of the O'Malley administration's "war on rural Maryland," on top of proposals to restrict development using septic systems and to raise tolls on bridges, tunnels and highways.
"In the last 20 years we've lost half our dairy farms in the state," Glassman said in an interview. 'You can imagine what the extra cost of these regulations would be."
Valerie Connelly, director of government relations for the Maryland Farm Bureau, called the draft regulations "hugely problematic" and said they would make it impossible for some to farm.
The proposal to limit fertilizing of grain crops planted in the fall is meant to reduce the amount of nitrogen and phosphorus washing off fields in winter and early spring. The state has budgeted more than $16 million to pay farmers to plant "cover crops" in the fall, which would soak up any nutrients left in the fields after the main crop has been harvested. But some farmers also plant grains in the fall for sale the next spring, and often fertilize those fields in the belief it would ensure a more abundant harvest.
Research done at the University of Maryland, though, shows that farmers can get the same yield on crops planted in the fall if they wait until spring to fertilize when there's less risk of it washing into nearby waterways.
But Connelly said the farm bureau thinks more study is needed before imposing that restriction.
"We're not saying the research is wrong," she said, "but we're saying there are farmers who get a result when they use fall fertilizer."
Farmers also question other provisions limiting when they can apply manure to their fields and requiring them to leave 10- to 35-foot setbacks from water.
"The farm community is viewing it as making it more and more difficult to raise livestock in the state of Maryland,'' Connelly said.
While state and federal funds are available to pay for up to 87.5 percent of the costs of putting up fence to keep livestock out of streams and to provide watering systems for farm animals, Glassman said some farmers can't afford to pay any more right now, and they feel put upon to do more to clean up the bay.
"We feel like we're already doing our part," said Glassman, who says he raises maybe a dozen purebred sheep. "Farming's on the wane," he added. "We just feel like we're carrying a heavier load than everyone else."
But Russell Brinsfield, executive director of the University of Maryland's Center for Agro-Ecology near Queenstown, said the proposed curbs are generally warranted. He called it a "bold move" by the state to propose changing the "nutrient management" regulations, and said he's not surprised they're getting "substantial blowback."
"We've done the easy things," he said, to limit farm runoff. "Now we're doing things that are going to have to be a little painful."
Brinsfield, also a farmer, defended the research showing little need to fertilize fall grain crops, saying it's "pretty conclusive." He also predicted that the change would save the state money it's now paying farmers, at the rate of $25 an acre, to plant crops in the fall that they intend to harvest for sale in the spring. Pure "cover crops," which aren't fertilized, are killed back in the spring with herbicide to provide nutrients for the next crop that's planted.
He also defended the stream setback requirements, saying that even though livestock dropping manure in streams is not a huge source of the nutrient pollution fouling the bay, "It's just not a wise thing to do."
"[Speaking] as a scientist, they all make sense," Brinsfield said of the draft rules. "Now whether you've got the political will … that's a whole different debate."
Farmers wouldn't be the only ones affected by the draft rules. The draft regulation would force an end by 2016 to spreading sewage sludge on farm fields in winter and impose other limits on its application to land other times of year.
Operators of sewage treatment plants said the limits would effectively bar them from putting sewage sludge on farm fields most of the year, forcing them to build costly storage facilities, dispose of it in landfill space or truck it out of state. Many of the state's counties and municipalities contract to have the treated sludge from their sewage plants trucked away and spread as fertilizer on croplands.
Anne Arundel County, for instance, estimates it would have to spend $30 million to build a facility large enough to hold all the sludge its sewage plants generate in winter, according to a letter from the Maryland Association of Municipal Wastewater Authorities. While some might be disposed of in landfills, those facilities can't accommodate all that's generated, the group says.
Association President Julie Pippel argued that the restriction is unwarranted, because state-financed upgrades of the largest sewage plants are reducing the nutrient content of the sludge.
Hance acknowledged that there were "flaws in the language" of the draft rules that are leading some farmers to conclude, wrongly, that they wouldn't be allowed to put horses, cows and other livestock out to pasture in the winter. He said state agriculture officials will correct and clarify such issues and weigh feedback before deciding what regulations to go forward with.
