Richard Rider

Richard Rider
San Diego, California, USA
August 24
San Diego Tax Fighters
Biography of Richard Rider (Updated July, 2011) San Diego, CA 92131 E-mail: * AGE: 66 * EDUCATION: B.A. Economics, University of North Carolina, 1968 * MILITARY SERVICE: Commander, Supply Corps, U. S. Naval Reserve, retired after 26 years (four years active, the rest in the reserve). ** OCCUPATION: Retired stockbroker and financial planner. Lifetime member of the International Association of Financial Planners. Former business owner. * AFFILIATION: • Chairman, San Diego Tax Fighters • National Taxpayers Union • Howard Jarvis Taxpayers Association • San Diego County Taxpayers Association * POLITICAL ACTIVITIES: • Successfully sued the county of San Diego (Rider vs. County of San Diego) to force a rollback of an illegal 1/2-cent jails sales tax, a precedent that saved California taxpayers over fourteen billion dollars, including $3.5 billion for San Diego taxpayers. • Actively supported a variety of tax-cutting ballot initiatives including Proposition 13. Has written ballot arguments against numerous county and state tax increase initiatives. • County co-chair of both California term limit initiatives (Prop 140 and Prop 164). • Libertarian Party candidate for governor in 1994. • Candidate for the 3rd District County Supervisor in 1992 (third place among six candidates with about 20% of the vote). • 1993 – appointed to (and then elected chair of) the San Diego County Social Services Advisory Board. • 1996 – appointed as a Commissioner on the California Constitution Revision Commission by state Assembly Speaker Kurt Pringle. • Has been involved in legal actions against City of San Diego to force a public vote on issuing bonds for Qualcomm stadium expansion, convention center, baseball ballpark and other projects. • 2005 – Unsuccessful candidate for Mayor of San Diego, though his reform ideas have since taken hold. • 2007 – Columnist for NORTH COUNTY TIMES and SAN DIEGO DAILY TRANSCRIPT • 2009 - The Howard Jarvis Taxpayers Association's "California Tax Fighter of the Year" * FAMILY: Married. Wife, Diane, is a retired public high school teacher. Two sons, ages 32 and 27.

SEPTEMBER 23, 2009 11:22PM

Rider Rant

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There is no virtue in compulsory government charity, and there is no virtue in advocating it.  A politician who portrays himself as "caring" and "sensitive" because he wants to expand the Government's charitable programs is merely saying that he's willing to try to do good with other people's money.  Well, who isn't?  And a voter who takes pride in supporting such programs is telling us that he'll do good with his own money - if a gun is held to his head.
P. J. O'Rourke



1.   Why everyone should want to be a San Diego fire fighter


2.   Democrats protested Bush I speaking to school kids – and then forgotaboutit


3.   If Obama says it, the press believes it – without question


4.   Rider Rambling Ruminations on Newspaper Media Bias


5.   Yet Another Academic Study Verifies that Pro Sports Subsidies Are Bad for Cities


6.   Feds start subsidizing proposed CA maglev train to Vegas


7.   Rider honored by the Jarvis Association


8.   U.S. has second highest corporate income tax among OECD nations

9.   High speed rail proponents’ job claims are largely illusionary

10.               SD Mayor Sanders suffers from “edifice complex”

11.               California ends plummet to bottom in annual “business climate” study

12.               New treasure trove of information on government salaries – check out California firefighters vs. the other states

13.               The Distortionary Effects of Taxes and Regulations

14.               Climate Reversal: Global Warming is Cooling Off


15.               Senior government staffers bribe themselves to recommend compensation increases





1.    Why everyone should want to be a San Diego fire fighter


RIDER COMMENT:  A couple years back, the San Diego Fire Department labor union was trying to claim that the city was paying too little to draw quality applicants, nor enough to retain the current work force.  This assertion turned out to be untrue (you are doubtless shocked and surprised by this revelation).


To counter that campaign, San Diego Tax Fighters paid to post SD FD fire fighter recruiting ads on Craigs List websites in a number of cities around the country.  Not only did we post it on Craigs List in San Diego, Bakersfield, LA, Orange County, San Francisco and Sacramento – we also paid to put them on the NYC and Chicago websites. 


Because the applications we generated went directly to the city, we’ll never know exactly what effect these ads had.  What we DO know is that there has been no further talk about a shortage of quality applicants.


I’ve posted that gonzo ad in my Rant before.  But I don’t think I ever posted the ad we sent to the actual fire departments of a number of big cities around the nation.  The goal was to get trained, experienced firefighters (especially from cold climes) to apply in sunny San Diego.  Here’s what we sent – which is a fun read and also surprisingly informative.  If you are a relative wants to learn more about the joys of becoming a union firefighter, this piece will be quite helpful, I suspect.



TO:  Fire fighter labor unions nationwide (2007)


Please post and circulate the following ad to your membership.  We need professional, experienced union fire fighters here in the city of San Diego, California.


Distributing this ad is in your union’s best interest.  The more of your fire fighters who decide to transfer to another fire department, the better your case will be for better pay, pensions and health care.



