QUOTE OF THE DAY
National Review: America’s Suicidal Cities
Some major American cities are dying, and the worst part is that these grievously ill patients often are refusing to take even the mildest medicine that would make things better.
Take Detroit, a city that has become a synonym for urban failure. The murder rate of one per 1,719 people last year was more than eleven times the rate in New York City. One contributing factor may be that two-thirds of Detroit’s streetlights are broken.
Once the fourth-largest city in the country, Detroit’s population has dropped by almost 30 percent since 2000 to below 700,000. Its vacant lots cover more land than the entire city of Paris. Despite enormous subsidies from the state government, Detroit is likely to finish the next fiscal year in June a full $50 million in the red. An audit could result in a state takeover of Detroit’s finances, and that could in turn lead to the nation’s largest-ever municipal bankruptcy.
NBC News: Plan on Working Past Age 65? You'll Have Company
If you're planning to work past age 65, you may find that you have a surprising amount of company among your peers.
A larger chunk of Americans are working into their late 60s and even beyond, part of a long-term trend that has continued despite the tight job market of the past five years and is expected to increase in coming decades.
"It's one of the most important changes in the labor force over the last generation," said Robert Johnson, director of The Urban Institute's Program on Retirement Policy.
Most Americans still stop working by the time they hit 65. But about 18.5 percent of Americans age 65 and over were working in 2012, according to the Bureau of Labor Statistics. That's a nearly 8 percentage point increase from a low in 1985, when just 10.8 percent of Americans over age 65 were still at work.
Politico: Senate passes debt ceiling, no-budget no-pay bill
With little fanfare Thursday, the Senate agreed to suspend the nation’s $16.4 trillion debt ceiling until May 19, postponing the specter of default that threatened the nation as early as February.
The vote was 64-34. It now heads to the White House for President Barack Obama’s expected signature.
It would also tie lawmakers’ salaries to whether their respective chambers pass a budget. If the House or the Senate do not pass a budget by April 15, the pay for members in that chamber will be held in an escrow account until they pass a budget or until the last day of the 113th Congress.
Senate Democratic leaders have said they will pass a budget this year – the first time since 2009.
Twelve Republicans voted for the bill; only one Democrat, Sen. Joe Manchin of West Virginia, opposed it.
CNBC: The Five Highest Tax States for the Highest Earners
When people talk tax rates, they usually talk federal income taxes.
But state tax rates, along with local taxes and sales taxes, can be just as significant when it comes to family finances.
A new study from the Institute on Taxation and Finance tallied up state and local income taxes, along with property, sales and excise taxes as a share of residents' household income.
It found that for the top one percent of earners, California is the most expensive state when it comes to state and local taxes. The top one percent of earners in California spend 8.8 percent of their income on state and local taxes (and that's before the tax hike in 2012).
The rest of the top five are Hawaii and Vermont, both of which take eight percent of high-earners' income, followed by New Jersey and Oregon, which take seven percent.
Much of this is a function of income-tax rates. But local taxes also play a role. Vermont's top marginal income-tax rate of 8.95 percent is slightly less than New York's top tax rate, but its other taxes push its total higher than New York's.
New York Times: Federal Rule Limits Aid to Families Who Can't Afford Employers' Health Coverage
The Obama administration adopted a strict definition of affordable health insurance on Wednesday that will deny federal financial assistance to millions of Americans with modest incomes who cannot afford family coverage offered by employers.
In deciding whether an employer's health plan is affordable, the Internal Revenue Service said it would look at the cost of coverage only for an individual employee, not for a family. Family coverage might be prohibitively expensive, but federal subsidies would not be available to help buy insurance for children in the family.
The policy decision came in a final regulation interpreting ambiguous language in the 2010 health care law.
Under the law, most Americans will be required to have health insurance starting next year. Low- and middle-income people can get tax credits to help them pay premiums, unless they have access to affordable coverage from an employer.
