Tag Archives: Union

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.

Mitch Daniels thinks that government should cut spending

Story about frugal Indiana governor Mitch Daniels at the Weekly Standard.

Excerpt:

Daniels is a font of statistics, but one comes to his lips more than any other. “Only 61 cents of every education dollar gets into the classroom in Indiana.” School funding increased every year under Daniels before the recession, and since the downturn, when most areas of state government have seen cuts of 25 percent or more, education has been reduced by only 2 percent. Yet the local school boards and their Democratic allies in the state legislature continue to complain. Daniels calls education funding “the bloody shirt” of Indiana politics: “It doesn’t take long before somebody starts waving it.” One of my favorite bits of Daniels video on YouTube shows him at a press conference defending a bill to end “social promotion” in the state’s grade schools. School districts were appalled that the bill would pass without “additional resources” to educate the kids who would be held back.

A reporter asked him about it.

“By the time a child has finished third grade, the state has spent $40,000 and the school district has had 720 days to teach that child to read,” he said, tight-lipped. “If that child can’t read by then, there is a fundamental failure in that district. And they’ll need to remedy it. The most unacceptable thing to do is to shove that child along to fourth grade into almost certain academic failure. That’s a cruel thing to do, it’s a wrong thing to do, and we’re going to put an end to it.”

The reporter pressed: But won’t the schools need more money?

Daniels’s eyes got wide.

“More than $40,000 to teach someone how to read? No. It won’t and it shouldn’t and any school district that can’t do it ought to face consequences.”

And this is actually normal behavior for him:

When Daniels took office, in 2004, the state faced a $200 million deficit and hadn’t balanced its budget in seven years. Four years later, all outstanding debts had been paid off; after four balanced budgets, the state was running a surplus of $1.3 billion, which has cushioned the blows from a steady decline in revenues caused by the recession. “That’s what saved us when the recession hit,” one official said. “If we didn’t have the cash reserves and the debts paid off, we would have been toast.” The state today is spending roughly the same amount that it was when Daniels took office, largely because he resisted the budget increases other states were indulging in the past decade.

No other state in the Midwest—all of them, like Indiana, dependent on a declining manufacturing sector—can match this record. Venture capital investment in Indiana had lagged at $39 million annually in the first years of this decade. By 2009 it was averaging $94 million. Even now the state has continued to add jobs—7 percent of new U.S. employment has been in Indiana this year, a state with 2 percent of the country’s population. For the first time in 40 years more people are moving into the state than leaving it. Indiana earned its first triple-A bond rating from Standard and Poor’s in 2008; the other two major bond rating agencies concurred in April 2010, making it one of only nine states with this distinction, and one of only two in the Midwest.

Yes, let’s elect people like Mitch Daniels who like to cut costs instead of increasing spending – people with a record for caring about balancing the budget.

UPDATE: Or not! ECM pointed me out this “truce” comment that he made. It turns out that he is soft on social issues and probably a little soft on foreign policy issues as well! Thanks, ECM.

Anti-Israel union thug assaults Blazing Cat Fur ON CAMERA

Story at Blazing Cat Fur, because he’s the cameraman. (H/T The Other McCain via ECM)

Blazing Cat Fur writes:

Ali Mallah a notorious Canadian Union of Public Employees (CUPE) Union Thug Assaults intrepid blogger Blazingcatfur! Mallah, who is also a Vice President of the virulently anti-semitic Canadian Arab Federation, is well known for his anti-Israel derangement and is shown in the video as he attempts to prevent Blazing from filming an anti-Netanyahu protest sponsored by the Leftist Islamofascist alliance in Toronto. The thugs were there to protest Netanyahu’s appearance at the annual Walk with Israel event. More on the protest here.

CUPE is a hard-left anti-Israel union. Every government worker in Canada has to be a member and pay dues to this group of socialist thugs. Blech! They oppose good policies like free trade, traditional marriage and reform of the single-payer health care system.

Remember this is a government union thug attacking a private citizen – it’s worse than the SEIU stuff I posted before. Public sector people don’t actually work for a living (military excluded), so really they just lobby government for pay raises and beat up people who get in their way. Another reason to push for smaller government – we don’t need to have people paid to do nothing except hold protest signs.

Public sector unions should be abolished. Heck, all unions should be abolished.

Gates of Vienna points out that there is a useful comment thread going on at Michael Coren’s blog. Apparently the police didn’t do anything to the Muslim union guy, but instead warned BLAZING CAT FUR to “keep things peaceful”.