Written By: Ben Boychuk
Published In: School Reform News
Publication date: 07/12/2010
Publisher: The Heartland Institute
Tech billionaire-philanthropist Bill Gates met with a mostly warm reception from the nation’s second-largest teachers union on Saturday. His message to the American Federation of Teachers: Do not fear change, but embrace it.
“You are driving the changes that will accelerate student gains,” Gates told the audience of about 3,400 union delegates assembled at the Washington State Convention Center in Seattle. “No other union is doing what you are to make this happen.”
“If reforms aren’t shaped by teachers’ knowledge and experience, they’re not going to succeed,” he said.
Teacher Training Funded
As president of the Bill & Melinda Gates Foundation, Gates has donated more than $4 billion over the past eight years to educational causes controversial with teachers unions, such as promoting charter schools and mayoral control of school districts.
More recently, however, Gates has put his philanthropic heft behind efforts such as the Measures of Effective Teaching project and Intensive Partnerships for Effective Teaching. Those initiatives were mostly all Gates wanted to discuss on Saturday.
“If we analyze the teachers whose students are making big gains, if we identify what they do, and if we find out how to transfer those skills to others—then every teacher can move closer to the top,” Gates explained. “It will elevate the whole profession.”
“We have to make sure that teachers get the evaluations, training, standards, curriculum, assessments, and the student data they need to improve their practice,” he said.
‘The Most Dangerous Man in America’
Gates received a standing ovation as he took the stage and his speech was interrupted with applause at several points. AFT President Randi Weingarten introduced Gates and praised him for “recognizing the need to help teachers and invest in teachers.”
Although Gates generally stayed clear of touchy topics, delegates sounded agitated at his discussion of tenure reform.
“You owe it to your profession and your students to make sure that tenure reflects more than the number of years spent in the classroom,” he said. “It should reflect the quality of the work in the classroom. And that means student achievement should be a factor in decisions about tenure.”
Despite what Education Week reporter Steven Sawchuk described as a “very carefully balanced” speech, some union members continue to regard the Microsoft founder with suspicion. A small group of delegates reportedly staged a walk out during the speech. And members of AFT’s “Peace and Justice Caucus” on Friday circulated fliers denouncing Gates’ speech and calling the billionaire “A Trojan Horse in the AFT House.”
Leonie Haimson, executive director of Class Size Matters and a blogger for the left-leaning Huffington Post, called Gates “the most dangerous man in America” in a post appearing a few hours before his speech.
“Watch out, America!” Haimson wrote. “You have nothing to lose but your public school system, at the hands of the richest man in the country who, like a spoiled child carelessly playing with toys, breaks one after another.”
The American Federation of Teachers is the second-largest teachers union in the United States, with 1.5 million members. The theme of this year’s AFT conference was “Building Futures Together.”
Ben Boychuk (bboychuk@heartland.org) is managing editor of School Reform News.
Sunday, July 11, 2010
Friday, June 4, 2010
Final Draft of Common Core State Standards Unveiled
Written By: Ben Boychuk
Published In: School Reform News
Publication date: 06/02/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
The final draft of proposed national school curriculum standards was released to the public on Wednesday. Officials, including several state governors and school superintendents, unveiled the completed Common Core State Standard Initiative frameworks during a press event at Peachtree Ridge High School in Suwanee, Georgia.
Forty-eight states in 2009 signed on to the project of crafting a uniform set of national standards for reading and mathematics, led by the National Governors Association Center for Best Practices (NGA) and Council of Chief State School Officers (CCSSO).
“The Common Core State Standards provide a consistent, clear understanding of what students are expected to learn, so teachers and parents have a roadmap for what they need to do to help them,” said West Virginia State Schools Superintendent Steve Paine, one of the speakers at Wednesday’s event. “These standards provide appropriate benchmarks for all students, regardless of where they live, and allow states to more effectively help all students to succeed.”
