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Thursday, January 27, 2011

Taxes so simple a 12 year-old gets it

Last week I was sitting in the office working on a couple of things when one of my coworkers mentioned a conversation about taxes she'd had with her 12 year old son.
I'm not quoting verbatim here, so bear with me, I got the sense of it.
It went something like this:
"So they tax you on what you make?"
"Then they tax you on the food you buy?"
"Then you pay taxes on your car?"
"Then you have to pay taxes on your house?"
"That's stupid!"
My reaction was to jump up, throw my hands in the air and scream, "YES!! YES!!! A 12 YEAR OLD GETS IT! WHY CAN'T CONGRESS!?!"
And that's the thing, even a 12 year old can see we're overtaxed. Between state and federal income taxes, sales taxes, gas taxes, automobile property taxes, home property taxes, social security taxes, taxes on your phone bill, more taxes on your Internet bill and probably a few more I'm forgetting, (some major cities have income taxes too) the average American taxpayer is taxed something like 50 percent of his income.
It's not just stupid, it's insane.
It should be pretty obvious in a market-based economy, which ours ostensibly is, that the more money you remove from circulation via taxes, the less there is for individuals to spend to drive the economy. Therefore taxation above a certain point has a chilling effect on the economy.
It's also pretty obvious that Congress just doesn't get it — and never has.
According to the Wikipedia entry on the income tax in the United States in 1944 and 1945 the top marginal rate was 94 percent on incomes above $200,000 a year. Granted that was a lot more money back then, but think about it — for every dollar someone in the top bracket made they got to keep six cents.
The only thing which made those tax rates even remotely sustainable was the war. There was 100 percent employment and most of the workforce was not at home needing to buy things, it was in the military.
These days the economy is in the tank, unemployment is, depending on who you ask, either hovering near 10 percent or well beyond it — taking half the money someone makes, given the falling value of the dollar is just nuts.
The purchasing power of each dollar we make is down, gas is over $3 a gallon and headed for $4 or $5 and half or more of our money goes to one governmental entity or another. Meanwhile they keep spending like drunken — I'd say sailors, but that would be an insult to drunken sailors.
All of it has to stop. We cannot continue to tax the way we do.
My suggestion has always been a flat tax. It doesn't get much fairer than that, or more progressive. If it's say 15 percent across the board, then those who make big bucks pay big bucks, those who make small bucks pay small bucks.
Unfortunately it's probably never going to happen. Neither will a national sales tax — at least not coupled with the elimination of the current tax system. I can see either or both being added. In neither case can the tax code simply be amended to put them in place. It will require the repeal of the the 16th Amendment to the the Constitution — which is unlikely to get through Congress although I suspect ratification by the states would be a foregone conclusion.
In the end, as I have noted before, the major problem is spending. But spending reform which is not coupled with tax reform is a half measure, and the time for half measures is long past.
All IMHO, of course.

Friday, January 21, 2011

Colorblindness not such a bad idea

As I write this it is about 20 minutes to 10, on a wet, grey Monday morning. It is also the day we celebrate Martin Luther King Jr.'s birthday.
I would be lying if I said King was one of my childhood heroes, first he died before I was born, and second, mine ran more to Issac Asimov or Arthur C. Clarke than MLK.
That being said, on this 25th anniversary of the founding of the federal holiday and the 50th since the great man was slain I find myself more and more struck by his life and his words.
I say "great man" and I mean it. When I was young I really didn't understand what the big deal was. I mean, I'd learned about Rosa Parks, of course, and about King, but I didn't realize that one of the big battles of the civil rights movement was fought in Kansas. Brown v. Topeka Board of Education in 1954 was the big federal case which struck down separate schools for black and white students.
I don't know why we didn't learn more about King and the civil rights movement in school. Given how little time is available to teach history, and the way it's usually taught in grade school especially, there simply wasn't enough time or perhaps it was not felt to be important in a school in southwest Kansas — or perhaps in the 70s and early 80s it was simply too raw, too recent.
Whatever the reason it was some years before I began to really hear about the man and his message.
These days, I find his "I have a Dream," speech more and more profound.
When I was young, and with the innocence of childhood, I didn't understand the issue so many adults seemed to have with color. I had friends who were white, and friends who were not, this was normal and not anything I paid particular attention to. As I got older, of course, that changed as it did for much of my generation. Still race, for the most part, was not much of an issue for me or for most of my friends. Oh, I had my prejudices and preconceptions, we all do.
I still do I suppose, although I try to work past that when I run up against them.
Still, the idea of a colorblind society appeals to me as it did to King. A society where people are "judged not by the color of their skin, but by the content of their character."
Unlike many commentators who wish to say King would be appalled by what his dream has become, I don't think so.
Oh, there are areas where he would be disappointed, of course. I think the idea of racial preferences would probably anger Rev. King. I think he would be disappointed as well by some of the lingering racism in this country. Especially, for the highly educated Dr. King, the "soft racism of low expectations," former President George W. Bush discussed in a State of the Union address.
Too, I think he would be upset by the tendency of politicians on both sides of the debate to divide us by race, and to use race to score political points. That is the worst kind of demagoguery and it needs to stop, whatever the party and whoever is doing it.
At the same time I think he would be heartened by the level of upward mobility in the African-American Community. Many more African-Americans are entering the middle and upper classes than ever before. Yes, there are still problems there, but slowly, surely, they're getting better.
I think he would have been elated by the election of Barack Obama as president.
Whatever my political differences with Obama, I was still aware of the immense progress of this nation when a black man could be elected president, and the historic nature of that election. I am proud that my nation has made that step — as I think King would be too.
Yes, we still have a long way to go to reach that colorblind society King dreamt of, but we have made enormous strides as well.
This week, as we celebrate the birth of the man who brought it all to a head, and next month as we remember the history, good and bad, of a people who have done great things for this nation, let us all set aside color and labels.
Let us all be, not African-American, or Asian-American or any other hyphenated-American, but simply Americans. Let us all set aside our preconceptions about each other based on race or politics and simply talk to one another. Let us celebrate both what we have in common, and the differences which make us great as a people — for the American people are a great people and they are one people, of many colors — and that is beautiful.
All IMHO, of course.

