When Wisconsin Republicans and their enablers yell about the need to cut the pay of average public employees to balance the state budget, they leave out some very inconvenient and illuminating facts. Let's consider a few of those facts in comparative fashion and see what's really going on here. For the moment, let's limit our focus to Wisconsin school teachers, who represent a vital component in the continued development of the state's wealth and economic security. Let's compare those teachers economically and demographically to Wisconsin's millionaires:
Number of teachers in Wisconsin: 59,552
Number of millionaires in Wisconsin: 89,977
Yes, it's amazing, but true: Wisconsin by far has more millionaires than school teachers. Suffice to say, the two categories do not appreciably overlap.
Average Wisconsin teacher salary: $46,390 (US rank: 28th among all states)
Typical wage cut faced by a Wisconsin school teacher if Gov. Scott Walker's non- negotiable give-backs are enacted: $5,567 to 6,958 per year (based on net total compensation reduction caused by Walker's plan).
Continuing average income boost for millionaires in Wisconsin and elsewhere, thanks to the recent extension of 2001 Bush-era federal tax cuts: Approximately $100,000 per year.
So here's the bottom line no one on the red side of the political aisle will ever bother to acknowledge:
If the State of Wisconsin increased taxes on resident millionaires to take back just one-twentieth of the extra money they've been keeping in their pockets thanks to the Bush tax cuts, that would totally wipe out the need to slash teacher salaries under Walker's scheme. Totally.
Would Wisconsin millionaires walking around with an extra $100K in their pockets every year notice the loss of five or six grand apiece? Unlikely.
Will hard-working school teachers notice the loss of five or six grand from each of their pockets, thanks to Gov. Walker? Damn right they will.
Read that again, because it reflects our broader public policies quite well. It adds up to: No pain for millionaires, who already in many cases enjoy effective tax rates below those imposed on rank and file workers, including teachers; and, meanwhile, huge pain for teachers.
And none of the above even takes into account state tax cuts for businesses that Gov. Walker recently rammed through the state legislature, before Democratic state senators walked away lest he succeed in making further draconian moves against the state's public workers --whom, studies show, already learn less than their direct counterparts in the private sector.
Some day, Wisconsin may actually secure new businesses that may create new if not better jobs, but at this rate the state will also have a less educated and skilled workforce to take advantage.
If you like the idea of a society where a small class of wealthy elites drive the mass of workers to put in long hours for low pay, few workplace protections and rare benefits, welcome to Neo-Wisconsin, where the plan to accelerate the socioeconomic race to the bottom is proceeding, based on a largely illusionary fiscal "emergency." The fiscal magicians on the right are busy taking us back to the good old days of the '90s. That is: the 1890s.
What does it say about America's national values? Just this: Being wealthy makes you worthy of greater reward from your fellow citizens; however, being a public school teacher or any other kind of public worker (except maybe law enforcement, a category Gov. Walker's own measure exempts from his attention) means you're greedy and deserve less.
If you're a struggling private-sector worker whose pay has lagged in recent years, and who is rightfully angry about Wall Street greed, think hard upon these events. Some of those Wall Street backers of Walker and his ilk have managed to get some of you very angry at precisely the wrong people. Sure, we'd all like to be millionaires, but is it right to take significant dollars out of the pockets of people who teach your kids, and give those dollars and many more to rich folks who would, from the standpoint of economic utility find the additional income insignificant?
Is that fair? Is that just? Does that even make any kind of rational public policy sense?
This little exercise might be called a teachable moment, but you have not and will not hear it mentioned by Republicans, or for that matter many in the mainstream news media. Because, increasingly, the conventional wisdom is that being wealthy in America is a virtue; whereas being a teacher is a moral defect, and, moreover, that the two conditions are utterly unrelated.
Next victim.
