The government watchdog group Citizens Against Government Waste (CAWG) has released the 21st edition of its Congressional Pig Book(an in-depth examination of pork-barrel spending) and it has some good news and some bad news.The good news is that since the House voluntarily imposed a ban on pork-barrel spending in 2010 (the Senate in 2011), the number of earmarks has plummeted by 98.3 percent (from 9,129 to 152) and the cost has decreased by 80 percent (from $16.5 billion to $3.3 billion).

Wait. Although those numbers are good — quite good, actually — why isn’t the decrease in both the number and cost of earmarks 100 percent? We thought there was a voluntary moratorium on pork-barrel spending.

That’s where the bad news comes in.

“Congress has figured out ways to stuff earmarks into spending by calling them different names,” CAWG president Tom Schatz explains, according to CBS News.

The CAWG report explains one of the problems with the self-imposed moratorium:

The supposed lack of earmarks resulted in a completely opaque process. Since earmarks were deemed to be non-existent, there were no names of legislators, no information on where and why the money will be spent, and no list or chart of earmarks in the appropriations bills or reports.

Earmarks were scattered throughout the legislative and report language, requiring substantial detective work to unearth each project. While the lower number and cost of earmarks is a vast improvement over prior years, transparency and accountability have regressed immeasurably.

“The transparency is much more difficult and it will be hard to see where, exactly, the money is being spent as it goes out the door,” Schatz said.

“Since they‘re technically not called ’earmarks‘ under Congress’ definition, Congress doesn’t have to disclose details — including who requested the money to be spent,” he adds.

According to the CAWG report, anything that satisfies at least two the following criteria is considered an earmark:

• Requested by only one chamber of Congress
• Not specifically authorized
• Not competitively awarded
• Not requested by the president
• Greatly exceeds the president‘s budget request or the previous year’s funding
• Not the subject of congressional hearings
• Serves only a local or special interest

And these are some of the projects CAWG found that violate the moratorium:

• $120 million to the military to research alternative energy.
• $255 million to upgrade the Army’s M1 Abrams tanks.
• $14 million for hydropower construction (the report believes this earmark is meant to benefit New York based on Sen. Chuck Schumer [D-NY] past involvement in hydropower earmarks).
• $10 million for the Chicago Sanitary and Ship Canal Dispersal Barrier.
• $48 million for the National Domestic Preparedness Consortium.
• $3.4 million for national fish hatchery system operations.
• $15 million for Rural Hospital Flexibility Grants (Flex) through the Department of Health and Human Services.
• $5 million for abstinence education.
• $5.8 million for the East-West Center in Hawaii meant to improve relations among Pacific nations. The center‘s recent projects include an endowment to honor President Obama’s mother.

“Because a moratorium is not a permanent ban on earmarks, a bipartisan group of senators is proposing such a ban,” Schatz said. “Since that effort has been rejected so far, it is reasonable to conclude that a majority of senators would like to restore earmarks.”

“Such a decision would bring back a deceptive practice that encourages backroom deal-making, vote swapping, and other political gamesmanship. It would also reverse the substantial progress that has been made in reducing the number and cost of earmarks and outrage the vast majority of taxpayers who continue to oppose any earmarks,” he added.

This year, Americans had to work from Jan. 1 until today just to earn enough to pay their total annual tax bill. Starting tomorrow, you can start working for yourself.

That we must work 107 days out of the year just to finance government spending is not right. But adding insult to injury is the reckless way government manages our money.

Americans are willing to pay to support vital services like national defense, roads, fire and police protection, education and a safety net for the elderly and the poor. What is intolerable is the hundreds of billions of dollars of our hard-earned money that is wasted on unnecessary programs, duplication, red tape, fraud, abuse and mismanagement. Over the past decade, the federal government has made hundreds of billions of dollars in improper payments, including more than $1 billion in payments to people who are deceased.

If the federal government can’t even figure out whether citizens are alive or dead, why should we trust them to spend even more of our tax dollars?

Washington politicians are simply addicted to spending other people’s money. The federal government will spend 31 percent more this year than it spent in 2008. And no matter how much we give, they will spend that much and more. That’s why our national debt now stands at $15.6 trillion, and growing fast. That represents $50,000 owed by every man, woman and child in the country.

And yet, there are some who want to raise taxes further to continue to fuel Washington’s spending addiction. Make no mistake, give Washington an extra dime and they will spend a dollar. That’s why we need to stop raising taxes and make government do more with what it already has.

