Social Security - Fred Thompson & Peter Brown
Peter Brown wrote, “Around the middle of the century Social Security will go broke. In that case, today’s young would get nothing at all.” Well folks, this is an out and out lie.
In 1984 our elected representatives made sure that social security could only use dedicated social security taxes and the funds allocated to the trust fund to pay benefits. If nothing is done to change either benefits or revenues, then by law when the trust fund falls to a predefined amount, across the board cuts take place. Social Security’s OASI program will be able to pay about 60% of promised scheduled benefits with COLA or about 70% of promised initial benefits without COLA. In no event will social security benefits be zero.
Fred Thompson proposes to change the method to calculate your initial benefit. Instead of using the National Change in US wages to index previous years’ wages, he proposes to use inflation. The difference between wage growth and inflation is equal to our change in the US living standard. In essence when you retire, your living standard will no longer be based on the buying power of your dollar, but about twenty years earlier. Had this method been used to calculate this years’ benefits, they would have been 30% smaller! How is changing the wage indexing index any different than doing nothing? Both methods reduce future benefits.
Keep in mind that in 1977 Congress adopted the Wage Index to keep benefits between cohorts fair in relation to life time indexed wages. Mathematically this is a very fair method. The problem is that Social Security in 1977 had well over $1 Trillion in unfunded liabilities, which has now grown to over $17 Trillion. They created a fair method, but never solved the initial 1937 problem of who pays for the first 40 cohorts of beneficiaries?
Congress has simply passed the buck onto each succeeding generation. Let us face the fact there is no painless solution. With this said, the solution should not be to simply shift 100% of the cost onto our children by paying the same payroll tax with smaller benefits. A child born after 1985 can expect to receive 29 cents for every one dollar in taxes and credited interest at the US Treasury rate. No matter if you raise taxes, retirement age, or cut future benefits, the sad fact remains; they can receive only 29 cents. If you raise taxes, they pay more for the same promised benefit. If they raise the retirement age, they pay longer and receive less. If they cut benefits, they pay the same for less. These are your children and grandchildren. Those born prior to 1938 have benefits that are paying them multiple times more than their fair share. There are over 8 million seniors with a net-worth of $1 million or more. One in five seniors have $1 million or more?
There are 117 million potential voters in the United States under age 46. There are only 36.5 million over the age of 65. Even when the boomers are all retired; those under age 46 will out number those over age 46. The young need to get out and vote or people like Bush and Thompson will steal ever more from you and say how they feel soooo sorry. Don’t fall for it.
My wife got up this morning to shop with her sisters early on Black Friday. I woke at about 5:45 am and thought, about going out to staples and seeing if I could get a portable hard drive, I could use, but really did not need. They open at 6 am and so I went back to bed. At 9:15 am I thought, hey they had a 256 DVD/CD case for just under $9. Maybe, just maybe they had lots of these and they were not the hot item. At 9:45 am I was at Staples and in the unlikely event they still had the portable hard drive I asked. Yes, they had the mini portable hard drive. In fact they had a lot. They even had a lot of the DVD case I was after as well as a large digital picture frame.
My prediction this year is that sales are going to be down. My wife said the stores were not full like they were last year and it was there were many of the hot items still on the shelves. The devaluation of the dollar is causing some real problems. The Federal Government must very quickly get the budget under control. It needs to act like any family does when laid off, cut back!
The Federal Government is not the only ones who need to cut back. The recent proposal to increase the mayor's salary by $10,000 is also a bad idea. The reason for the proposal: entice better qualified people to run. This is baloney. No one I know ran for mayor because of the salary. They ran out of spirit, heart and because they were driven to do so by some personal conviction. The city needs to hold spending including salaries at the current level. The reason is pretty simple; government wages and benefits should increase no faster than the private sector in this community. We should not be comparing wage and benefit structures of other communities and structuring ours after theirs.
Indiana to invalidate driver license or identification cards
It is amazing how many are like sheep or should I say the frog that jumped into a cold kettle of water only to realize much later that it was a cooking pot. Food for thought. In 1936 it was proposed that those covered by Social Security would receive a number. Many thought this was the Number of the Beast and debates raged. For many years up to 1974, the Social Security Card had printed at the bottom “Not For Identification.” This appeased many and the issue died. In 1960 the IRS began using the social security account number, but did not require it until 1996. Even the BMV did not require the SSN until recently. If you did not have a social security account number, you could still get a driver’s license, but they had to certify your birth certificate, just like social security does.
Now the BMV has mailed notices to thousands of people stating “We have provided three options for updating this information and request that you do so within 30 days of the date of this letter. Failure to update this information could result in invalidation of your license or identification card.” Remember a government issued ID is required to vote in Indiana.