ATTENTION:  Experienced fire fighters!

Tired of cold winters and hot, humid summers?


We desperately need professional, experienced union fire fighters here in sunny San Diego – the best climate in the Western Hemisphere.  No cold, no ice, no snow, no humidity, no wind and no bugs.  In addition, the pay and benefits are first rate.


Fire fighters wanted by the San Diego Fire Department (SDFD). 


Apply NOW for the best damn job in the world! 


Work 10 days a month for high pay!


Counting abundantly available overtime, earn up to $150,000 or more!


No SDFD employee has died on the job since 1978!


Retire with full benefits as early as age 50 with up to 90% of your highest salary!


For pension purposes, “salary” includes over a dozen extra categories of special pay – such as bilingual, EMT certified, paramedic, etc.  Normally you qualify for at least two or three of these categories!


Reside pretty much where you want – you don’t need to live in or near San Diego!  Many of us live 80+ miles away.  Take your sweet time coming in during fire emergencies – no penalty.


City’s liberal disability policy allows many if not most SDFD firefighters to avoid most income tax on their pensions upon retirement!


We have strong city labor unions, and – for all intents and purposes – control the city council!


Okay, okay – so what’s the catch?  Well, you have to be a high school graduate, a legal resident of the U.S., drug free, reasonably fit, above average intelligence, be able to see, and, most importantly, you must possess the Emergency Medical Technician Certificate (EMT-1) to be hired.  Previous fire fighter experience and certifications are a HUGE PLUS! 


If you don’t already have your EMT-1 certification, you’re too late for this year (we hire only once a year).  But we have an ongoing need for such certified people. 


More good news!  Because our fire fighters’ union wants higher pay and the city is very submissive to our desires, the city keeps these job openings a semi-secret.  If everyone knew the full story of what a great job and fabulous pay firefighting offers, the city would be swamped with applications – which would be both costly and embarrassing.  Perhaps you heard about the recent debacle in Oakland where 2,000 applicants were lined up for the handful of job openings.  Not in San Diego.  You can’t apply except during an unannounced period of time over the Christmas holiday season, and then only by mail. 


That application time is now!  The annual openings are now posted on the city website, but not advertised to the public. 


Last year (2006) the city received only 100 applications for about 30 openings, until some nosy reporter spilled the beans shortly before the deadline, and another 2,000 or so people rushed to get their job applications in on time.  With luck, this year the city’s sleepy press will miss this story all together.


And this year, there’s even more good news.  Our city fire fighters’ union is asserting that many, many current city fire fighters are leaving to get better paying jobs in other California cities.  If our union is to be believed, there should be a TON of openings for new fire fighters in San Diego.   (NOTE:  Didn’t happen.  Only an increase in retirees created more openings.)


For more information, you can call “Dave” in the city’s personnel office at 619-236-6467.  But you don’t need to do that.  Go to the city website for a very detailed PDF document with everything you need to know about the job.  The link is:




The salary schedules listed in the above job description PDF document are accurate, but are a bit misleading.  Within a San Diego fire fighting position, the employee almost always moves quickly from the bottom to the top of the pay scale in less than three years.  The Fire Fighter I position is a temporary probationary status that lasts less than two years – there are only about 20 fire fighters currently holding that designation, earning a top salary of $45,000. 


Assuming you pass the probationary period, you become a Fire Fighter II – we have 406 employees holding that designation.  Within three years you should reach the top pay scale of over $60,000 a year (plus all the overtime you want). 


If you qualify to operate and maintain the fire truck, you can advance to Fire Engineer.  There are 219 such positions with a top salary exceeding $71,000, plus overtime. 


The chances of moving up to Fire Captain are excellent.  There are 226 Fire Captains with a top salary of $82,000, plus overtime. 


Most city fire fighters manage to retire as either a Fire Captain or Fire Engineer, with their pension figured based on that salary.  A surprising number retire as Battalion Chief with a top salary of $95,600 – there are 16 Battalion Chiefs.


Our city’s pension formula is generous – 3% times number of years times your highest salary.


In addition, the city pays numerous substantial additional bonuses for qualifying as a paramedic, EMT, etc.  Obviously, the financial opportunities are substantial.


Finally, as a San Diego fire fighter, you later can file for disability (for any medical problem – job related or not) and there’s a good chance you can get up to half your pension tax-free.  Many San Diego fire fighters do.  This option could cut your federal and state income taxes 60% to 80%!





To discourage applications, the city does not post the fire fighter employment form on its otherwise sophisticated website.  To apply for the job, a job seeker can drop by the downtown or satellite city office and pick up a fire fighter application. 


Or you can request an application by mail.  To receive the application, you’ll need to mail your request to the city.  You MUST include a 9” by 12” stamped (currently 80 cents) self-addressed return envelope.  Mail your request to:



City of San Diego Personnel

1200 3rd Ave.  Suite 300

San Diego, CA 92101


San Diego is an equal opportunity employer.





