Beyond Buffett: What should be the top tax rate?

Billionaire financier Warren Buffett recently made headlines with his call for the mega-rich to pay a fairer share of taxes (link here):

Our leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

…Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

We need to talk specifics

To get beyond Buffett’s general call, we need to talk specifics. A good starting place is to ask: What should be the top income tax rate for those at the highest rung of the income ladder? In a lengthy piece for The Atlantic on the future of the middle class, Don Peck gives us some perspective (link here):

Over time, the United States has expected less and less of its elite, even as society has oriented itself in a way that is most likely to maximize their income. The top income-tax rate was 91 percent in 1960, 70 percent in 1980, 50 percent in 1986, and 39.6 percent in 2000, and is now 35 percent. Income from investments is taxed at a rate of 15 percent. The estate tax has been gutted.

We should be careful about calls to soak the rich — especially given natural tendencies to label as wealthy anyone in the next tax bracket or higher.

However, moderate tax hikes applying to those who can most easily afford them would be fair and are needed. This is all rather subjective, but here’s my sense. Even as someone who isn’t worried about reaching the highest tax bracket, top tax rates of 91 percent and 70 percent strike me as being too high. But somewhere between 40 and 45 percent seems fair — at least for folks making multiple millions. Some increase on taxes for investment income also would be appropriate.

Payroll taxes, too

In addition, we need to look at the payroll tax, which funds Social Security. As I noted last fall, although the Social Security retirement fund is facing an eventual shortfall due to the crush of Baby Boomers hurdling towards retirement, in reality it is among our most stable social programs. Jane Slaughter from Labor Notes observes that there’s a relatively easy fix to ensure the program’s ability to pay out full benefits long into the future (link here):

There’s an easy and equitable solution: make high earners pay their fair share. Today, most workers pay the 6.2 percent FICA tax on their entire incomes. But the fortunate ones—roughly the top 6 percent of earners–pay FICA only on their first $106,800. Eliminate that cap, keep their benefits the same, and we’d end up with another surplus after 2037.

Personal responsibility and public need

Unfortunately, powerful forces disagree with all of this. In fact, Republican leaders in Congress are mulling around ideas to impose higher taxes on those who are struggling the most, reasoning that those of low and moderate incomes who are paying few or no taxes are not doing their share to help this country.

In the meantime, the jobless rate remains very high. Teachers, police officers, and firefighters are being laid off. Important safety net programs such as Social Security disability and FEMA relief are crying for funding. Public libraries are closing or cutting their hours. Bridges and roads across the country are in dire need of repair. Too many people are hungry and broke, through no fault of their own.

Surely this harkens back to the observations of John Kenneth Galbraith, one of my intellectual heroes, when he wrote of an affluent society grounded in “private wealth” and “public squalor.”

President Franklin D. Roosevelt — a member of the patrician class himself — said that taxes “are dues that we pay for the privileges of membership in an organized society.” I think this dovetails well with the Biblical reminder that when someone is given much, much will be required in return. In sum, we should be asking more of those who can afford to contribute a greater amount toward the public good.

iPads for Yale med students

Entering Yale medical students will receive a new Apple iPad loaded with apps relevant to their curriculum, reports Chelsea Conaboy for the Boston Globe‘s health care professions blog (link here):

Yale School of Medicine this year will outfit all students with iPads and no longer provide printed course materials. The initiative, born out of a going-green effort, could save the school money in the long run, said Assistant Dean for Curriculum Mike Schwartz.

…The iPad has enough security tools that the students can use them to store health information in their clinical years. Eventually, the iPads will sync to hospital electronic health records, though Schwartz said that capability likely won’t be available for at least a year.

…A side note: Privacy is paramount when dealing with health information, and mobile devices pose a particular challenge because they are easily lost or stolen.

“Gee whiz” and “uh oh”

I had two conflicting reactions when I read this.

The first reaction was amazement over the supersonic emergence of the tablet computer, a market thoroughly dominated by the iPad. A couple of years ago, tablets were unheard of. When Apple released the iPad, many industry experts and reviewers scoffed at it. This is an incredible story of a product creating and then largely occupying a brand new market.