The rules also would have to be scrutinized by a joint legislative committee before being formally proposed.
Hance said many of the restrictions under consideration would not take effect for up to five years, giving farmers time to plan for them and adjust. As he often does, the agriculture secretary said farmers have already taken many steps voluntarily to reduce pollution from their fields and pasture. "But in this new age of [pollution diets], goals and deadlines," he added, "we're just trying to put in place a plan that helps the community reach its goals."
In most cases, we're not talking about human health. Instead, the problem is excess nutrients that causes algae blooms and eventually lack of oxygen in summer months.
Nutrients are both good and necessary in reasonable quantities. The environmentalists insist that only tiny quantities be allowed. It's hard not to believe that social engineering plays some part.
The question is, how many will ever improve enough to no longer be considered "impaired?" We're going to be watching and will let you know.
Chesapeake Bay rules rile farmers, local officials
State officials looking to clean up the Chesapeake Bay are weighing a series of new restrictions on how and when farmers can fertilize their fields — and on when municipal sewage treatment plants can spread their sludge on farmland.
Draft regulations drawn up by the Maryland Department of Agriculture are drawing fire from farmers and local officials, who say the limits being proposed are onerous, costly and unwarranted. But one scientist said they are backed by research and needed to reduce the pollution fouling the bay.
The rules, which have yet to be formally proposed, would, among other things, curtail the practice of fertilizing grain crops that are planted in the fall. They would also require farmers to keep livestock and fertilizer from 10 feet to 35 feet back from streams, ditches and ponds. And they would bar wintertime spreading of animal manure or sewage sludge, unless it's injected or worked into the soil to keep it from washing off.
Agriculture Secretary Earl F. "Buddy" Hance said the regulations have been under development for the past year to help Maryland comply with the bay pollution "diet" established by the U.S. Environmental Protection Agency. The six states that drain into the Chesapeake are being required to reduce nitrogen, phosphorus and sediment getting into the water by 20 percent to 25 percent by 2025.
But representatives of the state's growers say the restrictions could drive more of them out of business, particularly dairy and livestock farmers.
"This aspect of Maryland's pollution diet will end up starving our farming community," Sen. Barry Glassman, a Harford County Republican, said. In a news release, he called it another example of the O'Malley administration's "war on rural Maryland," on top of proposals to restrict development using septic systems and to raise tolls on bridges, tunnels and highways.
"In the last 20 years we've lost half our dairy farms in the state," Glassman said in an interview. 'You can imagine what the extra cost of these regulations would be."
Valerie Connelly, director of government relations for the Maryland Farm Bureau, called the draft regulations "hugely problematic" and said they would make it impossible for some to farm.
The proposal to limit fertilizing of grain crops planted in the fall is meant to reduce the amount of nitrogen and phosphorus washing off fields in winter and early spring. The state has budgeted more than $16 million to pay farmers to plant "cover crops" in the fall, which would soak up any nutrients left in the fields after the main crop has been harvested. But some farmers also plant grains in the fall for sale the next spring, and often fertilize those fields in the belief it would ensure a more abundant harvest.
Research done at the University of Maryland, though, shows that farmers can get the same yield on crops planted in the fall if they wait until spring to fertilize when there's less risk of it washing into nearby waterways.
But Connelly said the farm bureau thinks more study is needed before imposing that restriction.
"We're not saying the research is wrong," she said, "but we're saying there are farmers who get a result when they use fall fertilizer."
Farmers also question other provisions limiting when they can apply manure to their fields and requiring them to leave 10- to 35-foot setbacks from water.
"The farm community is viewing it as making it more and more difficult to raise livestock in the state of Maryland,'' Connelly said.
While state and federal funds are available to pay for up to 87.5 percent of the costs of putting up fence to keep livestock out of streams and to provide watering systems for farm animals, Glassman said some farmers can't afford to pay any more right now, and they feel put upon to do more to clean up the bay.