Gene Wilhoit, executive director of the CCSSO, explained the rationale for the standards during a webchat hosted by Education Week. “This is a call from multiple parties: parents are confused by differences across states, policymakers want greater clarify, teachers are concerned about current standards—and states overall called us to action,” Wilhoit said.
The location of Wednesday’s event—some 600 miles from Washington, DC — was deliberate, organizers said. They said they wanted to underscore how the standards project is not a creature of the federal education establishment.
Draft Drew 10,000 Comments
A first draft of the standards was released in March and drew more than 10,000 comments at the Common Core Standards Initiative’s website (http://www.corestandards.org/).
Although participation in the standards initiative is supposed to be voluntary, the Obama administration in March announced plans to make $14 billion in federal Title I grants to low-income schools contingent upon adopting the standards. Kentucky, Hawaii, Maryland and West Virginia already announced they would adopt the standards, based on the first draft.
States Resist Federal Push
Officials in Texas and Alaska, however, say they will not participate in the program. And Virginia Gov. Bob McDonnell (R) said Tuesday his state would not participate in the latest round of Race to the Top due to reservations about strings that may be attached to the common core standards.
“The way they have structured this [Race to the Top] program to mandate that we adopt a common core of standards to replace the Standards of Learning is unacceptable,” McDonnell told the Washington Post. “Our standards are much superior. They're well accepted. They're validated. All the education leaders have a comfort level with those.”
Chester E. Finn, Jr., president of the Thomas B. Fordham Institute and a former U.S. Department of Education official, praised the standards at National Review Online. “The documents total a couple inches of paper, and I don’t claim to have mastered them,” Finn wrote. “But I’ve seen enough to restate with fair confidence an earlier (and better informed) Fordham Institute judgment, namely that millions of American schoolkids would be better served if their states, districts, and schools set out in a serious way to impart these skills and content to their pupils rather than the nebulous and flaccid curricular goals they’re using now.”
Early Draft ‘Pedagogically Useless’
Sandra Stotsky, a member of the Massachusetts Board of Education and former state education department official, criticized the draft standards in a March memo to her colleagues on the state board. Stotsky, who helped craft the Bay State’s decade-old mathematics curriculum framework, concluded the common core standards’ first draft was “pedagogically useless.”
“I have consistently supported the goal of national standards for the English language arts but only if these standards are at least as good as, if not better than, those in Massachusetts,” Stotsky wrote.
States have until August to decide whether to adopt the Common Core Curriculum Standards.
Published In: School Reform News
Publication date: 06/02/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
The final draft of proposed national school curriculum standards was released to the public on Wednesday. Officials, including several state governors and school superintendents, unveiled the completed Common Core State Standard Initiative frameworks during a press event at Peachtree Ridge High School in Suwanee, Georgia.
Forty-eight states in 2009 signed on to the project of crafting a uniform set of national standards for reading and mathematics, led by the National Governors Association Center for Best Practices (NGA) and Council of Chief State School Officers (CCSSO).
“The Common Core State Standards provide a consistent, clear understanding of what students are expected to learn, so teachers and parents have a roadmap for what they need to do to help them,” said West Virginia State Schools Superintendent Steve Paine, one of the speakers at Wednesday’s event. “These standards provide appropriate benchmarks for all students, regardless of where they live, and allow states to more effectively help all students to succeed.”
Gene Wilhoit, executive director of the CCSSO, explained the rationale for the standards during a webchat hosted by Education Week. “This is a call from multiple parties: parents are confused by differences across states, policymakers want greater clarify, teachers are concerned about current standards—and states overall called us to action,” Wilhoit said.
The location of Wednesday’s event—some 600 miles from Washington, DC — was deliberate, organizers said. They said they wanted to underscore how the standards project is not a creature of the federal education establishment.
Draft Drew 10,000 Comments
A first draft of the standards was released in March and drew more than 10,000 comments at the Common Core Standards Initiative’s website (http://www.corestandards.org/).