The IRS requires a W-4, W-9 and Forms 1098-E and 1098-T be filled out when accepting a wage position, opening a financial account or attending a college/university. If you do not provide a SSN, you cannot work, open a financial account or attend college. Now we can add more to the list: You cannot vote, drive a car or get into a government building to address your representatives. In essence without a SSN, you cannot work, buy or sell, travel or vote.
What is wrong here? Under the new law to get a SSN, only certain documents can be accepted as proof of U.S. citizenship. These include your U.S. birth certificate, U.S. passport, Certificate of Naturalization, Certificate of Citizenship. If you are a U.S. citizen, Social Security must see your: U.S. driver’s license; State-issued non driver identity card; or U.S. passport. If you do not have these specific documents or cannot get a replacement for them within 10 days, we will ask to see other documents, including: Employee ID card; School ID card; Health insurance card (not a Medicare card); U.S. military ID card; or Adoption decree. To get most of the identified documents, you need a SSN, but without these documents you cannot get a SSN.
Does a social security number prove who you are or does it only prove a number was issued to a particular person, but who that person it cannot identify? Keep in mind politicians crafted this National ID, so does it really provide any protection or is it political fluff, false sense of security and can we expect it to end here?
When a national ID is debated, the majority speak out. Where is the majority now?
The 2nd Amendment
The 2nd amendment reads;
A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.
What is the plain and literal meaning of the 2nd amendment? We can gain some insight from previous opinions of tax, federal and supreme court decisions. Though these deal with statutes I would think the same logic would apply to the 2nd amendment.
In construing a statute, courts generally seek the plain and literal meaning of its language. See United States v. Locke, 471 U.S. 84, 93, 95-96 (1985); United States v. American Trucking Associations, Inc., 310 U.S. 534, 543 (1940). For that purpose, courts generally assume that Congress uses common words in their popular meaning. See Commissioner v. Groetzinger, 480 U.S. 23, 28 (1987), affg. 771 F.2d 269 (7th Cir. 1985).
In deciding whether the regulation comports with the statute’s plain language, we look to the ordinary usage or settled meanings of the words used in the statute by Congress. See Lynch v. Alworth-Stephens Co., 267 U.S. 364, 370 (1925). There is a strong presumption that Congress expresses its intention through the language it chooses. See INS v. Cardoza- Fonseca, 480 U.S. 421, 432 n.12 (1987).
A regulation may not contradict the unambiguous language of a statute. See Citizen’s Natl. Bank v. United States, 417 F.2d 675 (5th Cir. 1969); Hefti v. Commissioner, 97 T.C. 180, 189 (1991), affd. 983 F.2d 868 (8th Cir. 1993).
Where the statute’s language is plain, the language is where the interpretive task should end, and the sole function of the courts is to enforce such language according to its terms. United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241 (1989); United States v. Merriam, 263 U.S. 179, 187-188 (1923)(stating that tax statutes are not to be extended by implication beyond the clear import of the language used).
What are the common words in the 2nd amendment? right, people, keep, arms, infringed? Is there any disagreement on what right means?
Infringed - to encroach upon in a way that violates law or the rights of another. therefore "shall not infringed" would mean you cannot encroach on the persons stated right which is to keep bear arms.
“The right of the people to keep and bear arms, shall not be infringed.”
In 1776, the only arms people had were long rifles, pistals and some had cannon. I do not see any condition on who could or could not keep and bear arms. I also do not see any condition on the type of arms that could be kept. “A well regulated militia, being necessary to the security of a free state” means what? The colonists were not thrilled with the King’s army and hid their weapons. Keeping this in mind, do you think that any new government would make it a right to keep and bear arms, for those who had buried their weapons prior to the Revolution?
The militia of 1776 did not have a local meeting place or an armory. The citizen solders kept their own weapons’, brought their own lead shot and powder. I support 100% the right of an individual to keep and bear arms.
You are in a public park with your family. You are taking photos and video of your family outing. A law enforcement individual approaches you and tells you, you are not allowed to take photos of your child. What would you do?
You are on public school property. Your child is participating in a school sponsored activity. It could be track, foot ball, basketball, band, choir, etc. Paid Security tells you "You are not allowed to videotape your child." What would you do?
Your family is in Washington, DC. You are taking photographs of your family infront of the Washington Monument. Law enforcemnt tells you to handover you film or tape. What would you do?
East-Side Corridor "TIFF Financing"
Recently an article appeared in the News Sentinel in support of a TIF to fund a new East-Side Corridor. The proposed corridor would be about 6 1/2 miles long and open up an area that is not prone to development. The property taxes currently collected on the property in this area of undeveloped land are low. The thinking is if we spend $45 million to build/improve a road/bridge, that individuals/companies will develop this property and increase property values enough to pay the $45 million the taxpayers would have to pay.
