Category Archives: Politics

Economics, Politics

Let’s be progressive

Rather than trying to put caps onto salaries, in an attempt to prevent runaway wage growth, why don’t we just set up a progressive income tax such that: the more you make, the higher your tax bracket?

Everyone can start out with a base deduction plus social security insurance, health insurance and state/local tax costs, and then pay a flat rate at various steps thereafter.

My steps would be tied to the median household income (MHI) . For every multiple of the MHI, the tax rate would increase. The actual tax rate should be set such that the federal budget would be balanced i.e. the government will collect enough money to cover its expenditures for the year.

The base deduction for a single individual should be 40% of the MHI. For a household, the base deduction should be the MHI.

Politics

2025

I am starting to read through the Presidential Transition Project Plan for 2025. It is making for alarming reading.

In Federalist No. 47, James Madison warned that “[t]he accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the
very definition of tyranny.”

They argue that by distributing all the command and control of the Executive functions across wide and diverse groups of faceless bureaucrats who are writing, executing and adjudicating the rules that make our society work, that we are reaching that stage of tyranny. Instead, they want to consolidate all this into a more compact group of ideological political appointees and put the career bureaucrats out to pasture.

They are concerned that the “Radical Left” are running the bureaus, agencies, and departments with some sort of agenda to weaken America and it’s standing in the world. I believe Barry Goldwater is part of the Radical Left as well.

It will take a while get through all this. They have detailed breakdowns for the various Cabinet departments and independent agencies, and, how the incoming “conservative” president can fix it all.

Politics

Supreme Justice

I like the proposal to fix the term of a Supreme Court Justice to 18 years. A new Justice would be appointed every 2 years. In the event of a vacancy in the court, a new Justice would be appointed to fill the term of the vacated seat.

This would allow each President to appoint 2 Justices per term (minimum, for a 4 year term). This also allows Justices to achieve emeritus status while still able to enjoy life. Emeritus Justices may be called upon for other duties as determined by the Chief Justice.

A Justice can only serve one term.

Politics

Why bother with a Wealth tax?

Looking at some figures, the median net worth of an American household in 2020 is ~$121,000. If you look at older households (65+) which have had a chance to build up equity, the median net worth is ~$266,000. So rather than imposing a wealth tax, let us impose a 90% estate tax on any amount of estate over, say, 100 times the median net worth of the older household. So, any portion of an estate over $26.6 million would be taxed at 90%. Under $26.6 million, that can be tax-free inheritance.

Presumably, there will be those out there who will figure ways to game the system. We need to be vigilant and find ways to block the gamers. The primary reason for such a severe tax on large estates is to prevent the build up of an entitled aristocracy through the accumulation of generational wealth.

As I was looking at the wealth figures, I noticed that while the median net worth was $266,000 for 65+, the average, or mean, net worth was ~$1.2 Million, 4.5 times the mean.

Here is a table showing that more than 99% of households won’t even be affected by the 90% estate tax I have proposed, since they are only at $11 million. Maybe we should use the median household of $121,000 as our basis?

Politics

More thoughts on a minimum Living Wage

I discussed how to set a living minimum wage in an earlier post. Upon further reflection I would like to amend my approach. I was looking at two separate measures to determine a minimum wage: the poverty level of the nation or of an area, and the median household income for an area. The national median household income is $68,700, in 2019.

For the national minimum wage we will use 40% of the median annual income (rounded to the nearest $500)- $27,500. Working 2000 hours a year will result in a hourly wage of $13.75. This should be the national minimum wage which will be adjusted annually as the Census Bureau updates the median income.

In my earlier post I was looking at the HUD Median Family Income Calculation to derive a minimum wage for the more expensive Metro Areas around the country. My initial idea was to use the Extremely Low Income Level (30% of the Median family income) as a basis. Upon reflection, using a 40% value is more appropriate and balances with the national baseline.

Metro AreaMedian Family Income (HUD)Minimum Wage (40% MFI/2000 hours)
National$68,700$13.75
New York City$78,700$15.75
Los Angeles$77,300$15.50
Denver$100,000$20.00
Colorado Springs$81,600$16.25
Chicago$91,000$18.25
San Francisco$143,100$28.50
Seattle$113,300$22.75
Boston$119,000$23.75
DC Metro $126,000$25.25
Minneapolis$103,400$20.75
San Jose$141,600$28.25
Minimum Wage Table

Several other areas that should be addressed are piece work, gig work and personal service work.

