Archive for the ‘Politics and the Economy’ Category

Why Occupy Doesn’t Resonate With Me

November 19, 2011 Leave a comment

We had a very interesting incident in America today. As I am sure we’ve all heard, students at UC Davis were pepper sprayed by police for disobeying a police order to disperse and clear a path. From what I understand, there was a encampment of tents on campus much like other Occupy Wall Street type movements have in various spots across the US. These students had formed a circle, sitting down with their arms interlocked which blocked the path to this encampment. From the 2 different videos I saw, the police gave the students some warning that if they did not clear a path, that they would be sprayed and removed by force. And that is then what transpired.

Here’s the thing about this incident. The use of the pepper spray seemed to be unnecessary and excessive in this case. (Update: CNN has more parts to the story as to why the police ended up using the sprayOK, but maybe we should at the same time be talking about what everyone did wrong here. Just because the police officers were “more” wrong, does that make the protesters right? That’s the question I’ve been asking since I first saw the coverage of this incident. I even asked the question in a nice manner on BoingBoing where I first saw the article, for which apparently taking a viewpoint that wasn’t outrage against the police got me banned from commenting. I just feel it is important not to jump to conclusions. There are some things to consider.

Our freedoms, including those Constitutionally protected, have limits. Those limits generally are where they cross the line into interfering with the rights of others. If you commit a felony, you lose your right to bear arms. You are not allowed to shout “FIRE!” in a crowded theater because it can cause harm to others. In this case, the protesters were blocking access to a public space where a large number of people were gathered.

So what would have happened if someone was being assaulted in one of these tents and called 911 from their cell phone? The police would not have been able to get their squad car through without running over protesters. What if a cooking stove started a tent or tents on fire? How would you get a fire truck through? What if a protester inside the circle fell and had a serious head injury? How would the ambulance get through? Whenever these crowds gather, especially for an extended period of time, the police need access to them to protect them from each other and others. To say that every cop is evil and trying to suppress our rights by these actions is just as crazy as saying that every protester has good intentions.

I heard a comment last week that the NYPD has used up all of its goodwill from 9/11 due to its actions recently in Zuccotti Park . So if we had another terrorist attack somewhere in the United States, am I to believe that the NYPD or any other police force wouldn’t be there ready to serve just as those fine people did on that tragic day? Let’s try to put some sanity in this and realize that both the protesters and the police had some wrong-doing here, and that each should face their appropriate punishment, but it should not reflect on either as a whole.

Before I try to express why I the Occupy movement hasn’t resonated with me, everyone should go read Aaron Brown’s article on it. He’s a real writer, and expresses it much better than I could ever hope to. So go. Click on it. Then come back here.

If the Occupy movement wants to gain momentum and gain support from people like me, they need to do a few things. I think they would benefit from a leader. They need a more unified voice to give them a mission as to what it is they are really protesting. They could change their message from income equality to income fairness. If I get promoted at work, I shouldn’t keep making the same money I did previously. But I shouldn’t make 5000% more either. They should immediately support Congressman Walz’s bill to stop Congress from benefiting from insider stock knowledge. Occupy Wall Street needs to get a message that makes sense.

The police used excessive force. The protesters ignored their orders and did present a threat (I won’t make a judgement as to the degree) to public safety by blocking access to a large gathering in a public place. More than one wrong was committed here. And that’s really the point I want to make. The incorrect application of force does not vindicate the protesters. I don’t think we can properly place judgement on the degree as to which the force was excessive unless we can admit the amount of blame the protesters have in the situation. Other Occupiers should take note that they would better capture the hearts and minds of people like me if they did the right thing and admit when they cross the line, and let’s see if the police and our government can do the same.


Two Sides Don’t Form A Shape

November 11, 2011 Leave a comment

It is interesting to me how every issue or problem we face seems to get boiled down to a set of two mutually exclusive solutions. They generally never intersect, and one is typically status quo or expansion of the status quo. What I find very frustrating about this is it seems it is difficult to get alternate or blended solutions into the discussion, so that much like in geometry, real solutions can take “shape.”

Former President Bill Clinton has a new book that is full of new and different ideas for helping the economy get back on track. Not all of the ideas in the article linked here are new, nor do I agree 100% with every idea. However, the ideas are fresh. They might not even be new, but they are fresh. No one else is talking about them. One example that is appealing:

And in the near-term, Clinton says Congress should allow companies with earnings held overseas to repatriate that money at a tax rate below the usual 35% — say 15% to 20%.

If a company is able to prove they will use their repatriated profits to create new jobs in the United States, the tax rate should be dropped all the way to 0%.

With as much as $1 trillion in profits being held overseas, the scheme could create a nice chunk of revenue for the Treasury. Clinton says that money should be used to fund infrastructure grants to the states.