During these difficult economic times, families are tightening their belts and trying to make do with smaller paychecks. Americans now pay more today in taxes than they spend on groceries, clothing and shelter combined.

Congress, too, needs to make the difficult choices to get spending under control. Raising taxes is Washington’s way of admitting that it can’t kick the spending habit. It’s time for an intervention.

We need a top to bottom review of every federal program, to ensure each is necessary and run efficiently.

It starts with transparency — that’s why I’m pushing for passage of a bill I filed last year that would give every taxpayer a “receipt” that will show Americans exactly how their dollars are spent, as well as just how much spending and new debt we are piling on the backs of our children and grandchildren that year.

Before the federal government asks more of Americans, they should be collecting what is already owed.

Currently, this tax gap tops $500 billion. And part of this effort must include federal workers paying the back taxes they owe. Current and former federal employees, who derive their salaries from the taxpayer, owe more than $3 billion in unpaid taxes. That’s why I am introducing legislation that will require those employees who are behind on their taxes to start a repayment plan or have their wages garnished.

Finally, we need to reform the tax code to make it fairer and simpler, ending special interest loopholes and reducing rates to make them more globally competitive.

On April 1, reductions in business tax rates in Japan made America the most highly taxed country in the world as a place to do business. For a nation that prides itself on innovation and entrepreneurship, that’s shameful. And for a country desperately struggling to escape the current economic morass, it’s completely counter-productive. Letting businesses and people keep more of what they earn will create jobs and help our economy grow.

What we don’t need is higher taxes. Raising taxes means fewer jobs — it’s that simple. For example, industry experts in Massachusetts are already predicting job losses across our state if the 2.3 percent tax hike on medical device companies goes into effect next year. Here in the Bay State, there are more than 400 medical device companies that provide thousands of good-paying jobs, and this job-killing tax hike will crush them.

The federal government has proven time and again that it is not a responsible steward of your tax dollars. Until they start respecting the taxpayers’ dollars, we shouldn’t give them any more.

The government spent at least $205,075 in 2010 to “translocate” a single bush in San Francisco that stood in the path of a $1.045-billionhighway-renovation project that was partially funded by the economic stimulus legislation President Barack Obama signed in 2009.“In October 2009, an ecologist identified a plant growing in a concrete-bound median strip along Doyle Drive in the Presidio as Arctostaphylos franciscana,” the U.S. Department of Interior reported in the Aug. 10, 2010 edition of the Federal Register. “The plant’s location was directly in the footprint of a roadway improvement project designed to upgrade the seismic and structural integrity of the south access to the Golden Gate Bridge.

“The translocation of the Arctostaphylos franciscana plant to an active native plant management area of the Presidio was accomplished, apparently successfully and according to plan, on January 23, 2010,” the Interior Department reported.

The bush—a Franciscan manzanita—was a specimen of a commercially cultivated species of shrub that can be purchased from nurseries for as little as $15.98 per plant. The particular plant in question, however, was discovered in the midst of the City of San Francisco, in the median strip of a highway, and was deemed to be the last example of the species in the “wild.”

Prior to the discovery of this “wild” Franciscan manzanita, the plant had been considered extinct for as long as 62 years--extinct, that is, outside of people’s yards and botanical gardens.

Before that, the bush had grown in the “wild” in two cemeteries in San Francisco’s Richmond District as well as on Mount Davidson, a peak in the middle of San Francisco. The Department of Interior said that there had also been “unconfirmed sightings” of the shrub in the city’s Haight-Ashbury District—an area that became famous in the late 1960s as the epicenter of the psychedelic hippie movement.

The Haight-Ashbury population of the plant, the Interior Department said in the Federal Register, was believed to have been "lost to urbanization."

On Oct. 16, 2009, Dr. Daniel Gluesenkamp, a botanist who was then the director of Habitat Protection and Restoration for Audubon Canyon Ranch, noticed the manzanita when he was driving along Doyle Drive (the highway leading to the Golden Gate Bride that is now under renovation). The manzanita had been previously hidden by other vegetation but was uncovered as the area was being cleared in preparation for road construction.

With help from a biologist from the Presidio Trust (which oversees the Presidio) and an ecologist from the National Park Service, Gluesenkamp’s discovery was determined to be a Franciscan manzanita.

Shortly thereafter, the Presidio Trust, the California Department of Transportation (Caltrans), the National Park Service, the U.S. Fish and Wildlife Service, and the California Department of Fish and Game developed a Memorandum of Agreement (MOA) for saving this one bush from the highway project, for which ground had been broken in December 2009.