I’m no computer expert, but I was one of the skeptics. Within a year or so, however, I was drooling over iPads at Apple Stores. When the iPad 2 came out, I was a goner. I feared I would play with it for a few weeks and then put it away, like a kid who quickly tires of a birthday present he had obsessed over for months. But I find it’s not only a great entertainment machine, but also very handy for out-of-town trips to conferences and meetings.

The second reaction was concern. The iPad is a thin, light slab of metal, and as the article notes, it’s “easily lost or stolen.” The idea that important medical records and information — er, make that my medical records and information — could be stored in there is a little disconcerting.

Even the internal pull-up keyboard and the available plug-in keyboards raise concerns about fast and accurate typing of information. Overall, I just don’t think of the iPad as a heavy-duty work machine. I have no idea if the folks at Apple ever imagined it would be used for such purposes, and I hope the machine is built strong enough to withstand it.

Here to stay?

Are tablets a transitional, passing fancy or a new computer staple? The tablet market remains a relatively small one, but the emerging use of tablets for work purposes — an increasingly frequent sight not only in airport waiting areas but also in meeting rooms — suggests the latter.

I just hope the med students aren’t playing “Angry Birds” during the lecture on how to do an appendectomy.

Fresno school superintendent Larry Powell gives up salary, seeks to protect kids from bullying

This story sounds too good to be true, but I’ll run with it anyway: It’s about a public school superintendent who (1) gave up most of the remaining $800,000 on his contract; (2) serves as a leader in the anti-bullying movement for kids; and (3) earns praise from a leader of a union that negotiates with the school district.

Meet Larry Powell, age 63, the Fresno County (CA) School Superintendent. Tracie Cone of the Associated Press files this story about him (link here):

Some people give back to their community. Then there’s Fresno County School Superintendent Larry Powell, who’s really giving back. As in $800,000 — what would have been his compensation for the next three years.

Until his term expires in 2015, Powell will run 325 schools and 35 school districts with 195,000 students, all for less than a starting California teacher earns.

“How much do we need to keep accumulating?” asks Powell, 63. “There’s no reason for me to keep stockpiling money.”

Cone further reports that Powell “serves on the board of a national anti-bullying group that sprang from the Columbine shootings” and “is so popular he even counts among his friends his contract bargaining nemesis, the former head of the employees’ union.”

Early adversity

It has been a recurring theme on this blog to tout the impact of personal resilience and overcoming adversity in creating society’s difference makers. As Cone adds, Powell fits the bill:

He even sees as an asset his childhood contraction of polio, which left him with a limp and a brace, and now a lingering post-polio syndrome.

“It’s the most spectacular thing that has happened to me in all my life,” he said. “People stepped up to help me be successful.”

Giving back

News accounts indicate that Powell and his wife are secure for retirement and that he’s already reached the maximum pension under the California system. So it’s not as if he’s taking a vow of poverty by giving up most of his remaining salary.

But that doesn’t mean we should dismiss the significance of this gesture.

Right now we’re witnessing a mini-debate over whether America’s super rich should pay higher income taxes, sparked by Warren Buffett’s recent op-ed piece positing that he and other billionaires should be taxed at a higher rate for the betterment of society. By comparison, Larry Powell — a well-compensated public servant — has taken an immediate action route, opting to forgo most of his remaining salary. Bingo. Done.

We need such role models in visible positions, and it appears that Powell is one of those rarities. Take a look at Cone’s article and see if you don’t feel a little bit better about the ability of individuals to inspire others and serve as positive examples.

Wisdom, experience, and leadership

I’m wondering if we should raise the minimum age to serve as President of the United States from 35 to around 55 or 60.

Okay, I’m kidding. Or maybe not.

Bill Clinton today

After watching a couple of recent Commencement speeches by former President Clinton (including one at the online Walden University, linked above), I find myself wishing that the Bill Clinton of today was in the White House.

He’s still the charmer, but more importantly he’s wiser and more comfortable in his own skin than the younger, ambitious man who served as President from 1992 to 2000.

I’m sure if he became President today, I wouldn’t be in full agreement with his positions. But I’d have a lot more faith that his decisions and policy stances were grounded in experience, wisdom, and understanding — including mistakes he’s made and what he’s learned from them.

Our obsession with youth

Our societal obsession with youth and youthfulness has extended into the leaders we seek, and that’s rarely a good thing.