Think about that idea. It gives some to the business community and the conservatives asking for lower taxes on businesses. It gets more money in the American economy. It creates jobs. It increases tax revenues. And why isn’t every senator and representative drafting a bill today to get this done?

Another issue is the U.S. Postal Service and whether we should continue to subsidize postage and 6-day delivery to the tune of over $8 billion per year. Mail volume continues to decline, costs continue to rise and people continue to more and more use alternative ways to communicate. Yes, I know part of the problem is the way Congress changed the payments required to the pension fund. But, check the USPS’ own reports. Mail volume continues to go down. If they are servicing less mail every year, they need to start thinking about keeping the workforce and infrastructure at a proper proportion to the service they are delivering. Yet I see this petition popping up on my Twitter feed to save the 6-day delivery. I want to know why.

Here’s what I would propose. The USPS employs alot of people, and laying them off is probably not a good or practical thing to do at this point. However, it seems ludicrous to pay postal workers to do nothing and to continue to have the taxpayers foot the bill for a service that, while Constitutionally mandated to exist, probably needs to be pared back. (Note: Please read the link. I’m not suggesting postal workers do nothing all of the time. But the bizarre contract they have with the union costs the USPS millions every year to have workers literally sit and do nothing.) Why not scale back the postal service, and retrain those displaced workers to bury fiber optic cable throughout the United States. As people retire or leave for other jobs, you don’t replace them so that the program can be eventually eliminated. The fiber could then be sold to communication companies to deliver high speed communication services to communities all over the United States.  Quick math says we could have 60,000 people at roughly $60,000 per year burying cable at a cost of $4 billion. That leaves $4 billion to buy the cable itself to leave it at a break even point. Based on estimates of cable costs (just the cable material), that could buy roughly 250,000-500,000 miles of fiber optic cable. It seems to me if we are spending the $8 billion anyway, we could be doing something more productive like this which provides the future infrastructure we need.

There are plenty of issues that likely have alternative solutions. Education, housing, energy, unemployment, health care and many others seem to always be presented as two-solution systems. Have we lost the ability to think creatively? Are we simply too apathetic to care? Why do we not want to form real solutions? Let’s hope that whoever wins a year from now will be more like President Clinton and at least be willing to discuss new ideas.


October 27, 2011 Leave a comment

I love the way science work and the way scientists think because the logic really helps me to unlock my own thoughts. On my drive to school this morning, I was listening to an old episode of the StarTalk podcast, which is Neil deGrasse Tyson’s science show. He was having a discussion with a couple of members of the The Planetary Society as to why we should continue to fund the space program, and was really challenging them to really justify it, considering the current political and economic climate. And they did it. The analogy was brought up that as a parent, even when you are working to buy food, clothes, and shelter for your child, you don’t put books at a lower priority. You do them all at once, at an equal priority. It is an interesting thought.

I often write on my blog about how we need to be wary of the size of government and about how I really seem to align well with the libertarian ideal. I really do believe in the ideals of being a libertarian, for the more power we give to government to do charitable things, the more power we also grant them to do less charitable or malicious things. When we are looking at setting or changing a government policy, we need to remember that it is people running the government. The same people running those evil corporations also run the government. They are flawed human beings like anyone else.  However, there is a difference between an ideal or philosophy and reality. Government can’t always be made perpetually smaller.

The other parts of making a priority list are the “how” and the “why” parts. If we can’t figure out why we are doing something, it probably isn’t a very high priority. If we don’t know how we are going to do something, perhaps it needs to be broken down further so that the parts can be prioritized. An easy example of that would be health care. It needed to be changed. But to change health care all at once is a little like saying you want to move the Empire State Building a block over. It is possible, but it isn’t very practical and there are probably better solutions that can be done in smaller increments.

So when I disagree with government funding things like a welfare program, more money for education, health care, or any other of these things that we are asking of modern government, it isn’t that I necessarily think that government should stop doing them. It isn’t that I even necessarily think that government should make them a lower priority than some other government service (even if I mention the word priority).

My thought for today actually ends up being a fairly liberal one (I know – you are shocked). We need to fund these things of a modern society – health care, welfare, education, etc., and do so with equal priority. All I ask is we do so with thought and restraint instead of the way we are doing it now which is with no thought (for political gain) and no restraint (we can pay for it later). We can’t spend more, drastically cut, or make dramatic changes without more thought and consideration as to the consequences of those actions.

I remember when I first started in banking, a guy used to come see me at the bank once a week and talk politics. He told me the biggest problem with today’s politicians is they don’t follow this simple rule: if you have an idea, and ask 10 average people about it and they tell you it is pretty stupid, it is probably pretty stupid. Most of the ideas I’m hearing from Saint Paul, Washington D.C., and the campaign trail would fit that criteria pretty well.

