State-Level Corruption And Theft
The Market Ticker - Commentary on The Capital Markets
2017-09-10 13:00 by Karl Denninger
in Education , 189 references Ignore this thread
State-Level Corruption And Theft
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Ever wonder about property taxes, how they're set, and what they cover?

Specifically, the largest component of most property-tax assessments are for schools.

Virtually every State Constitution calls forth a State duty to provide a free public education.

Ok.  Fair enough.  I can argue against that quite-easily but so long as it's present in State Constitutions the law has to be followed in that regard.

But on whom should the funding costs fall?

Answer: Those closest to the output of the program, who thus have every incentive to do something about it if it sucks.

That's not you, as a common citizen.  If the schools suck in your local area you don't, for the most part, get the direct costs.  If you're a parent at age 18 your offspring are no longer your responsibility.  You can throw them out of the house -- literally.

Now it's certainly true that the indirect costs wind up on the citizens -- mostly through crime and social dependence.

The direct costs fall on the local employers.

How do you think the local electricians would response to there being no shop class? Or the local welding and machine shop?  The local construction companies would like people who can work with wood and metal too, right?  How would the computer software shop behave if schools failed to teach reasonably current computer programming languages?  Would any of the local businesses put up with High School graduates that can't write a business letter, make change for a $20 in their head or figure out sales tax on a piece of paper when the power goes out?

Nope.  They'd make a hell of a lot of noise and, in the extreme case, they could move their company and entirely de-fund the system.  That's a very effective and legal threat, which would serve to force the public education system to produce a quality product: Educated young adults.

Let me point out that when I ran MCSNet not only could not 1 applicant in 10 write said business letter while using proper English, make change for a $20 and compute the sales tax for a given amount on a piece of paper using nothing other than a pencil a good percentage of said applicants had been accepted to colleges in the area, including the University of Chicago, because they were current college students at the time!  How the hell do you both get a diploma and get accepted into college when you can't make change for a $20 in your head?

So why do we have a public school system that isn't funded by a tax on business in the state?

They are the direct beneficiaries of a good workforce and thus have the greatest incentives to make damn sure the money is spent well on people they are then able to employ!

There are many more reasons to do things this way, rather than through ad-valorem property tax levies.  One of the biggest is that it doesn't cost more to educate a rich person's kid than a poor person's.  In fact it's often the other way around; the poor kid is more-likely to be born into a broken and dysfunctional home, to have parents who are raging drug addicts or worse.  Yet today we demand that more-wealthy people subsidize these other children even though some of the parent's behavior is voluntary, often to the tune of 10x or more what the poorer family pays!  The poor family thus has no financial incentive to cut that crap out; they don't get the bill for their behavior in the form of higher school expenses, the rich bastard across town does!

The result is crap schools, especially in the cities.  It also results in schools that try to run the garbage that every kid needs to go college.  We then wonder why all the electrical and plumbing shops can't find good people to train and employ, and why all the framing and roofing seems to be done by illegal Mexican invaders.

The usual argument on the other side is that even the wealthy childless individual or couple benefits from an educated workforce.  That's true.  But that benefit is "soft" and impossible for the wealthy person to objectively measure where for the businessperson it's simple: EITHER THERE ARE QUALIFIED WORKERS IN THE LOCAL AREA TO HIRE OR THERE ARE NOT.

It's time to scrap the premise of funding schools with ad-valorem taxes.  Yes, schools have to be paid for, and yes, in a purely Libertarian world parents would pay for education on their own if they had kids, and only if they had kids.  But we don't live in that world and given State Constitutional guarantees of a free public education for all children we are left with the question of who is going to get taxed to pay for it, not whether it will happen.

There's nothing unconstitutional about a state-wide (rather than county-specific) levy for such a purpose, assessed on all employing businesses in the state.  Anyone with one or more employees (that is, other than a sole proprietor who has no employees on the payroll, whether part or full-time) should be getting the bill, from farmers employing people to pick oranges to the warehouse that pays people to move goods to the coffee shop on the corner, the lawyer's office downtown or the corporation that writes and sells software or provides Internet service.

It's in their best interest to make damn sure they have qualified workers available to them, and thus they're the best people to assess the quality of education and demand improvement because they will be like rabid dogs sicced on the County Education Boards to make damn sure they get their money's worth.

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