There are several errors in this thinking. First and foremost, you cannot get something from nothing. If a need existed currently for this land, then development would be taking place. Yes, a road can attract business to locate there, develop the land and increase the assessed value. However, low property costs can also attract business and development. My question is where does this business come from? Did it relocate from some place else leaving an empty shell of a building? Did it locate here as a new start up? Are we robbing Peter to pay Paul or more precisely robbing the taxpayer to fund another Kitty Hawk?
If all that happens is a relocation of an existing business in Allen county, then spending $45 million is a waste of money since the tax base does not increase, but is simply reallocated.
However, there is an even higher level of thinking that can easily dispel the notion of TIF financing and that is called basic mathematics. There is a call to cap property taxes to 1% of assessed value. How much increased valuation is needed to fund a bond for $45 million over 30 years? Keep in mind that a six and half-mile road requires yearly maintenance and snow removal. Have you ever seen a road that lasted 30 years without major repair? This proposed road would be for truck traffic, which would require even more maintenance. I would expect the taxpayer having to spend on an accrual basis about $3 to $4 million yearly on this new road. The bond cost would exceed $2.3 Million a year. Together the break-even point is about $6 to $7 million a year in increased tax revenue that can be directed directly to the taxing authority (outside of public education, library, etc). With a 1-% tax rate, with 50% going to fund public education, we would need an increase in property tax assessment of $1 Billion in this area.
Ok, now some will cry foul and say that this investment would attract new people to Fort Wayne or New Haven. These new people will pay property taxes, eat in restaurants, spend money and pay income taxes that would not have been paid before. This begs the question, is the purpose of government to tax people to increase revenues forever or provide services? As Fort Wayne has grown, the number of people living here and paying taxes has grown, yet the property tax rate and other taxes have gone up faster than inflation. Therefore, claiming a cost reduction based on economy of size is just plain false.
In the case of a TIFF, the local government or supporters claim the entire amount of the increase in assessed value and subsequent taxes paid, to pay project's cost while leaving the cost of maintaining the infrastructure(s) (new schools, snow removal, more parks, services, library, etc) to the those already here. In simple terms those supporting the use of TIFF’s are claiming that economy-of-size reduces costs. This is only true until you consume any excess you pay for currently, yet do not use. As soon as you add another paid worker and more infrastructure, your economy of size resets.
Yet we need to take into account the time value of money. It could take years before a company relocates here. This means we pay $6 to $7 million a year and get nothing for it. This investment capital over time increases the development costs. If it takes 7 to 8 years to fully develop the land, and realize increase property tax revenue, the cost to the taxpayer could double. So instead of possibly needing $1 Billion in increased assessment, we the taxpayers could need to see this small area of our county increase in value by $2 Billion.
The distance between Maplecrest Road and Adams Center road is 6.5 miles. It is about 2.8 miles to I-469 from Adams Center Road. The amount of land in the area west of I-469 is about 18 square miles. Of this half of this is developed. This means we could expect to buy or use immanent domain to take property belonging to another and develop it by some one else. The investment alone per acre is roughly $7,812.
What could be located here?
“As a publicly owned facility, Fries’ training center wouldn’t directly generate any taxes. But he expects it to attract restaurants, motels and other businesses that would pay TIF taxes.
Located on 200 acres formerly owned by the landfill, the center would provide a place for police officers to practice marksmanship and driving. Firefighters could practice, too, and divers could hone their skills in ponds. Other operations, including police-dog training, would be transferred there from the dilapidated Kidder building on Lima Road. The public could learn driving skills there, too. “I’m tired of seeing kids die on the roads,” Fries said.”
This new training site is 4.5 miles from the proposed Fries’ training center. We already have hotels and motels that built where they are in the expectation of doing business in the future. Would we see a dedicated new motel for this site? Would we actually see increase occupancy rates in Fort Wayne or would hotels see reduce profit margins leading to lower paid taxes? Sounds like people are counting the same dollar multiple times.
What we need is business that adds value and sells it outside the county. This type of business brings new dollars to the county and is the best way of improving our economy
State Funding of Edcuation - Bad Idea
Governor Daniel’s plan to have the State fund public education is a huge mistake. The plan is to reduce property taxes and allow local community taxing authority. In so doing the state would fund our public schools. Why is this a bad idea?
Let me first begin by telling a story of a Boy Scout who was on a trip to the Outer Boundary Waters located on the US/Canadian Border. The trip cost was about $300 plus out of pocket expenses. The scout was responsible for all meals on the way to and from the debarkation area. The troop stopped for the night and went out to eat. The scout was thrifty and chose a cheese sandwich meal, it was the cheapest. His reasoning was he wanted to buy a souvenir of a trip in a lifetime. Other scouts ordered steak dinners and ice cream sodas. When the waitress came around with the bill, she asked if it was one bill or separate. The scouts looked around and said one bill and divided the total among everyone equally. The scout who ordered the cheese sandwich meal was horrified. His bill went from just under $4 to over $10.
