Category Archives: News

How public sector unions cause tax rates to increase

Let’s take a look at the UK economy after over a decade of rule by the socialist Labor party.

Here’s an article from the UK Telegraph about the pensions of unionized public sector workers.

Excerpt:

It is estimated that, on average, private sector workers would need to put 37pc of their salary into their pension to match the retirement income paid to a public sector worker on a similar wage, if you believe a report by accountants PricewaterhouseCoopers.

Even public sector workers on modest final salary schemes might be surprised to learn how much they would need to save if they were in the private sector.

To get the average civil service pension of £5,928 a year you would need a pension pot of £189,151. The average NHS pension of £6,931 is equivalent to a pension pot of £221,155 and the average teachers’ pension of £9,358 is equivalent to a pot of £298,596, according to Hargreaves Lansdown, the financial adviser.

[…]The figures showed that average total pay, including bonuses, in the private sector in February was £451 a week. Excluding bonuses it was £418 a week. In the public sector the corresponding figures were £462 a week and £459 a week. Public sector pay, on average, is also rising at twice the rate of private sector wages.

Government workers have pensions and salaries that are higher than in the private sector, and those costs have to be paid by private sector workers who actually generate revenue and pay taxes. Public sector employees don’t actually have to do any work for the most part, (excluding things like military, etc.). People only work when they have customers to please, who can choose them or choose a competitor. Government has no competitors, and so they really don’t need to work hard to please a customer.

Another UK Telegraph article explains who pays for public sector union pensions.

Excerpt:

By 2015, almost £10 billion of public money will be spent every year supporting the retirement of millions of public sector employees – up from £4 billion this year, the independent body said.

[…]In 2010-11, the amount spent by the taxpayer on public sector pensions will be £4 billion, rising to £5.5 billion the following year, the report said.

The cost will then rise, on average, by 20 per cent each year until the commitment reaches £9.4 billion in 2014-15. This equates to almost £400 for each of Britain’s 26 million households. The sharp increase, according to the Treasury, is a result of Britain’s ageing population.

[…]There are more than two million public sector workers receiving pensions from “unfunded” schemes.

The schemes are heavily supported by the taxpayer, with employees generally contributing less than their counterparts in the private sector.

And another UK Telegraph article explains how taxes on the productive private sector will have to rise to pay for the pensions.

Here’s one of several proposed tax increases:

We already know that [the capital gains tax] is due to increase, said Grant Thornton, although we don’t know what new rate or rates will be. “We do know that it will be more in line with income tax, so it could go up to 40pc, but the option of taxing up to the highest rate of 50pc has not been ruled out,” the firm said, adding that the measure was “likely to go down like a lead balloon” with investors with share portfolios and anyone with a second home.

Any raise to the capital gains tax is a direct assault on capital investment, and will damage the economy more than raising consumption taxes. The worst thing that you can do in a recession is to punish investors and private businesses. You end up losing jobs, which decreases your tax revenue even more.

And they are going to raise consumption taxes:

The Chancellor may face an “irresistible temptation” to increase the rate of VAT to 20pc now that he has had the opportunity to review the country’s books, said Grant Thornton. The standard rate of 17.5pc is relatively low relative to other EU countries and many economists predict a rise to 20pc, which would cost someone on average earnings about £150 a year.

That one will hit the poor as well as the rich.

And one last UK Telegraph article to explain how the recession has hurt men most.

Excerpt:

Malcolm Hurlston, chairman of the [Consumer Credit Counselling Service], said: “Men have been hard hit by the recession and are emerging as the new underclass. Debt alone is no longer the problem. It is loss of income and other rising costs.

“This deterioration in the economic circumstances for men, still the main breadwinner in most homes, has serious implications for many households.”

The charity said it had seen the number of men contacting it for help soar from 146,00 in 2007 to 221,000 last year, a 51pc jump.

It added that the number of women seeking help had increased by only half this amount over the period, although women were still more likely to contact it than men, accounting for 52pc of its caseload.

Men who contacted the charity during 2009 owed an average of £26,957, down from nearly £30,000 in 2008, but still significantly higher than the £21,915 that women typically owed.

The main reason men gave for getting into debt was a fall in their income, with this cited by 26pc, while 23pc said they had become unemployed or been made redundant. A further 20pc of men blamed their situation on overcommitting themselves on credit.

When one group of people vote themselves higher benefits without any additional productivity, some other group is going to be taxed to pay for it. And higher taxes lower incomes and produce unemployment. The UK is replacing working men with big government dependency.

Ireland considers bill to criminalize dissent from same-sex civil unions

From Life Site News.

