If you Tax the Rich in France at Confiscatory Tax Rates they will Leave France

Posted by PITHOCRATES - December 15th, 2012

Week in Review

Rich people won’t leave the country if we raise tax rates.  Governments everywhere say this.  For they will believe that people with the ability to create wealth will just sit idly by while the government takes it away.  So believed the French socialist president.  François Gérard Georges Nicolas Hollande.  Who said he would tax millionaires at 75%.  And by golly he’s going to do it.  But it turns out those who can create wealth are none too keen on paying 75% of everything they earn over a million to the government.  And they’re saying so.  Not so much in words.  But with their feet (see Gerard Depardieu moves to tiny tax haven in Belgium just 800 YARDS from border where a third of people are French citizens dodging Hollande’s high taxes by Ian Sparks posted 12/10/2012 on the Daily Mail).

French film star Gerard Depardieu has moved into his new ‘tax exile’ mansion in Belgium – just 800 yards from the border with France.

The 64-year-old actor’s lavish home in the village of Nechin – on a street known as Millionaire’s Row – is less than two minutes drive from the French town of Roubaix.

Depardieu is the latest wealthy Frenchman fleeing a looming new tax of 75 per cent on all earnings over one million euros – about £850,000…

France’s economy minister Pierre Moscovici hit out this week at repeated warnings in the world’s media that France’s richest people were fleeing overseas.

He told a conference of business leaders in Paris: ‘I am troubled to read in the papers that the exile has begun, and that companies are fleeing…

His comments also came after Laurence Parisot – head of MEDEF, the French equivalent of the UK’s Confederation of British Industry – warned last month that left-wing economic policies risked turning France into ‘the poor man of Europe’.

She said: ‘Large foreign investors are shunning France altogether. It’s becoming really dramatic.

Now before you say the rich are a bunch of evil unpatriotic people who put their greed before the welfare of their nation answer me this.  Did you buy a lotto ticket for that recent half billion dollar jackpot?  If so, why?  Did you want that half billion?  Or did you want to win it so you could give it to the government to help the welfare of the nation?  Don’t answer that for it’s a stupid question.  People buy lotto tickets because they want to be rich.  So they will support raising taxes on the evil rich right up until the day they win a big lotto jackpot and become one of the evil rich.

Let’s look at what winning that jackpot would be like if the U.S. had a top marginal tax rate of 75% for all earnings over a million dollars.  Based on the 2011 tax rates for married filed jointly, and adding the 75% rate to the top of those tax rates, how much of a half billion dollar jackpot do you think you would be able to keep?  After paying your federal income tax of $374,818,212 you’d have only $125,181,789 left.  That’s still a lot of money.  But how many of you would be satisfied with winning $500,000,000 while only being able to keep $125,181,789?  Not many I’m guessing.  Most probably would say that’s not fair.  Which is what people like Gerard Depardieu are saying in France.  And why they are moving to Belgium.

Being a rich, greedy bastard is a sliding scale.  If you earn $35,000 annually anyone earning more who doesn’t vote to increase tax rates on the rich is a rich, greedy bastard.  Should you win a $500 million lotto jackpot the rich, greedy bastard line moves up.  And only applies to people earning more that $500 million.  So you can keep what is yours.

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The U.S. Starting to Chase the Wealthy and Job Creators out of the Country like the French

Posted by PITHOCRATES - May 13th, 2012

Week in Review

It’s just not the Socialist Hollande in France scaring the wealthy and job creators out of their country.  It’s happening in America, too (see Facebook’s Eduardo Saverin Joins Americans Renouncing Citizenship by Enjoli Francis posted 5/11/2012 on ABC News).

In 2011, billionaire Facebook co-founder Eduardo Saverin relinquished his U.S. citizenship and joined nearly 1,800 other Americans to do it last year — up from 235 in 2008…

Those in the expatriate community said that although Saverin’s move was likely a financial one — he paid an exit tax on the capital gains from his Facebook stock but the stock is now tax-free — they said expatriates who gave up their citizenship were driven by other factors.