The agreement of Dec. 21, 2009 – Memorandum of Agreement Regarding Planning, Development, and Implementation of the Conservation Plan for Franciscan Manzanita – explains how, why, and when the bush would be moved and which agencies would be responsible for which aspects of the move. (MOA - Fran Man - 2009.pdf)

While the MOA did not detail all the costs for moving the bush, it did state that in addition to funding removal and transportation of the Franciscan manzanita, Caltrans agreed to transfer $79,470 to the Presidio Trust “to fund the establishment, nurturing, and monitoring of the Mother Plant in its new location for a period not to exceed ten (10) years following relocation and two (2) years for salvaged rooted layers and cuttings according to the activities outlined in the Conservation Plan.”

Furthermore, Presidio Parkway Project spokesperson Molly Graham told CNSNews.com that the “hard removal”—n.b. actually digging up the plant, putting it on a truck, driving it somewhere else and replanting it--cost $100,000.

The MOA also stated that Caltrans agreed to “Transfer $25,605.00 to the Trust to fund the costs of reporting requirements of the initial 10-year period as outlined in the Conservation Plan.”

The $100,000 to pay for the “hard removal,” the $79,470 to pay for the “establishment, nurturing and monitoring” of the plant for a decade after its “hard removal,” and the $25,605 to cover the “reporting requirements” for the decade after the “hard removal,” equaled a total cost of $205,075 for “translocating” this manzanita bush.

But those were not the only costs incurred by taxpayers on behalf of the bush. According to the MOA, other costs included:

--“Contract for and provide funding not to exceed $7,025.00 for initial genetic or chromosomal testing of the Mother Plant by a qualified expert to be selected at Caltrans’ sole discretion.”  (MOA - Fran Man - 2009.pdf)

--“Contract for and fund the input, guidance, and advice of a qualified Manzanita expert on an as-needed basis to support the tending of the Mother Plant for a period not to exceed five (5) years, provided that said expert selection, retention and replacement at any point after hiring rests in the sole discretion of Caltrans.”

“Provide funding not to exceed $5,000.00 to each of 3 botanical gardens (Strybing, UC, and Tilden) to nurture salvaged rooted layers and to monitor and report findings as outlined in the Conservation Plan.”

--“Provide funding not to exceed $1,500.00 for the long-term seed storage of 300 seeds collected around the Mother Plant in November 2009 as outlined in the Conservation Plan.”

The plant is now protected by a fence and its location is kept secret, in part because the Presidio Trust and the National Park Service fear that nature-lovers seeking to see the rare wild Manzanita might trample it to death.

“[A] single trampling event could result in damage or the death of the wild plant,” the Interior Department noted in the Federal Register for Sept. 8, 2011. “As noted …, the Presidio Trust and NPS have made continuous efforts not to reveal the location of Arctostaphylos franciscana. They are concerned that public knowledge of the A. franciscana location would attract large numbers of plant enthusiasts who may damage the A. franciscana and compact the soil.”

The project to replace the Doyle Drive approach to the Golden Gate Bridge with a new road called the Presidio Parkway has an estimated total cost of $1.045 billion. The project has received a number of federal grants, including two under President Barack Obama’s American Recovery and Reinvestment Act. These included $83.28 million in stimulus funds awarded to the project on Dec. 24, 2009 (about a month before the manzanita bush was “translocated”) and $46 million awarded on Dec. 30, 2010.

In a Feb. 17, 2010 statement about stimulus money going to the project, then-House Speaker Nancy Pelosi described herself as “a long-time supporter of the Presidio Parkway project.”

“This badly deteriorated structure is designated a Post Disaster Recovery Route and is the only route between the San Francisco peninsula and northern California counties,” Pelosi’s statement said of project. “Unfortunately, the current roadway is reaching the end of its useful life. The Federal Highway Administration ranks Doyle Drive as the fifth worst bridge in the nation and the worst in California for structural sufficiency.

Construction on the new Presidio Parkway began in late 2009 and is scheduled to be completed in 2013.”

In September 2011, the Fish and Wildlife Service proposed naming the Franciscan manzanita an endangered species.

Had the plant been moved to a botanical garden it would have remained “extinct in the wild.” According to the MOA “Such translocation would essentially render the plant extinct in the wild (once again); it would be unlikely that the plant could be moved a second time once reintroduced populations are established; the seed from the mother plant would not be usable due to likely genetic contamination from other garden species of manzanitas.”

