Tag: Barack Hussein Obama

Capital gains should be counted as wages–to a point

Capital gains should be counted as wages–to a point

warren.buffet.secretary.caption_picIf you pay attention to the news, you have heard Warren Buffet claim that he pays a lower tax rate than his secretary. This pronouncement has prompted President Barack Hussein Obama to propose new taxes, affectionately nicknamed “Buffet taxes” or the “Buffet Rule.”

The “Buffet Rule” is going to get a lot of press attention in the coming weeks and it will get more attention if Mitt Romney successfully wins the nomination of the Republican Party.

MittRomneyProfilePicAt this writing, Mitt Romney is running for the Republican nomination and at some time he is probably going to have to divulge his finances more fully than he has already. Mr. Romney doesn’t appear to have a wage-earning job, therefore, his daily spending on clothes, food, mortgage, and hair-styling products comes from interest, capital gains, or dividend income from his earned fortune. It appears that Mr. Romney paid less than 15% on his income where a wage earner would pay a much higher rate.

A lot of people say that the tax code is broken and I agree. Some propose a flat tax rate for all income, but that is probably a political hot potato. A flat-tax is also a little repressive as low wage earners probably shouldn’t have the same tax rate as the more affluent.

In America, everyone can have an opinion. So here is my suggestion:

  • All Americans should pay a minimum of 1% of their income in Federal taxes.  The approximately 46% of Americans who pay no taxes needs to stop. If everyone pays at least a little bit, then they all are part of the general sharing of the load. Everyone will be a bit more invested in making sure that the spending is appropriate.
  • All income, regardless of source, needs to be considered wage income for the first $500,000. The top line of your income for federal taxes needs to include all wages that come from your W2 or 1099. If that number is less than $500K, then include dividend and capital gains income up to $500K.  Why did I choose $500K? It seems like a fair number. I could make an argument that it should be up to $1M, but I cannot make a logical argument that it is less than $300K. Here is my logic:
    • Everyone has daily expenses that need to be paid. For most Americans, these expenses are covered with our income from our job. The expenses are things such as food, clothes, house and car payments, cable TV, the occasional movie and dinner out, and (since Mitt’s expenses in this area are likely quite high) hair care products.
    • Money that covers these regular expenses comes from wages for all but the most affluent Americans.
    • It is not appropriate that those that are very wealthy and do not make a wage should have the source of funds for expenses categorized as anything but wages. Even if they don’t make a wage and received the money from dividends or interest, a portion of that income is used for exactly the same thing as the minimum wage earner. Therefore, we need to classify it as a wage since that is what it is replacing.
  • FICA is currently capped at first $110,100 of income. This needs to change.  The upper cap needs to be on all wages as I have described in the previous bullet. This is fair, as well. All wages should be subjected to FICA tax. This would likely fix the problem of Social Security being underfunded for quite some time. Yes, I think that Social Security should be eliminated, but that isn’t going to happen either.

The great thing about a blog is that I can rant. There is little chance that any of the above will ever be enacted. It was fun to argue the point though and I hope that it was fun for you to read.

The images in this post are assumed to be in the public domain. I have linked to the sites where I found them. I do not own the copyright for these images.

First thoughts on the day after election

First thoughts on the day after election

The massive mid-term election of 2010 is now over. My phone won’t ring 25 times today with some computer imploring me to vote for one candidate over another. The signs that are all along the streets in my town can come down (hopefully the candidates come out and clean up their mess). Life can now go back to some sort of normal.

The Republicans evidently picked up approximately 60 seats in the House of Representatives. They also made major increases in the Senate and that house appears to be split nearly 50/50 (the exact count probably won’t be known for a couple days as Alaska will probably take a while to count due to the write-in candidate).

What does this election mean? Does it mean that the 2-year era of liberalism is over? Does it mean that conservatism is the rule of the day? Does it mean that Barack Hussein Obama will lose in 2 years? Does it mean that the Republicans have a mandate to go ultra-conservative? Does it mean that the poor and down-trodden will need to look for their medicine in the trash cans of the homes of the wealthy? Does it mean that I have to give up drinking coffee and now drink tea?

What I am 100% confident in is that it doesn’t mean any of the above! It doesn’t mean that BHO is done. It doesn’t mean that all of healthcare should just go to the wealthiest. It doesn’t mean that we should now savage the environment.