Although participation in the standards initiative is supposed to be voluntary, the Obama administration in March announced plans to make $14 billion in federal Title I grants to low-income schools contingent upon adopting the standards. Kentucky, Hawaii, Maryland and West Virginia already announced they would adopt the standards, based on the first draft.
States Resist Federal Push
Officials in Texas and Alaska, however, say they will not participate in the program. And Virginia Gov. Bob McDonnell (R) said Tuesday his state would not participate in the latest round of Race to the Top due to reservations about strings that may be attached to the common core standards.
“The way they have structured this [Race to the Top] program to mandate that we adopt a common core of standards to replace the Standards of Learning is unacceptable,” McDonnell told the Washington Post. “Our standards are much superior. They're well accepted. They're validated. All the education leaders have a comfort level with those.”
Chester E. Finn, Jr., president of the Thomas B. Fordham Institute and a former U.S. Department of Education official, praised the standards at National Review Online. “The documents total a couple inches of paper, and I don’t claim to have mastered them,” Finn wrote. “But I’ve seen enough to restate with fair confidence an earlier (and better informed) Fordham Institute judgment, namely that millions of American schoolkids would be better served if their states, districts, and schools set out in a serious way to impart these skills and content to their pupils rather than the nebulous and flaccid curricular goals they’re using now.”
Early Draft ‘Pedagogically Useless’
Sandra Stotsky, a member of the Massachusetts Board of Education and former state education department official, criticized the draft standards in a March memo to her colleagues on the state board. Stotsky, who helped craft the Bay State’s decade-old mathematics curriculum framework, concluded the common core standards’ first draft was “pedagogically useless.”
“I have consistently supported the goal of national standards for the English language arts but only if these standards are at least as good as, if not better than, those in Massachusetts,” Stotsky wrote.
States have until August to decide whether to adopt the Common Core Curriculum Standards.
Monday, May 31, 2010
Time to Reform Teacher Tenure in California
Written By: Ben Boychuk
Publisher: MediaNews Group
Italic comments by: James SCholz for Congress
--------------------------------------------------------------------------------
“Last-hired, first-fired” is bad for schools, it’s bad for teachers, and it does a disservice to kids.
Peer evaluations should be used to eliminate the teachers that do not perform along with teachers history in the classroom and other pertinent factors that represent a good or bad teacher. Tenure makes for lazy teachers and should not be used for raises - more towards firing the old garbage!
The American Civil Liberties Union has come out against the union-mandated practice of protecting teachers with seniority from necessary layoffs. The ACLU argued in a class-action lawsuit against the Los Angeles Unified School District in February that “last-hired, first-fired” disproportionately harms younger teachers at predominantly low-income and minority schools.
They’re right. A Los Angeles Superior Court judge on May 12 ruled the district may not lay off teachers at three of the city’s lowest-performing middle schools based on years of experience.
Los Angeles Unified isn’t the only district facing severe cuts and few options. A bill winding through the state legislature would offer a statewide remedy—and naturally the teacher unions and their allies in Sacramento are doing everything they can to stop it.
SB 955, sponsored by Sen. Bob Huff (R-Diamond Bar), narrowly passed the Senate Education Committee late last month after a contentious and highly partisan debate that pitted reformers against defenders of the status quo.
The California Teachers Association and the California Federation of Teachers hate the bill. They say SB 955 “scapegoats teachers during bad economic times” and won’t save any money.
Actually, the bill would merely permit schools to make their own staffing decisions by evaluating teacher effectiveness, instead of the current rules that force them to fire teachers who have less experience. The bill would help ensure students get the very best teachers, not just those who have been teaching the longest.
Lawmakers in Colorado just passed a similar bill, which would create a new evaluation system for teachers and principals that will not rely simply or exclusively on student scores on standardized state tests.
But rather than let SB 955 move forward, California Senate President Pro Tem Darrell Steinberg (D-Sacramento) sent the bill to the rules committee for a “cooling-off period” so “stakeholders” could weigh in further. Those defenders of the status quo will always demand the same things: more money and more job protection. Notwithstanding the budget cuts of the past two years, school spending has increased for decades without noticeable improvement in educational outcomes. Test scores are as lackluster as ever.
