Friday, December 24, 2010

Massachusetts – State Lures One Corporation with Tax Cuts – It must be Christmas.

The President May Have Embraced the Tax Cut, Will He Play Santa in order to Move the Economy Forward? - photo telegraph UK

TheSpringfield Republican reports: The Commonwealth of Massachusetts needs taxpayers to offset the ever increasing deficit; therefore, one Corporation with roots in Massachusetts, Smith and Wesson, has been given a 6 Million dollar incentive (tax cut) to move a manufacturing plant from New Hampshire to Massachusetts – creating 270 plus jobs. The direct result of cutting corporate taxes is an increase in employers who hire – the resultant taxes from the employees hired buffer the state’s coffers. If Massachusetts would cut the corporate tax rate, across the board, how much better off would the Commonwealth be?

Massachusetts currently ranks 32nd out of 50 states in Corporate Tax Climate (Tax Foundation), with the higher number meaning a more tax friendly state; one which would invite corporations to invest, build and hire. That said, globally, Massachusetts remains non-competitive due to the addition of Federal and Local Taxes, so much so that, as of 2009, Massachusetts ranked 3rd Globally, with the combined tax rate of 41.2, with the U.S. as a whole, ranking 34th, behind U.S. states and the nation of Japan. The lowest tax rates for Corporations can be found in Europe, in these tables, with Ireland at approximately12 %. China and India are not included in the data. (Tax Foundation)

Should the state decrease the current corporate rate by half, in a concerted effort to draw businesses away from other U.S. states, and Japan, one would find that the employment rate in the Commonwealth would substantially decrease, there would be need to import population (see current loss of population and subsequent loss of a U.S. Congressional Seat), and perhaps export the unpopular trend of cutting Corporate Taxes so that the U.S. could enjoy parity with the rest of the world. It will remain to be seen if the incoming Chair of the House Ways and Means Committee will work toward cutting the national corporate tax rate. However, given the fiscal conservative nature of Republican Dave Camp(MI), there may be a review of the national corporate rate. It will also be interesting to see if that occurred how President Obama and his new found religion (tax cuts) would react.

This should work to make the U.S. competitive as long as the Unions are left out of the mix; specifically as regards to ridiculous pension policies and other benefits that would effectively negate any tax savings: (See auto industry bailed out and immediately moving out of the U.S. to build where no unions exist.)

To those who would continue to blindly follow the ideology of the Corporation as evil, and a chicken in every pot, one must at the very least introduce a bit of sound logic. Although Corporations might be evil, they do hire individuals do to jobs, which results in an increase in the tax revenues both state and federal, while lowering the unemployment rate. One can either be an unemployed ideologue (of course, that does not include journalists, college professors, and the students at Universities nationwide, along with the leftover hippies happily ensconced in Massachusetts (and neighboring states) or a gainfully employed taxpaying member of society.

On the level of personal taxes, one may want to look at an across the board Consumption or Fair Tax, which is a sales tax on all goods at one level, regardless of income, and would replace any other Federal income taxes and associated fees. That said, a radical reformation of the current tax system does not appear likely, unless and until like minded fiscal hawks have complete control of the House and the Senate and learn to shout a little louder than the opposition.

Imagine, if you will, the State known as the most Progressive Blue State, cutting corporate tax rates in order to attract businesses to increase jobs? Yes Virginia, there is a Santa Clause.

Thursday, December 23, 2010

Study Concludes Teachers Should Be Laid Off Based on Low Student Test Scores Not Seniority, Nation Teachers Union Predictably Disagrees

APvia ABC News reports that a new study by the The Center for Education Data and Research at the University of Washington concluded that teachers layoffs should be based, not on seniority, but on the teachers ability to effectively do the job at hand – proficiently educating students. The study was based on schools in Washington State, with the criteria of teacher effectiveness based on a percentage of student proficiency graded on standardized testing. The notion that standardized testing might indicate a teachers ability was pooh-poohed by the President of one of the national teachers unions – one Randi Weingarten, head of the American Federation of Teachers. Apparently Weingarten, following union standards of seniority trumping ability: “criticized the research, saying it could further push school districts toward evaluating teachers strictly on student test scores.”

This same “Union Boss” recently went to bat for teachers who were fired from a Rhode Island School due to the 7 percent pass rate in math proficiency of the junior class, among other issues, such as teachers showing up for work. (Boston Globe). The argument from the unions: lousy teachers may “connect better” with students.

