Rep. Vern Buchanan (R-FL) Joins Democrats to Clear Path for Vote Reviving Export-Import Bank

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Representative Vern Buchanan (R-FL District 16) was one of 62 Republicans to vote in favor of bringing to the House floor a bill funding the Export-Import Bank.

The Daily Signal reports:

The House of Representatives moved one step closer to bringing the Export-Import Bank back from the dead Monday after 62 Republicans teamed up with 184 House Democrats to force a vote to reauthorize the embattled agency.

Despite opposition from the vast majority of Republicans, the House passed a motion to discharge a bill reauthorizing Ex-Im from the Financial Services Committee, 246-177. (See how your member of Congress voted.)

The vote clears a path for the chamber to vote on the legislation sponsored by Rep. Stephen Fincher, R-Tenn. Under Fincher’s legislation, the 81-year-old bank would be reauthorized through 2019. Lawmakers are expected to vote on his bill tomorrow.

Read more.

Can you say bust the budget yet again?

Buchanan seems to say one thing and vote for the special interests.

Buchanan has repeatedly called for a Constitution balanced budget amendment but he has also consistently voted to raise the debt ceiling and keep wasteful spending programs – such as the Import-Export Bank – fully funded.

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Find Out How Your Congressman Voted on Reauthorizing the Export-Import Bank

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The Federal Reserve’s Counterfeit Prosperity

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When I was a young Secret Service agent on a local financial crimes task force between 2000 and 2002, I was inundated with an explosion of new counterfeit cases. There were a number of causes for this explosion in currency counterfeiting but the main ones were: the rapid advancement in ink-jet printing technology, the declining costs, and correspondingly increased availability of affordable home printers. Prior to these technological advancements, counterfeiting U.S. currency was the near exclusive purview of state-sponsored actors, sophisticated criminals and criminal syndicates.

With the growth in ink-jet printing, any thirteen-year-old with a printer could counterfeit money. I, along with hundreds of other Secret Service agents, were so preoccupied with tracking down this new class of counterfeiters and stemming the tidal wave of new counterfeit making its way into the money supply that I never had the time to philosophize on the deeper reasons why this crime is so dangerous to national cohesion.

We are lucky enough to live in a time where the authenticity of the physical currency in our wallets is taken for granted, but when the Secret Service was founded in 1865 to combat counterfeiting—the Secret Service’s role in Presidential Protection didn’t formally begin until 1901 after the assassination of President William McKinley—it was estimated that approximately half of the currency in circulation was counterfeit. Think about that: you had a roughly 50 percent chance, when engaged in commerce, of receiving money with ZERO value. That people had faith in their currency was so important to the U.S. government at the time that the Secret Service was established and charged with hunting down and prosecuting counterfeiters in order to re-establish public trust in the battered dollar.

Read more.

 

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62 House Republicans Join Democrats to Clear Path for Vote Reviving Export-Import Bank

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EDITORS NOTE: This column originally appeared in the Conservative Review. The featured image of Federal Reserve Chair Janet Yellen is by Jacquelyn Martin | AP Photo.

The Legacy of Arne Duncan, Common Core and So Much More: College (Part 2)

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As noted in my last post, outgoing Secretary of Education Arne Duncan has done his part to transform America through K-12 education.  This has happened through Common Core and by expanding the Department’s reach into younger and older cohorts.  Duncan got the promise for an additional $1 billion for preschool education.  As the Chronicle of Higher Education noted, Duncan is also leaving a “big imprint” on higher education.  His legacy is one of “innovation and regulation.”  College is put into a seamless web of K-16, or P-20, with an unprecedented federal role in admissions, placement, assessment, and financing.

The Chronicle notes that Duncan has deviated from the standard practice of Democratic secretaries who have just doled out money.  He has been “personally upbraid[ing] colleges over rising prices and low graduation rates, their handling of cases of sexual assault, their lax academic standards for athletes . . . , and their resistance to greater oversight.” Patricia McGuire, president of Trinity Washington University, has become disillusioned with Duncan’s “top-down approach.” Institutions, like Yale University, get nervous about the Department’s investigations of “sexually hostile environments.”

The nonprofits, like the Lumina Foundation, that have been funding Common Core, however, give a positive assessment. Jamie Merisotis, President and Chief Executive, praises Duncan’s “strong leadership” in putting our higher-education system “a step closer to reflecting the needs of today’s increasingly diverse college students — and the changing meaning of ‘college’ to include all types of postsecondary learning.”  Competency-based programs that “measure learning” through demonstration of a skill set are among his many “innovations.”  Inside Higher Education calls it “new delivery model with the potential to improve degree completion, reduce costs to students, and improve transparency and alignment of learning outcomes to the needs of employers and society.”

Currently, over 600 colleges are designing, creating, or already have competency-based education programs. This number has grown from 52 last year. As with Common Core, it is being funded by the Bill and Melinda Gates Foundation, with “guidance” from the U.S. Department of Education.

The notion of “competency” changes the fundamental notion of education, taking it from learning for its own sake, with a knowledgeable, independent citizenry as an outcome, to producing workers with skill sets.  Colleges that have agreed to align financial aid to such tests have ceded their own power.