Echoing union talking points, Steinberg ridiculously claims the bill “abrogates due process and teacher seniority rights”—a “right” to stay in a job regardless of performance? Where is that in the Bill of Rights? Steinberg also claims the bill would encourage cash-strapped districts to dismiss teachers based on salary.
The first claim is plainly false. Huff’s bill cannot strip teachers of their due process rights; what it does is limit the scope and duration of union appeals. Many school districts are loathe to remove even the most incompetent or negligent teachers because the process is so elaborate and the expense so great.
Steinberg’s second claim is also weak. Veteran teachers are expensive but not always better. Today teacher effectiveness is not allowed to play any role in determining which teachers are retained. As a result, several “Teachers of the Year” around the state had to be let go this year. Any rule that forces a district to lay off its best teachers is foolish and ought to be changed.
SB 955 would move California toward a more rational layoff policy and set the foundation for a performance-based evaluation system. With several more difficult budget years likely, principals and superintendents need concrete performance criteria for deciding who gets a pink slip and who remains in the classroom.
Teachers should be paid for performance. A merit pay system that rewards the best while encouraging the worst to find another line of work is a necessary reform. The current system is about preserving union jobs, not giving kids the best possible education.
Publisher: MediaNews Group
Italic comments by: James SCholz for Congress
--------------------------------------------------------------------------------
“Last-hired, first-fired” is bad for schools, it’s bad for teachers, and it does a disservice to kids.
Peer evaluations should be used to eliminate the teachers that do not perform along with teachers history in the classroom and other pertinent factors that represent a good or bad teacher. Tenure makes for lazy teachers and should not be used for raises - more towards firing the old garbage!
The American Civil Liberties Union has come out against the union-mandated practice of protecting teachers with seniority from necessary layoffs. The ACLU argued in a class-action lawsuit against the Los Angeles Unified School District in February that “last-hired, first-fired” disproportionately harms younger teachers at predominantly low-income and minority schools.
They’re right. A Los Angeles Superior Court judge on May 12 ruled the district may not lay off teachers at three of the city’s lowest-performing middle schools based on years of experience.
Los Angeles Unified isn’t the only district facing severe cuts and few options. A bill winding through the state legislature would offer a statewide remedy—and naturally the teacher unions and their allies in Sacramento are doing everything they can to stop it.
SB 955, sponsored by Sen. Bob Huff (R-Diamond Bar), narrowly passed the Senate Education Committee late last month after a contentious and highly partisan debate that pitted reformers against defenders of the status quo.
The California Teachers Association and the California Federation of Teachers hate the bill. They say SB 955 “scapegoats teachers during bad economic times” and won’t save any money.
Actually, the bill would merely permit schools to make their own staffing decisions by evaluating teacher effectiveness, instead of the current rules that force them to fire teachers who have less experience. The bill would help ensure students get the very best teachers, not just those who have been teaching the longest.
Lawmakers in Colorado just passed a similar bill, which would create a new evaluation system for teachers and principals that will not rely simply or exclusively on student scores on standardized state tests.
But rather than let SB 955 move forward, California Senate President Pro Tem Darrell Steinberg (D-Sacramento) sent the bill to the rules committee for a “cooling-off period” so “stakeholders” could weigh in further. Those defenders of the status quo will always demand the same things: more money and more job protection. Notwithstanding the budget cuts of the past two years, school spending has increased for decades without noticeable improvement in educational outcomes. Test scores are as lackluster as ever.
Echoing union talking points, Steinberg ridiculously claims the bill “abrogates due process and teacher seniority rights”—a “right” to stay in a job regardless of performance? Where is that in the Bill of Rights? Steinberg also claims the bill would encourage cash-strapped districts to dismiss teachers based on salary.
The first claim is plainly false. Huff’s bill cannot strip teachers of their due process rights; what it does is limit the scope and duration of union appeals. Many school districts are loathe to remove even the most incompetent or negligent teachers because the process is so elaborate and the expense so great.
