The Liberal Mismanagement of Government Continues. This is even more evident at the state than the federal level. A study of the best- and worst-managed states in America revealed that 4 of the top 5 are Republican strongholds, just as 4 of the bottom 5 are deep, deep blue. California (surprise!) comes in dead last, with the nation's second-highest unemployment rate and its worst credit rating, while according to the Tax Foundation, its business tax climate is the third-worst. Rhode Island, Illinois, and New Jersey provided misery with its company, the Garden State enjoying a crushing debt of 91.6% of its percentage of revenue. North Dakota, Wyoming, Nebraska, and Utah, meanwhile, enjoy very low unemployment rates and levels of debt, with Moody's credit agency attributing the latter's stability to its "tradition of conservative fiscal management." Words the blue states don't understand, that is, because that would be racist and hurting the poor or something.
In other blue-state news, the city everyone loves to stay the heck out of--Detroit--has now become so chaotic that one Michigan state senator has proposed dissolving the city altogether and putting it under county administration. The good people of suburban Wayne County can't wait for that, I bet. And back in California, the city of San Bernardino is now being sued by the state's public-employee pension agency, which says that even though the city has declared bankruptcy, it is still required to pay those big, big pensions, even at the expense of education, police services, etc. The agency is also reportedly trying to prove that you can, in fact, extract blood from a stone. So I heard.
In the "Further Proof That Tax Hikes Are A Bad Idea" Department: The British government announced earlier this year that it's been forced to surrender on its 50% tax rate for millionaires. Well, it didn't actually say that, but it did announce a slight lowering of the rate to 45%. And not a moment too soon: the Daily Telegraph pointed out recently that the number of Britons declaring income of more than 1 million pounds (that's what they call "dollars," Americans) fell from about 16,000 in 2009-10 to 6,000 two years later, rebounding somewhat to 10,000 after the government's announcement. One Conservative MP argued that this policy cost the state 7 billion pounds in revenue.
The reason why should be obvious to everyone here--overtaxed rich people either move their income out of the country, take advantage of loopholes, or stop producing it altogether--but sadly, it's not so obvious to our fellow Yanks. (My apologies to all Southerners reading the blog.) The latest ABC/WashPo poll shows that 60 percent of Americans, including 39 percent (!) of Republicans, favor raising taxes on those making over $250,000 a year--far outnumbering those who favor entitlement reform, even simply raising the Medicare eligibility age from 65 to 67. Good job, citizens. The $80 billion a year that tax hike will bring in should keep the federal government running. For, like, a couple weeks.
And Speaking of the Middle Class: Has anyone figured out yet whether the Obama administration really believes it can solve the debt crisis by heavily taxing the rich and not touching anyone else, or if they're just lying to middle-class voters and letting them believe that? Because I honestly don't know. Anyway, clearly a lot of people do believe that--but maybe not for long. In January, the payroll tax rates set by Congress are set to increase by nearly half, a change which will cost the average middle-class household an extra $1,000 per year. Ironically, given that about 160 million people are in the income categories affected, this may well raise more revenue than the tax hikes on the rich--and thus the dirty little secret of American economics: the bulk of national wealth doesn't lie with the rich, it lies with the middle class. Needless to say, the Obama spokesmen aren't exactly publicizing this pending change.
So if you're middle class, you may be about to get screwed out of a bit more money (and I haven't even mentioned the jailhouse shiving that is the Alternative Minimum Tax). Sucks, I know, but hey: You broke it, you bought it. We did try to warn you, didn't we?