Funny, Arne Duncan, when he spoke at the 2013 meeting of the American Education Research Association (AERA) and promised a “sea-change” in assessments for K-12 students, included “competency-based education,” as well as “non-cognitive skills.”  Others at that AERA meeting of academics and researchers working at universities, federal and state agencies, school systems, test companies, and non-profit agencies were Linda Darling-Hammond, who oversaw the development of the SBAC (Smarter Balanced Assessment Consortium) tests, one of the two Common Core tests, and her close colleague, Bill Ayers.

Many colleges are following the Department of Education in emphasizing non-cognitive, “social and emotional learning” skills.  Seventeen colleges have received funds from the Department’s “First in the World” grants to identify and help at-risk students through the aid of a tool called Diagnostic Assessment and Achievement of College Skills to measure such emotional attributes as “grit.”

Colleges have been targeted strategically.  Jacqueline King, director of Higher Collaboration at SBAC, has been working to “create greater academic alignment between K-12 and higher education.”  Common Core tests are determining placement in college courses.  In 2014, college faculty in Tennessee attended workshops to learn how to “synch up with Common Core,” in effect to teach grade 13.

I reported that the Department of Education had funded the 2013 working paper, “The Common Core State Standards: Implications for Community Colleges and Student Preparedness for College.”   It described the “Core to College” program in ten states: Colorado, Florida, Hawaii, Indiana, Kentucky, Louisiana, Massachusetts, North Carolina, Oregon, and Washington.  Core to College is funded by the Lumina, the William and Flora Hewlett, the Bill and Melinda Gates, and other foundations.  Their report, “Making Good on the College-Ready Promise and Higher Education Engagement Core to College Alignment Director Convening, August 1-2, 2012,” provides a record of discussions by “alignment directors” and guest speakers on teaching “a new type of student, more prepared for college-level, discipline-specific work.”  (As a former college instructor I am skeptical: having “more prepared” students meant an easier time in teaching them—not the need for special workshops.)

The ten states are to serve as “bellwethers and models for the rest of the country.”  Among the strategies, directors suggested more data, outreach to other “stakeholders” and private colleges, and more meetings.  They are also looking beyond “the English and Math Departments” that receive Common Core-certified students.  Speakers proposed “engaging faculty in other disciplines that could be touched by Common Core implementation, such as history or the social sciences.”

WestEd, a major Common Core funder, is evaluating the initiative.

The push for new assessments (especially at community colleges) has been quickly followed by calls for free community college.  In his 2014 State of the Union address, President Obama cited Tennessee’s still-developing program as a model.  The American Association of Community Colleges welcomed the proposal.  This year, on September 9, Obama announced that the “College Promise Campaign” would be chaired by Second Lady Jill Biden.  AACC President Walter Bumphus and Trustee President J. Noah Brown will serve on the National Advisory Board.

Democratic front-runners, Hillary Clinton and Bernie Sanders, pushed free college in their first presidential debate on October 13, 2015.

To top it off, the federal government is providing a college “scorecard.”  Of course, those who continue to refuse federal aid, like Grove City College and Hillsdale College, will continue to be left off.

Students at these colleges will also find themselves at an increasing financial disadvantage. One of Obama’s first orders of business was to make the federal government the bank for student loans.  This “bank” practices “loan forgiveness,” by graduating payment to income and providing complete forgiveness through work in government jobs, such as in public schools or at Americorps, the federal agency.  Indiana University law professor Sheila Seuss Kennedy and Indianapolis Chamber of Commerce manager Matt Impink enthused about such a “tour of duty” that sounds like the “civilian corps” Obama put forth at the beginning of his presidency.

We are well on our way.  With schools producing graduates with competencies “align[ed] to the needs of employers and society,” and with Common Core spitting out high school graduates “college and career ready,” we will no longer worry about higher learning.

EDITORS NOTE: This column originally appeared on the Selous Foundation for Public Policy Research website. The featured image is of President Obama announcing free community college with Vice President Joe Biden and Second Lady Jill Biden.

Anti-American Muslim Supremacist receives $164,050 in U.S. Taxpayer Money

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Linda Sarsour is an energetic purveyor of the “Islamophobia” myth, and has hysterically claimed that “Muslim kids” are being “executed” in the United States. She was instrumental in prevailing upon de Blasio to end legal and necessary surveillance in Muslim communities in New York. She is also a frequent visitor to the Obama White House, and has claimed that the jihad underwear bomber was a CIA agent — part of what she claims is a U.S. war against Islam.

She is a practiced exploiter of the “hate” smear against foes of jihad terror and Islamic supremacism, and has never apologized for using the Islamic honor murder of Shaima Alawadi to spread lies about the prevalence of hate crimes against Muslims in America. She is also an enthusiastic supporter of the “Palestinian” jihad against Israel. Given the general support for that jihad among Leftists, and the hard-Left tilt of the de Blasio regime in New York, it is not surprising that her hate-filled endeavors are taxpayer funded. But it is scandalous nonetheless: a grim sign of the times.

“Taxpayers should not be funding this anti-American hate-spewer,” by Andrea Peyser, New York Post, October 23, 2015:

…[Linda] Sarsour, a Muslim activist and ally of Mayor Bill de Blasio, blasted into the mainstream in August with a fawning profile published in The New York Times headlined: “Linda Sarsour is a Brooklyn Homegirl in a Hijab.” Although at age 35, the married mother of three who favors hijabs, or Muslim headscarves, is hardly a girl.

