Posts filed under 'People'
October 28th, 2008
From the Wall Street Journal:
Imagine this: Barack Obama proposes a Social Security payroll tax cut for low earners. Workers earning up to $8,000 per year would receive back the full 6.2% employee share of the 12.4% total payroll tax, up to $500 per year. Workers earning over $8,000 would receive $500 each, with this credit phasing out for individuals earning between $75,000 and $85,000.This tax cut would make an already progressive Social Security program even more redistributive. Under current law, a very low earner receives an inflation-adjusted return on his Social Security taxes of around 4%. That’s a good return, given that government bonds are projected to return less than 3% above inflation. A high-earning worker, on the other hand, receives only around a 1.5% rate of return. Under Sen. Obama’s proposal, returns for very low earners would rise to around 6% above inflation — about the same return as on stocks, except with none of the risk. Compounded over a lifetime’s contributions, the difference in the “deal” offered to workers of different earnings levels would be extreme.
While Social Security has always been progressive, many would say this plan goes too far and risks turning Social Security into a “welfare program.” Low earners receive more in benefits than they pay in taxes — meaning their “net tax” is already negative — and Mr. Obama’s plan would increase net subsidies from the program.
Moreover, this payroll tax cut plan would reduce Social Security’s tax revenues by around $710 billion over the next 10 years. If made permanent, the Obama tax cut would increase Social Security’s long-term deficit by almost 60% and push the program into insolvency in 2034, versus 2041 under current projections.
To fill the hole in Social Security’s finances, Mr. Obama would increase income taxes on high earners and pour that money into Social Security. This would be the first time that income tax revenues have been used to finance Social Security, which has always relied on its own dedicated payroll tax to differentiate itself from other government programs. Filling the gap with higher taxes on high earners would further increase Social Security’s progressivity, pushing it closer toward a welfare-program approach.
Now, you haven’t heard Mr. Obama describe anything like this plan. If you had, it’s likely you wouldn’t support it. But it’s almost exactly what his headline “tax cut” would do. The Obama campaign took the idea described above and made it much more complicated.
Under the plan, which he claims would cut taxes for 95% of Americans, provides an income tax credit worth 6.2% of earnings up to $8,000, for a maximum credit of $500 per worker or $1,000 per couple. The 6.2% figure is important, because it matches the employee share of the Social Security payroll tax. Because around a third of Americans currently pay no income taxes — a fraction that would rise to almost half under Mr. Obama’s plan, according to the Tax Policy Center — Mr. Obama’s tax credits would be refundable, meaning you could collect the credit even if you paid no income taxes.
While Mr. Obama calls his plan “Making Work Pay,” under standard economic assumptions his plan would actually discourage work for anyone earning over $8,000 per year. The tax credit itself would increase workers’ take-home pay, an “income effect” that reduces incentives to work. Moreover, for workers in the $75,000 to $85,000 income range, where the tax credit is phased out at five cents for each dollar of additional income, this would add five percentage points to their marginal tax rate.
So Mr. Obama has in essence proposed cutting Social Security taxes for low earners, which would shift the system toward a “welfare” approach and sharply increase its long-term deficit. To fill the funding gap, he will raise taxes on high earners and funnel the money into Social Security, making the system even more progressive and breaking a long tradition against funding Social Security with income taxes.
The complex way in which Mr. Obama structures and describes his plan would make it harder to administer than a straight payroll tax cut. But it is also more difficult for the typical American to understand. This may explain why he chose complexity over clarity.
Mr. Biggs is a resident scholar at the American Enterprise Institute in Washington, D.C. He blogs on Social Security policy at www.andrewgbiggs.blogspot.com.
October 28th, 2008
I got to thinking; when demand for products or services reduces, it is usual to see that business have reductions in workforce, i.e. layoffs. So with the election next week and no matter who wins, what are all these talkers, writers, comedians and gabbers going to do? What will they talk or write about? Their services will no longer be needed.
So will there be workforce reductions?
Maybe they could start making something and create new jobs!
October 28th, 2008
I went on a weekend trip using I-90 and O’Hare this past weekend and did my informal “recession watch” as I’ve done before. Mid-morning and mid-afternoon car travel. I again was amazed at the car and especially truck traffic in both directions on both days. Surely, if we really had a recession, wouldn’t the traffic be noticeably reduced?
The United terminal at O’Hare airport also seemed busy as in the past. I’ve done my share of driving in the past up and back to O’Hare, so I think I have a little experience in this observations.
So if we are in a recession, shouldn’t these indicators tell some of the story?
Or are my rose colored glasses in need of replacement?
October 23rd, 2008
I got to thinking about the numerous quality problems of products made in China, you know, baby’s milk, lead in toys, etc. and some of the manufacturing that I’ve heard returning from there and from Europe. With a growing unemployment of people especially from Wall Street, the banks, and yes even from the auto sector, maybe a rebirth can be accomplished.
I mean, what if these people were to get together, pool their monies, and start new manufacturing companies here in the Rockford Region and bring back some of the production back home? Wouldn’t that be great?
We have all the resources locally to help them. Far fetched?
October 23rd, 2008
Despite the doom and gloom of some sectors of the economy, there are some sectors that still remain buoyant. One of them in the manufacturing sector is on the lookout for new employees!
Yes, Ingersoll Machine Tools is hiring machinists, CNC machinists and programmers, maintenance and field service and assemblers. They are also looking for apprentices. Look here for more details.