Steinberg’s second claim is also weak. Veteran teachers are expensive but not always better. Today teacher effectiveness is not allowed to play any role in determining which teachers are retained. As a result, several “Teachers of the Year” around the state had to be let go this year. Any rule that forces a district to lay off its best teachers is foolish and ought to be changed.
SB 955 would move California toward a more rational layoff policy and set the foundation for a performance-based evaluation system. With several more difficult budget years likely, principals and superintendents need concrete performance criteria for deciding who gets a pink slip and who remains in the classroom.
Teachers should be paid for performance. A merit pay system that rewards the best while encouraging the worst to find another line of work is a necessary reform. The current system is about preserving union jobs, not giving kids the best possible education.
Monday, May 24, 2010
California Lawsuit Demands New School Finance System
Plaintiffs Want Court to Declare Current Funding Mechanism Unconstitutional
Written By: Ben Boychuk
Published In: School Reform News
Publication date: 05/20/2010
Publisher: The Heartland Institute
A coalition of establishment education groups and school districts on Thursday filed a lawsuit in a California court, alleging the Golden State’s Byzantine school finance system is unconstitutional. The plaintiffs, led by the California School Boards Association, say the state must restore billions of dollars in cuts and seek a new process to ensure schools are equitably funded.
“This lawsuit is not about adequacy but about getting the courts to declare the current school finance system unconstitutional,” California School Boards Association Executive Director Scott Plotkin said in a statement. “There is no rational connection between the system we have and the support that it’s given.”
Precedent in Kansas City
--------------------------
Court-ordered school finance plans have a poor track record. A federal judge in 1985 ordered Kansas City to raise property taxes to pay for citywide school improvements in a landmark desegregation case. Although Kansas City school officials spent more than $2 billion between 1985 and 2003, students made few gains in academic performance.
In March, Kansas City Superintendent John Covington announced plans to close as many as half of city schools due to declining enrollment.
The California School Board Association’s complaint argues that public schools must have primary claim to tax funding under the state constitution, but does not specify how much money the state would need to appropriate to insure school funding equity. The lawsuit does not ask for mandatory tax increases
Republican Candidate James Scholz
Missouri schools have repeatedly dropped their standards to comply with federal requirements as the "No child left behind" and many other federal programs. Missouri 4th District has been ignored and the school system is one of the worse in the State of Missouri. It is time to get the federal government out of the education system and bring it back to the people, give the teachers the responsibility and authority to make decisions as they are taught - fail a student if they don't meet the requirements - they'll get over it, it will not make them into serial killers, or some other strange animal - did it hurt you?
Written By: Ben Boychuk
Published In: School Reform News
Publication date: 05/20/2010
Publisher: The Heartland Institute
A coalition of establishment education groups and school districts on Thursday filed a lawsuit in a California court, alleging the Golden State’s Byzantine school finance system is unconstitutional. The plaintiffs, led by the California School Boards Association, say the state must restore billions of dollars in cuts and seek a new process to ensure schools are equitably funded.
“This lawsuit is not about adequacy but about getting the courts to declare the current school finance system unconstitutional,” California School Boards Association Executive Director Scott Plotkin said in a statement. “There is no rational connection between the system we have and the support that it’s given.”
Precedent in Kansas City
--------------------------
Court-ordered school finance plans have a poor track record. A federal judge in 1985 ordered Kansas City to raise property taxes to pay for citywide school improvements in a landmark desegregation case. Although Kansas City school officials spent more than $2 billion between 1985 and 2003, students made few gains in academic performance.
In March, Kansas City Superintendent John Covington announced plans to close as many as half of city schools due to declining enrollment.
