I stopped posting on my blog the day Google dropped my account. They restored it three days later, using a different user ID. I logged on once to make sure it worked, and then got so busy doing other things I have not had time to make any entries. So much for daily blogging. My thesis is taking up much of my time, so entries will be scarce until it's done.
Take care, now.
Saturday, November 8, 2008
Sunday, September 21, 2008
Am I Back? I think so....
I was one of those caught up in Google's "mark as a spam blog" problem, which is now (hopefully) fixed. It will take me a while to catch up. I do have a lot of material to distribute / discuss. However, as I have now started to write my MS thesis and want to be done by December, I won't be posting daily.
Some thoughts on recent developments.
1: I would like not to believe reports people will not vote for Barack Obama because he's black. I am more realistic than that, I expect it will happen, but it is an unbelievably stupid reason not to vote for someone. Normally in elections like this I would vote independent (I have voted for Ralph Nader in the last two elections), but I think this time Obama needs my vote. I did, briefly, consider McCain, and would still be considering him if he had nominated Joe Lieberman as his running mate. He wanted to, but knuckled under to pressure from certain elements in his party to pick Sarah Palin. That choice tells me McCain cannot be counted upon to change the course of this country. I have nothing against Palin personally, mind you; it is McCain's giving in to his party I find disturbing.
2: I listened to Barack Obama's entire infamous speech in which he supposedly called Sarah Palin "a pig" on NPR. Not once in the speech did Obama mention the prospective vice president, McCain's running mate, or Sarah Palin. And yet, the very first caller said, "Of course (Obama) called Sarah Palin a pig!" Her comment showed nothing but prejudice and bias. At first I was angry, but that anger soon turned to sadness, both for her and for the country. I sincerely hope this person is not representative of the intelligence of the average US citizen, or we are in real danger of seeing this country go down the toilet.
3: The current administration has put us in such a deep, deep hole, both economically and with our foreign relations, it will take much more than four years to be fixed. Although I will be voting for him, I pity Barack Obama if he wins, because he can't win here. The Bush administration has destroyed, in eight short years, any good will we've earned since World War II, and even if Obama undoes some of the damage he will be tarred with some of the same nastiness. It is unfortunate, but I think you could elect even the greatest presidents (Lincoln, both Roosevelts, whomever) this election there is just too much fallout for one president to clean up.
4: I am getting increasingly frustrated with politicians who do not have the guts to stand up to their fellow Congressionals when they violate the Constitution or other ethical models. I believe this is because politics has turned its focus from setting policy to getting re-elected. Take a look at how little time Congress is actually in session. Unfortunately Lee Atwater, Karl Rove, and their apprentices have turned political disagreement into treason. Thanks a lot, guys! We have so few people who have the guts to call for prosecuting the various unconstitutional acts perpetrated by the Bush administration, and some Democrats also. So, here's a tip of the hat to Senator Russ Feingold, who does have the guts. Thanks, Russ!
Some thoughts on recent developments.
1: I would like not to believe reports people will not vote for Barack Obama because he's black. I am more realistic than that, I expect it will happen, but it is an unbelievably stupid reason not to vote for someone. Normally in elections like this I would vote independent (I have voted for Ralph Nader in the last two elections), but I think this time Obama needs my vote. I did, briefly, consider McCain, and would still be considering him if he had nominated Joe Lieberman as his running mate. He wanted to, but knuckled under to pressure from certain elements in his party to pick Sarah Palin. That choice tells me McCain cannot be counted upon to change the course of this country. I have nothing against Palin personally, mind you; it is McCain's giving in to his party I find disturbing.
2: I listened to Barack Obama's entire infamous speech in which he supposedly called Sarah Palin "a pig" on NPR. Not once in the speech did Obama mention the prospective vice president, McCain's running mate, or Sarah Palin. And yet, the very first caller said, "Of course (Obama) called Sarah Palin a pig!" Her comment showed nothing but prejudice and bias. At first I was angry, but that anger soon turned to sadness, both for her and for the country. I sincerely hope this person is not representative of the intelligence of the average US citizen, or we are in real danger of seeing this country go down the toilet.