Phil Hodgen, an international tax lawyer in Pasadena, Calif., said that since 2009, when more than 150 U.S. customers of Swiss banking giant UBS were investigated for alleged tax evasion, the IRS had been going after Americans abroad with foreign bank accounts with a vengeance.

He said that in the last three years, new and old rules had created an enormous amount of resentment — and paperwork expenses — for expatriates…

Peter Dunn, a popular blogger who gave up his U.S. citizenship, said the expatriates he spoke to were mostly standard middle-class U.S. citizens who were ready to retire or who had retired abroad. He said because of these “invasive” rules, they now feared substantial penalties from not reporting their finances correctly.

In an expanding welfare state your wealth isn’t yours.  It belongs to the people.  At least that’s the way governments look at it.  With ever expanding deficits and debt they’re trying to take as much wealth away from the wealthy as possible.  Despite the great things they create for us.  Such as Facebook.  For if it wasn’t for Saverin’s wealth he invested in Facebook we wouldn’t have it today.  But he believed in it.  And took a risk.  With his own money.  The way entrepreneurs do.  Something a lot of people do.  But few ever experience the success Saverin has.  And few will ever take these risks again if they are going to be hounded for the rest of their life by the tax authorities.

Of course those who want to tax the rich will look as these expatriates as the lowest of scoundrels.  Running away with their wealth instead of paying their ‘fair’ share of taxes.  Even though the amount in dollars they pay in one year is greater than most people will pay in taxes in a lifetime.  But these expatriates are the greedy ones.  For not letting us take all of their wealth. 

Of course should someone win the lotto it’ll be a different story.  For though we attack the rich we all want to be rich.  If not we wouldn’t be buying those lotto tickets, would we?  So, yeah, we hate the rich.  Right up until we become rich.  Then all this antagonism against the rich is just a silly misunderstanding.  And those taxes on the wealthy really are too high.  But until we become rich we’ll hate pretty much anyone who has more than us.  Be jealous of them.  And covet what they have.

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FT112: “You can have liberty or equality but you can’t have both.” -Old Pithy

Posted by PITHOCRATES - April 6th, 2012

Fundamental Truth

Higher Taxes were Okay when it was Someone Else’s Money but they’re Just Plain Unfair when it’s your Money

People throw around the word ‘equality’ a lot.  Especially politicians.  To make life fair.  More egalitarian.  Where they make the rich pay their fair share.  For they won’t just voluntarily pay their fair share, will they?  Sounds fair, yes?  And just.  For no one should be ‘too rich’ when others have ‘so little’.  Of course the only people who agree with this are the ones who have ‘so little’.  Those who are ‘too rich’ are not all that supportive of using their wealth to help others be more equal.  Especially when the scale that measures what is ‘too rich’ is a sliding scale.  For someone believes a person is ‘too rich’ when they have more than he or she does.  And that holds true even if they win the lotto.

It’s open season on rich people.  Everyone attacks them.  For they are easy prey.  There are few of them.  So angering them won’t have a huge impact at the polls.  Which is why politicians whip up a fury of hate against them.  Which the people who have ‘so little’ are eager to join them in that hate.  Because they hate rich people.  They hate them a lot.  And there just isn’t anything good they can say about them.  They hate them so much that they buy lotto tickets in hopes of becoming rich people themselves.  Because that’s the only thing that can assuage their hate of rich people.  Becoming rich people.

People who have ‘so little’ will define anyone as having ‘too much’ if they have more than they do.  But if they win the lotto it’s a different story.  For rich people like them don’t have ‘too much’ then.  In fact they become downright greedy.  And become everything they once hated.  They don’t want to share their winnings.  (Even some in lotto groups who bought a winning ticket will try to keep that ticket for themselves, saying they bought THAT ticket with his or her own money and not the group’s money and therefore they don’t have to share THOSE winnings.)  And they sure don’t want to pay half of their winnings in taxes.  Higher taxes were okay when it was someone else’s money.  But they’re just plain unfair when it’s your money.  It’s just a fact of life.  People are greedy.  Even those with ‘so little’.

