A Question For The High Tax Left: What Is 39.5% Of Nothing?

Tax rates effect behavior. Tax rates that are too high result in people taking action to reduce their exposure to them. Examples abound, but the most recent is boxer Manny Pacquiao. He is refusing to fight his next match in the U.S. because he will have to fork over 39.5% of his purse to our government. His solution, hold the fight in China, where, despite a smaller purse, he will come home with $5 million more in his pocket. Tax Prof has the whole story.

When will the left learn that taxation is dynamic, not static. Raising taxes 10% does not mean 10% more revenue except in CBO projections. In fact, it may mean less revenue than before the increase was imposed. Or does the left realize this yet keep up their calls for ever higher taxes anyway because class warfare is their primary tactic?

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California's (& France's) Soak The Rich Scheme Not Quite Working Out As Planned (Updated)

At the urging of unions and the left, Californians recently passed Prop 30, raising state taxes on high earners to the highest in the nation. The left assured voters that the danger of high earners and businesses abandoning California in light of Prop 30 was ridiculous scaremongering. Gov. Brown even commissioned sage academic studies from sociologists at Stanford University to prove it.

This from Breitbart:

California State Controller John Chiang has announced that total state revenue for the month of November 2012 fell $806.8 million, or 10.8%, below budget.

Democrats thought they could hammer “the rich” by convincing voters to pass Proposition 30 to create the highest state income tax in the nation. But it now appears that high income earners have already “voted with their feet” by moving themselves and their businesses out of state, resulting in over $1 billion shortfall in corporate and income taxes last month and the beginning of a new financial crisis.

Who would have guessed that economics trumps sociology. Perhaps Gov Brown should have gotten a Stanford economist of some note to advise the state.

But hey, its not all bad for economy of deep blue California:

As panic spreads that goosing taxes on the rich may have created enough “tax flight” that the California will actually collect less taxes, there was welcome news that a business had committed to opening in the State. Executives of the 99 Cents Only Stores Inc. proclaimed they would be opening a new location in Beverly Hills on formerly posh Rodeo Drive.

Somewhere (probably in Texas), John Galt is laughing uncontrollably.

Here is my one red line. Any attempt to use our tax dollars to bail out failed blue states should be the clarion call for a second civil war. No more of this. The left needs to live with the consequences of their decisions or they will happily bleed us dry. California is one of several states that needs to go into bankruptcy, with all of their union contracts broken, their ridiculous public sector pensions slashed, and their environmental laws removed from the books.

I am going to make a new label for posts of this ilk - "I told you so." I imagine it will get very long between now and 2016.

Update: France is experiencing the same issues as California, as rich frogs hop over the border to Belgium in order to avoid the new, draconian 75% wealth tax recently imposed by France's socialist government. Gerard Depardieu is the latest to go Gault, leading the socialist mayor of Paris to express sorrow at Depardieu's lack of "generosity." So it is now "generosity" when a person is forced to pay taxes at the point of a government gun. The left are insane.

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Warren's Dishonest Class Warrior Speech At The DNC

Elizabeth Warren addressed the DNC tonight. It was horrendous.

She begins by noting that, "for many years now our middle class has been chipped, squeezed and hammered." That was her only honest remark of the night. Under the Obama economy, median incomes have dropped by over 10%, the number of people in the workforce is at record low numbers, long-term unemployment is at record high numbers, and of those 4.5 million jobs Obama is claiming to have created, 57% of them are low-wage jobs.

Warren goes on to enumerate some of the hardluck stories that she has seen. She mentions the construction worker out of work for nine months – but fails to note that the steep falloff in construction was because of the massive housing bubble created by progressives just like her. Warren mentions the head of a manufacturing company trying to "protect jobs but worried about costs" – but fails to note that the new costs are largely associated with Obamacare. Warren mentions a student "drowning in debt" – but fails to mention that the higher education bubble was created by the structure of government loans for higher education, nor does she mention that it was Joe Biden who ensured that student loans cannot be discharged in bankruptcy as a payoff to the banking industry.

