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Outdated Political Paradigms Need To Wither Away

“Governor Mills applauds Speaker Gideon’s leadership on this issue and shares her goal of working to ensure that people across Maine are able to take appropriate leave following major life events, like the birth of a child. The governor looks forward to reviewing the Speaker’s bill and working with her, other lawmakers, and members of the business community to pursue avenues to accomplish it.”House speaker proposes new tax to fund paid leave for Maine workers- Portland Press Herald
In Maine Wire, this week, Jacob Posik presents a reasonable but incomplete response to a bill sponsored by Maine House Speaker, Sara provide Maine workers with up to 12 weeks of paid family and medical leave, funded through a new 0.5 percent tax on worker earnings. The coverage in the Portland Press Herald and Maine Wire leave essential questions unanswered, such as who pays the half a percent of worker earnings? Is it deducted from the individual workers pay? Is it covered by the employer? Is it covered by all employers? Is it covered by the general taxpayer ?

The source of funds remains vague, as the discussion moves on to how funding will be concentrated and then redistributed. The Portland Press Herald reports:

The money generated would go into a statewide insurance pool, and would pay workers, depending on their income, 67 percent to 90 percent of their pay, capped at $800 per week. The lowest-income workers would receive 90 percent of pay, but everyone, regardless of income, would get up to $800 per week to offset lost wages.

Hidden Consequences of the Wealth Redistribution Economy

Quincy Hentzel, president and CEO of the Portland Regional Chamber of Commerce, said we should look out for unintended consequences. The proposal falls into both corporate and general welfare categories. Here are some of the hidden consequences embedded into the wealth redistribution economy.

If $800.00 per week represents 67% of one's earnings, 100% of one's earnings is 1194.00 per week. If the work week is set at 40 hours a week, it represents an hourly wage of $29.85  but if the work week is set at 35 hours per week as it in in the LePage-sponsored Major Business Headquarters Expansion Act, it becomes $34.12 per hour of (assumed) productivity.

Does corporate welfare encourage companies to hire more workers than they actually need?

LePage's Major Business headquarters Expansion Act was enacted in 2017, just in time for the Amazon Headquarters Contest, a company which claimed that the average income of it's employees is $100,000,00 per year, qualifying  as "elite" or "quality jobs" as is the term used in Maine statutory language. While LePage was promoting general welfare recipients work for rations, he was promoting a shorter work week for taxpayer-subsidized high income jobs. A shorter work week means less productivity, Wealth is only created when there is productivity.

There are questions as to how productive workers in state-negotiated "quality jobs" actually are, given Maine's corporate welfare is negotiated on meeting a quota for the number of workers a company employs at above average wages and benefits. There may come a point, when a corporation hires more than the number of employees it actually needs because it is more profitable to do so and collect the benefits. If a company hires employees but there is nothing for them to do, it results in a decrease in worker productivity per cost of hiring workers, which translates as inflation as the cost of hiring unproductive workers is absorbed by the entire economy, a hidden form of taxation. If corporate welfare laws reduce the work week for that sector, the reduced hours serve as a "fair share" method for increasing the number of workers hired while reducing the productivity of those workers, giving pause to wonder if the hypothesis that  corporate welfare encourages corporations to hire a greater number of workers than are actually needed, is more commonplace than not

Republicans are pushing talking points based on the number of jobs created, but if that figure is based on compliance with government mandates in exchange for corporate welfare, it is a tilted measure of economic gain. If or when reduced productivity is designed into the corporate system to meet corporate welfare requirements, social justice then demands the same for all causing Republicans go into an uproar about all the lazy people on social welfare.

The following argument is based on the hypothetical that government mandates over the number of employees hired at government mandated wages and benefits has the  capacity to hyper-generate inflation due to a disassociation between cost and productivity.