The plant is still considered wild according to the 2011 Federal Register entry because it has been moved to an undeveloped area of the Presidio and “is not receiving the level of protection, water, and nutrients that plants in a botanical garden may receive.”

One California nursery currently allows customer to purchase Franciscan manzanitas online for $15.98 per bush. Another sells them for $18.00 per bush.

While appearing on MSNBC’s “Morning Joe,” oil tycoon T. Boone Pickens dished on everything from energy policy, to natural gas, to “green” jobs. But it was when “Morning Joe” guest Mike Barnicle asked Pickens what he would do differently to boost the economy via the energy industry, the oilman had some depressing news.

“If I was president, I’d get an energy policy for America. We’re the only country in the world without an energy policy and you use 25 percent of the oil. We’re insane,” Pickens said. “And we have resources in America that we could have an energy policy.”

But what about energy independence?

“I wouldn’t want to be,” Pickens responded, “because I want to work with the Canadians. But we work with the Canadians like they’re the enemy sometimes. We tell them they can’t bring a Keystone pipeline to the United States…That’s 250 billion barrels of oil that the United States would capture for our use!”

“Morning Joe” co-host Mika Brzezinski pushed Pickens on the subject of the Obama administration’s approach to energy. The oilman didn’t change his tune.

“Well, they don’t have an energy policy,” Pickens said.

“So you don’t think that the oil production being up domestically is due to the work of this administration?” Brzezinski asked.

“It has nothing to do with the administration,” Pickens replied. “We’ve gotten someplace, but it’s because of technology advanced by the industry.”

However, out of all the things said by the tycoon, there was one moment that grabbed a lot of people’s attention. That was when Pickens, a man who has arguably put more money than any single person into the “green” energy industry, openly admitted that he has “lost his a*s” investing in wind energy.

The Republican side of the Senate Budget Committee will release a chart later today, clearly showing that America's debt is greater than the combined debt of the entire Eurozone and the U.K. America's debt is currently $15.1 trillion, while the Eurozone (which includes France, Germany, Greece, Italy, Spain, the U.K., and others) has a combined debt of $12.7 trillion. (All dollar amounts are in U.S. dollars, and the data refers to closing 2011 numbers.)

The Eurozone is larger than the United States, so America's debt per capita also exceeds the Eurozone's. According to the Census Bureau, the U.S. has a population of 313 million, whereas the Eurozone has a population in excess of 331 million.

Republican presidential candidate Mitt Romney frequently warns that the United States should not become like Greece. "We need to rein in government and unleash the extraordinary vitality and creativity of the American people," Romney wrote in a December op-ed. "We must not wait to suffer a crisis like Greece's or Portugal's to right the ship of state."

Awarding bonuses for wasting taxpayer dollars?

That appears to be incentive offered by the federal agency under fire for spending lavishly on a 2010 conference held near Las Vegas. The latest details from an inspector general report on the conference reveal 50 employees were given cash awards of $500 and $1,000 for their work arranging the now-infamous conference.

"It would also appear that a number of GSA bureaucrats who helped arrange the Las Vegas junket were handed cash bonuses for their work in wasting the better part of a million dollars," Rep. John Mica, R-Fla., said Tuesday.

Rep. Mica also revealed Tuesday that one high-ranking official spent an extra night in Vegas at taxpayer expense, even though the conference was already over.

Calling the new revelation the "icing on the cake," Mica said the official paid only $93 for a fourth night at the Vegas suite, which costs more than $1,000 a night.

The rest of the cost of the room "was apparently charged to the taxpayer" he said in a statement.

Rep. Jeff Denham, chairman of a subcommittee on economic development, public buildings and emergency management, said adding "personal vacation stays in Vegas" to the spending by GSA on the Las Vegas conference was "outrageous."

In light of the the scandal in the General Services Administration over the more than $800,000 spent on the 2010 event, the agency has made a shrewd decision about where to hold its next conference: not Vegas.

The GSA, the federal equivalent of the government's landlord, had been preparing to return to the Las Vegas area, but the Washington Post reported that the upcoming conference, scheduled for April 25 at a Vegas hotel, has been cancelled.

Several agency employees, including its chief, already have lost their jobs over an inspector general's report on the 2010 conference.

Music videos featured at that conference have more or less gone viral by this point, showing agency employees laughing it up while making light of the agency's spending and internal investigations.

The House Oversight and Government Reform Committee has been releasing the videos as it launches an investigation into GSA spending following the inspector general's report. The committee announced late Monday that it has scheduled a hearing for April 16, where Martha Johnson -- until recently the head of GSA -- has been invited to testify, along with the inspector general.