"We feel like we're already doing our part," said Glassman, who says he raises maybe a dozen purebred sheep. "Farming's on the wane," he added. "We just feel like we're carrying a heavier load than everyone else."
But Russell Brinsfield, executive director of the University of Maryland's Center for Agro-Ecology near Queenstown, said the proposed curbs are generally warranted. He called it a "bold move" by the state to propose changing the "nutrient management" regulations, and said he's not surprised they're getting "substantial blowback."
"We've done the easy things," he said, to limit farm runoff. "Now we're doing things that are going to have to be a little painful."
Brinsfield, also a farmer, defended the research showing little need to fertilize fall grain crops, saying it's "pretty conclusive." He also predicted that the change would save the state money it's now paying farmers, at the rate of $25 an acre, to plant crops in the fall that they intend to harvest for sale in the spring. Pure "cover crops," which aren't fertilized, are killed back in the spring with herbicide to provide nutrients for the next crop that's planted.
He also defended the stream setback requirements, saying that even though livestock dropping manure in streams is not a huge source of the nutrient pollution fouling the bay, "It's just not a wise thing to do."
"[Speaking] as a scientist, they all make sense," Brinsfield said of the draft rules. "Now whether you've got the political will … that's a whole different debate."
Farmers wouldn't be the only ones affected by the draft rules. The draft regulation would force an end by 2016 to spreading sewage sludge on farm fields in winter and impose other limits on its application to land other times of year.
Operators of sewage treatment plants said the limits would effectively bar them from putting sewage sludge on farm fields most of the year, forcing them to build costly storage facilities, dispose of it in landfill space or truck it out of state. Many of the state's counties and municipalities contract to have the treated sludge from their sewage plants trucked away and spread as fertilizer on croplands.
Anne Arundel County, for instance, estimates it would have to spend $30 million to build a facility large enough to hold all the sludge its sewage plants generate in winter, according to a letter from the Maryland Association of Municipal Wastewater Authorities. While some might be disposed of in landfills, those facilities can't accommodate all that's generated, the group says.
Association President Julie Pippel argued that the restriction is unwarranted, because state-financed upgrades of the largest sewage plants are reducing the nutrient content of the sludge.
Hance acknowledged that there were "flaws in the language" of the draft rules that are leading some farmers to conclude, wrongly, that they wouldn't be allowed to put horses, cows and other livestock out to pasture in the winter. He said state agriculture officials will correct and clarify such issues and weigh feedback before deciding what regulations to go forward with.
The rules also would have to be scrutinized by a joint legislative committee before being formally proposed.
Hance said many of the restrictions under consideration would not take effect for up to five years, giving farmers time to plan for them and adjust. As he often does, the agriculture secretary said farmers have already taken many steps voluntarily to reduce pollution from their fields and pasture. "But in this new age of [pollution diets], goals and deadlines," he added, "we're just trying to put in place a plan that helps the community reach its goals."
Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job
When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.
The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.
In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.
Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.
Again, this is the verdict of Obama’s own Council of Economic Advisors, which is about as much of a home-field ruling as anyone could ever ask for. In truth, it’s quite possible that by borrowing an amount greater than the regular defense budget or the annual cost of Medicare, and then spending it mostly on Democratic constituencies rather than in a manner genuinely designed to stimulate the economy, Obama’s “stimulus” has actually undermined the economy’s recovery — while leaving us (thus far) $666 billion deeper in debt.
The actual employment numbers from the administration’s own Bureau of Labor Statistics show that the unemployment rate was 7.3 percent when the “stimulus” was being debated. It has since risen to 9.1 percent. Meanwhile, the national debt at the end of 2008, when Obama was poised to take office, was $9.986 trillion (see Table S-9). It’s now $14.467 trillion — and counting.
All sides agree on these incriminating numbers — and now they also appear to agree on this important point: The economy would now be generating job growth at a faster rate if the Democrats hadn’t passed the “stimulus.”
http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html
The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.
In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.
Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.