The next meal the thrifty scout thinking they would split the meal bill equally ordered more than he would have in order to get what he thought was “his share.” However, this time the meals were not split evenly, but were separate orders. Again the thrifty scout paid more than he had budgeted for his meal. In the end the thrifty scout barely had enough money to pay for his meals up and back and none for a souvenir.
I tell this true life story because it is relevant to everyday life. What you do with your own money is up to you. Others should not affect your life to the point where their values over ride your own.
How does this affect us? We have Fort Wayne Community Schools, East, Southwest, and Northwest Allen County Schools. One has done a very poor job of maintaining their building over the past thirty to forty years; thus the tax rate actually paid was lower than what it should have been. The other three school systems budgeted maintenance and in so doing set a tax rate sufficiently higher to pay for this. Now with a stroke of a pen, those who paid higher property taxes to maintain their schools could easily end up paying even higher taxes, though not property taxes, to now fund on an equal footing the school system that failed in their fiduciary responsibility.
Property taxes are mandated by the Indiana Constitution as the means for local areas for funding. However, the Indiana Constitution does not state what the tax rate must be. The rate is left up to the local government. If the local government does not spend money, the tax rate is zero. If the taxing authorities go out on a spending spree, the tax rate will be high. The property tax rate is calculated by dividing the budget by the total assessed value of the properties. The higher the assessed total properties the lower the tax rates.
Our local property tax problem is one that is government made, yet many think it is the property tax itself that is the culprit and bad. Older homes were not reassessed on a regular basis nor was there a consistent method for doing so. The property taxes on these homes ended up being lower than the tax should have been. Those who bought homes or built new homes ended up paying a higher percentage of the property taxes solely because their properties were assessed a higher amount relative to older homes. Had all properties been assessed using the same method, then everyone, those in older homes and newer homes would be paying a property tax that was fair.
Now the government says they have a solution to the property tax mess they created in the first place. That solution is to let them both tax us and determine at the state level what we spend on OUR local schools. So those who maintained their schools and funded them properly could easily end up subsidizing those who were negligent in the past.
I am against funding schools at the state level. I want those I elect to be held accountable. Those who live in the Fort Wayne Community School System recently had a remonstrative to defeat spending $500 million on their dilapidated schools. At the state level who would you contact to fight this?
The federal government started out with very small control over people’s lives. Over the years they have assumed more and more of a role in what we the people do. In so doing, they federal government spends more and we have less control. The local budget should remain local and not be dependent on the state.
SSN: False Sense of Security
New York Governor has been in the news speaking out on issuing Driver’s licenses to illegal aliens. People think this is outrageous and that only those with Social Security Numbers should be allowed a drivers license.
The Governor pointed out that these illegal currently drive undocumented and that by allowing them to a license, they would at least know who they are. My question is how does a social security number prove who you are? Does it have your photo on it? How about your date of birth? It does not even have your address. So the question is what does a social security number actually prove?
The state merely compares the name of the potential driver and SSN to the Social Security Administrations database. If the name matches the SSN, then it is good. Is this any different than thieves posing as someone else? Identity thieves use your name, date of birth, SSN and more to steal from you.
I am against using the SSN for anything but Social Security. It simply is an unsecure number. The National ID Act is a false sense of security.
Barack Obama on Social Security
"If the guiding philosophy behind the traditional system of social insurance could be described as "We're all in it together," the philosophy behind Bush's Ownership Society seems to be, "You're on your own." Relying on the magic of the marketplace is a tempting idea, elegant in its simplicity. But it won't work. "
"Obama and other Democratic presidential candidates have previously signaled support for this idea. But during an interview on NBC's "Meet the Press," Obama said subjecting more of a person's income to the payroll tax is the option he would push for if elected president.
He objected to benefit cuts or a higher retirement age. "I think the best way to approach this is to adjust the cap on the payroll tax so that people like myself are paying a little bit more and people who are in need are protected," the Illinois senator said.
Currently, only the first $97,500 of a person's annual income is taxed. The amount is scheduled to rise to $102,000 next year. Obama's proposal could include a gap to shield middle-income earners from paying more in taxes, he said."
Obama has come out and stated he supports raising the Social Security tax versus raising taxes. The method he chooses is by increasing the base. The base was originally set at $3,000. Anyone making more than $3,000 a year did not pay Social Security tax on the amount above the base. The base was set at $3,000 or about 110% of the average wage in 1937 so that social security would not be seen as a welfare program. Benefits are based on wages subjected to the Social Security tax, not the actual taxes paid.