If there is No Incentive to Choose the Hard Jobs then Someone will have to Coerce People to ‘Choose’ Them

Consider this.  How hard would you work if you had to deposit your entire paycheck into a general fund?  Let’s call the fund the Equality Fund.  All workers everywhere on payday take their checks to the bank and deposit them into the Equality Fund.  And then they get their ‘equal share’ from that fund to live on.  So doctors and janitors earn different incomes.  But their distributions from the Equality Fund are the same.  NFL franchise players and workers in fast food earn different incomes.  But their distributions from the Equality Fund are the same.  Ditto for movie stars, rock stars, pop stars and lotto winners.  They all deposit their income into the General Fund.  And live on the same money as do hair stylists, Wal-Mart greeters, busboys and gardeners.  Even the people who don’t work.  Who love the Equality Fund.  Because with equality they don’t have to work.  Pretty sweet.  Don’t work.  And get paid the same as those who do work.  So they have no incentive ever to go to work.  And some of those who do work start asking themselves, “Why am I still working?” 

If there was an Equality Fund how hard would you work at your job?  Would you even work?  Would you choose a difficult career field that took a lot of costly education?  Would you work that hard to earn more money only to deposit those high earnings into the Equality Fund?  Instead of using those high earnings to buy a nice house?  In a nice neighborhood?  With nice schools for your kids?  Probably not.  Let’s say everyone is paid $50,000 from the Equality Fund.  Regardless of what you paid into it.  Either nothing.  Or millions of dollars.  Everyone lives on $50,000 per year.  Not too shabby.  Especially for low-income people or the unemployed.  They’re going to love the Equality Fund.  But those paying in millions will not be living in million dollar mansions.  Buying expensive cars.  Big boats.  Fly in their private jets.  Or even fly first-class.  No one will wear a Rolex watch.  Or other expensive jewelry.  Or high fashion.  No one will have these things.  Not when you’re raising a family on $50,000 per year.  Even if your work skills bring in the kind of high earnings that could afford them.  Because all of your pay will go into the Equality Fund.  Is that fair?  It’s equality.  But is it fair?

Let’s take this a little further.  Say everyone wises up and quits working.  Because they get the same amount to live on whether they work or not.  So why work?  Those who would like to tell the boss off and quit working are no doubt saying, “Sounds good to me.”  But this would cause a problem.  For what would you buy with your $50,000 annual allotment if no one worked?  For you need people to work if you want to buy a house.  A car.  A boat.  Fly.  Wear a watch.  Jewelry.  Clothing.  Sure, some will say we can just buy old homes.  And buy imported cars, boats, planes, watches, jewelry and clothing.   Sure, you could.  But you can’t import everything.  You can’t import road maintenance.  You can’t import port facilities and railroad infrastructure.  Or the people to operate them.  You can’t import restaurants complete with chefs, servers and busboys.  You can’t import emergency trauma care.  Maternity care.  Cardiac care.  A college education.  You just can’t import everything.  Someone has to work these jobs.  Even though they won’t get paid any more for working than they would for sitting at home collecting their allotment from the Equality Fund.  And when no one chooses to work at the jobs we can’t replace with imports someone will have to ‘help’ them change their mind.  To make them choose to work.  Even if it’s against their will. 

This is the problem with equality.  If we pay everyone equally no one will choose the hard jobs.  They’ll choose the easy jobs.  Worse, if we pay them equally whether they work or not they’ll simply choose not to work.  And if there is no incentive to choose the hard jobs then someone will have to coerce people to ‘choose’ them.

You can have Liberty or Equality but You can’t have Both

To choose your career you need liberty.  To choose to go to school to learn a high-paying skill you need liberty.  To work in a high-paying job you need liberty.  To keep your high-pay earnings you need liberty.  To work hard and to advance yourself to reach your personal goals you need liberty.  To play in the NFL you need liberty.  To be a movie star or rock star or pop star you need liberty.  To play the lotto and keep your winnings you need liberty.  To do all of these things you need liberty.  And one other thing that makes all of these things possible.  Inequality.