ADDENDUM: One correspondent privately responds to this blog item, saying the argument is a little misleading in that data used to arrive at the 80,000 number consider total net worth, not annual income. Further, says the correspondent, about 5,000 taxpayers in Wisconsin make over a million annually, and there are 32,000 in the top income tax bracket annually (over $200,000).
I appreciate those additional details, but my thought experiment remains. Let's assess my imaginary 5 percent surtax on Bush tax cuts just for that 32,000. That's still a big heap of offset to what the relatively modest-income teachers are getting hit with under Walker, after two previous years in which they absorbed earlier, three-percent cuts.
If my imaginary surtax doesn't make up the entire difference, then raise it somewhat, or make the teachers absorb a salary hit that is not so onerous. The wealthy have all sorts of tax excuses, and some seem legitimate. A farmer whose assets are mostly in his or her land is not collecting all that Bush tax cut benefit, for instance. Other excuses (i.e., "but we create jobs with our tax cuts!") are not convincing.
What's uncontestable is that the Walker salary cuts will drive some good teachers from the profession, and stress others out by increasing class sizes and reducing other school resources. Not good for the teachers, or, just as important, our students.
TIP:
Enter the amount, and click "Tip" to submit!
emma peel 2
C Berg
mginmn
Joan Walsh
Kerry Lauerman
Salon.com
Comments
The Republican agenda as expressed by Gov. Walker and those who advocate this position exemplifies the decadence and shear depravity we have allowed our dear fellow citizens to sink into. Therefore let us promptly forgive them AFTER relieving them of this sort of foul, immoral depravity that render and prevent their sad, ill awareness from seeing what is clear to those who want less.
Indeed, the wealthy class do not know it, but they subconsciously want the public to rescue them so that they may repent, and once again know the true joy and bliss of CARE. Verily.
Well, badscotsman, it seems you don't agree with Robin Hood, so I guess the only solution is the Walkeresque, GOP method of stealing from the poor and giving to the rich. You've forgotten that Gov. Walker has mandated corporate tax breaks roughly equal to the money he's taking away from working-class state employees. If that sounds Marxist to you, you're one heck of a strange, strange capitalist.
The Republican Stategy: use an economic downturn to justify cutting any and all benefits that help the poor or middle classes.
Since government workers are the only jobs that can't be shipped overseas, bust public unions.
The Republicon Philosophy: Social Darwinism . (Odd for a party that doesn't believe in evolution)
The Republicon Goals: Eliminate the middle class so we go back to a medieval-like society of the impoverished (serfs) and the super-rich (Lords). Eliminate democracy through a joint congresssional/corporate/military cabal.
The Republicon Endgame: Oligarchy/Plutocracy
WAKE UP AMERICANS BEFORE IT'S TOO LATE
Thanks for an article I wish I'd written.
A CEO, a tea party activist, and a public employee union member are sitting at a table with a plate of a dozen cookies in the middle. The CEO takes eleven and then turns to the tea partier and says, "Watch out for that union guy. He wants part of your cookie."
I am not interested in the "generosity" of millionaires. I'm tired of government-backed wealth shifting that puts more and more into the hands of fewer and fewer. This seems a reasonable solution to anyone but a millionaire, or someone who could easily not even miss a "minuscule" $5,000. Discretionary money doesn't even exist for many of us--maybe not even for most of us. "Discretionary money," for me, is when I have a few bucks left over after the bills are paid to make a few payments on medical bills. For the small group of elite in Wisconsin, well, gee, maybe they might have to take a pass on one of their 8 or 9 annual vacation trips. Awwww.
In 2009 the state legislature in Oregon raised the tax rate to 10.8% on joint-filer income of between $250,000 and $500,000, and to 11% on income above $500,000. Only New York City’s rate was higher. Oregon’s liberal voters ratified the tax increase on individuals and another on businesses in January of that year, no doubt feeling good about their “shared sacrifice.”