The California School Board Association’s complaint argues that public schools must have primary claim to tax funding under the state constitution, but does not specify how much money the state would need to appropriate to insure school funding equity. The lawsuit does not ask for mandatory tax increases
Republican Candidate James Scholz
Missouri schools have repeatedly dropped their standards to comply with federal requirements as the "No child left behind" and many other federal programs. Missouri 4th District has been ignored and the school system is one of the worse in the State of Missouri. It is time to get the federal government out of the education system and bring it back to the people, give the teachers the responsibility and authority to make decisions as they are taught - fail a student if they don't meet the requirements - they'll get over it, it will not make them into serial killers, or some other strange animal - did it hurt you?
Monday, May 17, 2010
IKE SKELTON ENDORSES REPUBLICAN JAMES SCHOLZ
In a recent statement, Ike Skelton stated that he feels that Republican Candidate James A. Scholz is the best suited to represent the people of the 4th Congressional District. Skelton cited, James Scholz’ background in the military, his business experience as a government contractor, and his passion for the people will provide a sound platform that represents the foundation of the 4th Congressional District and Missouri. Ike, a lifetime resident of Lebanon is genuine in his support for Republican candidate, James Scholz. Remember to go to www.vote4th.com and donate whatever you can to help keep the campaign rolling along.
Friday, May 7, 2010
Congress Levies Huge Healthcare Tax on Unearned Income
Written By: John W. Skorburg
Published In: Finance, Insurance & Real Estate News > June 2010
Publication date: 04/06/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
Less than a week after the party-line passage of healthcare overhaul legislation, the U.S. Congress agreed on tens of billions of dollars of new taxes on “the rich” to help pay for it. President Obama signed it into law on March 30.
"Today, we mark an important milestone on the way to health insurance reform,” said the president at the signing.
For the first time, the federal government will impose a special tax on the unearned income of high-earner married couples (above $250,000) and high-earner singles (above $200,000). The centerpiece is a 3.8 percent Medicare surtax on capital gains and other investment income.
Federal officials project this additional revenue source to bring in more than $200 billion in the first seven years.
$30 Billion a Year
The congressional Joint Committee on Taxation estimates the new Medicare tax on investments will generate more than $30 billion annually, or $210.2 billion from 2013 through 2019. Investment income includes such sources as rental income, dividends, interest, and income from trusts, annuities, and capital gains.
“The thresholds cited in the study are not indexed for inflation in the bill. Therefore, assuming no other changes were made to the provision, more and more taxpayers will be hit by this provision as we move later into the decade,” said Tax Foundation President Scott Hodge.
‘Economy Killer’
“The capital gains rate is already set to rise from 15 to 20 percent in 2011,” noted Americans for Tax Reform Tax Policy Director Ryan Ellis, referring to the expiration of tax cuts enacted during the George W. Bush administration. “This new surtax would result in a capital gains rate of 23.8 percent in 2014. A close-to-24 percent capital gains tax rate is an economy killer in the United States.”
“These proposals are a radical change from U.S. tax policy without much debate at a time when we should shift the fundamental core of policy in a more pro-saving and investment direction,” said Mark Bloomfield, president of the American Council for Capital Formation (ACCF). "We already have a shortage of saving and investment in the United States."
A 2008 report by Ernst & Young LLP compares individual long-term capital gains taxes among 25 major international trading partners of the United States. The U.S. capital gains tax rate already compared ‘unfavorably’ to those of most other major economies before the upcoming scheduled rate hikes, said ACCF Communications Director Mike Burita,
“More than half of the countries surveyed have individual capital gains tax rates lower than that of the United States,” Burita said. These new taxes may move our country into an even more unfavorable position.”
ACCF states a low capital gains tax rate has an “important role to play” in fostering economic growth, and lowering taxes on capital gains has been a “crucial element in promoting the entrepreneurial drive” on which the U.S. economy thrives.
The Tax Foundation’s Hodge notes a single taxpayer would pay an additional $0.90 in Medicare taxes for every $100 earned in excess of $200,000—on top of the current Medicare tax total of $5,802.90 annually, including the employer share, the person would pay on $200,000 of earnings.
A married couple with $5 million in investment income would see a Medicare tax increase of $180,500 annually. Currently, such income is not subject to a Medicare tax.