But perhaps Ms. Warren's most outrageous statements were a primal scream that some people in America are getting wealthy. Indeed, she seemed downright angry that the government is allowing any of these evil people or corporations to keep some of their wealth. To Ms. Warren, all of this means “that the system is rigged." It is clear Ms. Warren does not see any connection between wealth creation and job creation. That is idiocy unbound. Additionally, her claim that the system is rigged implies that those who are creating wealth are doing so nefariously.

I do agree with Ms. Warren, at least in part, that the system is rigged. I think it very unfair that she was able to gain the position of employment based not solely on her accomplishments, but by falsely claiming to be part Cherokee Indian. Likewise, I feel it very unfair that Democratic cronies are receiving sweetheart government deals, such as with Solyandra or GE. In addition, I feel it very unfair that we still live in a nation where, as a condition of working in one's chosen profession, one could be forced to pay union dues. And I feel it very unfair that the people who caused our economic melt-down are not being prosecuted by the current administration. It is very clear, however, that Ms. Warrens definition of “rigged” differs substantially from mine.

According to Ms. Warren, the system is rigged because, one, “oil companies guzzle down billions in subsidies." That, of course, is a flat-out lie. Oil companies receive no subsidies. They have available to them the same tax breaks that do all businesses.

Two, Ms. Warren claims the system is rigged because "billionaires pay lower tax rates than their secretaries." That too is a lie. To the extent that there is a disparity, it is because we treat capital gains – i.e., money risked on investment – at 15%. Billionaires simply make a larger portion of their income from capital gains. We already have plenty of data showing that increasing the tax rate on capital gains lowers GDP and tax receipts – so in terms of making any economic sense, Ms. Warren's argument is groundless. Good lord, even uber-socialist Sweden, the darling of many our own lefties, recently dropped its capital gains tax rate - to 0%. At least the radical left there has some economic sense. At any rate, Warren's point is the most cynical of appeals to populism.

Three, Ms. Warren claims the system is rigged because “Wall Street CEOs – the same ones who wrecked our economy and destroyed millions of jobs – still strut around Congress, no shame, demanding favors and acting like we should thank them.” This is the big lie of Democrats.

The but for cause of our economic meltdown was Democratic social engineering of the housing market, and ultimately our credit standards, through the CRA, Fanny and Freddy. Not that I am defending Wall Street. I think that there are a whole host of people who should be put in jail over the economic meltdown. However, to do so, would be for Democrats to shine a spotlight on their role in the economic melt down. Thus, there has not been a single prosecution., to my knowledge, against the people who rated subprime mortgages as AAA investments. And indeed, a few weeks ago, the Justice Department announced that it would not prosecute Goldman Sachs for fraud in its marketing of securities backed by subprime mortgages.

This seems par for the course for this administration – a protector of the same Wall St. they regularly denounce. And do remember that former Sen. John Corzine, Democrat, presided over the theft of $1.2 billion in customer assets at MF global, yet is still walking free, still raising money for the president, and likely to escape justice under this Democratic administration. It is all a travesty made into a farce as the Democrats attempt to paint themselves as the champions of middle America against Wall Street.

There were many other low lights – such as Warren's using Romney's factually accurate remark that corporations are “people” to launch an utterly ridiculous primer in how individuals and corporations differ. Romney was referring to how the law treats corporations – and how they have done so since 1819. Warren, a law professor, saw his true statement as a chance to launch another scurrilous attack. And there was her glowing mention of Ted Kennedy. In truth, I was waiting for her to announce to the crowd that her great great grandmother had married a Kennedy, making her 1/32nd entitled to the Kennedy Ancestral Senate Seat.

I could go on and on about every line of this woman's vile screed. The bottom line, Elizabeth Warren is about as intellectually dishonest person as you'll find. Here's yet another Democrat in the mold of Nancy Pelosi and Debbie Wasserman Schultz. It is impossible to find common ground and to hold rational discussion with such people. God help us if she is actually voted into the Senate.

Udpate: Heh. Rush is on the Warren speech today. To paraphrase, Warren presented the strongest case yet for not reelecting Obama, she just doesn't realize it.

