Federal Spending Out of Control

If you have read my columns, you know that the issue affecting our country is not a lack of revenue, it is excessive government spending, that has taken a substantial shift upward in the past four years.  We have a Federal Government that does not budget, so We the People have no visibility into planned expenditures.  We have an administration that is only focused on ideology and not interested in solving our fiscal problems.

In my attempt to continue to educate all on the disaster that is Federal Spending, here is another graphic clearly showing the issue.  As you will note, despite what the Administration claims, facts are a stubborn thing.  As Mitt Romney told the President - "While you are entitled to your own opinion, Mr. President, you are not entitled to your own facts.

Using data from the Office of Management and Budget, I prepared the chart below that clearly shows that Federal Spending is the real problem.

 

 Take a look at the last four years, clearly there has been a huge jump in expenses relative to other years.  While there was a drop in revenue, this is clearly due to the recession, as business and individuals all made significantly less than they had in prior years.  But clearly the increase in spending far exceeds the percentage decline in revenues.

In 2009, Federal Revenues were down 17.5%, but Federal Spending increased 46.8%!!  Federal Revenue only declined in 2009, since then, revenues have continued to rise, averaging an increase of 3.3% for the last three years.

While one could argue the additional Federal Spending might have been needed to help get us out of the Great Recession, it clearly should have come back down in subsequent years.  Clearly that did not happen, and as a matter of fact, the President's own plan shows Federal Spending continuing at the elevated levels and increasing every year for the next 10 years!! 

The orange bars show Federal Spending from 2013 to 2022, clearly there is no plan by the President to cut spending, in fact under the President's plan Federal Spending will increase from $3.5 trillion in 2012 to $5.8 trillion in 2022.  This equates to an average increase in spending of over 15% per year!!

 

Revenues are represented by the purple bars and they do show an increasing trend, but that assumes that the economy grows every year at a 5% pace or higher.  We are definitely not going to meet that target in 2012 and the plan for 2013 is less than 5% also, so we are already starting out in the hole.

The most disturbing part of this graph is the fact that this Administration plans to run deficit budgets for the next 10 years.  Under this plan, the Administration is projecting the we will spend another $6.8 trillion more than we collect in revenues over the next 10 years.  This is totally unacceptable and we deserve better.  Our children and grandchildren will be the ones to suffer if this becomes reality.  We will be the first generation in history to provide a economic reality that is worse for them than we had.  We should all be embarrassed by this.

Since the Democrats have failed to approve a budget the last 4 years, it is clear that this is probably the best case scenario and not the most likely.

You can effect the debate.  Write your elected officials and tell them to get spending under control!

 

We have a SPENDING problem

Back in July of 2011 I wrote about the Spending Problem facing our county.  It is amazing how similar the talking points of the President and Democrats are today compared to 16 months ago.  This should come as no surprise as this is the party that fails to create and pass a budget, so how could they possibly know what the financial condition of our country is.  If this was a public company the board and all of the senior management would be fired.  But we have people so clueless about the economy that they not only didn't fire these clowns, they put them all back in office. 

The definition of insanity is doing the same thing and expecting different results.  What does the public think is going to happen.  We have had four years where the Senate has failed to pass a budget and not surprisingly we have had four consecutive years with trillion dollar budget deficits.  Now we face a fiscal cliff and the President and the Democrats continue to spout the same campaign rhetoric we have heard for the past 2 years -Tax the Rich.  Well I, and others have shown that the proposal made by Obama to increase taxes on the rich will do nothing to reduce the deficit or fix our fiscal issues.  In fact, that tax on Millionaires, (those making more than $250,000), will only fund the Federal government for 8 days.

We need real expense reductions, not political reductions.  Politicians are famous for claiming that spending is decreased when the rate of increase from one year to the next is lower.  Most normal people would classify a decrease as actually spending less on a program in the current year than you did the prior year.

Now we hear from the President and top Democratic leaders that entitlement programs are off the table.  Well, when you consider that Defense, Social Security, Medicare & Medicaid and Welfare programs make up 74% of the Federal Expenditures and interest on our ever growing debt accounts for another 6%, not considering these programs leave you very little opportunity to cut costs.

 

We heard from several Democrats today, that the Republicans need to present a plan on what expenses they would cut.  Well, that was done long before we were in this crisis state.  Remember, Paul Ryan presented a plan last year to fundamentally deal with this fiscal crisis and all the President did was call him names.  The President was also presented with another plan prepared by Simpson-Bowles that presented yet another bi-partisan approach to dealing with the fiscal crisis.  And what did our President do with the plan -NOTHING!!  So far he has yet to produce any credible plan in writing that attempts to deal with the fiscal crisis.

It is now the President's turn to present the American people with his solution on how we stop spending $1.5 trillion more than we create in revenue each year and how he plans to bring down the massive Federal Debt that has grown by $5 trillion since he has been in office.  This country needs leadership on this issue and publicly criticizing the Republicans and others who want to see real reform is unacceptable.  This President needs to lead.

He wanted a second term, well now he got it.  The question is, what will he do with the opportunity?  Based on his past performance, I am not optimistic that any real progress will be made to deal with this fiscal crisis.  We might avoid the fiscal cliff for now, but we will continue to spend and continue to claim the rich don't pay enough.  

As I stated in the beginning of this post, expecting this President and these politicians in Washington to do anything else would be insane.

Federal Spending - No Decline in Sight

I have spent the last two columns talking about the inadequacy of the “tax the rich” plan of the President. As I have stated numerous times, we do not have a revenue problem, we have a spending problem. To that point, look at the graph below, showing total federal receipts since 1980.

While we did see a drop in revenues in 2008, due to the financial crisis, we are now back to pre-crisis receipt levels. In fact, federal receipts in fiscal 2011 were actually more than 2005 and just shy of 2006 levels. Not bad for an economy that is coming out of a severe recession and operating in an anti-business environment.


Now if we flip to the other side of the ledger, you will see, that despite declining revenues, there was no corresponding decline in Federal spending. In fact, spending in 2008 increased to $3.5 trillion and has stayed there and based on the President’s own budget it is only going to continue to climb from there. In fact, by end of the President’s next term, spending is expected to exceed $4.5 trillion, $1 trillion more than we are already overspending today.

As you can clearly see, from the table below, the President intends to continue spending more they we can afford, which will put the government in debt by an additional $4 trillion by the time Obama leaves office. This is clearly a President who is not serious about solving our problems.

The only way we can solve our fiscal problems is to stop spending money we don’t have. Unless and until our elected leaders acknowledge this, there is no hope for this country.

Presidential Math

The President has made it pretty clear that he wants to solve the fiscal crisis by increasing taxes on the rich.  In my last post I clearly showed that millionaires (people making $250,000 or more), pay over 50% of all personal taxes.  While I totally agree that we definitely are going to need more revenue, more importantly, we need REAL expense reduction.  The government has grown far beyond our ability to pay.  But that will have to wait for another column.

Today's post is to expose the ridiculousness of the President's proposal to raise taxes on the rich.  Again, please remember that if your household makes more than $250,000 a year you are a "millionaire", according to the President.

So the President has proposed raising tax rates on "millionaires" from the current top rate of 36% to 39.6%.  This combined with other changes to the tax code would result in $849 billion in new revenues over 10 years.  What the President and media fail to mention when they quote these figures is that the budget deficit just last year was $1.1 trillion.  So $849 billion over the next 10 years doesn't even cover the deficit this administration created just last year alone.

So instead of playing governmental games with these figures let's look at what this means annually.  The President's own budget for 2013 shows that the government will spend $3.8 trillion and plans to collect $2.9 trillion in revenues.  So much for a balanced budget.  If we stay on budget we will add another $900 billion to the deficit.  So the extra $84 billion that we plan to get from the "rich" in 2013 will only cover a very small portion of the planned deficit.

In fact, in October, the first month of the new fiscal year for the government, the deficit is already $120 billion!!  So we have already exceeded the amount we would have collected from the rich.

We have a spending problem, not a revenue problem.  Until politicians are willing to accept this reality we have no hope of solving our fiscal issues.

Tax the Rich - They Need to Pay their Fair Share

The President and the accomplice media continue to say the solution to all of our fiscal problems is to simply tax the rich.  The President claims the the rich need to pay their fair share.  What the President fails to provide is any facts when he reads from his teleprompter and the media is no better.  There was a time when the media was the great equalizer in this country, they actually investigated stories, dug into details and presented their findings relative to what was being claimed. 