Congratulations. Instead of $180 million collected last year from the new tax, the state received $130 million. The Eugene Register-Guard newspaper reported that after the tax was raised “income tax and other revenue collections began plunging so steeply that any gains from the two measures seemed trivial.”
One reason revenues were so low was that about one-quarter of the rich tax filers seemed to have gone missing. The state expected 38,000 Oregonians to pay the higher tax, but only 28,000 did. The rest of them simply left the state. When Maryland recently enacted a big millionaire tax about a third of the states highest income earners moved away.
Raise taxes on rich people and they leave, taking of course, their tax money with them. Raise taxes on corporations – and they leave (of course, without local workers) Learn from former N.J. Gov. Corzine. He raised taxes and the very rich left. Tom Golisano, one of the richest businessman and philanthropist in NY state, took all the monies he used to give away here, and moved it to FLORIDA. Lower taxes are better for all. We must live within our means. This means reduced spending, not increased taxes. I understand how difficult it is for union members to loose their benefits (or have to start paying some money for them). It’s much more difficult to loose what you’ve had, then not to have it in the first place. Unfortunately, we’re living in a very difficult times. I am pretty sure we’ll survive, and I am absolutely sure that you will, too.
In America, the vast majority of the rich are rich because they've worked hard --- and that is a virtue, as far as I'm concerned.
Further, the tax the evil rich is an easy out. Rather than discussing the tax burden and Wisconsin's in high in general, and higher still for the higher income brackets, you want to tax them over there. Not us. They deserve it, we don't.
Let's add to this the fact that the net pay of teachers in Wisconsin ignores the far more generous than average benefits and the nine month year. Some calculations bring this number to 100K$/year, which is, by most counts, a generous salary.
The two questions are: Is the tax structure of Wisconsin fair? and
Is the pay for teachers sufficient to attract produce a large enough pool of good teachers?
You addressed neither of those questions.
Is the pay for teachers sufficient to attract produce a large enough pool of good teachers?
The tax structure of Wisconsin used to be very fair; now it is fairly regressive, as is the federal tax code, which is to say, it punishes rank and file workers and gives wealthier residents and businesses unwarranted tax breaks, paid for largely by those aforementioned rank and file workers -- which was the point of my article.
As to whether teacher pay is sufficient to attract quality: Wisconsin teacher pay averages 28th among states. Cutting their pay by a significant proportion after two years of earlier cuts surely will not attract as many good teachers going forward.
Finally, several studies have concluded that public workers in Wisconsin -- even with their more generous pension and health care benefits -- are still paid about 5 percent less than comparable workers in the private sector. Take out eventual pension benefits (which after all are not current income and may never be income for some workers who quit or die early) and the Wisconsin public workers compare even less favorably -- about 25 percent less. And that's before Walker's draconian cuts.
Reinvest the million dollars in your freakin' business and write off the entire million dollars. You're going to buy/upgrade equipment. You're going to expand. You might actually hire some more people! Maybe you'll start an entirely new enterprise and hire an entirely new staff to run it! In any case, high taxes are only applied to money that is taken out of the system. Money that is put back into a business is written off and no taxes are paid on it at all! The only problem is that the cost of sending jobs overseas can also be written off- that should end. The idea that lowering taxes on really, really wealthy people creates jobs? That should end too. It's a falsehood that is creating a lot of problems right now.
Where in the world is the evidence of that? I've known some wealthy people (some are cousins and other distant relatives.) Very few (none, I'd venture to say) work the long arduous hours that I do. Some work about average-hard. MANY not only don't work much, but brag about how they earn money in their leisure, while others labor.
In case you haven't been paying attention, the richest half-percent have achieved their meteoric rise in fortunes through unethical "investing." They've pulled another couple percentages along with them. When the bottom fell out in September 2008, they all panicked as a group, because they knew they were not contributing to the gross national product--they were not building true wealth in any sense of the word--it was all on paper, fabricated, a systemic Ponzi scheme. Yet we "had" to bail them out. What a load of malarkey.