With this said, it is very obvious that Obama is truly ignorant about social security. He is using it as a political tool to gain attention. Hopefully many of the voters will see through this for what it is, another scam that is either unintentional, or worse intentional.
Increasing the base does help to a very slight degree. First how many people make over $102,000 a year? This really limits who is going to be affected. Second, because the base increases, those affected will see larger social security benefits (See last sentence of first paragraph). Currently about 85% of wall wages are subjected to the Social Security Tax. If the base was eliminated, at most SS-OASI would see revenues increase by 15%. Sounds pretty good right? However, the $45 billion increase would do little to counter the nearly yearky $1 Trillion increase in the liability. It gets even smaller when you take into account that more than half of this income would need to be set aside to pay higher benefits.
THE COLD HARD TRUTH IS anyone born after 1985 can expect at most to receive 29 cents in benefits for every one dollar paid in taxes and credited interest. Raising the payroll tax means the worker will have less take home pay, the savings rate will drop more and the worker will get just 29 cents back for each additional dollar increase in the payroll tax.
Social Security is a lousy deal for those born after 1938, then why on earth would we want our children to be burdened and disenfranchised even more? This is nothing less than legalized theft. In Fort Wayne, two city council members of long standing were unseated. It is now time for the those under age 46 who make up over 55% of all potential voters in the United States to take a stand once and for all. Do you like paying 10.6% of your wages to Social Security in return receiving a benefit that is worth just 29 cents on the dollar? If not vote the suckers out. Register and for the price of a little time, vote, it is free and you just might make a difference.
What is the effect of raising the base?
I track currency values as a bench mark. The Euro is replacing the Dollar as the currency of choice. This has and will continue to affect the value of the dollar. The price of oil has routinely been priced in Dollars, but as the dollar looses value among other currencies, those selling the oil and being paid dollars find it more costly to buy things in Europe. For that reason there has been a push by Iran to change the pricing of oil to the Euro.
The price of oil though priced in Dollars has risen much slower against the Euro. In simple terms our currency is being devaluated. The most likely reasons are huge budget deficits, large trade deficits and the inability of our representatives to do something to change Medicare and Social Security.
With a devaluated Dollar, we should see exports picking up. However, our representatives must be held accountable for these large deficits, otherwise our dollar will continue to plummet. I see our country as an addict. We spend too much and save too little, why?
We must first admit we have a problem. That problem is a misconception that has been perpetuated by the media and others. That misconception is that the United States is the richest country. It is not the richest country. We have spent in the past forty years, what our forefathers built and saved over 200 years.
We must also admit that the government should not and cannot pay for everything. Affordable healthcare would be nice, but how would government do this? I have heard great things about the VA, but as a veteran, who has suffered using the VA medical system, I would not want this for my family nor yours. For example I waited months to be seen by a neurologist. I got my appointment and then drove 65 miles to Marion where I was seen for about ten minutes and told to go to Fort Wayne to have test done. A year later I was sent back to Marion only to be seen for 5 minutes and told he could not do anything until the test were done. It required well over six hours, 260 miles driving and one year later I still have not been treated.
We need to get back to basics. What does a family do when faced with a layoff? They cut back, they do without. Guess what, that is exactly what we need to be doing as a country.
How large a problem is this? With large deficits since 1959, the government (we the people) must borrow to pay for what we the people want now. It is this "now" syndrome that is bad. We do not want to save and wait, but we want it now! For that reason China, Japan and others have loaned us money to feed the "we are the richest" addiction that created another addiction I call "I want it now."
What happens if we can no longer borrow money to fund deficits? Anyone holding US backed securities abroad such as Treasury note is taking a licking from the devaluation. They certainly will not be in much hurry to invest more and possibly the opposite, sell and cut their losses. Is the US Treasury on the verge of subprime fiasco?
Social Security unfunded liability is over $17 Trillion. The unfunded Medicare Rx drug program is at least $3.5 Trillion under funded and Medicare is at least $8 Trillion unfunded. Then add in all the National debt of over $9 Trillion. What as the total trade imbalance been? It would not surprise me if we the people were indebted over $50 trillion not including personal debt.
Thanks to all you helped
I want to thank all those who helped me in my bid for City Council at Large. It was a learning experience for me. I think we made a difference in some of the issues and the way other candidates responded. It appeared to me that both Democrats and Republicans attempted to associate with some of the Liberation positions.
It is a tough nut to crack when a large fraction of voters from both parties vote straight party. This locks up nearly half of all votes. The remaining votes get distributed more randomly.
