QUOTE OF THE DAY
CBS: American Households Hit 43-Year Low In Net Worth
The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.
According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole.
AP: Debt Hits $16,306,713,000,000
Figures on government spending and debt. The government's fiscal year runs Oct. 1 through Sept. 30.
Washington Post: Obama seeks Aug 1 deadline for tax reform
President Obama is seeking an Aug. 1 deadline for overhauling the tax code and making changes to expensive federal health programs, the final pieces of what the administration conceives as a far-reaching plan to rein in the national debt, senior administration officials said Friday.
New York Times: Complaints Aside, Most Face Lower Tax Burden Than in 1980
Most Americans in 2010 paid far less in total taxes — federal, state and local — than they would have paid 30 years ago. According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.
Households earning more than $200,000 benefited from the largest percentage declines in total taxation as a share of income. Middle-income households benefited, too. More than 85 percent of households with earnings above $25,000 paid less in total taxes than comparable households in 1980.
Yahoo! Finance: States likely to get hammered if cliff talks fail
When state governments suffered big revenue losses during the Great Recession, the federal government came to the rescue with $150 billion in stimulus funds that saved jobs, repaired roads and maintained health care services. Now, almost four years later, states risk losing billions of dollars in block grants if no fix is found for avoiding the billions in spending cuts and tax hikes set to take effect next year.
Reuters: How much is $250,000?
From where I sit, $250,000 a year - the amount President Barack Obama and other Democrats say is top-tier household income - is a substantial amount of money. But I don't sit in Manhattan or Honolulu or San Francisco, where folks say they can easily blow through that much paying rent and childcare, and not living like kings.
Politico: Fiscal Cliff Would Slash Physicians' Medicare Compensation
Not only do doctors face a 2 percent cut in Medicare reimbursements because of the failure — thus far — to avoid sequestration, but they’re also looking at a 27 percent reduction in pay in the absence of a deal to fix the Medicare payment formula.
Reason: Texas schools track students with RFID chips
The nanny of the month comes to us from deep in the heart of Texas, where administrators at San Antonio's Northside school district are tracking kids with radio frequency identification chips. Dozens of electronic readers have been installed in the school's ceiling panels to keep tabs on the kiddos while they're at school. The official number-one reason for going RFID is to "increase student safety and security," but--since district funding goes up when attendance goes up--it's clearly all about the Benjamins.
MSNBC: Jindal’s private tuition voucher program ruled unconstitutional
A Baton Rouge judge has ruled Louisiana governor Bobby Jindal’s private school tuition voucher program unconstitutional.
Daily Must-Reads November 30
QUOTE OF THE DAY
The Fiscal Times: Tax Exodus: 5 States That Residents Are Fleeing
This comes as a surprise to many, but
Illinois has seen a huge exodus of residents in the past few years. The
state recently increased their income tax by approximately 67%. That is
an incredible jump, so it stands to reason residents are looking for a
way out. Our residency lectures are consistently filled with more
Illinois residents than any other state, hands down. Ironically, the
Land of Lincoln could lose enough pennies through attrition that its
financial problems only worsen.
New York Times: In Drive to Unionize, Fast-Food Workers Walk Off the Job
“I feel I deserve $15 an hour,” said Ms.
Archer, 59. “I work very hard.” She said she hoped a union would
deliver affordable health insurance and paid sick days.
UnitedNY.org, the Black Institute and
the Service Employees International Union, a powerful union that is
playing a quiet but important role behind the scenes.
New York Post: Job stats dismal; tax break safe from cliff
Prepare yourself for disappointment and political finger pointing.
Analysts at Citigroup are warning
customers that the unemployment rate could surge to 10 percent in the
coming months, up from the current 7.9 percent.
Weekly Standard: Top 0.1% pays more income tax than bottom 80%
In 2010, according to the TPC, Americans
in the lowest quintile of income-earners — the bottom 20 percent — paid
minus-3.8 percent of the total federal income tax burden. In other
words, they got more back, in income tax credits and the like, than
they paid in. Similarly, those in the second quintile paid minus-4.3
percent of the total federal income tax burden — so they, too, weren’t
paying into the income tax till but rather were taking out.
Those in the middle quintile — pretty
much the center of the middle class (this quintile had an average
income of $44,000) — paid 3.9 percent of the total federal income tax
burden (about $1 of every $25 dollars in income taxes paid nationwide).
And those in the fourth quintile — whose income ranged from $58,000 to
$102,000 — paid 15.1 percent of the total federal income tax burden.
Bloomberg: Recession Left Baby Bust as U.S. Births Lowest Since 1920
The U.S. birth rate last year fell to
its lowest level since at least 1920, led by a decline in the number of
babies born to immigrant women, who have been driving the growth in the
nation’s population for two decades.