All too often we elevate talented, promising people to high-level leadership positions before they are ready, or at least before they possess the experience and emotional intelligence to fulfill their considerable promise. (I put our current President in that category.)

School of Life

The School of Life is a valuable teacher. That’s why when it comes to leadership positions, in most cases I’ll opt for a talented, energetic, albeit weathered veteran over a shiny ingenue or a hyper-confident rookie.

Going with an untested leader is a crapshoot, plain and simple. Sometimes it works out well, but I’m convinced that — other things being relatively equal — we’ll get better results with more seasoned people at the helm.

Waiting for Irene with geeky gadgets and water bottles

I’m waiting in Boston for the inevitable arrival of Hurricane Irene, and after I collected provisions for a possible loss of electricity and water supply, my thoughts turned to how I connect with the outside world and get some work done if things go down. As someone who makes a living exchanging information and ideas, the possibility of being cut off from lines of communication sets off my anxiety.

Here’s the “kit” I assembled in response:

  • A portable Radio Shack AM/FM/NOAA radio, with new backup batteries;
  • Clock radio, with a new backup 9v battery;
  • My ancient cell phone, a flip-style dumb phone with an antennae;
  • Laptop with a typical Mac battery that will poop out after a few hours;
  • iPad with 3g connection & battery that should hold out for 9-10 hours;
  • iPod with a bunch of music and audio lectures stored;
  • Kindle e-reader with the portable clip-on light I bought at Barnes & Noble yesterday. and,
  • Extra notebooks and pens.

Basic human needs

Yup, this is the list of a professor and information junkie. But perhaps it also betrays my avoidance of dwelling upon our collective helplessness in facing the powers of a hurricane making a beeline this way. Even with a weaker hurricane, we are reduced to thinking about survival. The possibilities include:

  • Physical harm
  • Structural building damage
  • Basement flooding
  • No electricity
  • No water

Much of this is now in nature’s/God’s/Irene’s hands at this point. In the event of losing power and water, I’ve tried to accumulate enough provisions to last for several days. (Corn nuts or Jack Links “prime rib,” anyone?)

Different things

As I attend to my own situation, the threat of severe weather means different things to different workers. For those in the weather business, this is game time — the playoffs if not the Super Bowl. The same goes for workers in many public safety fields.

If you have a business in a store front that may be in harm’s way, there is considerable anxiety about damage. If that business is seasonal, there’s a likely loss of income in the midst of a difficult economy.

Retail workers at supermarkets, convenience stores, and hardware stores are dealing with lines of customers, many of whom waited until the last minute to get storm provisions.

Water bottles

Merely contemplating the loss of water over an extended period of time has triggered a sort of psychosomatic thirst for cold, clean water. As I filled up water bottles and containers, I found myself gulping down glasses of H2O.

One of the water bottles I filled was a thank-you gift for donating to the Mercy Corps, an international non-profit agency that supports disaster relief, sustainable development, and health and nutrition programs for those in dire need. The twist was not lost on me: All I had to do was turn on the tap to get as much clean water as I needed. Hundreds of millions of people — the very folks supported by the Mercy Corps — do not enjoy that luxury.

The possibilities I’m hoping to avoid — which at their very worst likely would be measured in months — are lifelong experiences for so many others.

When the bullying comes from a board member

What happens when the perpetrator of workplace bullying is not a manager, peer, or subordinate, but rather a member of the organization’s board of directors or board of trustees?

“Board bullying,” as I call it, is one of the largely unexplored aspects of workplace bullying. I do not know how frequent it is, and I have not yet found any research literature on the topic. (Readers, if you know of any studies, please share in the comments!)

And yet I know it is real. I suspect it is more prevalent in the non-profit sector than in the business sector, but that impression may be unduly influenced by the fact that I’ve spent much of my career and volunteer service in non-profit organizations.

Varieties

Bullying-type behaviors by board members come in several varieties:

1. Internal board interactions — Examples may include a dictatorial board chair who bullies and intimidates fellow board members, or perhaps extreme variations of groupthink and peer pressure used by board members to bludgeon or ostracize other board members who take unpopular positions.