It is, I think a sad fact of politics that voters tend to think their candidate is ok while everyone else’s are not. Both the JG and News Sentinel identified a poll that presented voters opinions on issues. Based on how voters replied to the poll, shows a discontinuity between what the believed and how they voted. They were against Harrison Square and high property taxes, elected those candidates that support both.
Thanks for your help and I would like your support for my bid for Indiana’s 3rd district U.S. Representative seat in 2008.
BIZPAC on Government Efficiency
BIZPAC and the Chamber feel increasing the efficiency and effectiveness of the delivery of governmental services is essential to providing a system that benefits business growth and job creation. They quality of local government, not the quantity, is critical to how our communities operate. And inefficient, ineffective government that struggles to make ends meet, cannot focus on best practices, or establish a vision for economic growth. For too long local government has been trapped, due in large part to its outdated structure. A more efficient and solvent government can participate in the important work of creating communities of vision for the future: a vision that includes economic growth, educational opportunities, sound infrastructure, and outstanding public safety.
Once again I disagree with BIZPAC. We differ on the responsibility of government. Fort Wayne used to have limited government, but over the years has taken on ever more responsibility. This has increased property taxes and created a need for the local income tax. Yet, they want more efficiency in government with projects like Harrison Square, Kitty Hawk, and North River Development. If you want more efficiency, get government out of the business of buying and funding projects and back into zoning, planning and providing those services it is responsible for.
Let us talk about out dated structures.
- Education - What is out dated about learning to read, write and arithmetic? Do they have another way to improve the process of presentation and retention? The brain today still processes information the same way it did 10,000 years ago.
- Sound infrastructure - They did not think that CEDIT should be used for infrastructure such as sidewalks, curbs and streets.
- Public Safety - Possibly spending taxes on infrastructure will keep communities from deteriorating thus creating pride in the neighborhoods instead of spending tax dollars to subsidize risky investment such as Harrison Square.
- Economic Growth - What a catch phrase. It encompasses everything, but has no basis what so ever. What it means to one person is different to another. We all want economic development. We all want jobs to provide for our families.
Obviously I am not a politician. I am a husband, father to five children and an engineer. I want my children to do better than I. This city council seems to think that government needs to provide everything. That they know best. They assert their perceived values on City Council on all those in the city. I ask for your vote November 6.
BIZPAC on CEDIT
BIZPAC believes that County Economic Development Income Tax dollars should be used for exactly that, economic development. While improving existing residential infrastructure such as curbs, sidewalks, and streets serves to better the quality of life in Fort Wayne, BIZPAC does not believe that these are truly economic development projects. We urge council members to consider using CEDIT dollars for significant economic development projects that will provide a return on investment.
Wow, this is really stretching free enterprise. Should taxpayers be required to subsidize business? I thought that local government was to limit government involvement and maintain public property (streets, sidewalks, parks, police and fire). In simple terms do those things that an individual or company cannot provide. BIZPAC support using your tax dollars for significant economic development projects that will provide a return on investment. Are they talking being share holders in a company, no? Are they talking about providing government jobs, no? They are talking about using tax dollars to give to a company that on its own does not want to invest in Fort Wayne.
What happens after several iterations of this cycle? Pretty clear that property taxes will rise, side walks, streets and services will diminish making it harder to attract and retain businesses. Tax dollars to pay for taxpayer-funded infrastructure such as side walks, roads, alleys and parks. I do not approve of raising property taxes to subsidize private investment.
BIZPAC supports Harrison Square
Harrison Square & North River:
BIZPAC and the Chamber strongly support the downtown revitalization project, including both Harrison Square and the North River project. Downtown revitalization is vital for improving the business climate and advancing current businesses as well as attracting new businesses.
Ok, we the taxpayer invest $46 Million in Harrison Square. What is the benchmark for this project? When will we know if the $46 Million of taxpayers' money was well spent or wasted? Let me provide what I think is a benchmark.
The city of Fort Wayne currently knows how much sales tax is generated in Fort Wayne. It also knows how many jobs there are. It should be a simple task to determine just how much increase there is in sales in the city of Fort Wayne every year after Harrison Square opens. If the increase is not on the order of an added $100 million a year, it was a failure. Why do I say this? $46 million is worth at 5%, $2,300,000 a year. For us to recoup this even with a 1% sales tax would require the City of Fort Wayne to generate as whole more than $230 million in sales yearly beyond the current sales.