Sunday, January 16, 2011

Politics has no place in tragedy

I was getting ready to take my son back to college in Wichita the morning of Jan. 8 when I saw the news Rep. Gabrielle Giffords (D.-Ariz), had been shot, along with several others.
As I read the news on the Fox Web site it was unclear at first if it was a Democrat or a Republican who had been shot.
By that night the political attacks had started, with Paul Krugman at the New York Times already writing an odious column blaming the attack on conservatives.
Let me be very clear. No one should be making any sort of political hay out of this tragedy — a nine year old girl and a federal judge are dead. So are a number of others, including a man who shielded his wife with his own body — and Giffords, who was shot in the head, is fighting for her life.
As the facts start to trickle in, it becomes increasingly clear this was not a politically motivated attack. Jared Loughner, 22, who is accused in the attack which wounded 14 and killed six others appears to have been a deeply disturbed individual. Loughner had been turned down by the military and apparently suspended by Pima County Community College until he had gotten counseling. He then apparently withdrew.
It is sad in this world today that individuals — of any political persuasion — will use a tragedy to advance a political agenda.
For myself, I'm not interested in the politics. I commend President Barack Obama for lowering flags to half mast today. I commend him further for ordering a moment of silence for the dead today. I will credit him as well for ordering the head of the FBI to Arizona to take charge of the investigation.
If he gains some political capital from this so be it. As Americans we should all put aside politics in the face of tragedy. We should honor the fallen no matter their politics. We should comfort the survivors and their families without regard to party.
None of that matters.
What matters is a brave woman is fighting for her life, and her husband is by her side, undoubtedly scared that he may lose the love of his life.
What matters is a mother is mourning her daughter, a wife, her husband.
What matters is the three heroic bystanders. One woman who grabbed Loughner's spare magazine as he tried to reload, allowing two men to tackle him and hold him for police.
Let us all put aside politics in this case. Let this tragedy be used to bring us all together as a nation.
We can all mourn the fallen in this case. If Rep. Giffords recovers from this and resumes her seat I will cheer with her colleagues.
Whatever his mental problems, the only person to blame here is Loughner. My hope is that at the very least he will spend the rest of his life locked up, although if ever there was a case that called for the death penalty this would be it.
Regardless, my prayers, and I would hope everyone else's are with the families of the wounded and fallen, and yes with Loughner's family as well. This is as much a tragedy for them as it is for those he killed, and with this nation that we not allow this to tear us further apart — as I am all too afraid it will.
All IMHO, of course.