People working in fast food can’t earn the same as neurosurgeons.  Because if they paid their workers that much the cost of fast food would be prohibitive.  And no one would be neurosurgeons because it’s a lot less stressful working in fast food.  It doesn’t take years of training.  Or expensive malpractice insurance.  You don’t have to live with accidents that permanently disable or kill people.  Or deal with their aggrieved family members.  So that’s why we pay neurosurgeons so much.  It’s a very difficult profession that few choose.  Because so few choose this profession those that do are very valuable resources.  Demanding high pay.  And because they demand such high salaries it attracts the few who are willing to deal with all the things that come with being a neurosurgeon.  The high pay helps people choose this valued career despite the high personal costs.  So inequality is a good thing.  It provides incentive to choose the hard jobs.  Which is a good thing.  For who wants a low-paid person forced to be a neurosurgeon operating on his or her brain?

Everyone who has ever bought a lotto ticket agrees that inequality is a good thing.  They wouldn’t buy a ticket otherwise.  Because they buy those tickets to become rich.  To have more than other people.  That is, to be unequal.  Because everyone is greedy.  Just like football players, movie stars, rock stars, pop stars and, of course, lotto winners.  And not a one of them is going to work hard to develop their unique earning potential just to put the fruits of their labor into the Equality Fund.  They may talk the talk.  Support Democrats.  But they do that just so the people who have ‘so little’ leave them alone.  For they all still live in their million dollar mansions.  Because they like being unequal.  The more unequal the better.  They adore their pampered lives.  And when it comes to choosing liberty or equality they choose liberty.  As their comfortable lives clearly show.  For you can have liberty.  Or you can have equality.  But you can’t have both.  And that’s okay with them.

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LESSONS LEARNED #34: “Sure, until you win the lotto you’re all for sticking it to the rich.” -Old Pithy

Posted by PITHOCRATES - October 7th, 2010

Buddy Can You Spare a Dime

In the old days, we used to jail people who didn’t pay their debts.  Even in the United States.  A couple of signers of the Declaration of Independence even served time in a debtors’ prison.  We took it seriously.  Honoring your debts.  For those who didn’t, they found themselves inside a jail until they did.  Or until they died.

We jailed some people over small sums.  The severity of the punishment (broken families, disease, starvation, privation, physical abuse, etc.) was often extreme in comparison to the size of the debt owed.  In time we would move away from such barbaric justice.  No, in the modern, caring world, we don’t torment those who are down on their luck and find themselves penniless.  You see, the modern world is a caring world.  We abhor the sufferings of our fellow man.  So we show them kindness.  Charity.  We forgive them their debts and help them rebuild their lives.  Well, most of us do.

If you find yourself owing the IRS, you better pay up.  For they will send you to prison.  And take whatever you have.  They will destroy your life.  And your family.  Because they want to make something perfectly clear.  You don’t f*ck with the IRS.  They play to keep.  All the time.

The War on Alcohol

The 18th Amendment prohibited “the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes.”  The government may have shut down supply, but the market remained.  Enter criminal gangs.  Who furnished the supply to meet the demand.

None did it better than Al Capone.  His gang ruled Chicago.  People admired him.  After all, he wasn’t hurting anyone.  He was just giving the people what they wanted.  A way to relax and blow off steam.  Like we do today when we enjoy an alcoholic beverage with our friends.  But the gang violence grew.  The pictures following the Saint Valentine’s Day Massacre were just too gruesome.  Soon thereafter the FBI branded Scarface as public enemy #1.

Bootlegging, prostitution, murder, extortion…Capone broke a lot of laws.  But he crossed the line.  He committed a crime that was so heinous that it would land him ultimately in Alcatraz, America’s most secured federal prison.  That crime?  Income tax evasion.

On the Road Again

Willie Nelson is a big time Democrat.  He’s into saving the environment.  Animal rights.  Legalizing marijuana.  Helping the farmers.  And he’s a regular peacenik.  So you’d think he’d be a big fan of Big Government.  Well, yes and no. 