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Obama Is Clueless On Economic Funadamentals

The left is still railing about the right "lying" about Obama's remarks in Roanoke:



The left argues that Obama was not talking about businesses in the quote above, but about roads and bridges. It doesn't matter. Even straining credulity to concede the point for the rest of this post, it shows that Obama fundamentally misunderstands the economy.

In Obama's mind, the government is the key to prosperity, and American's owe it obeisance. Under either interpretation, it is crystal clear that Obama sees government as that which allows the growth of private enterprise and wealth. That is precisely backwards.

Every penny of wealth in our nation comes from private enterprise. The government creates, of itself, nothing - it is a parasite, albeit a necessary one, on the private sector. The dollar is worth more than the paper it is printed on solely because of the goods and services produced by the private sector, period. Moreover, before government can build a road or push out a defense contract, it must first collect tax - and those taxes are wholly taken from wealth that first arises in the private sector.

This is not a 'what came first' question, 'the chicken or the egg?' For example, go to England and you will find countless very narrow roads. None of them were originally "built" by government. They were, for millennia, roads cut by individuals on horse and cart taking goods and services to and from market. As this developed, the famed medieval markets were co-opted by the king - so that he could tax the private enterprise that went on there.

Government is wholly dependent on the private economy for tax dollar one. It is not, as Obama and the left seem to think, a goose that will always lay golden eggs solely for the benefit of government. It turns reality on its head. The key to government revenues is through growing private sector wealth, not raiding it and demanding yet more. For Obama to make the remarks he did in the video above show beyond doubt that he doesn't grasp this most fundamental of concepts, irrespective of what he meant.

And if there is any doubt about his inability to grasp basic economic concepts, later Obama made the following comment in an interview in July, claiming that Romney's business experience has nothing to do with job creation, adding that “[a]s the head of a private equity firm his job was to maximize profits and help wealthy investors."

How does Obama think jobs are created - by government without the private sector footing the bill? Does he think a single job in the private sector is not tied to the creation or protection of wealth? This is not the Soviet economy, where the old joke was, "I pretend to work, the government pretends to pay me." That economy failed for precisely that reason. Jobs don't come first, the creation of wealth does. No one in the private sector creates a job simply for the sake of doing so. Make work jobs are solely the province of governement.

At any rate, the left is daily screaming the mantra that the right is "LYING" about Obama's remarks in Norfolk. It doesn't matter, as any way you slice it, Obama is an economic special needs child who needs to be removed far from the reins of government if we are to have any chance to recover.

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What Is Romney's Vision & What Does It Mean For Our Country?

"I'm not concerned about the very poor. We have a safety net there."

Mitt Romney, CNN Interview, 1 February 2012

As Mark Levin asked on his show the other day, does Romney have a clue about capitalism? I would add, does he have a clue about the failure of the welfare state, the plight of those caught in generational poverty, or for that matter, the role of Democrats in insuring that nothing is done about it?

My gravest concern about Romney's electability is that the left is going to be able to successfully portray him as a combination Dr. Evil / Gordon Gecko / Robber barron in what is going to be a take no prisoners bout of class warfare. And if they do, Obama may well win. After all, if nothing else, Romney's campaign has taught us how saturation negative ads can indeed work to destroy one's opponent, irrespective of fairness or accuracy.

What Romney said in the quote above is beyond tin ear. It not only plays right into the left's class warfare meme, it just shows almost a complete failure to grasp the plight of America. The left will make a huge deal out of this. The right should also, as we are getting very close to making this man our nominee for President.

What a conservative candidate should have said:

President Obama's economy has driven millions of people into poverty and threatens to drive many more there unless we turn things around. History tells us with 100% certainty that the way to do that is through capitalism and wealth creation.

And yet, President Obama answer to all of this is to punish wealth creation out of "fairness." That language is also found in the history books. It is the language of class warfare, of socialism, and of economic ruin. Obama's appeal to "fairness" falsely appeals to our sense of justice. Inevitably, it will cripple our nation and make life that much harder for our declining middle class.