President Obama named Sarsour one of his “Champions of Change.” The daughter of Palestinian immigrants, who told the Times that she wed in an arranged marriage at age 17, is described on the White House website like this: “Ambitious, outspoken and independent, Linda shatters stereotypes of Muslim women, also treasuring her religious and ethnic heritage.”

But some observers got acquainted with Sarsour’s anti-Americanism two weeks after the politically correct Newspaper of Record lionized her. Sarsour, who serves as executive director of the generously city-taxpayer-funded Arab American Association of New York, based in her native Brooklyn, responded when Republican presidential candidate Ted Cruz tweeted, “America is and remains a nation built on Judeo-Christian values.”

“Genocide & slavery?” she shot back….

Her outrageous online assaults sank to a depressing level this month, when Sarsour tweeted a picture of a small Palestinian boy standing before Israeli soldiers clutching rocks in both hands. She added the words, “The definition of courage.”

“No, the definition of barbarism,” Queens City Councilman Rory Lancman, 46, responded.

Sarsour has the right to free speech, however reprehensible. So says the US Constitution. But as she waged a social-media war with Lancman, first reported by The Post’s Rich Calder, she seemed unaware that he, too, enjoys the same right.

She tweeted: “city elected official attacking a constituent on foreign policy issue when they weren’t asked. Welcome to NYC Council.”

“You must be especially proud of the 13-yr-old Palestinian who stabbed the 13-yr-old Israeli,” Lancman wrote.

She replied: “don’t put words in my mouth. Shame on you. Using my tax payer $$ to attack people online. Go do your job.”

But this tweet by Sarsour turned the fight downright ugly: “The Zionist trolls are out to play. Bring it. You will never silence me.”

“This is a woman who supports violence and supports terrorists while at the same time proclaiming that this country is founded on Judeo-Christian values of genocide and slavery,” a prominent political insider, who led me to Sarsour’s nasty “genocide” tweet, told me.

“And somehow, she receives taxpayer money,” the insider said. “I think that’s a very sad commentary on where this city and society are right now.”…

Lancman, who is Jewish, put out a statement that read, “Attacking Jews in their homes, schools, supermarkets, cafes, buses, roads, synagogues and seder tables is barbarous, and enlisting children to commit those acts is even more so.”

But he would not comment further to me about Sarsour, or say whether he believed her organization should continue receiving city funds, which have totaled $164,050 since 2012.

Sarsour, a co-founder of the Muslim Democratic Club of New York, has said she’s considering running for the Brooklyn City Council seat that Vincent Gentile, 56, is to vacate in 2017 due to term limits.

The Times piece describes Sarsour as some kind of dynamo, celebrating her for helping to partly dismantle the city Police Department’s surveillance program of Muslims….

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EDITORS NOTE: The featured image is of Linda Sarsour with NYC Mayor Bill de Blasio.

Bernie Sanders’s Plan to Fix College Is Worse than Nothing by Ariel Deschapell

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Bernie Sanders has tapped into a frenzied millennial base by proposing “free” college tuition (that is, tuition paid for by the government). Bachelor degrees are pitched as the primary means by which individuals can gain skills and increase their incomes, so skyrocketing tuition is becoming a hot election topic. But are more subsidies to the university system a legitimate solution to the problem, or simply a stunt to capitalize on youthful outrage?

There’s no denying that the price of higher education is unrealistically high, and a fix is needed. But Sanders’ plan doesn’t even purport to be a solution. It does nothing to address the root problem of rising costs. It merely spreads those costs to society as a whole by socializing them.

Proponents of this idea don’t ever seem to explore the more fundamental question of why the cost of college continues to increase, let alone how socializing those costs stops the inflationary trend.

The assumption seems to be that rising costs are simply a law of nature that we have to deal with. Fortunately, this isn’t the case. If we look at the wider economy, the cost of higher education is clearly an anomaly. Products across the economic spectrum, from smartphones to automobiles, decrease in cost and increase in quality year after year, despite heavy demand. Indeed, consumer demand is what drives continuous innovation in these industries.

Could the problem be something as simple as decreased public funding? Even if that were true, it still wouldn’t explain why universities seem incapable of cutting costs and maximizing performance. Apple, Samsung, and most any other firms seem perfectly able to do so without any regular source of taxpayer funding.

Higher education possess no unique characteristic that prevents it from improving and adapting as every other industry regularly does. But incentives matter, and the market incentives that drive competitive innovation in other industries are heavily distorted in the college and university system.

For starters, under the Higher Education Act signed into law by Lyndon B. Johnson in 1965, universities and colleges gained a de facto monopoly on higher education.

As Senator Mike Lee explains,

Under the federal Higher Education Act, students are eligible for Title IV student loans and grants only if they attend formally accredited institutions. That makes some sense, for purposes of quality control.

Except that under the law, only degree-issuing academic institutions are allowed to be accredited. And only the U.S. Department of Education gets to say who can be an accreditor.

That is, the federal government today operates a kind of higher-education cartel, with federally approved accreditors using their gatekeeper power to keep out unwanted competition.

Can this explain why higher education seems perpetually stagnant and inefficient? Since 1965, computers have gone from being the size of a small building to vastly more powerful, more common, and more affordable pocket-sized devices. Whole other industries have been continuously disrupted again and again, giving way to newer and better models for doing business.

Yet despite a relentlessly increasing price tag, a college education is largely the same beast it was decades ago. In 21st century America, our higher education system is still governed by rules written in 1965.