He became very wealthy by the 1980s.  And like a good Democrat, he tried to shield some of that wealth from the IRS.  He parked some of it in some talk shelters.  Then came along Ronald Reagan.  He understood what Andrew Mellon understood (Secretary of the Treasury for Warren G. Harding).  High tax rates made rich people hide their money.  Lower tax rates encouraged rich people to invest their money.  When Mellon cut the tax rates wealthy people paid more taxes and less wealthy people paid fewer taxes.  The progressive tax system worked even better at lower tax rates.  Tax revenue increased as the wealthy invested their money instead of finding creative ways to hide it.  It worked for Reagan, too.  He even closed tax shelters as a further incentive for the wealthy to invest their money to grow the economy and create jobs.  That worked, too.  Savvy wealthy people everywhere were putting Americans back to work.  Only one small problem.  The not so savvy wealthy were caught unawares.

Willie Nelson didn’t move his money from his tax shelters.  When Reagan disallowed those shelters, his money sat there accruing federal taxes.  And interest and penalties.  He blamed and sued his accountants.  The accountants countered that they only did the accounting and taxes.  They were not investment advisors.  Anyway, the IRS seized his assets.  He went on the road again and often to pay off his tax bill.  His total bill came to about 16 million in back taxes, interest and penalties.  Which he paid.  As he no doubt would have from the get-go if he had sought appropriate counsel to help him negotiate the 1,000+ page U.S. tax code.

Easy Money – For the IRS

There are many stories like Willie Nelson’s.  Even Treasury Secretary Timothy Geithner, the smartest man in America, couldn’t figure out his own taxes.  (But we were to excuse him for this because no one else was as qualified as he was to write and administer the U.S. tax code).  But it’s not only the not-so-savvy celebrity rich and the intellectually challenged intellectuals who have trouble with the U.S. tax code.  The poorest of the poor who never had money can sometimes run afoul of the IRS.

Playing the lotto.  Millions do.  Most lose.  And they’re lucky that they do.  Many lotto winners have their lives take a turn for the worse.  Friends and relatives you don’t know are reacquainting themselves with you.  Well, not you so much as your new found wealth.  Con men target you.  Charities.  Neighbors.  Some spend the money fast.  Or recklessly.  Develop drug addictions.  Get robbed.  Even murdered.  There are a lot of stories out there.  Just search the Internet.

When you win the lotto, you can take a lump-sum payment.  Or you can take a series of payments.  Either way the IRS taxes this as income.  And the amount of these payouts will most probably push you in the highest income tax bracket during the period of these payouts.  So the IRS likes lotto winners.  Your odds of winning are slim to none but someone always wins.  And that’s a tax bonanza for the IRS.  Not-so-savvy people who become rich overnight.  The full force and power of the U.S. government falling on some poor schmuck who probably never had a tax liability in his or her life.  Money just doesn’t get any easier. 

Capital Gain or Income?

Some may sell the rights to their future payments.  It’s sort of like selling a rental property.  For example, take a house that rents for $1,000 per month and sells for $150,000.   The buyer gets those future rent payments.  The seller gets the money back that they paid for the house and, hopefully, a capital gain (i.e., they sell the house for more than they paid for it).  The seller pays a capital gains tax on their capital gain.  They do not pay any further income tax on the rental income that the buyer now collects.

Some lotto winners see selling their rights to future payments in the same light.  And that they should only pay a one-time capitals gain tax (at a lower capital gains tax rate) in lieu of the higher income tax rate.  The IRS begs to differ.  And they usually get their way.

Sadly, some buyers advised those selling their rights that they could pay the lower capital gains tax rate.  Which they did.  And faced heavy tax bills for back taxes, interest and penalties as a consequence.  Once again, easy money for the IRS.  You can search the Internet for stories like these, too.

