Stop taxing savings

The fiscal cliff might be less steep if Americans were not quite so dependent on the government in their old age. Of course, if we didn't need the government quite so much when we're old, the cliff might have not have arisen in the first place. Social Security and Medicare might be in far better shape, and the need for reforming these so-called entitlements would not be as urgent as it has become.

It's too late to fix this now and have an effect on the present. But what about the future? Congress could help the next generation of senior citizens by adding better logic to how the government treats savings, including savings for old age.

Now, if you are a diligent saver, the government collects income tax on interest earnings above a certain amount even if you do not take the money out. That's a good way to discourage people with good incomes from saving much at all. As for retirement savings, Congress allows you to put money aside before taxes are deducted. But then, once you pass 70 and a half, you have to take it out of that sheltered account and start paying taxes on the amount you take out. So the government forgoes tax revenue when people have income enough to save, but then taxes them when they're old and need their money much more. There ought to be a better way.

How about this: Exempt all savings. including earnings on money saved, from federal taxation. This also would let retirement savers keep all of their nest eggs. And it would make Americans less dependent on Social Security, which might make reasonable reforms in that program both less necessary and easier to reach. (hh)

From Ray Kopczynski: "But then, once you pass 70 and a half, you have to take it out of that sheltered account and start paying taxes on the amount you take out. So the government forgoes tax revenue when people have income enough to save, but then taxes them when they're old and need their money much more."
True enough, but I believe that is because, everything else being equal, your gross wages will be considerably less in retirement -- than before. Hence, you will be taxed at a lower rate. Personally, I do not think that is any kind of dis-incentive to "save."
"How about this: Exempt all savings. including earnings on money saved, from federal taxation. This also would let retirement savers keep all of their nest eggs. And it would make Americans less dependent on Social Security..."
The devil is in the details.  When you say "all savings," are you meaning your classic savings-accounts at lending institutions?  Or does that include any/all investment income?  Inheritance monies?  I honestly believe that if folks use a modicum of common sense, they would not (and should not) rely on (or be "dependent on") social security as sole means for their retirement years.

Weekend quick point: Love the library

(The noise in the background is a leaf blower in action on this Saturday afternoon. Brooms and rakes would make hardly any noise. Just pointing that out.)

Energy plan: What about price?

This is not what the Oregon energy plan has in mind, but it's a thought processor that uses no electricity at all. Super efficient!

Energy planning in the public sector is a great field to work in. You get to meet and discuss things and write reports and plans, drawing a paycheck every month, but you never actually have to produce any results. If you made a 10- or 20-year plan and it didn't pan out when the 10 or 20 years are up, nobody is going to come after you and want his money back.

Oregon Gov. John Kitzhaber has just appointed a new director of the state Department of Energy. That department and  the new director are being tasked with carrying out the 10-year Energy Action Plan the governor announced last summer. That plan calls for Oregon to reduce its use of fossil fuels, develop Oregon-based renewable energy sources, reduce emissions of so-called greenhouse gases, improve energy efficiency, create jobs and strengthen the economy.

To that end there is -- you guessed it! -- a task force. The task force has a leadership group and several so-called "design teams" to work on things like efficiency and demand management. One team is charged with "identifying achievable energy mix scenarios relative to existing state law," according to one account. So, lots of opportunities for consultants to be hired and studies to be written and eventually, maybe, law changes to be proposed.

Amazingly, nothing in the governor's energy plan so far says anything about keeping the cost and the price of electricity and fuel down. People in Oregon would be very interested in what they have to pay to heat their houses, keep their work place going and operate their cars. Wouldn't they? So they'd want the state to promote low-cost energy in all its forms. But according to the state plan, that is not what the state-paid energy planners actually do. (hh)

A long case, for a reason

Seeing this book on my shelf, in the middle here, started these reflections.

I was idly looking at my bookshelf Thursday when my eyes lit on "Fatal Justice." Whatever happened to Jeffrey MacDonald, I wondered.

He's the former Army doctor whose pregnant wife and two young daughters were murdered in their house on base at Fort Bragg, N.C., in 1970. MacDonald was badly injured in the same attack. But in 1979 he was convicted of murdering his family. The conviction was overturned once but then reinstated. Except for that brief period, he's been in federal prison since. Now he's 69 and still fighting to prove his innocence in a fair trial.

In the 1980s I read a book called "Fatal Vision," whose author, Joe McGinnis, concluded that MacDonald was guilty. But then, "Fatal Justice" came out in 1995. The authors, Jerry Allen Potter and Fred Bost, demonstrated that the case was mishandled from start to finish and MacDonald got a raw deal. Now a new book has come out, "A Wilderness of Error" by Errol Morris. A former investigator, he too documents flaws in the prosecution.

My otherwise routine interest in the case as a reader perked up in the 1990s when I learned -- through an Albany man who I still believe was unjustly convicted in a completely different and unrelated case -- that MacDonald was an inmate at the federal prison in Sheridan. That's why looking at the bookshelf made me wonder about the latest.

Well, in September a federal judge in North Carolina held a two-week hearing on evidence. It may be a year or more before he rules. In October, "Fatal Vision" author McGinnis, who testified against MacDonald, complained in a New York Times column that this case -- like Jarndyce in Dickens' "Bleak House" -- may outlive all the principals who started it. That's what you get when a man is imprisoned for life in a case marked by sloppiness and misconduct and the courts refuse to admit their mistake. (hh)

Charter school: Worth the risk

Ideally, school boards ought to jump at the chance of sponsoring charter schools. But as expected, the Albany School Board turned down a request to allow one. Why is that?

As the Albany Democrat-Herald's Jennifer Moody reported on Tuesday (Nov. 27), members of the Albany board felt that the proposed school would offer pay levels too low to get good teachers and was not planning to spend enough money on technology. And besides that, it didn't even have a site nailed down.

Here's what was missing from the reasoning: The legislature authorized charter schools in 1999 in order to shake things up a little. The law was passed "to create a way to take responsible risks to create new, innovative and more flexible ways of educating children within the public school system." So yes, there's some risk in setting up these schools. But the risk is what the law is asking school boards to take, not to avoid.

The board worried about having to give up money. But it would also be dishing off a proportional number of students, so the money would likely be a wash.

What about achievement standards? Of Oregon's more than 100 charter schools, some meet the state standards and some don't, just like the rest of the public schools. But Sand Ridge, a charter school within the Lebanon district, shows that success is possible. Sand Ridge has been rated "outstanding" on the Oregon rating system, and it also met the federal goal of making yearly progress.

The Albany board has been too timid. The backers of this would-be charter school now hope to find another sponsor, as the law allows, perhaps Linn-Benton Community College or the state itself. Let's wish them luck. (hh)

From Hazel Siebrecht: I read on the Oregonian site yesterday that Oregon is fourth in the nation for kids not graduating high school! If they will attend a charter school which is obligated to meet certain criteria, that is a vast improvement on dropping out. What do low-paid teachers have to do with anything if their students are meeting the standards? ?

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