Reason: Judge Approves Hostess Liquidation Plan
A judge gave Hostess Brands Inc. final
approval to shut down its 85-year-old baking business and start selling
off the pieces with up to $1.8 million earmarked as bonuses for
managers overseeing the liquidation.
The company behind iconic treats such as
Ho Hos and pantry staples like Wonder Bread now has the bankruptcy
court's full blessing to start seeking buyers for its 30 brands and 36
plants with a skeleton staff at its helm. A group of the company's top
executives—19 officers and high-level managers—deserve extra
compensation as they wind down operations, Judge Robert Drain of the
U.S. Bankruptcy Court in White Plains, N.Y., said at a Thursday hearing.
WSJ: Charities Fight to Keep Tax Break on Donations
In 2011, the nation's biggest charities
swung into action to oppose President Barack Obama using limits on tax
deductions to help pay for a jobs bill. Warning that such a move would
hurt charitable giving, they prevailed, and Democrats looked elsewhere.
A year later, deductions are again in
the cross hairs as Washington tries to avert tax increases and spending
cuts. After years of successfully fending off such efforts, nonprofits
worry this time could be different.CBS: Detroit Mayor, 'We are in an environment of entitlement'...
are in an environment, I think, of entitlement, we’ve got a lot of
people who are city workers, who for years and years, 20, 30 years,
think they are entitled to a job and all that comes with it,” Bing said.
Daily Must-Reads November 29
The Telegraph: Two-thirds of millionaires left Britain to avoid 50% tax rate
two-thirds of the country’s million-pound earners disappeared from
Britain after the introduction of the 50% top rate of tax, figures have
CNBC: How the ‘Fiscal Cliff’ Could Hurt Married Couples
are many financial perks that come with being married. Filing taxes
generally isn’t one of them. If a complex, arcane tax code leaves
singles confused and frustrated, try doubling the confusion associated
with credits, deductions and income.
Crain's Chicago Business: Labor the biggest donor to state lawmakers — by far
Springfield Democrats begin to flex their growing legislative muscle,
some new campaign disclosure data say a lot about who the winners owe —
and who they can forget.
data come from the Illinois Campaign for Political Reform. While the
group is still crunching for a bigger report to be issued soon, it says
that by far and away the biggest donor to legislators in the just ended
general-election season was — who else? — organized labor, which
dropped a stunning $10.7 million on House and Senate candidates from
March to November. And that's only direct contributions, excluding
CBS: Michigan governor won't rule out dissolving City of Detroit
would no doubt be controversial, but the idea of dissolving the
fiscally struggling city of Detroit and absorbing it into Wayne County
is being tossed around in Lansing.
How technology and misguided legal reasoning have made your life an open e-book.
1986 The American Banker defined E-mail as "a trademark of CompuServe,"
Computerworld noted that sending a single message required a 10-minute
phone call, and InfoWorld described "a pilot scheme that will allow
users of one system to send messages to mailbox holders on another."
That was the year Congress enacted the Electronic Communications
Privacy Act (ECPA), so it is hardly surprising that the once
forward-looking law seems antiquated today.
The Daily Caller: Teacher test fraud opens the door to school choice in Arkansas
teachers in three southern states paid stand-ins to take their
licensing exams, according to a federal investigation that uncovered 15
years of mass fraud in the public school licensing system.
Cal Watchdog: California's Wealthy Likely To Flee Tax Hike
the recent campaign, Gov. Jerry Brown insisted that people would not
try to avoid his Proposition 30 tax increase by halting investments and
“hiding” their money. Prop 30 boosts the top state income tax rate on
millionaires to 13.3 percent from 10.3 percent.
US Today: Obama uses Twitter in 'fiscal cliff' PR campaign
President Obama's campaign for his "fiscal cliff" plan includes the Twitter-verse.
White House has set up a new Twitter hashtag: "My2K," a reference to
the extra $2,200 in taxes it says the average family will pay if all
the George W. Bush-era tax cuts expire at the end of the year.
McClatchy: Government weeks away from hitting debt ceiling
official Washington is focused on potential tax hikes and automatic
spending cuts, another fiscal crisis looms on the horizon. A report
released Tuesday warned that the federal government is likely to hit a
ceiling on issuing new debt come late December and could begin
defaulting on obligations by mid-February.
WSJ: The Great 2012 Cashout
you've heard from various economic sages that tax rates don't matter
either to economic growth or taxpayer behavior. Don't tell that to the
companies and individuals who are busy cashing out their investments or
paying dividends to get ahead of the Obama tax scythe in January.
