David Cay Johnston challenges reporting that parrots false claims by Governor Scott Walker.
When it comes to improving public understanding of tax policy, nothing has been more troubling than the deeply flawed coverage of the Wisconsin state employees’ fight over collective bargaining.
Economic nonsense is being reported as fact in most of the news reports on the Wisconsin dispute, the product of a breakdown of skepticism among journalists multiplied by their lack of understanding of basic economic principles.
Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans.
Accepting Gov. Walker’ s assertions as fact, and failing to check, created the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not.
Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.
How can that be? Because the “contributions” consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services.
Thus, state workers are not being asked to simply “contribute more” to Wisconsin’ s retirement system (or as the argument goes, “pay their fair share” of retirement costs as do employees in Wisconsin’ s private sector who still have pensions and health insurance). They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin.
Democracy Now interviews Johnston about the media coverage and the historical consequence to today’s wages of stripping away union rights and collective bargaining.
In their coverage of Wisconsin Gov. Scott Walker’s attempt to undermine public workers’ unions, many journalists have parroted Walker’s claim that unionized state workers get their pensions “subsidized” by the state. We speak with investigative reporter and Pulitzer Prize-winner David Cay Johnston, who counters the assertion that pensions are costing taxpayers by pointing out that the workers themselves contribute 100 percent in deferred compensation.
Johnston has a piece up today at Tax.com that reaffirms tax cuts have not resulted in higher tax revenue or more jobs or higher wages.
Corporate income tax receipts fell 27 percent and declined 34 percent per capita, even though profits boomed, rising 60 percent.
Payroll taxes increased slightly overall, but slipped per capita because the nation’s population grew five times faster than the number of people with any work. The average wage also declined slightly.
You read it here first. Lowered tax rates did not result in increased tax revenues as promised by politician after pundit after professional economist. And even though this harsh truth has been obvious from the official data for some time, the same politicians and pundits keep prevaricating. Some of them even say it is irrelevant that as a share of GDP, income tax revenues are at their lowest level since 1951, when Harry S. Truman was president.
No matter how many times advocates of lower tax rates said it, tax rate cuts did not pay for themselves, did not spur economic growth, did not increase jobs, and did not make America better off.
Glad you brought that up Pirate. There has been an ominous trend across the country to sell off public infrastructure. Lengths of American highway and tolled interchanges are now owned by foreign corporations who ‘maintain’ them for a profit- this is called outsourcing political will. The gov doesn’t have the courage to raise taxes to support these structures so they sell them off and immediately the new owner increases the toll. Energy production and distribution is an essential service and should never be given over to ‘for profit’ operators.
Union busting isn’t all that is going on in Wisconsin. Of course, I would rather see union folks making a family wage than the current trend to reward “management types” with an additional hefty bonus just for doing the job.
But, that is not the total of what has been proposed in Wi. The bill is 144 pages long and proposes, among other things, that the governor has the right to sell State owned utility plants without any competitive bidding or other consultation. They may simply be sold off or operations may be privatized, again without any competition. These actions, done without recourse, are defined in the proposed law as in the public interest. The wealthy playing cronyism, again.
Here is my source:
http://www.nytimes.com/2011/02/25/opinion/25krugman.html?_r=2
Agreed. When did the community hold a big celebration to honor brains? How often are fundraisers held to buy academic scholarships compared to football gear?
As to the “editor”, some of his editorials, especially this last one should be sent to journalism teachers across the country as examples of how not to write.
Personally, I thing there are other things in schools that could be cut back. I have never understood the reason for sending teams clear across a state to play other schools. I suggest intramural sports be looked at closer. The number of teams would be dictated by the number of students who signed up to play. That way everybody who signs up gets to take part in each game. Teaching sportsmanship is the goal of sorts in schools to begin with. That can still be accomplished without the large overhead involved with travel. The students ARE in school to learn something, not parlay their athletic ability into a search for a career. When was the last time a student body gathered to honor a 4.0 student?
Wall Street argues you will not get the best and the brightest if you don’t pay enormous salaries and bonuses. Unlike teachers who have to meet arbitrary standards to receive ‘merit pay’ Wall Street bozos can tank the global economy and still get their bonus for Christmas
They only work 9 months out of the year? Well, kinda. Actually, most schools districts in the US contract a certain number of days. Which coincides with the school year. The number of days contracted to be worked does come to roughly nine months out of each year. However, if you want teachers to work the additional days required to total a 12 month school year, you’ll need to pay them for the additional 3 months they will be teaching. From my math, that comes to a 25% raise for all teachers and staff across the board. I can only speak for myself, but if the boss pays me for 6 hours of work each day I’m just not about to work 8 hours! In addition, unless we have a qualified teaching staff, and are willing to pay for them, the outcome may very well be a student who becomes the likes of the editor of The World newspaper, and I personally don’t think we need another one of those!
Would you?
oh den, have you been watching Fox News? The evil greedy school teachers, selfishly driving around in their minivans and Kias and spending their spoils at Ross and Walmart are the cause of all the budget woes in this country… watch the videos here http://mgx.com/blogs/2011/03/04/the-daily-show-crisis-in-dairyland-for-richer-for-poorer/
Pulitzer Prize-winner David Cay Johnston, who counters the assertion that pensions are costing taxpayers by pointing out that the workers themselves contribute 100 percent in deferred compensation.
Sounds like to me that they are paid too much in the first place, so they can defer compensation, which is used to pay for the pensions “subsidized” .
Gee, where does the money come from that pays their deferred compensation. I think we need add the issue of paid to much for too little. They only work 9 months a year.
I guess the only people who understands and accepts the deferred compensation rhetoric are those who have been to their institute of higher learning