President Obama thinks he can tax and regulate us to prosperity. He thinks that he can do better than capitalism by pouring billions into creating new markets out of whole cloth with huge government mandates. President Obama's idea of capitalism is crony capitalism, where he, not the marketplace, picks the winners and losers. It is great if you are a crony of the President - but it hurts every other person in this country. No nation on earth has ever succeeded with the economic policies this President embraces.

But even beyond that, the welfare and entitlement society are driving our nation into bankruptcy. As to the welfare state, it has utterly failed the many poor in our society who are caught in generational cycles of poverty. It is a tragedy and a travesty that fifty years on from the start of the welfare state, 25% of the black population is still living below the poverty line. But we know how to stop that cycle. Education is the key. To paraphrase Juan Williams, the most important thing we can do for the perennial poor is to allow their children to receive precisely the same level of quality education that President Obama's children receive.

Sasha and Malia are receiving the very finest education available in a private school in Washinton D.C. Yet one of the first acts of President Obama was to end a program that gave the poor children of Washington, D.C. the opportunity to get that same education as his children. Instead, President Obama consigned the DC's poor to the worst public educational system in America. He did that because the Teacher's Unions - the economic foundation of the Democrat Party and the single biggest impediment to improving education in America - complained.

Unfortunately, if you vote for President Obama, if you are poor or, for that matter, for many in the middle class, your children will never get that opportunity that Sasha and Malia Obama have. There is no excuse for any child born of this country to be forced into a substandard education. Unfortunately, that cycle will never end under President Obama and the Democrats, because they value the dollars they get from the Teachers' unions more than they care about the generational poor in this country.

We really are at an absolutely critical point in our nation's history. Progressivism has built up in our machinery of state to levels that have worked fundamental change to our nation and that threaten to drag us down into bankruptcy and societal failure. Wholesale fundamental changes need to occur to clean out the machinery before it becomes irrevocably broken. Our educational system desperately needs to be overhauled. The out of control regulatory bureaucracies need to be systemically altered to restore democratic control. The EPA should never be able to regulate carbon without an affirmative vote of Congress. HHS should never be able to force Christians to fund acts that directly violate their religion's core beleifs without an affirmative vote of Congress. The FCC should never be able to unilaterally exercise control over the internet without an affirmative vote of Congress. The methods by which the left funnels hundreds of millions of taxpayer dollars to left wing organizations needs to end. Unions need to be brought to heel. No person in America should be forced to pay dues to a union simply so that they can get a job in a particular industry. The greens' keys to the courthouse, where decisions are made that should only be made by Congress, needs to end. The left's war on our military needs to end before we become so weakened that other nation's are willing to become adventurous. And then there are the entitlement programs that have us on the knife's edge of ruin.

I look at all of the above and ask myself, will Romney make any of those changes? Does he have a vision for America that addresses any of these fundamental issues? I don't think so. At best, I think that he will tinker around the margins for most of them. Villagers With Torches has a very good post up answering the question similarly. But each primary voter really needs to look at it and answer that question for themselves. Romney would be better for America than Obama, true, but is he, at this critical moment, the best choice that Republicans can make?

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The Legacy of Margaret Thatcher - & Her Take On Class Warfare

The grocer's daughter who grew to be Prime Minister, Margaret Thatcher, aka The Iron Lady, aka Attila The Hen, the lady famously described by French President Mitterand as having "the eyes of Caligula and the mouth of Marilyn Monroe" - is in the news this week as a movie documenting her life, The Iron Lady, hits the theaters. This from the Heritage Foundation via Nice Deb:

As moveigoers head to theaters this weekend, many will want to compare the person they saw on screen to the real woman. As we explained this week, there is no resource better than the Iron Lady’s own words. Our new video attempts to shine a spotlight on her important legacy—one that continues to inspire.

Like President Ronald Reagan, her political soulmate, she came to power at a desperate time in her country’s history, when real leadership and bold ideas were most needed. And by applying conservative principles to the challenges she faced, she was able to achieve real and lasting success. Then, as today, she faced an extraordinary set of challenges and a chorus of voices saying her country’s best days were behind it. Thatcher’s successes are a comforting reminder of the power of a bold, conservative vision at work.