2.   Democrats protested Bush I speaking to school kids – and then forgotaboutit


RIDER COMMENT:   As you know, the Democrats and the press got quite upset that conservatives were suspect when President Obama arranged to speak to the nation’s children.  Especially so, since the initial White House materials indicated that he’d be telling the kids to get active supporting Obama’s socialist causes. 


The right wing protest got widely panned, but no one mentioned that the protests may indeed have dramatically changed the President’s message to the tykes.  Ah well.


But there’s another wrinkle that got almost zero coverage.  Turns out that the Dems protested Bush I’s 1991 speech to kids for the same “propaganda” reasons.  Somehow the press seems to have missed that irony.  It’s a mystery how that oversight happened.


Here’s the story:



Flashback 1991: Gephardt Called Bush's Speech to Students 'Paid Political Advertising'


By Noel Sheppard (Bio | Archive)
September 3, 2009 - 10:45 ET


As Barack Obama prepares a nationwide broadcast to America's students next Tuesday, it has been revealed that Democrats complained in 1991 when then President George H. W. Bush broadcast a speech from a Northwest Washington junior high school.

In fact, the House Majority leader at the time, Dick Gephardt (D-Mo.), said "The Department of Education should not be producing paid political advertising for the President, it should be helping us to produce smarter students."

Such was reported by the Washington Post on October 3, 1991 (h/t KY3 Political Notebook via Chuck Todd):


House Democrats criticized President Bush yesterday for using Education Department funds to produce and broadcast a speech that he made Tuesday at a Northwest Washington junior high school.

The Democratic critics accused Bush of turning government money for education to his own political use, namely, an ongoing effort to inoculate himself against their charges of inattention to domestic issues. The speech at Alice Deal Junior High School, broadcast live on radio and television, urged students to study hard, avoid drugs and turn in troublemakers.

"The Department of Education should not be producing paid political advertising for the president, it should be helping us to produce smarter students," House Majority Leader Richard A. Gephardt (D-Mo.) said. "And the president should be doing more about education than saying, 'Lights, camera, action.' "

Two House committees demanded that the department explain the use of its funds for the speech, an explanation that Deputy Secretary David T. Kearns provided late in the day in a letter to Rep. William D. Ford (D-Mich.), chairman of the House Education and Labor Committee. Education Secretary Lamar Alexander was out of town.  [...]

Rep. Patricia Schroeder (D-Colo.), chairwoman of the Select Committee on Children, Youth and Families, said it was outrageous for the White House to "start using precious dollars for campaigns" when "we are struggling for every silly dime we can get" for education programs.

Rep. Martin Frost (D-Tex.) said that if Bush feels obliged to use government funds to hire outside consultants "to make him look good," then he should fire some of the public relations experts on the White House payroll. "Then the president might be more sympathetic to unemployment benefits," Frost said, referring to Bush's threat to veto legislation to extend benefits.

Makes one wonder if today's media, with the economy in what they've repeatedly called the worst recession since the Great Depression, will question Obama's use of education funds for his upcoming speech.

After all, when you look at Education Secretary Arne Duncan's letter concerning this event, one has to assume it's costing the Department a great deal of money.




3.    If Obama says it, the press believes it – without question


RIDER COMMENT:  Just another example of how the press parrots “their” President’s sweeping assertions and accusations without researching the matter, or raising questions.


September 14, 2009

If the President Says It

By Paul Jacob

Is President Barack Obama trying to echo the paranoid days of the Clintons' famous "vast right-wing conspiracy" complaint? Obama says that those who oppose the Democrats' medical reforms are "those who are profiting from the status quo." Further, he says the opposition is "well-financed."

Great story, if true.

But the president won't name names. When asked by Washington Examiner columnist Timothy Carney, the White House declined to name any individual, any group, any organization profiting in the industry now and actively supporting the opposition. Same for Obama's revamped campaign outfit, Organizing for America. It's now run by the Democratic National Committee. Carney asked folks there which nefarious profiteer funds against Obama, but they wouldn't clarify a thing.

Carney went looking in the medical care industry, looking at the companies and organizations with the deepest pockets. Which ones are now spending millions to oppose Obama's reforms? He found zip. Nada. Bubkes.

The big pharmaceuticals are on board with the Democrats, it turns out. So are the biggest insurance companies.

The president is just blowing smoke. The opponents of his medical industry reforms are not well-financed. They are grassroots and widespread.

The big companies hope that the reforms will consolidate their market-leading positions, protect them from competition. Most big government programs do just that.

The people, on the other hand, have the most to lose from more government.

This is Common Sense. I'm Paul Jacob.



4.     Rider Rambling Ruminations on Newspaper Media Bias


RIDER COMMENTARY: (NOTE:  This updated commentary originally was published in a Rider Rant 18 months ago.  For veteran readers, you have this author’s permission to skip this gem.)


Often we stereotype newspapers as “liberal,” or “conservative,” or even rarely “libertarian.” Such sweeping tags are sometimes misleading.


Each paper has TWO internal departments influenced by political bias – the editorial page editors and the news department. Sometimes they agree, but sometimes they display dramatic differences.


I recall reading a recent objective study of how liberal the NEWS stories were from different major papers. Guess which paper had the most liberal slant on news. The WALL ST JOURNAL!