Because of these rules (and a flood of taxpayer-backed loans), more students are funneled into accredited higher education every year, while the supply remains artificially restricted. Even the smallest regional colleges turn away more students than they could hope to take in.

Is it any surprise then that tuition continues to climb when there exists so little competitive pressure to keep it in check? Without the risk of losing potential students to superior alternatives, universities lack the basic incentives to maximize the value they provide while minimizing the cost.

With this in mind, what does Sanders’s proposal do to address the underlying structural problem in higher education? As it turns out, worse than nothing.

Instead of seeking to weaken the cartel and drive down prices by increasing competition, free tuition goes the exact opposite way. Like decades worth of failed higher education programs, Sanders seeks to continue stimulating demand while doing nothing to address the artificially limited supply and dearth of innovation. Unchecked by any last remnant of market forces college costs will continue to run away at an even faster rate than before.

Were it still 1965, the Senator might suggest we deal with the AT&T telephone monopoly by demanding free landlines for all Americans forever. Thankfully, this isn’t what happened, and instead of a sprawling federally subsidized landline monopoly, we have a cheap, competitive nationwide market for cellular and mobile internet providers.

But this is exactly what Sanders proposes for higher education: a stagnant, expensive, uncompetitive industry, stuck in the past and eating up billions in subsidies. In doing so, he threatens to deny us the creative destruction sorely needed to bring higher education into the 21st century.

Socialized college tuition may provide a popular and illusory respite for students, but only the competition present in free markets can actually reduce costs and spur sustainable innovation.

Ariel Deschapell
Ariel Deschapell

Ariel holds the Henry Hazlitt Fellowship for Digital Development at FEE. He is a student of Florida International University with a focus in finance and economics.

American Immigration Crisis: One Vote, One Man, One Time

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Manchester, NH: On Saturday, July 25th, the Center for Security Policy, in partnership with First Principles and High Frontier, hosted The New Hampshire National Security Action Summit. A number of America’s most influential national security leaders addressed the current state of U.S. foreign and defense policies in an increasingly dangerous world. Its purpose was to ensure that the common defense receives the priority attention it requires from elected officials and their constituents, at both the federal and state levels.

Specifically, the event covered four key topics of interest to both our nation and the state of New Hampshire:

  • The threat from Iran, shariah and the Global Jihad Movement
  • The hollowing-out of the U.S. military
  • The border insecurity and immigration crises
  • America’s electrical power grid and threats to critical infrastructure

Here is the 18-minute video on border security and the immigration crisis given by James Simpson:

To view the full video of the action summit click here.

U.S. Muslim Migrant Resettlement: How to follow the money

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So many of our readers are eager to start researching the resettlement contractors working near you, so here are a few places to start to learn about how they are financed (this is in no way meant to be an all inclusive list, because I don’t know every place to research myself!).

But, first, although off-topic, I want you to see what a one-woman blogger accomplished in Chicago (not a refugee issue, but one involving fraud in the Chicago school system!).  See here (hat tip: Judy).  It can be done!

I’m tech-impaired, but if I can find stuff, so can you.  It just takes a little patience!

Call or write the non-profit group:

Start with contacting the resettlement agency near you (a handy list is here).  As IRS designated 501(c)3 organizations they are NOT allowed to keep their financial documents from you—they are required to give anyone who calls a copy of their financial statement and their Form 990 (if they have one).  Legitimate churches are not required to file Form 990’s so some of the contractors are doing this federal work (resettling refugees) pretending to be churches only.

Go to Guidestar:

Find their IRS Form 990’s on Guidestar by going here and registering to use Guidestar.  It can get tricky because you have to use their exact name as they filed on their Form 990.  For example, you won’t find the Hebrew Immigrant Aid Society, but you will find its Form 990 by typing in HIAS, Inc.

USA Spending.gov:

USA Spending.gov is a very handy site as long as you know the exact name of the entity you are searching for.  It also has the advantage of tracking across federal agencies and will give you grants and contracts!  Enter the name of the non-profit in the search window in upper right.

For example, you might find that a resettlement contractor is getting cashola, not just from the Office of Refugee Resettlement (in HHS), but from the US Justice Department from some voter registration grants.  If you don’t find the non-profit group listed, don’t give up right away, try to find the exact name it is using. I looked up a specific Catholic Charities this morning under its diocese name and nothing came up, but then I saw on their website that they had a slightly different name and found what I was looking for under that name.

Annual reports to Congress:

These are a treasure trove of information on grants and statistics on welfare use (among other things). I see here that they are late again.  FY2014 should have been released months ago.

Office of Refugee Resettlement:

Go here to programs and click on those of your choice to see who is getting all of the (your!) money!

Non-Profit Facts. com:

A reader sent me this website, which I have never used until today, so try it too by clicking here.  I did test it on the specific Catholic non-profit I searched at USA Spending.gov and was disappointed to see that this website did not mention the $140,000 HUD grant they had received in the last year.  However, there are still some useful bits of information here.  For example, I learned that this “church” group was not required to file a Form 990.

And, finally, you will need to check with your state and local governments about funding these ‘non-profit’ groups receive from you at that level.  This post is meant to address only federal money flowing to them.  You may have to use state public information laws to extract information from them.

Other suggestions that have worked for you?  Send them my way!