Determined Democrats
The Senate approved the changes by a margin of 56 to 43 in a mostly party-line vote. The U.S. House of Representatives concurred by a vote of 227 to 207.
Not one Republican voted ‘aye’ on this final phase, and 35 Democrats disagreed with their own leaders—including three in the Senate. Democrat Senators Blanche Lincoln and Mark Pryor of Arkansas and Ben Nelson of Nebraska joined 40 Senate Republicans in opposition.
Congressional Republicans had worked vigorously to stop the tax hike.
"The important thing now is to replace those who voted for the healthcare bill [including reconciliation] and to repeal it when we get some new members here," Senator Jim DeMint (R-SC) told Fox News Channel's Sean Hannity after the final vote.
A simple majority was needed for passage because the House and Senate majority leaders used the budget reconciliation rules to preclude any Republican filibuster, which would have taken 60 votes in the Senate to overcome.
John W. Skorburg (JSkorburg@heartland.org) is associate editor of Budget & Tax News and a lecturer in economics and finance at the University of Illinois at Chicago.
Internet Info
“Examples of Taxpayers Facing Medicare Tax Increase under Health Care Bill,” Tax Foundation Fiscal Fact No. 219: http://www.taxfoundation.org/publications/show/26041.html
Published In: Finance, Insurance & Real Estate News > June 2010
Publication date: 04/06/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
Less than a week after the party-line passage of healthcare overhaul legislation, the U.S. Congress agreed on tens of billions of dollars of new taxes on “the rich” to help pay for it. President Obama signed it into law on March 30.
"Today, we mark an important milestone on the way to health insurance reform,” said the president at the signing.
For the first time, the federal government will impose a special tax on the unearned income of high-earner married couples (above $250,000) and high-earner singles (above $200,000). The centerpiece is a 3.8 percent Medicare surtax on capital gains and other investment income.
Federal officials project this additional revenue source to bring in more than $200 billion in the first seven years.
$30 Billion a Year
The congressional Joint Committee on Taxation estimates the new Medicare tax on investments will generate more than $30 billion annually, or $210.2 billion from 2013 through 2019. Investment income includes such sources as rental income, dividends, interest, and income from trusts, annuities, and capital gains.
“The thresholds cited in the study are not indexed for inflation in the bill. Therefore, assuming no other changes were made to the provision, more and more taxpayers will be hit by this provision as we move later into the decade,” said Tax Foundation President Scott Hodge.
‘Economy Killer’
“The capital gains rate is already set to rise from 15 to 20 percent in 2011,” noted Americans for Tax Reform Tax Policy Director Ryan Ellis, referring to the expiration of tax cuts enacted during the George W. Bush administration. “This new surtax would result in a capital gains rate of 23.8 percent in 2014. A close-to-24 percent capital gains tax rate is an economy killer in the United States.”
“These proposals are a radical change from U.S. tax policy without much debate at a time when we should shift the fundamental core of policy in a more pro-saving and investment direction,” said Mark Bloomfield, president of the American Council for Capital Formation (ACCF). "We already have a shortage of saving and investment in the United States."
A 2008 report by Ernst & Young LLP compares individual long-term capital gains taxes among 25 major international trading partners of the United States. The U.S. capital gains tax rate already compared ‘unfavorably’ to those of most other major economies before the upcoming scheduled rate hikes, said ACCF Communications Director Mike Burita,
“More than half of the countries surveyed have individual capital gains tax rates lower than that of the United States,” Burita said. These new taxes may move our country into an even more unfavorable position.”
ACCF states a low capital gains tax rate has an “important role to play” in fostering economic growth, and lowering taxes on capital gains has been a “crucial element in promoting the entrepreneurial drive” on which the U.S. economy thrives.
The Tax Foundation’s Hodge notes a single taxpayer would pay an additional $0.90 in Medicare taxes for every $100 earned in excess of $200,000—on top of the current Medicare tax total of $5,802.90 annually, including the employer share, the person would pay on $200,000 of earnings.