A Case of Shame On Everyone?

September 5, 2011 2 comments

I tweeted earlier today a video clip of Jimmy Hoffa Jr. It was the very first one that came across my Twitter feed. Here it is: Note – sorry I couldn’t get wordpress to like the embed code. You’ll have to follow the link, but I wanted to use the original clip I posted on Twitter.

So apparently FOX News did its usual thing and put as much spin as they could on this clip. They cut off the previous sentence to make it seem more “violent” according to

Now I posted the video knowing full well Mr. Hoffa wasn’t intending to tell people to go out and murder or maim any of the GOP politicians, even without the previous sentence. My point in posting it is that on both sides we seem to have forgotten our promise not to use the violent metaphors in regards to politicians. This is not to mean that you aren’t free to use them, but out of respect for Representative Giffords we were going to find other ways to phrase political and election disagreements.

The right wing media has already countered the editing job by pointing out more of Hoffa’s speech and its war metaphors.

So here’s the difficult question – what do we do? It seems that the “battle” metaphor is often appropriate in politics. So can we perhaps just make an effort to tone it down and be mindful of our speech. I think in this case Mr. Hoffa went over the line by saying “take these son of a bitches out.” Use the battle and war metaphors, but when it gets to the point of talking about the actual people, how about being more specific and saying we are going to use our votes and take charge or something similar. Let’s not leave any question in anyone’s mind as to what we mean when we say we are going to “take someone out.”

So shame on FOX News. And shame on Mr. Hoffa. I’d hope they would both apologize. I know neither will.

It’s All About Balance AKA Boy Are We Selfish

August 2, 2011 Leave a comment

I wouldn’t consider myself an expert on history, but I have been reading quite a bit to try to better understand how things in the economy, politics and our government work so I can make better decisions in the voting booth. I also want to start being more involved in the process so that I feel that my little voice somehow makes a small difference in making things better. This summer has been a learning experience. I have come to realize one of the biggest biases in politics, the economy and government is our own personal selfishness. Being selfish does not make one a bad person, but not being aware of it is where problems can arise.

David Frum posted a great blog yesterday about how the ideological stance of the Republican party is harmful to the American economy and political process. Mr. Frum worked for President Bush (43), has written books on the conservatism and believes in smaller government. He also understands that the political process is about balance and getting there is sometimes about compromise and leadership, and not always about getting through all of your ideals. It is a great read and not very long – I recommend checking out the link.

The other thing I’ve come to realize is I am thinking that for all of his flaws that President Clinton really was a great President because he understood our selfishness, and somehow was able to find bits of leadership and find ways to make it work for everyone. We had a balanced budget, yet for the rich and conservatives he signed welfare reform and a massive cut in capital gains taxes. For the middle class he raised income taxes on higher incomes. For the military protectionist types, we went to war in the Balkans. There was some level of gun control with the Brady Bill. There was something for everyone in President Clinton’s policies, and he knew it. Everyone got a little of what they wanted, and it fed their selfish desires.

Certainly there were things that people didn’t like about the policies. Not everything was perfect. I don’t think the policies of Clinton would have prevented a tech stock bubble or the housing bubble. In fact, a case could be made that the capital gains cut made that problem worse. The overall point is that leadership and political discussion requires understanding we are all selfish. If we start with that premise, then we know to be careful anytime we want to start or change a government program or give the government more money.

I wanted to cover that after a Twitter discussion I had with State Representative Ryan Winkler this morning. I thank the Representative for taking the time to discuss some issues with me. He seems to be reasonable in his views. But the initial post that brought on the discussion was his tweet this morning that said:

Moody’s downgrade of MN finances due to ‘political intractability’. In other words, GOP obstructionism lowers our credit score.

I stated that intractability simply means “complex.” His response is the government needs to spend more money on education and taxes should be raised based on the ability to pay (later stating the rich should pay more). Now there is no doubt that education is important. But there is a selfish bias to assume that the rich who already foot over half the bill for education should pay even more for it.

The other point is that if taxing more and spending more were the solution to our economic problems, then why not do it ad infinitum? There must be a point in taxation and government spending (and government hiring for that matter) where the benefit stops or we would just have the government tax us 100% and hire all of us so unemployment would be 0%. Obviously that doesn’t work. So we have to realize that it is our very selfish nature, the desire to make more money, that drives our economy. The government must exist to protect us, so it will always be a cog in the machine that is our economy. It is not easy to find that point where it isn’t doing enough, and when it is doing too much. In either case, it is hurting our economy. The danger on the “too much” side is that can also affect our freedom.