Again, this is the verdict of Obama’s own Council of Economic Advisors, which is about as much of a home-field ruling as anyone could ever ask for. In truth, it’s quite possible that by borrowing an amount greater than the regular defense budget or the annual cost of Medicare, and then spending it mostly on Democratic constituencies rather than in a manner genuinely designed to stimulate the economy, Obama’s “stimulus” has actually undermined the economy’s recovery — while leaving us (thus far) $666 billion deeper in debt.
The actual employment numbers from the administration’s own Bureau of Labor Statistics show that the unemployment rate was 7.3 percent when the “stimulus” was being debated. It has since risen to 9.1 percent. Meanwhile, the national debt at the end of 2008, when Obama was poised to take office, was $9.986 trillion (see Table S-9). It’s now $14.467 trillion — and counting.
All sides agree on these incriminating numbers — and now they also appear to agree on this important point: The economy would now be generating job growth at a faster rate if the Democrats hadn’t passed the “stimulus.”
http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html
See just how abusive government can be.
George Pappas says he felt under attack the minute the state’s sales tax auditor walked through the door of his Forestview Restaurant in the Town of Lancaster.
“He was just ruthless,” Pappas said.
The auditor, according to the restaurateur, appeared to have presumed Pappas was skimming money and only was seeking some way to prove it.
Though Pappas said he was able to produce all his books, records and tapes — cash register reports that itemize each day’s sales — some copies of paper sales checks for individual sales made over the previous three years were missing.
“Do you think with a thousand people coming through my doors, a couple of checks aren’t going to go missing?” Pappas asked.
Sometimes, someone rips a check out of a pad to jot down a note or a phone number. Sometimes servers accidentally go home with the guest check pads in their aprons. Sometimes they get splashed with grease or water.
But the absence of some paper guest checks meant the auditor was able to declare Pappas had “inadequate records.” That opened the door to presuming Pappas had dodged taxes and to estimating a bill for what Pappas owed.
The estimate — $250,000 — means that tax authorities had concluded that Pappas had stolen or hidden $3 million in revenue.
“If I had that kind of money, would I have debt? Wouldn’t I be living in a palace?” Pappas asked. “I’ve been working just to pay lawyers for the last six years. I can barely pay my bills. I’m living on a line of credit.”
Pappas, who will bring his case before the state’s tax appeals tribunal in September, has spent $145,000 on legal bills since his first state audit six years ago.
Michael Hallac was in the middle of renovating his Clarence Dairy Queen franchise when what he calls his “nightmare” with state tax authorities began.
Like most bars and restaurants in the state, Dairy Queen uses electronic point-of-sales systems rather than old-fashioned paper checks. But even though he had met stringent record-keeping requirements and oversight set by the Dairy Queen Corp., the absence of those paper checks opened the door for an auditor to estimate a bill of “several thousand dollars” in unpaid taxes.
He now has hooked up journal printers to every cash register to produce individual sales checks that, with today’s technology, wouldn’t otherwise be created.
The fate of the owner of one small pizzeria hangs in the balance. Though he said he is barely scratching out a living, auditors used the
same “inadequate records” claim to estimate a tax bill that, with penalties and fees, will approach $30,000. If the amount — which he is appealing — stands, it will put him out of business.
Bar and restaurant owners repeat the same story: In a climate of fear and intimidation, auditors are using unfair methods to calculate imaginary sales tax.
Instead of revising tax laws written well before the digital age, tax enforcers are exploiting them to close budget gaps and justify their own salaries, critics allege.
“It’s like ‘The Sopranos,’ but they have a badge,” said the pizzeria owner, who asked not to be named for fear of retribution. “It’s extortion.”
The state itself has admitted it aims to review every business to make sure it is paying its fair share of sales tax. It has hired 330 new auditors with the goal of raising $220 million per year.
Claims follow story
But the state’s taxpayer advocate said great strides have been made to make the process fairer and keep auditors in line. After an article in The Buffalo News detailing claims by restaurant owners who believed they were unfairly targeted, the advocate’s office was flooded by calls from restaurateurs with similar stories.
“Clearly, improvements had to be made,” said Jack Trachtenberg, deputy commissioner and taxpayer rights advocate with the state Department of Taxation and Finance.
Some major sticking points, he said, have been resolved.