The practice of taking the relationship between cost and productivity out of the equation for the corporate welfare sector, creates detrimental effects on businesses operating in the free enterprise sector since new minimum wage laws in Maine tie a raise in minimum wage to a raise in the cost of living. If the government mandates that companies hire more employees at high wages and benefits than the company actually needs, to receive corporate entitlements, the inflation caused by this policy directly impacts the free enterprise economy operating outside the state's wealth redistribution economy.

While the Industrial Partnerships Act of 2013, arranges for the Maine public high school educational system be used to train workers for state approved careers, it is a conventional practice for businesses in the free enterprise sector to train workers at company expense while paying a minimum wage. which includes payroll taxes, which are covered up to 80% for the State's targeted sector located in Pine Tree Zones. That means the free enterprise sector covers its own payroll tax and in addition its "fair share" of corporate welfare payroll taxes.

Before minimum wage was conceived of as a living wage entitlement, one of the functions of the minimum wage was that it allowed a business to train unskilled workers, giving those workers an opportunity to raise their value in the labor market without paying a high price for training. Employers were able to train workers without taking a large loss in the process. With government taking over the role of managing the economy, taxpayers are used to subsidize worker training in government-approved careers as small businesses, not included under the government's umbrella are phased out of the picture.

By definition, income in the free enterprise zone is directly related to productivity, since free enterprise does not receive income from the wealth redistribution sector. Knowing that government practices are potentially creating inflation which will automatically cause the cost of employing and training workers to escalate, means that the employer in the free enterprise zone must continually raise the price of its services and products to keep up with the rising cost of training workers, created by government policies benefiting the wealth redistribution economy. This in turn increases the cost of living and drives inflation, which, pursuant to new Maine minimum wage laws, automatically multiplies the cost of the training workers in the free enterprise zone, and the circle keeps on escalating upward with one gain cancelling out the other. Let us not forget that companies operating in the wealth redistribution economy receive generous tax exemptions and so it is the free enterprise zone, and the personal income taxes on "quality jobs", which is relied upon to finance the public-private government operating the wealth redistribution economy. 

The Northeast Exception to Corporate Welfare produces the highest medium income in the nation.

New Hampshire is exception to the corporate welfare economy which has spread over the entire North east, and yet, New Hampshire has the highest medium income in the country. New Hampshire is looking like the best option for Maine's free enterprise economy out side of service industries needed by the wealth culture which is rapidly replacing Maine's native culture.

The terms, median income and average income do not share the same meaning. The medium income means that half of the populous makes less than the medium income.
Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. Mean income (average) is the amount obtained by dividing the total aggregate income of a group by the number of units in that group. Mode income is the most frequently occurring income in a given income distributionWikipedia
Maine Income Statistics show that the Average (Mean) income is greater than the median income.
The following data are the most current income statistics for Maine from the US Census Bureau, are in 2017 inflation adjusted dollars and are from the American Community Survey 2017 5-year estimates

  • Median Household Income: $53,024.
  • Average Household Income: $70,210.
  • Per Capita Income: $29,886.

The Democrat's new entitlement proposal misses the real needs of the people

Getting back to the new general welfare entitlement currently proposed by Democrats. In calculating the cost of adding a new entitlement to the cost of government, a hidden factor is that many of the workers in the higher income bracket are already being taxpayer subsidized in deals negotiated by the state with its private partners, and those pre-tax-payer-subsidized-incomes become the basis for a receiving a higher level of paid time-off under Representative Gideon's proposed bill, a double whammy for taxpayers.

First, under corporate welfare,the taxpayers subsidize "quality jobs" statutorily defined as jobs paying higher than average wages and benefits.

Then, under the new general welfare proposal, taxpayer's subsidize paid time-off  pro-rated by income, including taxpayer-subsidized higher incomes.

If one is to accurately account for the cost of the new entitlement, the entitlements based on upper income pay which is already being subsidized by the taxpayer needs to be prorated to what it would be without the existing subsidization of "quality jobs". If Governor Mills reasoning is that paid time-off should not be an exclusive privilege for "elites" (same as "quality jobs" class), then corporate welfare needs to be calculated into that "elite" factor. Granting time off for paid leave can be used as another means (including shorter work weeks) by which the corporate welfare sector can adjust for potentially hiring more workers than needed to meet the quota to receive corporate entitlements.