Look at it another way. If unemployment benefits were a great driver of our economy, then why not just start sending checks to everyone so that they could go buy more stuff? If government work was a big driver of the economy, then why not double the government work force? Now don’t take this as me saying to stop those benefits or saying we don’t need government workers. What I am saying is that there is a point where government money becomes ineffective in the economy. We have to be aware of that. Based on the last 20 years and my humble opinion, government is probably spending about enough. What we need to do is get the size of the federal government reduced and get more spending brought back to the state and local level. We are going to need to raise taxes to get the budgets balanced. That would do much more for the economy than what is happening now.

So you can see, I will freely admit we are going to have to raise taxes in order to ensure that our standard of living doesn’t suffer during this economic malaise we are in. Likely, that is going to fall on those with higher incomes more. We can debate on how we should accomplish that, which I think can be done by fixing the tax code more than by raising the rates. But we are going to have to go back to the rates of 10-15 years ago to make sure we don’t lose all we have gained. But we have to be careful that we don’t allow those taxes to be spent on other things due to selfish motivations.

Do You Really Think We Are That Selfish?

I’d like to ask all of you how many televisions you own? How many iPods? How many PCs? How many pairs of designer jeans? How many times did you eat out this year so far? How many magazines do you subscribe to? Do you have cable? Premium cable? How many major sporting events have you attended? How many of the things in your house are made in the US? How many of you have mutual funds in your retirement accounts that benefit from the very corporate profits you are now claiming to despise.

My point is we are all selfish – rich, middle-class, and poor alike. We must first admit that we are selfish and step outside of that selfishness before we start shouting about the problems we face in our country. We must also realize that part of being free is the right to be selfish and the only way to maintain that freedom is to make sure that whatever we do, it is applied equally.

We need to do things to support and encourage freedom and success, but we cannot buy success through wealth transfer. We cannot spread out way of life throughout the world to people who do not want it.

Name calling and demonizing a group of people or one certain party is not going to solve the problem. that is what these politicians want, and you are playing right into their hands – they want this polarization, as it solidifies their base for the next election. Realize we all have our own self-motivating factors, and lets all work to try to bring out the better in people instead of continuing to grow the self-interest.

OK, I Get It. But What About The Math?

July 30, 2011 1 comment

For the handful of you who have been reading my blog have come to realize, I am very wary of the size of government. The essence of the American government was for it to be small with enumerated powers in order to keep the maximum number of freedoms with the individual. There were those that didn’t have freedoms, but history tells us our very brightest of our Founding Fathers struggled with this and did there best to put us on a path of increased freedom. We also cannot ignore human nature, and that an overly socialistic government cannot be sustained simply because people will not work harder for something which they can get for free. There are moral implications, including the idea that giving government more will allow government to spend money on things you may morally object to. I will continue to be cautious whenever it comes to government and its programs.

I also want people to understand that I get it. We have a different society than we had in 1776 and 1787. We have a different set of expectations with a different standard of living. We have an aging population. Our tax burden is lower than it has been in the last many decades. We have military in Iraq, Afghanistan, Libya, Kosovo, Japan, Korea, Germany and other places along with all of the troops we need to care for at home. The point is we have national expenses we are incurring and we haven’t really asked the nation to pay for them.

First a Word On The Debt Ceiling

If you think your party has the right stance on this issue, than you are already wrong. I’m sorry, but that’s just a fact. We are going to have to get a budget plan that puts us on a path that gets us back to a balanced budget. The President simply wants to raise taxes and raise the ceiling while raising spending even faster (thus adding to the debt instead of reducing it over the next 10 years). The Tea Party faction of the GOP seems to think they can put a stop to spending right here and immediately balance the budget right now without any increase in taxes which is also unreasonable. Neither is sustainable. Both plans are a disaster. Don’t BS yourself into thinking otherwise. Not raising the debt ceiling becomes a problem very soon. Raising the debt ceiling under the President’s plan is a problem just a little while later.

In fact, I am going to call out one liberal website specifically. The Daily Kos. While there is truth that you could put a majority of the debt blame on the Republicans who spent against their conservative nature from 2001 on, the truth is the democrats controlled both houses in 2006. In 2008, The democrats took a firmer control of the Senate and also gained the White House. Now granted, it wasn’t filibuster proof, but it was a powerful majority. Not only did they not do anything about tax policy or the tax rates, but the house didn’t even finish a budget for 2011 before the GOP took over control of the house (which should have been done in 2010). For the Daily Kos to pin it all on the GOP is a total joke and does nothing to make real progress on the issue. The democrats had a pretty good opportunity to make some changes, and the only changes they made were to spend more without figuring out how to pay for it.

