No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Archive for March 29th, 2011

Tax the rich? We’ve already tried that – part 2

by @ 19:22. Filed under Politics, Taxes.

(H/T – Lance Burri, just because I don’t think a million hits is enough for him, or is it the fact that he used the eggs-in-a-basket analogy)

If I had paid attention on Saturday, I probably would have done this as the Weekend Hot Read. Robert Frank of The Wall Street Journal used the collapse of the rich and the resulting collapse of various states’ tax revenues as the topic of the WSJ’s Saturday Essay. I’ll take a larger chunk than Lance did to get you to read the entire thing:

The story of (Brad) Williams, the former chief economist and forecaster for the California Legislative Analyst’s Office, shows just how vulnerable states have become to the income shocks among the rich, and why reform has proven difficult.

In the mid-1990s, shortly after taking the job, Mr. Williams discovered he had a problem. Part of his job was to help state politicians plan their budgets and tax projections….

Historically, California’s tax revenues tracked the broader state economy. Yet in the mid-1990s, Mr. Williams noticed that they had started to diverge. Employment was barely growing while income-tax revenue was soaring.

“It was like we suddenly had two different economies,” Mr. Williams said. “There was the California economy and then there were personal income taxes.”

In all his years of forecasting, he had rarely encountered such a puzzle. He did some economic sleuthing and discovered that most of the growth was coming from a small group of high earners. The average incomes of the top 20% of Californian earners (households making $95,000 in 1998) jumped by an inflation-adjusted 75% between 1980 and 1998, while incomes for the rest of the state grew by less than 3% over the same period. Capital-gains realizations—largely stock sales—quadrupled between 1994 and 1999, to nearly $80 billion.

Mr. Williams reported his findings in early 2000, in a report called “California’s Changing Income Distribution,” which was widely circulated in the state capital. He wrote that state tax collections would be “subject to more volatility than in the past.”

The essay goes on to note how the states that became most-addicted to the outsized increased revenue from the high-income earners, have become the worst economic basket cases as the POR Economy (™ Tom Blumer) decimated those same people.

$100,000 per commuting beneficiary is still too much

by @ 18:12. Filed under Choo-choos, Politics - Wisconsin.

I’m disappointed to learn that Scott Walker has applied for at least $150 million in Porkulus funds for the Hiawatha Milwaukee-to-Madison line to turn that into a “bit faster than car speed” line. Despite it being one of Amtrak’s top 10 lines and setting a new ridership record of 783,060 riders one-way passenger trips in FY2010 , it still needed a $5.5 million subsidy (90% covered by OtherPeoplesMoney in the form of federal money with a very-minor Illinois contribution) last year.

Once one strips away the 100 people per weekend day from even the projected 850,000 one-way passenger trips, that leaves roughly 1,500 daily commuters who rather like the idea of paying less for getting down to where they really want to be than the average parking rate in downtown Chicago while sucking the difference between what they pay and what it costs out of your pocketbook.

Cash for Clunkers II – Electric Boogaloo

by @ 10:58. Filed under Business, Politics - National.

Kerry Picket caught a change to the $7500-per-electric vehicle giveaway to Government Motors being pushed by Michigan Democrat Senator Debbie Stabenow in a proposed bill and President Barack Obama in his 2012 budget. To wit, instead of a tax credit of $7,500 for buying the Chevy Volt (and the all-electric Nissan Leaf), that $7,500 would be taken off at the dealer, with the dealer hoping to get compensated by the government at a later date. If you don’t believe Kerry’s and my assertion that it is Cash for Clunkers II, allow me to lift a couple paragraphs from the story:

In fact, Department of Energy’s David Sandalow told Bloomberg News in February the insta-credit would operate the “same way the 2009 ‘Cash for Clunkers’ program worked.”

The Detroit News reported Vice President Joe Biden said at an Indiana battery assembly plant, “You won’t have to wait,’ it would be like the cash-for-clunkers program.”

No word if the dealers will have to run glass through the engines of any cars traded in for the overpriced glorified golf carts, or whether the compensation for the dealers would be any faster than it was for the first Cash for Clunkers.

It’s also worth noting that Government Motors is currently trading at somewhere under $31/share. If the Treasury could dump its remaining 33.3% of Government Motors now, it will have lost over $13 billion on the venture, most of it transferred to the UAW.

Revisions/extensions (11:31 am 3/29/2011) – There’s more discussion at Sister Toldjah, who suggested a new liberal motto (“If at first you don’t succeed, fail, fail again”), The PJ Tattler from Bryan Preston, who noted all the Dem-supporting groups who will also be bailed out, and Memeorandum (just because I haven’t linked there lately).

Reinforcing the “Act 10 is law” argument

by @ 0:36. Filed under Politics - Wisconsin.

Yesterday, the Wisconsin Department of Justice filed motions for both the repeal of Judge Maryann Sumi’s temporary restraining order and the withdrawal of its emergency appeal of the case because it asserts Act 10 is now in force and has been since Saturday. I’ll provide the Cliff’s Notes version:

  • With regard to the actual publication of an act, the Secretary of State has but one role – within one working day (i.e., a weekday that is not a state-recognized holiday) of the deposit of an act in his office, designate a date of publishment that is within 10 working days of its enactment. It is the Legislative Reference Bureau, which must publish on that designated date, or if there is no date designated, within that same 10 working-day window, that accomplishes the publication.

    As there is no statutory mechanism for that date to be changed after the first working day after deposit has passed, the “good faith” attempt by Doug La Follette to rescind the assigned date following Sumi’s TRO does not have any statutory weight.

  • As Dane County DA Ismael Ozanne failed to name the Legislative Reference Bureau in his attempt to overturn established case law barring judicial restraint on the publication of an act, it published the act in accordance with state law, and “(t)hat bell cannot be unrung now”.
  • As for the argument that it is a post-publication notice (one that can be as late as 10 days after the date of publication set by the Secretary of State and the act of publication by the Legislative Reference Bureau) by the Secretary of State in the official state newspaper, the Wisconsin State Journal, that is publication for the purposes of the constitutional requirement to publish, the DOJ notes the distinction in the state statutes between the actual publication of the act and a post-publication notice that includes the date of publication to knock that argument down.
  • As for the argument that a failure by the Secretary of State to designate a date of publishment (or specifically in this case, attempt a recession of designation), the DOJ asserts that, when the various mandates on the publication of an act are read together, the intent of the Legislature was that, unless specified in the act, it is to take effect no later than the day after ten working days after enactment, with a Secretary of State-exercised option to make that date earlier. I’ll quote from the request if this is not the case (emphasis in the original):

    To read these statutes any other way would permit a Secretary of State to delay publication of the act, thus granting far more power to the office of the Secretary of State than the Legislature intended when it imposed a series of ministerial, non-discretionary duties on the office. It would also effectively nullify the statutory directive to LRB to publish acts based upon the time the governor approves of a bill, and not when the Secretary of State acts. And most significantly, it would deprive the legislative of its prerogative to pass laws and put them into force. Goodland, 243 Wis. at 468 (“If a court can intervene and prohibit publication of an act, the court determines what shall be law and not the legislature…. This it may not do.”)

The ball is now squarely in Sumi’s court (no pun intended). If she were honest in her opposition to the act, she would vacate the existing TRO and replace it with one that blocks enforcement. Something tells me, however, she is going to try to retain her ill-conceived seizure of power for herself, the remainder of the liberal wing of the judiciary, and Doug La Follette.

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