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Florida and Texas Win Again

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The far Left’s actions with regard to tax policy rarely match up to their lingo. Whether it’s John Kerry’s tax savings by docking his boat in Rhode Island rather than Massachusetts to dodge the penalty, or the Clinton’s avoidance of a hefty real estate tax bill by using slick accounting, it’s clear that the far-left’s luminaries do not practice what they preach.

As I reported in August when I wrote about the mass exodus from high-tax states toward more profitable areas, a number of blue state residents are following the same “do as I say, not as I do” approach. To be fair, many of those fleeing blue states for more business-friendly environments are conservatives fed up with having their hard-earned money pilfered by the blue state tax-vacuum, but the laws of probability state this exodus cannot be comprised of conservatives alone.

With the release of a new batch of IRS tax migration data for the 2013-2014 filing year, the evidence keeps piling up that Americans are voting with their feet, and their feet are voting for lower-tax, business-friendly states.

With the release of a new batch of IRS tax migration data for the 2013-2014 filing year, the evidence keeps piling up that Americans are voting with their feet, and their feet are voting for lower-tax, business-friendly states. This data has to be devastating to tax-and-spend liberals who keep insisting that the economic arc of history bends in their direction, but when the IRS data—along with something as simple as market-based U-Haul rates—conclusively indicate otherwise, it’s time to reevaluate that approach.

So, who are the winners and who are the losers? Again, low-tax, business-friendly, Florida and Texas are the big winners, while the high-tax, big government states like New York, California, Illinois, and New Jersey are the big losers.

Recently released IRS tax migration data from the 2013-2014 year indicate that an astonishing 5.4 billion dollars in taxable income fled the state of New York alone, while 4.2 billion left California (hat tip to Jim Pettit, who has written frequently on this topic, for organizing the data). Where is the money going? Florida enjoyed an influx of 10.6 billion dollars in income and Texas gained 4.9 billion. This is in addition to the 17.5 billion, which flowed into the top four finishers, Florida, Texas, South Carolina and, North Carolina, in the 2012-2013 filing year.

To be clear, I am not suggesting that tax rates are the only reason that people are leaving blue states for lower-tax red states, but it defies common sense to insist that this isn’t a major contributing factor. I even had someone write to me that it’s “the weather” that best accounts for the shifts. Really, the weather? I’ve heard a number of complaints from Californians about things ranging from taxes to traffic, but I’ve rarely heard complaints about the weather.

Adding to this pervasive “do a I say, not as I do” phenomenon—in which liberals vote for higher taxes and then move away from regions where their policies have won the day—is that the migration is happening at the county level as well.

As reported by Andrew Blake in the Washington Times and congressional candidate Frank Howard, Washington D.C. and its surrounding suburbs, which overwhelmingly vote Democratic in local, state, and federal elections, witnessed nearly 2 billion dollars flee from the city and its surrounding bedtime communities.

I witnessed this firsthand during my campaign for Congress.

I witnessed this firsthand during my campaign for Congress. I would knock on doors in Frederick County, MD, a largely conservative county just north on I-270 from Montgomery County, a D.C. bedtime community, which has zero countywide elected Republicans. People in Frederick would tell me that they just moved in. When I inquired, “Where from?” they would often respond: “Montgomery County. You just can’t run a business there.”

There’s a crucial election cycle right around the corner. If you are running for office, or supporting someone who is, please do your future constituents a favor and tell them in a clear and well-thought out message why you are running, and why people are running away from tax-and-spend liberal governance.

EDITORS NOTE: This column originally appeared in the Conservative Review. FULL DISCLOSURE: Frank Howard, referenced herein, served as Dan Bongino’s campaign chairman for a brief period during his 2014 congressional campaign.

Can Soaking the Rich Reduce Income Inequality? by Karen Walby, Ph.D.

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On the campaign trail recently, Bernie Sanders, a candidate running for the Democratic Party’s presidential nomination, said that America’s leaders shouldn’t worry so much about economic growth if that growth serves to enrich only the wealthiest Americans. And that our economic goals have to be redistributing a significant amount of wealth back from those in the top one percent of households according to income to the households at the bottom of the income distribution.

Most of the candidates for the Republican presidential nomination have said in one way or another that creating economic growth and with it economic opportunity is the best way to address the issue of income inequality. The subject is so popular it even has its own website, inequality.org.

Income inequality refers to the extent to which income is distributed in an uneven manner among a population. In the US, income inequality, or the gap between the rich and everyone else, has been growing markedly, by every major statistical measure, for some 30 years. While there is general agreement that this is something that needs to be addressed, a consensus on how to reduce income inequality remains elusive.

Three economists from the Brookings Institute recently looked into this issue in their article “Would a significant increase in the top income tax rate substantially alter income inequality?” And their findings are enlightening: They found that even a big increase in the marginal tax rate for top earners would have “shockingly little effect” on after-tax income inequality.

To briefly summarize their findings, they hiked the top income tax rate from 39.6 to 50%, a 26% increase. For households in the 95th to 99th percentiles of income, taxes would rise by an average of $6,464 a year while for the top 0.1 percent, the average yearly tax increase would be in $568,617. This rate increase would generate $96 billion in additional tax revenues.

But what effect would increasing taxes on the richest households have on reducing the income difference between the richest and the poorest households?