Statewide, auditors have gone back to class for retraining on the proper way to conduct audits. Auditors now are required to use business records for audit evaluations even if they would be ruled “technically inadequate” by paper era standards. Estimating a tax bill using other methods, such as comparing a bar’s price markups to national averages or comparing one day’s business with the same calendar day on a previous year, should be used only as a last resort.
“The rules can be very strict and cause people unintentional slip-ups,” he said. “That shouldn’t mean we rush to dismiss records and rush into estimating. If a company has substantive records, we should use them.”
If a business owner truly has insufficient records for a complete audit, auditors now are required to use several methods to estimate the amount owed. Even then, if the owner can show evidence of why the estimate is incorrect, auditors must be ready to make adjustments, taking into account such things as a restaurant’s size, location, prices and hours.
The department also put together an extensive bulletin for the food and beverage industry, posting specifics about what records owners need to keep and outlining exactly what adequate records mean. That definition, however, still includes paper sales checks.
The state also is working with the makers of point-of-sales systems to include mechanisms in cash registers that would assure tax enforcers that unethical business owners looking to cover up tax evasion cannot manipulate those records. Arguments for requiring paper sales checks include lack of trust in electronic records.
Other than litigation, taxpayers have been able to contest unfair auditing practices only through the Bureau of Conciliation and Mediation Services. But mediators sometimes had a tendency to side with auditors rather than taxpayers.
“I raised the issue early on that the conciliatory process was not working properly,” Trachtenberg said. “Kevin Law, who was appointed director of the [mediation services] has made a lot of changes.”
Over the past six months, the system has been revamped to ensure that mediators are not beholden to auditors.
But what about the reputation many auditors in Western New York have as bullies?
“I hope that’s not happening. But if it is, we need to hear from [business owners],” Trachtenberg said. “I know some people are afraid [of retribution], but if we don’t know about it, we can’t do anything about it.”
The state has mailed business owners the names of managers and supervisors to whom they can make complaints.
Business owners also are urged to contact the taxpayer advocate’s office if they have a problem with an auditor, the audit or estimation methods. Complaints can be kept confidential at the owner’s request.
Trachtenberg — who notes that he reports to the tax commissioner, not the enforcement office and so can remain impartial — insists the results speak for themselves.
Last year, he said, the advocate’s office took in 1,921 complaints from restaurant owners. Roughly 68 percent were resolved in the taxpayer’s favor, with some or all of the relief they requested being granted.
Owners finally triumph
The Buffalo Tap Room & Grill in the Town of Tonawanda — which, despite detailed records dating back to 1984, was slapped with a$330,000 tax bill last year — eventually triumphed. The bill was dismissed, with owners Dave Panaro and Dennis Nettina paying nothing.
Hallac admitted no wrongdoing at his Dairy Queen, but settled and paid a few thousand dollars through his mediation hearing, just to get things over with. Of course, now that opens him up to state and federal income tax bills, because that few thousand dollars will be considered undeclared income.
Panaro and Nettina have led the fight against unethical tax collection practices, urging business owners to band together and leaning on lawmakers to stand up for small businesses.
That does not win back the time and money they spent fighting their own battles. And it doesn’t restore their health to what it was before the state’s hammer came down. But they hope it will spare other companies similar ordeals.
And despite the reforms Trachtenberg says are being made, the voice mail boxes of sales tax compliance consultants such as David Gross continue to fill up with messages from teary, terrified clients.
Still, the state insists progress is being made.
“Clearly, audits could have been done better,” Trachtenberg said. “And we’re working to assure they’re done better going forward.”
http://www.buffalonews.com/business/local-business/article476514.ece
“He was just ruthless,” Pappas said.
The auditor, according to the restaurateur, appeared to have presumed Pappas was skimming money and only was seeking some way to prove it.
Though Pappas said he was able to produce all his books, records and tapes — cash register reports that itemize each day’s sales — some copies of paper sales checks for individual sales made over the previous three years were missing.
“Do you think with a thousand people coming through my doors, a couple of checks aren’t going to go missing?” Pappas asked.