Pay or Else

Whether a gangster, a celebrity, a Democrat brainiac or a low-income lotto winner, we all share something in common.  Whatever our politics, when it comes to our money, we all try to avoid paying our ‘fair share’ of taxes.  We may demand that other rich people pay their taxes, but we will do everything we can to avoid paying our taxes.  But we play a dangerous game when we do.  For those who do and lose, they learn a painful lesson.

You don’t f*ck with the IRS.

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FUNDAMENTAL TRUTH #34: “Sure, until you win the lotto you’re all for sticking it to the rich.” -Old Pithy

Posted by PITHOCRATES - October 5th, 2010

Money Envy

Class warfare is a different kind of warfare.  During the English Civil War, the Protestants and the Catholics were trying to kill each other.  They didn’t want to have anything to do with each other.  Protestants didn’t want to be Catholic.  Catholics didn’t want to be Protestant.  But in class warfare, it’s a little different.  The poor want to be rich.

The poor hate the rich because they have it so much better than the poor.  But they don’t hate the idea of being rich per se.  Just who gets to be rich.  Because, given half the chance, they’d choose to be rich if they could.  Why?  Because the rich typically don’t go wanting for food, shelter or clothes.  They also get to have all the neat toys to play with.  And they wear some nice bling.

So the poor don’t really hate the rich.  It’s just money envy.  After a child grows up he or she may notice that they like money.  They see they have no money of their own.  So they want their mother’s or father’s money.  Because there are limits, and sometimes outright rejection, they seek money elsewhere.  As they grow up, they may get a job.  Sell drugs.  Prostitute themselves to conventioneers.  Marry into it.  Steal it.  Become a ward of the state.  Or play the lotto.

Whose Money is it Anyway?

During this phase in their life, politicians, college professors and the media bombard them with messages of income redistribution.  Fair share sacrifice.  Taxes on the rich.   And all around fairness.  It all sounds good.  And right.  Those damn rich people.  How dare they?  Why them?  Why not me? 

Well, some inherited their money.  Like the Kennedys.  Some married into it.  Like John Kerry.  They live like rich royalty from days of old.  When there was a true aristocratic class that could actually own people.  But they are there, fighting for you.  Liberals.  Taking away other people’s money and giving it to the more deserving.  And the poor are all for that.

A luxury tax?  Yeah, stick it to them.  An inheritance tax?  Sounds good to me.  How about taxing their assets?  Their net wealth?  Because some of those rich bastards don’t even work.  They invest their money.  Sure, they pay a confiscatory capital gains tax on their earnings, but their earnings pale in comparison to their overall wealth.  We need to go after that pile of wealth.  Redistribute it.  Along egalitarian principles.  Level the playing field.  Close the gap between the rich and the poor.  The way the liberals look at it, it’s the government’s money anyway.  So the government can spread it around as they damn well please.

Poor/Rich – It’s All Relative

Most of these rich bastards are not Kennedys or John Kerrys, though.  Most are self-made.  Through hard work.  And personal sacrifice.  Most are small business owners.  They borrowed everything they could.  They mortgaged their homes.  They risked their children’s college funds.  And they made something.  A small business.  Created jobs.  They hired people.  Something the Kennedys and the John Kerrys of the world don’t do.

Most of these small business owners are ‘S’ corporations.  They aren’t big corporations with corporate officers.  No finance or a legal department.  They’re just people who work 80+ hours a week.  They may never see a million in annual revenue.  But they’ll probably make more than $250,000.  And, being an ‘S’ corporation, that makes them rich.  Even if they leave the money in their business to grow it.  But the IRS still taxes them like they’re rich fat cats lighting their cigars with $20 bills. 

Yes, they’re small business owners.  But they’re still pretty much middle class people.  Do the poor hate them, too?  Sort of.  Simply because they have more than they do.  And the politicians, college professors and the media point out how wrong that is.

Congratulations.  And Thank You

And then one day you buy a lotto ticket and, overnight, you become rich.  Congratulations.  It’s nice to have another rich person to tax.

Yes, you won the lotto and now you’re rich.  How does that feel?  Are you looking forward to redistributing your winnings?  For egalitarian principles?  Help close that gap between rich and poor?  Or have you become a greedy rich bastard?  Like all those others you used to hate until you became one of them?