Get familiar with the writing of Matt Taibbi. Seriously.
Of course it doesn't. There are 60,000 public school teachers in Wisconsin but about 374,000 public workers at all local and state levels in the state. I simply chose teachers as one category to employ for my thought experiment. It could have been engineers, highway plowers, natural resources biologists, accountants, public defenders and all the other hard working public employees who will see similar cuts in their pay.
If you make it, please pick up after you. At the moment, Wisconsin taxpayers are being burdened with huge cleanup costs attributable solely to ignorant and slovenly protesters who, typically, have no respect for the property of others. And, come to think of it, that's what this post is basically all about.
No, they're not. First, if you have been at any of the huge rallies, it's simply amazing how clean the Capitol areas have been kept -- not just by state workers, but by the protesters themselves. If you're referring to the Walker administration's claim that it will cost $7.5 million to clean up the halls of the Capitol, well, late this week administration officials admitted the actual cost would be only a fraction of that. The Walker lieutenants are just blowing more smoke out there in hopes of making people think there's a fire. It's just smoke.
PS--I carried a Hefty garbage bag with me on February 18. I not only carried out my own garbage, but I collected from others. (Apparently, public employees need to eat. Go figure.)
Unless that attitude of respect for the building changed drastically during the next week, I have a hard time believing that the damage was 7.2 million. Crazy. (I did see that the latest estimate is closer to 340, 000 dollars, but even that is dependent upon the people they hire to clean the stone.)
Oh, I never saw the palm trees lining State Street either, but that could be because I was too busy shouting. . . .or maybe I was dodging snowflakes. . . .which never showed up on the Fox News clip either. Crazy. Anyone who lives here knows how much snow is on the ground and how much of the crap we've had this winter.
The Wisconsin (2 year) budget deficit was estimated by the outgoing Democratic administration to be $2.2 billion. Walker estimates it to be $3.6 billion. Either way your ‘plan’ covers less than $450,000,000. Or, is it that teachers are the only one’s in Wisconsin who matter in your world? The rest of the unfunded liabilities aren’t important. . . I got it. . . .
Later, you seem to admit that you don’t know the difference between possessing the wealth to be a millionaire and earning a million dollars a year. Now all of a sudden, only 5,000 taxpayers are supposed to cover a $2.2 billion to $3.6 billion deficit? I note that you conveniently forgot to make that calculation.
Let’s see. . that would be between $440,000 and $720,000 apiece. But, who cares? They’re rich! They can afford it! They OWE it to us! We’re ENTITLED to the money those rich people in New York City cheated us out of. . . .
Ohhhhhh. . OK. . that’s really too much for those Chippendale furniture owning – cocktail party people. Let’s stretch this deficit over the 32,000 Wisconsinites who earn more than $200,000 per year. . . That’s up to $112,500 each, on TOP of what they now pay in taxes . . . Yeah. . .THAT’s the solution!!!!!!!!!!!!!!!
Now, of course, all the foregoing neglects the ongoing unfunded liabilities that progressive thinking has brought to Wisconsin. About half the current estimated debt seems tied to the State’s Medicaid program. . . . But, again, I got it. . . we have to take care of them teachers. . . and we’re gonna make those stingy rich people do it. . . . after all it’s all their fault. .. . and we need our kids to know that pie are squared.
Walker seems determined to rid Wisconsin of the kind of thinking displayed in your post.
You display the kind of thinking I really despise. The topic here is Wisconsin and its state taxes. If you live in Wisconsin, you almost certainly don't work on Wall Street. Wisconsin isn't known for being a hub of finance, either, so one can conclude that the average Wisconsin millionaire had little to do with the Wall Street crash.
So, if you're punishing Wisconsin millionaires for Wall Street, you're basically saying to be rich is to be bad.
