Health Care Taxes Too Much for Unions

Liberals should know that they have gone too far when even  unions oppose their plans for higher taxes. As The Washington Times reported today, the Teamsters are balking at proposed taxes on health plans. In all, the Senate health care plan has a total of $493.6 billion in new taxes. A list of the new taxes is available at Townhall.com.

More Stimulus Absurdity

After blowing economic stimulus funds on everything from turtle bridges to imaginary congressional districts, now the federal government wants some of it back. As The Washington Post has reported, a tax credit intended to lighten the load for some taxpayers has actually done the reverse for about 15.4 million Americans whose taxes are withheld from their pay checks:

But federal tax tables that guide those withholdings did not account for some wage earners whose personal situations complicated the tax credit calculation. That category included some workers with more than one job, some married couples in which both spouses work, and some Social Security recipients with jobs.

The Treasury Department’s inspector general for tax administration estimated that more than 10 percent of all taxpayers who file individual tax returns for 2009 could owe additional taxes because of the complexities of the Making Work Pay credit. Of that group, the IRS estimated that 65,000 taxpayers could technically face penalties for underpaying their taxes in 2009, although the agency said it would waive such fees.

While the inspector general’s report estimated that millions of taxpayers will be negatively affected by the tax credit, a Treasury official said the vast majority will only receive a slightly reduced refund and not an out-of-pocket tax liability on April 15.

Of course, at 1419 pages long, who had the time to read all the fine print in the stimulus bill, let alone peruse IRS withholding tables?

Phony Jobs for Phantom Districts

The blogosphere is abuzz today with news that the economic stimulus program has created or saved 30 jobs in Arizona’s 15th Congressional District.

So what is all the fuss about?

Well, for starters, the state doesn’t have a 15th Congressional District.

In fact, the stimulus  is credited with saving or creating jobs in phantom districts in other states as well. Like 35 jobs in Minnesota’s 57th Congressional District or 25 jobs in New Mexico’s 22nd Congressional District. In all, $6.4 billion went to 440 nonexistent districts, according to a report on watchdog.org. Another report found a total of 75,343 phony jobs.

The White House has responded on its blog, calling on critics to look at the “big picture,” noting that the stimulus still netted 600,000 to 700,000 jobs.

So let’s look at the big picture. Earlier this year, the White House economic team claimed that unemployment wouldn’t rise above 8 percent if the stimulus program was approved. And where are we today? 10.2 percent unemployment, according to the latest Bureau of Labor Statistics report. Sorry folks, the big picture doesn’t look much better for you.

The Heritage Foundation blog, by the way, has a great roundup of this story.

Poverty Institute Hides from Transparency

The Poverty Institute announced yesterday that it will be legally separating from the Rhode Island College Foundation, although the institute will continue to rent space from the college and collaborate with faculty and students on social welfare issues. ‘Well then, what is the point?’ you might wonder.

We can think of at least one benefit for The Poverty Institute. OSPRI has long sought any e-mails that were sent out on taxpayer-funded computers and check registers for the last three years from the institute.  Because it is part of the state university system, we’ve filed Freedom of Information Act requests in order to obtain these documents. As a private organization, however, The Poverty Institute won’t be subject to those same transparency rules. Which is fine – but when they used public funds to do their business, we think the information should be public. And we will continue to work towards that goal.

Ironically, the institute’s homepage has a link to an issue brief that takes the Rhode Island Department of Revenue to task for not disclosing information on six tax credits given to corporations.

PS> we also filed a FOIA request for the college’s check register – they are insisting that we give them over $66,000 to produce the records. Yes, you read that right – $66,000.

Does Labor Lobbyist Have Unlimited Access?

How much does $60.7 million buy you? Well, for the Service Employees International Union—which spent that much to get Barack Obama elected—it appears to be lots of face time with the President. Last month, The New York Times reported that the union president, Andy Stern, has visited the White House more than anyone else. Even more than Oprah and George Clooney. According to visitor logs, Stern dropped by 22 times in the first six months—at a rate of nearly one visit per week in office. Now, Americans for Tax Reform and the Alliance for Worker Freedom are demanding that the U.S. Attorney General investigate whether Stern was involved in any illegal lobbying activities. Read their open letter here.