Whether you do or not doesn’t matter.  For the IRS will be coming after you.  With their hand out.  For their share, a sizeable chunk of your winnings.  Your windfall will push you into the highest tax brackets.  And, guess what?  If you don’t pay your ‘fair share of taxes’ willingly, they’ll come after you.  Or seize your wealth.  And as sad as that may be, few will pity you.  Just as you did not pity those before you were rich.

Be Careful What You Vote For

Class warfare is good for politics.  Because there are always more poor people than rich.  And poor people are useful to someone running for public office.

But they don’t like you.  They don’t really care about you.  They care about only one thing.  To keep you poor.  For should you win the lotto, the chances of you voting for high taxes and income redistribution are slim to none.  Your egalitarian principles will fly out the window.  Which won’t help them.  So should you become rich, they will vilify you.  Come after you with a vengeance.  To take your wealth.  And return it to the rightful owners.  Themselves.  The government.  So they can use it as they please.  To buy votes.

And how will you feel then?  You might want to think about this ‘what if’.  Because you could win the lotto one day.  Inherit wealth.  Marry into it.  Or even earn it.  I mean, be careful what you vote for while in college.  One day you might make something of that education.  You may very well become rich one day.

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FUNDAMENTAL TRUTH #26: “If we need Big Government to protect us from ourselves, then our public schools can’t be the best place to learn.” -Old Pithy

Posted by PITHOCRATES - August 10th, 2010

IT’S A PARADOX.  You can’t have both.  Great public schools.  And a Big Government nanny state.  The public schools can’t be the best place to learn if we graduate hopelessly incapable of taking care of ourselves.  You cannot reconcile the two.  It is impossible.  The need of Big Government is an indictment on public education.  It sucks.  It sucks so bad that our only hope to survive is by a dependence on government.

The Founding Fathers did NOT want a Big Government nanny state.  So they tried to limit its money and power.  The nation’s capital ended up in a swamp because Thomas Jefferson wanted to keep it out of the big cities (such as New York and Philadelphia).  History has shown that wealth (the big cities) and power (sovereign authority) combine to make the worst of governments. 

And they believed in the importance of education.  A real education.  History.  Math.  Science.  Architecture.  Engineering.  Economics.  For they believed an educated constituency was the greatest protection against Big Government.  They knew it.  Just as well as the proponents of Big Government knew it.  Know it.

So is it a coincidence?  That the rise of Big Government corresponded with a fall in the quality of public education?  If we need Big Government to be our nanny, we obviously are not well educated.  Otherwise, we could take care of ourselves.  Like we did for the first century or so of our existence.  So, did our poor public school system give life to Big Government?  Or is it the other way around?  Did a growing Big Government protect itself from the danger of a well educated constituency?

STUDENTS GRADUATE TODAY without being able to do the most simple of tasks.  To point to Australia on a map.  To identify the three branches of government.  To name a current member of the U.S. Supreme court.  The current Speaker of the House.  To identify the allies during World War II.  Or even tell us who’s buried in Grant’s tomb.

Few can define compound interest.  Or calculate it.  Few can make important investment decisions for their retirement.  But they can tell you how Christopher Columbus raped the indigenous people in the New World.  How America ruthlessly expanded westward, stealing land from the North American Indians.  How we cruelly enslaved a race to build a nation predicated on liberty.  You’ll find these in the curriculum.  And in the schools’ libraries.  But you won’t learn much about how Martin Van Buren created the Democrat Party to prosper on political spoils and patronage.  Or that the Democratic Party was the party of slavery.  The party of the KKK.  The party of Jim Crowe laws (the legal segregation of blacks after the Republicans ended slavery).  That it was the Democrats who enacted Prohibition because they knew what was best for us.