Forbes: How Much Tax Would You Owe On A $550 Million Powerball Jackpot?
talk of the fiscal cliff and tax hikes for the rich dominating the
news, you might be worrying about how much you’ll really get to keep
after you win tonight’s record-setting Powerball jackpot.
Daily Must-Reads November 28
WirePoints: Does Illinois violate its own budget and accounting laws? The state itself says yes
reason why Illinois is a fiscal wreck is that the state’s budget and
accounting are muck, and they are prepared — according to the state
itself — in open violation of state law.
Points and Figures: ObamaCare health exchanges won’t work
is a debate right now about whether to establish a state run health
care exchange, or let the federal government administer the exchange.
It’s a poor Solomon’s choice. Neither will work.
Huffington Post: High School Graduation Rates By State: U.S. Department Of Education Releases First-Ever National Data
The U.S. Department of Education has released a first-ever list detailing state-by-state four-year high school graduation rates.
Daily Herald: Khan Academy on Illinois pensions
The free online school of everything has taken on the Illinois pension crisis.
video is from Khan Academy, the heralded online video series that can
teach you about algebra, physics or whatever else you want to learn
when you have nothing else to do.
New York Post: ‘Poverty’ like we’ve never seen it
federal government now considers a family of four in New York City to
be poor if its pre-tax income is below $37,900.Even with full medical
calculation helps explain why newly revised Census Bureau figures hike
the number of poor Americans to 49 million as of last year, further
widening an already yawning gap between ordinary perceptions of poverty
and how the government sees it.
ABC News: Durbin Wants No Entitlements in ‘Fiscal Cliff’ Deal
and Medicaid savings should be part of future debt-reduction efforts,
but not on the table in talks regarding the impending “fiscal cliff,”
the second-highest ranking Democrat in the Senate said.
Zero Hedge: America's Lost Decade In One Simple Chart
the stock market's dismal decade of much-ado-about-nothing and ignore
the USD Dollar's declination; when it comes to reflection on what this
once great nation has 'created' since 2001, the following chart from
Pennsylvania's Department of Public Welfare sums it up better than most.
Daily Must-Reads November 27
USA Today: Are we living in the Hunger Games?
know the story: While the provinces starve, the Capital City lives it
up, its wheeler-dealer bigshots growing fat on the tribute extracted
from the rest of the country.
don't live in The Hunger Games yet, but I'm not the first to notice
that Washington, D.C., is doing a lot better than the rest of the
country. Even in upscale parts of L.A. or New York, you see boarded up
storefronts and other signs that the economy isn't what it used to be.
But not so much in the Washington area, where housing prices are going
up, fancy restaurants advertise $92 Wagyu steaks, and the Tyson's
Corner mall outshines -- as I can attest from firsthand experience --
even Beverly Hills' famed Rodeo Drive.
Chicago Tribune: CPS boss proposes 5-year moratorium on school closings
to help sell drastic school closings this year, Chicago Public Schools
is planning to commit to a five-year moratorium on shuttering schools
starting in fall 2013. New schools CEO Barbara Byrd-Bennett announced
the commitment to a moratorium Monday at a City Club luncheon.
The New York Times: Norquist Says Some Republicans Are Having ‘Impure Thoughts’ on Taxes
Norquist on Monday found a new way of dismissing a handful of
Republican lawmakers — including the House majority leader — who are
now publicly wavering about the pledge they signed to never vote for a
tax increase.WSJ: Republicans and the Tax Pledge
of the more amazing post-election spectacles is the media celebration
of Republicans who say they're willing to repudiate their pledge
against raising taxes. So the same folks who like to denounce
politicians because they can't be trusted are now praising politicians
who openly admit they can't be trusted.
The New York Times: Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny
A tax break that has long been untouchable could soon be in for some serious scrutiny.
Reuters: Warren Buffett calls for a minimum tax on the wealthy
Buffett, the legendary investor who changed the debate about U.S. tax
reform in 2011 with a call for the rich to pay more, is now calling for
minimum tax rates for millionaires.
Forbes: The U.S. Supreme Court Allows New Challenge To Obamacare To Go Forward
the heading of “it’s not over until it’s over”, the United States
Supreme Court has vacated a decision by the Fourth Circuit Court of
Appeals, ordering the appellate court to hear arguments on the
constitutionality of two key provisions of the Affordable Care Act.
Reason: Treat the Tax-Me-More Crowd to a Voluntary Additional Tax
the clock ticks toward a tax increase scheduled to take effect at year
end, expect to hear a lot from the “tax me more” crowd.
are wealthy individuals who profess to favor increases in their own tax
bills. A series of recent articles help define the genre, which was
pioneered by Warren Buffett last year in his New York Times op-ed piece
that ran under the headline “Stop Coddling The Super-Rich.”