I've noted this remarkable disparity in the WSJ for years, but most pundits still think of the Journal as a conservative paper. It is conservative – in the editorial section and selected op-eds. Not in the news department.


Similarly the libertarian OC REGISTER's news reporters and editors pretty closely match the usual liberal bias found in competing daily papers' news stories – such as the LA TIMES.


Not surprisingly, the SAN DIEGO UNION-TRIBUNE has a rather liberal news department, though their investigative skills (or perhaps reporting latitude) have improved dramatically after losing scoop after scoop to the tiny Voice of San Diego Internet news service.


The SD U-T's editorial department has within itself an interesting schism. Recently fired head opinion editor “Bow Tie Bob” Kittle reflected in his pieces the standard Big Government GOP stance of George Bush et al. On the local level, Kittle frequently sided with the Big Spenders – supporting too many local bond and tax increases – especially for subsidies that profit the newspaper, such as taxpayer-paid pro sports stadiums. But one of the U-T's other editorial writers – Chris Reed – comes to the paper from the OC REGISTER editorial department, and writes much more from a limited government, libertarian perspective.


AN ASIDE: Kittle got one thing right – warning about the San Diego city pensions.  He was an early clairvoyant Cassandra – warning of the San Diego impending disaster and the overly generous pensions. As I recall events, while the SD U-T news department was still buying the city propaganda and denigrating us “naysayers” for raising the alarm, Kittle wrote some excellent editorials on this topic.


So in a sense, the U-T represents to some degree all three viewpoints. But sadly, the aggregate result is that the U-T publishes a pronounced pro-Big Government slant to news and opinions. They don't offer a single national or local libertarian-oriented columnist or syndicated op-ed – such as Walter Williams, Thomas Sowell, Paul Jacob, or Debra Saunders.


As an editorial writer, “libertarian lite” Reed must confine himself to positions at least tangentially acceptable to the paper. Some dissent is allowed, but not too much. For instance, Reed can BLOG online about his well-reasoned opposition to the immoral and hopeless War on Drugs, but he'll probably never be able to get this viewpoint actually PRINTED in the paper.


So how can one tell when a news story has a liberal bias? (I prefer to describe it as a “statist” bias – a high support level for and mindless acceptance of government officials' assertions and their solutions to problems.)


Here's a simple example. Goggle just about ANY daily newspaper's article about a municipal bond – especially school bonds. The typical 30 paragraph article will have 15-20 paragraphs supporting the bond and its results – touting the planned improvements and quoting several advocates. Another 8 to 13 paragraphs will be straight neutral facts, and the remaining two paragraphs MIGHT quote some lone opponent, or raise a taxpayer objection – even though 40% or more of the voters in these lopsided contests (opponents are outspent 2000 to 1) are likely to vote “no” on the bond. Rarely indeed is this journalistic bond reporting formula appreciably varied.


But here's the interesting part. News reporters and editors honestly believe that this type of story is objective journalism. They are genuinely stunned when anyone suggests that such stories are biased and one-sided.


There is no changing the fact that the OVERWHELMING MAJORITY of people who go into news journalism are Big Government supporters – a significantly greater percentage than the generally liberal college student body. Such is a fact of life. Studies of journalism students and subsequent polls of reporters verify this fact.


There's another pro-Big Government factor affecting the press that's not often mentioned. Reporters are just doing their job, grinding out stories and meeting deadlines. Government agencies and politicians spew out endless press releases and hold tightly scripted press conferences (all with taxpayers' money). It's just too easy to take such propaganda and rework it into stories. Indeed, we've all read or seen stories that essentially were reprinted government press releases.


Often it's just too much trouble to run down the opposition viewpoint. If such balance IS sought out, it's a one or two sentence comment in a sea of government misinformation.


The only hope is that news editors understand this intrinsic bias, and encourage their reporters to be more objective, skeptical and inquisitive – putting their personal preferences aside when writing stories. Of course, the problem with that magic bullet is that news editors are all former reporters, bringing the same liberal/statist bias to their new positions. And because they all pretty much think the same politically, most reporters are convinced that they write unbiased stories.


For whatever reason (good business decision, or maybe quaintly strong journalistic ethics), the Voice of San Diego liberal reporters are able to present pretty objective, skeptical pieces – articles I suspect are sometimes at odds with their personal leanings. But most big print papers still let a reporter's bias play too big a role in their stories.


Oddly enough, the statist big newspapers are losing readers like crazy. Could there be a connection???



5.      Yet Another Academic Study Verifies that Pro Sports Subsidies Are Bad for Cities


RIDER COMMENT:  Actually this study was done last year.  But since interest in subsidizing the Chargers owners is picking up a bit, I thought I’d rerun this post from my May, 2008 Rider Rant. 


In study after study (those studies that are not funded by pro sports or their vendors), subsidies pro sports stadiums turn out to be bad investments. But here's one that raises (what for many is) a new documented wrinkle – too often such pro sports stadiums actually REDUCE the economic wellbeing of a city's workers and businesses.


