Virginia

The Lazy Non-Poor People Below the “Poverty” Line Who Get Welfare, and the Hard-Working Poor Above it Who Get Taxed

by Hans Bader on September 13, 2011 · 6 comments

in Legal, Politics as Usual, Zeitgeist

There are plenty of people below the poverty line who aren’t really poor, and some people above the poverty line who are indeed quite poor. The poverty line is a very arbitrary measure seemingly designed to justify lots of spending on welfare and social services for “disadvantaged” people who aren’t really poor, spending that generates jobs for government employees (and government-subsidized non-profits) who provide welfare and handouts.

Robert Rector of the Heritage Foundation explains how many people below the poverty line aren’t really poor at all:

There is a wide chasm between the public’s concept of poverty and “poverty” as it is defined by the Census Bureau. The public generally thinks of poverty as . . . homelessness, or malnutrition and chronic hunger. In reality, the vast majority of those identified as poor by the annual census report did not experience significant material deprivation.

In a recent Rasmussen poll, adults agreed (by a ratio of six to one) that “a family that is adequately fed and living in a house or apartment that is in good repair” is not poor. By that simple test, about 80 percent of the Census Bureau’s “poor” people would not be considered poor by their fellow Americans.

In the same Rasmussen poll, however, 73 percent said poverty was a severe problem. Why the disconnect? The answer: Public perception of poverty in the U.S. is governed by the mainstream media, which invariably depicts the Census Bureau’s tens of millions of poor people as chronically hungry and malnourished, homeless or barely hanging on in overcrowded, dilapidated housing.

The strategy of the media is to take the least fortunate 3 percent or 4 percent of the poor and portray their condition as representative of most poor Americans. . .[But] they are far from typical among the poor. . . a poor child in American is far more likely to have a widescreen plasma television, cable or satellite TV, a computer and an Xbox or TiVo in his home than he is to be hungry. . .In 2009, the U.S. Department of Agriculture asked parents living in poverty this question: “In the last 12 months, were [your] children ever hungry but you just couldn’t afford more food?” Some 96 percent of poor parents responded “no”: Their children never had been hungry because of a lack of food resources at any time in the previous year. . . .

Here are more surprising facts about Americans defined as “poor” by the Census Bureau. . .

Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning. Fully 92 percent of poor households have a microwave; two-thirds have at least one DVD player and 70 percent have a VCR. Nearly 75 percent have a car or truck; 31 percent have two or more cars or trucks. . .Nearly two-thirds have cable or satellite television. Half have a personal computer; one in seven have two or more computers. More than half of poor families with children have a video game system such as Xbox or PlayStation. . . A third have a widescreen plasma or LCD TV. . .

At a single point in time, only one in 70 poor persons is homeless. The vast majority of the houses or apartments of the poor are in good repair; only 6 percent are over-crowded. The average poor American has more living space than the average non-poor individual living in Sweden, France, Germany or the United Kingdom. . .Forty-two percent of all poor households own their home; on average, it’s a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio. . . among the lowest-income fifth of households, inflation-adjusted consumer spending actually increased modestly during the recession.

Given these facts, how does the Census Bureau conclude that more than 40 million Americans are poor? They identify a family as poor the family’s cash income falls below specific thresholds. For example, in 2009 a family of four was “poor” if annual cash income fell below $21,954.

But in counting income, the Census Bureau ignores almost the entire welfare state. This year, government will spend over $900 billion on means-tested anti-poverty programs that provide cash, food, housing, medical care and targeted social services to poor and near-poor Americans. . .This means-tested welfare spending comes to around $9,000 for each poor or low-income American — virtually none of which is counted by census officials for purposes of calculating poverty or inequality.

[click to continue…]

More Proof That Unions Don’t Improve Schools

by Hans Bader on June 22, 2011

in Labor, Legal, Regulation

Schools in right-to-work states (where unions are weak) are getting better and better over time compared to schools in heavily-unionized states.

