Two Thirds Done

Thoughts and experiences of an eighty one year old Wild Duck.

Avram Miller by the sea
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587 posts since 2006

Tag: tax policy

  • See where you tax money goes and puke

    Every year when I file my taxes (which I actually have to pay quarterly), I wait for the IRS to send me a thank you note but it never comes.  Today, I thought that it would be wonderful to have an app that would let you see where you tax dollars went.   I did a search on the Internet an discovered that the White House actually has a calculator.  You put the money paid Federal Tax and you can find out where it went. Lets say you paid $125,000 in federal tax. You would find out that you spent $31,125 for defense which is about 25% of your tax.  However, this does not count the $5,625 for veterans benefits which I think are really part of  the Defense Budget but instead shows up in separate category called Veterans Benefits.  We can contrast this with $875 for environmental protection which means you pay almost 33 times as much for defending the country against other countries then defending the country against climate change.  You pay even less for Energy and Conservation, about $625.  Healthy and Food Safety does somewhat better at  $17,500.

    The things that stand out clearly is that we spend way to much for defense.  We have an army greater than the next twenty countries.  Why do we need this force?  I think the answer is simple.  We need to spend this kind of money to keep the military/industrial complex happy.  The NRA is nothing compared to those bastards that bleed our country by paying off the whores of Washington otherwise none as Congress.  Not only do they drain our country of it wealth but they kill our young people in senseless wars to accomplish this.

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  • Definition of the Middle Class

    Definition of the Middle Class
    After watching the Presidential debate last night, I now realize the difference between the two presidential candidates when it comes to the definition of middle class.
    Romney must think that anyone who does not have a zero to the left of the decimal point is middle class. That is, people whose income ranks them at 1.0% or higher is middle class while 0.9% or less is upper-class.  I loved Romney’s remarks last night that his tax plan would mean that middle class families would not have to pay tax on capital gains, interest or dividends.
    Does he really think this is a problem for the middle class? While many middle class families have  investments, they are mostly in retirement accounts that are not taxed.  His plan is very generous from someone who pays almost nothing on income from investments.  You have to keep in mind that the 14% he paid last year was on the investment he made in his own trust.  It did not count the gains he made in his massive IRA, the trust he has for his children or probably off-shore accounts.  It is also just the realized capital gains,  the gains from actually selling stuff that went up.  His net-worth probably grew much more.
    Obama thinks you are wealthy if your family earns $250,000 or more. I doubt that families in California or New York with two wage-earners, child care and a big mortgage, consider themselves wealthy.  Obama wants to increase the tax on those making more than $250,000 but seems to forget that he already did that with the 3.8% Medicare surtax on wages and investment earnings above $250,000.  If the Bush tax cuts expire for those making over $250,000, the marginal tax rate in a state like California will be close to 50%.
    I have an idea that will benefit the middle class.  Let’s get out of Afghanistan and cut back on our military budget.

  • Bridges not Bombs

    It seems like a lot of people,  particularly those in government, are confused about the difference between building a bomb and building a bridge.  A bomb does not have much function other than to blow up people.  I guess you could argue that in the right circumstance it might provide the owner with some protection against an enemy,  but I think it would be hard to really make the case that the majority of weapons have a utility.   Given that our government is running  about a 40% deficit (it takes in revenues that are about 60% of what it spends), we must borrow money to build the bomb.  Now, I don’t actually think we should build bridges ( although I think we should repair the ones we have) but I do think there are things that we could do to create value and actually pay back the money and interest we  have to borrow to build to such things.  A great example would be a national smart grid to improve the distribution of electric power.

    It seems that the government and our citizens cannot tell the difference   between borrowing money to create value and borrowing money to destroy value.  What if we used our soldiers and the industries that provide materials to conduct wars (remember the USA spends more money in defense then all the other countries of the world combined) to actually build things that would pay for themselves over time?  This kind of borrowing can be  supported by our economy.  There is a difference between borrowing money to finance a vacation and borrowing money to get a college education, but it appears our political leaders cannot see this difference.

    There is an other example of lack of understanding.  Government officials and TV pudents talk about how much money  America corporations  have in their treasuries.  They say companies are not spending this money because their is no consumer demand for more of their products. But there is another reason that seems to escape all these talking heads.  So much of the profits of American companies were made overseas and are not subject to US tax until they are brought back.  So if  an American company wants to use this cash to invest in the USA they first have to pay about 40% in tax.   Given our situation we should allow companies to bring this money back without tax- provided they invest the money in creating US jobs or  pay dividends to their shareholders.  This should get the money in circulation.  And speaking of dividends, they are taxed twice. First they are taxed at the corporate level and then at the individual level.  Not only should they be taxed only once but frankly, I don’t think they should be taxed at all.