The City likes to use tables that show how many times a particular dollar gets spent within a community. Every time this dollar gets spent, it generates income for one and an expense for another. Theoretically the faster money travels through the economy, the more impact it has in a given amount of time. The problem with Fort Wayne and Harrison Square is that the dollar that is being multiplied had to come from someplace. Where did it come from? If it is a dollar that was already allocated to be spent in Fort Wayne, then Harrison Square did nothing but divert it from some place else. This cannot be counted as being beneficial. Therefore, we need dollars from outside the city of Fort Wayne, that would not have been spent here to begin with. When that dollar arrives in the city, then the amount of its impact is directly related to the cost of the service or product. If is 100% service, then it has a strong multiplier. If it is an item made in China or some where else, then only a fraction of the dollar will stay in Fort Wayne.
Keep in mind that there is also a cost for tearing down the current stadium, the jobs there that will be lost as well as jobs lost due to closing downtown busineses to make way for Harrison Square. How many jobs have been lost so far?
I received a letter from BIZPACK this afternoon. What is BIZPACK?
The Greater Fort Wayne Business Political Action Committee (BIZPAC) is an organization lead by a non-partisan Board of Directors. BIZPAC supports elected officials or candidates who are advocates for limited government, free enterprise, and a pro-business, pro-economic growth environment in the Northeast Indiana region.
Here is what they have to say about TIF's.
Use of TIF:
BIZPAC believes that tax incremental financing (TIF) is an important tool. TIF allows us to create special districts that will generate private-sector development. During the development period, the tax base is frozen at the predevelopment level. Property taxes continue to be paid, but taxes derived from increase in assessed values resulting from new development go into a special fund created to retire bonds issued to originate the development or to leverage future growth in the district. While we should be cautious of when and how TIF may be used, BIZPAC supports its use with the following principles:
Here is my response to TIF's
- Private development would not occur without the stimulative actions.
- The tax base in the redevelopment district was stagnant or declining, and the tax increase would not have occurred but for the public expenditures.
- Healthy areas that grow and develop without the intervention of the TIF do not need tax revenues diverted.
The problem is that during the frozen period, the city infrastructure needs to be maintained. This added cost is not paid for by these redirected funds. As a result the taxpayers outside the tiff either have to pay higher taxes or cut services. At the end of the frozen period, the accumulated cost of paying for maintenance of the roads, sewers, snow removal, stop lights and curbs far exceeds the frozen predevelopment level. In simple terms you cannot get something from nothing.
The second problem with TIF's is that the taxpayer takes on the greatest risk. They buy the land, put in sewers, road upgrades, traffic lights, and a lot of other costly tasks. What happens if the venture fails?
If the private sector thinks they can make money at creating something, they will. It is only when the private sector thinks the risk is too high and the returns are too low that they will not invest capital. However, if they can find a sucker willing to reduce their cost and risk exposure, they certianly will invest. Just look at Kitty Hawk. The taxpayers are on the hook for $36 Million unless we can find another sucker to take it off our hands.
I am truly sorry to learn that BIZPAC lacks the mathematical skills in analyzing this ponzi scheme. It is no different than what was used to create the Social Security and Medicare programs. I am also sad to learn that BIZPAC agenda are "advocates for limited government, free enterprise, and a pro-business, pro-economic growth environment in the Northeast Indiana region
" yet want to use taxpayers money to compete with existing business. Example is Glennbrook Vs Jefferson Pointe. Did we really need another shopping center? Or are people spending any more in Fort Wayne or just redistributing their spending? Redistribution is government interference is socialism.
Side Walks and Alleys
Tom Henry is offers plan to fix city’s sidewalks and alleys. This is great. How much will it cost? Again we are talking about spending MORE money. As with any family budget, we (most of us) live on a fixed income. We cannot and do not generally buy anything we want. We have to say no to our kids when they want something.
- $500 million - Fort Wayne Community Schools need fixed, but will it take $500 million?
- $500 Million – EPA mandate to separate storm and sewage sewers.
- $214 Million -Unfunded Police and Fire Pensions growing at 5% or more each year!
- $85 Million - The Allen County Library expanded and we are paying for these bonds.
- $46 million - City Council voted to spend $46 million on Harrison Square (bond funding)
- $36 Million - Kitty Hawk filed for Bankruptcy – could cost taxpayers $36 Million.
- $4 Million - Omni Source Property?
- City side walks to make it safe to walk need fixed, but what is the cost? Sounds more like a sound bite, feel good thing, but I bet it will it survive after the election.
- North River Front Development?
- One council member thought that local pools should have reduced admission to those who live in the area. The parks belong to everyone, not just those who live in the local vicinity. If we want reduced fees to use the pools, great, but it should apply to everyone in the city and a cost needs to be defined.
How many other projects are there? How many bonds are currently outstanding? What is the priority of these projects? Should we take care of necessities first?
