Sense on Cents

. . . TEACH A MAN TO FISH, FEED HIM FOR A LIFETIME!”

While there are so many issues being debated during this election, it seems clear to me that the relative merits of our current tax system as highlighted by “that one’s” interaction with “Joe the Plumber” will carry the day.

Amidst all the rhetoric and spin that is giving me a headache, I thought it may be helpful for all of us to take a deep breath and merely “review” some data so that we can make as informed and thoughtful a decision as possible.

Let’s lay out some data that I collected from a variety of reputable sources (Kiplingers, U.S. Census Bureau, WSJ) and then go from there. To be fair, the numbers are taken from the last few years but for our argument here, the big picture will be very much in focus.

BREAKDOWN OF INCOME AND TAXES PAID BY CATEGORY

Income Category 2004 AGI Percent of all income Percent of income taxes paid

Source: IRS

*** Bottom 35% pay 0 federal income tax ***

2. WHAT DO WE KNOW ABOUT the Top 5%? (Source: U.S. Census Bureau)?

(Obviously, if I were a full-time professional journalist and not merely a concerned citizen, I would make sure that my year-to-year comparison was fully aligned between Kiplingers and the U.S. Census Bureau … what I am trying to achieve though is a focus on the big picture and I think my points will be clear.)

The income break point is 157k — 90% correlation with college educated and two-parent families, so can somebody please enlighten me as to why I see the break point for the top 5% of income earners as being at 150k +/- and “that one” is saying that all those individuals below 200k (families below 250k) will get a tax cut?

Are we being duped and that number should really be 150K?

3. INCOME LEVELS by LEVEL of EDUCATION (U.S. Census Bureau)

4. Family Structure (Source: Wall St. Journal)

70% of newly born African Americans are born into a single parent structure.

50% of newly born Hispanic Americans are born into a single parent structure.

App 30% of newly born Caucasian Americans are born into a single parent structure.

Please accept my apology for not having the data for Asian Americans or Native Americans, but for our purpose here I think the above will suffice.

5. Dropout Rates (America’s Promise Alliance) = CRISIS! 1.2 million American children are dropping out of school every year! This rate is trending higher and has solidified the underclass in our society. Over a 10-year time period, it represents 4% of our population. Over a 20-year time frame, at that rate, it represents 8% of our population! This trend has been growing over the last 30 years.

The overwhelming percentage of these dropouts come from the inner cities where approximately 50% of students drop out!

Graduation Rates (Source: CBS News, America’s Promise Alliance):

Detroit 25% — Indianapolis 30% — Cleveland 34% — Baltimore 35% — New York City 45% — Los Angeles 45%

Against the backdrop of all this information, why is it that it is not only the top 5% but even the great middle class (guys like “Joe the Plumber) who look at our tax system and realize that “spreading the wealth” is the equivalent of “throwing good money after bad”.

What do I mean by that?

Given the current state of our socioeconomic system, the poverty that is embedded in the system is being perpetuated by the GROWING LACK Of FAMILY STRUCTURE and the DELINQUENT INNER CITY SCHOOLS.

“That One’s” redistribution of wealth is the equivalent of “throwing good money after bad” because it does not address the core issues that are holding those in the inner cities back.

While I do not pretend that I can “deliver personal responsibility” upon people and magically have children born into marital bliss, I do know that enormous numbers in the inner cities know that education is the only way for future generations to get out of poverty.

As was recently written in the NY Times (yes, how about that) in describing the school administration in Washington D.C., “a RAPACIOUS CENTRAL BUREAUCRACY THAT WAS INFAMOUS FOR WASTING MONEY AND THWARTING REFORM.”

John McCain very succinctly highlighted the need for:

1. increased accountability in assessing inner city school boards and administrations

2. promoting the development and implementation of more charter schools in the inner cities, and

3. allowing for more widespread use of school vouchers.

Time and again, inner-city parents have clamored for all of these measures to be implemented. What has gotten done? The situation has only gotten worse. …..wasting money and thwarting reform!

What did BO do while he was involved with the Chicago public schools?

How come his time spent there and his accomplishments there have not garnered greater focus?

Obama did call for more charter schools but he whiffed when confronted on the vouchers. WHY?

Very simply, it is because Obama and the Democratic Party are held hostage by the teachers unions in this country. With drop-out rates of 50% and above, why is it that this crowd isn’t shown the door?

The unions and bureaucracy may not be the TOTAL problem but, as highlighted by the quote about the D.C school system and the figures presented, they certainly are not part of the solution.

Charter schools and vouchers are making some progress in certain cities but the power of those mechanisms are stifled by the bureaucracy and unions. All of us are paying for it.

You know who gets this?? The American public gets this.

Whether they are in the middle class or the upper tax brackets, they know that the current system is broken because it penalizes those who are working hard to improve their lot.

Guys like “Joe the Plumber” don’t want the government handout, they merely want the government to “get their hand out” of their pocket. How does it penalize them, because each marginal dollar is taxed at ever higher rates.

Those on the upper end are enticed to move income overseas (including Canada which just reelected Stephen Harper on a platform of lower taxes across the board) or merely stop producing altogether. Those in the middle class see and feel the waste as well.

With all due respect to those in the lower incomes, they have little to no “skin in the game,” thus the wasteful spending is not impactful to them. Additionally, given that BO is proposing to “give them a fish”, they are not incentivized to “learn” how to fish because if in fact they start to catch some fish of their own and generate greater income, they lose the “handout” and then have to commit even greater time and effort to getting ahead. Thus what we are left with currently are disincentives and waste. These disincentives and waste are only exacerbated under Obama’s plan.

Our country needs to address the causes not the effects of our tax code and educational underperformance.

Reward work at every level! Hold people accountable at every level! Help those who truly need the help, but help them by “teaching” them how to help themselves. This takes real courage and leadership which BO has NEVER truly displayed.

Without dramatic changes in our current inner city education structure and our tax code I am truly fearful that our country will continue to lose ground to our overseas competitors. We need real leadership!! We need John McCain!

Again, I share these thoughts and opinions with all due respect and humility. I love this great land and all my fellow Americans but I am deeply concerned for the paths on which BO would take us. He either doesn’t get it or he is too focused on his own ambition and power to display the courage and leadership we ALL need. God Bless America!

This entry was posted on Tuesday, October 21st, 2008 at 7:00 AM and is filed under Barack Obama, Economy, Education. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.