I don’t think that the newly elected Republicans have a mandate at all except for the mandate to do a good job and figure out the best way to solve each individual problem regardless of party direction.

I think it means that Americans want a government that works. We want it to work rather slowly and deliberately. We want politicians that don’t act like politicians but rather act like leaders. We want compromise to be the rule of the day. We want our leaders to read, understand, and thoughtfully debate the bills that are before them. We don’t want to find out about what is in the bill after it is turned into law – we want our leaders to know what is in the bill before they make it a law.

We don’t want stagnation. If Boehner drives the government to a stall the way that Gingrich did, that would be a mistake.

Most of all, I think Americans don’t want to deal with the federal government. We don’t want our lives to be tied up with governing. Life is hard enough with births, jobs, bills, lousy bosses, teenagers, sickness, and death – we don’t want to worry about the feds as well. I think most Americans would be perfectly happy if government would just get out of our lives with the exception of keeping us safe, making sure the infrastructure works, and helping out with the truly disadvantaged. We will pay a reasonable tax for that as long as we think it is well managed.

I raise my coffee cup in a salute to the Tea Party activists for energizing America in making their point. That point, I believe, is that we want our legislators to pay attention to us, don’t tax us to death, and spend what you need but make sure what you buy is needed. 2 years ago, pundits were saying that the Republican party was dead, now the pundits need to say, “Listen to your constituents if you want to keep your job.” 

There is no such thing as a mandate to do radical things. Extremism is a bad position no matter which side of the scale you are on.

If the grown men and women in the federal government can’t get along better than a bunch of nursery school kids, then we will take away their ball and send a new bunch of children to Washington in 2 years.

Tax plan just doesn’t seem to be fair

Tax plan just doesn’t seem to be fair

President Barack Hussein Obama has been talking about his new plan to invigorate the economy and move us out of a double-dip or very long recession. I have to admit that I am confused by his logic.

First, a bit about myself. I hate taxes. I know that I need to pay them. I know that I make a good living (not from this blog mind you) and I need to pay into the system more than some others that don’t work as hard as I work. I get all of that.

In general though, I don’t want to pay taxes and I definitely don’t want to pay MORE taxes. I would much prefer that the federal, state, and local governments do a better job of using my money wisely. I would also appreciate that my money is not transferred to someone that won’t work (strong distinction from “can’t work” and “can’t find work”). In fact, if an adult WON’T work then I am perfectly comfortable with that adult starving to death and dying. Probably my only regret in that scenario is that my tax dollars will likely have to go to bury his sorry body. I realize that this isn’t a very Christian attitude but, frankly, God gave that adult man or woman 2 legs, 2 arms and a brain to use to work – not to live off of the generosity of others.

Now, back to the President’s proposals. I just don’t get it. Something doesn’t make sense. According to CBS News:

President Barack Obama will call on Congress to pass new tax breaks that would allow businesses to write off 100 percent of their new capital investments through 2011, the latest in a series of proposals the White House is rolling out in hopes of jump-starting economic growth ahead of the November elections.

An administration official said the tax breaks would save businesses $200 billion over two years, allowing companies to have more cash on hand. The president will outline the proposal during a speech on the economy in Cleveland, Ohio, on Wednesday.

I understand that part on a simplistic level. It makes perfect sense to me that if businesses don’t have to pay taxes on capital investments, they will be able to justify more money (the original money plus the tax money they didn’t have to spend) on capital investments. They might even spend more money on that as the internal return on that investment would be a little bit better without the tax overhead. This would potentially mean more purchases of goods by businesses which, in theory, would spark more jobs to be created.

However, according to the Washinton Post:

Corporate America is hoarding a massive pile of cash. It just doesn’t want to spend it hiring anyone.

Nonfinancial companies are sitting on $1.8 trillion in cash, roughly one-quarter more than at the beginning of the recession. And as several major firms report impressive earnings this week, the money continues to flow into firms’ coffers.

This means that the businesses are doing well, even if people are not doing well. So the President’s message is that we need to give these rich businesses an incentive to have them spend the money and that incentive will be taxes. I guess that makes sense. How about doing the reverse though? Why not tax them on the cash that they leave laying around and don’t invest? That way the US coffers don’t go down but actually might go up if they don’t spend it AND we get the benefit of increasing capital expenditures.  In fact, we might get MORE business spending with my plan. Why not heavily tax any cash that is in excess of last year’s cash reserves for the company.