It should be obvious to those outside the spectrum of the unionized school, that students, who are proficient in test scores, will be more successful in life than those who are not, thereby becoming an asset to the nation, rather than a liability. The parents (taxpayers in some instances), are given the option of either allowing their child to fail in union dominated public schools, or placing them in a private educational facility, either a parochial or private secular college preparatory school, and/or homeschooling, in order for those children to beat the “odds” of individual school districts and have a chance of succeeding.

Massachusetts rankings as of 2009, (available online here shows school systems such as Springfield, MA, with a graduation rate of 54.5% and Lawrence, MA at a rate of 48.1%, joining 68 out of 285 school districts who have a less than 80% graduation rate. Only 11 out of 50 states are graded by the U.S. Department of Education based on standardized testing. Massachusetts students tested slightly above the national average in one subject area (Mathematics). The fact that the Commonwealth competed for the honor of scoring “above average” out of 11 states does not negate the fact that over 25% of the Commonwealth's school districts are performing at sub-standard levels. What of those states where there are no measurements and or standardized testing?

The problem basing a school systems performance on standardized tests is obvious; it would indicate whether or not students are being taught to a specific grade level by competent educators. Up until the 1960’s only 330,000 teachers were union members – nationwide (state university encyclopedia of education), standardized testing was the norm, and graduation rates ”peaked in the 1960’s", falling throughout the decades (George Mason University) in direct correlation to an increase in numbers of unionized (or union protected) teachers.

Therefore, one can conclude that the blame for failure to educate America’s students falls directly on the shoulders of the Teacher’s Unions and those City and Town governments that continue to sign union contracts for their teachers. What is necessary is leadership on State and Local levels that have the backbone (spine) to break the Teacher’s unions and allow competitive hiring of competent teachers in order for our nation to progress. Unions have their place in the workforce, where blue-collar, non-degreed workers, in substandard and dangerous working conditions need representation in order to defend themselves. The public school arena does not fit that particular criteria and the Union Boss, with the following pedigree: “ degrees from Cornell University’s School of Industrial and Labor Relations and the Cardozo School of Law; a lawyer for the Wall Street firm of Stroock & Stroock & Lavan and an active member of the Democratic National Committee.” is qualified enough to find gainful employment should the Unions be dissolved. The problem with today’s American education systems is glaringly apparent: political clout trumps America’s future.

Wednesday, December 22, 2010

Massachusetts Redistricting Games Begin – Democrats Would be Best Served by Merging 10th and 4th Districts – Analysis

Odd man out? 10th District Newly Elected Bill Keating (D-) - Photo

In what the Boston Globe is dubbing”a game of survival” between the Massachusetts Congressional Delegation one name that does not pop up in the initial articles regarding the loss of one U.S. House seat in the Bay State, is that of newly elected 10th District Representative, Democrat Bill Keating. In the 2010, 9 of the 10 Congressional districts were challenged, with Keating invested in the most competitive race in the State; he narrowly won victory over Republican Challenger, Jeff Perry. Although Richard Neal (D-MA2) and Barney Frank (D-MA4) had to campaign for “their” seats for the first time in decades, they managed to garner a 10 point lead over their challengers, Republican newcomers, Tom Wesley and Sean Bielat respectively. (The anticipated outcome by the New York Times for the MA2 district was Neal 71%/Wesley 26%, with the actual results of Neal 57% to Wesley’s 43%. The highest percentage of returns went to Olver (MA1) 60%, Markey (MA7) 67%, and Lynch (MA) with 68%. The most vulnerable and holding the smallest district in size and population appears to be Keating – the 10th District, which is also known to be stronger for Republican’s, encompasses Cape Cod, and would, therefore, be an easy and natural merger with the MA4th. The Democrats do benefit from a bit of extra press, in all the posturing, Neal and Olver have received more press in the Local Media over redistricing than they did during their 2010 campaigns.

Democrats could easily “kill two birds with one stone” by merging the 4th and 10th, adding the larger Democrat friendly urban areas of New Bedford and a large section of Fall River to the smaller towns and villages on the Cape. One, they reduce the political opportunities for a challenger to the Democrat Controlled Seat, and would save the nation’s highest profile Congressional Representative, Barney Frank, from extinction.
Although rumors of Frank’s retirement have been constant over the past few election cycles, the legislator fought tooth and nail in 2008, and would, one would gather, be the last one of the current delegation to retire. Frank is a Democrat Icon, revered by the Progressives, and the target of Conservatives would focus on Frank in any upcoming election, essentially taking the heat off Representatives such as Tierney (scandal: his wife made the 5 top political scandals list for her indictment in a mob related money laundering schemeduring the 2010 campaign). Niki Tsongas (D-MA5) would be safe as the “token” woman, (Massachusetts being such a stalwart champion of women’s rights under Democrat rule.)