Some Math On Taxing the Rich

I took a look at the Forbes billionaire list to get an idea of how much money the richest people in the United States really have. In order to take care of just the deficit…just this year… we would have to take every dollar and asset of the richest 400 people in the United States. I am not saying their income. I am saying taking everything they own, leaving them with nothing would only run 1/3 of just the federal government. We would have to take roughly the next 3,000-4,000 richest people’s entire net worth in order to run the rest of the government for just one year. It wouldn’t take too many years to run out of rich people. I sure hope we aren’t going to resort to taking stuff people have already earned. We already do that at death through the estate tax.

As far as taxing the rich, it simply won’t fill the gap for several reasons. First, those that are already rich receive large amounts of income from capital gains. The top rate there is 20%. Now you could make a case to reverse the Clinton tax cut and go back to 28 % and see a decent bump in revenue. But let’s assume all of the AGI reported on the latest numbers available is regular income. If we taxed the top 5% of incomes (meaning the top 5% by number of returns filed with positive AGI or about 7 million returns) at a 3% higher rate, the federal government would take in an extra $87 billion. Keep in mind this calculation is based on raising their effective tax rate 3%, meaning the true top rate would have to go up much higher, and the top rate tier would have to have to begin lower than the $159,000 mark. Now you are hitting the small business sector. Also keep in mind, this top 5% already pays over 58% of all income taxes.

Let’s say we really want to generate income. Let’s hit the top 10% with a 10% effective tax increase, making their average effective rate over 28%. Now you are talking some real money. This would raise over $385 billion in revenue for the government. Keep in mind this tier starts at $113,799 and already pays nearly 70% of all income taxes. That $385 billion would only take care of about 20-25% of the deficit. To cover the entire federal budget, you would have to take every dollar that everyone making over $110,000 earns. Not the money over $110,000. All of their money (after their personal exemption). Hey, then the rest of us wouldn’t have to pay taxes.

Looking at Table 1 in this article, you will see that about half the people in the US pay little to no taxes. If we look at the top half, we see an effective rate on average of 13.65%. In order to fill the budget deficit this year, we would have to increase the effective rate on the top half by over 20%, nearly tripling our tax burden. I hope I’ve proved my point…taxes alone won’t solve the deficit problem. History has also shown that tax increases can only do so much.

Anything You Can Do I Can Do Better

One of my favorite things to hear is someone defend Obama’s change of heart on the debt ceiling because Bush was a big spending president. It is now quite well know that then Senator Obama made a speech in the senate in 2006 calling the raising of the debt ceiling distasteful and a sign of a failure of leadership. Now not raising the debt ceiling is the same according to the same man. His supporters will say that the GOP did the same with President Bush, and it is true, many did. But putting the long-term future of our country in jeopardy because we made mistakes in the past is not a reason to keep making those mistakes. In most cases, this out of control debt has been a bi-partisan effort.

I was never a supporter of President Bush, and I never voted for him. I voted for President Obama based on my social values, his overall record in the senate, and his word given in the debate that his spending programs would be matched by cuts elsewhere. Instead, spending has increased over 30% since he has taken office. The debt has grown by $4 trillion. Unemployment and housing are stagnant. This from the same candidiate who told us that, “…But there is no doubt that we’ve been living beyond our means and we’re going to have to make some adjustments.”

Other countries have higher tax rates than us, and some have lower. Some have larger income and asset gaps, and some have smaller. That doesn’t always make it the right policy for our country. Sure, we should look at those countries and their policies and look at the successes and failures of those types of policies, but we do need to also realize some of the variables are different and know that it might not work here in our country.

What Does All This Spending Look Like?

Yes, I know. The Heritage Foundation has a conservative bias. But these are charts generated from government data, so I am presenting just the graphics so you can hopefully draw some of your own conclusions before you look at the source article. The first is a table showing spending in decending order of 2010 dollars. It is a good way to view how the government spends and also shows how it might not be so easy to decide where to start trimming.

Federal Spending Table

Also interesting is the chart showing the growth of the new major components of spending.

Spending being crowded

It’s alot of money.

So What Conservative Crap Are You Pushing Today?

My point all along in my blog is to be skeptical of the status quo. The government is such a massive entity and is not well equipped to act quickly and adjust to changes in society, the economy, or to act on the will of the people. Often it doesn’t want to for the fear of change and the lack of leadership. Both parties and both sides need to realize the paths they want to take are not going to bring us prosperity. They are only paths to short-term votes, and some of us, like me, are seeing right through it.

Let’s look at a few major components of spending. The military needs to come home. We can’t force people to be like us. Yes, a national security threat or a mass genocide we should act on, but we can’t be occupiers and supervisors of the world. Time to bring the troops home. We also need to be prepared for the costs of taking care of those who served, and give them the benefits we promised them. We are going to have to look at trimming benefits for future military service members. It is a voluntary military, and if we are not having to send them into as many dangerous situations it is one area we can consider. As long as everyone knows what to expect, there is nothing wrong with looking at those benefits.