You can find a thoughtful review of the film at Diogenes' Middle Finger.

And now for some bonus footage. As noted above, Thatcher led her nation to an improving economy that saw the incomes of all citizens, from poorest to richest, rise. Yet she was attacked on class warfare grounds during "Question Time" near the end of her term because the income divide between rich and poor had widened.



How's that for hitting the nail on the head.

(H/T Althouse)

As an aside, let me add that I think the British political system is screwed for a number of reasons, but the one thing they do right is Question Time. Every Wednesday when Parliament is in session, the Prime Minister makes an appearance on the floor of Parliament and fields questions from the members of Parliament. It is healthy debate and high drama. It also explains why the average Prime Minister is, in terms of speaking and debating skills, head and shoulders beyond our average President. If there is one British custom we should take from Britain, this would be it.

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Krauthammer On Obama's Class Warfare Strategy

Charles Krauthammer exposes the absurdity of Obama's class warfare strategy for reelection, likening it more to the mantle of Hugo Chavez than of the mantle of Teddy Roosevelt.  This from Dr. Krauthammer:

In the first month of his presidency, Barack Obama averred that if in three years he hadn’t alleviated the nation’s economic pain, he’d be a “one-term proposition.”

When three-quarters of Americans think the country is on the “wrong track” and even Bill Clinton calls the economy “lousy,” how then to run for a second term? Traveling Tuesday to Osawatomie, Kan., site of a famous 1910 Teddy Roosevelt speech, Obama laid out the case.

It seems that he and his policies have nothing to do with the current state of things. Sure, presidents are ordinarily held accountable for economic growth, unemployment, national indebtedness (see Obama, above). But not this time. Responsibility, you see, lies with the rich.

Or, as the philosophers of Zuccotti Park call them, the 1 percent. For Obama, these rich are the ones holding back the 99 percent. The “breathtaking greed of a few” is crushing the middle class. If only the rich paid their “fair share,” the middle class would have a chance. Otherwise, government won’t have enough funds to “invest” in education and innovation, the golden path to the sunny uplands of economic growth and opportunity.

Where to begin? A country spending twice as much per capita on education as it did in 1970 with zero effect on test scores is not underinvesting in education. It’s mis-investing. As for federally directed spending on innovation — like Solyndra? Ethanol? The preposterously subsidized, flammable Chevy Volt?

Our current economic distress is attributable to myriad causes: globalization, expensive high-tech medicine, a huge debt burden, a burst housing bubble largely driven by precisely the egalitarian impulse that Obama is promoting (government aggressively pushing “affordable housing” that turned out to be disastrously unaffordable), an aging population straining the social safety net. Yes, growing inequality is a problem throughout the Western world. But Obama’s pretense that it is the root cause of this sick economy is ridiculous.

As is his solution, that old perennial: selective abolition of the Bush tax cuts. As if all that ails us, all that keeps the economy from humming and the middle class from advancing, is a 4.6-point hike in marginal tax rates for the rich.

This, in a country $15 trillion in debt with out-of-control entitlements systematically starving every other national need. This obsession with a sock-it-to-the-rich tax hike that, at most, would have reduced this year’s deficit from $1.30 trillion to $1.22 trillion is the classic reflex of reactionary liberalism — anything to avoid addressing the underlying structural problems, which would require modernizing the totemic programs of the New Deal and Great Society. . . .

In Kansas, Obama lamented that millions “are now forced to take their children to food banks.” You have to admire the audacity. That’s the kind of damning observation the opposition brings up when you’ve been in office three years. Yet Obama summoned it to make the case for his reelection!

Why? Because, you see, he bears no responsibility for the current economic distress. It’s the rich. And, like Horatius at the bridge, Obama stands with the American masses against the soulless plutocrats.

This is populism so crude that it channels not Teddy Roosevelt so much as Hugo Chavez. But with high unemployment, economic stagnation and unprecedented deficits, what else can Obama say?

He can’t run on stewardship. He can’t run on policy. His signature initiatives — the stimulus, Obamacare and the failed cap-and-trade — will go unmentioned in his campaign ads. Indeed, they will be the stuff of Republican ads.