As Walter Russell Mead notes in “Blue State Schools: The Shame Of A Nation“:

When it comes to excellence in education, red states rule — at least according to a panel of experts assembled by Tina Brown’s Newsweek. Using a set of indicators ranging from graduation rate to college admissions and SAT scores, the panel reviewed data from high schools all over the country to find the best public schools in the country. The results make depressing reading for the teacher unions: the very best public high schools in the country are heavily concentrated in red states. Three of the nation’s ten best public high schools are in Texas — the no-income tax, right-to-work state that blue model defenders like to characterize as America at its worst. Florida, another no-income tax, right-to-work state long misgoverned by the evil and rapacious Bush dynasty, has two of the top ten schools. Newsweek isn’t alone with these shocking results. Another top public school list, compiled by the Washington Post, was issued in May. Texas and Florida rank number one and number two on that list’s top ten as well … On both lists only one of the top ten public schools was located in a blue state.

Last week, the Wisconsin Supreme Court upheld a state law limiting collective bargaining with teachers’ unions and other government-employee unions in Wisconsin. To justify collective bargaining, Wisconsin union supporters, such as the Democratic National Committee, had falsely claimed that Virginia, which bans collective bargaining in state agencies, ranks 44th in the nation in ACT/SAT scores, compared to Wisconsin ranking 2nd. In reality, Virginia actually beat Wisconsin in ACT scores in 2010, with Virginia ranked 12th and Wisconsin ranked 17th. Unlike Wisconsin, Virginia is a right-to-work state that bars forcing employees to pay union dues. A law professor noted that “in Virginia, test scores have steadily improved since collective bargaining for teachers was ended.”

Supreme Court Refuses the Speedier Route for Health Care Appeal

by Kathryn Ciano on April 27, 2011

in Economy, Healthcare, Legal, Regulation

Monday morning the Supreme Court rejected Virginia Attorney General Ken Cuccinelli’s request to speed up the process for a ruling on Virginia’s health care appeal.

By rejecting Virginia’s unusual request, the Court denied Cuccinelli’s request that its appeal bypass usual legal procedures to go directly before the nation’s highest court. Instead, the Fourth Circuit Court of Appeals will hear Virginia’s appeal, scheduled for May 10.

So far five federal judges have heard challenges to Obama’s sweeping healthcare overhaul. Judges in Florida and Virginia have declared the law unconstitutional, while Democratic appointees in Michigan, Virginia, and Washington, D.C. have upheld Obamacare.

Virginia’s chief complaint with Obamacare is the individual mandate. Twenty-six states joined Florida’s appeal that Congress grossly overstepped its authority with this unprecedented requirement that individuals buy health insurance or pay a penalty to the government if they do not purchase coverage.

No justices sat out of Monday’s denial of fast-track process. Yet the slow route is new for Obamacare, a highly contested sweeping legislation that passed only when then-speaker of the  House Nancy Pelosi invoked a bizarre, constitutionally-dubious “deem and pass” procedure that unseated civics as we know it and “deemed” the bill popular rather than put it to popular vote the way the American Constitution requires.

[click to continue…]

Bogus Statistic from Wisconsin Union Backers Spreads Despite Repeated Debunking

by Hans Bader on February 28, 2011 · 6 comments

in Economy, Employment, Labor, Regulation

Post image for Bogus Statistic from Wisconsin Union Backers Spreads Despite Repeated Debunking

“A lie can make it half way around the world before the truth has time to put its boots on” — like a false statistic recently spread by supporters of Wisconsin’s government-employee unions, such as MSNBC’s Rachel Maddow. Despite being debunked by PolitiFact, it has since been widely repeated in multiple letters to the editor, and it remains uncorrected on the web sites of publications like The Economist.

On Wednesday, PolitiFact debunked the claim by Wisconsin union supporters that Virginia, which bans collective bargaining in state agencies, ranks 44th in the nation in ACT/SAT scores, compared to Wisconsin ranking 2nd. For example, it noted that in 2009, Virginia ranked 22nd in ACT scores, while Wisconsin ranked 13th. As PolitiFact notes, this claim was originally disseminated by the Wisconsin Democratic Party, which has now retracted it.

(Although PolitiFact didn’t note this, in 2010, Virginia actually beat Wisconsin in ACT scores, with Virginia ranked 12th and Wisconsin ranked 17th. Unlike Wisconsin, Virginia is a right-to-work state that bars forcing employees to pay union dues. Collective bargaining with government employee unions is currently mandated in Wisconsin, but banned in Virginia.)

[click to continue…]

Wisconsin Union Backers Defame Virginia and Spread Bogus Statistics

by Hans Bader on February 26, 2011 · 1 comment

in Features, Labor, Politics as Usual, Regulation, Zeitgeist

Post image for Wisconsin Union Backers Defame Virginia and Spread Bogus Statistics

Virginia schools have better-than-average test scores. Virginia obviously doesn’t rank an abysmal 44th in the nation on SATs and ACTs, as supporters of Wisconsin government-employee unions keep falsely claiming. They’re making that claim up because Virginia bans collective bargaining by government employees, and Wisconsin, which currently mandates collective bargaining in government agencies, is considering proposals by its newly-elected conservative governor to bar such bargaining in areas like pensions, which frequently result in government costs being passed on to future generations.

In 2009, Virginia ranked in the middle of states on the ACT and SAT, and in 2010, it actually outranked Wisconsin on the ACT (12th vs. 17th in “average composite score“). The reason it doesn’t rank higher on the SAT is because so many of its students take the test – including marginal students who wouldn’t even take them in another state. (Wisconsin boasts a higher average SAT score than Virginia partly because only “four percent” of Wisconsin students took the SAT, compared to “67 percent” in Virginia. Virginia’s lower average SAT score is a function of a larger pool, not dumb students or bad schools, as PolitiFact pointed out in debunking the false claim that Virginia ranks 44th.)

[click to continue…]

$7 Billion or More in New Taxes for Virginians Under EPA Mandate

by Hans Bader on December 1, 2010 · 1 comment

in Deregulate to Stimulate, Economy, Environment

The EPA told Virginia earlier that it would impose costly measures on Virginia Counties, measures so costly that they would result in record property tax increases in places like Fairfax County Virginia. The measures were designed to make the Chesapeake Bay cleaner. The EPA left open the door to less costly measures to achieve the same goal if Virginia could suggest any to the EPA’s liking.

Virginia has now attempted to do just that, submitting a $7 billion plan to make water going into the Chesapeake Bay purer. But The Washington Examiner reports that the EPA will likely reject it in favor of more costly measures.

So it looks like Virginia taxpayers will be paying at least $7 billion, probably a lot more, to comply with the EPA’s costly mandates. (Virginia, like most states — but unlike the federal government — has a constitutional requirement that it maintain a balanced budget, so it can’t just borrow and spend the $7 billion, it has to raise taxes to pay for it, or dump the cost on its municipal governments to raise themselves through higher property taxes.)

Virginia officials have been critical of the EPA’s proposed measures, calling them a “massive unfunded federal mandate.” 

In addition to higher property taxes, homeowners in liberal Washington suburbs face costly new “green building” regulations at the hands of local governments. For example, the Arlington County Board is also mulling new energy regulations that could increase the cost of home renovations by as much as 40 percent.

Taxpayers in Maryland counties like Montgomery may also end up paying increased taxes due to the EPA’s Chesapeake Bay regulations.

New CEI Podcast — October 21, 2010: Relic of Prohibition

by Ryan Young on October 21, 2010

in Nanny State, Personal Liberty, Podcast, Regulation

Have a listen here.

CEI Director of Insurance Studies Michelle Minton analyzes proposals to privatize Virginia’s liquor stores. Virginia is one of 18 states where the government holds a legal monopoly on the sale of spirits.

Virginia ABC Store Privatization: Improving Plan, Dimming Political Support

by Michelle Minton on October 1, 2010 · 2 comments

in Deregulate to Stimulate, Economy, Nanny State, Personal Liberty, Regulation

When Virginia’s governor Bob McDonnell’s unveiled his plans for privatizing the state-run liquor sales system nobody was terribly thrilled. The plan’s basic outline (as I have written about before) is that the state’s 332 state-owned stores and auction off 1,000 licenses. The plan included some new fees on wholesalers, restaurants, distributors, and slightly reduced the per gallon excise tax on spirits.

The Proposed Privatization Plan:

1,000 Retail Licenses Up for Auction

600 Tier 1 licenses (i.e. grocery stores) cost=  min. bid + $2000/year

150 Tier 2 licenses (i.e. specialty stores) cost = min. bid + $1000/year

250 Tier 3 licenses (i.e. convenience stores) cost = the min. bid + $500/year

Wholesaler Fees: Licensing fee= 2.5x profits of spirits lines to be distributed

Excise tax: $17.50 per gallon

Previously, the plan had included a 2.5 percent tax on restaurants’ sales of liquor. This “fee” would give restaurants the privilege of buying liquor at wholesale prices and have the goods delivered to their business; this was one of the gripes smaller businesses had with plan, saying that it would negatively impact “Mom & Pop” businesses. Their complaints were apparently taken into account by the McDonnell team which announced changes to the plan on Thursday, including the deletion of this 2.5 percent tax.  They also eliminated the 1 percent annual tax on wholesalers’ gross receipts.

As this article in The Washington Post notes, the changes are likely to garner support from businesses as well as fiscally conservative legislators, but it will only increase the displeasure of those skeptical about the financial implications of privatization.

…the revision will probably deepen concerns of lawmakers who think privatization will be a bad deal for the state over time. McDonnell’s projections show that with the modifications, his plan would result in $47 million less each year to fund such state services as schools and police.

The revisions highlight a central conundrum McDonnell faces as he attempts to sell his complex proposal: Changes he might make to satisfy the concerns of some lawmakers are likely to cost the support of others.

While politicians are understandably concerned about the financial state of the Commonwealth, loss of tax revenue is no justification for doing away with a government service that they have admitted does no good for the people of Virginia and in fact impedes sales of and access to liquor. Additionally, legislators do not seem to understand that once liquor is widely available in Virginia and comparably priced to other states, the sales of other types of alcohol will also increase. About 70 percent of wine drinkers also drink spirits, and research by DISCUS (the Distilled Spirits Council of the United States) shows that in Washington, D.C., there is a ratio of about 3 cases of wine for every 1 case of spirits sold. Their research clearly shows that Virginia residents are primarily purchasing their liquor in the District.

On that note, here is a sample of statistics about the current sad state of liquor sales in Virginia as compared to the U.S. on average and neighboring states:

Outlet Density in Virginia: Density of liquor store outlets in Virginia is 0.6 per 10,000 adults

Outlet Density in the U.S.: Density in the U.S. on average is 3.2 per 10,000 adults

Sales in Virginia: Liquor sales rate is 1.62 gallons per adult

Sales in the U.S.: 2.04 gallons per adult

Sales in D.C.: 4.46 gallons per adult

Excise Tax on Liquor in MD/D.C.: $1.570 per gallon

Excise Tax on Liquor in Virginia: $20.13 per gallon

It is time to set aside fears and get government out of the business of selling liquor. Loss of general fund revenue is a bogus reason to oppose the plan: government shouldn’t be griping about losing money it had no right to it in the first place. They have admitted that the government monopoly on sales provides zero benefit for Virginians, so it’s time to get rid of it and find money somewhere else (maybe cutting programs?). The fear that privatization will result in 1,000 new liquor stores is unfounded as most of the licenses will be sold to stores already selling wine and beer, actually decreasing liquor stores. Finally, fears about crime and traffic fatalities are unfounded, as case studies of other states that have undergone privatization show no rise in these ills.

Though the privatization plan may not be perfect, if it gets the government out of the sale of liquor, it is a step in the right direction.

Republicans Should Favor Privatization of Liquor Sales

by Michelle Minton on August 19, 2010 · 1 comment

in Odds & Ends

Republicans should support increased privatization and oppose the continuation of government-run entities. It should go without saying, but some Republicans in Virginia (and beyond) seem to have forgotten what it means to be a Republican.

Since his election last November, Governor Bob McDonnell has expressed an interest in privatizing  the commonwealth’s alcohol beverage control system. Now as his plans take shape and edge closer to abolishing the state’s hold on alcohol retail sales some Republicans are showing nervousness about McDonnell’s ideas.

Del. Tom Gear (R-Hampton) said he was concerned by suggestions that Costco and Wal-Mart would be able to sell liquor in a new system. He said he’s worried the big companies could make it tough for small retail businesses to successfully compete in the market. “My idea was to create jobs from small operations, mom-and-pop stores,” he said. “Costco can put in liquor and never have to hire a single person.” Gear also said he was concerned about replacing the $248 million ABC now deposits in the general fund annual in liquor profits, excise and sales taxes.

Sen. Emmett Hanger (R-Augusta) is concerned about the potential loss of tax revenue and increased consumption: “The money is already flowing into the general fund and being spent, every last penny. There is not a bonanza to have there.” “The experts I’ve talked to think privatization would be the absolutely wrong direction to go.”

Del. Bob Marshall (R-Prince William) is also concerned about increased consumption and revenue. “We have to make a decision not just about what’s going for today, but 10 years from now,” he said.