Alas those days are long gone and now it is up to us to do the homework and point out the facts.  While everyone is entitled to their own opinion, they are not entitled to their own facts.

Let's start by examining the constant cry from the President for the rich to pay their fair share.  So first we have to agree on what is considered rich?  If you listen to the President that is hard to tell because in his first campaign, and his first years in office, the rich were considered those making over $1 million a year.  Now it appears as though the definition of millionaires has been changed to those making $250,000 or more.  Just listen to the President, he constantly says millionaires need to pay more in taxes and then you see what he proposes and it is clearly aimed at those making $250,000 or more.  So are we talking about millionaires or not?

Despite the rhetoric of the President, for purposes of this column we are going to assume the rich are defined as those individuals making at least $250,000 per year.  So, how much in taxes does this group pay?  To find this out one simply needs to go to IRS.GOV.  There are a number of tables you can view that show detailed tax data.

In 2009, the last year for which detailed data is available, people with Adjusted Gross Income of $250,000 or more paid $434 billion in taxes.  In total the government collected $865 billion in tax revenues from individuals.  So the group that we are so worried about paying their fair share actually provided over 50% of the total tax revenue from individuals. 

Below is a break down of the information by each income group.

As you can clearly see from the tables above, people earning over $250,000 made up less than 2% of the total tax returns in 2009, but they paid 50% of all the taxes.  So, if this isn't fair what should this be - 75%, 90%?  Also notice that people earning over $1 million are paying on average, just under $750,000 in taxes, while those earning $250,000 or more are paying nearly $100,000 in taxes on average.  Plus, the effective tax rates for those earning over $250,000 are significantly higher than those making less than $250,000.

You would never know this from the media.  They always conveniently forget to mention facts such as theses as they fail to fit the liberal narrative.  This is not about paying your fair share, it is clear from the data that the more you make the higher percentage of tax you pay.  If there is an argument if should be from those making $250,000 -$499,999 as they have the highest effective tax rates and now Obama wants to make them pay even more. 

Remember also, that this only shows individual income tax, not state, local, sales, social security or medicare taxes.  When those are added in these high income tax payers are nearly 50% in taxes already. 

We need to stop playing politics and start solving the problems in this country.  The only way we do this is if we are honest about what is really going on.  The only way we do this is by sharing the FACTS.

Photo ID - OK in Madison for Bus Passes, but not Voting

Our dear friends in Madison have been very vocal about their opposition to voter id, because they claim it disenfranchises the poor and elderly who don't have a driver's license.  They claim that to require someone to show a photo id in order to vote is a huge burden to a large segment of the population, despite the fact that free photo ids are provided in the voter id bill passed and signed into law.

So isn't ironic that these same liberals who can't stand the thought of showing an id to vote have no problem requiring that you show a photo id to use a bus pass.  Talk about hypocrites!!  So the exact population that they say would be disenfranchised by requiring an id to vote, now need to get a photo id just to use a bus pass.  But in the case of Madison, they don't offer to pay for the photo id if you don't have one.  You can't make this stuff up.

So why do they want to require a photo id for using a bus pass?  To stem the fraudulent use of bus passes.  Wow, what a concept, actually validate you say who you are before you use the bus pass.  Kinda like asking you to validate who you actually are before your vote.  If the photo id is such a great way to ensure the bus pass is only used by the rightful owner, than why the fuss over showing a photo id to vote?

You can answer that question yourselves.  By their own actions, the liberals in Madison have shown that the photo id is an effective deterrent to fraudulent bus pass use and therefore, would be an equally effective deterrent to voter fraud.  And since they are requiring people who ride the bus, who presumably don't have licenses, to show an id, it is no more of a burden for these people to show that same id they use for their bus pass when they vote.


 

Debt and Deficits - Know the Facts

It is important this November that people be informed.  If you don't know the issues, you have a responsibility to learn them.  Do not rely on what either party tells you.  Do your own research and may your own decision.  Don't just spout the talking points of either party.

You have a responsibility to make an informed decision, and not simply vote for someone you are told to vote for.  Please consider how your decision will affect you and your children and their children. 

