Just a little pork for breakfast this Friday morning –

Did you know that last year we gave Pakistan $10 million to create a remake of Sesame Street? Or how about the $550,000 we spent to create a documentary about how rock and roll contributed to the collapse of the Soviet Union? Here are some other examples of how taxpayer money was spent last year:

• $936,818 of the American Recovery and Reinvestment Act went to stimulating online soap operas.
• $764,825 went to studying how college students use mobile devices for social networking
• $1.35 million went to entrepreneurship training in Barbados
• $22.04 million was spent on a duplicative occupational training program
• $206,000 went to the government to create its own version of Farmville
• $100,000 was spent towards growing the Massachusetts video game industry
• $500,000 went to analyzing the spread of political info on the web

You want to see more. Check out Senator Tom Coburn’s Wastebook 2011.

“Send me a bill that bans insider trading by Members of Congress, and I will sign it tomorrow”

Did anyone notice an exchange after the State of the Union Address Tuesday night between Obama and Scott Brown and wonder what it was all about – here it is: Stock Act 2011 (read the bill here) This is a bill that would ban insider trading in Congress. Yes insider trading is already illegal, but the bill addresses issues such as lobbying and legislation passing. According to this Huffington Post article members of Congress have historically received abnormally high returns on their investments (though I’ve also read articles claiming the opposite, you can decide for yourselves). The Stock Act was “re-introduced” back in March of 2011 and faces opposition by members of both parties.

Courthouses to nowhere – $835 million for empty courtrooms that cost $51 million a year to maintain

Wasteful spending on courthouses has been studied thoroughly by the Government Accountability Office (GAO) and you’ll be shocked by what they found. Since 2000, 33 federal courthouses have been built, with approximately 3.56 million extra square feet constructed (1) over the federally authorized amount (2) due to overestimating the number of judges and (3) without planning for courtroom sharing. The GAO estimates construction of this extra space cost taxpayers $835 million and today we spend $51 million each year in order to maintain it.  Using the judiciary’s own data the GAO found that if courtroom sharing was considered they could further cut down the number of courtrooms needed by 40%! Due to a lack of congressional oversight and no requirement to report overages of cost or size, this type of waste goes undetected.

What’s worse than a government sanctioned study that shows nearly a billion dollars of waste? The government ignoring it and pushing forward to add more waste, with the  construction of a proposed $400 million Los Angeles federal courthouse, that the state can’t even fill with judges. To date, the planning of this courthouse has cost taxpayers $150 million, without a single shovel hitting the ground. Studies the district have done show that there are judicial vacancies across the board in the other L.A. courthouses, and the list of judges that were supposed to be filling this new courthouse is dwindling. Even the GAO has spoken out specifically about this project and stated that the new courthouse is not needed, and in fact L.A. should be thinking about selling its other courthouses that are experiencing vacancies. Yet just 4 days ago it was announced plans would go forward.

It’s this type of blatant disregard for taxpayer money that everyone should be angry about. There’s no accountability at any level and the waste just continues. This weeks post was hard for me to write, not for lack of wasteful spending, but for the abundance of it that I have to choose from. Even if we were to raise taxes of any kind – is this what you’d want it to be spent on? Would we really be better off? I will keep posting these every Wednesday and you may see your answers start to change.

Click to see the full report

Romney’s tax return reveals something unexpected…

The most unexpected aspect of Romney’s tax return is that it’s actually exactly as he described – so why the hold out? By refusing to release his tax returns earlier than usual he brought upon himself needless scrutiny from his opponents, the media and the public. I was hoping to learn something new about him, but really all it showed was that he made a lot of money last year – as if anyone was questioning that. But like with all things there are critics and supporters and here’s what they are saying:

What critics are saying: Romney criticized Newt last night for his involvement with Freddie, but actually has investments in both Fannie and Freddie. He also has/had offshore investments, including a Swiss bank account.

What are supporters saying: ALL of his investments are held in blind trusts, which means he doesn’t even know what he’s invested in and his administrators are not allowed to discuss it with him. In general, most diversified portfolios will have some sort of foreign investment holdings. The U.S. taxes on worldwide net income, which means any income generated in a foreign country will still be subject to U.S. taxation. He also gave a significant portion of his income to charity.

Revisit our 15% tax rate post about Romney.

During the debate “self-deportation” most tweeted

Illegal immigration has always been a hot topic in this country and no administration has ever truly been able to deal with it. As such, it naturally came up in last nights debate. Although each candidates ideas were similar, Romney’s “self-deportation” approach became the most buzzworthy and most tweeted moment of the night.

Romney’s self-deportation in a nutshell is - don’t let illegal immigrants work and they’ll be forced to either find a legal path to citizenship or they’ll go back to their respective country of origin – i.e. “self-deport”. This approach organically leaves only two choices for illegal immigrants-(1)earn legality or (2)leave the U.S. The goal in this is essentially to have the U.S. save face by avoiding the backlash of forcible deportations and still give immigrants legal options for staying here.

It seems as though all of the Republican candidates see the importance of legal immigration, considering its strong foundation in this country - but the key word for them is legal.

A study done by the Federation for American Immigration Reform (F.A.I.R.) claims that illegal immigrants cost the U.S. $113 billion a year and that the burden has hit the states especially the hardest. In California, the additional cost of immigration each year is $21 billion – a number which is more than its current deficit. Opponents of these studies claim that it doesn’t fairly account for the GDP created by the population and unfairly includes children of illegals, who will eventually become U.S citizens.