Deval Patrick, Democrat Governor, is still, according to CBS3 Springfield MA holding to the myth that the Democrat Congressional Delegation from Massachusetts will continue to have clout in the Congress, even with the redistricting. Although Massachusetts is somewhat of an “island unto itself”, and therefore, many who hold higher office may have missed the fact that the balance of the 49 states (with few exceptions), elected a majority of Republicans to the Congress, and almost managed to take the Senate in 2010. Those Congressional Representatives who survived in Massachusetts, including the Govenor, did so with either narrow margins (Patrick did not win a 2nd term by mandate, he won over Baker, by 3 points, (see addition of 3rd candidate, Democrat turned independent, turned Democrat, Tim Cahill in Governors Race), or with a lot of help from unions and community service organizations getting out the vote in a massive 13 hour attempt, as it appeared that an extra 20,000 voters were needed here and there in order to maintain the total Democrat advantage.

The Massachusetts Democrats, who pulled out of these races, went to a lame duck session of Congress only to find that the clout they once had, appears to have disappeared. Neal, (D-MA2) who was vying for the Chair of the Ways and Means, and then after the loss of Democrat Power, was vying for ranking member – lost that honor to Sander Levin of MI. Both Neal and Olver, however, are reliable progressive votes. Therefore, it would appear that the only reason one would consider eliminating a Western Massachusetts District over a merger of the 4th and 10th Districts, would be that one currently holds a seat out towards Boston, and Boston traditionally treats Western Massachusetts as a source of tax revenue, nothing more, nothing less.

That said, according to an article from PBS station, WBUR, it is Washington who will have the final say, not Beacon Hill. If that is the case, then the new Minority Leader, Nancy Pelosi will have some input into the decision as to which seat to “cut”. Considering how close the former Speaker is to Frank and Neal and Olver, it is doubtful that, if this is correct, any one of those aforementioned would be added to the unemployment rolls.

Therefore, as the Boston Globe and those East of the Worcester Line, begin to eye two Western Massachusetts Districts, for more taxes and a Congressional seat, they may want to take a look at the new kid on the block, and the advantages of a 4th and 10th district merger.

What else is in involved in a redistricting effort? There are state representatives that will lose “careers” regardless of which District is merged or redrawn, and this is where Beacon Hill comes into play. With the Governors ties to the Administration, as strong as they are, his stated “minimal” involvement in the process versus State Legislators slated to redistrict the Commonwealth, one would gather that his input from Washington as to who stays and who goes in Congress would trump any fights on Beacon Hill for state representatives positions.

Of note: Secretary of State William Galvin (D), has called for an independent counsel to decide the redistricting according to the Globe and was summarily told where that idea might be shelved by Massachusetts Senate President Therese Murray and Massachusetts House Speaker DeLeo. Incidentally, the Senate President hails from Plymouth which is part of the 10th District.

Tuesday, December 21, 2010

Barney Frank (D-MA-4), Will Be Up for Re-Election in 2012

Barney Frank(D-MA4) will be up for reelection in 2012 - photo wikipedia

Barney Frank, (MA-4) will, once again, be up for reelection in 2012. In 2010 Frank faced his first serious challenge in decades, and won by, what can be considered a narrow margin in Massachusetts, receiving a total vote of 126,194 to Republican newcomer, Sean Beilat’s 101,517. The 24,677 votes in Franks favor is a far cry from the 2008 election where Frank received 203,032 votes to Republican Earl Sholley’s 75,571 votes,or what was anticipated happening in 2010. As more voters become aware of Frank’s involvement in the Financial Sector over his long tenure in the Senate, dissatisfaction sets in; it is the candidate who will drive home this point in 2012 that will best Barney.