3: The current administration has put us in such a deep, deep hole, both economically and with our foreign relations, it will take much more than four years to be fixed. Although I will be voting for him, I pity Barack Obama if he wins, because he can't win here. The Bush administration has destroyed, in eight short years, any good will we've earned since World War II, and even if Obama undoes some of the damage he will be tarred with some of the same nastiness. It is unfortunate, but I think you could elect even the greatest presidents (Lincoln, both Roosevelts, whomever) this election there is just too much fallout for one president to clean up.
4: I am getting increasingly frustrated with politicians who do not have the guts to stand up to their fellow Congressionals when they violate the Constitution or other ethical models. I believe this is because politics has turned its focus from setting policy to getting re-elected. Take a look at how little time Congress is actually in session. Unfortunately Lee Atwater, Karl Rove, and their apprentices have turned political disagreement into treason. Thanks a lot, guys! We have so few people who have the guts to call for prosecuting the various unconstitutional acts perpetrated by the Bush administration, and some Democrats also. So, here's a tip of the hat to Senator Russ Feingold, who does have the guts. Thanks, Russ!
Thursday, August 21, 2008
Vacation break
I am on vacation for a few days, so this blog will be a couple of days behind. In the interim, some thoughts have come up.
Stay tuned!
- In a broadcast from NPR, a university professor made the statement "Poverty cannot be cured by the current method (motivate lazy people) nor can it be cured by throwing money at the problem (the old welfare system). To eliminate poverty one must eliminate the causes, which means not providing opportunities alone but providing the opportunity to seize those opportunities. In other words, poverty begets more poverty, and the best way to eliminate it (or at least reduce it) is to provide programs such that people do not have to worry where their next meal is coming from or if they have a roof over their heads. In the prior post I talked about Maslow's needs; in a subsequent post I'll list them and discuss how the government can help.
- On another NPR program, a question was raised as to what the new president will do about President Bush's (and de facto president Cheney's) grab for executive power. A former Reagan aide says not only does the next President have to promise not to abuse the power, he has to repudiate the current administration's attempts as unconstitutional, in fact illegal. I'm all for that, and I'll explain in another post.
- Last but not least, there are a couple of things I've learned in the last day about taxes and the US budget, again on NPR. I will discuss them and make some changes to my "! TAXES !" post.
Stay tuned!
Wednesday, August 20, 2008
If I were President: ! TAXES !
Every time I think about taxes, taxation, and the IRS I think of something new. In some ways I think a flat tax would be a lot cheaper to manage, but if a flat tax is installed one would have to count all income. The example I used was Lee Iacocca in the 1970s with Chrysler. Mr. Iacocca took a salary of $1 for the first years of his contract. Under a flat tax on income, should Mr. Iacocca have gotten the same servies as others in his neighborhood who make $20,000? $40,000?
All wage statistics are taken from the US Department of Labor.
Suppose I install a flat tax of, say, 15% on all income. To be fair (see the Iacocca question), all income must be taxed, including dividends and capital gains. Welfare and unemployment insurance is not income, nor is Social Security above a certain minimum (more on that in a bit). Currently capital gains are taxed at 15%, so its inclusion as income would have no effect on investments.
Some people say taxing dividends as income amounts to double taxation. They're right; a company pays dividends out of its profits. Profits are taxed, and then the dividends are taxed again as income when a person declares them on their income tax. I can say three things in response to that. One, that is the current situation; making dividends subject to a flat tax doesn't change the current tax structure. Second, companies routinely make more money than their profit margins appear to be, as they get tax breaks we individuals do not get. I am not personally against these tax breaks; their purpose is to encourage businesses to keep doing business where they are rather than move to a cheaper location. However, it does weaken the argument over double taxation because not all company income is taxed. And finally, it is reasonable to ask companies employing thousands of people and making millions of dollars (sometimes billions!) to pay more taxes than does a single, four-person family. This is one of the reasons I sometimes lean toward a flat tax on everything.