Saturday, January 8, 2011

It's the spending, stupid

I've not been a fan of the New York Times for some years, the "Grey Lady" has been infested with ideologues, pinheads, incompetents and plagiarists for so many years it's actually become a source of amusement to me to see what they'll come up with next.
This latest idiocy, is just a case in point. In a recent editorial entitled "The Economy in 2011," the geniuses at the "Paper of Record's" editorial board came out and said, and I quote: "The federal deficit must be addressed. But cutting too deep, too fast will stall the recovery. There will have to be painful cuts ahead, and everything will have to be on the table, including entitlements and defense. Despite what the Republicans claim, there is no way to tackle the deficit and keep growing without raising taxes."
Let us tackle the second part of that statement first.
In point of fact there is an easy way to tackle the deficit and keep growing, and I'm not convinced the economy is actually growing, without raising taxes — cut spending.
The problem with the deficit is not the tax rate. As my old friend and colleague Charlie Martin once pointed out in one of his columns, any tax scheme will eliminate the deficit, balance out and eventually produce a surplus if only one condition is met — spending must not increase faster than Gross Domestic Product. In other words, you simply cannot spend more than you make. Something that is painfully obvious to most average Americans, but not apparently to liberals whose grasp of money is a bit fuzzy. Now, if we wish to eliminate the budget deficit we will need to balance tax rates and spending. A delicate game, but something the Congressional Budget Office is more than capable of doing.
The tax rates are not the problem, spending is. The current deficit is about $1.5 trillion, which means we're spending about $1.5 trillion more than we make. Now to the NYT the solution to this is simple, we simply have to raise taxes. And to some degree they have a point. Nearly 50 percent of the American public either pays no taxes at all or actually gets back more than they paid in due to things like the Earned Income Credit and the Extra Child Tax Credit. It reasonable to suggest the bottom half of the tax bracket should be paying more of their fair share.
This, of course, is not what the NYT and the liberals in Congress suggest, they seem to think the top two percent of wage earners, who are already paying 40 percent of the tax burden should pay more. I'm not sure exactly how this is fair, but it's really beside the point, if we raise taxes too much on the people with money, and it's not the ultra rich they're actually talking about soaking, it's upper middle class folks who own small businesses which are the job creation engine of the economy who will be most hurt by tax increases.
The NYT is right, (and yes my fingers nearly burst into flames writing that), entitlements must be on the table for cuts. However, I do not concede that defense should be on the table. As Adam Smith said "Opulence must take second place to defense."
The NYT hates the military, as do most liberals it seems. They also seem to be constitutionally incapable of realizing we are at war and live in dangerous times. Moreover according to in 2010 the defense budget was about $900 billion. Education spending was $1 trillion, health care was $1.1 trillion and government pensions totaled $1 trillion. I'm sure there is waste, fraud and abuse in the Department of Defense, as I'm quite certain there is in the other departments as well, and that needs to be addressed. But we simply cannot afford President Barack Obama's health care plan, or many of the other entitlements so many Americans have become used to.
Spending has got to be cut, and even European nations are figuring that out and instituting "austerity programs" — witness the rioting in Greece.
Meanwhile we're actually increasing spending.
The only way to help this economy rebound is to create a business friendly environment by reducing corporate tax rates, reducing burdensome regulations and cut spending. Do those three things and America will be back, stronger than ever.
All IMHO, of course.

Sunday, January 2, 2011

A few New Years Resolutions for Congress

I'm generally opposed to New Year's resolutions. They seem a little pointless to me, given that no one ever actually keeps them.
Everyone starts off the year with good intentions of course. They plan to eat better, be nicer to the dog, loose weight, stop killing the neighbors and burying their bodies at the local dump — whatever.
But real life intervenes and next thing you know you've got a butcher knife in your hand and you're pondering fava beans and a nice Chianti, or maybe that's just me.
However, this year we have a new Congress taking power in Washington D.C. and I'd like to propose 10 resolutions to the Republicans and Democrats taking their seats on Jan. 5.
1.) All new members should attend addiction deterrence classes and all returning members should attend addiction counseling and join a 12 step program in order to help them break the spending addiction in Washington. We're out of money and when normal people are out of money they have to stop spending — politicians should do likewise.
2.) They should resolve to pass no legislation they haven't read. If you don't know what's in it you certainly shouldn't be voting for it. They should also resolve to keep bills under 100 pages. No one has the time to read thousands of pages of verbose leagalese, let alone digest and understand what the bills actually say.
3.) On that note, they need to do what President Barack Obama promised, and make sure that all bills are posted on the Web for two weeks before they are voted on. That way the American people have time to read them as well — and to decide if we want it passed or not.
4.) While they're at it the new Congress Critters should resolve to apply the 10th Amendment to all bills prior to passage. That's the one that limits the power of the Federal Government and basically says "if it's not in the constitution you can't do it."
5.) They should also resolve to stop abusing the interstate commerce clause of Article 1, Section 8 of the Constitution to regulate everything from what food our children are allowed to eat in school to health care. The purpose of the interstate commerce clause was to prevent economic warfare between say, Kansas and Colorado, not to allow the federal government to intrude into every aspect of our personal lives.
6.) In point of fact, they should resolve to publish in every bill where in the constitution they derive the authority to pass the law. If they can't find it, it should never even come to a vote.
7.) Even better, they need to resolve to not pass a law unless they first repeal a law. The current federal law alone runs to thousands of volumes. I think we have enough laws. Let's get rid of a few before we add some.
8.) They should also resolve to trim back the federal bureaucracy a bit. The FCC, for instance, recently decided to regulate the Internet — despite having no explicit authority to do so. They just decided they wanted to, and then did. The regulations promulgated by these agencies have the force of law, even though they've never actually been voted on. Let's rein in the bureaucrats just a bit. I suspect we've got a few more agencies than we actually need anyway.
9.) I'd also like to see them resolve to quite monkeying around with the military. I'm ambivalent about the Don't Ask, Don't Tell policy, however when your generals are telling you something is a Bad Idea, it's generally a Good Idea to listen to them. Yes, civilian control of the military is an important principal, and yes, Congress does have the authority to do what they did. But the military in the middle of a war is not the place for social engineering or political correctness. These are warriors, and their job is to kill people and break things. They do that very well indeed, can we not do things that may detract from that ability?
10.) Finally, they should resolve to come down from their ivory tower, clean out their ears and start listening to the American people. Our legislators, whatever they may tell themselves, are not some sort of elite. They were sent there by us, to represent us, and they power they have is derived from and borrowed from us. As many of them found out in November, in this country you rile the American people at your own considerable peril. They need to remember that before they get reminded again.
All IMHO, of course.