People of my generation are going to have to shore up social security for our parents and grandparents by taking less and working longer. There is no way around it. Yup, we might be the first generation in quite awhile not as well off as the previous one. I am willing to do that for my parents…and for my kids. Sacrifice is part of the American spirit. I will never have to go to war and see the things those people had to see, so instead I am going to have to work a little harder and a little longer. We all have to make sacrifices at times in our lives. Get used to it.

We are going to have to find more reasonable ways to control medical costs and find reasonable ways to provide medical coverage. The outline of Obamacare is a mess and will spiral costs completely out of control. It was bad before, and this new system did nothing to really fix it. There are smart people out there with ideas, and we have to be willing to listen. Again, it isn’t going to be perfect. We won’t all get our hangnails removed for free by a plastic surgeon. But we can find a reasonable approach to make it work that won’t spend us into oblivion.

We do need to discuss what we mean by poor. What is poverty? Many of my liberal friends were appalled at this article would dare say anything about air conditioning or televisions as a luxury item. That wasn’t really the point of the article at all. The point is if a person has all of these things, shelter, food, etc., and yet because we base poverty simply on income and provide them with some sort of income transfer payment, are we really helping them? Does that payment really move them out of poverty? If they are safe, fed, etc., is that really poverty? Even Gene Simmons on his twitter stepped in a little when he quoted Winston Churchill, “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”

I am not saying there are not people that don’t need help and that there won’t always be people that need help. Transferring income or basing help just on income alone isn’t going to solve the problem with finite resources. For example, the article shows 32.2% of poor households have more than 2 TVs, 17.9% have a big screen TV, 29.3% have a game system, yet only 29.3% have internet service. Somehow I would think more opportunity would be available if we could get more internet to those people instead of having resources going to big screen TVs and game systems.

Please my liberal friends, I understand the system can’t be and never will be perfect. Just try to understand my point of this section. We have a limited set of resources. We need to spend them wisely. I think we could do better. Often the solution given is spend more and tax more. Even if we tax more, we are still in the hole. To my conservative friends, we are going to have to tax more. We cannot cut that much money all at once. We cannot continue to fight the wars President Bush started and President Obama has continued while spending on both of their social agendas and not have a tax increase. Even if we cut all of those programs, we’ve spent the money for 10 years and we need to pay for that.

Yes, Raise The Debt Ceiling and Tax the Rich – Just Remember the Math

So, Congress better get on it and raise the debt ceiling at least a little bit to get us by until they can get us a plan that hurts everyone. That’s what good leadership will do. This fiscal policy of the last 10 1/2 years is a total nightmare, and getting out of it is going to take guts and some pain. It is going to take some taxes. A judicious increase with long-term stability. In fact, it could be accomplished best with a massive simplification of the tax code so that the effective rates come much closer to the real rates without raising the real rates at all. It would also make things much more fair. There are going to be cuts to programs to the poor.

There are going to have to be sacrifices from us all, because as the math shows, even the rich can’t do it all. Yes, the rich are going to have to be a part of the solution. Let’s not call it their “fair share” since the richest do pay most of the taxes anyway. Let’s just be honest and say we want to increase the progression of the taxes. At least that is intellectually honest. Then, I can be OK with it.

The math should show that trying to balance this all on the rich is just as foolish as the GOP trying to force the President’s hand by not raising the debt ceiling. If we try to solve this through taxes only, the math shows we will fail. If we try to plunder existing wealth, we will have lost our freedom. We can’t do it without some shared sacrifice. Everything needs to be on the table. We need new thinking. We need to rethink our priorities. Let’s get it done.

An Interesting Dilemma In Morality

July 14, 2011 Leave a comment

I will warn you up front. This post will probably twist your brain. You may want to grab a beer before you read this one. In fact, this post is more out there to try to see if I can better express it in writing than I can in thinking. I’d really like your feedback. I’d really like you to think about it. Let’s see if this changes anyone’s mind.

I have posted a few blogs now about why the government needs to be careful about taxing more (even the rich), about how we have the power to tax the rich with our consumer power and how even the arguments for taxing the rich are riddled with logical fallacies. Before I show another interesting thought on taxation, let me throw out this one fact that came to light recently. This Tax Foundation data which comes right from the IRS but is presented neatly is amazing. It shows that in 2008, almost 140 million tax returns were filed. If you just divide the number of returns up evenly and look at the top 1% or the top 1.4 million returns, the bottom return of the 1% had an AGI of $380,354. Certainly a nice amount of money. What is interesting to me is if we took every dollar (AGI) that the top 1% made in 2008), it still wouldn’t be enough to balance the federal budget this year. Every. Single. Dollar. Yikes.