One last flat tax comment. This is how it would work. I have not checked these calculations with an economist, so I have no idea if it would work; this is just a "fer instance" exercise. My "flat tax" would have the following attributes.
There are some incentives to work out. I would like to see people work for a living and not be on welfare. I think I stated (in an earlier post) I would create a federal jobs program. I would like to see everyone be able to afford housing, food, clothes, and companionship (essentially Maslow's basic needs). I would like to cut down on corporate welfare; they don't really need it. It does not seem fair for the US government to limit profits or prices; however, it is perfectly fair (and expected!) to collect a fair and reasonable share of the companies within its borders. Governments exist for the good of all, not just the good of corporations.
It's probably hit you already: I said I was going to tax Social Security income. To clarify, I am going to tax some Social Security income. This is to prevent people who earn a lot of money and collect Social Security from gaming the system. In addition to the above taxation, people earning Social Security with additional income greater than five times the poverty level would have their Social Security checks reduced by 5% for each multiplier they are above the poverty line. For example, today five times the poverty line is $67,500. If a person was receiving non-Social Security payments totaling, say, $95,000, they would receive 85% of their expected social security check each month (five percent times three). Naturally all of this would be indexed to inflation.
If a flat tax can't fly, then we need to revamp the current system. Did you know the IRS rules now run to over 1,500 pages? Are we kidding? Many of those pages are tax loopholes or outright breaks for corporations, or limits on income so individuals cannot get tax breaks they may need. I'd certainly roll back some of the Bush tax cuts; re-evaluate the business tax situation; install a higher Federal minimum wage (starting at, say, $10 an hour) and index it to inflation; and look to overhaul the government's budget through GAP (general accounting practice) and the GAO (government accountability office).
One last comment on taxes. These sound like either really good, or really bad, ideas. The big problem I see is politicians are now so concerned with getting re-elected they will never vote to raise any taxes, or even talk about it. As I said in my first post, when I pick my cabinet members I will make sure to immediately start a knowledgeable task force to study our current tax and budget situation to improve all of our standings relative to the companies and their CEOs making astonishing amounts of money most of us can only dream of.
All wage statistics are taken from the US Department of Labor.
Interesting poverty statistic: 25% of African-Americans and 20% of Hispanics are living in poverty. The overall rate is 12.5%. I do not believe this means whites are better workers or that non-whites are lazy. I do believe this is a subtle form of racism (more on the negative affects of this in my next post).
Suppose I install a flat tax of, say, 15% on all income. To be fair (see the Iacocca question), all income must be taxed, including dividends and capital gains. Welfare and unemployment insurance is not income, nor is Social Security above a certain minimum (more on that in a bit). Currently capital gains are taxed at 15%, so its inclusion as income would have no effect on investments.
Interesting poverty statistics: for one person, the US defines the poverty level as roughly $10,500 per year. For a married couple with no kids, the level is $13,500, which isn't much of a gap. For a married couple with two kids (my situation), the poverty level is about $20,500. Now, for a rent of $900 a month (a typical two-bedroom apartment in a suburb), that means roughly one-half of the family's income is spent on shelter. This to me seems unreasonable; it certainly puts home ownership beyond the means of most people.
Some people say taxing dividends as income amounts to double taxation. They're right; a company pays dividends out of its profits. Profits are taxed, and then the dividends are taxed again as income when a person declares them on their income tax. I can say three things in response to that. One, that is the current situation; making dividends subject to a flat tax doesn't change the current tax structure. Second, companies routinely make more money than their profit margins appear to be, as they get tax breaks we individuals do not get. I am not personally against these tax breaks; their purpose is to encourage businesses to keep doing business where they are rather than move to a cheaper location. However, it does weaken the argument over double taxation because not all company income is taxed. And finally, it is reasonable to ask companies employing thousands of people and making millions of dollars (sometimes billions!) to pay more taxes than does a single, four-person family. This is one of the reasons I sometimes lean toward a flat tax on everything.