 

In the Red: State Budget Report Released

The Department of Administration today released the first quarter report for fiscal year 2010, showing an estimated deficit of $219.8 million. This is worse than what was reported in The Providence Journal last week and it already takes into account cost-cutting measures like the eight furlough days scheduled for state workers this year. OSPRI has posted a copy of the report here.

Health Care Reform Could Harm Innovation

A lot of reporting and commentary—here and elsewhere—has been devoted to detailing the numerous deleterious consequences of national health care reform:  higher costs, higher taxes, less freedom, and less competition. One we haven’t gotten into as much is what will happen to medical innovation. Here is what the Cato Institute found:

New research by the Cato Institute shows that America generates more medical innovations than any other country, and in some cases, more than all other countries combined. Medical innovation may be more important than covering the uninsured or controlling health care spending, inasmuch as a treatment must first be invented before its costs can be reduced and its use extended to everyone. The Democrats’ health care legislation focuses on expanding health insurance coverage, which should encourage innovation—yet it does so by expanding price controls, government purchasing, and health insurance regulation, which reduce innovation. What would be the net effect? What are the alternatives?

The results of this research will be released at a forum on Friday. Rhode Islanders can watch it by visiting this page.

 

Big Unions Making Government Bigger

As this Heritage Foundation blog post notes, gone are the days when “union worker” conjured up images of Americans “working in a steel plant, or coal mine, or auto factory.” Because overly-generous salaries and benefits are easier to fetch from government than the private sector, unions are increasingly turning to public employees to boost membership:

Heritage scholar James Sherk has the numbers: The overall unionization rate between January and September 2009 stood at 12.4%, unchanged from last year. However, this difference masks a large difference between unions in the private and public sectors. Union membership has fallen to 7.3% of private sector workers – the lowest rate since Roosevelt signed the National Labor Relations Act into law. But it is a completely different story in the public sector: 37.6% of government employees belong to unions, up almost a percentage point since last year. Those 7.9 million unionized government employees are 51% of all union members nationwide.

It’s even worse in Rhode Island. According to unionfacts.com, 63.6 % of the 50,060 public employees in the state  are unionized. Union facts has a nifty graph on their site showing how union salaries have exceeded the rate of inflation. If it weren’t for union-inflated salaries, Ocean State residents could be paying 40.51 % less in state income taxes, according to the site. This is what Union Facts calls the “Government Employee Union Tax.”

The confluence of big unions and big government becomes a vicious cycle, in which government boosts union membership, salaries, and benefits, and, in turn, unions advocate for higher taxes and spending.

In Oregon, for example, unions are using their coffers to fund ballot initiatives that would establish higher personal income and corporate taxes. And why not? With all that extra money lying around, who in the Oregon state government will blush at dishing out higher salaries and bonuses to union workers?

As California Goes, So Might Rhode Island

This new study from the Pew Center on the States says Rhode Island could be headed toward the same kind of fiscal catastrophe that has enveloped California.Here is how DailyFinance summarizes the report:

While California’s economic struggles, such as issuing IOUs to state employees and business contractors, have been well documented, many more states are facing a combination of economic, money-management and political pressures that are driving them to the brink of collapse. The Pew report cites high home foreclosure rates, increasing joblessness, declining state revenues, poor money management, legal and political obstacles to balanced budgets and the size of budget gaps as the six factors that contribute to most of the problems.

The Providence Business News also reported on this study. For a vivid look at the economic and social breakdown in California, check out this story from the Guardian.

 

State Deficit Yawns Wider

Here’s the latest bad fiscal news from The Providence Journal:

Having barely recovered from the last budget battle, state leaders on Tuesday learned that Rhode Island’s battered economy is largely responsible for creating another gaping budget hole.

This one, conservatively projected at $200 million for the fiscal year that began July 1, was agreed upon by the state’s top budget officials in what has become a painful annual exercise known as the November Revenue Estimating Conference.

“It’s extremely bleak,” said House Finance Committee chairman Steven M. Costantino, considered the legislature’s budget architect. “Let’s hope at some point this stabilizes.”

The projection comes just four months after the General Assembly adopted a slew of budget changes –– trimming pension benefits for thousands of state workers and teachers, wiping out revenue-sharing for cities and towns, and raising the gas tax, among them –– intended to balance this year’s budget, as required by law.

For a state-by-state comparison of budget deficits, click here. Note, however, that the information on Rhode Island does not take into account this latest estimate.