Sometimes, someone rips a check out of a pad to jot down a note or a phone number. Sometimes servers accidentally go home with the guest check pads in their aprons. Sometimes they get splashed with grease or water.
But the absence of some paper guest checks meant the auditor was able to declare Pappas had “inadequate records.” That opened the door to presuming Pappas had dodged taxes and to estimating a bill for what Pappas owed.
The estimate — $250,000 — means that tax authorities had concluded that Pappas had stolen or hidden $3 million in revenue.
“If I had that kind of money, would I have debt? Wouldn’t I be living in a palace?” Pappas asked. “I’ve been working just to pay lawyers for the last six years. I can barely pay my bills. I’m living on a line of credit.”
Pappas, who will bring his case before the state’s tax appeals tribunal in September, has spent $145,000 on legal bills since his first state audit six years ago.
Michael Hallac was in the middle of renovating his Clarence Dairy Queen franchise when what he calls his “nightmare” with state tax authorities began.
Like most bars and restaurants in the state, Dairy Queen uses electronic point-of-sales systems rather than old-fashioned paper checks. But even though he had met stringent record-keeping requirements and oversight set by the Dairy Queen Corp., the absence of those paper checks opened the door for an auditor to estimate a bill of “several thousand dollars” in unpaid taxes.
He now has hooked up journal printers to every cash register to produce individual sales checks that, with today’s technology, wouldn’t otherwise be created.
The fate of the owner of one small pizzeria hangs in the balance. Though he said he is barely scratching out a living, auditors used the
same “inadequate records” claim to estimate a tax bill that, with penalties and fees, will approach $30,000. If the amount — which he is appealing — stands, it will put him out of business.
Bar and restaurant owners repeat the same story: In a climate of fear and intimidation, auditors are using unfair methods to calculate imaginary sales tax.
Instead of revising tax laws written well before the digital age, tax enforcers are exploiting them to close budget gaps and justify their own salaries, critics allege.
“It’s like ‘The Sopranos,’ but they have a badge,” said the pizzeria owner, who asked not to be named for fear of retribution. “It’s extortion.”
The state itself has admitted it aims to review every business to make sure it is paying its fair share of sales tax. It has hired 330 new auditors with the goal of raising $220 million per year.
Claims follow story
But the state’s taxpayer advocate said great strides have been made to make the process fairer and keep auditors in line. After an article in The Buffalo News detailing claims by restaurant owners who believed they were unfairly targeted, the advocate’s office was flooded by calls from restaurateurs with similar stories.
“Clearly, improvements had to be made,” said Jack Trachtenberg, deputy commissioner and taxpayer rights advocate with the state Department of Taxation and Finance.
Some major sticking points, he said, have been resolved.
Statewide, auditors have gone back to class for retraining on the proper way to conduct audits. Auditors now are required to use business records for audit evaluations even if they would be ruled “technically inadequate” by paper era standards. Estimating a tax bill using other methods, such as comparing a bar’s price markups to national averages or comparing one day’s business with the same calendar day on a previous year, should be used only as a last resort.
“The rules can be very strict and cause people unintentional slip-ups,” he said. “That shouldn’t mean we rush to dismiss records and rush into estimating. If a company has substantive records, we should use them.”
If a business owner truly has insufficient records for a complete audit, auditors now are required to use several methods to estimate the amount owed. Even then, if the owner can show evidence of why the estimate is incorrect, auditors must be ready to make adjustments, taking into account such things as a restaurant’s size, location, prices and hours.
The department also put together an extensive bulletin for the food and beverage industry, posting specifics about what records owners need to keep and outlining exactly what adequate records mean. That definition, however, still includes paper sales checks.
The state also is working with the makers of point-of-sales systems to include mechanisms in cash registers that would assure tax enforcers that unethical business owners looking to cover up tax evasion cannot manipulate those records. Arguments for requiring paper sales checks include lack of trust in electronic records.
Other than litigation, taxpayers have been able to contest unfair auditing practices only through the Bureau of Conciliation and Mediation Services. But mediators sometimes had a tendency to side with auditors rather than taxpayers.