What I want to look at today is the application of morals in our laws. I have had a few discussions on this where the argument is made that morals are the basis of our laws. I would argue that in reality, it is our laws that protect our personal freedoms and personal property that happen to coincide with our morals. Perhaps the lines are simply more blurry. A simple example might be a law against physical harm. Someone who assaults you or someone who kills another is charged with a crime for inflicting personal harm against your or the deceased’s body (property). Most would agree it is morally wrong to inflict that kind of harm against another, but the basis for the law is a property harm. Same with theft. It might be morally wrong, but it is a law because it is a violation of the rights to my property.

Let’s take a clear example of a moral law applied as governmental law that I feel is wrong. I have blogged in the past about gay marriage and how there are many reasons, one of which is protection of contract law, as to why gay marriage should be legal. I think most readers of my blog are going to be in agreement with me that gay people should be able to get married, or at the very least don’t really care. The bottom line is it is two adult people who are consenting to a specific arrangement that by law has special benefits only allowed with one person at a time (right now in MN statute as one man and one woman). The argument from the Republican side is that government has an interest in heterosexual marriage for the health of the state (nation) through procreation. The law doesn’t and I don’t think would be Constitutional if it required procreation, so even if that were true the law couldn’t require that as part of the contract.

Some would argue that being gay is a choice. I don’t really care. Even if it is a choice, the science says it is not a disease (the APA removed it in 1973) so it is a choice a person is free to make. Note: I am not offering my opinion that it is a choice for people to be gay. I am simply saying that choice or not, it is irrelevant in how homosexuals are treated by the law. An adult watching pornography to excess may be harmful to their own health, that is a choice that person can make. I can choose to have a 3rd or 4th beer which many experts would say is harmful, but should the government make it illegal for me to do so? Mormons abstain from all alcohol, but we do not impose their morals on the entire country (and when we did it fail miserably). My point is even the moral choice argument is not a reason to ban something because some morals simply do not violate another’s personal rights or property.

The more compelling or interesting moral argument I want to make is in government taxation and spending. Starting with taxation, the interesting arguments I often hear when making a case to raise taxes on the wealthy and on corporations is the “ability to pay,” “paying their fair share” and “keeping massive profits.” Let’s start with a very basic premise, is it wrong to make money? The question may seem like a straw man question, but it is not because there would be a few people who would probably say we should all make exactly the same amount. OK, so once we’ve eliminated that for the most of us, I ask the next question. Is it wrong to make lots of money? How much is too much money? If you answered there is no amount too much, then shouldn’t the rich pay the same rate as the rest?

However, if you answered that some people do make too much and should contribute more than the rest of us, I want you to think about what kind of judgement that is. Isn’t that a moral judgment? Isn’t the very idea of judging somebody to be too rich or so rich that they should be giving to the poor a concept of morals.  That is the internal debate I have whenever the idea comes up about setting a separate rate for those making incomes much higher than me or any of my friends. Who gets to decide what is “rich?” Are we not making a moral judgement? By making that moral judgment from the left (since taxing the rich is a liberal concept), are we any better than those conservatives making a moral judgment on homosexuality?

I do realize that for most homosexual people, it is not a choice (I can’t say all simply because I don’t think the science would even say that). So certainly there are differences in the gay marriage issue and the taxation issue. We have to have some taxation in order to provide police, courts, the military, etc. We can’t have “some” gay marriage. Taxes always have to exist as a part of government and they have to adjust as the government faces national security threats, national disasters, etc. A gay person shouldn’t be denied a free consensual choice just because some find it morally objectionable.

One other thing to consider that makes me very sad about the vote on this gay marriage amendment that also applies to the “tax the rich concept.” The reason we have a democratic republic and not a direct democracy is to filter the majority. We don’t want 51% to be able to rule 49% of the people. It is sad that Minnesota’s Constitution could possibly change if 50.01% of people make it so. Hopefully next session the DFL will be able to pass another amendment proposal that would require a 3/5 vote in both chambers to have an amendment appear on the ballot. It would help to filter contentious issues. At the same time, this filter is also meant to protect those at the top from the majority. When government taxes us, they are taking our money by force (go to jail if you don’t pay). So when we tell the rich they need to pay even more than we do, we in essence are saying we paid you for your product, but now we are taking back that money by force through mob/majority rule. Is that moral? Note: See my previous posts or IRS data. Top 1% of income earners (make over $400,000/year) pay 40% of income taxes and top 5% (make over $250,000/year) pay over 60% of income taxes.

The other part of the concept of taxes hard to reconcile with the gay marriage debate is a whole host of taxation issues that comes with being a married couple. People who are married get special tax treatment (very special tax treatment). If one spouse dies, the other spouse is able to take over all of the property without having to pay the estate tax. We know there are people that find gay marriage morally objectionable. I would imagine there are a few people that find heterosexual marriage to be offensive as well. Should we go by their moral judgment and eliminate the spousal exemption of the estate tax, so the remaining spouse might have to sell the house to cover the 35% the US Treasury wants? The very concept of special tax treatment for married couples, gay or straight, could bring up moral objections from some of our citizens.