The Hill: Obama faces huge challenge in setting up health insurance exchanges
Obama administration faces major logistical and financial challenges in
creating health insurance exchanges for states that have declined to
set up their own systems.
Daily Must-Reads November 26
Crain's Chicago Business: Unions have a new enemy — their own members
Multinational corporations have a new ally in their battles with organized labor: unionized workers.
organized labor loses leverage in a race-to-the-bottom global market,
some workers are becoming so disillusioned by what their unions can, or
rather can't, do for them that they want out. The disaffected include
dozens of machinists at Caterpillar Inc.'s plant in Joliet who crossed
the picket line during a strike last summer and are planning unfair
labor practices complaints against the union.
CNBC: Morgan Stanley’s Doom Scenario: Major Recession in 2013
global economy is likely to be stuck in the “twilight zone” of sluggish
growth in 2013, Morgan Stanley has warned, but if policymakers fail to
act, it could get a lot worse.
Points and Figures: The Keynesian Way To Rebuild America
mayor, Rahm Emanuel penned an editorial for the Washington Post. In
it, he advocates bringing the Chicago way to the rest of America. I
would disagree. Say what you will about the corruption in Chicago-and
it’s rampant-but the logic behind the Chicago Way is not the way
forward. The Chicago Way is not out of the box thinking. It’s more of
WSJ: The Fiscal Cliff Drama, in Infographics
“fiscal cliff,” when a package of spending cuts and tax increases is
set to go into effect unless the White House and Congress negotiate an
alternative, is fast approaching. Here’s a look at the players, their
positions and the fallout if a deal isn’t reached.
NBC: Feds say teachers hired stand-in to take their certification tests
was a brazen and surprisingly long-lived scheme, authorities said, to
help aspiring public school teachers cheat on the tests they must pass
to prove they are qualified to lead their classrooms.
NBC Chicago: Lawmakers Face Gambling, Prisons, Assault Weapons
will be staring down some of the higher-profile issues in Illinois when
they begin their fall session Tuesday. But resolution of gambling,
state facility closures, immigration and medical marijuana proposals
could come in the form of dramatic confrontation, negotiating-table
settlements, anticlimactic if symbolic votes, or no decisions at all.Do You Live in a Death Spiral State?
about buying a house? Or a municipal bond? Be careful where you put
your capital. Don’t put it in a state at high risk of a fiscal tailspin.
states make our list of danger spots for investors. They can look
forward to a rising tax burden, deteriorating state finances and an
exodus of employers. The list includes California, New York, Illinois
and Ohio, along with some smaller states like New Mexico and Hawaii.
Daily Must-Reads November 25
CNBC: The Millionaires Who Pay the Highest Tax Rate
Buffett and Mitt Romney have managed to create one of the enduring
myths of our tax debate: that the rich pay a lower rate than the rest
The Washington Post: How to rebuild America
Emanuel, a Democrat, is mayor of Chicago and represented Illinois’ 5th
District in the U.S. House from 2003 to 2009. He was White House chief
of staff from January 2009 to October 2010.
much post-election analysis has focused on voter demographics and
campaign mechanics, leaving Democrats in danger of drawing the wrong
lessons from our electoral success.
Northwest Herald: Quinn could play Santa Claus by reforming state tax code
If Gov. Pat Quinn is looking to moonlight during the holiday season, he ought to consider becoming a gift wrapper at Sears.
all, the governor promised the retail giant $150 million in subsidies
within the last year. He might as well have tied it with a bow on top.
Welcome to the goofy world of Illinois corporate welfare.
Examiner Editorial: If top 5% paid 40% of taxes, what is their 'fair' share?
income taxes, taken in isolation, do not tell the whole story, because
lower-income Americans do pay payroll taxes. But even taking into
account all forms of taxation, the top 1 percent still paid 22 percent
of federal taxes while earning just 13.4 percent of household income.
The top 5 percent paid 40 percent of all federal taxes, despite earning
only 26 percent of all income. No matter how you slice the numbers,
it's hard to understand why anyone would think the wealthy aren't
already shouldering a burden commensurate with their blessings.The Economist: Poking Walmart, choking Twinkies
Why America’s private-sector unions are in declineBuilt in Chicago: Tons of tech jobs and not enough takers
lined up near the TV cameras, waving signs that read “On Strike”. Many
wore the lurid T-shirts of OUR Walmart (Organisation United for Respect
at Walmart), the group organising the protest.
of Americans are unemployed and businesses are looking to cut costs by
letting people go. But in this tough economic climate, there is one
industry starving for talent and fresh workers: web and technology
development. Brandon Passley, founder and owner of Vokal, a Chicago
application engineering company, is one of the many entrepreneurs and
managers struggling to fill positions in his field.