CNBC: How Rising Taxes Drove Incomes Higher in December
One day after the Federal Open Market Committee announced that economic growth paused in December 2012, the Commerce Department released data showing that personal income rose by the most since 2004.
The 2.6 percent increase in incomes blew away the official expectations number, which was 0.8 percent.
The biggest clue to how incomes rose while the economy stalled is contained in the Commerce Department's data about the sources of rising income. Of the $353 billion income rise, $268 billion came from dividends. That is, dividends accounted for around 75 percent of the total increase.
Jim Pethokoukis: Mission accomplished for Obama’s jobs council? Not so much
President Obama’s Jobs and Competitiveness Council will soon be no more. It expires today, and the White House has no plans to renew it. The Associated Press:
Officials said the president always intended for the council to fulfill its mission and then wind down, and said that Obama would continue to actively engage and seek input from business leaders about ways to accelerate job-creation and economic growth. Among the steps Obama plans to pursue are expedited permits for infrastructure projects, the White House said.
So has its mission been fulfilled? Looking beyond the official 7.8% unemployment rate, I think several charts tell the tale.
John Stossel: Obama is not king
Watching President Obama’s inaugural, I was confused. It looked like a new king was being crowned. Thousands cheered, like subjects worshipping nobility. At a time when America faces unsustainable debt and terrible economic troubles, why such pomp?
Maybe it’s because so many people tell themselves presidents can solve any problem, like fairy-tale kings—or gods.
Before America’s first inauguration, John Adams suggested George Washington be called “His Most Benign Highness.” Fortunately, Congress insisted on the more modest title, “President.”
At his inaugural, President Obama himself said, “The patriots of 1776 did not fight to replace the tyranny of a king with the privileges of a few.”
But then Obama went on to say that his privileged few should force the rest of us to do a zillion things.
He said, “We must do these things, together.” But what “together” means to big-government folks is that they have a vision—and all of us, together, must go deeper into debt to pay for their vision, even if we disagree.
Cato: Why GDP Data Shouldn’t Be Interpreted in Ways that Support Keynesian Spending
Fighting against statism in Washington is a lot like trying to swim upstream. It seems that everything (how to measure spending cuts, how to estimate tax revenue, etc) is rigged to make your job harder.
A timely example is the way the way government puts together data on economic output and the way the media reports these numbers.
Just yesterday, for instance, the government released preliminary numbers for 4th quarter gross domestic product (GDP). The numbers were rather dismal, but that’s not the point.
I’m more concerned with the supposed reason why the numbers were bad. According to Politico, “the fall was largely due to a drop in government spending.” Bloomberg specifically cited a “plunge in defense spending” and the Associated Press warned that “sharp government spending cuts” are the economy’s biggest threat in 2013.
LA Times: CA Takes In $5B More Than Expected in Taxes
California was flooded with tax dollars in January, according to a new report, and the state received $5 billion more revenue this month than Gov. Jerry Brown had anticipated.
The Wednesday report from the Legislative Analyst's Office shows a stark reversal for the state budget. At the end of November, tax revenue had fallen almost $1 billion short in the current fiscal year, according to figures from Brown's Department of Finance.
Now the state appears to be $5 billion ahead, which could provide further evidence for the governor's declaration that California has emerged from its financial crisis.
The analyst's office floated three possible causes for the surge in tax revenue. The most positive theory is also the simplest -- the economy has improved and there's more income to tax.
The others are less optimistic. It's possible that wealthy residents, fearful that federal budget negotiations would increase their taxes, decided to cash out investments early. If so, that means the state could see less tax revenue in the next fiscal year.
Washington Post: Charters: the good ones remain good, and the bad ones rarely improve
Charter schools that start out doing poorly aren’t likely to improve, and charters that are successful from the beginning most often stay that way, according to a new study by researchers at Stanford University.