A married couple with $5 million in investment income would see a Medicare tax increase of $180,500 annually. Currently, such income is not subject to a Medicare tax.
Determined Democrats
The Senate approved the changes by a margin of 56 to 43 in a mostly party-line vote. The U.S. House of Representatives concurred by a vote of 227 to 207.
Not one Republican voted ‘aye’ on this final phase, and 35 Democrats disagreed with their own leaders—including three in the Senate. Democrat Senators Blanche Lincoln and Mark Pryor of Arkansas and Ben Nelson of Nebraska joined 40 Senate Republicans in opposition.
Congressional Republicans had worked vigorously to stop the tax hike.
"The important thing now is to replace those who voted for the healthcare bill [including reconciliation] and to repeal it when we get some new members here," Senator Jim DeMint (R-SC) told Fox News Channel's Sean Hannity after the final vote.
A simple majority was needed for passage because the House and Senate majority leaders used the budget reconciliation rules to preclude any Republican filibuster, which would have taken 60 votes in the Senate to overcome.
John W. Skorburg (JSkorburg@heartland.org) is associate editor of Budget & Tax News and a lecturer in economics and finance at the University of Illinois at Chicago.
Internet Info
“Examples of Taxpayers Facing Medicare Tax Increase under Health Care Bill,” Tax Foundation Fiscal Fact No. 219: http://www.taxfoundation.org/publications/show/26041.html
Thursday, May 6, 2010
Illinois House Votes Down Voucher Bill
Written By: Ben Boychuk
Published In: School Reform News
Publication date: 05/05/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
The Illinois House of Representatives has defeated a bill to establish a pilot voucher program for students in Chicago’s worst public schools.
The House on Wednesday afternoon voted 66-48 against SB 2494. The bill needed 60 votes to pass.
Legislators had debated a series of amendments to the bill on Tuesday and Wednesday, with several Republicans switching from “yes” to “no” and Democrats switching from “no” to “yes.”
A number of Democrats urged their colleagues to support the bill.
“I’m pleading with you, I’m begging you,” said Rep. Ken Dunkin (D-Chicago) during Wednesday’s emotional floor debate. “Help me help kids in my district.”
Sponsored by Sen. James Meeks, a Southside Chicago Democrat and pastor of the largest Baptist congregation in the city, SB 2494 would have provided vouchers of up to $4,000 to as many as 30,000 elementary school students in the bottom 10 percent of Chicago’s public schools. The students could have used the vouchers to transfer to a private or parochial school of their choice. The state Senate passed the bill last month.
State teachers unions strongly opposed the bill. Gov. Pat Quinn (D) had previously said he opposes school choice.
Ben Boychuk (bboychuk@dslextreme.com) is managing editor of School Reform News.
Published In: School Reform News
Publication date: 05/05/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
The Illinois House of Representatives has defeated a bill to establish a pilot voucher program for students in Chicago’s worst public schools.
The House on Wednesday afternoon voted 66-48 against SB 2494. The bill needed 60 votes to pass.
Legislators had debated a series of amendments to the bill on Tuesday and Wednesday, with several Republicans switching from “yes” to “no” and Democrats switching from “no” to “yes.”
A number of Democrats urged their colleagues to support the bill.
“I’m pleading with you, I’m begging you,” said Rep. Ken Dunkin (D-Chicago) during Wednesday’s emotional floor debate. “Help me help kids in my district.”
Sponsored by Sen. James Meeks, a Southside Chicago Democrat and pastor of the largest Baptist congregation in the city, SB 2494 would have provided vouchers of up to $4,000 to as many as 30,000 elementary school students in the bottom 10 percent of Chicago’s public schools. The students could have used the vouchers to transfer to a private or parochial school of their choice. The state Senate passed the bill last month.
State teachers unions strongly opposed the bill. Gov. Pat Quinn (D) had previously said he opposes school choice.
Ben Boychuk (bboychuk@dslextreme.com) is managing editor of School Reform News.
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