With the welfare of our children in mind, let's consider for a moment the massive debt that has been accumulated the past four years.  While some will choose to blame George W. Bush for all the spending, it ignores the bigger issue - We have spent $16 trillion more than we collected in taxes so far as a nation.  $10 trillion of that has been accumulated by just two Presidents - Bush and Obama.

In 8 years in office, the national debt increased $4.7 trillion, under George W. Bush.  In the past 4 years, the national debt under President Obama has increased $5.1 trillion.  At this rate the national debt will be in excess of $21 trillion by the next Presidential election.  That would equate to over $185,000 per taxpayer. 

The path we are on is unsustainable!!  In the past 3 years the Senate has refused to produce a budget, the President has proposed budgets that continue to spend more than we have, which continues to add to the deficit.  These budgets have been a disgrace to the American people and have shown the lack of concern for addressing the fiscal issues in our country.  We need leaders who will deal with the fiscal issues at hand and not simply kick the can down the road.

Every individual in this county knows that you can not continue to spend more than you make.  Most households learned this the hard way during the economic crisis and the Great Recession.  So what did people do, they cut spending!!  What a novel idea.  Perhaps we should let a few of these people who had to tighten their own belts take a stab at trimming the Federal Budget.  I am sure they could find some ways to reduce spending.

Major corporations and small business also know the they can no continue to operate in lean times the same they did during peak times.  They learn to improve efficiency, delay capital spending and in some cases need to downsize, so that the size of the business is commensurate with the value generated.  These are really simple concepts that the public sector just doesn't seem to get or chooses to ignore.

During the good times, government was able to grow, unchecked as revenues were pouring in and there was a seemingly endless supply of cash, but that growth in government is never a one time expenditure.  Most all government spending is in perpetuity and only increases over time.  Once a program starts people find it difficult, if not, impossible to stop any Federal Program.

It is time for the Federal Government to start acting behaving like adults and face that fact that all of the Federal programs, can not be supported in the current economy and with current revenues.  As I pointed out yesterday, even if we tax 100% of all the revenue of everyone making over $200,000 per year we don't even begin to chip away at the deficit.  Unless and until we deal with the excessive spending we will not lower the deficit and the national debt will continue to rise.

Cutting spending is never easy, but neither is cutting back on the household budget, but we all do it and we all live through it.  We find a way to make it work.  We need our elected representatives to do their job and quit playing politics.  It is our money they are spending and we should demand that they only spend no more, and preferably less than we give them.

The debt issue is real and is an issue every household can relate to.  What would you do if this was your household budget?  Do you think any bank in the country would let you borrow $40 of every $100 you spend?   Clearly, you and I could not get away with what our Federal Government and many of our State and Local Governments are doing.  We need to demand balanced budgets and expect the same fiscal discipline you and I have to exhibit in order to keep a good credit rating. 

The decision you make in November, not only for President, but for all elected positions will determine if we address our fiscal issues or if they will become the next crisis we face.  If you thought the financial crisis was painful, just wait until we fall off the fiscal cliff.

Taxing the Rich - The Math Doesn't Work

This is a great piece that effectively and unemotionally explains the problem facing us as a nation with our excessive spending.  We hear all too often that all we need to do is tax the rich and get them to pay their fair share.  While that might sound like a great idea, the facts don't support this claim.  If people would just check the facts and challenge politicians to be honest, we could have an open honest discussion.  The political bickering is not helping us solve the problem.

Even if you tax everyone making $200,000 or more 100%, you won't collect enough to pay down this year's deficit, much less make any progress on reducing the $15 trillion we already spent that we didn't have.  Government has grown beyond our ability to pay for it and it is time the government, do what every business has had to do in tough times - downsize.


We need to quit demonizing the rich and get back to encouraging people to be innovative, take risks and excel.  We have rewarded complacency and what started as a safety net has turned into a way of life.  The intent of government assistance was exactly that assistance, not a sustained stream of income and benefits for life.

You can't make an informed decision in November if you don't educate yourself.  Take some time and watch this video!!

Numbers that should scare us all

We all know about the fiscal crisis that is affecting Europe.  Way too much governmental spending and excessive budget deficits have caused a crisis in the region.  Citizens in these countries are resisting austerity measures as they have become addicted to having government provide their every need.  It is clear something must be done in Europe to avoid a financial crisis that could pull the whole world back into recession.

