Barrack Obama has been spending a lot of his time pushing for the passage of what he calls “The Buffett Rule” This would be a change to the tax code that would apply a 30% tax rate on all income of someone making a million dollars or more. It stems from a comment from billionaire Warren Buffett, who lamented that he pays an effective tax rate lower than his secretary. 

What it really is; is populism and an election year tactic to find a boogey man to rally people behind the president. First, let’s define a few terms:

Populism, as defined by PublicEye.org is a rhetorical style that seeks to mobilize “the people” as a social or political force. And because it is rhetorical it is filled with half-truths and in this case out right lies

Tax Rate, the percentage at which a person or entity is taxed on the next dollar earned. For example; If Warren Buffett is taxed at a 39% rate on a 2 million dollar salary his tax would be something like $780,000.

Effective Tax Rate; The amount of money collected in taxes from an individual or entity; divided by his total income.
 
Two quick points on that last sentence concerning WB’s $780,000 tax. Warren Buffett is taxed at 39% (the highest income tax rate) on his salary. Second the US has a graduated tax system, so the first $15,000 is taxed at one rate; the next $15,000 (or whatever it is) is taxed at a higher rate until you get to the top 39% rate. So Buffett’s hypothetical federal income tax is less than $780,000. But, we will use that number to make the math easy.

When (if) Barrack Obama, his sycophants, and Warren Buffet make the statement that WB pays an effective tax rate that is less than his secretary that is true. But, it is misleading. He pays an effective tax rate that is lower for two very good reasons. First WB likely gets most of his income not from salary (taxed at 39%), but from dividends and capital gains. Both of those are taxed at a 15% rate, no matter how much of them you make. How can that 15% rate be fair you ask? Because that money has already been taxed. 

Dividends are premiums paid out as a bonus to stock holders from profits made. Profits are what are left over after all expenses and taxes are paid. Capital Gains are the money you make when you sell something that you bought low (using your after-tax income) and sold high. The investor, WB, in this case put his after-tax money at risk, hoping he would make a profit. When he does the government only takes 15% of his money. If he had taken a loss, he could only deduct $3000 per year from his income.

A case could be made that the tax rate on Dividends and Capital Gains should be zero, because that money has already had a bite taken out of it by Uncle Sam.

The second reason WB pays a lower rate is from the way payroll taxes are collected. Payroll taxes are Social Security, Medicare, and such that are deducted from your salary.

Why is Trayvon Martin garnering all this attention? Of course it’s a tragedy when someone is killed. Why are the usual race baiters coming out of the woodwork? Why did Barack Obama feel obligated to chime in on one side?

Could it be because the liberals, leftstream media, and  President Obama need a springboard for Obama’s election run? Nothing gets  lefties more excited than a white on black crime. Facts don’t matter. Witness  the Duke lacrosse scandal, in which a black stripper accused a bunch of college  kids of raping her. Never mind that it didn’t happen, nor was there any  evidence, other than her word, that it did. Remember the Tawana Brawley case.  She accused an unknown white person of assaulting her, writing racial epithets  all over body, and then dumping her, naked. She made that up. 

But that didn’t matter. It was a way for the normal race baiters, Al Sharpton, Louis Farrakhan, and Jesse Jackson to get their faces on TV and stir things up. Now our president, the man, a black man, in the position of power most able to ease racial tensions, has the opportunity to diffuse this. What does he do? He gets in front of a camera to tell us how this tragic victim
looks like it could be his son. Now I wonder which side of racial equation that falls on?

Once again, the right thing to do, with respect to race relation, just like when Obama’s black law professor friend, Henry Louis Gates, got into a scuffle with the police, was to stay out of it. Or at most tell the  American public that he had no reason to suspect anyone’s race had anything to do with this tragedy, and he was going to wait for all the facts to come out. But Obama is not interest in race relations. He is interested in one thing; himself.
 
The man who shot Trayvon Martin, George Zimmerman, appears to be white when you look at his surname. So, he’s perfect; a white guy who shoots a black boy for no reason other than he looks suspicious and black. But Zimmerman is mixed race; in his picture he looks like a light skinned Hispanic. That’s because that is what he is. His mother is HIspanic. He is what the media have dubbed a White Hispanic. Any other time he would just be called Hispanic or White. But that won’t fit the narrative of a white guy murdering a black kid. Nor does it fit when we
see Zimmerman’s mugshot; so he must be called a White Hispanic.

I am not defending Zimmerman. I don’t have the facts either. Everyone seems to agree that Zimmerman was following Martin, because Zimmerman thought Martin was up to no good. Everyone agrees there was some sort of scuffle or fight, in which one or the other cried out for help. Everyone agrees that Zimmerman shot and killed Martin. That’s it. People on both sides
are screaming about motive and who did what; but they don’t know. If Zimmerman is at fault here, he deserves significant jail time; possible even the death penalty, if it was done in cold blood.