Excerpt: [Pro sports] reduced per capita personal income . . . wages and employment in the retail and services sectors have dropped because of professional sports.


National Center for Policy Analysis



Since 1990, construction of stadiums and arenas for professional sports franchises has occurred at an incredible pace, says Dennis Coates, a professor at the University of Maryland, Baltimore County.

For example:

  • Major League Baseball (30 teams) has opened 18 new stadiums and has four more currently under construction.
  • The National Football League (32 teams) has opened 17 new stadiums; done major renovations to four others; has three under construction; and has four more projects at various stages of planning and negotiations.
  • The National Basketball Association (30 teams) has opened more than two-thirds of its 30 arenas since 1990, and at least three NBA franchises are actively seeking new arenas.

In most cases, state and local governments have been closely involved in the financing, design, construction, and management or ownership of professional sports facilities.

For instance:

  • Depending on how one measures the public share of stadium costs, it ranges from 58 percent to 63 percent after 2000.
  • The average public contribution to the total of capital and operating cost is between $149 million and $161 million in 1995-99, and between $249 and $280 million in 2000-06.

The most basic question about stadiums, arenas and sports franchises is the extent to which they contribute to the vitality of the local economy.  Professional sports environments -- which includes the presence of franchises in multiple sports, the arrival or departure of teams, and stadium construction -- may actually reduce local incomes, says Coates:

  • The overall sports environment reduced per capita personal income, a finding that was new in the economic literature at the time we published it (1999).
  • In many local economies, wages and employment in the retail and services sectors have dropped because of professional sports.

Source: Dennis Coates, "Closer Look at Stadium Subsidies," The American, Tuesday 29 April, 2008.

For text: 







6.   Feds start subsidizing proposed CA maglev train to Vegas


RIDER COMMENT:  Fortunately this is probably a ghost train.  But the $45 million the feds just committed to this supposedly “only” $12 billion project is very real money.  Below is a comment I posted on a couple websites concerning this foolishness.,0,1322147.story

COMMENT:  So the feds are doling out $45 million for the proposed maglev Anaheim to Las Vegas high speed train, putting the bill on the taxpayers' credit card (it simply adds to the national debt we will pay forever). Great.

And how much is the train projected to cost? $12 BILLION! Let's see -- that $45 million is 0.0375% of the total cost. No, not 3.75%.  $45 million is less than four one-hundredth of one percent of the projected cost.

Furthermore, anyone who believes the train will cost ONLY $12 billion hasn't been following this passenger rail con game for the last 100 years -- the proponents ALWAYS grossly understate the true cost (to get the project started). Our most recent example is San Diego County's Sprinter light rail train that came in MANY TIMES higher than its original projected cost.

Lastly, the train's ticket revenue will not cover even its annual OPERATING costs -- let alone the initial capital costs, or the cost of replacing worn out rolling stock and track 30 years down the (rail)road. No passenger train in the country – perhaps in the world – covers its operating costs with fare box revenue.

The good news is that I doubt this pipedream will ever be built. The money simply will not appear. But regardless, we taxpayers will pay interest forever on the $45 million federal seed money – spent by proponents largely to raise more money!


Oh, BTW, the Vegas maglev train will be useless for San Diegans. It takes one hour, five minutes to fly from our Lindberg airport to Vegas. Add airport hassles at both ends and you might have another 1.5 hours total.

But for us locals to use the Vegas train, we have to first motor to Anaheim, a drive which itself can take 1.5-2.5 hours. It's a lot quicker for most of us to go to the airport for the quick flight. And with Southwest, it's dirt cheap (doubtless less than the train ticket will cost).


The final irony?  If this boondoggle actually is built, we Californians will end up subsidizing (via federal and perhaps state subsidies) a train to take people to Vegas to spend and/or lose their California paychecks – and to shop in a lower sales tax city.  Works for the Vegas economy!





7.   Rider honored by the Jarvis Association


RIDER COMMENT: Many of you (but not all) received that Howard Jarvis press release announcing my selection as California Tax Fighter of the Year.  I later found out that the award has been issued by HJTA only three times, which really DID make my selection an honor. 


I had a great time last month in Sacramento on the Capitol steps (sorta) – receiving the award and speaking briefly to the estimated crowd of 10,000 protestors. 


No, they were not government employees protesting my award – they were citizens VERY unhappy with the tax and regulate mentality of both our state and national politicians.


If you want to peruse that HJTA press release, here’s the link:






8.   U.S. has second highest corporate income tax among OECD nations


RIDER COMMENT:  U.S. politicians continue their relentless efforts to make our country one of the worst places to do business in the world.  Who says government doesn’t work?


As the report below shows, more and more our out competitor countries are learning that it’s wise policy to lower corporate income taxes.  The larger the savings, the more likely the country is to draw and retain golden geese.


Even socialist Sweden again lowered its corporate income tax in 2009.  Now the U.S. corporate income tax is about 50% higher than these communal Scandinavians.


Not to be outdone, CA politicians retain our 6th highest STATE income tax – the highest west of the Mississippi.  Apparently we don’t need no stinkin’ profitable businesses in CA.  We grow tax revenue on trees out here.