What’s left? Class resentment. Got a better idea?

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Class Warfare, Math & The Payroll Tax Issue

Our Class Warrior in Chief is pushing the meme that we can have a temporary extension of the payroll tax holiday if only the radical Republicans would agree to cover the cost by enacting a permanent 3.25% tax hike on the ever shrinking number of people in the U.S. earning over $1 million per year.   The problem comes when you actually crunch the numbers.  The cost of the payroll tax holiday is $265 billion.  A static analysis of the proposed tax hike by Brookings shows that it would only add $21.5 billion annually to our nation's coffers.  In other words, this class warfare meme is a complete fraud.  As the good folks at Powerline point out, "[i]t is ironic, to say the least, that from the Democrats’ perspective the nation suffers, more than anything else, from a shortage of rich people."

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Gender & Class Warfare - The Paycheck Fairness Act

Obama, America's greatest class, race and gender warrior, is throwing his support behind a new bill, the Paycheck Fairness Act, ostensibly to fight rampant gender discrimination in wages. The law would significantly expand government interference in our economy. It would result in an explosion of litigation that will impact many businesses and that will undoubtedly threaten the viability of many small businesses. As such, it will inevitably increase unemployment. It will be a gold mine for trial attorneys and it will act as a means to funnel public funds to community organizers and their left wing groups. But it is a wholly unnecessary law. According to a 2009 study commissioned by the Bureau of Labor, the wage gap has nothing to do with gender discrimination.

We stand today in the midst of not merely a recession, but a mancession. Unemployment in this recession is hitting males at vastly greater rates than women. At last report, men accounted for some 80% of the job losses in this recession. As of June, 2010, according to the Bureau of Labor Statistics, the unemployment rate for all men, sixteen years of age in over, was 10.4%. That compared to 8.9% for women. Yet men, and particularly white men, are not a victim class recognized by Obama and the left. Consequently, they receive no assistance. So why is it that women in particular require more assistance now?

Obama is claiming that they do because of a gap in wages caused by gender discrimination. Explaining why America needs to pass the Paycheck Fairness Act, Obama issued a statement on Tuesday:

. . . Women make only 77 cents for every dollar that men earn. The gap is even more significant for working women of color, and it affects women across all education levels. As Vice President Biden and the Middle Class Task Force will discuss today, this is not just a question of fairness for hard-working women. Paycheck discrimination hurts families who lose out on badly needed income. And with so many families depending on women's wages, it hurts the American economy as a whole. In difficult economic times like these, we simply cannot afford this discriminatory burden.

That same justification is also at the center of the bill now in the Senate, where it tells us that:

. . . many women continue to earn significantly lower pay than men for equal work. These pay disparities exist in both the private and governmental sectors. In many instances, the pay disparities can only be due to continued intentional discrimination or the lingering effects of past discrimination.

So there you have it. We still live in a nation where misogynists and evil white males are oppressing women. The problem is, the facts are in complete contradiction.

In 2008, the Department of Labor commissioned CONSAND Research Corp. to do a study to determine why the gender pay disparity exists and what to do about it. The final report, issued in 2009, concluded that the major reasons for the disparity were that:

A greater percentage of women than men tend to work part-time. Part-time work tends to pay less than full-time work.

A greater percentage of women than men tend to leave the labor force for child birth, child care and elder care. Some of the wage gap is explained by the percentage of women who were not in the labor force during previous years, the age of women, and the number of children in the home.

Women, especially working mothers, tend to value “family friendly” workplace policies more than men. Some of the wage gap is explained by industry and occupation, particularly, the percentage of women who work in the industry and occupation.

After discussing additional legitimate reasons for the raw wage disparity, the author concluded:

. . . this study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct.

(emphasis added)

It would seem that Obama and the left are being far less than honest in their push to pass the Paycheck Fairness Act.