To answer that, the authors calculated the Gini coefficient for after-tax income before and after the 26% increase in the tax rate for the richest households. (The Gini coefficient is an index that ranges from 0, if everyone has the same earnings (maximum equality), to 1, if a single person has all the earnings and everyone else has none (maximum inequality.)

Under the current income tax rates, the after-tax income Gini coefficient was estimated to be .574. Raising the top marginal tax rate to 50 percent would reduce the Gini coefficient to .571, only a one-half of one percent decrease in income inequality. Incredibly, even when the authors assumed that all of the $96 billion in increased tax collections would be redistributed on an equal basis to the households in the bottom 20%, the Gini coefficient was only reduced to .560, a reduction in income inequality of only 2.4 percent.

So it turns out that the primary justification for keeping the progressive income tax system, that it is more beneficial to the poor, has been exposed for the fantasy it is.

The FAIRtax, a single rate tax on all consumption which replaces all federal income and payroll taxes, avoids the pitfalls of attempting to soak the rich. Thanks to the prebate, poor households would pay no sales taxes in net terms. Second, it eliminates the highly regressive Social Security and Medicare payroll taxes.  And third, it effectively taxes wealth as well as wages:  When the rich spend their wealth and when workers spend their wages, they will both pay taxes.  This broadens the effective tax base to include wealth, not just the income earned on it (much of which is currently exempted or taxed at a low rate under the current system).  Thus, one can lower the required consumption tax rate and, thereby, reduce the tax burden on workers.

headshot3_Karen_Walby_HeadshotABOUT DR. KAREN WALBY

Karen Walby, Ph.D. is the Director of Research Americans For Fair Taxation. To learn more about the Fair Tax click here.

Muslim Refugee Resettlement Resistance Grows: Feds shifiting costs to State and Local Taxpayers

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Fox News reporter, Melissa Jacobs, posted a very useful piece earlier this week entitled, ‘Obama’s refugee resettlement plan could stir battle with states.‘

Here is a bit that interested me (be sure to read the whole thing because she mentions several states and local communities resisting the resettlement of more refugees.  See if your city or state gets a mention!).

The Obama administration’s pledge to absorb thousands more Syrian and other refugees could run headlong into resistance from state and local officials worried about whether their communities can handle the influx.

[….]

“It’s a fiscal issue,” said Peter Steele, a spokesman for Maine Gov. Paul LePage. “You can only pay for what you can afford, and those funds should be going to the most needy citizens in our state.”

Don Barnett

Don Barnett, Center for Immigration Studies Fellow.

[….]

…. push back from the states could pose practical challenges.

According to a 1980 law, states can opt out of the program and need to be consulted in the process. However, Don Barnett, a fellow with the Center for Immigration Studies,describes refugee resettlement as a “secretive” and lucrative business for “non-profits” who operate with little coordination with state and local communities.

“In every encounter I’ve had with resettlement representatives, they will say if the locality doesn’t want it, we won’t resettle them — but this hasn’t been tested,” Barnett said.

Concern about the funding burden falling on local governments is hardly new.

The 1981 Select Commission on Immigration and Refugee Policy noted, “Many state and local officials are concerned that the costs of resettlement assistance will continue beyond the period of federal reimbursement and that the burden of providing services will then fall upon their governments.”

“There is a complete cost shift to the states,” Barnett said.

Indeed, federal funding, extended for 36 months at the beginning of the program, dropped to the current eight-month period by 1991. The Heritage Foundation estimates the total lifetime cost of government benefits at $6.5 billion per 10,000 refugees.

See Julia Hahn at Breitbart, here, for more on the Heritage Foundation study.

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Maryland Senators want more Syrians resettled in the state; seek to streamline security screening

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Federal Bureaucrats Are Paid 78% More than Private Sector Workers by Chris Edwards

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New data show that worker compensation is rising faster in the federal government than in the private sector. After rapid growth in federal pay during the George W. Bush years, growth slowed from 2011 to 2013 after policymakers enacted a partial freeze on federal wages.

That era of restraint is now over. The latest data from the Bureau of Economic Analysis (BEA) show that wages rose 2.9 percent in the federal government in 2014, on average, compared to 1.7 percent in the private sector.

When benefits such as pensions and health care are included, federal compensation increased 2.8 percent, on average, compared to 1.3 percent in the private sector.

Federal civilian workers had an average wage of $84,153 in 2014, compared to an average in the private sector of $56,350. The federal advantage in overall compensation (wages plus benefits) is even greater. Federal compensation averaged $119,934 in 2014, which was 78 percent higher than the private-sector average of $67,246.

This essay discusses trends in federal and private pay.

The BEA provides compensation data by industry. The figure shows average compensation in 17 major private industry groups, as well as compensation for federal civilian workers, the military, state and local governments, and federal government enterprises (mainly the postal service).

The federal government has the fourth highest paid workers in the United States, after utilities, mining, and the management of companies.

Federal compensation is higher, on average, than compensation in the information, finance and insurance, and professional and scientific industries.

Federal compensation is more than twice as high as compensation in the education industry, and it is more than three times higher than compensation in the retail trade industry.

For more information, see here.

Cross-posted from Cato.org.

Chris EdwardsChris Edwards

Chris Edwards is the director of tax policy studies at Cato and editor of DownsizingGovernment.org.