It gets a bit more confusing. When it comes to people, the President feels the exact opposite as he does on businesses. He is fully okay with taxing a person more if they make more money. He wants to increase taxes on those that make a certain amount ($250K seems to be the magic number right now). This is exactly the opposite of what he is doing for businesses. For people he isn’t incenting them to spend more money to jumpstart the economy, he is simply taxing them for making more money. 

If a person last year made $220K and then had a great year and made $275K, the President wants to sock it to that enterprising citizen. He wants to charge him more for the right to be a US citizen and live in this great land. That 25% increase is going to drive that individual to pay a much higher rate of income tax. But not the company that is in the same city as the individual. That company has increased its cash by 25% (according to the article cited above) and it is receiving a tax break, not a tax bill.

How about a similar offer to people, Mr. President? How about you say that you don’t have to pay taxes on anything that you buy that generates manufacturing jobs in the US.  Buy a car – get a tax write-off for your down payment.  Buy a house – get a tax write-off for your down payment. Replace the windows in your house – no taxes on that money.  Buy a pizza – that isn’t taxable either. Even your latte at Starbuck’s should have no taxes if you treated people like you treat corporations. Buy a TV or computer manufactured in China though and you pay income taxes. Sorry Best Buy and Apple – you get screwed in my plan but not really since it just remains status quo for you. The people that benefit are the people that live within the borders of the land of the free and the brave.

Like I said above, I don’t like taxes. I know that there has to be some taxes because I want to have those brave soldiers that rescue ships that are attacked by pirates. But how about a little common sense and fair play when it comes to the tax burden.

I thought he could do more than one thing at a time

I thought he could do more than one thing at a time

I am perplexed by President Obama’s speech last night. He spoke to the American people from his Oval Office to announce the end of Operation Iraqi Freedom. While that declaration is not confusing, this paragraph is:

And so at this moment, as we wind down the war in Iraq, we must tackle those challenges at home with as much energy, and grit, and sense of common purpose as our men and women in uniform who have served abroad. They have met every test that they faced. Now, it is our turn. Now, it is our responsibility to honor them by coming together, all of us, and working to secure the dream that so many generations have fought for — the dream that a better life awaits anyone who is willing to work for it and reach for it. (taken from the transcripts on CNN)

It almost seems like he couldn’t work on the economy because of the distractions of the war. Surely this is not so. He repeatedly spoke in the election that a President (or at least him as President) can do more than one thing at once. Maybe, he found out he can’t do it all.

Will Clinton take over as VP?

Will Clinton take over as VP?

A recent article on FoxNews suggests that Barack Hussein Obama should drop Vice President Joseph Biden from the ticket in 2012 and put Hillary Clinton in the job instead.

I don’t think she will do it.

She will stay Secretary of State for the balance of the first term. If BHO is re-elected, she will resign shortly into the second term and no one will blame her as the SecState job is brutal.  This will allow her to publish one more book and do the money-raising chicken-dinner circuit.  She will then run in 2016 to succeed BHO, taking credit for thegood that she did as SecState but distancing herself from BHO’s screwups.

If BHO would lose in 2012 , she would be even better positioned for ’16.

Also, dropping Biden in 2012 (unless he is sick) will be seen as intensely disloyal by the American voters.  No President has changed VPs for an election since FDR put Truman on the ticket.  Nixon ran through a couple VPs but that was because Agnew was even more crooked than Tricky Dick and even then it wasn’t for an election – it was mid-term and Agnew had to resign the position.

It would be near political suicide to switch VPs in the 21st century just based on politics. Even George W. Bush didn’t do it with Dick Cheney which would have been a good move for the party. Cheney had terrible numbers and was never a candidate for President in 2008. Putting a fresh face on the ticket would have allowed Bush to weasel out of some of his mistakes and would have setup a successor candidate (rather than the very limp and inadequate McCain).  For that matter, GWB could have put McCain on the ticket and given him a better standing to run for President with fewer competitors in the primary.

If Biden should become very ill, Clinton is the obvious choice for VP. I have nothing against Mr. Biden, so I don’t want anything bad to happen to him, but if for some reason he is faced with a life-threatening illness, Hillary will be the logical and politically-prudent choice for VP.

Biden is here to stay if he is healthy. Look for Clinton on the ticket in 2016.