“I raised the issue early on that the conciliatory process was not working properly,” Trachtenberg said. “Kevin Law, who was appointed director of the [mediation services] has made a lot of changes.”
Over the past six months, the system has been revamped to ensure that mediators are not beholden to auditors.
But what about the reputation many auditors in Western New York have as bullies?
“I hope that’s not happening. But if it is, we need to hear from [business owners],” Trachtenberg said. “I know some people are afraid [of retribution], but if we don’t know about it, we can’t do anything about it.”
The state has mailed business owners the names of managers and supervisors to whom they can make complaints.
Business owners also are urged to contact the taxpayer advocate’s office if they have a problem with an auditor, the audit or estimation methods. Complaints can be kept confidential at the owner’s request.
Trachtenberg — who notes that he reports to the tax commissioner, not the enforcement office and so can remain impartial — insists the results speak for themselves.
Last year, he said, the advocate’s office took in 1,921 complaints from restaurant owners. Roughly 68 percent were resolved in the taxpayer’s favor, with some or all of the relief they requested being granted.
Owners finally triumph
The Buffalo Tap Room & Grill in the Town of Tonawanda — which, despite detailed records dating back to 1984, was slapped with a$330,000 tax bill last year — eventually triumphed. The bill was dismissed, with owners Dave Panaro and Dennis Nettina paying nothing.
Hallac admitted no wrongdoing at his Dairy Queen, but settled and paid a few thousand dollars through his mediation hearing, just to get things over with. Of course, now that opens him up to state and federal income tax bills, because that few thousand dollars will be considered undeclared income.
Panaro and Nettina have led the fight against unethical tax collection practices, urging business owners to band together and leaning on lawmakers to stand up for small businesses.
That does not win back the time and money they spent fighting their own battles. And it doesn’t restore their health to what it was before the state’s hammer came down. But they hope it will spare other companies similar ordeals.
And despite the reforms Trachtenberg says are being made, the voice mail boxes of sales tax compliance consultants such as David Gross continue to fill up with messages from teary, terrified clients.
Still, the state insists progress is being made.
“Clearly, audits could have been done better,” Trachtenberg said. “And we’re working to assure they’re done better going forward.”
http://www.buffalonews.com/business/local-business/article476514.ece
Saturday, July 2, 2011
Is Democracy Viable?
Nuclear weapons in the hands of the world's leading sponsor of international terrorism might seem to be something that would sober up even the most giddy members of the chattering class. But that chilling prospect cannot seem to compete for attention with cheap behavior by an immature Congressman, infatuated with himself.
A society that cannot or will not focus on matters of life and death is a society whose survival as a free nation is at least questionable. Hard as it may be to conceive how the kind of world that one has been used to, and taken for granted, can come to an end, it can happen in the lifetime of today's generation.
Those who founded the United States of America were keenly aware that they were making a radical departure in the kinds of governments under which human beings had lived over the centuries -- and that its success was by no means guaranteed. Monarchies in Europe had lasted for centuries and the Chinese dynasties for thousands of years. But a democratic republic was something else.
While the convention that was writing the Constitution of the United States was still in session, a lady asked Benjamin Franklin what the delegation was creating. "A republic, madam," he said, "if you can keep it."
In the middle of the next century, Abraham Lincoln still posed it as a question whether "government of the people, by the people and for the people shall not perish from the earth." Years earlier, Lincoln had warned of the dangers to a free society from its own designing power-seekers -- and how only the vigilance, wisdom and dedication of the public could preserve their freedom.
But, today, few people seem to see such dangers, either internally or internationally.
A recent poll showed that nearly half the American public believes that the government should redistribute wealth. That so many people are so willing to blithely put such an enormous and dangerous arbitrary power in the hands of politicians -- risking their own freedom, in hopes of getting what someone else has -- is a painful sign of how far many citizens and voters fall short of what is needed to preserve a democratic republic.
The ease with which people with wealth can ship it overseas electronically, or put it in tax shelters at home, means that raising the tax rate on wealthy people is not going to bring in the kind of tax revenue that would enable wealth redistribution to provide the bonanza that some people are expecting.
