Sunday, February 19, 2017

TAX THE RICH



There has been a lot of hoopla lately about the Maine tax rate from the Governor. If you have been reading the papers, you would have been told that Maine has a very high tax rate, second only to California’s. That sounded sort of off to me – so I did some investigation.

First – let’s get this out of the way. Yes – Maine has the second highest tax rate for people making over $200,000.00 per year. The referendum voted on in November tacked on a fourth bracket to our tax system. See the chart below.

Maine - Single Tax Brackets
Tax Bracket           Tax Rate
$0.00+                    5.8%
$21,049.00+       6.75%
$37,499.00+       7.15%
200,000.00+       10.15%

That means that 16,000 Maine residents (approximately) will pay a rate of 10.15% on their income OVER the $200,000.00 level. All Mainers pay 5.8% on the first $21,049.00 of income and it goes up from there. Now, if you lived in Idaho and had an income over a mere $10,890.00, the tax rate is 7.4%, so keep in mind that all the states have unique ways of raising revenue.

Let’s look at some of the other tax rates in the USA.

In DC, the highest rate is 8.95%
Hawaii, it’s 8.25%
Idaho, it’s 7.4%
Iowa, it’s 8.98%
Minnesota, it’s 9.85%
New York, it’s 8.82%
Oregon, it’s 9.9%
Vermont, it’s 8.95%
Wisconsin, it’s 7.65%

And in California, the highest individual income tax rate is 13.3%. Actually, in California, poor people pay a much lower tax rate that the poor folks in Maine. Check out the chart. 



In California, folks making below 30K pay LESS tax than Mainers. And until you get to the 200K mark, Mainers pay less than Californians. So – it’s not as straight forward a comparison as presented in the papers or by the Governor. 

The Governor is convinced that our tax rate is destroying our ability to attract new industry to the state. Apparently, the “job creators” get spooked when the tax rate goes over a certain level. But wait a minute…how does California do so well with such a high tax rate? California – boy, wouldn’t Maine love to have just 20% of California’s economic activity! Wouldn’t that be GREAT! All those tech companies, the film industry, the aerospace industry – and all that agriculture! Wow!

So why does California have all this economic activity? Well, California is COOL! It’s got all this cool stuff – a great coastline, tons of culture, great food, wine and awesome outdoor activities – people want to work there. Wait a minute. Maine has all that….

So, I propose that the tax rate has some effect on whether an industry chooses to locate in a particular state, but it may not be as important as the Governor wants you to think. I grew up in Fairfield County Connecticut which is right outside of New York City. For many years, companies moved out of Manhattan to Greenwich and Stamford Ct. and it had nothing to do with the tax rate. Some in depth research by the state showed that where the CEO lived had more to do with where the company moved than anything else. If you lived in Dairen or New Canaan, you moved your business to Stamford – just a short drive over the hill from your house. In you lived in Summit New Jersey, you moved your business to New Jersey.

The governors low tax plan is designed to make us competitive with Alabama or Mississippi (or Mexico), so that somebody will move a plant that builds F-150 trucks to Maine. Not only is that a pipe dream, but I know I don’t want to live in a state as poor as Mississippi. I have a better plan. Let’s convince the CEO’s of the software companies and biotech firms in Cambridge and Boston that Portland is just as hip and cool as their towns.  It’s not as crowded, their employees would have a better standard of living and they would all be closer to skiing, hiking and some of the best sailing on the East Coast. This should not be a hard sell – I’m sure they have all vacationed here at least once.

Still worried about those “job creators”? Don’t be. A report generated by the Congressional Research Service, a non-partisan department of the US legislature, stated very clearly in 2012 that low taxes has little or no effect on economic activity. Here is a quote from the report:

“There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. The share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. The evidence does not suggest necessarily a relationship between tax policy with regard to the top tax rates and the size of the economic pie, but there may be a relationship to how the economic pie is sliced”.

Are you wondering why you have not heard of this 2012 report? Because the Senate Republicans suppressed it. Tax the rich – it won’t hurt and will most likely help our economy and allow more people to thrive. Not just rich people – all people.