Ingersoll
October 21st, 2008
In today’s world of fears of recession, job losses, financial crisis and all the rest, it sometimes pays for us to look backwards to see what, if any, advice we could learn from our ancient past. I’ve done some studying as a hobby and so I thought I’d add a few tips/sayings that I’ve learned. Here are a few:
Be the best ever and better than the rest: Hippolochus son, Glaucus told to Diomedes in Homer’s Illiad; chapter 6. Seems like a good way to view your business and the service to customers.
You will not achieve happiness if you don’t work hard and it’s a shame not to want to work hard: Euripides, 480 BC–406 BC one the three great tragedians of classical Athens. Good advice for each of us.
Cleverness proves better than inflexibility (describing an octopus crawling over a large boulder): Theognis, 6th century BC., ancient Greek poet; Be flexible in adapting to changes in customer requirements.
Well, for now, let’s see how these work and I’ll look for more!
October 20th, 2008
Goodwill Abilities Center and TECHWORKS Training Center are proud to announce that we will be graduating a class of 10 students from our Fast-Track CNC Machine Operator training program this Thursday, October 23, 2008 at 4 pm. TECHWORKS is located at 185 15th Avenue in Rockford.Â
This is a great class of hard working and motivated individuals who will be looking for work in the manufacturing industry upon graduation. The students have been instructed and passed all exams in shop math, safety procedures, reading precision measuring devices including calipers and micrometers, blueprint reading, and manual mill and lathe operations as well as CNC machine operations.Â
 We are very proud of these students and know that they will make excellent employees in our community.Â
The graduation is open to manufacturers and potential employers and you will have a chance after the graduation to meet the students and review their resumes to see if you can find your next great employee. If you are interested in reviewing the students’ information and you can not attend the graduation, please feel free to contact me and I can send you resumes or transcripts and discuss the students with you.Â
 We thank you and hope you will be able to attend!
 Courtney Geiger
Workforce Development Manager
Goodwill Abilities Center/TECHWORKS Training Facility
815.987.6226
Â
October 16th, 2008
My earlier blog “Tax the Rich, Maggie Changed this 25 Years Ago” brought to mind another experience while working in England; that of health care.
We had a choice of taking the Government controlled health care insurance or paying a little extra for Private Health Insurance. After listening to several people, including neighbors, we decided to pay the few extra dollars to get the private health insurance. Why?
The biggest advantage was that the private health system drew the best doctors; the government system drew the less qualified doctors plus the waiting times to get appointments were much longer. Poorer service and less qualified doctors lost to the better doctors and less waiting time to get appointments.
We were also told that because of the government system, these doctors received lower pay and many of the good ones left the country to pursure better paying careers and avoid being controlled by the government.
Is this what one of the candidates wants for us?
I think my experience would tell me which I would prefer.
October 16th, 2008
The Workforce Connection had their official opening yesterday with a ribbon cutting ceremony at 5:00 p.m. Although they have been in their new facility since July, this event capped a major move to the Supply Core building on North Main St. in downtown Rockford.
To say the least, the facilities on the 3 floors are very impressive and gives this organization a classy look. Compared to their past location in the shopping mall on south 11th Street, this indeed is a major improvement. Parking was easy in the next door building and easy access to the facilities entrance on the 3rd floor.
The Workforce Connection accomplishes a great deal in providing for training our workforce: Job Fairs (this past January, they hosted 75 exhibitors and over 800 people), Incumbent Worker Training (15 different manufacturers and $58,377 provided), provided classes and graduates from TechWorks to work for Rockford Products, and many more accomplishments just in this past year.
Take a look at their web site for further information. www.theworkforceconnection.orgThis organization is a valuable asset to our community and their new location will allow it to improve their services even further.
October 13th, 2008
As the title suggests, this isn’t anything to do with manufacturing, but more of a personal observation. Over a long weekend, my wife and I attended a family gathering to “celebrate” the passing of one of our senior members. It was held in Plymouth, MA and we flew in and out of the Providence, RI airport, very close to where we lived before we came “back home” almost 20 years ago.
While arriving at the T. F. Green Providence airport, I was stunned at what I saw. It is a new, larger airport, hosting a number of airlines (we flew United). When I asked a police officer at the Starbucks what happened, he said “they built a new one, in 1996, and the old one was torn down later. The it was improved to add in all the security features”. I flew out of the old one many times in the late 1980’s before I relocated to the Rockford Region in 1990. Was I impressed? You bet!!
As we drove from the Providence airport towards Plymouth, I observed numerous businesses that I didn’t remember from 20 years ago. Well, maybe my mind was forgetting? It seemed like there were many more than I remembered.
How about the roads? We took I-95, I195, I495 mainly, and what a smooth sailing (pun, RI is the Ocean State). Compared to the roads of northern Illinois, it is what like driving on air!. Oh, yes, no tolls. Also, we had a GPS device that talked to us as we made our way from the airport to Plymouth (yeah, the one with the Rock).
We also observed the politeness of passengers on both flights towards each other. Easterners tend to be (at least in the past) pretty gruff. But on this trip, we were pleasantly surprised. Good ‘ole fashioned being courteous.
When boarding our flight home and walking down the aisle of the airplane, I noticed so many people reading/talking to their Blackberries, telephones, etc. I mentioned to one guy, “whatever happened to the days of smoke signals”. He chuckled and said “I wish I could get rid of this thing”. Obviously, a corporate type!
I’ve kept up since leaving RI with flying, driving and all the tech stuff, but this kinda make me look at a 20 year window to see how far we’ve come and the changes some of us have made.
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