In early October, AFSCME put out a rather silly ad featuring Mitt Romney’s former garbage collector in La Jolla, Calif. “My name is Richard Hayes,” said the collector, “and I pick up Mitt Romney’s trash. We’re kind of like the invisible people. . . . He doesn’t realize that . . . if it wasn’t for us, it’d be a big health issue.” Hayes went on to complain that Romney had never shaken his hand or hugged him. The sledgehammer message was clear: Mitt Romney could have no idea about quotidian things such as trash collection, because his wealth and detachment prevent him from having to know what life is like for blue-collar workers. But there was just a small problem with this. In Romney’s book, No Apology, he explained that, “during my campaign for governor, I decided to spend a day every few weeks doing the jobs of other people in Massachusetts. . . . One day I gathered trash as a garbage collector. . . . It was as if I was invisible. Perhaps it was because a lot of us don’t think garbage men are worthy of notice; I disagree — anyone who works that hard deserves our respect.”
Unless a deal is reached on taxes before New Year’s Day, the U.S. economy will enjoy yet another dubious distinction: suffering under the highest tax rate on dividends in the world. The U.S. already labors under the highest statutory corporate-tax rate, though politically favored businesses and industries escape paying the full bill. For individual investors, qualified dividends are taxed at the lower capital-gains rate, but that arrangement will expire in January, putting dividends back at the higher personal-income rate. Low-income dividend recipients, those in the two lowest brackets, currently pay a tax of 0 percent; in 2013, that will go up to 15 percent and 28 percent, respectively. High-income taxpayers will see dividends taxed at 39.6 percent — along with another 3.8 percent surtax on investment income to fund Obamacare. Add in state and local taxes, and a New York–based investor will be paying taxes of more than 50 percent on dividend income — which of course already has been taxed as corporate income. The Monaco Yacht Club set have ways of getting around that (expatriating money, incorporating, and forming specialized partnerships) but the ordinary investor will get hammered — as will the enterprises counting on his investment to enable them to grow and innovate. Mitt Romney happens to be sitting on a credible alternative to this dire scenario.
The Bureau of Labor Statistics household survey revealed an unusually large — 0.3 percent — drop in unemployment in September, and many skeptics cried foul. Business titan Jack Welch called the figures “unbelievable” and strongly implied that the Obama administration had somehow manipulated the numbers. We think that unlikely: Because the household survey has a much smaller sample size than the institutional-payroll survey, it shows a good deal more month-to-month volatility. And a fairly good technical explanation exists for the September numbers: There usually is a large decline in employment among workers aged 20 to 24 as they return to school in September. That did not happen this year: For reasons that are unclear, it happened mostly in August. Because the BLS uses a seasonal-adjustment protocol in crunching its numbers, the lack of a large decrease in September, where it was expected, shows up as an increase. Statistics are fun. Critics who argue that the official 7.8 percent unemployment rate and the 0.3 percent September drop are inconsistent with our current rate of growth, competing measures of unemployment, and other economic indicators are of course correct; that the household survey suffers from important limitations is not news to those who follow it. It is unlikely that the White House played a behind-the-scenes role here, and, given the grim state of the real-world job market, even less likely that it will derive any lasting benefit from this statistical hiccup.