Republican politicians should NOT support policy simply to fall in line with the party or support a proposal simply because its author is a Republican — especially if the proposal only pays lip service to individual liberty, private property, or personal responsibility. However, many of the concerns expressed by McDonnell’s conservative opponents show an utter lack of concern for the principles their party is supposedly based on.

More than that — their concerns are entirely unfounded:

No new money

It’s understandable that lawmakers are concerned about losing a practically guaranteed annual revenue stream of $248 million, all of which is already allocated to pay for goods and services around the state. But according to an article published in the Washington Examiner this week those fears are unfounded when considering how much VA spends on the business of controlling liquor sales:

The Department of Alcoholic Beverage Control has a budget of $514 million. Through the third quarter of 2010, the Agency had spent more than $237 million on “supplies and materials.” Of that, $232 million was spent on alcoholic beverages…. meaning the commonwealth, in the interest of restocking the shelves at its ABC stores, was cutting checks to distilleries, wineries and importers across the country.

Higher rates of crime and abuse

Again it’s understandable that lawmakers and other interested parties are concerned that  “loosening” the state’s grip on alcohol sales will result in minor abuse, increased alcoholism, crime, and traffic accidents due to increased availability and affordability. If we look at other localities that have switched from control to private systems, we can see that these fears seem to be unfounded.

For example, Iowa privatized state stores in the 1980s without such an increase in social ills. The number of liquor stores nearly doubled, tax revenue from sales increased by $125 million, (according to the state’s division of alcoholic beverage control) yet, underage drinking and alcohol-related fatalities “remained steady.”

…even though Iowa’s number of liquor stores roughly doubled, its incidence of underage drinking and alcohol-related fatalities remained steady. “Privatization didn’t really have any effect” on such problems, said Keith Bailey of the Iowa chapter of MADD.

Similarly in Alberta, Canada, which privatized alcohol sales in 1993 has seen cheaper prices, increased numbers of retail operations, and higher amounts of government revenue.

Of the four western provinces along with Ontario and Quebec, Alberta is tied for the highest in terms of dollars raised from alcohol per capita, ahead of those with retail and distribution monopolies.

In addition to the fiscal benefits, privatization in Alberta did not result in a spike in crime, death, and abuse. In fact, despite increased availability in Alberta, consumption declined following privatization along with traffic accidents related to alcohol.

In the decade following privatization, Alberta’s impaired driving rate declined by a higher percentage than any other province — 73%. That compares to a 47% decline for Saskatchewan and an average 50% for Canada. In addition, citizens of Saskatchewan report higher rates of alcohol-related harm than nearly all other provinces, including Alberta.

All lawmakers, not simply Republicans, should seriously consider the merits of privatizing liquor sales. In particular, Republicans should temper their fear of change with a commitment to their espoused ideals. Infinite numbers of studies could be conducted, statistics could be collected from now until kingdom come: we will never know without a doubt what the results will be of privatizing liquor sales in Virginia. But by supporting the policies that best preserve free enterprise and personal liberty, Republicans can at least be certain that they are protecting their ideals and the rights of their citizens.

Regulation of the Day 147: Breathing Fire

by Ryan Young on August 18, 2010

in Nanny State, Personal Liberty, Regulation, Regulation of the Day

Jimmy’s Old Town Tavern in Herndon, Virginia, has an unusual attraction: fire-breathing bartenders. That tradition may be coming to an end, according to the Washington Examiner:

Fairfax County fire investigators charged Tegee Rogers, 33, of Herndon, and Justin Fedorchak, 39, of Manassas, with manufacturing an explosive device, setting a fire capable of spreading, and burning or destroying a meeting house. They also were charged with several state fire code misdemeanors.

Both men are looking at as much as 45 years in prison. Fire marshals gave them no warning before pressing criminal charges. They have been breathing fire at Jimmy’s for over a decade without previous incident. Both men were surprised; given that Jimmy’s openly advertises its fire-breathing tradition, fire marshals have had plenty of chances to tell them to stop.

Owner Jimmy Cirrito is sticking up for his employees. He told the Examiner:

“But I don’t think we’ve done anything wrong,” he said. “There’s a lot of fire in restaurants. I’ve been served flaming desserts, I’ve roasted marshmallows on tables, I’ve seen 75 candles and sparklers on cakes, and I’ve seen bartenders perform the tricks coast-to-coast and no one’s been arrested.”

(Via Tim Carney)

← Previous Entries