No, instead, students today learn about the importance of being sensitive to other people’s feelings.  That we should be our brother’s keepers.  That Big Government is good.  Important.  And necessary.  We teach them that FDR’s New Deal programs ended the Great Depression.  That massive government spending on make-work government jobs restored the economy.  It didn’t.  They learn that LBJ’s Great Society ended racial discrimination and poverty.  It didn’t.  These programs failed.  As many Big Government programs of compassion do.  But that’s not in the curriculum. 

Worst, most students haven’t a clue about economics.  What makes economic activity.  What hinders it.  The consequences of monetary and fiscal policy.  So they haven’t a clue about how all those compassionate programs of Big Government often lead to unemployment and recession.  So when they are old enough to vote, they are compassionate.  They approve of expanding the nanny state without any idea of the economic impact.

WE SPEND A fortune on public education.  Per student expenditures are among the highest in the world.   But the money we spend is never enough.  They always ask for more.  For the children.  So, to help the children, they raise taxes (property, sales, etc.).  For the children, they get the poor to gamble away what little they have (the lotto).  More money than ever before is collected.  For the children.  But it’s still not enough.  Which begs the question, where is all that money going?  Clearly, it isn’t to the children.

And because the children are so precious, they’re good leverage.  There’s nothing like a good strike at the beginning of the school year to get a better contract.  Why, they even have our precious children carry picket signs.  Because it’s all about the children.  Of course, unions protect dues-paying members.  And the last I heard, children don’t pay union dues.

But the teachers are underpaid and overworked, aren’t they?  If they are, they are the only union workers that are.  It’s why you join a union.  For leverage.  For negotiating power to get better salary and benefit packages.  And they do.  Your typical public school teacher does better than your typical salaried worker.  And they work less to get it.  Oh, they talk about ‘non-compensated’ hours worked after school.  That means approximately anything more than an 8-hour day.  The real world typically pays a salaried worker for only a 40 hour week when they often work 50 hours or more.  And they often don’t get the Friday after Thanksgiving off.  Or a Christmas break.  Or a winter break.  Or an Easter break.  Or the 3 months of summer off.   When you factor in the actual time worked and the benefits, they do very well.  Far better than private school teachers.  And private school students outperform public school students.  Hell, some of the most stalwart defenders of public education send their kids to private school.  Because they can.  The poor do, too.  When they can.  When they have access to school vouchers.  Everyone, when given the choice, chooses private school over public school.  If that ain’t an indictment on the public school system, I don’t know what is.

So where does all that money go?  To the teachers.  Their unions.  And the public school bureaucracy.

WE SPEND MORE money on public education.  But private school students do better than public school students.  And private school teachers make less than public school teachers.  So when we pay more we get less.  A more poorly educated student.  So what conclusion can we draw?  We are spending more money than we need to on public education.  And if we’re spending too much right now, spending more money sure isn’t going to make anything better for the children.  The teachers, perhaps.  But not the children.  Because the truth is this.  It’s not about the children.

The public schools are not educating.  They’re indoctrinating.  They’re producing good liberal democrats.  Because Big Government knows that an educated constituency is the greatest threat against their power.  So they control education.  They take care of the union teachers who, in turn, teach the students to love Big Government.  It’s rather Orwellian, really.  Elites taking care of elites.  At the expense of the children.  And our future.

Conspiracy?  If it wasn’t so much in the open, perhaps.  But the Democratic Party hasn’t changed much since the days of Martin Van Buren.  It’s about getting power.  And keeping power.  And you do that with patronage.  And dependency.  Big Government has given us Social Security, Medicare, Medicaid, unemployment benefits and numerous welfare programs.  And now the holy grail of them all.  National health care.  The larger these programs, the greater the dependence.  The larger the dependency, the greater number of loyal Democrat voters. 

SO IS THERE a paradox?  It depends on your point of view.  From outside of the public school system, yes.  If you think it’s about the children, yes.  But from inside the public school system or from inside of Big Government, no.  Because, there, it is not about the children.  It’s about well paid teachers.  And an uninformed electorate.  And the systems in place work very well in achieving these goals.

So, no, our public schools are not the best place for children to learn.  But it’s a pretty good place to indoctrinate them into loving Big Government.

www.PITHOCRATES.com

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