What isn't covered is the media is the fact that the US has the highest Government Debt per capita.  Worse than Greece, Spain, Ireland and Portugal.  All of the countries we hear about nightly.  But why is it we hear nothing about US debt levels?

Given that the per capita income in the U.S. was just over $27,000, this debt load represents almost two years of income!!  No matter how you look at this, the current levels are unacceptable.  But, due to our reckless spending the last three years and failure to even pass a budget, the numbers are even worse now and if they keep up will be catastrophic by 2016.  And these estimates don't take into account the enormous impact that Obama Care will have on the debt and deficit.

The table below shows the debt per citizen and per taxpayer from 2000, 2004, 2008 and 2012.  It then projects values for 2016 based on the percentage increase we saw between 2008 and 2012.  I highly doubt that the increase between 2012 and 2016 will be less than 50%, more likely it will be significantly higher given the record deficits the past three years.

And what did we, the taxpayers get for a 50% increase in debt per taxpayer between 2008 and 2012?  Nothing, except a weak economy, high unemployment, lower 401(k) balances and many of us are making less now than we did 4 years ago.

It is time for our politicians to stop talking and starting solutioning!  We the taxpayers can not afford more debt.  Families and States are forced to balance their budgets, it is time the Federal Government do the same.  We hear lots of strong talk about no Corporate Bailouts, but we should have equally strong talk about no Government bailouts.  We need Congress to set a plan for reducing this deficit, living within their means and fixing this fiscal crisis.  We need to downsize government just like businesses have to downsize during difficult times. 

The government has grown beyond our ability to pay for it and no amount of tax increases on the "Rich", those making $250,000 or more, is going to fix this mess.  I have posted data before that shows that even if we tax 100% of the income that is earned by these "Rich" taxpayers it only covers the current years deficit and does nothing to lower the total debt.  So we need to stop this non-sense about taxing the rich and focus our efforts on reducing expenses substantially!!

Politicians can talk all they want, but the facts are clear.  It is up to us to tell these politicians what we expect and if they do not perform, we need to vote them out and we need to replace them with people who are willing to make the tough decisions and put the taxpayer before their desire to be re-elected.

Make your voice heard this November.

Thank You Letter from a Taxpayer

This is the "thank you letter" many of you may have heard read on the radio, thought it was worth sharing if you haven't already heard this...


To all leftists, occupiers, union thugs and malcontents,

Thank you! What an election!

We couldn't have done it without you. Without your tantrums, outbursts and boorish behavior we might have stayed home for this election. Without your filthy, pot smoking hemp -headed minions occupying, dirtying and damaging our Capitol we might have been complacent. Without your obnoxious protests, boycotts and other actions from your union playbook, we might have sat this one out.

But you couldn't hold back. You couldn't restrain yourselves and behave like adults. You couldn't accept the 2010 election results. We sat and watched as you erupted in a juvenile hissy fit that embarrassed Wisconsin. The spectacle you created is what motivated us. And thanks to your pathetic behavior, we won. We turned out. Big time! And now we are organized and energized. Committed. "All in". And we aren't going away. We now have our own organizations (no dues required), an army of volunteers and the means to communicate. And countless new sources of funding, including a donor base from all 50 states. And we have "iverifythe recall" to ferret out your infiltrators in our future local elections.

So thank you little boy Tate, Graeme Zielinski, Fred "Loonie" Levenhagen, Ismael Ozanne, Maryanne Sumi, Noble Ray, Charles Tubbs, Joanne Kloppenberg, Segway Boy, John Chisolm, public employee union members, UW TA's, WEAC, SEIU, MTI, AFSCME Council 24 in Union Grove and WI prison guards,. Thanks for the death threats, the intimidation, the bullying, belligerence, thuggery and goonish behavior. The lack of ethics and the failure to enforce rules and laws. Thank you for putting your selfish, greedy motives on display for all taxpayers to see.

Your antics might have made you feel good but they didn't make you look good. They sickened the rest of us.