Minimum wage workers are the lowest income workers. They earn $440.00 per week based on a 40 hour work week and would receive 396.00 per week in paid leave, if their work week is forty hours. Minimum wage jobs are not tax payer subsidized.

3.7% of Households in Maine are High Income Households that make over $200,000 a year or about 8.7 times minimum wage, but they will be entitled to collect the full $800.00 amount of paid-time off. This does not take the elite factor out of paid time off.

According to what we are being told about the new general welfare paid leave entitlement, Only the lowest income workers get the 90%. Technically the lowest paid workers are equivalent with minimum wage workers. Workers can get " 67% to 90% of their pay, which sounds like a sliding scale but sliding scales often oppress a person from improving their economic standing because it jeopardizes losing benefits. What is the case with a minimum wage worker who gets a pay raise of $1.00 per hour? Does that worker risk losing their 90% coverage?

Democrats should be looking at the effects created by social justice regulations, in the same way that Republicans consider regulations affecting the business environment.

The difference between 90% of $440.00 and 75% of $480.00 is only $36.00. It is unlikely that it would deter those at the bottom of the economy from seeking to improve their status but the same sliding scale policy has a fundamentally prohibitive effect in public housing, where qualifications, based on income are tied to the unit of housing, rather than the inhabitants income so that taking a part time job at minimum wage at 20 hours a week can disqualify the resident from the housing unit. Such policies are oppressive to growth and development, not only for the individual but for the community environment in which the public housing is situated. Under such regulations, any one improving their financial circumstances must move, to maintain the static, stuck in a rut, character of the neighbor hood. All it would take to encourage growth instead of stagnation, is a change the measure of the sliding scale from the unit to the applicant and transform a rut environment to a growth environment. A person improving their economic status would have their rent increased instead of being forced to move.

Where is the Democrat who will sponsor the legislation to achieve this liberating change? Despite portraits painted of the poorest among us by politicians like LePage, I believe that most favor opportunities to improve their own lives through their own talents and hard work over rations. Even if I am wrong, and those favoring opportunities are the minority, it is a minority which needs to be encouraged so that it can become contagious.

The private sector can provide solutions for special interests. If Governor Mills is to be the representative of the people over corporations, she should shift from framing the solutions as rations to solutions which enable opportunity for the bottom to rise on the basis of their own talent and skills and make certain that programs intended to help the bottom are not effectively oppressing the bottom by keeping the people exactly where they are, by design- but "whose design?", is the nagging question. There is a wealth of human potential lost in such policies.

Both social welfare and corporate welfare programs are inconsistent with the purpose of government defined in the Maine Constitution.

The Maine Constitution defines the object of government as establishing justice, promoting our common welfare, and trusting in God.

(Maine Constitution) PREAMBLE.
Objects of government.  We the people of Maine, in order to establish justice,insure tranquility, provide for our mutual defense, promote our common welfare, and secure to ourselves and our posterity the blessings of liberty, acknowledging with grateful hearts the goodness of the Sovereign Ruler of the Universe in affording us an opportunity, so favorable to the design; and, imploring God's aid and direction in its accomplishment, do agree to form ourselves into a free and independent State, by the style and title of the State of Maine and do ordain and establish the following Constitution for the government of the same.
(emphasis added)

The term common welfare is similar to
 "general welfare" as used in the US Constitution:
Preamble United States Constitution:We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America. (emphasis added)