The very concept and intent of the income tax when the amendment was passed was to tax only the very top portions of income (in fact only about 4% of the population was intended to pay it at all). But since 1913, we have changed the income tax code to be such a mess of special interests that it has gone from a few percent of income over $1 million to over 20,000 pages of a mess not even the best tax attorneys can understand. Corporations like GE took huge tax credits because they built the windmills. (they still paid taxes, but no where near the 35% corporate tax rate. See #4 here). People like Governor Dayton or Warren Buffet take advantage of income tax free states and set up trusts to avoid taxes, and further avoid taxes by taking income as long-term capital gains which is taxed at a much lower 20% rate.

So yes, large corporations and the very rich often do pay a lower rate than many of us in the middle class. They also pay many more dollars than each year than we ever will in our lifetime. If we feel that they should be paying more on par as the same rate as the rest of us, then it is time to adjust the tax code and put some stability in the rates. It is not the fault of the corporations or the rich person for wanting to keep more of their money. They do it legally. It is the politicians that gave them the key to do it. A simpler tax code with lower overall rates would go much farther in fixing the “fairness” issue than changing the rates every couple of years would ever do.

On the other side of government, we can all agree that there is some waste in the spending. We can all agree to disagree where government should spend the money that it does take in. This is another reason why we need to be careful in how much money we give to government. Whenever government asks for more money by raising the tax rates, it usually means a program is going to be expanded or a new program is going to bee added. I again point you to this video of Penn Jillette I have mentioned before in this blog where he makes a great logical case as to why we need to be careful of the size of government because eventually government will spend money on something we object to. The more we allow government to clash with our own morals, the more we then allow them to impose their own morals on us as well.

So that was alot of information Eric, what are you saying?

Two people in a consensual relationship that choose to get married do so because there is a list of benefits that come with the civil contract as defined by statute. These benefits are a list of standard things you might do with a person you intended on living with for a long time anyway, and are some of the things that people have come to expect from the various religious marriages celebrated for many centuries. By state standards, that’s what marriage is: a standard contract between two people. We don’t allow gay marriage (or polygamy for that matter) based on a mostly moral objection based in a religious belief. There is also an economic objection because of the economic advantage gained by married couples, but the moral objection is by far the largest objection.

When someone gets rich (Steve Jobs, Warren Buffet, Sam Walton), they do it by creating a product or service at a price or service we feel is fair or adequate. It is a private transaction between two people where they exchange their product for our money. When we choose to tax them because of the income disparity, we are making a similar moral judgment that income inequality is unfair. We also make a further moral judgment that if we take more from the rich, they won’t notice it in their lifestyle as much as if it is taken from the middle class making it OK. The only economic argument I have heard made is that we need to equalize income or it stifles overall economic growth. Money has no value unless it is put somewhere.

I do find statistic such as in this article from  showing corporations with massive amounts of cash and large profits yet we don’t see many of them hiring. We can all shake our fists at those companies, but then when we stop at a Bank of America or Wells Fargo ATM on our way to Dairy Queen (Berkshire Hathaway) and make a quick stop at Walmart for milk and bread and maybe some GE CFL light bulbs, we put more cash in those very corporations hands we claim to despise. I would argue to tax them more after voluntarily paying for their product is actually immoral because we are taking money back from them by force we gave them of our own free will.

The differences in the two issues are that in the gay marriage issue, there is no real defined benefit in keeping them from being able to be married. There are some flawed studies from group that are already biased to support the conservative position of opposition, but there is no real negative outcome in allowing a gay couple to marry. In taxing the rich more, we do get to provide more programs to help those in need, build better bridges, provide better education. If we don’t tax the rich more, we are then not passing our moral judgment through the government. As you can see it is a much trickier balance.

Please realize this post is more about getting you to think about your own morality when discussing political issues. We will never get away from morals in the law and in politics since they do intersect often with personal property and personal rights. It is immoral to most people to steal from someone else, but you are also taking their property. It might be immoral to some to drink or do drugs, but when someone drives while intoxicated they put other’s lives and property in danger. We bust some people for drugs, others we choose to ignore their personal use joint. Is that moral or even fair?

My premise is we will continue to discuss and adjust things that will be a necessary part of government such as taxes, spending and the criminal code. When we discuss and decide these issues, we need to be aware of our moral bias and try to acknowledge it and be as fair as possible in balancing morals with rights for every individual. Society has decided government has some role in helping those unable to provide for themselves, and we will continue to discuss the role of government versus the family in those situations.