Dr. Ben Carson calls for revocation of Council on American Islamic Relations (CAIR) tax-exempt status

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140713-Ben-Carson-ftrThey demanded he drop out of the race. They’re a 501c3 organization, and such organizations are not supposed to intervene in campaigns either on behalf of or in opposition to a candidate. Clearly the gang of thugs at Hamas-linked CAIR, designated a terror organization by the United Arab Emirates, is in violation of the law here, but it is almost certain that Obama’s politicized Justice Department will take no action.

“Carson: Pro-Islam nonprofit broke the law with political attack,” by Bradford Richardson, The Hill, October 3, 2015:

Republican presidential candidate Ben Carson says a nonprofit Islamic advocacy group broke the law by calling for him to drop out of the presidential race.

“The Council on American-Islamic Relations (CAIR) held a public press conference demanding that I withdraw from the presidential race,” Carson said in an email to supporters Saturday.

“Here’s the catch – CAIR is a tax-exempt nonprofit, and the IRS rules explicitly prohibit such groups from intervening in political campaigns on behalf of – or in opposition to – a candidate,” the email continues.

Carson said he is demanding the IRS take action against the group and started an online petition to remove CAIR’s tax-exempt status.

A spokesman for CAIR called for Carson to drop out of the presidential race after the GOP candidate said a Muslim should not be elected president.

CAIR is a 501(c)(3) group with tax-exempt status, according to the group’s website.

The group previously lost its tax-exempt status in 2011 for not filing tax returns for three years in a row, but regained it the next year.

“We find it interesting that Dr. Carson seeks to use a federal government agency to silence his critics and wonder if that tactic would be used to suppress First Amendment freedoms should he become president,” CAIR said in response to Carson.

“CAIR is not in violation of any IRS regulation in that we did not ‘participate in’ or ‘intervene in’ any political campaign. We, as mandated by our mission as a civil rights organization, merely expressed the opinion of our community that a candidate whose views violate Article VI of the Constitution is unfit for public office.”…

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When Anti-Gunners Say ‘Gun Safety,’ They Don’t Mean It

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In what can only be described as a blatant display of hypocrisy, two gun ban groups have started a petition to deny a federal grant for Project Childsafe, a gun safety program operated by the National Shooting Sports Foundation (NSSF).

This year, for the first time since Barack Obama’s 2008 election, the NSSF has won a U.S. Department of Justice grant, in the amount of $2.4 million dollars for Project Childsafe.  According to NSSF’s website, this program is “committed to promoting firearms safety among firearms owners through the distribution of safety education messages and free firearm safety kits.”

As gun owners, we are all dedicated to safe firearm usage, and NRA is the leading provider of firearms safety training in the world. With tens of thousands of trainers and instructors, NRA provides the curriculum and guidelines that allow millions of Americans to learn how to use and store firearms safely.

NSSF is also dedicated to firearm safety.  In cooperation with their industry partners, including manufacturers, distributors and dealers, the group promotes numerous programs and materials on safe gun ownership.  Project Childsafe is just one of the programs that NSSF sponsors, and it is operated in partnership with law enforcement departments throughout the United States.

Apparently, real dedication to firearm safety is opposed by two anti-gun groups. The Newtown Action Alliance and the Coalition to Stop Gun Violence have begun a petition campaign to have the Justice Department rescind the grant.  It seems that all the talk of “firearm safety” and “responsible gun ownership” from these anti-gun groups is nothing but a smokescreen.

But this is not surprising.  NRA and NSSF spend millions each year to teach and promote firearm safety — programs that actually save lives.  For NRA and NSSF, safety isn’t just a political ruse, it’s a top priority. In contrast, groups like those challenging the Project Childsafe grant do nothing to promote firearms safety. They hide behind the term “gun safety” to fool people about their real intentions: to reduce or eliminate legal gun ownership.

With the antagonism that the Obama administration has shown to legal gun owners and any organization that defends the Second Amendment, it remains to be seen if the grant will be delivered or if anti-gun politics will win the day.

If these two radical groups are successful, it will only prove that any talk of gun safety by Obama, his Justice Department or anti-gun groups is just that, empty talk.

NSSF_PCS_Infographic_PCSByTheNumbers_Updated092014_v01

Homeschooling Is a Threat to Public Education: But Not for the Reasons You Might Think by B.K. Marcus

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According to my local government, I’m just now beginning my fifth year as a homeschooling dad. That’s how long state law has required us to file the paperwork.

In that time, I’ve heard homeschoolers called elitists (because not everyone can afford to educate their own children), snobs (because it is assumed that we look down on those who send their kids to group schools), religious fanatics (because, well, aren’t all homeschoolers Bible-thumping snake handlers or something?), hippies (because if you’re not locking your kid up with a Bible, you must be one of those barefoot, patchouli-scented unschoolers), negligent (because what about socialization?), and just plain selfish.

All the epithets sting, but that last one feels the most unfair.

We are selfish, apparently, because we’re focused on the well-being of our own children and families instead of the larger community. But not only do many homeschooling families devote their time to volunteer work and charity, and not only do we evolve spontaneous extended community co-ops, but some parents also become ardent activists, making homeschooling a political movement and not just a personal choice.

That activism has at least one academic calling for greater government scrutiny of homeschooling families.

In a recent City Journal article, “Homeschooling in the City,” Matthew Hennessey quotes Georgetown law school professor Robin L. West, who “worries that homeschooled children grow up to become right-wing political ‘soldiers,’ eager to ‘undermine, limit, or destroy state functions.’”