The Maine Constitution was established 33 years after the US Constitution was signed. During those years there would have been ample debate over the meaning of the phrase "general welfare", as established by Madison and Hamilton. The phrase,"general welfare" echoes history in the oft repeated words, "It serves the public benefit". Why did the authors of the Maine Constitution explicitly change the language from "general welfare" to "common welfare"?
According to James Madison, the clause (general welfare) authorized Congress to spend money, but only to carry out the powers and duties specifically enumerated in the subsequent clauses of Article I, Section 8, and elsewhere in the Constitution, not to meet the seemingly infinite needs of the general welfare. Alexander Hamilton maintained that the clause granted Congress the power to spend without limitation for the general welfare of the nation. The winner of this debate was not declared for 150 years.
In United States v. Butler, 56 S. Ct. 312, 297 U.S. 1, 80 L. Ed. 477 (1936), the U.S. Supreme Court invalidated a federal agricultural spending program because a specific congressional power over agricultural production appeared nowhere in the Constitution. According to the Court in Butler, the spending program invaded a right reserved to the states by the Tenth Amendment.
It was a specific choice of the founders of the Maine Constitution to change the  words of the United States Constitution from "general welfare" to "common good" but the distinction between the two phrases is difficult to find online. A search for "common welfare" brings up the definition of "general welfare", which is unusual in itself, even for two words with essentially the same meaning. 

My interpretation factors in the debate between Madison and Hamilton over the clause, "general welfare" as used in the United States Constitution. It is reasonable to speculate that the term "common welfare" is intended to be more specific than "general welfare" and limited to welfare which is common to all.

The clause "common defense" was also changed to "mutual defense". If "general welfare" were changed to "common welfare" with the intent to restrict the meaning to welfare common to all, then "common defense" would also need to be changed. On the same token that subsidizing economic development in Southern Maine is not experienced as a benefit to those in Washington County, coming to the military aid of a city in Washington County, may not be perceived as a benefit to those living in Southern Maine. The term "mutual defense" connotes an alliance similar to NATO, in which if one part of a Union is threatened, all members of the Union will come to its rescue. Thus changing "common defense" to "mutual defense" supports the interpretation that "general welfare" was changed to "common welfare" to connote that the object of government is shared by all in common and for the rest we implore God's aid and direction, - not man's law.

Governor Mills goal of taking the elitism out of paid leave tells us that she is going along with central management of the economy by the state. The difference between a Democratic central manager and a Republican central manager is that the Democrat will negotiate more benefits going to the people, while the Republican will negotiate more benefits going to privately owned corporate interests.  Both parties share a mutual vision of Maine being run by and for large corporations. Since Maine has never had a public conversation about the root premise ,that of the centrally managed economy, the best Maine can do is to keep on alternating the party in control.

At the End of The Major Business Headquarters Expansion Act,  under the heading, "Legislative findings, purpose", is found its self-rationalization, used as the means by which government is transformed into something it was never intended to be:

Sec. 4. Legislative findings, purpose. The Legislature finds that it is in the best interest of the people of the State of Maine to encourage the location and expansion of major business headquarters in the State and to encourage the recruitment and training of employees for these facilities. The Legislature further finds that the location and expansion of major business headquarters in Maine will create jobs, benefit small businesses that supply goods and services to the major business headquarters and its employees, increase the tax base and provide many other direct and indirect economic benefits to the State.
The purpose of this credit is to create high-quality jobs in the State by encouraging major businesses to locate their headquarters in this State or to expand their headquarters in the State Major Business Headquarters Expansion Act of 2017 in Maine, sponsored by Governor LePage
This is the manner in which politicians change our Constitution. They know that even an UN-Constitutional law is the rule of law until successfully challenged in court. They state arbitrary opinions as if they are incontestable facts. The Democrats seem to believe themselves and openly announce what they are doing, or thinking about doing but Republicans favor secrecy, knowing that there will be opposition if their policies are publicly announced. If the Legislature really believed the Major Business Headquarters Expansion Act is in the best interest of the people, where was the press release announcing this gift to the collective good of mankind?  Why, was it said, about the State's proposal to Amazon, that the details of the proposal were not publicly available, when the details are clearly codified in the Major Business Headquarters Expansion Act?

In Amazon Doesn’t Just Want to Dominate the Market—It Wants to Become the Market, Stacy Mitchell explains in detail, the nature of what the Maine Legislature finds to be in the best interest of the people of  the state of Maine.


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