An agency spokesman told the Post that the acting administrator has promised greater scrutiny of any conferences "that involve travel or substantial expenditures of public funds."

The conference that had been scheduled for later this month was focused on environmentally friendly products and services and was intended to bring together GSA employees and contractors.

The Obama administration has not attempted to defend the 2010 conference. Top Obama officials have condemned the expenses and pledged to implement protections to clamp down on wasteful spending. 

The administration, though, has pointed to rising costs under the George W. Bush administration to suggest that the $820,000 Vegas conference could have been avoided -- if the Bush-era GSA had acted. 

According to figures obtained by Fox News, the budget for the so-called Western Regions Conference rose from $93,000 in 2004 to $323,855 in 2006. It then jumped to $655,025 in 2008. 

But Lurita Doan, who headed the agency under Bush until her resignation in 2008, told Fox News that President Obama's team is trying to "divert attention" from its own scandal.

Strange, unlikely, surreal: Take the tax codes of the 50 states, apply a magnifying glass, and here and there, hiding amongst the small print, are specimens that would amaze P.T. Barnum:

A tax on fur, a tax on nudity; taxes on bagels (if sliced, but not if intact); on salt, pets, tattoos; on blueberries, on candy (if not containing flour), on illegal drugs, on sparklers, septic tanks and playing cards. Californians don't pay tax on fresh fruit--unless, per chance, they buy their banana from a vending machine.

New tax marvels are being born daily. New York tax expert Barbara Weltman, publisher of "Big Ideas for Small Business," points to one new one, imposed by Mississippi on salt produced from that state's lands or waters (3 percent of the value produced).

"Unique, weird taxes are states' creative ways to increase revenue in a way consistent with their population and products," she says. Some oddities arise from the circumstances of the moment: The feds, for example, have begun taxing arrows and other "archery products"--an innovation she suspects has arisen in light of the popularity of "The Hunger Games."

Ladies and gentlemen, we present below, for your delectation and amusement--for the first time on any stage--the wildest taxes levied by the 50 states, some supplied by Weltman, some coaxed from states' websites, and others found by eFile, GoBanking, TurboTax/Intuit and the Corporate Tax Network.

Blueberries: They're a big deal in Maine, which produces all but 1 percent of the wild ones sold nationally. Maine taxes them every which way: Anyone growing, handling, processing, selling or purchasing blueberries pays a tax of a penny-and-a-half per pound.

Fur: Come the day your Davy Crocket cap finally wears out, best not buy its replacement in Minnesota, which imposes a tax of 6.5 percent on the sale of fur apparel. How much fur must it bear? Your hat or coat or mukluk must contain at least three times as much fur as it does of the next-most-valuable material that went into its construction. The same tax applies to the shipping of fur items and to any finance charges that may have been incurred.

Nudity: You'd think that Utah, being one of the more circumspect states, would have less nudity to tax than, say, would Nevada. No matter, the civic fathers (and mothers) of Utah levy a tax on services provided by the unclothed. A jiggle parlor, for example, or any other business employing "nude or partially nude" workers, must pay a tax of 10 percent on services sold to patrons (surely patrons from out of state—probably Nevada). If the workers are wearing fur from Minnesota, that would complicate the situation.

Tattoos: Arkansas doesn't just tax tattoos (6 percent of sales). The Natural State applies the same tax to body piercings and electrolysis. So, if you need to have your hair removed before applying for a job as an exotic dancer in Utah, don't have it done in Arkansas.

Playing Cards:In Alabama, your purchase of a deck of playing cards will be subject to a tax of 10 cents per pack. The seller, though, pays $1, plus another $3 for a license. If all that you'll be playing is a friendly, noncommercial game of 52-Card Pickup, don't expect an exemption: the tax applies to all decks of 54 cards or fewer, no matter what their purpose.

Candy, Sodas: Illinois applies to candy a surcharge of 5 percent over and above its 1.25 percent sales tax on food. But candy isn't candy—at least not for tax purposes—if it contains flour. Malted milk balls thus would be exempt, wax mustaches would not. In Chicago, a soda served from a soda fountain is taxed 9 percent; the same soda drunk from a bottle or a can is taxed 3 percent

Litigation:New York taxes litigation, which makes sense, since so much of it is manufactured here. Newcastle taxed coal. Any New Yorker involved in criminal or civil proceedings pays a flat $25.