I assume that for West, the “right-wing” label subsumes all of us who seek to “undermine, limit, or destroy state functions” — you know, people like John Locke, Tom Paine, and Henry David Thoreau.

I almost wish West’s fears were better founded.

Very few of the homeschoolers I know, whether on the right or the left, are eager to curtail the growing scope of government — except when the bureaucracy tries to reach into their homes and families. Many of the homeschooling dads I know are in the military, many of the moms drive cars with Obama bumper stickers, and many of the kids started out in public school before their parents decided they would be better educated outside the system. The activists are focused on education and on parents’ rights. Beyond those immediate issues, there’s little consensus on the proper scope of government power in areas outside of education.

It used to frustrate me that there are so few classical liberals in evidence in the diverse and active homeschooling community where I live. But there’s something to be said for a nonideological movement away from the state’s education cartel.

The American Founders (whom West, no doubt, considers “right-wing”) saw the future of freedom in the idea of decentralization: small governments should have to compete for citizens, akin to businesses having to compete for customers. Citizens who were dissatisfied could vote with their feet, leaving behind the territorial government that failed to serve their needs. It was, after all, such freedom of movement that had allowed individual liberty and general prosperity to grow, however imperfectly, in late-medieval Europe.

That liberalization was not the result of ideology. It was the effect of exit.

If landlords were too rough on the peasants, the peasants could seek a better situation elsewhere. Feudal law said they couldn’t, but the reality was that they could — especially in the post-Plague era. So compensation grew and working conditions improved, despite a widespread belief in the Great Chain of Being, a doctrine that stood against such changes.

If local princes interfered too much with nearby markets, merchants could pick up and leave. Other principalities welcomed them into freer local economies. Again, this liberalizing migration was not the result of enlightened rulers or ideologically motivated migrants; it was the consequence of fragmented authority and easy exit.

We live in an era when territorial authority has grown larger and ever more centralized. There is less political power behind the threat of departure when the rules are so similar everywhere you go. But there are other ways to leave Leviathan. Technology helps us outcompete the state, drawing ever more people away from government regulations and cartels. These defectors are savvy and self-interested; they are not necessarily ideological. The “gap economy” couldn’t thrive if it depended on philosophical converts.

Homeschooling took off before the advent of digital peer-to-peer technology, but the idea is similar: those who think they can do better than the monopoly system simply choose to leave that system, whether or not the law acknowledges that option. Through peer networking, homeschoolers, like generations of migrants before them, have sought alternatives outside the norm, leading to the kind of innovation that centralized systems inhibit.

Between 1970 and 2012, the number of American children educated at home grew from 10,000 to 1.77 million, according to economist Walter Williams.

Professor West and other advocates of big government are right to be worried by those numbers, but not because homeschooled kids are learning any anti-government ideology at home. The greatest threat that homeschooling poses to the government system is its diversity, its resiliency, and its undisputed academic success.

Homeschooling looks ever more appealing as an alternative to public education. That pressures public schools to make staying put more attractive. It pressures legislatures to explore options such as charter schools and school choice. As the government schools lose their monopoly status, the competition benefits even the families who never consider the alternatives.

I’m too new to homeschooling to take much credit, but we can thank those thousands of pioneers in the 1960s and ‘70s, and the millions of families over the decades since then, who quietly withdrew their children and their consent, and selfishly attended to the well-being of their own families.

B.K. Marcus
B.K. Marcus

B.K. Marcus is managing editor of the Freeman.

Big Government Is Still Young by Alberto Mingardi

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I am reading Charles Murray’s By the People. Rebuilding Liberty Without Permission. By the way, it is quite an engaging read.

Right at the beginning of the book, Murray struggles to give some measure of the extent of increase in government involvement with everyone’s life.

Here’s a passage:

Until the 1930s, the federal government remained tiny. The federal budget of 1928 totalled $38.0 billion, expressed in 2010 dollars. …

Of that total budget in 1928, $9.4 billion went to defense. Of non-defense spending, another $9.4 billion went to repayment of the national debt and $9.0 billion went to pensions and the Veteran Bureau. That left $10.2 billion for everything else — all the expenses associated with the White House, the federal judiciary, and the Departments of State, Treasury, Justice, Commerce, Labour, Interior, the Post Office, and all the independent agencies of the federal government.

Expressed as per capita spending in constant dollars, that $10.2 billion amounted to 1.0 percent of comparable federal spending in 2013. Think about it: one one-hundredth.

Murray has quite a few similar “facts from the past” that turn out to be rather surprising for the contemporary reader. To me, the most striking thing is how fast government expansion was accomplished. I fear we very often forget that.

In Western countries, most people today think pensions are a most common feature of human life — and yet human beings had compulsory savings and pension systems for a minuscule fraction of their history.

If government grows fast, however, culture changes fast too. The sense of entitlement takes root easily in society.

For one thing, looking back makes us think that big government is not inevitable: after all, government was capricious, tyrannical, arbitrary during most of human history, but it never was this intrusive and expensive.

For the other, it is remarkable how easy we get used — perhaps, we become addicted? — to new government programs, and how strongly they can permeate society and change culture.

First published at © Econlog. Reprinted with permission.

Alberto Mingardi

Alberto Mingardi

Alberto Mingardi is Director General of Istituto Bruno Leoni, Italy’s free-market think tank.