2. Board to staff interactions — Examples may include board members or a board chair exercising excessive pressure and intimidation with staff members to make certain business or policy decisions. In cases of very dysfunctional and ethically marginal organizations, board bullies may be among those who retaliate against staff who report illegalities or ethical transgressions.

3. Board self-dealing — This can include board members exerting pressure on fellow board members and staff to deliver inappropriate favors and benefits, such as “wink and a nod” agreements to provide them with monetary and other benefits paid for by the organization.

4. Sexual harassment — The most common situation is older male board members directing unwanted attention toward younger female staffers.

Bullying-type behaviors vs. targeted bullying

As with standard-brand workplace bullying, it’s important to distinguish instances of incivility and disrespect from targeted, malicious bullying.

At times, the behaviors may be unintentional. One of the unfortunate realities of board service is that very few board members have any training or instruction on how to provide effective service. When combined with the same imperfections in interpersonal skills that we see in the everyday workplace, bullying-type behaviors may follow. This is the kind of stuff that often straddles the line between bullying and bad management.

On fewer occasions, the bullying behaviors are deliberate and targeted. These situations are very similar to classic instances of severe, targeted, and malicious workplace bullying.

Recourse

As with employee-to-employee bullying situations, there are no easy solutions when these behaviors are committed by board members. Thus, it may be useful to consult an advice book such as Gary & Ruth Namie’s The Bully at Work (2d ed., 2009).

If the behavior is more along the lines of incivility or disrespect, self-help measures such as confronting the individual may be effective, but a lot of this depends on the nature of the personal relationship between the individuals.

When the bullying clearly implicates legal protections — such as sexual harassment or retaliation for whistleblowing — it may be possible to file complaints internally and/or with appropriate enforcement agencies.

If the bullying is targeted and malicious, then the situation is much more difficult. Ultimately, those experiencing bullying-type behaviors at the hands of powerful board members often face the common dilemma of “should I stay, or should I go?”

Training and education

We need to do a better job of training board members, both generally and within specific organizations. This includes building awareness of when personal behaviors step over the line.

More research and understanding

Finally, we need to understand better this form of workplace bullying. Perhaps some enterprising professors or graduate students will take on this task. It should prove to be an interesting topic of study.

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New jobs, new economy: Envisioning better ways to work and earn a living

Bravo to YES! magazine, whose Fall issue (link here) is devoted to examining how we can create new jobs and a new economy based on human and community needs and sustainable practices:

The jobs crisis has slipped off the political radar, but to ordinary Americans, jobs and the economy are top issues. How can we build strong local economies that sustain us in an era of ecological limits? What can we do to support each other in challenging times, and how can we rebuild the American Dream?

The Fall issue is rich with ideas and inspiration. Here are titles of some of the articles:

  • Who’s Building the Do-It-Ourselves Economy?
  • Work Less, Live More
  • 5 Steps to Redefine Making a Living
  • 7 Smart Solutions

YES! has been among the most thoughtful voices calling for a new economy, one not so much vested in “isms” (capitalism, socialism, etc.), but rather one emphasizing individual and community priorities and values in the context of a sustainable society.

It won’t come from Wall Street or Washington D.C.

Implicit in all of these pieces is the realization that human-level solutions to our economic crisis are highly unlikely to come from Wall Street or D.C. I couldn’t agree more. Our mega-institutions are simply too broken right now.

The idea of Big Business as the Great American Jobs Machine may have had some credibility decades ago, but certainly no more. Wall Street is about short-term gains and shareholder profits, and jobs creation ranks very low on its priority list.

As for many of our policy makers in the nation’s capital, the less said, the better. Few are talking about jobs; even fewer are taking the long-term view that we desperately need.

Grassroots entrepreneurship

In the meantime, encouraging and enabling entrepreneurial, socially responsible initiatives at the local, grassroots levels may provide some answers to the jobs crisis and to the question of how we build a sustainable and inclusive society.

Granted, these ideas need testing and refining, and frankly some of the new jobs described in YES! will leave people wrestling with how to pay the bills each month. But the more valuable point is that we need to ask ourselves some fundamental questions about how to live healthy, meaningful, and secure lives after decades of excess and credit-driven buying frenzy. Raising these questions is very threatening to those who have reaped the benefits of the status quo, but for everyone else, they are vital.

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Can communal responses to tough times lead us to better lives?

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