Sunday, February 12, 2017


Immigrants All

When I read that the Republicans were accusing the press of underreporting terrorist attacks, I was curious what kind of data they would produce. 78 incidents allegedly occurred between September, 2014 and December, 2016. I say allegedly because when I read that statistic, I was very surprised that the number was so low. Think about it – this is a list of all terrorist acts worldwide over the course of two plus years. That’s 7 billion earthlings in which 1.6 billion are Muslim – and only 78 terrorist attacks – seems low to me.
Well, I decided to check out a few things. One, I checked all 78 incidents using Google to see what kind of reporting there was. In every case, there were news articles and most incidents have Wikipedia entries. But the real shock was when I was way down the list…I came upon a Wiki entry that was contradictory to the Republicans point of view – apparently, in November 2016, there were 165 terrorist incidents in the world. 
See link:


This seems more in line with my understanding of what was happening in the world. Now, I don’t know what the Republicans criteria was, but it looks like all incidents had to be an example of “Radical Islamic Terrorism” … and there needed to be a westerner as a victim. As shown in the Wiki site, there are many manifestations of terrorism and they are not all Islamic. Based on this information, I can only conclude that the world is a dangerous place and the United States is a remarkably stable and safe country to live in.
To get a real overview of the Republican list, here is how it breaks down – I have grouped it by geography as well as whether the terrorist was a citizen of the country, or an immigrant/refugee. Many incidents listed ISIL as the “perpetrator”, so I have listed them separately.

US & Canada
Immigrant/Refugee 4
Citizen 9


Europe
Immigrant/Refugee 12
Citizen 14
Unknown 1


Islamic World 
Citizen 12
ISIL 20


Far East 
Citizen 3
Immigrant 3

So let’s focus on the four immigrant/refugee attacks that happened in the United States. Here is a list of the perpetrators:
  1. New York/New Jersey – September 2016 - Ahmad Khan Rahami was born in Afghanistan, and his family was granted asylum in the United States in 2011…
  2. St Cloud, MN – September 2016 - Dahir A. Adan was a member of St. Cloud's Somali-American community. He was born in Kenya and moved to the U.S. at the age of two…
  3. Columbus OH - February 2016 - Mohamed Barry was 30 at the time of his death. A native of Guinea in West Africa, he arrived in the U.S. in 2000…
  4. Columbus, OH, November, 2016 - Abdul Razak Ali Artan was a Somali refugee who left his homeland with his family in 2007, lived in Pakistan and then came to the United States in 2014 as a legal permanent resident.
I am astounded at how well we have done over the last 15 years. Think about it – the towers come down in September 2001 and we have had no “major” attacks (like 9/11) and damn few minor attacks. In the last two years, we have had four attacks by “non-citizens”. I congratulate the FBI, CIA, NSA, the border patrol and immigration officials. Good job!

Now – let’s talk about America and Muslims. I would like to establish the proposition that America accepts and embraces all colors and creeds. If that is the case, then we must accommodate our Muslim friends as best we can – allowing them their unique cultural traditions, their “non-western” cosmology and theology, and their traditions and holidays. Note I used the word accommodate – no acquiesce. I am not requiring any American to hold Ramadan sacred; or submit to Sharia Law. I wish only to welcome my Muslin friends into the golden light of freedom that is America.

Here in Portland Maine, we have a number of African immigrants. Many are Somali. Around 5,000 Somalis resided in Portland; a town of 66,000 residents. Around the turn of the century, Somali immigrants in the United States began a secondary migration to Maine from other states on account of the area's low crime rate, good schools and cheap housing. Isn’t it remarkable that Somali’s value the same things as we do? Low crime – good schools – cheap housing? No – it's not remarkable. It’s what you would expect from people who are looking for a safe place to settle down, raise their children and live out their lives in peace. But their Muslims – should we fear them… no.
We must embrace our fellow immigrants and welcome them into our community. We must do what is necessary to make them feel at home and accepted. We must. It’s our duty as Americans. Immigrants all.