For piece work I am thinking of jobs that pay per unit produced rather than the actual time needed to produce the units. This will require some historical information on the time it takes to produce a batch of units. If, on average, it takes 8 hours to produce 100 units then a minimum per unit wage will be 8*$13.75/100 = $1.10 per unit and earn $110 for the eight hour day. As a minimum. Now if a worker is just learning the trade they might produce only 80 units in 8 hours and only earn $88 for the day. An experienced worker may produce 120 units and earn $132 for the day. Of course, this will require honest reviews of how long the actual unit production time is. The same process can be used for filling bushels of produce, painting ‘art’ works, etc.

Gig work is another area that needs to be reviewed. Gig workers are like piece workers in that the work is on demand and produced as needed over a possible indeterminate time. If you don’t produce there is no income. One of the problems with the ‘gig’ economy is that the Ubers and Lyfts claim to be intermediaries connecting the customer with the driver and they will be glad to handle the monetary interchange, for a cut. And they set the rates. I suppose a driver could set a bottom limit to what they would drive for, but I don’t know if they would get many calls after that. I think the gig intermediaries need to have realistic rates for the amount a time their gig “contractor” will take to do a job and ensure their rate is sufficient to cover a minimum wage for the worker and all the withholding and mileage rates that accrue.

Another category of work I am trying to define are the folks who act as rafting guides, tourist guides, people who have to be on-the-job 24 hours a day, travelling and away from home. At a minimum they should be earning the equivalent of a 16 hour day, or $220 a day.

Salaried people must make at least the median family income per year. Below that they should be paid an hourly wage plus overtime as incurred.

Corporations that are paying for labor need to withhold SSA and Medicare from laborers be they employees, contractors, gig workers, piece workers or whatever. If the corporation is paying for the labor they must match the SSA and Medicare and remit the monies to the appropriate office.

Politics

A minimum wage should be a living wage

1 Comment

In the US, the poverty level for a family of four is $26,500 in 2021.

Given that someone working 40 hours a week, 50 weeks a year, 2000 hours a year, should be earning, at least, a minimum, LIVING, wage, then a minimum hourly wage of $13.25 is justified. I suggest that this should be considered a minimum living wage for an individual-nationally. *

Now there is another factor to consider, location. HUD has a extremely-low-income category that it tracks.** Basically, it is 30% of the median income of a Metropolitan Area. (don’t forget, median means that half of the families in the area make more than the median and half make less)

Again, we will use the “family of four” as our baseline. In my home county of El Paso, Colorado, the Median Family income is $81,600. 30% of that is $24,500 (rounded to the nearest 100). Divide by 2000 hours, that would create a Minimum wage of $12.25. Since the National Minimum is higher, the higher one applies. Any Metro area with an median family income of less than $90,000 will use the national minimum wage. (rounding results to nearest $.25)

Metro Area Median Family IncMinimum Wage
New York City$78,700National Minimum
San Francisco$143,100$21.50
Boston$119,000$18.00
DC Metro$121,000$19.00
Chicago$91,000$13.50
Seattle$113,300$17.00
Los Angeles$77,300National Minimum
Metro Area Minimum Wages

Rather than going with a flat $15 an hour minimum wage that is being bandied about, I propose this model as one that will change as the local economy changes, growing as needed, rather than waiting for Congress do to anything. The current annual wage of a Congressman is $174,000, ~6.6 times the Poverty Level we are basing our minimum wage on. Why don’t we keep that ratio in place and tie the Congressional wages to 6.6 times the national poverty level for a family of four?

*note this applies to the lower 48 states. Alaska and Hawaii have higher baseline poverty levels.

https://www.federalregister.gov/documents/2020/01/17/2020-00858/annual-update-of-the-hhs-poverty-guidelines

** The FY 2014 Consolidated Appropriations Act changed the definition of extremely low-income to be the greater of 30/50ths (60 percent) of the Section 8 very low-income limit or the poverty guideline as established by the Department of Health and Human Services (HHS), provided that this amount is not greater than the Section 8 50% very low-income limit. Consequently, the extremely low income limits may equal the very low (50%) income limits.

Politics

Civics Lesson

In light of the recent insurrection, where citizens invaded the Halls of Congress, disrupting the primary business of our democracy as it was happening, I would like to propose a law:

As a requirement to graduate from high school, or to enter government service, either in the military or civilian branches, you must be able to pass the same civics test new citizens are required to take.

There are 128 questions. You have to correctly answer 12 of 20. The test is broken down into three sections: American Government, American History, Symbols and Holidays. (The Radical Republicans released the latest version of the test in December, 2020 , and their influence is felt. )

I include the government service folks since many are required to swear to defend the Constitution and it would be useful for them to know what they are swearing to.

https://www.uscis.gov/citizenship-resource-center/the-2020-version-of-the-civics-test/128-civics-questions-and-answers-with-mp3-audio-2020-version

General, Liberating Thoughts, Politics

Happy New Year! 2020

Happy New Year! 2020 – the year of Hindsight! I hope it is your best one yet.