Oddly enough, there is some hope. Even some liberal Democrats are starting to figure out that such anti-business taxes send a message to “evilcorporations” that they are not wanted.  And the CEO’s listen well to this message.


The question is, can Big Government advocates grasp the economics of high taxes?  Perhaps more important, can they go against their primal instinct to pillage wealthy people and businesses?


We do indeed live in interesting times.



August 5, 2009

As Industrialized Countries Cut Corporate Taxes, U.S. Rate Still Second-Highest

Washington, DC - Canada, the Czech Republic, Korea, and Sweden all cut their corporate tax rates in 2009, distancing the United States even further from the pack with its combined federal and state rate of 39.1 percent—second only to Japan for the highest corporate tax rate among nations in the Organization for Economic Cooperation and Development (OECD). A Tax Foundation analysis of new OECD data finds that 2009 marks the 12th consecutive year in which the U.S. corporate tax rate is higher than the average rate among non-U.S. OECD nations—and roughly 50 percent higher than that of a mid-ranked country such as Sweden.

"America's high corporate tax rate should be a red flag to U.S. lawmakers worried about the country's flagging economic growth, slow wage growth, and our overall global competitiveness," write Tax Foundation President Scott Hodge and Summer Fellow André Dammert, who authored Tax Foundation Fiscal Fact No. 184, " U.S. Lags While Competitors Accelerate Corporate Income Tax Reform." The Fiscal Fact is available online at

Korea enacted the largest rate cut this year of 3.3 percentage points, followed by Sweden and Luxemburg, which cut their rates by 1.7 points and 1 point, respectively. Great Britain - from which Google recently moved its European operation to lower its tax bill - and Japan are transitioning toward more "territorial" tax systems that tax firms only on the profits earned within the country's borders. These global trends toward lower corporate tax rates and "territorial" systems that don't tax foreign profits stand in stark opposition to the Obama administration's proposal to raise more than $220 billion in new corporate taxes by making the U.S. world-wide tax system tougher.

"U.S. lawmakers must take note of these global trends and take steps to make the U.S. corporate tax system competitive with its major trading partners," Hodge and Dammert conclude. "If they don't, we risk continuing to fall behind in the global race to attract capital, jobs, and economic growth."

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.



9.   High speed rail proponents’ job claims are largely illusionary

RIDER COMMENT:  As I point out in a letter to the editor for the BAKERSFIELD CALIFORNIAN (below), the high speed rail (HSR) proponent’s of a big job increase from their train is largely illusionary.

RE:  "Bullet train development gaining speed"



The permanent job increase claimed from HSR fans is largely bogus.  Aside from the actual operation and maintenance of this boondoggle, the rest of the projected illusionary job increases are what economists call the "substitution effect."


Remember, this hugely expensive "bullet" train never leaves the state -- all it does is shuffle people around the state.  As a result, the CA traveler who would have bought lunch in his locale will instead buy his lunch in ANOTHER CA locale.  No state economic gain occurs.  Hence the substitution effect.


If HSR is effective and does indeed reduce air travel, then there will be a LOSS of jobs in that industry -- again, all within CA.  That's never figured into these absurd projections.


One "study" by HSR proponents claimed a ludicrous 450,000 net new permanent jobs.  The press has never challenged this silly assertion.

Some folks will indeed get rich from HSR -- they are the driving force behind this project, and largely reside outside of CA.  But all that the rest of the state will get is a bill for the massive increase in bond indebtedness coupled with a likely half billion dollar annual HSR operating subsidy that's never mentioned by its supporters.



10.               SD Mayor Sanders suffers from “edifice complex”

RIDER COMMENT:  My following letter to the editor ran in several local papers.  My letter was first rejected by the 183 lb gorilla (down from previous 600 lb) SAN DIEGO UNION-TRIBUNE. 

My letters was in response to the mayor’s speech saying he is putting a high priority on a bigger convention center, a new downtown library monument, and a new city hall – three projects which together will easily cost over 1.5 billion dollars. Just 72 hours later the mayor announced major cuts in city services – including police and fire fighter hiring.  Hmmm . . . anyone see a nexus between the two announcements?

Dear Editor:

Mayor Sanders has developed a mental condition quite common among politicians -- an "edifice complex." 

Seeing the end of his tour in office on the distant horizon, our mayor wants to leave a legacy.  Several, actually. 

Reining in city spending is good, but invisible, and provides no lasting monument to one's tenure in office.  Hence the mayor falls into his predecessor's (Dick Murphy) mode -- putting fiscal frugality on the back burner while pushing numerous massive, unfundable bricks-and-mortar projects. 

In fairness, this edifice complex afflicts most politicians -- damn near all, as a matter of fact.  We should not be surprised that our mayor has succumbed to this malady as well.



11.               California ends plummet to bottom in annual “business climate” study

RIDER COMMENT:  I’m sick and tired of denigrating the great state of California – pointing out we rank poorly against other states, and are getting worse.  For a change, I have some good news (brace yourself).