Discriminating against women in wages has been unlawful since the Equal Pay Act was passed in 1963 (codified at 29 U.S. § 206(d)). As it currently stands, if a woman complains of unequal pay, the employer may then defend by pointing to any of several defenses, including that the disparity is justified by "any other factor other than sex." Obama would modify that defense by adopting a much stricter standard - that employers must show the difference in pay was based on a “bona fide factor other than sex” that is “job related” and “consistent with business necessity." What precisely those terms mean in any particular context will be argued out ad infinitum during very costly and protracted litigation. Importantly, the bill adds that, even if the employer is able to establish the defense above, the plaintiff could still succeed by convincing a jury that some alternative practice could have been adopted that may have negated any need for the disparity. This will open up the floodgates of litigation.

For but one example, what if a woman is hired for a job at 30k, but a man with several years more experience and training is hired for $33k. Is the business then responsible for paying for additional training for the woman to justify bringing her salary up to $33k. How much of a role should experience play in setting wages? Those would be jury questions under the Paycheck Fairness Act, thus taking reasonable decisions on compensation out of the hands of business and putting them in the hands of trial attorneys, judges and juries.

Additionally, the Paycheck Fairness Act would vastly expand the scope of what plaintiffs could use as evidence in making a case for discrimination. Under the Equal Pay Act, a plaintiff is limited to showing a disparity in pay within the particular business and locale at which they work, or in a locale close by. The Paycheck Fairness Act mandates that the plaintiff may look at least county wide, but then goes on to provide the EEOC will have the final say in expanding the geographic area at issue, thus potentially allowing for comparisons between numerous different locales with very different economies. So should a woman working in Henderson, TN, population 6,325, be able to make out a claim for wage discrimination using as her proof the wages of a male working for the same company in Atlanta? Likewise, can a plaintiff look at similarly sized cities throughout the U.S.? If you are a business owner and the Paycheck Fairness Act is passed, the bottom line is you have to assume the answer to both questions is yes, at least until the EEOC makes a final determination.

But all of this gets far worse. For not only does the Paycheck Fairness Act make it much more likely that an employer may be held liable for what we would consider reasonable business decisions, they would also face far greater potential liability if they lose.

Under the Equal Pay Act of 1963, if a plaintiff won, they could recover two times lost wages plus attorneys fees. Under the Paycheck Fairness Act, the damages are unlimited. An employer may be liable for both compensatory and punitive damages, making law suits under PFA a potentially fatal landmine for businesses of all sizes - but particularly small businesses - and a gold mine for the plaintiff's bar. The costs of litigation and the potential for crippling judgments will likely lead many businesses to settle suits for which they have meritorious defenses. And for all of this, the costs get passed on to the public.

Then there are the massive reporting provisions that businesses will be required to meet. The Paycheck Fairness Act charges the EEOC to "issue regulations to provide for the collection of pay information data from employers as described by the sex, race, and national origin of employees."

Lastly, the Paycheck Fairness Act authorizes the Secretary of Labour to give grants to "private nonprofit organization" or "community-based organizations" in order to fund programs that will:

. . . help girls and women strengthen their negotiation skills to allow the girls and women to obtain higher salaries and rates of compensation that are equal to those paid to similarly-situated male employees.

History tells us that a provision of this ilk is nothing more than a conduit to funnel ever more of our tax dollars to ACORN type organizations.

To sum up, this is a bill meant to solve a problem that does not exist. Obama and the left, in claiming that the gap in wages between men and women is because of discrimination, are lying through their teeth in yet another act determined to balkanize America. The proposed bill would inject the courts into core business decisions. It would result in an explosion of litigation that could cripple businesses at a time when our economy can ill afford any more shocks. And the bill would be yet another means for of our Community Organizer in Chief to funnel money to community organizers and their groups. This is a horrid piece of legislation that would do nothing to eliminate discrimination and everything to harm business and our economy. In other words, it is yet another unjustified major assault on our economy and the fabric of our country by Obama and the left.

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America's Class Warrior

How many times has your paycheck been signed by a poor person?