Bagels, Pets: In Durham, North Carolina, residents who own a cat or dog must pay tax, since the state considers pets to be personal property no different from, say, a TV or stereo—though there would be a difference if a stereo or TV could be neutered. The tax on spayed or neutered pets is $10. But on animals intact, it is $75. This is the reverse of New York's bagel tax, which applies an eight cent charge to altered bagels (ones sliced and schmeered) but not to ones uncut.

Balloon Rides: Kansas wisely distinguishes between tethered balloons and balloons set free. The latter, says efile.com, "are considered a legitimate form of air transportation." Thus rides in the former are taxed as amusements, rides in the latter are not.

In Pennsylvania--as in every other state--there's a tax on alcohol. But Pennsylvania's tax arose as a response to the devastating Johnstown flood, which killed several thousand people in the 19th century. A follow-up flood in '36 did more damage. The state imposed a tax on alcohol to raise money to rebuild the city, and in 1942 rebuilding was complete. Yet the tax remains, picking Pennsylvanians' pockets of $200 million annually.

Be careful what you wish for? Yes. But be careful what you tax. Silly or otherwise, taxes are forever.

An investigation by the inspector general of the General Services Administration found rampant abuse of an employee awards program of the agency’s Pacific Rim region, the same region that has come under fire for spending more than $800,000 on a Las Vegas training conference for 300 employees.

The report on the “Hats Off” employee recognition program, obtained by The Washington Post, found numerous violations of agency directives, theft and misuse of government purchasing cards in the maintenance of the awards program.

The inspector general found “significant control weaknesses in the Hats Off Program.”

The report found that in fiscal year 2009, Pacific Rim employees received $256 in awards and Public Buildings Service employees in the region averaged $328.

The budget for the program rose dramatically in recent years. In 2008, employees at the Pacific Rim region, which oversees federal property in California, Arizona, Nevada and the Pacific Islands, received $47,012 in gifts. The next year it increased to $211,842, then dropped to $134,596 by 2010. In 2011, the program issued $844 worth of awards.

Jeffrey E. Neely became acting commissioner of the region in January 2009, having been public buildings commissioner. Neely was placed on administrative leave for planning the Vegas training conference. Expenditures for the awards program dropped dramatically after the inspector general began his investigation.

The findings in the report include:

■ Employees associated with administering the Hats Off Program were in the top 10 of recipients.

■ Instances of employees swapping awards with each other and supervisors accepting items from employees.

■ One employee, whose name was redacted from the report, gave “out 635 awards to 113 individuals, totaling $3,175.”

■ The Pacific Rim region maintained an inadequate inventory system and meager security on the storage room that held the gift items.

■ Total employee awards exceeded GSA’s 4 percent cap on employee annual salaries. Awards for Region 9 employees also exceeded GSA’s limit of $99-per-item limit on gifts.

Five government-issued purchasing cards were used to make purchases for the online “Hats Off” store, the inspector general found. In four instances, holders split the purchases to circumvent the cards’ single-purchase limit, a violation of agency regulations.

Unidentified public building service card holders allowed others, including two student interns, to make purchases with the cards to buy items for the store, a violation of GSA regulations.

The employee awards program was founded in 2001 as a merit-based point system that would offer coupons that could be redeemed at the “Hats Off” store. Initially, prizes included GSA-stamped mouse pads and backpacks but eventually included electronic goods.

At the start of each fiscal year all non-supervisory employees received 40 virtual “hats” which would be given as peer-to-peer recognition. One virtual hat was worth about $5. Employees could not give hats to themselves, but the investigation found numerous instances of employees swapping hats with each other.

Items in the virtual store included 8G iPod Nanos (redeemable with 30 virtual hats) and Coby 7 Portable DVD Player Tablets (redeemable with 20 virtual hats).

The Pacific Rim region maintained a storage facility on the fourth floor of the Phillip Burton Federal Building in San Francisco. A former GSA employee said items could either be redeemed physically at the storage space, or through an online mall.

The report cited significant security lapses with the storage room. Too many people had access to the space, and administrators often gave out the code to the lock. The office of the inspector general was first alerted to improprieties in the Pacific Rims region’s Hats Off program after more than 40 iPods were found missing and reported to the Federal Protective Service of the Department of Homeland Security. A further inquiry by the inspector general found that 115 iPods valued at $20,000 were unaccounted for and possibly stolen.

The Pacific Rim region organized the 2010 conference that cost $823,000 and included penthouse suites, a clown and a mentalist. GSA Administrator Martha N. Johnson resigned last Monday following revelations of the conference, and two of her senior assistants were fired.

GSA has since terminated the Hats Off program, an agency spokesman said.