Thank you Shirley Abrahamson and Ann Walsh Bradley. Your petty politics woke us up. Thanks you Miles Kristan for dumping the beer on Robin Vos's head. Thank you University doctors for writing the phony excuses; Madison teachers for calling in sick or dragging your students to the protests without permission. Thank you Katherine Windels for making death threats against the Governor. The noontime capitol singers who taunted Sheboygan high school students. Thank you WEA Trust for raping Wisconsin taxpayers. Thank you Gwen Moore for your embarrassing minstrel show. And thanks all of you for harassing the Walker family at their private home.

You have all been exposed. Your tactics have been rejected. Your bad behavior has been forever captured on You Tube.

Thank you Peter Barca and fellow Assembly members for donning your foolish orange T-shirts and screaming "shame" at legislators just doing their jobs.

Thank you Mark Miller and all 14 senators for fleeing the state and making fools of yourselves in the process. Your combination of childishness and ignorance fits in very well in Illinois. I’m sure you felt right at home. Thanks for showing us what democracy doesn't look like.

And Mayor Barrett. How grateful we are that you chose one low road after another in your issue-less campaign against the Governor. This was your strike three. You are out. Take a seat on the bench and stay there. I have a hunch this was your final at-bat.

All of you helped turn Wisconsin permanently red. Your Governor, Scott Walker, will not just complete his first term, he is all but assured as many future terms as he seeks. He will be your governor for a long, long time. Get used to it. And his national "rock star" status just might lead him to be your President some day.

Just think, it couldn't have happened without you! So to all of you blue fisters, thank you from the bottom of my happy, red heart.

Sincerely,

A Wisconsin Taxpayer

The NO-Bama Budget

Interesting that President Obama is criticizing Paul Ryan's budget as radical, yet the Paul Ryan budget was approved by Congress by a vote of 228-191, while the budget submitted by Barack Obama did not receive any votes.  That's right the vote in Congress for the Obama budget was 0-414.  Which one is radical?

I guess the Ryan plan would be considered radical if balancing the budget and only spending within your means is radical.  Or perhaps the President believes that lying to the American people about the sustainability of Medicare and Social Security as they currently exist, will somehow endear him to voters.  Only an idiot or someone looking to deceive the public, would honestly tell people we can continue these programs as they are currently designed.

So instead of offering constructive alternatives all this President does is whine and complain about ideas presented by others.

We have a serious financial situation in this country and the solution from this President is to spend more.  This President believes we simply need to tax the rich more.  As I have pointed out in previous posts, even if you tax the 1% at 100%, there is not enough revenue to close the gap created by this President.

Since Obama’s inauguration, the federal debt has increased by $4.2 trillion. That is more than ALL the debt racked up from the birth of our country through President George H.W. Bush, according to CNS News. That is the real difference in the Ryan plan vs. the Obama plan.  Obama plans to keep spending and increasing this enormous debt load on the country.  A burden our children and grandchildren can not afford.

Everyone would agree that Greece is all but bankrupt with debt per citizen of over $50,792, but what many don't know is the this number is just as bad for the US at $49,842.  If you look at the chart below you can see that the trend is not encouraging.

Unless we start dealing with the real problem - SPENDING - this will only continue to get worse.  The choice is really clear.  Do you want more Government spending and more taxes or lower taxes and smaller government? 

We need to learn to spend within our means as a country.  The only message these politicians understand is the message we send through the voting booth.  So make your voice heard in November!!

Germantown School District less than honest with taxpayers

The Germantown School District recently sent a survey out to residents to presumably assist them in planning for the future.  At the beginning of the survey they indicate that in the past two years the district has reduced the budget by more than $2.2 million and eliminated 13 staff position which equated to 8 FTE.  For next year the district is forecasting a budget shortfall of $2.3 million.  They then go on to tell us, in this impartial survey, that:

·        Fringe benefits are some of the very lowest in our region, 42 of 45 area districts

·        Starting salary ranks 37 of 45 area districts

·        Average salary ranks 37 of 45 area districts

·        Administrative cost per student is the bottom 8% of all school districts in Wisconsin, ranking 396 of 431 districts.

All numbers reflect 2010-11 data as this year’s information is not yet available.

We are then asked to respond to a number of leading questions that I am sure they will try to use to show taxpayers support more spending.