Either way both Democrats and Republicans can agree that the system is flawed and in desperate need of reform. There’s an estimated 13 million illegal immigrants in the U.S. today and the number is growing. The DREAM Act, which was mentioned during the debate, is a bi-partisan bill that makes a pathway of legality for illegal immigrants that came here as children – however, it is being held up because many republicans believe that without modifications the bill encourages illegal immigration.

The hard truth is the term “illegal” isn’t just a label it refers to a law being broken and that’s why its clear we need reform. But what type of reform is up for debate. If it were a simple situation we would follow the letter of the law – but we’ve kept the status quo of turning the other cheek for so long that we have generations of families here now and that’s why finding the solution has become so difficult.

What kind of solution would you support?

It took $18 billion, 9 agencies and 47 programs to do this one function…

If you guessed help find unemployed workers jobs through federal programs, then you would be correct!

This post can practically write itself and I’m just going to copy and paste excerpts from an employment and training programs report released by the Government Accountability Office (GAO):

“…little is known about the effectiveness of most programs. In fiscal year 2009, 9 federal agencies spent approximately $18 billion to administer 47 programs….Nearly all programs track multiple outcome measures, but only five programs have had an impact study completed since 2004 to assess whether outcomes resulted from the program and not some other cause”

So just what did the 5 impact studies find, according to the GAO:

“The five impact studies generally found that the effects of participation were not consistent across programs, with only some demonstrating positive impacts that tended to be small, inconclusive, or restricted to short-term impacts.”

To summarize, 9 agencies, spent $18,000,000,000, on 47 programs, which their own studies have shown have little if any positive impact.

I get that the government wants to say its helping the unemployed find jobs and these programs, at least, on the surface, seem well-intended. But how can we justify billions being spent on any program that doesn’t even work. When we decide to spend billions in the first place, shouldn’t effectiveness be a minimum requirement? This is a lose-lose situation for everyone – the unemployed aren’t actually being helped and taxpayer money is being virtually thrown away.

Read the full report here.

Is Romney really paying less in taxes than you?

Romney’s admission to paying 15% in income taxes last year is certainly causing a stir, with headlines such as CNN’s “Romneys Tax Rate Lower than yours” and ABC News’ “Multmillionaires Low Rate” and articles making claims that this multimillionaire is paying less than the average American all over the news.

First off the claim that 15% is less than what the average American pays is very misleading, when in 2009 (the most recent year data is available from the IRS) the average American was taxed at about 11%. Second there is no magical tax code section that allows only rich people to legally evade paying taxes. The special capital gains rate does not only apply to the rich, when you go out and purchase stocks and subsequently sell them, that same special rate will apply to you too.

As far as Romney goes, his tax preparer popped his information into a tax software program and the system generated what he owed according the law – we’re not talking about something that he did illegally. And don’t forget the intention of the lower capital gains rate to begin with, which was to encourage investment – exactly what Romney did.

I really have a hard time understanding the mind set of enacting laws with the intention of creating growth and then villainizing people when they follow them. I especially can’t stand the medias attempt to further the divide between the so called rich and poor by using misleading information. Something you’ll hear a lot from us here is that we all need to work together – whether you like it or not the top 50% of people pay 97.7% of all taxes, with the top 1% paying 36.7%, this is certainly significant.

Check out this site which shows different income tax statistics.

The C Word

These days Corporation has taken over as the new dirty word. It elicits feelings of disgust and visions of corporate greed and overindulgence. But are corporations really so evil? After the banks were bailed out and CEO’s spent millions on lavish parties and bonuses, its hard to argue that they are not. But is it possible that the very corporations we feel so strongly opposed to could actually be good for us?

How could they be good for us? They create jobs. It’s just that simple. When we chase corporations out with our high corporate tax rates and over regulation we lose jobs and revenue. Studies done by the Organisation for Economic Co-operation and Development (OECD) show that corporate taxes are the most harmful to economic growth. Recognizing this many countries have lowered their corporate tax rates. So why is it then that the U.S. remains unchanged and has one of the highest corporate tax rates out of all developed countries? Because Corporation has become a dirty word and the general public has been made to hate them. Albeit not without good reason, but it’s that old saying cutting off your nose to spite your face. We force out the corporations and with them their jobs and their revenues.

It’s certainly true that large corporations can choke out small businesses, treat employees poorly and unevenly distribute profits. As a small business owner myself I can absolutely appreciate the sentiment of protecting the future of the mom and pop shops, but the truth is my business wouldn’t exist without corporations. The cost of producing many of the raw materials I use in my products would be to large for a small business to bear on its own. It may be a hard pill to swallow but corporations exist and make up a part of our 100%. We should be working together to create policies that entice corporations to stay and create jobs while holding them accountable to the communities they operate within.

This synergistic approach has not gone unrecognized by corporations who affectionately refer to it as “creating shared value” – no longer is charitable giving a percentage of a budget its becoming an integral part of the business model. Nestle Co. created shared value when they launched their “Cocoa Plan” – an intiative to improve, stabilize and reduce poverty in the rural communities where their cocoa is produced. In 2010, they trained 2,400 farmers, produced 210,000 plants, implemented clean water programs in 12 villages and bought 6,400 tons of cocoa from 9,056 different farms in 20 cooperatives.  What does shared value mean to them -”Creating Shared Value is the basic way we do business, which states that in order to create long-term value for shareholders, we have to create value for society.”

As corporations begin to evolve, understanding the value in aligning shareholder goals with community ones, shouldn’t our politics begin to evolve as well? This isn’t to say Corporations deserve a get out of jail free card for their bad behavior, but it’s time both sides worked together towards mutually benficial goals.

Want to read more about Nestle – click here

See the full OECD study – click here