Frank now has several negatives playing against him, one of which is the “power factor”, Frank will be the outgoing Chairman of the Finance Committee, but will still serve as a member of the Committee in the House of Representatives, a position from which he oversaw the Federally backed mortgage giants, Freddie Mac and Fannie Mae. Up to the very end of his Chair, Frank remains steadfastly progressive, an interview with CNBC (below), gives Franks perspective on voting against the tax cuts instituted by President Obama and a bipartisan committee of legislators. According to Frank, “taxing the rich”, (or those who create jobs), is a no-brainer, and those who inherit “estates” should be taxed to the hilt, because “they didn’t earn the money”. Perhaps Frank would be wise to visit a family farm, where everyone works, and where an estate tax of the magnitude preferred by Frank, would result in the loss of the farm by heirs, otherwise known as sons and daughters.

Additionally, Frank, who’s 4th district is home to some of the highest unemployment in the Bay State, was given a helping hand in this past election, when those supporting the Dream Act, got out and in 13 hours, across Massachusetts, found enough votes to push each and every Congressional incumbent over the top to a win. It is doubtful, with Massachusetts in the firm grasp of like-minded progressives, that the situation will change any time between now and the next election.

Finally, the anti-incumbent mood in Massachusetts was not lessened by the results of the 2010 elections, specifically on the Congressional side, where each challenger gave the incumbent Democrat a serious run for their money, the end result being that those war chest heavy incumbents had to spend the money at home defending their turf, instead of spreading it across the nation, allowing Democrats to hold seats. Contrary, the mood is one of although the Congressman was reelected; the gap was much narrower than in the one previous contest, and, therefore, the Republican candidate who does end up as the Frank Challenger will be well armed. The candidate will most likely be a strong fiscal conservative, who sat out the last election, and has the wherewithal to go toe to toe with Frank.

Frank’s district should escape any redistricting attempts as the Census due out today, may indicate a loss of a Congressional seat in the Bay State due to a drop in population. The most likely target will be those districts in the Western end of the state currently held by Olver (D-MA1) and Neal (D-MA2).

Monday, December 20, 2010

High Tax Rates and Cost of Living Causes Tax-Payer Population Shift to Sunbelt and Tax Free States

Entitlements Pull Indigent and Illegal Immigrants - Massachusetts May Lose Population in 2010 Census

Massachusetts has one of the highest tax rates in the nation, with Govenor Deval Patrick pushing through a round of new taxes in 2009 on everything from cell phones to an increase in the sales tax, and promising more upon his reelection n 2010 and as a result, people move. The outcome is thatthere is less income for the Commonwealth to meet its entitlement budget.

States Progject to Gain population (Green) verus Lose (Brown)

The likelihood of Deval Patrick proposing new taxes to cover the ever burgeoning deficit is high, and it is unlikely he would be willing to make the cuts to programs necessary to balance the budget. Further, he would be opposed to tax cuts necessary to give incentive for individuals or corporations which would bring jobs to the State.

The inability of Democratic Governors over the decades to cut taxes, and cut programs has caused a population shift south and west to more tax friendly climes and states that have lower cost of living. From an increase of approximately 26% in groceries over the previous year (save your receipts, it’s stunning), to rising heating costs during the winter months, to a lack of jobs due to high corporate tax rates, those that can, move out of Massachusetts. During the 1970’s under Michael Dukakis (who’s philosophy of tax and spend is similar to Patrick’s), watch the state’s unemployment rate soar as factory after factory closed, and moved to the Sun Belt. Moving into the state were those who found an environment friend to those who preferred to survive by government assistance. Massachusetts is ranked 7th in illegal immigration in the nation.

Therefore, as the Department of Revenue continues to announce shortfalls, and the Governor continues to provide more benefits from the State - the 2010 Census (due out today) (Boston Globe) may show a shortfall in population once again. The result is the loss of a Congressional Representative, and Deval Patrick and Company trying to find a way to increase fees (taxes) and taxes (taxes) in order to cover the budget.

What is most startling, is that information on bad governing practice by predecessors is available in history books, online news clipping, one’s memory if it serve one correctly, and or a myriad of places that anyone with the wherewithal to become Governor might look to find a virtual “how not to” book on the subject. From the state to the Federal government, historical figures (many of whom as living, breathing, guides to the window of historical economic buffoons abound, Carter, Dukakis, etc.) who, if one (Governor) took the time to study (or reflect using long-term memory), the policy of tax and spend, then these cyclical migrations to states other than Massachusetts, would not occur.

Although it is difficult to say what will occur, as the results will be released today at 11:00, (as the Boston Globe notes), the aforementioned bad fiscal policy may have resulted in a loss of population, or at the very least a loss of taxpayers, as well as a Congressional seat.

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