In other words, people who are willing to give government more arbitrary power can give up their birthright of freedom without even getting the mess of pottage. Worse yet, they can give up their children's and their grandchildren's birthright of freedom.
Free and democratic societies have existed for a relatively short time, as history is measured -- and their staying power has always been open to question. So much depends on the wisdom of the voters that the franchise was always limited, in one way or another, so that voting would be confined to those with a stake in the viability and progress of the country, and the knowledge to cast their vote intelligently.
In our own times, however, voting has been seen as just one of the many "rights" to which everyone is supposed to be entitled. The emphasis has been on the voter, rather than on the momentous consequences of elections for the nation today and for generations yet unborn.
To those who see voting as more or less just a matter of self-expression, almost a recreational activity, there is no need to inform themselves on both sides of the issues before voting, much less sit down and think beyond the rhetoric to the realities that the rhetoric conceals.
Careless voters may be easily swayed by charisma and rhetoric, oblivious to the monumental disasters created around the world by 20th century leaders with charisma and rhetoric, such as Hitler.
Voters like this represent a danger of terminal frivolity for freedom and democracy.
http://townhall.com/columnists/thomassowell/2011/06/29/is_democracy_viable/page/2
A society that cannot or will not focus on matters of life and death is a society whose survival as a free nation is at least questionable. Hard as it may be to conceive how the kind of world that one has been used to, and taken for granted, can come to an end, it can happen in the lifetime of today's generation.
Those who founded the United States of America were keenly aware that they were making a radical departure in the kinds of governments under which human beings had lived over the centuries -- and that its success was by no means guaranteed. Monarchies in Europe had lasted for centuries and the Chinese dynasties for thousands of years. But a democratic republic was something else.
While the convention that was writing the Constitution of the United States was still in session, a lady asked Benjamin Franklin what the delegation was creating. "A republic, madam," he said, "if you can keep it."
In the middle of the next century, Abraham Lincoln still posed it as a question whether "government of the people, by the people and for the people shall not perish from the earth." Years earlier, Lincoln had warned of the dangers to a free society from its own designing power-seekers -- and how only the vigilance, wisdom and dedication of the public could preserve their freedom.
But, today, few people seem to see such dangers, either internally or internationally.
A recent poll showed that nearly half the American public believes that the government should redistribute wealth. That so many people are so willing to blithely put such an enormous and dangerous arbitrary power in the hands of politicians -- risking their own freedom, in hopes of getting what someone else has -- is a painful sign of how far many citizens and voters fall short of what is needed to preserve a democratic republic.
The ease with which people with wealth can ship it overseas electronically, or put it in tax shelters at home, means that raising the tax rate on wealthy people is not going to bring in the kind of tax revenue that would enable wealth redistribution to provide the bonanza that some people are expecting.
In other words, people who are willing to give government more arbitrary power can give up their birthright of freedom without even getting the mess of pottage. Worse yet, they can give up their children's and their grandchildren's birthright of freedom.
Free and democratic societies have existed for a relatively short time, as history is measured -- and their staying power has always been open to question. So much depends on the wisdom of the voters that the franchise was always limited, in one way or another, so that voting would be confined to those with a stake in the viability and progress of the country, and the knowledge to cast their vote intelligently.
In our own times, however, voting has been seen as just one of the many "rights" to which everyone is supposed to be entitled. The emphasis has been on the voter, rather than on the momentous consequences of elections for the nation today and for generations yet unborn.
To those who see voting as more or less just a matter of self-expression, almost a recreational activity, there is no need to inform themselves on both sides of the issues before voting, much less sit down and think beyond the rhetoric to the realities that the rhetoric conceals.
Careless voters may be easily swayed by charisma and rhetoric, oblivious to the monumental disasters created around the world by 20th century leaders with charisma and rhetoric, such as Hitler.
Voters like this represent a danger of terminal frivolity for freedom and democracy.
http://townhall.com/columnists/thomassowell/2011/06/29/is_democracy_viable/page/2
Subscribe to:
Posts (Atom)