Obama's $3 Trillion Tax Increase; http://globaleconomicanalysis.blogspot.com

http://globaleconomicanalysis.blogspot.com

Obama's $3 Trillion Tax Increase; IRS To Track PayPal Transactions; Toledo Ohio Fiscal Emergency; Obama's Utopian Education Goals


Here are a few stories this past week that caught my eye that I have yet to mention.

$3 Trillion Tax Increase

Obama's $3,000,000,000,000 Tax Hike

From the Heritage Foundation

When he released his new budget proposal on February 1, President Barack Obama asserted that the government "simply cannot continue to spend as if deficits don't have consequences; as if waste doesn't matter; as if the hard-earned tax dollars of the American people can be treated like Monopoly money; as if we can ignore this challenge for another generation."[1]

Yet the President's new budget does exactly that-- raising taxes by $3 trillion and federal spending by $1.6 trillion over the next ten years. If enacted, this budget would increase the 2010 deficit to more than $1.5 trillion, and leave a deficit of more than $1 trillion even after an assumed return to peace and prosperity. Overall, the President's budget would double the national debt over the next decade.[2]

President Obama's Budget

•Would permanently expand the federal government by 3 percent of gross domestic product (GDP) over 2007 pre-recession levels;

•Would raise taxes on all Americans by nearly $3 trillion over the next decade;

•Would raise taxes for 3.2 million small businesses and upper-income taxpayers by an average of $300,000 over the next decade;

•Would borrow 42 cents for each dollar spent in 2010;

•Would run a $1.6 trillion deficit in 2010--$143 billion higher than the recession-driven 2009 deficit;

•Would leave permanent deficits that top $1 trillion as late as 2020;

•Would dump an additional $74,000 per household of debt into the laps of our children and grandchildren; and

•Would double the publicly held national debt to over $18 trillion.
There's lots more in the article if you can stomach reading it.

IRS Will Track Online Sellers' Transactions Including PayPal

IRS to Track Online Sellers' Payment Transactions Beginning Next Year
Starting next year, any bank or other payment settlement company that processes credit cards, debit cards, and electronic payments such as PayPal will have to issue information returns telling the IRS what merchants receive. The new returns are Form 1099-K, Merchant Card and Third-Party Payments.

Purpose of Reporting
The IRS believes that many online sellers fail to report their transactions. Some don't report because they mistakenly believe that Internet sales are invisible. Others do so because they are trying to evade taxes.

Who's Subject to Reporting
All merchants who accept payments through credit cards, debit cards, gift cards and PayPal will receive information returns telling them - and the IRS - the gross amount of the merchant card transactions. This will be broken down month by month. While the form uses the word "card," the IRS has made it clear that this is interpreted broadly to include third-party network transactions (i.e., PayPal).
15,000 San Francisco Layoff Notices

15,000 San Francisco City Workers to Receive Lay Off Notices
Fifteen thousand San Francisco city workers began receiving lay off notices this weekend. Mayor Gavin Newsom said that many of those workers would be able to reapply for their jobs and get rehired, but at a 37.5 hour work week instead of 40 hours per week. That would amount to a 6.25 percent cut in pay for the employees that are rehired. The Mayor’s plan is projected to save the city $50 million as it faces a $522 million budget gap. In addition to the loss of pay the reduced hours will impact the amount of money going into worker pension funds. The city’s unions have come together to draft up a compromise and they have expressed they will file a lawsuit if the city can’t agree to it. One suggestion is reducing the amount of outsourcing. Newsom has also asked department heads to accept a pay cut of 10 percent.
Toledo Ohio Fiscal Emergency

Top Bell aide says Toledo likely to face 'fiscal emergency'
March 07, 2010

Unless there is a fundamental change in the way Toledo's government operates, the city will likely be unable to pay its employees before the year is through, a top official in the Bell administration warned.

That looming financial disaster leads people such as Mayor Mike Bell and Councilman D. Michael Collins to throw out words like "bankruptcy" or "receivership," two feared terms but ones that are not likely to become reality.

The truth is that receivership or bankruptcy is probably not an option for the city anytime soon. But being slapped by the state as a "fiscal emergency" municipality is a real threat - a label some dislike but others advise Toledo to embrace given its $48 million deficit.

Mr. Bell has proposed a number of options - including the controversial legal maneuver to claim what lawyers call "exigent circumstances" to get concessions from city unions that they have so far been unwilling to even entertain.

Wilma Brown, the most senior member of City Council and its president, mistakenly said the city would "go into receivership" if the budget is not balanced by March 31 and the union contracts would be "null and void."

That could happen under bankruptcy, but Toledo could not file for that federal protection without the state's permission and then would still have to ask a federal bankruptcy judge.

Mr. Herwat said he had not directed City Law Director Adam Loukx to prepare for the long process of a municipal bankruptcy.
Bankruptcy is the sensible action yet it appears to be the one action not under serious consideration, yet anyway. Hopefully stubborn unions make it the only choice.

300 Toledo Layoffs

Furlough of 300 city of Toledo workers threatened
The Bell administration plans to begin sending up to 300 layoff notices to city employees next week in case it cannot balance a $48 million deficit through union concessions and other measures, a top city official said yesterday.

Last week, Mr. Bell said he was willing to lay off police officers and firefighters but that funding for Toledo's parks, pools, and recreation programs would be the first things slashed under his contingency plan to balance the city budget.

Mr. Bell is also asking council to force concessions from city unions without them agreeing to renegotiate terms of their contracts by approving a controversial measure called “exigent circumstances.”

Unions representing police, fire, and other city employees have refused to open their contracts as requested by Mr. Bell, who has asked them to consider paying the employee share of their state pensions and a greater share of health insurance costs.
The only thing unions will react to is complete extermination. Give it to them. The correct solution is to declare bankruptcy and seek to void all union contracts.

Iowa Association of School Boards Director Gives Herself a $157,000 Raise

Director On Leave After Audit Shows $157,000 Raise
New allegations have emerged that the executive director of the Iowa Association of School Boards gave herself a $157,000 raise. Maxine Kilcrease was suspended from the private, nonprofit group, which is funded with taxpayer money. Recent reports said the group was running low on funds.

[An] audit uncovered details that said Kilcrease, who was hired last summer, raised her salary from $210,000 to $367,000 in September without the board's knowledge or consent.
This is an open and shut case. Kilcrease is headed for prison in my opinion.

Obama's Utopian Education Goals

Obama Calls for Sweeping Overhaul in Education Law
The Obama administration on Saturday called for a broad overhaul of President George W. Bush’s No Child Left Behind law, proposing to reshape divisive provisions that encouraged instructors to teach to tests, narrowed the curriculum, and labeled one in three American schools as failing.

The administration would replace the law’s pass-fail school grading system with one that would measure individual students’ academic growth and judge schools based not on test scores alone but also on indicators like pupil attendance, graduation rates and learning climate.

In addition, President Obama would replace the law’s requirement that every American child reach proficiency in reading and math, which administration officials have called utopian, with a new national target that could prove equally elusive: that all students should graduate from high school prepared for college and a career.
Let me get this straight. Requiring proficiency in reading and math is "utopian", but a much tougher standard requiring "students to be prepared for college and a career" is not.

Did drug laws get repealed last week or is Obama illegally smoking something?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com