2019 wasn’t the best of years, though we did get a chance to visit Ireland, meet some cousins, and attend a Worldcon, as well as a brief visit to Iceland on the way back. Between travel and medical issues I only got to spend half a year on the golf course. The good news is that, medically, I am back in the pink for 2020. Physically, I need to continue the exercising and stretching I began last year with the Silver Sneakers program down at the gym. That should also help on the golf course.

As we enter the election year, I am conflicted. I support Bernie Sanders wholeheartedly. I believe his Democratic Socialism platform is the best for the US moving into the 21st century. Our own Constitution starts with “We the People” and mandates to:

  • form a more perfect union,
  • establish justice,
  • insure domestic tranquility,
  • provide for the common defense,
  • promote the general welfare,
  • secure the blessings of liberty for ourselves and our descendants,

if that’s not Socialism, I don’t know what would be. But, the man is 78 years old; I really believe he would not survive first first term. I wish he had a groomed successor in his 50’s ready to go, but the other Democrats in the running don’t seem ready to adopt his platform. This also means his VP pick will be critical and I expect that “politics” will give us a less than optimal successor. It will be an interesting year.

I do think it is time for Congress to take back its constitutional duties and to stop ceding them to the executive. Especially sending American sailors, marines and soldiers into combat at the whim of the executive. Congress opened the door about letting the Executive use military force without direct Congressional approval and the Executive has ripped the door off the hinges. Our military actions throughout the world over the past 70 years have not been the actions of a democratic republic promoting its ideals to the world.

What we do seem to be doing is making the world safe for business. Not safe for the people who patronize the businesses but the businesses themselves. And to add some confusion to the mix, businesses are becoming multi-national and and by making the world safer for business we are making it less safe for ourselves, since if the business is engaging in practices our country deems unsafe, they will just move to another country that doesn’t prohibit or limit those practices. The practices are still unsafe and continue to create a harmful environment; it is just at a remove from us. And we still protect the overall business that is engaging in these practices. Realistically, we need to ban/prohibit these businesses from doing business in our country if we find them engaging in practices that we prohibit here because they are harmful.

Business concentrates money, politics concentrates power, concentrated money buys concentrated power, concentrated power can intensify concentrated money. We need to break this cycle. Let’s start by diffusing the power. Let Representatives have a maximum number of constituents, say 100,000 per Representative. Triple the size of the Senate and let the top three vote-getters be seated in each Senatorial election. Set a restriction that a person cannot hold successive terms of office. A Congressional incumbent can not run for the same office, but they can run in the following election when they are not the incumbent.

Congress should also incorporate sunset timelines into every bill, say 20-25 years, then the bill/law expires. Of course Congress may just reaffirm all the sunsetting bills en mass, so we restrict that so no more than half of the sunsetting bills can be approved in a bundle. The rest must be approved on to case-by-case basis.

On the money side:

  • 90% estate taxes on estates in excess of $5,000,000 should help prevent the concentration of wealth.
  • Political contributions can only come from registered voters or Citizens. Get businesses out of politics.
  • All political contributions are publicly available for review.
  • 90% income tax on incomes over $5,000,000 should help as well.

Actually, I have a whole income taxing scheme that I will discuss in a later post.

Happy New Year! Let the Fun Begin!

Economics, Politics

Minimal Wage

Once again the discussion of minimum wage is coming to the forefront of political discussion. There is a lot of vocal support for a $15 an hour minimum wage. I think that is a few dollars more per hour than necessary for a national minimum wage.

A minimum wage should be able to provide the wage earner with a basic living wage. The national poverty level for a family of four is in the neighborhood of $24,000 a year. A person working full-time, 40 hours a week, 50 weeks a year will work 2,000 hours a year. Using these numbers, $12 an hour is a reasonable minimum wage – nationally.

Now, within some urban areas (Metropolitan Statistical Areas) the effective poverty level for a family of four is much greater than national level and it would be very appropriate to tie the minimum wage to HUD’s Extremely Low Income for a family of four for an area, or to the national poverty level for a family of four, whichever is greater. Such that, in San Francisco, the ELI for a family of 4 is $44,000 so a minimum wage for that area should be $22 an hour. In Seattle, the ELI is $32,100, which would lead to a $16.50 per hour minimum wage. In the Bronx, the ELI is $31,300, which will lead to a $15.65 per hour minimum wage.

We have the facts and figures derived from the various government departments that track this data, such as the Census Bureau, HUD, Social Security, the Fed, HHS, etc. Let’s use this data responsibly and keep on top of the growing economy and the wage gap. And the numbers can change every year as the economy grows and we don’t strand people at an old wage for many years while the politicians pontificate.