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April 2, 2012

1)  NEA Doubles Down on Warren Buffett's Secretary. As irksome as it may be to have a tax-exempt entity with $1.5 billion in annual income argue passionately in favor of people paying their fair share of taxes, the National Education Association is perfectly within its rights to do so. Just as we are perfectly within our rights to point out when it makes up crap to support its arguments.

For those of you who had forgotten the 15 minutes of fame enjoyed by Warren Buffett's secretary, Debbie Bosanek, my apologies for reminding you. For those who need a refresher, it's pretty simple and summed up by ABC News: "Bosanek pays a tax rate of 35.8 percent of income, while Buffett pays a rate at 17.4 percent."

It took a few media cycles to ascertain that Buffett made about $46 million, mostly from capital gains, while Bosanek earned about $60,000. And it took a few more media cycles for every financial pundit in America to attempt to figure out how Bosanek's tax rate could be so high, based on such a relatively low income.

So let's avoid a rehash of effective rates vs. marginal rates, Social Security and payroll taxes, etc., and just accept the intended spin of "Rich people are gaming the system at the expense of poor people," even if the vehicle used didn't have all of its wheels.

Enter the NEA, which in support of the legislation inspired by Buffett's secretary, the Paying a Fair Share Act, decided to go one step beyond with this argument:



They pay more in taxes than billionaire investor Warren Buffet! Our nationís tax laws are out of whack. It is not fair that a bus driver, a custodian, and Warren Buffetís own secretary pay more in taxes than our nationís richest individuals.

Let's begin with the obvious. Neither bus drivers, nor custodians, nor Warren Buffett's secretary pay more in taxes than our nation's richest individuals. In absolute terms, Buffett paid more in taxes in one year than his secretary will earn in 130 years.

The larger problem with this argument is that education support professionals (ESPs) and Warren Buffett's secretary don't have much in common. Bosanek makes $60,000 a year - in Nebraska. The average full-time ESP salary nationwide, according to NEA itself, is $30,480. Even if we assume that entire amount to be taxable, the marginal federal income tax rate is 15%, and the effective tax rate would be 13.6%. But there are exemptions, deductions and tax credits. The Tax Policy Center reports that 69.5% of all households with an income below $50,000 pay no federal income tax whatsoever.

If "fair share" means those with more pay more, NEA should apply the principle to its teacher members, who currently pay the same standard dues rate regardless of income, geography, or economic condition. Why should a starting teacher in North Dakota have to pay 0.7% of her salary in NEA national dues, when a top-of-the-scale teacher in New Jersey only pays 0.2%?

2)  Last Week's Intercepts. EIA's blog, Intercepts, covered these topics from March 27-April 2:

*  Palm Beach Joins South Florida Teacher Union Turmoil. The members are always the last to know.

Palm Beach Union Has Labor Troubles, Too. With the UAW, no less.

*  Whatís Wrong With Jeff Reardon? He must be pretty bad, if Mike Schaufler is preferable.

Charter Unions Not Very Uniony. Laissez-faire affiliates.

*  Some School Reforms Placed on Waivers. Waiver leads to waver.

3)  Quote of the Week #1. "What we are really saying is that the teachers unions have almost veto power over anything that happens in education in Connecticut." - Joseph Cirasuolo, executive director of the Connecticut Association of School Superintendents, after state lawmakers held closed-door negotiations with the teachers' unions about Gov. Malloy's education reform. All others were excluded. (March 29 Hartford Courant)

Quote of the Week #2. "I have three children. When one of them does something wrong, I don't beat all three. I don't punish all of them. I punish the one that did something wrong." - Chad Major of the Professional Firefighters Association of Louisiana, testifying against a bill that would open collective bargaining sessions to the public. (March 28 New Orleans Times-Picayune)


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