Interesting poverty statistics: a minimum-wage job at the current US minimum wage is $6.55 (it is different in different states, so I'll use the overall average), which amounts to a salary of $13,600 per year. This is not substantially above the poverty level; an extra $3,000 a year is only $58 per week. You can barely buy a decent pair of sneakers for that. If a family has children and they both work, where can they find daycare for $115 a week? If they alternate shifts, one parent will not see the other except on weekends. That's almost like having a divorce. They might be able to save a few bucks on daycare, but then they need insurance... and what if they do not work for a company providing insurance?
One last flat tax comment. This is how it would work. I have not checked these calculations with an economist, so I have no idea if it would work; this is just a "fer instance" exercise. My "flat tax" would have the following attributes.
- 15% tax on all income (dividends, capital gains, salary, commissions, everything).
- Below two and one-half times the poverty line (based on filing status and indexed to inflation) the individual will pay no taxes at all.
- Social security income over five times the poverty line (again based on filing status and indexed to inflation) would be taxed at normal income rates.
- Personal deductions will remain for one home, one home equity loan, local and state tax payments, day care expenses (say, $7,000 per year per child under 15, indexed to inflation, limited to $28,000 per year), student loan interest, and certain savings programs (with an upper limit on income to be eligible) such as 529 plans.
- Paycheck deductions for 401-K, 403-B, and other retirement and IRA will remain as well.
- Tax credits I have yet to work out, but at least one would be for teachers spending their own money for school books etc.
- Company profits will be taxed at the same 15% rate, with certain (to be worked out) deductions for R&D. Further, money paid out as dividends will not be taxed.
There are some incentives to work out. I would like to see people work for a living and not be on welfare. I think I stated (in an earlier post) I would create a federal jobs program. I would like to see everyone be able to afford housing, food, clothes, and companionship (essentially Maslow's basic needs). I would like to cut down on corporate welfare; they don't really need it. It does not seem fair for the US government to limit profits or prices; however, it is perfectly fair (and expected!) to collect a fair and reasonable share of the companies within its borders. Governments exist for the good of all, not just the good of corporations.
Interesting poverty statistics: a person in the US cannot get insurance unless that person is rich or working. This means a large number of people in the United States cannot get health care of any kind. To me this is backwards; the people most in need of preventive care are the poor. Health insurance should be a basic right, not based on your job.
It's probably hit you already: I said I was going to tax Social Security income. To clarify, I am going to tax some Social Security income. This is to prevent people who earn a lot of money and collect Social Security from gaming the system. In addition to the above taxation, people earning Social Security with additional income greater than five times the poverty level would have their Social Security checks reduced by 5% for each multiplier they are above the poverty line. For example, today five times the poverty line is $67,500. If a person was receiving non-Social Security payments totaling, say, $95,000, they would receive 85% of their expected social security check each month (five percent times three). Naturally all of this would be indexed to inflation.
If a flat tax can't fly, then we need to revamp the current system. Did you know the IRS rules now run to over 1,500 pages? Are we kidding? Many of those pages are tax loopholes or outright breaks for corporations, or limits on income so individuals cannot get tax breaks they may need. I'd certainly roll back some of the Bush tax cuts; re-evaluate the business tax situation; install a higher Federal minimum wage (starting at, say, $10 an hour) and index it to inflation; and look to overhaul the government's budget through GAP (general accounting practice) and the GAO (government accountability office).
One last comment on taxes. These sound like either really good, or really bad, ideas. The big problem I see is politicians are now so concerned with getting re-elected they will never vote to raise any taxes, or even talk about it. As I said in my first post, when I pick my cabinet members I will make sure to immediately start a knowledgeable task force to study our current tax and budget situation to improve all of our standings relative to the companies and their CEOs making astonishing amounts of money most of us can only dream of.