But, I go back to my original question; why this incident? My theory is that those on the left need an excuse to energize their flagging base; which blacks are the cornerstone of.

Last week I told you about the Bureau of Labor Statistic’s (BLS) created entity call the Marginally Attached Person. A Marginally Attached Person is “Persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.”

In real English that is someone who is not working and is not longer trying to find a job. To listen to the leftstream media, these people have stopped looking for work because they are so incredibly frustrated with the job market that they have given up all hope. They paint a picture of a person spending hour after hour, day after day, week after week, diligently searching for a job, any job. They fill out hundreds of applications and when called for the rare interview they are eventually disappointed. 

Well, the anecdotal evidence I, and people I talk to about this situation paints a different picture. Most stories start out the same, with said person losing his job for one irrelevant reason or another, and then getting on unemployment. At that point their situation changed from
unemployed to “on vacation” The quote I hear often is “I’ll start looking for work when my unemployment gets close.” That means when the money starts to run out I’ll find a job. 

But sitting at home and not having to work to get your money is additive. You get used to it, you want it to continue. You don’t want to have to get up each morning and be someplace at a certain time, and do what someone else tells you to. You want to be free to do what ever you want, and have the bills paid by someone else. I was seriously injured by a drunk driver 25 years ago, and I had money coming in without working. It was nice. Towards the end I was a bit resentful that it could not continue. But, do you know why I willingly and happily returned to work? I healed and that stopped the money. It was work or starve, in my mind. Milking the system, via my neighbors never crossed my mind.

The Labor Participation Level (LPL), which is essentially everyone except the Marginally Attached Person and the elderly, has shrunk steadily under Obama. His high pointwas the day he took office in Jan 2009, at 65.7%. It is now 63.7%. Each percentage point is about 1.5 million
workers. Some of that is due to the elderly reaching retirement age. But, that is mitigated by those turning 16 and entering the labor market. The number of people working in Jan ’09 was 142.2 million. Now it is 141.6 million. The number of MAPs was 2.13 million. Now it is 2.81 million, and steadily growing.

The Marginally Attached Person (MAP) still has to eat and support a family. So rather than go back to work a very large segment of the unemployed are devoting their time and efforts not to finding a job, but to milking the rest of us via the myriad of government programs to assist “the
poor” 

We are going on a journey over a couple of blogs, looking at the unemployment situation. Today I want to try to understand the way the  federal government comes up with it’s monthly number, and how that relates to  the economic recovery.

The US Bureau of Labor Statistics (BLS) is responsible for calculating and reporting the month unemployment number. If you are like me,  you basically assume that the unemployment number is calculated by taking all  the adults in the US and divide that by the number of those adults not working. Presto, you have the unemployment number. 

That’s not how it’s done. I spent a couple of hours on BLS’s website looking at spreadsheets, charts, and definition of terms. What I found is that my assumptions on each of the two variables in the unemployment equation are wrong. Let’s start with my bottom number; total adults in the
US.

Officially, the BLS calls it the “Civilian Labor Force” The Civilian Labor Force is “All persons in the civilian noninstitutional population classified as either employed or unemployed.” While that sound  innocuous enough, it is filled with things you wouldn’t even think of. 
 
First, let’s deal with the benign ones; the issues that make sense. Since it is “civilian” it excludes all military personnel from the population. That could make a difference when comparing apples to apples. With  wars ending and soldiers coming back home, you could be classifying a lot more people as civilian. But as it turns out, the military levels are about the same now as compared to when Obama took office. That is what I am interested in. I want to know if real unemployment is better or worse in the last three years.

The Civilian Labor Force also excludes retired persons, students, and those taking care of children or other family members. That sounds reasonable to me. Retirees, kids in school, and stay at home Moms (who I am sure would argue they “work” for a living) should not be part of the
potential labor force. They are either already working or not eligible to work.

Next is the word “noninstitutional”. That means those not in jail and not in a mental facility. OK, I can buy that. You don’t want to include those incapable of seeking work in an unemployment number. I couldn’t find a lot of information to compare Jan 2009 (when Obama took office) to now; so I will assume that they are about the same as well.

But that leaves us with the final part of the definition; “classified as either employed or unemployed” Well, duh!  What else is there?  As it turns out, in addition to retirees, and such, (that I mentioned above), there are those who are classified as “Marginally Attached Workers.” What the hell is that, you ask?

A Marginally Attached Worker is “Persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed