What is it about doing taxes and thinking about last year? Every time I prepare my tax returns, I find myself thinking "Was it really just last year that I..." or "Wow, last year we sure spent a lot on...."
It's also a time to plan ahead. If I got a sizable refund for a certain year, then I know I overpaid taxes (No, I do not think of it as a tremendous gift from Uncle Sam, despite what he might wish). So I consider ways to reduce my taxes paid to avoid such refunds in the future. All in all, it's almost like having a New Years Eve reflection and a New Years Day Resolution - only in dollars and cents.
This post probably has no deeper meaning. I just find myself doing my taxes and thinking about the recent past and the oncoming future. At least I know I won't be paying so much in taxes for a while. That's one benefit of living on a graduate school stipend, and of having three beautiful children.
On a somewhat related note, someone (okay, it was my accountant) asked me today if I got in. He wasn't negative about it, but he was probably the first person who seemed to really suggest that I ought to wonder IF I will get in. I made my case to him, explaining the reasons why I felt sure that at least one school would accept me. I didn't list "I feel called from God to do this" among my reasons (perhaps I should have), but I explained why schools might find me a good choice. I'm not down about it, but it did give me a momentary pause. A "what if" moment. But it passed. I cannot let doubt stand in my way. I know I will get in somewhere, if not multiple places. Then I can quit doubting acceptance and start doubting what exactly I am getting myself in to (just kidding, mostly). I am looking forward to knowing where I can go.
-- Robert
Showing posts with label Taxes. Show all posts
Showing posts with label Taxes. Show all posts
Tuesday, January 20, 2009
Monday, April 28, 2008
Tax Law
The tax law in the state of Georgia required that I file by mail this year to get a small credit related to a business I own. I believe that credit amounts to roughly $25 for me. Because of the paper filing, though, I will not receive my refund from the state until late May, despite having mailed it during the first week of March. My brother-in-law, who files in Virginia, got his refund from Georgia a week after he e-filed his return. I have written a letter of grievance to one of the legislators I know well, and I will probably share similar letters with two or three more. I have a real problem with a law that gives an advantage to an out-of-state taxpayer in receiving his refund over an in-state taxpayer. I also have a problem with a law that requires paper filing knowing they have every intention of taking two and a half months to actually return funds. I would probably not care, but I was expecting to pay a lot of taxes last year when I paid a large estimate in the first quarter, only to later realize I would not have to (because of changes to my business). So the state has had my money for over thirteen months now, but I will only get some interest back if they decide they have taken more time than they consider reasonable to return the money.
It is time to pass the FairTax, and to enact similar legislation in the states. It is ridiculous that a bureaucracy has taken this much control over our lives and our money, and that we simply stand by and let it happen. I agree with Lee Iacocca, who recently wrote in his book Where Have All the Leaders Gone about his concern for the lack of leadership in this nation with regard to numerous pressing issues, including energy, health care, taxes, and industry. I have not yet had the chance to read his book, but the excerpt I read hit home for me. Too many have chosen to maintain the status quo instead of leading the charge to make needed changes. Our our tax system is broken, as is our governmental policy on welfare and minimum wage, and without major reformations the economy could suffer catastrophic losses. It has already taken major hits, and policies demanding the creation of false economies to establish some new way of polluting - some would say of creating energy - are driving inflation at a mind boggling pace. The time for action is now. Really it was yesterday, but we must not stand by. I am tired of pretending I am satisfied with the state of things as they are. My business is being crushed. My paycheck is being bled dry more rapidly than ever. I am sick and tired of feeling sick and tired of the state of the world. I know I am not the only one who is fed up.
-- Robert
It is time to pass the FairTax, and to enact similar legislation in the states. It is ridiculous that a bureaucracy has taken this much control over our lives and our money, and that we simply stand by and let it happen. I agree with Lee Iacocca, who recently wrote in his book Where Have All the Leaders Gone about his concern for the lack of leadership in this nation with regard to numerous pressing issues, including energy, health care, taxes, and industry. I have not yet had the chance to read his book, but the excerpt I read hit home for me. Too many have chosen to maintain the status quo instead of leading the charge to make needed changes. Our our tax system is broken, as is our governmental policy on welfare and minimum wage, and without major reformations the economy could suffer catastrophic losses. It has already taken major hits, and policies demanding the creation of false economies to establish some new way of polluting - some would say of creating energy - are driving inflation at a mind boggling pace. The time for action is now. Really it was yesterday, but we must not stand by. I am tired of pretending I am satisfied with the state of things as they are. My business is being crushed. My paycheck is being bled dry more rapidly than ever. I am sick and tired of feeling sick and tired of the state of the world. I know I am not the only one who is fed up.
-- Robert
Tuesday, April 8, 2008
Calling All Refunds
I am, by nature, an early tax return filer. I like to file early so I can recover the money Uncle Same borrowed (stole) from me without paying any interest (though he's all too happy to get interest and penalties should I miss a dollar or two on my payments). This year, because of a particular "benefit" on my return, I could not e-file. Instead, I had to paper file my state return. Because of paper filing, my return has still not appeared on the lovely online system or in the automated phone system. The Internet page is happy to report the "Department of Revenue currently has no record of a return being posted for the entered Social Security Number." Reading that, I became concerned and dialed the listed 800 number to reach the automated attendant. That electronically recorded voice was happy to report that while no return was on file, I needed to allow "at least four weeks for a return to appear in the system." I pressed one to speak to a representative, and was told in extremely rapid recorded English I could call GOODLUCKHEARINGTHISNUMBERSINCEITALKSOFAST if all agents are busy, or I could check the convenient online system for my return. I literally never realized the first five times I called that they were saying a phone number to call, but each time the recording ends with them immediately hanging up (no, it does not let me know that all agents are, in fact, busy). Well, today I finally talked to a person after listening to yet another message and waiting on hold with dead silence on the line for over ten minutes. That person explained that the four weeks is actually seven or more, and they're just particularly behind on processing returns. No real apologies (sure, he might have said the words "I apologize" but somewhat like a cashier says "paper or plastic" or McDonald's employees ask if I want fries with that). I explained that my refund was not a small amount of money, but I had only filed by paper because of Georgia law, so perhaps my refund could be located and sped up. No, nothing could be done. Have a nice day. Ah, smell the bureaucracy.
Fortunately, I enjoy having a great relationship with several important legislators. I will be seeing them soon at the district and state party conventions. I have written a letter to one who has a lot of influence in Atlanta, so hopefully something might be done. Here's hoping.
-- Robert
Fortunately, I enjoy having a great relationship with several important legislators. I will be seeing them soon at the district and state party conventions. I have written a letter to one who has a lot of influence in Atlanta, so hopefully something might be done. Here's hoping.
-- Robert
Thursday, March 6, 2008
Thoughts from The Total Money Makeover
I am about half way through The Total Money Makeover, and I am thoroughly enjoying this book. I wish, in many ways, I had read it last summer because I think that is when we had our crisis that is as close to rock bottom as I ever want to get again. Right after paying out most of the cash we had in any account to some loan or another, our air conditioner broke. In the dead of summer. In South Georgia. Something also triggered a migraine for the first time in years for my wife, and she needed to go to the doctor. One doctor's visit turned into two MRI's, a MRA, a balance test, and at least one other test whose name escapes me at the moment. She visited a neurologist and another specialist. The concerns ranged from her having an aneurysm to just a small loop of blood vessels in her brain, and it all turned out to be an inner ear imbalance. As the last doctor explained, they have to run all the other tests to rule out the inner ear, and then they can tell it is the inner ear. So, a new A/C unit, several thousand in unexpected doctor bills, and no cash. No expectation of cash any time soon, either. I was certainly worried. I didn't want the stress of that moment to trigger another migraine for Ellie, and I didn't want the lack of air conditioning to drive us nuts.
The first thing I did after all this sudden money crunch was to make sure I paid my tithing. I know a lot of people would consider it crazy to do such a thing in the midst of a money crisis, but I knew I needed the peace and all the blessings I could muster at a time like that. My mind was very much unburdened after I paid it, and I know I was blessed to come out of troubled times because of it, but I will leave my testimony of tithing at that for now.
Then, I did what this book would tell me not to do: I borrowed on my credit card. I had run through all the 0% balance transfer offers over time, and the one I had was for 1.99% for nine months. I borrowed enough to make sure I could pay them out of the funds, pay the bills we were suddenly hit with, and have a reserve in case something else came up. The exact amount is a little too embarassing to publish here, but I never plan to borrow short-term like that again. I actually never plan to truly borrow again, as The Total Money Makeover suggests. Dave Ramsey would describe last summer as the time "Murphy moved in" (Murphy from Murphy's Law that whatever can go wrong will go wrong).
This month, we will pay off all our debts other than our house, and we have no reason to expect to incur any new debts any time soon (read: never). I did not follow the plan Dave Ramsey would have suggested for my debt elimination, but I came close. I still paid into my retirement, paid of all my other credit cards as they came due (though I still used them), paid extra on my home loan each month, and then put any extra I could justify into the credit card debt. I certainly would've paid it faster if I had followed the Debt Snowball and put all the extra onto the debt, but I am thankful it never came to needing to. For anyone familiar with the Baby Steps, we are somewhere between steps three and four, but we're actually not far from moving towards six. We will have most of our necessary emergency fund built up by the end of the month, and I already invest 10% into my 401(k) each month, but we will plan to invest the remaining 5% into our Roth IRA later in the summer. The college accounts are already funded at this point, so we're planning to work on paying off our house as quickly as we can muster from now on. We've only owned our home four years, but we already own nearly half of the equity, and by year end we hope to have paid nearly half our original loan on it. Then we plan to refinance to a 15-year fixed rate loan on the remaining balance.
A couple of things will slow us down this year, but I consider them necessary to continuing our progress. We need to replace our stove to avoid a potentially dangerous situation, and our dishwasher will probably need to be replaced soon, too. We may also invest in a new closet design for our master bedroom because it would improve our ability to manage our space dramatically, which would in turn make it easier to be home more. Being home more comes with the territory of spending less, since we eat out less, go to movies less, and so forth. Our current plan is to spend the next several months really planning the closet and get it from Ikea. We've already paid for a trip to California in May for Todd's wedding, but most of the rest of our summer will be spent at home afterward.
I hope this post does not sound gloomy. I am really excited to become completely debt free. I feel less stress about money today than I have in ages, and I feel like I have a plan now to take control of my income, as Dave says to "Tell [my] money where to go instead of wondering where it went." I will probably write more about this book in the future since this blog is all about success and I think we will be successful. I haven't decided to make it a regular day of the week entry, but I might, just to keep myself on track and motivated. Here's hoping we're completely debt free in a couple of years.
-- Robert
P.S.: For anyone wondering, my wife was able to get her balance straight and has not had another full on migraine since. Her post on the balance issues is here.
The first thing I did after all this sudden money crunch was to make sure I paid my tithing. I know a lot of people would consider it crazy to do such a thing in the midst of a money crisis, but I knew I needed the peace and all the blessings I could muster at a time like that. My mind was very much unburdened after I paid it, and I know I was blessed to come out of troubled times because of it, but I will leave my testimony of tithing at that for now.
Then, I did what this book would tell me not to do: I borrowed on my credit card. I had run through all the 0% balance transfer offers over time, and the one I had was for 1.99% for nine months. I borrowed enough to make sure I could pay them out of the funds, pay the bills we were suddenly hit with, and have a reserve in case something else came up. The exact amount is a little too embarassing to publish here, but I never plan to borrow short-term like that again. I actually never plan to truly borrow again, as The Total Money Makeover suggests. Dave Ramsey would describe last summer as the time "Murphy moved in" (Murphy from Murphy's Law that whatever can go wrong will go wrong).
This month, we will pay off all our debts other than our house, and we have no reason to expect to incur any new debts any time soon (read: never). I did not follow the plan Dave Ramsey would have suggested for my debt elimination, but I came close. I still paid into my retirement, paid of all my other credit cards as they came due (though I still used them), paid extra on my home loan each month, and then put any extra I could justify into the credit card debt. I certainly would've paid it faster if I had followed the Debt Snowball and put all the extra onto the debt, but I am thankful it never came to needing to. For anyone familiar with the Baby Steps, we are somewhere between steps three and four, but we're actually not far from moving towards six. We will have most of our necessary emergency fund built up by the end of the month, and I already invest 10% into my 401(k) each month, but we will plan to invest the remaining 5% into our Roth IRA later in the summer. The college accounts are already funded at this point, so we're planning to work on paying off our house as quickly as we can muster from now on. We've only owned our home four years, but we already own nearly half of the equity, and by year end we hope to have paid nearly half our original loan on it. Then we plan to refinance to a 15-year fixed rate loan on the remaining balance.
A couple of things will slow us down this year, but I consider them necessary to continuing our progress. We need to replace our stove to avoid a potentially dangerous situation, and our dishwasher will probably need to be replaced soon, too. We may also invest in a new closet design for our master bedroom because it would improve our ability to manage our space dramatically, which would in turn make it easier to be home more. Being home more comes with the territory of spending less, since we eat out less, go to movies less, and so forth. Our current plan is to spend the next several months really planning the closet and get it from Ikea. We've already paid for a trip to California in May for Todd's wedding, but most of the rest of our summer will be spent at home afterward.
I hope this post does not sound gloomy. I am really excited to become completely debt free. I feel less stress about money today than I have in ages, and I feel like I have a plan now to take control of my income, as Dave says to "Tell [my] money where to go instead of wondering where it went." I will probably write more about this book in the future since this blog is all about success and I think we will be successful. I haven't decided to make it a regular day of the week entry, but I might, just to keep myself on track and motivated. Here's hoping we're completely debt free in a couple of years.
-- Robert
P.S.: For anyone wondering, my wife was able to get her balance straight and has not had another full on migraine since. Her post on the balance issues is here.
Monday, February 25, 2008
Proposed Legislation on the Tax Code, More from the Senator
When the Senator came Wednesday, he also discussed various elements of the new stimulus package, Social Security, and tax code. I want to highlight some of what he said, most of which I found encouraging.
Stimulus Package
In the past month, the Congress worked to pass a stimulus package in the hopes of avoiding an economic recession. He was proud of the bipartisan effort that went into getting the bill passed, and of what the package did. He like that the plan helped individuals and families with a rebate, and it helped business by allowing faster write-offs of new equipment purchases. The spending by families and investments by businesses should spur growth in the economy. While I am not as big of a fan of the package passed because it did not make the 2003 tax cuts permanent, I always appreciate the government cutting taxes.
Social Security
He explained that the plans President Bush had of allowing individuals to retain a portion of their Social Security had been sidetracked early in the president's first term. The senator believes, though, that the only long-term solution to save Social Security is to allow people to invest a portion of their Social Security withholdings in a private account like an IRA or 401(k). By allowing them to invest the funds, they can grow and actually build a retirement instead of relying on the present Social Security system, which does not invest any funds at present. He basically described a plan similar to the one I described here. I was very encouraged to hear what he had to say.
Tax Reform
The Senator definitely favors tax reform, but not overnight. He sponsored a bill that would dissolve the present tax code by 2010, with the understanding that it had to be rebuilt by that time. He recalled the effect that sudden changes in the tax code in the 80's had on the Savings and Loans industry (it was wiped out) and how it contributed to the recession of 1991. He favors a consumption tax (like the FairTax) because it allows individuals to decide whether or not they want to pay the tax instead of making it compulsory. I definitely appreciated his take on how to properly implement tax changes, and I look forward to seeing what else comes out of Washington in the next few months and years.
I really appreciated the senator's visit to our small town. He had not met my wife before, so it was good to introduce him to the new parts of my family, and to let my wife see why I supported him even though he was not the candidate we first supported when he ran for Senate. He is a good man, not so full of himself as many politicians. He had engaging answers, and regularly referred to the problems in Washington as something "we" need to change, instead of "they" (he knows he is there and shares in the blame, he explained). I hope he remains in Washington and gets more accomplished for now. If he decides to run for governor in the next election, though, I can't say I wouldn't support him.
-- Robert
Stimulus Package
In the past month, the Congress worked to pass a stimulus package in the hopes of avoiding an economic recession. He was proud of the bipartisan effort that went into getting the bill passed, and of what the package did. He like that the plan helped individuals and families with a rebate, and it helped business by allowing faster write-offs of new equipment purchases. The spending by families and investments by businesses should spur growth in the economy. While I am not as big of a fan of the package passed because it did not make the 2003 tax cuts permanent, I always appreciate the government cutting taxes.
Social Security
He explained that the plans President Bush had of allowing individuals to retain a portion of their Social Security had been sidetracked early in the president's first term. The senator believes, though, that the only long-term solution to save Social Security is to allow people to invest a portion of their Social Security withholdings in a private account like an IRA or 401(k). By allowing them to invest the funds, they can grow and actually build a retirement instead of relying on the present Social Security system, which does not invest any funds at present. He basically described a plan similar to the one I described here. I was very encouraged to hear what he had to say.
Tax Reform
The Senator definitely favors tax reform, but not overnight. He sponsored a bill that would dissolve the present tax code by 2010, with the understanding that it had to be rebuilt by that time. He recalled the effect that sudden changes in the tax code in the 80's had on the Savings and Loans industry (it was wiped out) and how it contributed to the recession of 1991. He favors a consumption tax (like the FairTax) because it allows individuals to decide whether or not they want to pay the tax instead of making it compulsory. I definitely appreciated his take on how to properly implement tax changes, and I look forward to seeing what else comes out of Washington in the next few months and years.
I really appreciated the senator's visit to our small town. He had not met my wife before, so it was good to introduce him to the new parts of my family, and to let my wife see why I supported him even though he was not the candidate we first supported when he ran for Senate. He is a good man, not so full of himself as many politicians. He had engaging answers, and regularly referred to the problems in Washington as something "we" need to change, instead of "they" (he knows he is there and shares in the blame, he explained). I hope he remains in Washington and gets more accomplished for now. If he decides to run for governor in the next election, though, I can't say I wouldn't support him.
-- Robert
Thursday, February 21, 2008
One Man's Proposal to Curb The Rising Cost of Health Care, Part 2
3. Government incentives to enter the most needed fields of medicine
Programs already exist that pay off loans for doctors who work a certain number of years in rural areas. Programs could also reimburse some measure of tuition or pay off some measure of loans for doctors to enter the fields in high demand that are not presently attracting as many doctors. There would be more primary care physicians available, helping people have greater availability. Loan payoffs could be tied to working in a given field as well as working in geographic or economic areas that need more doctors. If those programs already exist, then perhaps I am showing my ignorance. As it stands, new doctors are focusing on fields that earn them more money, and some further incentive to encourage more people to work in medicine as the field continues to have an increasing demand in years to come. I freely admit I am fairly ignorant on how these programs presently work to encourage doctors to work in rural areas. If they already include the requirement to go into certain fields, then good for them.
4. Remove the requirement that students must have an undergraduate degree to enter medical school
Once upon a time, students could go to veterinary school without completing a bachelor's degree. I know my former vet, now retired, did just that about fifty years ago. As it stands, for a person to become a doctor, they have to go through eight years of study and four years of residency to be a doctor free to practice on their own. If we removed the requirement for students finish the bachelor's program first, and instead required something more like an associate's in pre-med that involved all the necessary sciences, we could at least remove some of the time spent becoming a doctor. I know the enormous commitment to become a doctor has deterred many of my very intelligent friends from pursuing it, even some who planned all through their childhood to become one. If we shorten the path, we might hope to get more doctors.
5. Final Thoughts
In addition to these ideas, I also completely agree with Lawyer Mama that the system already pays for people's care, whether we like it or not. One commenter, SarcastaMom, on her blog post about universal health care, suggested we take the large sums spent on expensive care after the fact and invest it in more preventative care and education. I agree, but we need to come up with a good way to accomplish that shift in spending. Making it part of Medicaid and Medicare might make some sense, but not if it becomes "add-on" instead of "in-lieu-of" spending. My suggestion would be to require those on Medicaid to have an annual physical, which would help in curtailing major illnesses growing unchecked before they turn into something serious. Private insurance could also pay for an annual physical without regard to deductible as a further encouragement for people to get a better idea of how their general health is doing.
Doctors are already swamped in any office I visit, but with these government incentives, the cost of medical care to the consumer could and would go down and the availability would go up. These programs would also avoid the government taking over the role of insurance companies, but instead help the actual cost of medical care go down by removing the government-related costs from the equation. That's my two cents on the matter. Now I'd love to hear other ideas.
-- Robert
Programs already exist that pay off loans for doctors who work a certain number of years in rural areas. Programs could also reimburse some measure of tuition or pay off some measure of loans for doctors to enter the fields in high demand that are not presently attracting as many doctors. There would be more primary care physicians available, helping people have greater availability. Loan payoffs could be tied to working in a given field as well as working in geographic or economic areas that need more doctors. If those programs already exist, then perhaps I am showing my ignorance. As it stands, new doctors are focusing on fields that earn them more money, and some further incentive to encourage more people to work in medicine as the field continues to have an increasing demand in years to come. I freely admit I am fairly ignorant on how these programs presently work to encourage doctors to work in rural areas. If they already include the requirement to go into certain fields, then good for them.
4. Remove the requirement that students must have an undergraduate degree to enter medical school
Once upon a time, students could go to veterinary school without completing a bachelor's degree. I know my former vet, now retired, did just that about fifty years ago. As it stands, for a person to become a doctor, they have to go through eight years of study and four years of residency to be a doctor free to practice on their own. If we removed the requirement for students finish the bachelor's program first, and instead required something more like an associate's in pre-med that involved all the necessary sciences, we could at least remove some of the time spent becoming a doctor. I know the enormous commitment to become a doctor has deterred many of my very intelligent friends from pursuing it, even some who planned all through their childhood to become one. If we shorten the path, we might hope to get more doctors.
5. Final Thoughts
In addition to these ideas, I also completely agree with Lawyer Mama that the system already pays for people's care, whether we like it or not. One commenter, SarcastaMom, on her blog post about universal health care, suggested we take the large sums spent on expensive care after the fact and invest it in more preventative care and education. I agree, but we need to come up with a good way to accomplish that shift in spending. Making it part of Medicaid and Medicare might make some sense, but not if it becomes "add-on" instead of "in-lieu-of" spending. My suggestion would be to require those on Medicaid to have an annual physical, which would help in curtailing major illnesses growing unchecked before they turn into something serious. Private insurance could also pay for an annual physical without regard to deductible as a further encouragement for people to get a better idea of how their general health is doing.
Doctors are already swamped in any office I visit, but with these government incentives, the cost of medical care to the consumer could and would go down and the availability would go up. These programs would also avoid the government taking over the role of insurance companies, but instead help the actual cost of medical care go down by removing the government-related costs from the equation. That's my two cents on the matter. Now I'd love to hear other ideas.
-- Robert
Tuesday, February 19, 2008
One Man's Proposal to Curb The Rising Cost of Health Care, Part 1
Saturday, my wife and I were taking a lovely walk through our neighborhood. As we walked, we discussed this post on universal health care. We both agree that we do not want universal health care, but what good is simply disagreeing without proposing a solution, or at least an alternative. I came up with something I would love to have input on. Today I will post the first two parts of where I thought we could start.
1. Medical professionals no longer pay federal taxes on income
If we removed the income tax and payroll tax from medical professionals, we would allow doctors to charge less for their services. We would also encourage more people to consider entering the medical field. Presently, various economic studies have shown that the average doctor makes less than the average businessman when the costs and time spent becoming a doctor are taken into account. In simpler terms, while a doctor's actual income may appear quite high, the investment spent to become a doctor is much higher in dollars and time, and the average business school graduate can make a higher living with less time and money invested thanks to several more years of earning power to build up with. If doctors no longer had to pay taxes, we would substantially increase their ability to make a living, some of which could be passed on to patients in the form of reduced fees. As more students become doctors, the increased supply would also reduce the cost of medical care on the system. Presently, we need similar increases in the supply of other medical professionals, such as nurses and EMT's, and removing their taxes would definitely encourage more people to consider medicine when choosing a career.
2. The Federal Government pays malpractice insurance premiums on doctors
One of the highest costs any medical practice copes with is the premium on malpractice insurance. If government paid those premiums, doctors could again charge less for their services. If particular doctors had continual problems with malfeasance, then the government could revoke their license and cease paying their premiums to avoid a rise in those costs. Managing those malpractice premiums would also encourage the government to oversee medical care as well as evaluate awards in malpractice cases more carefully. Taking more of the burden off of doctors to manage the business side of their practice would give them more time to focus on actual medical care. If the cost of paying these premiums is anywhere near the cost of insuring the forty-six million presently without insurance in this country, I would be fairly surprised. Even if it was close, paying the malpractice premiums would go a long way to reducing the cost of medical insurance as the cost of medical care reduced, making the malpractice premiums an investment in reduction.
The second half of this proposal will be up on Thursday. I look forward to plenty of comments on both days.
-- Robert
1. Medical professionals no longer pay federal taxes on income
If we removed the income tax and payroll tax from medical professionals, we would allow doctors to charge less for their services. We would also encourage more people to consider entering the medical field. Presently, various economic studies have shown that the average doctor makes less than the average businessman when the costs and time spent becoming a doctor are taken into account. In simpler terms, while a doctor's actual income may appear quite high, the investment spent to become a doctor is much higher in dollars and time, and the average business school graduate can make a higher living with less time and money invested thanks to several more years of earning power to build up with. If doctors no longer had to pay taxes, we would substantially increase their ability to make a living, some of which could be passed on to patients in the form of reduced fees. As more students become doctors, the increased supply would also reduce the cost of medical care on the system. Presently, we need similar increases in the supply of other medical professionals, such as nurses and EMT's, and removing their taxes would definitely encourage more people to consider medicine when choosing a career.
2. The Federal Government pays malpractice insurance premiums on doctors
One of the highest costs any medical practice copes with is the premium on malpractice insurance. If government paid those premiums, doctors could again charge less for their services. If particular doctors had continual problems with malfeasance, then the government could revoke their license and cease paying their premiums to avoid a rise in those costs. Managing those malpractice premiums would also encourage the government to oversee medical care as well as evaluate awards in malpractice cases more carefully. Taking more of the burden off of doctors to manage the business side of their practice would give them more time to focus on actual medical care. If the cost of paying these premiums is anywhere near the cost of insuring the forty-six million presently without insurance in this country, I would be fairly surprised. Even if it was close, paying the malpractice premiums would go a long way to reducing the cost of medical insurance as the cost of medical care reduced, making the malpractice premiums an investment in reduction.
The second half of this proposal will be up on Thursday. I look forward to plenty of comments on both days.
-- Robert
Saturday, February 16, 2008
Universal Health Care
This post is written in response to a post by Lawyer Mama which can be read in part here and in full here.
To preface, I am one of those who has to pay for my own insurance out of my paycheck. I have spent an average of more than 20% of that paycheck each year on medical costs.
I don't want universal health care. I would much prefer a private solution where group health care were more readily available to those who do not work for employers that provide coverage in the benefits package. There are more and more companies getting out of that benefit area anyway because the costs are skyrocketing. By the insurance companies offering group coverage based on locality, age, or whatever other logic diversified their risk adequately, more people could get coverage.
I also think a better solution is that more health-related items should be tax deductible. Pay for a gym? Tax deductible. Get an annual physical? Tax deductible. If more preventative medicine practices were covered by insurance or tax deductible, people would be more encouraged to undertake those practices. Universal health care without those remedies would only increase the velocity of the costs increases as more people become encouraged to "just wait 'til it blows" (my father once told me to do that with a tire that was leaky, and I did, so it happened on the way to school, kind of fits the poor timing comment). As one driver once said to another, regarding his truck, "I don't maintain my equipment. I just hope it goes out while I'm under a load with [my company]." I don't let him work with us anymore. Because the current system encourages people to wait until their problems are chronic, our costs will continue to go up.
The last reason I would not want universal health care is the same reason I don't want Social Security in its present form anymore. When the government takes tax dollars to pay for something, they are matching dollars with dollars. When an insurance company takes in premiums, they invest those premiums and use their profits to pay for health care. Government could never compete with them on their ability to cover costs (even as bad as they are already about paying for what they are supposed to). If government took tax dollars in and paid them to private insurance companies to handle those who qualify for some program, I would be willing to entertain proposals on the idea.
I have one further problem with creating one more program to help those who are "unable to help themselves." By aiding those considered less fortunate, more people become less fortunate. If I could quit paying what I do for insurance and just qualify for a government program instead, I might. Certainly many would. It happens time and again. The welfare rolls have plenty on them who could do more for themselves than they do, but they're satisfied getting by on welfare because they get medical costs handled and basic needs met. I won't discuss the criminal subculture of welfare recipients who find other sources of income here because I don't want to cloud the issue. Creating universal health care to insure those who are not presently insured would actually mean insuring more than their 46-million.
I know plenty of young people who are healthy and able-bodied who simply don't have insurance because they choose not to. Sure, they're taking a risk, but that's their choice. If I had saved all my premiums and simply paid for the various costs of medical care I had incurred with my family (and no, they are not low) over the past four years, I would still have money left over from my premiums I am sure. But I pay for insurance to cover catastrophies. I am also a diabetic who will need further health care for probably the rest of my life. If I had not gotten on insurance before, I might be faced with a serious problem now. Still, I don't want universal health care to save me. I prefer to look for better solutions than government managed programs. I am definitely interested in discussing government aided private solutions when the aid comes in the form of tax breaks and positive incentives instead of increased taxation to build more programs.
I would love to hear more thoughts on this subject. I have posted the links to the inspiration for my comments on the subject, so hopefully comments here will be something new beyond those endorsements.
-- Robert
To preface, I am one of those who has to pay for my own insurance out of my paycheck. I have spent an average of more than 20% of that paycheck each year on medical costs.
I don't want universal health care. I would much prefer a private solution where group health care were more readily available to those who do not work for employers that provide coverage in the benefits package. There are more and more companies getting out of that benefit area anyway because the costs are skyrocketing. By the insurance companies offering group coverage based on locality, age, or whatever other logic diversified their risk adequately, more people could get coverage.
I also think a better solution is that more health-related items should be tax deductible. Pay for a gym? Tax deductible. Get an annual physical? Tax deductible. If more preventative medicine practices were covered by insurance or tax deductible, people would be more encouraged to undertake those practices. Universal health care without those remedies would only increase the velocity of the costs increases as more people become encouraged to "just wait 'til it blows" (my father once told me to do that with a tire that was leaky, and I did, so it happened on the way to school, kind of fits the poor timing comment). As one driver once said to another, regarding his truck, "I don't maintain my equipment. I just hope it goes out while I'm under a load with [my company]." I don't let him work with us anymore. Because the current system encourages people to wait until their problems are chronic, our costs will continue to go up.
The last reason I would not want universal health care is the same reason I don't want Social Security in its present form anymore. When the government takes tax dollars to pay for something, they are matching dollars with dollars. When an insurance company takes in premiums, they invest those premiums and use their profits to pay for health care. Government could never compete with them on their ability to cover costs (even as bad as they are already about paying for what they are supposed to). If government took tax dollars in and paid them to private insurance companies to handle those who qualify for some program, I would be willing to entertain proposals on the idea.
I have one further problem with creating one more program to help those who are "unable to help themselves." By aiding those considered less fortunate, more people become less fortunate. If I could quit paying what I do for insurance and just qualify for a government program instead, I might. Certainly many would. It happens time and again. The welfare rolls have plenty on them who could do more for themselves than they do, but they're satisfied getting by on welfare because they get medical costs handled and basic needs met. I won't discuss the criminal subculture of welfare recipients who find other sources of income here because I don't want to cloud the issue. Creating universal health care to insure those who are not presently insured would actually mean insuring more than their 46-million.
I know plenty of young people who are healthy and able-bodied who simply don't have insurance because they choose not to. Sure, they're taking a risk, but that's their choice. If I had saved all my premiums and simply paid for the various costs of medical care I had incurred with my family (and no, they are not low) over the past four years, I would still have money left over from my premiums I am sure. But I pay for insurance to cover catastrophies. I am also a diabetic who will need further health care for probably the rest of my life. If I had not gotten on insurance before, I might be faced with a serious problem now. Still, I don't want universal health care to save me. I prefer to look for better solutions than government managed programs. I am definitely interested in discussing government aided private solutions when the aid comes in the form of tax breaks and positive incentives instead of increased taxation to build more programs.
I would love to hear more thoughts on this subject. I have posted the links to the inspiration for my comments on the subject, so hopefully comments here will be something new beyond those endorsements.
-- Robert
Thursday, February 14, 2008
Social Security - An Investment Strategy
Last night as I was driving home, I heard Dave Ramsey explain how Social Security looks as an investment of our wealth. If a person making $40,000 a year from age twenty to seventy with no pay increases were allowed to keep two percent of his paycheck out of the 7.65% held out now for Social Security, and he invested that $800 a year for that entire fifty years at the average market return of 12%, he could retired with over $2.6M in savings. If he lived off five percent of that and kept it invest at seven percent (for security), he would have three times the annual income he had made his entire life to live on, and he would still have the same money left when he died for his children to inherit. Instead, for the 7.65% he put in, he gets back about $1,200 a month to live on. Imagine how well off he would be if he had gotten to keep all his social security withholdings to invest. In other words, Social Security represents one of the worst investments in the history of the world. Our government withholds money, never invests it, and then gives it back at a faster pace than it was paid in, but the money never had a chance to even counteract inflation. Should we still continue to tinker with a system based on the hope that its investors die off before they ever collect, or should we let people opt out? I would love to hear input on this topic.
Updated:
I am sure some government analysts (I will do my best not to sound condescending here) can determine what amount needs to still be paid in by employees to make sure everyone presently on Social Security can get it until they're 85 or so, and anyone who wishes to stay in will just be aware they will only get paid out of it up to the level of total contribution (which will give them an added incentive to opt out). Since it's so popular to burden the employers with this cost, they could continue to pay in on all employees who opt out for the first few years, with a phase out on any employees who have opted out. That will give employers a great incentive to offer employees who choose to opt out: they can use the 7.65% they're not longer paying to match retirement funds in a 401(k) plan. Let me explain that more clearly: presently, many employers match retirement funds for employees vested in their retirement plan (called a 401(k) when involving businesses). Since the employers are already matching those taxes, it will not cost them any more to give those funds to the employee in a matching situation, which will help even more people retire well. Those funds will be invested in the market in some fashion (stocks or bonds, most likely) which will help the economy. Social Security would be protected for anyone still paying in, but those who choose to opt out have a great opportunity to prepare themselves for the future in a way that unburdens the government and other taxpayers.
-- Robert
Updated:
I am sure some government analysts (I will do my best not to sound condescending here) can determine what amount needs to still be paid in by employees to make sure everyone presently on Social Security can get it until they're 85 or so, and anyone who wishes to stay in will just be aware they will only get paid out of it up to the level of total contribution (which will give them an added incentive to opt out). Since it's so popular to burden the employers with this cost, they could continue to pay in on all employees who opt out for the first few years, with a phase out on any employees who have opted out. That will give employers a great incentive to offer employees who choose to opt out: they can use the 7.65% they're not longer paying to match retirement funds in a 401(k) plan. Let me explain that more clearly: presently, many employers match retirement funds for employees vested in their retirement plan (called a 401(k) when involving businesses). Since the employers are already matching those taxes, it will not cost them any more to give those funds to the employee in a matching situation, which will help even more people retire well. Those funds will be invested in the market in some fashion (stocks or bonds, most likely) which will help the economy. Social Security would be protected for anyone still paying in, but those who choose to opt out have a great opportunity to prepare themselves for the future in a way that unburdens the government and other taxpayers.
-- Robert
Monday, February 11, 2008
Some More On My Perspective - A Response to Lawyer Mama
I don't mean this response to sound defensive, so please don't read it with that tone. I am simply posting it to explain my own perspective.
My father was dirt poor growing up as he did in the Depression Era South. The fact is, where he lived, the "Great Depression" was nothing new, as the area had been in Depression for decades. He and his brothers wanted a better life. As one teacher advised them, they wanted a job where "their head was above their butt". So they worked hard and went to college. They worked their way through college, struggling at times, but they did it. When my father decided he wanted to marry my mother, he explained to her simply "I want to marry you, but not if you won't let me finish my Masters Degree." She didn't, and he helped her get her own in Library Science while he got his Masters of Accounting. They both understood that sacrifice comes with the territory of wanting a better life.
My concern is that today, people have forgotten the meaning of sacrifice. They think having their cable turned off for a year means they're really giving up something. One article I read recently (I believe it was the Deseret News, but I can't say for sure) described how well the "poor" of this nation live compared to the average person thirty years ago. Most have cable, phones, air conditioning, and available food. That's more than many people can say in the developing world even among their wealthy. Americans have grown fat on the entitlement mindset. Once in a while I still hear of someone truly giving up something to get something more, and almost every time it seems to be in the memoirs of someone successful. Most of the most successful people I know - and I've had the great fortune to know quite a few, having been around politics and industry all my life - have come up from very poor circumstances thanks to a lot of hard work coupled with opportunities they sought out and made good on. The list of those who have come from a life of privilege and managed to grow their already large wealth is much shorter. The fact is, I've also had the chance to observe the children of the wealthy and successful, and all too often they are squanderers. I do not look at them with admiration any more than I look at someone from the projects with automatic derision.
Right now, our nation has several built in programs that are making progress of any kind difficult. Corporate taxes, high regulations, minimum wages, welfare programs... each of these contributes to the growing debt and the growing number of companies leaving this country in favor of localities with freer markets. Americans continue to buy their products after they leave, so why should they stay? Obviously, we have all voted with our dollars to say "we'd rather you paid low wages and had lower regulations so we can pay less." We can fool ourselves into thinking idealistically that the evil corporations need to suffer for all the things they do wrong in this country, but the ones we end up paying are the ones who do even more wrong when they leave to avoid our bogus policies. We are one of the only nations in the world that has policies that favor foreign corporations over our own.
What I want to see in this country is an absolute revolution in our way of thinking. The tax system we have puts a huge burden on every citizen - even those who don't pay taxes.
We need a better way to implement taxes, and we need a better way to encourage good habits - saving, investing, getting an education, sacrificing present wants for great opportunities in the future. I honestly believe the FairTax would go a long way towards achieving my desired goals, but it will take an absolutely revolution for it to ever pass. Too many people are apathetic to government or to change of any kind. The status quo is maintained simply to avoid having to get involved. We need more people to care. We need more people involved. There are many great thinkers in this nation who have long since given up trying to be heard because the political process has so many ways to destroy changes. I want a dialogue, even though it may involve some passionate views that disagree with my own, I want to hear what people have to say about what needs to change. The political process has got to improve, or the people have got to learn how to work through the system to improve the nation. Whatever happens, the status quo in this country will not suffice much longer.
-- Robert
My father was dirt poor growing up as he did in the Depression Era South. The fact is, where he lived, the "Great Depression" was nothing new, as the area had been in Depression for decades. He and his brothers wanted a better life. As one teacher advised them, they wanted a job where "their head was above their butt". So they worked hard and went to college. They worked their way through college, struggling at times, but they did it. When my father decided he wanted to marry my mother, he explained to her simply "I want to marry you, but not if you won't let me finish my Masters Degree." She didn't, and he helped her get her own in Library Science while he got his Masters of Accounting. They both understood that sacrifice comes with the territory of wanting a better life.
My concern is that today, people have forgotten the meaning of sacrifice. They think having their cable turned off for a year means they're really giving up something. One article I read recently (I believe it was the Deseret News, but I can't say for sure) described how well the "poor" of this nation live compared to the average person thirty years ago. Most have cable, phones, air conditioning, and available food. That's more than many people can say in the developing world even among their wealthy. Americans have grown fat on the entitlement mindset. Once in a while I still hear of someone truly giving up something to get something more, and almost every time it seems to be in the memoirs of someone successful. Most of the most successful people I know - and I've had the great fortune to know quite a few, having been around politics and industry all my life - have come up from very poor circumstances thanks to a lot of hard work coupled with opportunities they sought out and made good on. The list of those who have come from a life of privilege and managed to grow their already large wealth is much shorter. The fact is, I've also had the chance to observe the children of the wealthy and successful, and all too often they are squanderers. I do not look at them with admiration any more than I look at someone from the projects with automatic derision.
Right now, our nation has several built in programs that are making progress of any kind difficult. Corporate taxes, high regulations, minimum wages, welfare programs... each of these contributes to the growing debt and the growing number of companies leaving this country in favor of localities with freer markets. Americans continue to buy their products after they leave, so why should they stay? Obviously, we have all voted with our dollars to say "we'd rather you paid low wages and had lower regulations so we can pay less." We can fool ourselves into thinking idealistically that the evil corporations need to suffer for all the things they do wrong in this country, but the ones we end up paying are the ones who do even more wrong when they leave to avoid our bogus policies. We are one of the only nations in the world that has policies that favor foreign corporations over our own.
What I want to see in this country is an absolute revolution in our way of thinking. The tax system we have puts a huge burden on every citizen - even those who don't pay taxes.
We need a better way to implement taxes, and we need a better way to encourage good habits - saving, investing, getting an education, sacrificing present wants for great opportunities in the future. I honestly believe the FairTax would go a long way towards achieving my desired goals, but it will take an absolutely revolution for it to ever pass. Too many people are apathetic to government or to change of any kind. The status quo is maintained simply to avoid having to get involved. We need more people to care. We need more people involved. There are many great thinkers in this nation who have long since given up trying to be heard because the political process has so many ways to destroy changes. I want a dialogue, even though it may involve some passionate views that disagree with my own, I want to hear what people have to say about what needs to change. The political process has got to improve, or the people have got to learn how to work through the system to improve the nation. Whatever happens, the status quo in this country will not suffice much longer.
-- Robert
Sunday, February 10, 2008
The Corporate Tax - The Most Regressive Tax in America
Most people I know debate whether taxing a corporation more is good or bad, or whether giving corporations tax breaks is good or bad. Corporations pay very high tax rates. The fact is that taxing corporations at all is bad for everyone.
What is a corporation, after all? A corporation is an entity funded by investors and lenders, run by managers in charge of creating a profit for the investors and repaying the lenders by creating a product or providing a service for a group of consumers. In a legal sense, a corporation is a distinct entity, but in a practical sense it is a group of people. It is also an employer of people in most cases.
What effect does taxing a corporation have on the economy? First, it reduces the capacity of that corporation to employ people because of the reduction of funds. It also reduces the ability of that corporation to research new products or improve existing ones. Worst of all, it forces the corporation to raise prices to compensate for the reduced revenue. What happens when fewer people are employed, less product development occurs, and prices rise? It hurts the poor, and creates more poverty. Those with less income are less able to afford basic goods and services, and with fewer people employed there are more people who have less income.
So, in short, a tax on corporations is the most regressive tax around. A regressive tax is one that taxes the poor more than the wealthy. Another example with be any form of sales tax not refunded or reduced for the poor. Corporate taxes have the same effect because they create inflation through the ideas mentioned above, which is just one more reason they should be unilaterally repealled and the FairTax should be adopted. By taking the inflation out of the market, taxes can be paid in a smarter way while more jobs become available, more research is done, and prices go down for everyone. The FairTax represents a win-win that both political parties should be falling over themselves to pass.
What is a corporation, after all? A corporation is an entity funded by investors and lenders, run by managers in charge of creating a profit for the investors and repaying the lenders by creating a product or providing a service for a group of consumers. In a legal sense, a corporation is a distinct entity, but in a practical sense it is a group of people. It is also an employer of people in most cases.
What effect does taxing a corporation have on the economy? First, it reduces the capacity of that corporation to employ people because of the reduction of funds. It also reduces the ability of that corporation to research new products or improve existing ones. Worst of all, it forces the corporation to raise prices to compensate for the reduced revenue. What happens when fewer people are employed, less product development occurs, and prices rise? It hurts the poor, and creates more poverty. Those with less income are less able to afford basic goods and services, and with fewer people employed there are more people who have less income.
So, in short, a tax on corporations is the most regressive tax around. A regressive tax is one that taxes the poor more than the wealthy. Another example with be any form of sales tax not refunded or reduced for the poor. Corporate taxes have the same effect because they create inflation through the ideas mentioned above, which is just one more reason they should be unilaterally repealled and the FairTax should be adopted. By taking the inflation out of the market, taxes can be paid in a smarter way while more jobs become available, more research is done, and prices go down for everyone. The FairTax represents a win-win that both political parties should be falling over themselves to pass.
Saturday, February 9, 2008
Welfare, Social Security - Thoughts on Government Programs
Private enterprise could help single mothers by lowering their prices after their taxes are eliminated. They could hire more single mothers, too. If we changed welfare from a handout program to one that paid for training opportunities, then it would be a much better program. Social Security should be something the younger generation should be allowed to opt out of. It has been one of the worst programs in history because it has taken money away from people, never invested it in anything to counteract inflation, and then handed it back after it was worth half what was taken. If we all had the same six percent back to invest how we choose (even if it was only in CD’s), we’d all be better off.
The statistics do show that private/non-profit aid to the needy reduced after welfare was implemented. They also show that crime increased dramatically after welfare was implemented. If welfare recipients were working – especially working hard – to receive their benefits, then it would encourage them to get off welfare. Imagine forming recipient groups that aided each other by some number working outside the home, some caring for children while their parents worked, and it all being coordinated in some fashion to help them all work to get off the dole. Would that not be an improvement?
Fiscal analysis is not necessarily cold-blooded. If you ask me to decide if I would rather someone else’s children have health care or mine do, the financial analyst in me says mine every time. So does the heart in me, but the numbers make sense on that, too. In any financial system where people do not take care of their own costs, the system breaks down because people are less encouraged to do more. The more money you take out of a working man’s pocket to give to someone else, the less encouragement he has to work.
For the record, I have no company health insurance. Over 20% of my paycheck goes to it each year, and I am the sole breadwinner. I do not want government health insurance because I know it would degrade the quality of care I get, which is already somewhat lacking at times. We need to implement the FairTax, pure and simple, and watch how encouraged businesses are to return to these shores – which would lower the costs of products simply by lowering the need of transportation. There are a lot of inefficiencies in the system thanks to the illogical corporate tax. I’m sure I’ve written quite enough here. My post tomorrow is all about how corporate taxes are the most regressive in America. I’d love to hear anyone’s thoughts.
-- Robert
The statistics do show that private/non-profit aid to the needy reduced after welfare was implemented. They also show that crime increased dramatically after welfare was implemented. If welfare recipients were working – especially working hard – to receive their benefits, then it would encourage them to get off welfare. Imagine forming recipient groups that aided each other by some number working outside the home, some caring for children while their parents worked, and it all being coordinated in some fashion to help them all work to get off the dole. Would that not be an improvement?
Fiscal analysis is not necessarily cold-blooded. If you ask me to decide if I would rather someone else’s children have health care or mine do, the financial analyst in me says mine every time. So does the heart in me, but the numbers make sense on that, too. In any financial system where people do not take care of their own costs, the system breaks down because people are less encouraged to do more. The more money you take out of a working man’s pocket to give to someone else, the less encouragement he has to work.
For the record, I have no company health insurance. Over 20% of my paycheck goes to it each year, and I am the sole breadwinner. I do not want government health insurance because I know it would degrade the quality of care I get, which is already somewhat lacking at times. We need to implement the FairTax, pure and simple, and watch how encouraged businesses are to return to these shores – which would lower the costs of products simply by lowering the need of transportation. There are a lot of inefficiencies in the system thanks to the illogical corporate tax. I’m sure I’ve written quite enough here. My post tomorrow is all about how corporate taxes are the most regressive in America. I’d love to hear anyone’s thoughts.
-- Robert
Dialogue Between Robert and Todd (Part 5)
Todd: I wonder often about the issue of health care and how well citizens understand the issue. I do believe that a society has a moral charge to ensure that people have access to high-quality healthcare. People have a fundamental right to receive treatment when they are sick. But...there's a caveat. People don't have the right to have someone else pay for it. THey don't have the right to a government program that ensures they have treatment when they need it. They don't have the right to ignore preventative measures and get treatment when they could have prevented the illness. There's a lot of caveats.
Todd: Unfortunately our present government (therefore the people) seem much more interested in this pie-in-the-sky notion of "universal health care." Now, universal health care sounds great! Everyone has a good doctor and everyone gets treated and everyone is healthy. Who wouldn't vote for that!??!? But, we know the reality is that we don't have unlimited health care resources. We know that health care organizations have a tough time making money under universal systems.
Todd: We know that employers need relief from health care costs as much as (more than) individuals who are uninsured.
Todd: We know we need a system that invests more heavily in preventative care than band-aid treatment.
Robert: One thing that could help that is to encourage people to take those measures. Let people write off all physicals, for instance.
Robert: Helping insurance companies form more co-ops for individuals without access to health care through their work place could help.
Todd: We also know that putting caps on drug prices doesn't necessarily work because drug companies need bigger profits to ensure that their shareholders will continue to invest in the HUGE cost of developing drugs. I'm not sure that deregulation is necessary the answer to drug costs because the bulk of costs aren't necessarily borne in getting a drug approved, and I would argue that ensuring research-based drugs get to market in this country is a justifiable duty of government.
Robert: Health care is definitely a huge monster for the government (and everyone) to tackle.
Robert: But the worst thing they could do to solve it is to get into the business.
Robert: Working with industry, instead of squeezing it, is definitely something the government needs to get back to. Continuing to treat corporations terribly does not encourage people to come to the table.
Todd: It's tough, but something isn't working right within the market. Drug companies are spending more and more to put out products and health insurers are making less and less money. Businesses can't afford coverage, individuals can't either. Businesses are struggling to offer health insurance to employees or even their owners for the self-employed. And every year, we have higher quality medical technologies in the USA, and each year we have higher infant mortality rates, and our life expectancy is no greater than other developed nations. Something isn't working right here.
Todd: I wish I knew what the answer was, but I just don't. There are a lot of proposals out there that I've yet to read, and with most things the answer probably is within a combination of them.
Robert: As Glenn Beck said the other day: we can now do things to people (medically) in this country that we can't afford to do.
Todd: And as we're having this discussion I just saw Hillary Clinton say at a rally something about freezing interest rates to ensure people "Keep their homes." It's solutions like that that make me cringe when both sides of the aisle start pandering like that. Not only would freezing interest rates accomplish nothing, it does not speak to the fundamental issues of bad usery laws that allow predatory lending and allow uneducated people to get credit that they cannot afford.
Robert: One thing I heard on the radio a few weeks ago was about what we're eating. We're too into processed foods that we microwave, and our bodies don't get the nutrients they used to from pasture fed meats and organic vegetables, so we have to eat a lot more to get those nutrients. We gain weight, and our health declines.
Robert: The telling statistic the author describing this pointed out: look at our spending on health care versus food from around 1960 (I think) and compare it to today. The percentages are inverted.
Robert: And it will lock more people out of homes, as people are denied loans because of the locked rates even though they might have been able to afford such rates.
Todd: The move to organic food is an excellent one, and one that the market is driving in a very real way. The government is doing well in states and at the federal level to provide some relief to smaller farmers to ensure they at least have access to the marketplace. More public education on the value of eating better and investing in organic research for mass-food production is a good use of public funds, personally. It's a much wiser investment of public money than continued public health care dollars going into a giant grave (literally).
Robert: Definitely, by finding ways to improve health from the beginning, we save a fortune down the road. Just like educating people on any subject will save society long-term.
Robert: That's one reason I support turning welfare into a training program, and even providing some child care for single parents who enter the program.
Robert: Help people get jobs and get off instead of staying on the dole.
Todd: Which is one of the reasons I believe in the agency I'm working for. Invest in early development, and you save bundles down the road on the child who turns into a functioning adult who can learn and improve him/herself
Todd: A question that I've personally struggled with is this. What is government's role in promoting or providing access to postsecondary education?
Robert: Well, if the government would remove a lot of the taxes from the equation that make it so hard to live on a low wage, then people who are not interested in post-secondary education can still make a living to survive.
Robert: But while they do keep those taxes in place, they should do what they can to help individuals who cannot afford it to find ways to fund further education. We should not have a system that puts everyone in college, and certainly not one that pays everyone's college costs, but we could have one that makes college loans more available, and gives grants to truly exceptional students (though I'm not sure how to determine who those students are).
Todd: Do you think that providing college tuition assistance would hinder research universities from making more money, in other words manipulating the marketplace to keep their costs low? Research universities need that revenue to do the research. Endowments alone don't pay for it.
Robert: Hard to say.
Robert: But imagine what corporations could do to work with colleges if they had more funds to invest with them thanks to the elimination of corporate taxes.
Todd: That's very true.
And that was where our one night chat ended. Now I hope the readers of this blog understand why I appreciate Todd contributing. He brings a lot to the table that helps me think and expand my knowledge. I hope anyone still reading at this point has enjoyed these posts. Hopefully we will get to post a chat like this again soon.
Todd: Unfortunately our present government (therefore the people) seem much more interested in this pie-in-the-sky notion of "universal health care." Now, universal health care sounds great! Everyone has a good doctor and everyone gets treated and everyone is healthy. Who wouldn't vote for that!??!? But, we know the reality is that we don't have unlimited health care resources. We know that health care organizations have a tough time making money under universal systems.
Todd: We know that employers need relief from health care costs as much as (more than) individuals who are uninsured.
Todd: We know we need a system that invests more heavily in preventative care than band-aid treatment.
Robert: One thing that could help that is to encourage people to take those measures. Let people write off all physicals, for instance.
Robert: Helping insurance companies form more co-ops for individuals without access to health care through their work place could help.
Todd: We also know that putting caps on drug prices doesn't necessarily work because drug companies need bigger profits to ensure that their shareholders will continue to invest in the HUGE cost of developing drugs. I'm not sure that deregulation is necessary the answer to drug costs because the bulk of costs aren't necessarily borne in getting a drug approved, and I would argue that ensuring research-based drugs get to market in this country is a justifiable duty of government.
Robert: Health care is definitely a huge monster for the government (and everyone) to tackle.
Robert: But the worst thing they could do to solve it is to get into the business.
Robert: Working with industry, instead of squeezing it, is definitely something the government needs to get back to. Continuing to treat corporations terribly does not encourage people to come to the table.
Todd: It's tough, but something isn't working right within the market. Drug companies are spending more and more to put out products and health insurers are making less and less money. Businesses can't afford coverage, individuals can't either. Businesses are struggling to offer health insurance to employees or even their owners for the self-employed. And every year, we have higher quality medical technologies in the USA, and each year we have higher infant mortality rates, and our life expectancy is no greater than other developed nations. Something isn't working right here.
Todd: I wish I knew what the answer was, but I just don't. There are a lot of proposals out there that I've yet to read, and with most things the answer probably is within a combination of them.
Robert: As Glenn Beck said the other day: we can now do things to people (medically) in this country that we can't afford to do.
Todd: And as we're having this discussion I just saw Hillary Clinton say at a rally something about freezing interest rates to ensure people "Keep their homes." It's solutions like that that make me cringe when both sides of the aisle start pandering like that. Not only would freezing interest rates accomplish nothing, it does not speak to the fundamental issues of bad usery laws that allow predatory lending and allow uneducated people to get credit that they cannot afford.
Robert: One thing I heard on the radio a few weeks ago was about what we're eating. We're too into processed foods that we microwave, and our bodies don't get the nutrients they used to from pasture fed meats and organic vegetables, so we have to eat a lot more to get those nutrients. We gain weight, and our health declines.
Robert: The telling statistic the author describing this pointed out: look at our spending on health care versus food from around 1960 (I think) and compare it to today. The percentages are inverted.
Robert: And it will lock more people out of homes, as people are denied loans because of the locked rates even though they might have been able to afford such rates.
Todd: The move to organic food is an excellent one, and one that the market is driving in a very real way. The government is doing well in states and at the federal level to provide some relief to smaller farmers to ensure they at least have access to the marketplace. More public education on the value of eating better and investing in organic research for mass-food production is a good use of public funds, personally. It's a much wiser investment of public money than continued public health care dollars going into a giant grave (literally).
Robert: Definitely, by finding ways to improve health from the beginning, we save a fortune down the road. Just like educating people on any subject will save society long-term.
Robert: That's one reason I support turning welfare into a training program, and even providing some child care for single parents who enter the program.
Robert: Help people get jobs and get off instead of staying on the dole.
Todd: Which is one of the reasons I believe in the agency I'm working for. Invest in early development, and you save bundles down the road on the child who turns into a functioning adult who can learn and improve him/herself
Todd: A question that I've personally struggled with is this. What is government's role in promoting or providing access to postsecondary education?
Robert: Well, if the government would remove a lot of the taxes from the equation that make it so hard to live on a low wage, then people who are not interested in post-secondary education can still make a living to survive.
Robert: But while they do keep those taxes in place, they should do what they can to help individuals who cannot afford it to find ways to fund further education. We should not have a system that puts everyone in college, and certainly not one that pays everyone's college costs, but we could have one that makes college loans more available, and gives grants to truly exceptional students (though I'm not sure how to determine who those students are).
Todd: Do you think that providing college tuition assistance would hinder research universities from making more money, in other words manipulating the marketplace to keep their costs low? Research universities need that revenue to do the research. Endowments alone don't pay for it.
Robert: Hard to say.
Robert: But imagine what corporations could do to work with colleges if they had more funds to invest with them thanks to the elimination of corporate taxes.
Todd: That's very true.
And that was where our one night chat ended. Now I hope the readers of this blog understand why I appreciate Todd contributing. He brings a lot to the table that helps me think and expand my knowledge. I hope anyone still reading at this point has enjoyed these posts. Hopefully we will get to post a chat like this again soon.
Friday, February 8, 2008
A Dialogue Between Robert and Todd (Part 4)
Robert: Who would be harmed by the FairTax?
Robert: Other than people who thrive on the current system?
Todd: Well its different degrees of harm, but there's the probability that those who now pay no income tax pay more. Whether that's right or wrong is beyond me to decide, I'm simply pointing out that they would be adversely affected. That's my whole point that there's no means of collecting from the public that won't adversely affect someone.
Robert: With a prebate to everyone up to the poverty level, it's unlikely people who are not paying now would start to pay.
Todd: That's an excellent point
Robert: The fact is, the Fair Tax is well named. It might actually give a "welfare" effect to the poor, if they are wise about spending money for new goods only on food and buying all they can used.
Robert: They'd actually get some help paying for those with the prebate.
Todd: I think that the prospectg of a Fair Tax is appealling. I think the threat of the "underground economy" is a reasonable concern, and one I'd like to learn more about. I think proponents make sense when the reference existing tax laws. I'd like to read more about the pros and cons of the Fair tax when compared to a VAT.
Robert: What's VAT?
Robert: There would not need to be an underground economy. The FairTax is only imposed on new goods and services.
Todd: Value Added Tax
Robert: And if all income taxes (and federal taxes in general) are removed, then people will have far more funds available to pay the tax that way.
Robert: So what does the VAT do?
Todd: No I understand that, but I believe the critic's point is that you may have a widespread desire to avoid the tax by purchasing the goods as a business rather than from the retailer. The proponents of a VAT argue that this could be avoided by taxing the good throughout the cycle of transactions up to and including the retail transaction. That's just one concern I'd like to learn more about.
Robert: So in other words, tax at each step of the building process to avoid cheating?
Robert: Well, one thing to note about enforcement of the FairTax: with 80% of all tax returns removed (only business would file, no individuals), the government would have more ability to handle oversight and cut out cheaters.
Todd: I think that's a fair argument, plus businesses are already required to have a sellers license to purchase tax exempt goods and the laws are already on the books.
Robert: Exactly, so the VAT complicates things more than necessary, it would seem.
Robert: By moving the tax to only the final transaction, you simplify the market processes and help businesses grow by cutting red tape.
Todd: It's disheartening that only Mike Gravel, Ron Paul (sort of) and Huckabee are the ones talking seriously about tax reform, although to be fair McCain, Romney and Giuliani said they would sign the fair tax act if passed.
Todd: Tax reform is a bipartisan issue because the current system, in my view punishes the working American as much as it does the super-wealthy.
Robert: It punishes the worker more.
Todd: And tax relief doesn't have to be an issue that you cast aside whenever you are talking about promoting a healthy economy or protecting American jobs. Frankly I don't see how they don't go hand-in-hand.
Robert: It pushes out corporations that the working man can work for. It makes the necessary wage so high that people hire illegals to avoid taxes or just move overseas to avoid them legally.
Todd: Tax reform is a middle class issue, frankly, and it makes sense that it should be as important as the Environment or Health Care. This is a complicated system that all pieces fit together.
Robert: That's probably my main irritation with the current "solution" being pushed by the President. It's a one-time tax rebate, giving people back their own money. If that is an answer, why not give back more of the people's money and stop taking it away?
Robert: Absolutely.Robert: And that is also one thing I hate about our current tax system. It gives people the false impression that the government "gives" them something around April every year (if they're among the fortunate folk getting a refund) and they go spend it in many cases.
Todd: This all leads back to the issue of public will. You need public will to accomplish things in government, and to have public will to solve problems, you need an educated public that sees practical realities. I'm not so sure America has EVER been that way.
Robert: Indeed, that is why the framers were so afraid of giving the "common man" the right to vote.Robert: They felt such people could not be trusted to understand what was best.
(to be continued tomorrow)
Robert: Other than people who thrive on the current system?
Todd: Well its different degrees of harm, but there's the probability that those who now pay no income tax pay more. Whether that's right or wrong is beyond me to decide, I'm simply pointing out that they would be adversely affected. That's my whole point that there's no means of collecting from the public that won't adversely affect someone.
Robert: With a prebate to everyone up to the poverty level, it's unlikely people who are not paying now would start to pay.
Todd: That's an excellent point
Robert: The fact is, the Fair Tax is well named. It might actually give a "welfare" effect to the poor, if they are wise about spending money for new goods only on food and buying all they can used.
Robert: They'd actually get some help paying for those with the prebate.
Todd: I think that the prospectg of a Fair Tax is appealling. I think the threat of the "underground economy" is a reasonable concern, and one I'd like to learn more about. I think proponents make sense when the reference existing tax laws. I'd like to read more about the pros and cons of the Fair tax when compared to a VAT.
Robert: What's VAT?
Robert: There would not need to be an underground economy. The FairTax is only imposed on new goods and services.
Todd: Value Added Tax
Robert: And if all income taxes (and federal taxes in general) are removed, then people will have far more funds available to pay the tax that way.
Robert: So what does the VAT do?
Todd: No I understand that, but I believe the critic's point is that you may have a widespread desire to avoid the tax by purchasing the goods as a business rather than from the retailer. The proponents of a VAT argue that this could be avoided by taxing the good throughout the cycle of transactions up to and including the retail transaction. That's just one concern I'd like to learn more about.
Robert: So in other words, tax at each step of the building process to avoid cheating?
Robert: Well, one thing to note about enforcement of the FairTax: with 80% of all tax returns removed (only business would file, no individuals), the government would have more ability to handle oversight and cut out cheaters.
Todd: I think that's a fair argument, plus businesses are already required to have a sellers license to purchase tax exempt goods and the laws are already on the books.
Robert: Exactly, so the VAT complicates things more than necessary, it would seem.
Robert: By moving the tax to only the final transaction, you simplify the market processes and help businesses grow by cutting red tape.
Todd: It's disheartening that only Mike Gravel, Ron Paul (sort of) and Huckabee are the ones talking seriously about tax reform, although to be fair McCain, Romney and Giuliani said they would sign the fair tax act if passed.
Todd: Tax reform is a bipartisan issue because the current system, in my view punishes the working American as much as it does the super-wealthy.
Robert: It punishes the worker more.
Todd: And tax relief doesn't have to be an issue that you cast aside whenever you are talking about promoting a healthy economy or protecting American jobs. Frankly I don't see how they don't go hand-in-hand.
Robert: It pushes out corporations that the working man can work for. It makes the necessary wage so high that people hire illegals to avoid taxes or just move overseas to avoid them legally.
Todd: Tax reform is a middle class issue, frankly, and it makes sense that it should be as important as the Environment or Health Care. This is a complicated system that all pieces fit together.
Robert: That's probably my main irritation with the current "solution" being pushed by the President. It's a one-time tax rebate, giving people back their own money. If that is an answer, why not give back more of the people's money and stop taking it away?
Robert: Absolutely.Robert: And that is also one thing I hate about our current tax system. It gives people the false impression that the government "gives" them something around April every year (if they're among the fortunate folk getting a refund) and they go spend it in many cases.
Todd: This all leads back to the issue of public will. You need public will to accomplish things in government, and to have public will to solve problems, you need an educated public that sees practical realities. I'm not so sure America has EVER been that way.
Robert: Indeed, that is why the framers were so afraid of giving the "common man" the right to vote.Robert: They felt such people could not be trusted to understand what was best.
(to be continued tomorrow)
Thursday, February 7, 2008
A Dialogue Between Robert and Todd (Part 3)
Robert: Stepping away from Kyoto and emissions, just anything: should the government make choices for us that we do not want?
Todd: No, by definition it shouldn't. I’m not suggesting an elitist or non-constitutional approach. I used the words "public will" deliberately. We, as the citizens, need to be more educated and more rational about how we combat harmful emissions. When we have the support of the business community and their influential dollars, this makes it easier. It's up to us, not some phantom government that is going to decide for us.
Robert: There are things that make some sense - like protecting people from being murdered for trying to vote, even though those people are in the minority. But if the vast majority of people don't want something, should the government be doing it?
Robert: One good place to start helping corporations invest more in the research you suggest: eliminate the corporate tax, which has no reason to exist in the first place.
Robert: It hinders our economy, causes inflation, hampers the job market, increases illegal immigration.... it is responsible for much of what's wrong with our country.
Robert: Put the money back in the hands of the corporations so they can do the research, they can hire the staff, they can grow the economy... I know it's not going to happen in this very liberal environment, but that's what would help the most.
Todd: I think tax relief for corporations always has that sort of bad taste to many working Americans. I don't know how you get by that, but in principle I agree with you. You have to provide a financial, profit-driven incentive to get corporations to do anything. Corporations aren't a person that has altruistic intentions; corporations need to show shareholders benefit to anything they do. And the easiest way to do that is not to hand them a check, but relieve their burden to the Government.
Todd: The less a corporation has to "render unto Caesar" the more willing they are to talk to Caesar.
Robert: Not just tax relief: tax elimination. Tell me one reason that corporations should pay taxes?
Robert: All you do by that is take money out of the hands of employers.
Robert: Corporation owners already pay taxes on dividends and gains, why should corporations pay taxes, too?
Todd: Corporations shouldn't pay taxes. The corporation isn't anything the government protects. And corporations don't pay taxes anyway. There's nobody to pay it. You and I, the customer and the employee and the shareholder pay it. So yeah, that's what I'm saying. Lessen the burden that the employee and the customer and the shareholder pay to the government, and you have relieved the American of some of his burden overall.
Robert: Then we agree on that.
Todd: That allows decision-makers in corporations to invest their money in things that help them make more money, and when that's coupled with public will (who are the customer and shareholder) you have the ability to improve a host of social and environmental ills because you are letting the market do what it does best.
Todd: In other words, you're working within industry and not trying to manipulate an industry. Robert: Exactly.
Robert: And again, exactly.
Robert: That is what people need to understand.
Robert: The government is harming the economy and harming the market's ability to respond to some of what its customers want because it is robbing the corporations of money.
Todd: Well that's kind of what taxation is all about unfortunately. The question, is there a balance? I can't imagine a taxation system that doesn't harm someone. Even the Fair Tax would do that. The issue is one of costs and benefits. If I harm the middle class worker just a little bit here, are the returns going to be that we can reduce significantly the chances of his daughter getting sick from mercury poisoning and hindering her development that makes her less productive and makes her earn less and pay less taxes and so on and so on.....
(to be continued)
Todd: No, by definition it shouldn't. I’m not suggesting an elitist or non-constitutional approach. I used the words "public will" deliberately. We, as the citizens, need to be more educated and more rational about how we combat harmful emissions. When we have the support of the business community and their influential dollars, this makes it easier. It's up to us, not some phantom government that is going to decide for us.
Robert: There are things that make some sense - like protecting people from being murdered for trying to vote, even though those people are in the minority. But if the vast majority of people don't want something, should the government be doing it?
Robert: One good place to start helping corporations invest more in the research you suggest: eliminate the corporate tax, which has no reason to exist in the first place.
Robert: It hinders our economy, causes inflation, hampers the job market, increases illegal immigration.... it is responsible for much of what's wrong with our country.
Robert: Put the money back in the hands of the corporations so they can do the research, they can hire the staff, they can grow the economy... I know it's not going to happen in this very liberal environment, but that's what would help the most.
Todd: I think tax relief for corporations always has that sort of bad taste to many working Americans. I don't know how you get by that, but in principle I agree with you. You have to provide a financial, profit-driven incentive to get corporations to do anything. Corporations aren't a person that has altruistic intentions; corporations need to show shareholders benefit to anything they do. And the easiest way to do that is not to hand them a check, but relieve their burden to the Government.
Todd: The less a corporation has to "render unto Caesar" the more willing they are to talk to Caesar.
Robert: Not just tax relief: tax elimination. Tell me one reason that corporations should pay taxes?
Robert: All you do by that is take money out of the hands of employers.
Robert: Corporation owners already pay taxes on dividends and gains, why should corporations pay taxes, too?
Todd: Corporations shouldn't pay taxes. The corporation isn't anything the government protects. And corporations don't pay taxes anyway. There's nobody to pay it. You and I, the customer and the employee and the shareholder pay it. So yeah, that's what I'm saying. Lessen the burden that the employee and the customer and the shareholder pay to the government, and you have relieved the American of some of his burden overall.
Robert: Then we agree on that.
Todd: That allows decision-makers in corporations to invest their money in things that help them make more money, and when that's coupled with public will (who are the customer and shareholder) you have the ability to improve a host of social and environmental ills because you are letting the market do what it does best.
Todd: In other words, you're working within industry and not trying to manipulate an industry. Robert: Exactly.
Robert: And again, exactly.
Robert: That is what people need to understand.
Robert: The government is harming the economy and harming the market's ability to respond to some of what its customers want because it is robbing the corporations of money.
Todd: Well that's kind of what taxation is all about unfortunately. The question, is there a balance? I can't imagine a taxation system that doesn't harm someone. Even the Fair Tax would do that. The issue is one of costs and benefits. If I harm the middle class worker just a little bit here, are the returns going to be that we can reduce significantly the chances of his daughter getting sick from mercury poisoning and hindering her development that makes her less productive and makes her earn less and pay less taxes and so on and so on.....
(to be continued)
Wednesday, February 6, 2008
A Dialogue Between Robert and Todd (Part 2)
Robert: What if we study how to combat emissions in our air?
Todd: I'd like to believe that the answer lies somewhere in the middle. It is proven that we can reduce emissions by doing certain things that help Americans save money. When we invest in public transport, carpooling promotion and cheaper fuel alternatives we can help raise standard of living while reducing emissions.
Robert: So far there are no cheaper fuel alternatives.
Robert: Ethanol is far from an answer.
Robert: Without government subsidies, right now nothing save perhaps nuclear power has shown promise as a viable alternative.
Todd: We (as a government, I suppose I'm saying) will invest billions in combating the spread of HIV/AIDS and various Cancers. We do this because everyone can more or less agree that using public money to try and save lives around the world is a good thing to do. This public funding makes sense for drug companies and health care conglomerates because it helps them make money.
Todd: I would argue that providing that same type of public health, if not on the same scale, is just as reasonable when we talk about reducing mercury emissions from coal mining operations, for example. We know that Coal Miners are going to be able to make more money, employ more, expand more and produce more energy more profitably if we can make it more worth their while to make the considerable investments in cleaner technologies.
Todd: Now we know mercury in the air ends up in the soil and water. We know it poisons fish, and it poisons humans eventually and disproportionately poisons children. When the coal companies make more, and our air, soil and water get cleaner, we now have an opportunity for all sides to step back and say, "Y'know, we think that's a pretty good thing."
Robert: So what we need to do is help corporations get benefits from using those technologies, instead of penalties from failing to.
Todd: Right now, the Clean Water and Clean Air Acts regulate without proportionate investment. That's one-sided and shortsighted. We should keep in mind a conservative (Nixon) saw the potential in reducing emissions, but unfortunately the public will to push public money toward cheaper technology is simply not there.
Robert: And here's the question that has to be answered: is it the place of government to take our money and spend it on things we, as a public, do not want?Todd: The voting public seems to collectively think that the only assistance should be to the individual, and markets won't work that way. Public investment SHOULD help the corporations that pollute, but vilifying polluters is a much easier way to get votes. Kyoto has some good market-based principles in it, but the encouraging of public investment falls short of what it needs to be in a nation like the USA.
(to be continued tomorrow)
Todd: I'd like to believe that the answer lies somewhere in the middle. It is proven that we can reduce emissions by doing certain things that help Americans save money. When we invest in public transport, carpooling promotion and cheaper fuel alternatives we can help raise standard of living while reducing emissions.
Robert: So far there are no cheaper fuel alternatives.
Robert: Ethanol is far from an answer.
Robert: Without government subsidies, right now nothing save perhaps nuclear power has shown promise as a viable alternative.
Todd: We (as a government, I suppose I'm saying) will invest billions in combating the spread of HIV/AIDS and various Cancers. We do this because everyone can more or less agree that using public money to try and save lives around the world is a good thing to do. This public funding makes sense for drug companies and health care conglomerates because it helps them make money.
Todd: I would argue that providing that same type of public health, if not on the same scale, is just as reasonable when we talk about reducing mercury emissions from coal mining operations, for example. We know that Coal Miners are going to be able to make more money, employ more, expand more and produce more energy more profitably if we can make it more worth their while to make the considerable investments in cleaner technologies.
Todd: Now we know mercury in the air ends up in the soil and water. We know it poisons fish, and it poisons humans eventually and disproportionately poisons children. When the coal companies make more, and our air, soil and water get cleaner, we now have an opportunity for all sides to step back and say, "Y'know, we think that's a pretty good thing."
Robert: So what we need to do is help corporations get benefits from using those technologies, instead of penalties from failing to.
Todd: Right now, the Clean Water and Clean Air Acts regulate without proportionate investment. That's one-sided and shortsighted. We should keep in mind a conservative (Nixon) saw the potential in reducing emissions, but unfortunately the public will to push public money toward cheaper technology is simply not there.
Robert: And here's the question that has to be answered: is it the place of government to take our money and spend it on things we, as a public, do not want?Todd: The voting public seems to collectively think that the only assistance should be to the individual, and markets won't work that way. Public investment SHOULD help the corporations that pollute, but vilifying polluters is a much easier way to get votes. Kyoto has some good market-based principles in it, but the encouraging of public investment falls short of what it needs to be in a nation like the USA.
(to be continued tomorrow)
Tuesday, February 5, 2008
A Dialogue Between Robert and Todd
Todd and I were discussing the election, and our conversation turned towards the subject of greenhouse gases, but then to regulations and taxes in general. I asked him if I could share our conversation to show our two different, but intertwined points of view. I hope it makes sense and makes for interesting reading. It all came out of one conversation we had over chat, but I broke it up into five posts. Hope everyone enjoys it.
Robert: Meaning complying with Kyoto will do a lot of damage to our economy.
Robert: What we NEED is the Fair Tax, and then some serious deregulation.
Todd: I think that a modified Kyoto compact among more developed nations has to be implemented soon. The ability for reductions in greenhouse gas emissions MUST be coupled with aggressive public investment in private research into new technologies that can affordably and profitably bring our emissions lower. It is quite easy to draft a plan that works for developing nations who do not have the private energy infrastructure that the US of A has. What is more difficult and less palatable to the extreme environmentalist is that we have to make "going green" an attractive business proposition.
Todd: Once we do that, we now have solutions that businesses will be more than happy to accept tougher government standards for. Regulation must always be married with the benefit of the corporation in mind. To do so otherwise is to simply ignore human nature and is a recipe for policy failure.
Robert: Tell me honestly, are you suggesting you believe in Global Warming as a human-caused phenomenon?
Todd: I would not even approach Global Warming as an end goal to alter when we know that emissions have such harmful public health effects on even the smallest scale. Here in Phoenix as our population grows our per capita rates of Asthma-related hospital discharges have erupted.
Todd: Harmful emissions in our atmosphere are a public health concern that government rightly should be concerned with. We must carefully study climate change data and if we are to accept the postulate that global warming is being caused by anthropogenic emissions, and we know that these emissions constitute a public health threat even in the short term, then I believe we have steady ground on which to make policy changes. Even if we don't accept that global warming is anthropogenic, we should continue to fund research into it to be certain. We do know that period s of global warming are occurring now. We believe that they have occurred in the past. We disagree on its possible effects. We KNOW that carbon dioxide, ozone, nitrous oxide and particulate matter emissions are harmful to humans.
Todd: Let's start with what we know.... that's all I'm suggesting.
Robert: Right now, there is no viable alternative to oil that works on a large scale. Emission reduction must come as a function of the economy, or in the end, it will just continue to wreck our economy.
Robert: Right now our standard of living is being stilted by government policies regarding oil restrictions and emissions.
Todd: Well there are two schools of thought on this, and I'm not certain I'm willing to subscribe to one of the other. One school says that humans invariably are going to have to change their behavior if they want to change the amount of harmful emissions we generate. Okay, that sounds logical. The other says that maybe humans don't have to change their behavior if we simply bring the most serious offenders in line with newer technologies.
Robert: There's also the school of thought that humans are somewhat arrogant to assume they can truly influence the whole environment in the way people like Al Gore think we do.
(to be continued tomorrow)
Robert: Meaning complying with Kyoto will do a lot of damage to our economy.
Robert: What we NEED is the Fair Tax, and then some serious deregulation.
Todd: I think that a modified Kyoto compact among more developed nations has to be implemented soon. The ability for reductions in greenhouse gas emissions MUST be coupled with aggressive public investment in private research into new technologies that can affordably and profitably bring our emissions lower. It is quite easy to draft a plan that works for developing nations who do not have the private energy infrastructure that the US of A has. What is more difficult and less palatable to the extreme environmentalist is that we have to make "going green" an attractive business proposition.
Todd: Once we do that, we now have solutions that businesses will be more than happy to accept tougher government standards for. Regulation must always be married with the benefit of the corporation in mind. To do so otherwise is to simply ignore human nature and is a recipe for policy failure.
Robert: Tell me honestly, are you suggesting you believe in Global Warming as a human-caused phenomenon?
Todd: I would not even approach Global Warming as an end goal to alter when we know that emissions have such harmful public health effects on even the smallest scale. Here in Phoenix as our population grows our per capita rates of Asthma-related hospital discharges have erupted.
Todd: Harmful emissions in our atmosphere are a public health concern that government rightly should be concerned with. We must carefully study climate change data and if we are to accept the postulate that global warming is being caused by anthropogenic emissions, and we know that these emissions constitute a public health threat even in the short term, then I believe we have steady ground on which to make policy changes. Even if we don't accept that global warming is anthropogenic, we should continue to fund research into it to be certain. We do know that period s of global warming are occurring now. We believe that they have occurred in the past. We disagree on its possible effects. We KNOW that carbon dioxide, ozone, nitrous oxide and particulate matter emissions are harmful to humans.
Todd: Let's start with what we know.... that's all I'm suggesting.
Robert: Right now, there is no viable alternative to oil that works on a large scale. Emission reduction must come as a function of the economy, or in the end, it will just continue to wreck our economy.
Robert: Right now our standard of living is being stilted by government policies regarding oil restrictions and emissions.
Todd: Well there are two schools of thought on this, and I'm not certain I'm willing to subscribe to one of the other. One school says that humans invariably are going to have to change their behavior if they want to change the amount of harmful emissions we generate. Okay, that sounds logical. The other says that maybe humans don't have to change their behavior if we simply bring the most serious offenders in line with newer technologies.
Robert: There's also the school of thought that humans are somewhat arrogant to assume they can truly influence the whole environment in the way people like Al Gore think we do.
(to be continued tomorrow)
Saturday, February 2, 2008
FairTax Illustration - basic example
If it suddenly cost 40% less to make a product, even if the corporation only passed on 20% of that 40% initially, prices would drop. If a product cost $2.00 to make after taxes and gets sold for $4.00, with $1.00 of overhead cost coming out, that's about $1.00 of profit that gets taxed $.40. If the product costs $1.60 because that tax is gone, it could be sold for $3.20 with the $1.00 overhead, and the corporation still makes the same $.60 profit, but the cost of that $3.20 product after the 23% tax is $3.94 - but they're paying that out of their whole paycheck plus their prebate. So the cost of bringing that product home is less, the corporation makes the same profit, and the taxes are still paid to cover the cost of running the government.
Corporations will reduce their costs as a function of competition. Some might temporarily withhold the savings, but as soon as the first "Tax sale! We're passing the savings on to you! Buy now and save!" commercial flashes across the TV, prices will drop dramatically. I will cover more on corporations in my next post.
-- Robert
Corporations will reduce their costs as a function of competition. Some might temporarily withhold the savings, but as soon as the first "Tax sale! We're passing the savings on to you! Buy now and save!" commercial flashes across the TV, prices will drop dramatically. I will cover more on corporations in my next post.
-- Robert
Friday, February 1, 2008
Taxes (FairTax Part 1)
In its present form, the tax code penalizes success. The more a person succeeds financially, the more the government taxes him. This practice takes funds out of the hands of people who have shown they know how to use them. It also pits one group against another through envy, making prosperity unpopular. Leaving funds in the hands of individuals promotes success because it allows them to use them as they want. The United States still stands as a bastion of individual freedom and opportunity. Tax reduction gives individuals back greater freedom (and responsibility) for choosing how they live their lives. Tax cuts represent an increase in the standard of living, and they stimulate the economy through increased spending, investing, and saving. Individuals built and rebuilt this nation time and again. The more the government raises taxes to build government programs to solve problems, the less money individuals have to implement plans privately. Program after program created in the private sector have outperformed government programs designed to achieve the same thing. Our government has grown too large, and the only way to downsize government is to cut its resources.
The Fair Tax represents the best idea of how to put more dollars back into the hands of consumers. It is not, as some critics assume, just a new tax. It is a tax to replace all forms of federal income and payroll taxes. To quote the website:
"The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The FairTax Act (HR 25, S 1025) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system."
I want to cover a few points of why this tax is not bad for the poor, and what some of the language means.
1) As it states, this tax is "progressive", which means it taxes the wealthy more than the poor (a regressive tax taxes the poor more). How is it progressive? By giving "prebates" to all citizens, only those who use up their prebate actually pay taxes.
2) What is a prebate? The government will issue checks to every individual or family based on family size that will be enough to cover taxes up to the level of poverty (as determined by the government). Those funds reimburse everyone before the funds are actually spent - thus the term PREbate. Once those funds have been spent, then any spending on new goods will be taxed. Yes, the Fair Tax is only paid on new items (just like state sales tax), so those who want to avoid the tax can buy used goods.
3) By eliminating all other government taxes, individuals have their entire paycheck to spend, giving them more choices in where their money goes.
4) The 23% tax rate sounds high, but after corporations cease paying taxes (often 40-50% of income) prices will drop more than enough to compensate for the tax.
5) Eliminating the current tax code will remove $265 billion in costs to maintain the current tax code. Since sales taxes are already handled by state agencies, a much smaller cost will be involved in implementing the new federal tax.
6) The Fair Tax legislation involves repealing the 16th Amendment which allows a federal income tax, so (despite what critics say) without a new amendment being passed to replace it, the federal government could not simply put back in the income tax.
Anyone interested in a program that would provide more funding, remove more government waste, and return more individual freedom, please read up on the Fair Tax at FairTax.org. The "About'>http://www.fairtax.org/site/PageServer?pagename=about_main/">About the Fair Tax" link is a good place to start, especially the FairTax Five towards the bottom of that page.
This tax does not necessarily eliminate government spending, because it better funds the government. Still, that makes it a wonderful idea for both parties to get behind - it helps the poor and wealthy alike, funds all the programs that both sides are so fond of, and spurs the economy to new heights. By giving the money back to the people, the country can see just how strong the power of one is.
-- Robert
The Fair Tax represents the best idea of how to put more dollars back into the hands of consumers. It is not, as some critics assume, just a new tax. It is a tax to replace all forms of federal income and payroll taxes. To quote the website:
"The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The FairTax Act (HR 25, S 1025) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system."
I want to cover a few points of why this tax is not bad for the poor, and what some of the language means.
1) As it states, this tax is "progressive", which means it taxes the wealthy more than the poor (a regressive tax taxes the poor more). How is it progressive? By giving "prebates" to all citizens, only those who use up their prebate actually pay taxes.
2) What is a prebate? The government will issue checks to every individual or family based on family size that will be enough to cover taxes up to the level of poverty (as determined by the government). Those funds reimburse everyone before the funds are actually spent - thus the term PREbate. Once those funds have been spent, then any spending on new goods will be taxed. Yes, the Fair Tax is only paid on new items (just like state sales tax), so those who want to avoid the tax can buy used goods.
3) By eliminating all other government taxes, individuals have their entire paycheck to spend, giving them more choices in where their money goes.
4) The 23% tax rate sounds high, but after corporations cease paying taxes (often 40-50% of income) prices will drop more than enough to compensate for the tax.
5) Eliminating the current tax code will remove $265 billion in costs to maintain the current tax code. Since sales taxes are already handled by state agencies, a much smaller cost will be involved in implementing the new federal tax.
6) The Fair Tax legislation involves repealing the 16th Amendment which allows a federal income tax, so (despite what critics say) without a new amendment being passed to replace it, the federal government could not simply put back in the income tax.
Anyone interested in a program that would provide more funding, remove more government waste, and return more individual freedom, please read up on the Fair Tax at FairTax.org. The "About'>http://www.fairtax.org/site/PageServer?pagename=about_main/">About the Fair Tax" link is a good place to start, especially the FairTax Five towards the bottom of that page.
This tax does not necessarily eliminate government spending, because it better funds the government. Still, that makes it a wonderful idea for both parties to get behind - it helps the poor and wealthy alike, funds all the programs that both sides are so fond of, and spurs the economy to new heights. By giving the money back to the people, the country can see just how strong the power of one is.
-- Robert
Saturday, January 26, 2008
Misnomers
To this point, I have avoided politics. I feel it necessary to write something about two issues being raised lately: the need to give a lot of people a check to stimulate the economy, and the need to let people out of contracts they signed. The people receiving checks are people who pay taxes, so what the government is doing is returning their own money - proving that the economy would be better off if people had more of their own wealth. So the misnomer to me is that the government is doing something positive by "giving people money" but instead they're proving they are guilty of holding back the economy by taking more dollars in taxes. The same is true of any plan to reduce corporate taxes. Corporations should not pay taxes, since their owners already pay taxes on their distributions. By taxing corporations, prices go up (read: inflation) and jobs are less available (read: unemployment). If the economy can be improved by lowering taxes, then why have higher taxes in the first place?
As for letting people out of adjustable rate mortgages because those loans might have reached their adjustable periods personally offends me. I have such a loan, and I had to ask to even get one when I got it. People have had the chance to prepare themselves for the increase in payment. Their failure to plan is not my fault, and I should not have to pay more taxes to help them out of their own mistakes. I think the Federal Reserve has done enough to ease the problems by dropping the Prime Rate and anything more from the government risks a repetition of the Savings and Loan debacle of the 1980's. The government went beyond what they were legally obligated to in bailing the Savings and Loans out of bad loans, and the response from the owners of the Savings and Loans was to give away more bad loans with the knowledge they would never have to worry about those loans being repaid. The hole got deeper because of government intervention. ARM loans can actually be a wonderful way to get equity in a home faster, as I wrote here. According to research done in Canada on their loan market, ARM loans involve less total interest on average than standard fixed rate mortgages, which agrees with my post and my own research. Bailing people out of these loans because of poor planning is unfair to the rest of us. Calling them evil is just plain wrong.
What does any of this have to do with "Making That Money"? The government keeps wanting to take more and more of the money we make - income taxes, gas taxes, sales taxes, property taxes, and various forms of licensing fees - and then redistribute it in what ways they think make us feel good. I personally am for less government, more personal freedom, and more personal responsibility. That goes hand in hand with lower taxes, which means more of my money in my hands - more to invest, more to save, and more to spend as I see fit.
-- Robert
As for letting people out of adjustable rate mortgages because those loans might have reached their adjustable periods personally offends me. I have such a loan, and I had to ask to even get one when I got it. People have had the chance to prepare themselves for the increase in payment. Their failure to plan is not my fault, and I should not have to pay more taxes to help them out of their own mistakes. I think the Federal Reserve has done enough to ease the problems by dropping the Prime Rate and anything more from the government risks a repetition of the Savings and Loan debacle of the 1980's. The government went beyond what they were legally obligated to in bailing the Savings and Loans out of bad loans, and the response from the owners of the Savings and Loans was to give away more bad loans with the knowledge they would never have to worry about those loans being repaid. The hole got deeper because of government intervention. ARM loans can actually be a wonderful way to get equity in a home faster, as I wrote here. According to research done in Canada on their loan market, ARM loans involve less total interest on average than standard fixed rate mortgages, which agrees with my post and my own research. Bailing people out of these loans because of poor planning is unfair to the rest of us. Calling them evil is just plain wrong.
What does any of this have to do with "Making That Money"? The government keeps wanting to take more and more of the money we make - income taxes, gas taxes, sales taxes, property taxes, and various forms of licensing fees - and then redistribute it in what ways they think make us feel good. I personally am for less government, more personal freedom, and more personal responsibility. That goes hand in hand with lower taxes, which means more of my money in my hands - more to invest, more to save, and more to spend as I see fit.
-- Robert
Subscribe to:
Posts (Atom)