To prove my point, the richest man in Wisconsin, John Menard, made his money on a chain of home improvement stores. Kohler, the next richest, manufactures plumbing supplies. The next are a few Johnsons of Johnson Wax. Then you get a Kellog of breakfast cereal fame.
The rich people I know work very long hours, not including the time they spend on airplanes, which is a special form of hell. All the rich people I know worked for their money.
Let's take, for example, the three richest men in America, Bill Gates, Warren Buffett and Larry Ellison. They all founded the companies that made them rich. They didn't do it by taking long lunch breaks and playing golf all weekend.
Let's take the richest men in Wisconsin: Menard founded a chain of home improvement stores. Kohler manufactures plumbing supplies. The Johnsons made their fortune on cleaning supplies, The Kellogs selling cereal.
Yes, there are some people who made their money manipulating Wall Street, but they don't represent the bulk of the rich.
The next point is that the top tax bracket includes successful professionals: top lawyers, doctors, managers who earn their income by being very good at their profession and people who earn a thousand times as much.
This is one of the frustrating things about the news. It's all spin. I've read in credible sources that the comparable pay of teachers is much higher. I presume you used credible sources, too. We come down to an question of what the facts are, not what conclusions should be drawn from the facts.
I do feel that pension matters a lot. If you are guaranteed a good pension (and most pensions carry forward from jobs you've quit long ago), you don't have to invest in an IRA or save as much.
People do count future benefits a lot. When I worked for the Federal Gov't, I worked with many people whose only reason for not quitting long ago was the great benefits --- in particular, the gov't pension.
My comparison, rather, focuses on a thought experiment, to wit: Was it sensible to give people who earn taxable income of a million dollars a year nearly $100K on average in federal tax cuts, when many states -- thanks to the mini-Depression brought on mainly by Wall Street excesses -- are facing greatly reduced revenues? No, it wasn't sensible. But is it okay to nick middle-class teachers and other public employees to pick up a significant chunk of the shortfall in Wisconsin and elsewhere? Apparently, your answer is yes.
Regarding "unfunded liabilities": Wisconsin's projected deficit is, in inflation-adjusted dollars, pretty much in line with continuing projected deficits since Tommy Thompson's administration started running them in the mid '90s. And he and subsequent governors and legislatures -- excepting Walker -- have been able to overcome those deficits without scorched-earth cuts that badly hurt average citizens. As for unfunded liabilities: Not really. Mainly that would entail the state's pension fund, which unlike many others is fundamentally sound -- even after the recession's impact it remains 97 percent funded according to standard accounting methods and has already made a comeback in earnings. Walker and the GOP nevertheless continue to allude to major public pension funding shortfalls in other states as somehow pertaining to this state. But that's untrue. True, Medicaid costs are soaring in many states but Walker's "fix" in Wisconsin is to cut services in a way that reduces federal payments, which will hurt public health and serve as a double economic whammy. Program adjustments and economies, sure, but not nearly as draconian as Walker's, which will totally end health care coverage for many retirees, disabled people and working poor in this state. And that's a huge backwards step.
Walker seems to like cutting corporate taxes and refusing federal aids, and then balancing those lost revenues on the backs of public workers and local economies, through massive cuts that will in fact wreck those economies.
Wisconsin + Walker = Mississippi.
I'm not unaware of the income inequality in the US. I support social services for those who need them and I am interested in discussions of what is a fair way to pay for them.
But what infuriates the hell out of me is when I hear I should be punitively taxed because I'm "the enemy." That's not fair at all.
Gee, that must be it, because no one in their right mind should object to suggestions that they be killed and made into cat food to appease your wrath against an entirely different set of people.
As it gets worse, and it looks like it will, some pretty violent things will occur.
That is, if you are really interested.