Fort Wayne City Debt
Debt Service Fund (GOB)
1998 Redevelopment District Refunding 12 yr
1999 Park Bond 20 yr
2005 Park Bond 10 yr
Total Current DS Obligations
Current Special Obligation Bonds
2001 Safety/Annexation Bond 10 yr
2002 Infrastructure Bond 10 yr
Redevelopment Rev Bond Series 2005 A-1 15 yr
Redevelopment Rev Bond Series 2005 A-2 15 yr
Redevelopment Rev Bond Series 2005B 12 yr
2005 CEDIT Bond 12 yr
Total Current Spec. Oblg. Bonds
New Debt Service GOB/SO
Total new GOB/SO Debt -
Grand Total GO/SO Debt
2001 Plaza Parking Garage Construction 20yr
First Mortgage Bonds:
Refunding Bonds of 2003-Wallace St 10 yr
Northwest Fire Station 2000 - Station # 15 10yr
Street Dept - N Substation 10 yr
Fire Stations (18 & 19) Project 15 yr
Public Safety Academy Project 17 yr
2001 Street Rolling Stock 7 yr
2002 Street Rolling Stock 7yr
2002 Vehicle Lease 5 yr
2003 Vehicle Lease 5 yr
2003 Street Rolling Stock 7 yr
2004 Vehicle Lease 5 yr
2004 Fire Truck Lease 7 yr
2004 Street Rolling Stock 5 yr
2005 Vehicle Lease 5 yr
2005 Solid Waste Containers Lease 10 yr
2005 Street Rolling Stock 5 yr
2006 Vehicle Lease 5 yr
2006 Fire Truck Lease 7 yr
2006 Street Rolling Stock 5 yr
2006 Technology Lease 3 yr
2006 Financial System Lease 5 yr
Current Capital Lease
New Capital Leases
2007 Vehicle Lease 5 yr
2007 Street Equipment Lease 5 yr
Total New Cap Lease Items
Grand Total All Capital Leases
Other Loans Payable
1999 Brownfield IDFA 9yr
2004 Civic Parking Garage Phase II 7yr
Total Current Other Loans Pay
New Loans Payable
Total New Other Loans Payable -
Grand Total All Other Loans
Total - All Civil City Budgeted Items
(DOES NOT INCLUDE HEADWATERS OR FRANKE PARK IMPROVEMENT DEBT)
Total Current Obligations:
Total All Obligations
Social Security Proposed Change
The democrats were reported in the news today to be looking at “shoring up” social security. Their plan is to raise the base to which social security taxes are applied. Currently Social Security taxes the first $97,500 and anything above that is, let us say tax-free. Taxing those who make more than $97,500 sounds acceptable right? Why should a person making minimum wage pay a full 12.4% of their wage to social security while the person making $200,000 pays 12.4% only on the first $97,500?
You might change your support if you knew the dirty little secret behind the social security benefit. Your social security benefit is not based on the taxes you pay. It has nothing to do with the taxes you paid, but is based solely on the wages that were subjected to Social Security. Your total Social Security wages are adjusted by the change in the US Average Wage in the year they were earned and the US Average Wage in the year you turn 60. This is much better than inflation since it raise all wages to the current standard of living. The best 35 years are then averaged together to determine your average monthly wage index. This average wage index is then used to determine your Social Security benefit. The larger the average wage index, the larger the social security benefit. Thus subjecting more wages to the social security tax will increase average wage index and thus the social security benefit of those who are affected.
So how much can the Social Security Administration expect to get from this increase in the payroll base? Well that is pretty simple to calculate. Currently 83% of all wages are subjected to the social security base of $97,500. Social Security revenues would jump by 13% if all wages were subjected to the social security tax. However, of this 13% increase in revenue, Social Security would have to set aside 51% of this increase in order to accrual the cost of paying the higher benefits when these workers began receiving Social Security. This results in a 6.5 to 7% net increase in revenues.
Let us face the cold hard facts once and for all. Social Security needs in excess of $17 Trillion in the bank earning 5 to 5.5% a year. It has $1.9 Trillion. It is under funded by more than $15 Trillion. This $15 Trillion would be earning over $750 Billion a year in interest. A 7% increase in Social Security revenues would add $40 Billion in revenues and would extend the ability to pay full benefits by less than 3 years. This means those who now under age 41 would not benefit at all from this while at the same time continue to pay into a terribly tragically flawed program.
For anyone born after 1985, the best you can do from Social Security is to receive 29 cents in benefits for every $1 dollar in taxes and credited interest at the US Treasury rate. No matter what is done, raise taxes, raise retirement age, cut benefits, the sad fact remains that you will still only receive at most 29 cents in benefits for every $1 dollar paid. If they raise the tax rate to pay you full promised benefits, you pay more for the same lousy benefit. If they raise the retirement age, you pay longer, receive fewer benefits for the same amount of tax. If they cut benefits, you receive less for the same amount of tax.
Why are we trying to save this wreck?