Anonymous

Obama ran as the great uniter. Instead he has been the ultimate divider, not merely on issues of race, but even moreso on issues of class. While few in the MSM have played up this reality, across the pond, where class warfare became a staple of Labour politics, it now appears a defining feature of Obama's America. This from the Telegraph:

When David Cameron visits the United States this week, he will find a country whose national political argument has become more like our own in Britain than probably he – and certainly I – would ever have imagined. For America has learned, thanks to Barack Obama's crash course in European-style government, about the titanic force of class differences. The president's determination to transform the US into a social democracy, complete with a centrally run healthcare programme and a redistributive tax system, has collided rather magnificently with America's history as a nation of displaced people who were prepared to risk their futures on a bid to be free from the power of the state.

They are talking a lot about this in the US now. Suddenly the phenomenon of class resentment is a live political issue. . . .

There was a warning of what was to come during the election campaign with Joe the Plumber, to whom Mr Obama unwisely confided his intention to "spread the wealth around". Americans who have risen from poverty to become qualified tradesmen or entrepreneurs generally believe that they have a right to put what wealth they produce back into their own businesses, rather than trusting governments to spread it around among those judged to be deserving.

But Joe's warning was not heeded. Most of the constituency whose instincts were the same as his voted for Obama, and have now lived to regret it. This in itself is not especially surprising: it could simply be seen as the self-interested politics of personal survival. What is more startling is the growth in America of precisely the sort of political alignment which we have known for many years in Britain: an electoral alliance of the educated, self-consciously (or self-deceivingly, depending on your point of view) "enlightened" class with the poor and deprived.

America, in other words, has discovered bourgeois guilt. A country without a hereditary nobility has embraced noblesse oblige. Now, there is nothing inherently strange or perverse about people who lead successful, secure lives feeling a sense of responsibility toward those who are disadvantaged. What is peculiar in American terms is that this sentiment is taking on precisely the pseudo-aristocratic tone of disdain for the aspiring, struggling middle class that is such a familiar part of the British scene.

Liberal politics is now – over there as much as here – a form of social snobbery. To express concern about mass immigration, or reservations about the Obama healthcare plan, is unacceptable in bien-pensant circles because this is simply not the way educated people are supposed to think. It follows that those who do think (and talk) this way are small-minded bigots, rednecks, oiks, or whatever your local code word is for "not the right sort".

The petit bourgeois virtues of thrift, ambition and self-reliance – which are essential for anyone attempting to escape from poverty under his own steam – have long been derided in Britain as tokens of a downmarket upbringing. But not long ago in America they were considered, even among the highly educated, to be the quintessential national virtues, because even well-off professionals had probably had parents or grandparents who were once penniless immigrants. Nobody dismissed "ambition" as a form of gaucherie: the opposite of having ambition was being a bum, a good-for-nothing who would waste the opportunities that the new country offered for self-improvement.

But now the British Lefties who – like so many Jane Austen heroines looking down on those "in trade" – used to dismiss Margaret Thatcher as "a grocer's daughter", have their counterparts in the US, where virtually everybody's family started poor. Our "white van man" is their Tea Party activist, and the insult war is getting very vicious. It is becoming commonplace now for liberals in the US to label the Tea Party movement as racist, the most damaging insult of all in respectable American life.

So the Democrats, who once represented the interests of ferociously self-respecting blue-collar America, are now seen – under their highly educated president, who wholeheartedly embraces the orthodoxy of the liberal salon – as having abandoned their traditional following. Which is precisely what Labour did here when it turned its back on what used to be called "the respectable working class" because of its embarrassing resentments and "prejudices" against welfare claimants, immigrants, and anti-social youths. Bizarrely, among people who see themselves as profoundly empathetic, there was an utter failure to understand why the spirit of benevolent understanding and tolerance did not flourish among those whose daily lives were directly affected by a mass influx of foreign workers, or local delinquency, or a welfare system that rewarded inertia.

So who will speak – both here and over there – for the aspiring, the enterprising, the law-abiding, and, perhaps most important of all in these economic times, the productive classes? . . .

What is most depressing about this – apart from the injustice of it – is that the people who have been disenfranchised and disowned are the very ones on whom both countries' economic recovery depends.

I have written before that the UK has become a laboratory for socialism advanced perhaps half a century further along the socialist path than America. It would seem that Obama is trying to catch us up in his first term in office.

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