The fact that the wealthy control a hugely disproportionate amount of the country's wealth which impoverishes a frightening percentage of the general populace indicates there is something severely wrong. A nation is conceived as a community that cares for its members, it is not a free-for-all dogfight and when the old, the sick, the out of work are severely damaged by the allocation of too much of the wealth to a very small sector then the nation as a whole becomes very sick and destructive of its creative potential. Success of individuals measured only by personal wealth is a form of social psychosis.
Thanks for taking the time to reply. I’ll go one round here; because I don’t want to hijack your post away from those who sweetly compliment you on your effort.
I continue to claim that I understand the thrust of your post; but I won’t argue this point directly. Instead, let me humbly offer the fact that Wisconsin residents consist of far more than just teachers, public employees, people whose wealth exceeds $1 million and those who earn more than $200,000 per year. Couple this fact with the presumption that the government of Wisconsin is similar to the federal government described by Lincoln – of (all) the people, by (all) the people, and for (all) the people.
Then, if you want to play Governor for a day, consider the entire budget deficit, as your current Governor must do. If you want to play Governor for a day, then have ALL the citizens of Wisconsin share the pain of solving its revenue shortfall.
This world isn’t here for us to take just from the rich and give just to the select poor. That’s a philosophy of envy with respect to the rich and one of misery with respect to those we identify as deserving poor. Such is always the result of socialist and collectivist principles.
America is a land where generally equality is guaranteed only with respect to birth. Thereafter, the only rights to which we are entitled are those that are generally inalienable, along with those more specific ones explicitly enshrined in our federal and State constitutions.
We don’t all succeed equally. We are not all equally entitled to anything else.
We are not entitled to be secure in our jobs. We are not entitled to a living wage. Every citizen must work for these things.
If you want to be the one whose employment no one person, or one entity, can terminate, then find the capital and risk it by investing in a business of your own. Just keep in mind that every business needs one thing – customers. Also, even as boss/owner, your own salary can disappear with a loss and your own job can disappear without customers.
I am foregoing my rant about those who were cheated by Bernie Madoff and whomever you lump with his ilk, simply because it is irrelevant to the subject at hand, both here and in your post. Please be grateful for this. It always takes two greedy people to enter into a contract where one is cheated; and every investment of capital carries with it some risk.
Let me finish instead by humbly suggesting the steps associated with your next “thought experiment” on this topic:
First, pick a number, any number, which you believe accurately estimates the amount by which State revenues will fall short of State expenses for the forthcoming Wisconsin budget. No one will assign you much credibility if you pick a number less than Governor Doyle estimated for this amount; and you won’t have many friends here if you pick a number greater than what Governor Walker is estimating.
Second, pick a strategy of revenue increases and spending cuts whose sum is equal to, or greater than, your estimate of the Wisconsin budget deficit. Increase taxes on all incomes, if you wish. Increase taxes on all wealth, if you wish. Cut benefits for all, if you wish.
In the end, if you still want the rich to bear a disproportionate amount of the tax increases and a disproportionate amount of the benefit decreases, then don’t be surprised if they insist on greater influence in government for the money you are costing them. That’s how they became rich, by making efficient use of their money.
On the other hand, if make this pain ‘equal’ across all sectors, then you might be surprised how quickly Wisconsin voters, in general, will insist on government spending that doesn’t present this deficit to them again.
I am not favoring Governor Walker’s position with this comment. On the other hand, I do not believe that his only targets are teachers and public sector workers.
Good luck!
Chris
You mean like what's happening to teachers right now? I couldn't agree more.
The bottom line is we tax payer are paying more and more into SS and expect less and less return for the money we put in our retirement plans. The government is expecting the citizens to pay more for a longer period while the actual government workers pay less and receive more. Sorry making sure government workers are able to retire in their 50s with better benefits than the people paying the bill is not our priority.
It is time teachers and other governmental workers join the rest of America in the reality that everyone is going to do with less and give more to fix the massive problems facing this country.
42 thousand (51 thousand is the average) is not to shabby considering the average American worker makes less and works on the average 100 day more per year.