Monday, August 18, 2008
If I were President 4: some social programs
In earlier posts I said I would stop the War on Drugs. I would do so because it hasn't worked. We've spent a great deal of money on the "war," and yet drug use is higher than before the War on Drugs was declared. If I remember correctly, in Economics 101 we are taught "the quantity supplied is related to the quantity demanded" such that price will act to equalize the quantity demanded and the quantity supplied, also called an economic equilibrium. If we want to reduce the usage of drugs in the US, there are two ways to do it: limit the quantity supplied or reduce the quantity demanded. The War on Drugs failed to do the first, and the jailing of people for minor drug offenses did not reduce demand, so where does that leave us?
It turns out there have been pilot programs which reduce the likelihood of teens and young adults getting involved with drugs. These programs cost a fraction of police enforcement of drug laws. Further, if the number of drug offenses is reduced, prison overcrowding would be reduced. According to the Bureau of Justice, 21% of state prisoners and 55% of federal prisoners are in for drug offenses. In numbers, this is half a million people... and most of those are either users or low-level dealers, and a large majority are minorities. The US has the largest per capita incarceration rate... even higher than China's, odd considering that country's regular jailing of dissidents.
One other contribution to the high rate of incarceration is minimum required sentences and the so-called "three strikes" laws. If judges had more leeway in sentencing there would be fewer people in jail, even if they sentence the same number of people they did before, just because of the shorter terms many of these prisoners would get.
So far this has been a lot of talk. What I would propose in a budget is a reduction in the drug enforcement agency and a commensurate increase in the number of prevention and treatment programs. In addition, I plan a number of reforms to improve the overall standard of living, which will also act to reduce the number of drug users. Such reforms include government works projects, particularly for infrastructure improvements (modeled after FDR's WPA projects); an increase in the minimum wage to place incomes of those workers above the poverty level; a more equitable tax structure (which I will discuss in the next post); and other improvements I have not fully thought out yet.
Next are two social programs I'll touch on: Social Security and Medicare. Please read this post. In that post I wrote:
As a final comment in this post, I draw your attention to evidence-based social programs that work. Please give that website a read.
Next post: taxes.
It turns out there have been pilot programs which reduce the likelihood of teens and young adults getting involved with drugs. These programs cost a fraction of police enforcement of drug laws. Further, if the number of drug offenses is reduced, prison overcrowding would be reduced. According to the Bureau of Justice, 21% of state prisoners and 55% of federal prisoners are in for drug offenses. In numbers, this is half a million people... and most of those are either users or low-level dealers, and a large majority are minorities. The US has the largest per capita incarceration rate... even higher than China's, odd considering that country's regular jailing of dissidents.
One other contribution to the high rate of incarceration is minimum required sentences and the so-called "three strikes" laws. If judges had more leeway in sentencing there would be fewer people in jail, even if they sentence the same number of people they did before, just because of the shorter terms many of these prisoners would get.
So far this has been a lot of talk. What I would propose in a budget is a reduction in the drug enforcement agency and a commensurate increase in the number of prevention and treatment programs. In addition, I plan a number of reforms to improve the overall standard of living, which will also act to reduce the number of drug users. Such reforms include government works projects, particularly for infrastructure improvements (modeled after FDR's WPA projects); an increase in the minimum wage to place incomes of those workers above the poverty level; a more equitable tax structure (which I will discuss in the next post); and other improvements I have not fully thought out yet.
Next are two social programs I'll touch on: Social Security and Medicare. Please read this post. In that post I wrote:
... the real fix to Social Security is to eliminate the cap on taxable income for Social Security taxes, or at least make it a reasonable number (say, $1,000,000) and then index it for inflation....
Finally, the real social program in trouble is not Social Security but Medicare. To fix both problems, the Social Security tax should be lowered to 4%, the Medicare tax raised from 1.7% to 4%, and have no caps on income subject to these taxes. Today the combined weight of these two taxes is 7.8 percent, so the change I suggest would retain about the same weight (it's actually a 0.2% tax increase, which is very slight) but resolve both problems for the foreseeable future.
As a final comment in this post, I draw your attention to evidence-based social programs that work. Please give that website a read.
Next post: taxes.
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