The public buildings subcommittee of the House Transportation and Infrastructure Committee, chaired by Rep. Jeff Denham (R-Calif.), will hold a hearing on GSA on April 19.

In the stagnant days of the Carter administration, when inflation was approaching 13.5% and interest rates were peaking at 21.5%, income was more evenly distributed than in any period in 20th-century America. Since the days of that equality in misery, the measured income of the top 1% of income tax filers has risen over three and a half times as fast as the income of the population as a whole.

This growth in income inequality is largely the result of three dynamics:

1) Changes in the way Americans pay taxes and manage their investments, which were a direct result of reductions in marginal tax rates.

2) A dynamic shift in the labor-capital ratio, resulting from the adoption of market-based economies around the world.

3) The flourishing of economic freedom and technological advances in the Reagan era, which were the product of lower tax rates, a reduced regulatory burden, and an improved business climate. These changes have not only raised the measured income of the top 1%, they benefited the nation and the world.

While income distribution has become a source of protest and political debate, any analysis of taxes paid in high tax-and-spend countries shows that the U.S. has the most progressive income tax system in the world. An inconvenient truth for the advocates of higher taxes on America's rich is that big governments in developed countries are funded not by taxing the rich more than the U.S. does, but by taxing everybody else more.

In 1986, before the top marginal tax rate was reduced to 28% from 50%, half of all businesses in America were organized as C-Corps and taxed as corporations. By 2007, only 21% of businesses in America were taxed as corporations and 79% were organized as pass-through entities, with four million S-Corps and three million partnerships filing taxes as individuals. By reducing personal tax rates below the level of the corporate rate, the Tax Reform Act of 1986 dramatically influenced how entrepreneurs structure businesses.

This has had a profound effect on what is now measured as the income of the top 1%, since a significant amount of what is now declared as personal income is actually income from businesses that are now taxed as individuals.

In 1986, just 5.6% of the income of top 1% filers came from business organizations filing as Sub-chapter S-Corps and partnerships. By 2007, almost 19% of income declared on tax returns filed by the top 1% came from business income. A significant amount of income that critics claim is going to John Q. Astor actually is being earned by Joe E. Brown & Sons hardware store.

The reported income of the top 1% also significantly increased as tax rates on capital gains were lowered, first under President Bill Clinton and then under President George W. Bush. At a top tax rate of 28%, realized capital gains were 2.5% of GDP and made up 17.7% of the income of top 1% filers. As the top tax rate fell to 20% in 1997 and 15% in 2003, realized capital gains rose to 4.6% and then to 5% of GDP. The percentage of the income of top 1% filers coming from capital gains grew to 26% in the 1997-2002 period and 28.1% during 2003-07.

By reducing the penalty for transferring capital from one investment to another, these lower tax rates increased the mobility of capital. High-income taxpayers sold more assets, declared more income, and paid more taxes.

Similarly, when the tax rate on dividends fell to 15% in 2003, dividend income for the top 1% grew 178% by 2007 to make up 5.6% of the income of these filers. In 2007, immediately prior to the recession, capital gains and dividend income combined was equal to the amount of salary, bonus and exercised stock options earned by the average top 1% filer.

Lower tax rates made dividend-paying stocks more attractive to high-income investors and made dividend payouts more attractive for companies that would have previously retained those earnings or bought back their stock. Capital trapped in companies with below-market rates of return was redeployed and the entire economy benefited.

All of this has had a huge impact on the measured income of the top 1% and the growth in income inequality. This impact can be estimated by examining what would have happened to the income of the top 1% if tax rates had not been lowered and these economic transformations had not occurred.

If the share of income coming from businesses, capital gains and dividends had remained at the levels before the tax rate changes of 1986, 1997 and 2003 respectively, the income of top 1% filers would have been 31% lower in 2007. The growth in income since 1979 for top 1% filers would have been only 2.5 times as large as the income growth of all taxpayers—not 3.6 times as large.

More businesses would have remained C-Corps and been taxed as corporations, fewer assets would have been sold and thus fewer capital gains would have been declared, and fewer dividends would have been paid. All of this would have lowered the income declared by the top 1%. Economic growth would have been lower and aggregate measured income of all taxpayers would have fallen, but the distribution of income would have been flatter.

The growing participation of China, India, Brazil, Russia and Turkey in the world economy has also affected income inequality. The vast expansion of labor engaged in world commerce has raised the return on capital and reduced the relative return on labor. The share of income flowing to capital—both traditional and human capital such as education and training—has risen.