While those statements, from the survey, sound impressive, it is tough to evaluate without some context.  So, being the inquisitive type, I went to the Germantown School District web site and the Department of Public Instruction to uncover some facts.  Here are some of my findings:

Budget reduced by $2.2 million over past two years

While a budget is nice and important for managing expenses, I find it most helpful to see what they actually spent.  And no, surprise expenses in the year ended 2010 were 4.0% higher than 2009 and expenses in the year ended 2011 were up another 3.4% over 2010.  So, instead of the more than $2.2 million they claimed to have reduced from the budget, in the last two years, they actually spent $3.5 million more!!  How’s that for truth in advertising.

Starting Salary ranks 37 of 45 area districts.

Notice they didn’t say salary, they said starting salary.  So they bring in new teachers at rates significantly lower than other districts, ranking them 266 out of 424, with a low salary of $31,913, but you have to also consider that they also get avg. fringe benefits of $15,505.  What the district failed to point out is that they have one of the highest top salaries in the state.  Germantown ranks 44 out of 424, with a high salary of $78,104.  This is significantly above the median high salary of $62,740.

Average Salary ranks 37 of 25 area districts

While this may be true, what they fail to tell you is that the average salary is $56,017, significantly above the average for the state which is $50,627 and well above the per capita income of $34,698 earned by residents in Germantown according to the 2010 census.

Administrative cost per student is the bottom 8% of all school districts in Wisconsin

While admirable, let’s look at the facts, not the hype.  According to the Administrative salary report from the Department of Public Instruction, the total salary and benefits for the 15 administrators in Germantown totaled $1.6 million   This is an average of over $106,000 in salary and benefits for this group.

 

The one thing I have learned in my 52 years is numbers don’t lie, but liars use numbers.  There is any number of ways to use the same information to try to make your point.  I just wish these governmental entities would respect the intelligence of the electorate and be more straight forward and honest in their disclosures to taxpayers.

I want to make it clear that I am not anti-teacher.  I am frustrated that the teacher’s union does not recognize that most taxpayers have suffered the past few years and most of us have less income than we did 3 years ago, many more of us are out of work, our retirement nest egg is significantly smaller than it was three years ago and our home is now worth less than it was three years ago.

It is now time for the school districts to examine the cost of education and to find creative and innovative ways to deliver a better product.  Buying overpriced insurance from a union owned company can not be tolerated.  The school districts owe it to the taxpayers to find ways to cut costs.  There are ways to reduce expenses and not impact the quality of education.  If any school district doesn’t think they can find any cost savings, I would be happy to sit with them and go through their books to find opportunities for them.

TAX SYSTEM EXPLAINED IN BEER

I couldn't resist sharing this.  Hope you enjoy.

Finally, a way to understand class warfare in real world terms.


Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.  If they paid their bill the way we pay our taxes, it would go something like this...

     The first four men (the poorest) would pay nothing
     The fifth would pay $1
     The sixth would pay $3
     The seventh would pay $7
     The eighth would pay $12
     The ninth would pay $18
     The tenth man (the richest) would pay $59

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.  "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20".  Drinks for the ten men would now cost just $80.


The group still wanted to pay their bill the way we pay our taxes.  So the first four men were unaffected.  They would still drink for free, but what about the other six men ?  How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33.  But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using.  He proceeded to work out the amounts he suggested that each should now pay.

And so, the fifth man,
     The first four men still paid nothing.
     The fifth man, now paid nothing (100% savings).
     The sixth now paid $2 instead of $3 (33% savings).
     The seventh now paid $5 instead of $7 (28% savings).
     The eighth now paid $9 instead of $12 (25% savings).
     The ninth now paid $14 instead of $18 (22% savings).
     The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before.  And the first four continued to drink for free.  But, once outside the bar, the men began to compare their savings.

"I only got a dollar out of the $20 savings," declared the sixth man.  He pointed to the tenth man, "but he got $10!"

"Yeah, that's right," exclaimed the fifth man.  "I only saved a dollar too.  It's unfair that he got ten times more benefit than me!"

"That's true!" shouted the seventh man.  "Why should he get $10 back, when I got only $2?  The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all.  This new tax system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works.  The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.  Tax them too much, attack them for being wealthy, and they just may not show up anymore.  In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.



David R. Kamerschen, Ph.D.
Professor of Economics