The report, done by Stanford’s Center for Research on Education Outcomes (CREDO) and funded by the Robertson Foundation, also found that charter management organizations on average do not do a “dramatically better” job than traditional public schools or charter schools that are individually managed.
One caveat to the findings: They are based on standardized test scores, and there are big concerns among educators and researchers as to whether student achievement should be primarily based on these scores given the limitations of test design and other factors. I am writing about the report because it is going to be cited in the school reform debate, as previous CREDO reports have been, especially the 2009 report that showed that only 17 percent of charter schools across the board get better test scores than traditional schools.
The latest report, conveniently released during National School Choice Week, found that the success or failure of charters can be predicted by the third of operation. Assigning charters to one of five different ranks based on performance, the researchers found that 80 percent at the bottom in their first year were still at the bottom in year five. Ninety-four percent of charters that began at the top level were still there five years later.
Points and Figures: Tax Code Carve Out-Free Money For Smart Investors
Taxes rarely if ever enter into the decision to invest in a startup company. So many fail, that you are more likely to get a tax write off than worry about paying taxes on any gains! But, in the new tax law anyone that buys stock, holds it and sells off a gain got a tax increase of 59%.
Taxes are not revenue generators. They are incentives for behavior.
Because there was a massive increase in taxes on stock investing, it’s going to decrease the amount of risk capital dedicated to stocks. Further, Sarbanes Oxley created poor incentives to publicly list a company, and Dodd-Frank increased the cost to access capital at banks.
Worldwide, investors and companies have seen increased regulation in financial marketplaces by governments. They have also seen increased government interference through higher taxes and poor fiscal/monetary policy. It’s hard to imagine that every government worldwide could be so screwed up, but they are.
Private investors are losing trust in public marketplaces. It’s not because of HFT, that’s a symptom. It’s because they keep getting burned because the structure of the marketplace is so tiered they know they don’t have a fair chance. Governments, through their regulatory policy, have codified the stacked rules of the game.
Technori: StartupBus and a Battle Royale for Chicago’s Top Talent
Word on the street is that Chicago is becoming one of the best places to conceive, build, and launch an incredible startup. But with the announcement of StartupBus Chicago, we now have an opportunity to prove it, by competing head to head with cities better known for nurturing great startups.
StartupBus is an annual, premier and exclusive competition that invites only the nation’s top entrepreneurial cities to compete against one another. A team of Hackers (Developers), Hipsters (Designers), and Hustlers (Product, Marketing, PR) are challenged to create a viable company in 72 hours while traveling 60mph on a bus. The destination: SXSW Interactive in Austin, Texas. The teams will then find out if their hard work over those three days of developing products and refining pitches will pay off against the other chosen regions.
Chicago previously participated in the very first StartupBus in March 2011 against: San Francisco, Silicon Valley, Cleveland, New York, and Miami. After a brief hiatus in 2012, StartupBus Chicago is back to represent for the Midwest, and to show that Chicago is one of the best places to start a company.
To kick-off the return, StartupBus will begin with a “Battle Royale” on February 9th at 1871 from 10 a.m. to 6 p.m. Participants will compete head-to-head in three rounds. This event will serve as the process for selecting the area’s best talent, who will then be awarded cash prizes and a coveted spot aboard the bus; to represent Chicago in the final competition against other regions at SXSW interactive.
Washington Times: With parents making choices, bad schools left behind
Now is the time for all good education advocates to come to the aid of school choice.
It’s National School Choice Week, so pay attention if you truly want a way forward.
The numbers do not lie.
Nationwide, 2.3 million students attend public charter schools and an estimated 255,000 students use tax-credit scholarships and vouchers to attend private schools of their parents’ choosing.
The number of school-age children whose families do not have such options are estimated at 49 million. These are the very children who deserve being turned around because of poor schooling, revolving doors for principals and teaching staffs, school violence, school boundaries and school bullying, and any or no other reason at all.
CARTOON OF THE DAY