In relative terms, the return to unskilled labor has fallen. Short of a crippling reversal in world trade, which would reduce the value of both labor and capital, this effect will dominate world markets for the foreseeable future. Since high-income Americans own more capital and have higher levels of education and training, their incomes have grown faster than everyone else's.

The flowering of talent from the expanded freedom and technological progress ushered in by the Reagan era has also played a role. Inequality is a natural result of the expansion of liberty and the development of new technology and new products. Henry Ford, Andrew Carnegie, Sam Walton and Bill Gates caused the income distribution to become more uneven, but they enriched the world.

To vilify success and the rewards it garners is an assault not just on capitalism but on liberty itself. As Will and Ariel Durant observed in "The Lessons of History" (1968), "freedom and equality are sworn and everlasting enemies, and when one prevails the other dies . . . to check the growth of inequality, liberty must be sacrificed."

Nowhere is the political debate over income inequality more detached from reality than the call for the top 1% of American income earners to pay their "fair share." The Organization for Economic Cooperation and Development (OECD) data on the ratio of the share of income taxes paid by the richest taxpayers relative to their share of income show that the U.S. has the world's most progressive tax burden.

The top 10% of earners in the U.S. pay 35% more of the income tax burden than in Sweden and 22% more than in France. These figures—from the 2008 OECD publication "Growing Unequal?"—include all household taxes imposed on income at the federal, state and local level, including social insurance taxes.

In an eternal irony unique to large welfare states, it is the expansion of government in the name of the poor and middle class that always costs poor and middle-class families the most. When the U.S. collects 16.1% of GDP in income taxes, the top 10% of taxpayers pay 7.3% and the other 90% pick up 8.9%.

In France, however, they collect 24.3% of GDP in income taxes with the top 10% paying 6.8% and the rest paying a whopping 17.5% of GDP. Sweden collects its 28.5% of GDP through income taxes by tapping the top 10% for 7.6%, but the other 90% get hit for a back-breaking 20.9% of GDP.

If the U.S. spent and taxed like France and Sweden, it would hardly affect the top 10%, who would pay about what they pay now, but the bottom 90% would see their taxes double.

Since OECD members have significantly higher consumption taxes on average than the U.S., the total tax burden of bigger government is even more heavily borne by lower-income citizens in developed nations than these numbers suggest.

The real and alarming message in these OECD numbers is that there appear to be limits in the real world to how much tax blood can be extracted from rich turnips. With much higher marginal income-tax rates, countries that are clearly willing to soak the rich have proven to be incapable of doing so.

Proposals to raise taxes on high-income Americans in the name of "fairness" not only threaten economic growth. The experience of nations with large governments shows that this argument is simply a red herring for a massive tax increase on middle-income Americans.

In the end, taxing is about feeding government, not redistributing wealth. What nation ever set off on the road to big government promising to tax middle-income workers, and what nation ever got big government without doing it?

Martha Johnson, the head of the federal agency that oversees supplies, transportation and office space for the federal government, has resigned amid reports of lavish spending at a 2010 training conference outside Las Vegas.

What made it so lavish? To start, the General Services Administration’s (GSA) “training conference” cost the taxpayer around $835,000. Staged at a luxury hotel, it featured (among other things) a $3,200 mind reader, $6,300 worth of commemorative coin sets, and a $75,000 training exercise where the attendees tried to build a bicycle. Furthermore, the airfare and lodging for six the “planning trips” for the event cost around $147,000.

The Washington Post reports:

‘When the White House was informed of the Inspector General’s findings we acted quickly to determine who was responsible for such a gross misuse of taxpayer dollars,’ White House Chief of Staff Jack Lew said in a statement to The Washington Post. President Obama ‘was outraged by the excessive spending, questionable dealings with contractors, and disregard for taxpayer dollars,’ Lew said, ‘and called for all those responsible to be held fully accountable.’

Accounting procedures are being revamped, and there will be more oversight over conference planners and contractors, [GSA spokesman] Mecher said. All employees will be required to take mandatory training in conference planning. Travel budgets for several regional offices have been reduced, and future conferences in the western region, which hosted the Nevada event, were canceled.

Johnson will be replaced by former city administrator for the District of Columbia and assistant secretary in the Treasury Department Dan Tangherlini.

Though many would love to believe that the excessive government waste ends with Martha Johnson’s resignation, this is not the first time taxpayer dollars have been wasted. The question remains: should you really be in charge of vast federal funds if you need to take “mandatory conference planning” and think a clown is the best way to liven up a professional training conference?