The Tax Foundation just came out with their annual state “business climate” comparison for 2010.   In spite of our expanding fiscal and regulatory problems in our “Golden State,” we didn’t drop!  We are still ranked only the 48th worst state.  Talk about a turnaround!

Granted, our current new rank is uncomfortably lower than our 42nd rank in 2006, but it appears that (for now), our plunge to the bottom has stopped.

So, you ask, which states could possibly be worse?  Basket case New Jersey is the worst, closely followed by “simple majority vote to raise taxes” New York.  This pair will be tough for CA to beat in this race to the bottom, but our statesmen in Sacramento (and in local governments) will do their best to challenge these competitors in upcoming years.

Isn’t competition grand?



12.               New treasure trove of information on government salaries – check out California firefighters vs. the other states

RIDER COMMENT:  The Tax Foundation just posted up a ton of info on government salaries.  You can compare states’ average wages for different government jobs.  Also you can to some degree compare public vs. private wages.  I have not had a chance to peruse this data, but thought I better get the links up for those who want to delve into this further.


Here’s one quick example of what is available:  In 2007, California firefighters made an average of $108,959 in wages, easily the highest in the nation.  The national average for firefighters was $65,081.  The 2nd highest state 2007 average firefighter wage was $96,086 in Nevada.  The 3rdhighest was Alaska with $84,888.



13.               The Distortionary Effects of Taxes and Regulations

RIDER COMMENT: This amazing story speaks for itself.  How government can screw anything up.  In this case, for a chicken tax.

The Distortionary Effects of Taxes and Regulations

Several times a month, Transit Connect vans from a Ford Motor Co. factory in Turkey roll off a ship here shiny and new, rear side windows gleaming, back seats firmly bolted to the floor. Their first stop in America is a low-slung, brick warehouse in Baltimore where those same windows, never squeegeed at a gas station, and seats, never touched by human backsides, are promptly ripped out. The fabric is shredded, the steel parts are broken down, and everything is sent off along with the glass to be recycled.

Workers cut out the rubber window seal with a special knife and popped out the glass using suction cups. The space is plugged with a metal panel that cures for 15 minutes before being tested outside for waterproofing. Another worker unhooked a rear seat belt as easily as he would pop the top off a soda bottle. Using a drill, he quickly unscrewed six bolts to free the seats. Workers at the other end dump the seats into cardboard boxes, which are hoisted onto an open tractor-trailer and shipped to Ohio. Ford says the shredded seat fabric and foam become landfill cover, while the steel is processed for other uses.

Reason? Find out here in the WSJ article "To Outfox the Chicken Tax, Ford Strips Its Own Vans," although you probably guess that it has nothing to do with economics and everything to do with politics. Thanks to Michael Kelly.

MP: This story perfectly illustrates why taxes and regulations are almost always distortionary: because people and companies can change their behavior to avoid or circumvent them. Other examples include free food on airlines to circumvent ticket price-fixing by the government, employer-sponsored health insurance to circumvent price/wage controls during WWII, free "stuff" (toasters, etc.) at banks in the 1960s and 1970s to avoid interest rate controls, etc.

Update: As Greg Mankiw points out, this story also illustrates the "deadweight loss" (loss of economic efficiency) of a tariff.





14.               Climate Reversal: Global Warming is Cooling Off


RIDER COMMENT:  While much of the press is still in denial, some outlets (outside Fox) are starting to report that global warming isn’t happening.  At least in the short term – perhaps for the next 20 years or more.  Former global warming boosters are themselves reassessing their premature conclusions, though much of the press has yet to report this reversal.


Agree or disagree with the certainty of global warming, it appears that the urgency that powered the Al Gore bandwagon has lost momentum. 


BTW, am I the only guy who thinks of Al Gore as a modern day Elmer Gantry?   Of course Gantry, the charlatan preacher, never won the Nobel Prize for Hyperbole – an award retired by the rotund Gore.

Climate Reversal: Global Warming is Cooling Off


Calgary Herald - When a leading proponent for one point of view suddenly starts batting for the other side, it's usually newsworthy. So why was a speech last week by Professor Mojib Latif of Germany's Leibniz Institute not given more prominence?

Latif is one of the leading climate modellers in the world. He is the recipient of several international climate-study prizes and a lead author for the United Nations Intergovernmental Panel on Climate Change (IPCC). He has contributed significantly to the IPCC's last two five-year reports that have stated unequivocally that man-made greenhouse emissions are causing the planet to warm dangerously.

Yet last week in Geneva, at the UN's World Climate Conference--an annual gathering of the so-called "scientific consensus" on man-made climate change --Latif conceded the Earth has not warmed for nearly a decade and that we are likely entering "one or even two decades during which temperatures cool."

The global warming theory has been based all along on the idea that the Atlantic and Pacific Oceans would absorb much of the greenhouse warming caused by a rise in man-made carbon dioxide, then they would let off that heat and warm the atmosphere and the land. But as Latif pointed out, the Atlantic, and particularly the North Atlantic, has been cooling instead. And it looks set to continue a cooling phase for 10 to 20 more years.