Excerpt:

While Irish legislators prepare to pass civil partnership legislation, the country’s Catholic bishops conference has issued a last minute call for a halt to the plans. Failing that, they said, parliament must allow for “greater recognition of the proper autonomy of Churches and the right to social and civil freedom in religious matters.”

“This includes the right of individuals to the free exercise of conscience,” they said.

The planned legislation includes a provision to force civil marriage registrars to comply with requests from homosexual partners. Under the bill, a civil registrar who conscientiously refuses to carry out such a ceremony will face criminal prosecution, a possible fine and up to 6 months in prison. Similar penalties will be meted out for anyone refusing for reasons of conscience to rent meeting facilities for homosexual partnership ceremonies.

[…]In Britain and other jurisdictions where “gay marriage” or homosexual civil partnerships have been created, legal conflicts have immediately emerged over the rights of religious objectors. The UK has seen a flurry of cases in which Christians in many public roles have been silenced or sacked for refusing to accommodate the homosexualist ideologies.

Comments will be strictly monitored in accordance with Obama laws restricting free speech on controversial topics.

Obama’s traditional allies are beginning to notice his incompetence

First, in the UK. (H/T Scrubone)

Excerpt:

What a difference 18 months and an oil spill makes. In January 2009 Barack Obama was hugely popular on this side of the Atlantic, and could have walked on water in the eyes of the British media, the political elites, and the general public. In June 2010 however he probably qualifies as the most despised US president since Nixon among the British people. In fact you can’t open a London paper at this time without reading yet another fiery broadside against a leader who famously boasted of restoring “America’s standing” in the world.

When even Obama’s most ardent political supporters in Britain, including Boris Johnson, are on the offensive against the White House, you know the president’s halo has dramatically slipped. It’s hard to believe that any politician could become more disliked in the UK than Gordon Brown, but Barack Obama is achieving that in spades. And as Janet Daley noted of the British press, the love affair with Barack is well and truly over.

As I wrote previouslywe are witnessing one of the worst exercises in public diplomacy by a US government in recent memory, one that could cause significant long-term damage to the incredibly important economic and political partnership between Great Britain and the United States. And for those who say this is minor storm in a tea cup, I would point out that it is highly unusual for a British Prime Minister to have to stand up to an onslaught against British interests by an American president, as David Cameron has just done. In fact the prospect of a major confrontation between Downing Street and the White House grows stronger by the day.

But this is not the whole picture. President Obama’s handling of BP is part of a far bigger problem. This is an administration that has consistently insulted Britain, and has even sided with her foes in some cases, most notably in its wholehearted support for Argentina’s call for negotiations over the sovereignty of the Falklands, a position that has been strongly backed by Venezuelan tyrant Hugo Chavez. Time and time again, the Obama team has undercut America’s key allies, from London to Prague to Jerusalem, while kowtowing to the enemies of the United States in the name of engagement. It is a disastrous foreign policy that not only weakens American global power, but generates resentment and anger in nations that have traditionally stood shoulder to shoulder with America.

And even on CNN, the network that put Obama into office.

Excerpt:

CAFFERTY: Wolf, it turns out that recovery is in the eye of the beholder. President Obama and Vice President Biden have kicked off a massive P.R. campaign, celebrating what they’re calling ‘recovery summer.’ They say the $860 billion economic stimulus bill is working. The White House says two and a half million jobs have been created, and that the number should reach three and a half million by the end of this year. They’re highlighting new jobs at thousands of infrastructure projects across the country.

But the celebration may be premature. Just yesterday,  the Labor Department reported new claims for jobless benefits jumped by 12,000 last week- much sharper increase than was expected, and it shows that the pace of layoffs has not slowed appreciably. Plus, we still have a national unemployment hovering just below 10 percent. An editorial in the Washington Times, called ‘Obama’s Endless Summer of Spending,’ suggests the administration’s ‘make-work’ jobs program has failed, and that those infrastructure jobs, which are being funded by the taxpayers, will disappear when the stimulus money runs out- soon. Fact is the current recovery has been one of the worst for job creation ever.

Meanwhile, the picture in many of the 50 states is terrible and getting worse. State and local governments are cutting wherever they can, in order to meet their budgets, reducing or eliminating public services, underfunding state pension plans, and cutting 230,000 state and local government jobs in just the last couple of years.

Former Fed Chairman Alan Greenspan is out with a dire warning that the U.S. may soon reach its borrowing limit if we don’t make some drastic changes and reduce our $13 trillion national debt. But President Obama wants billions more for stimulus spending. Somewhere, there appears to be a rather serious disconnect.

I blogged before about how underwhelmed MSNBC was with his lame oil spill speech. His presidential approval numbers are around -20.