But it is increasingly clear that global warming is on hiatus for the time being. And that is not what the UN, the alarmist scientists or environmentalists predicted. For the past dozen years, since the Kyoto accords were signed in 1997, it has been beaten into our heads with the force and repetition of the rowing drum on a slave galley that the Earth is warming and will continue to warm rapidly through this century until we reach deadly temperatures around 2100.




15.               Senior government staffers bribe themselves to recommend compensation increases


RIDER COMMENT:  Many of you are familiar with the madness prevailing at the Metropolitan Water District of Southern California (MWD), where in these economic times they are proposing a retroactive 25% increase in pensions for existing employees.  Much has been written properly deriding this giveaway.  But below is an excellent analysis that needs more emphasis for anyone interested in the cost of government employee compensation.


As I have written before, a central problem with government compensation is that the people who make the decisions also get the compensation!  Hence the approval process is a greased rail down which slides benefit increases neither justified nor properly vetted.  And the worst culprits in this process are the senior staffers who tell their gullible, economically illiterate politicians that these luxurious increases in compensation are actually good policy.


This article gives a concrete, specific example of how senior staff profits mightily from its own recommendations – in this case there’s a million dollar payoff.


Chris Reed Blog


September 21, 2009

The $1.06 million reasons that MWD's CEO would push for a pension spike that makes absolutely no sense

Why on Earth would the leaders of the Metropolitan Water District of Southern California -- with an unfunded pension liability of more than $400 million -- choose to push for a contract that would spike pensions for its 2,000 employees by 25 percent and create $70 million more in long-term unfunded liabilities?

The nominal reason is that other savings from concessions make the pension spike defensible overall. But this just doesn't add up. The concessions can be reversed at any time, while pension increases can't. Meanwhile, up and down California, public agencies have won huge givebacks from employees who see revenue plunging and know that they have no choice but to cooperate -- and these givebacks have not been generated by sweeteners like pension spikes.

So why would MWD provide a huge pension spike it didn't have to? Given that MWD is in the middle of a two-year, 31 percent increase in the rates it charges for water to water districts throughout SoCal, the timing of the pension giveaway also is horrible on public relations grounds. What could be the motive of MWD's leaders?

Could it be .... financial self-interest?

Sorry to be cynical, but of course it could be. Do the top officials who negotiated the pension spike stand to benefit from it? Yep.

All management and Metropolitan Water District staff are part of the CalPERS retirement system. What gets ratified affects all MWD employees.

That's from PR consultant Brian Lewis, whose firm is under contract to MWD. Lewis also told me that MWD General Manager/Chief Executive Officer Jeffrey Kightlinger is paid $276,000 and has been with MWD for 14 years. Kightlinger strongly defended the pension spike here. (Strongly but unconvincingly.)

So if the pension spike is adopted, how would Kightlinger personally benefit? Assuming the 50-year-old MWD exec works 16 more years and gets an average pay raise of 3 percent a year (which is probably on the low side), after 30 years with MWD, Kightlinger's final year of pay would be $442,898.98.

Under the current pension formula (2 percent of "12 highest paid consecutive months," normally the final year on the job, multiplied by years of service), Kightlinger would get an annual pension of $265,739.39.

Under the pension formula Kightlinger is pushing hard to get imposed, he would get an annual pension of $332,174.24.

So he would get $66,434.85 more a year under the plan he says is a great deal for MWD's 19 million water customers. He would get $1,277.59 more each week from the day he retired until the day he died.

What would Kightlinger's total additional pension compensation be?

According to this actuarial chart from the Social Security Administration, the mean additional life expectancy of a 66-year-old American is 16.02 years.

So if Kightlinger remained at MWD for 30 years and continued on as boss and got smallish raises over that span, here's how much additional money he could he expect as a result of the pension hike he's now fighting for:


($66,434.85 x 16.02 = $1,064,286.30.)

Maybe none of this has anything to do with Kightlinger's decision-making. But given how wrongheaded his decision-making is on this issue, it is fair to bring it up -- and to remember that all the MWD execs from Kightlinger on down stand to benefit greatly from the pension spike they call a great deal.

It's the only explanation that makes any sense in trying to figure out why MWD executives have done what they've done.

Posted by Chris Reed at September 21, 2009 02:59 PM




For more on this amazing MWD attempt at ripping off water customers, read my friend Marcia Fritz’s cogent analysis of the folly of the district’s planned pension increase.  Among other things, it points out that, like the city of San Diego, the MWD has a second pension plan – a matching 401k-type plan on top of their lucrative defined benefit plan. 


It’s another Chris Reed blog item, and a bit dry for most.  But if it’s a topic of interest, I herewith provide you with another arrow for your quiver:



RIDER NOTE:  I’ve been experimenting with posting my Rants on a blog.  Actually this is my third blog effort.  But this time I think I found the right match.  It easily handles HTML and formatting from my Word program – previous blogs did not. 

To read these items as a blog (and to share with others) go to:

Given time, I'll post up past rants.  Major undertaking.

There you will also find my latest version of “Breaking Bad:  CA vs. the other states.”  This dynamic document is updated at least twice a month.

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