WHAT’s UP WITH TAXES?

WHAT’s UP WITH TAXES?

 

Election time is nearing, and with it will be even more talk about taxes than we normally have.  In general, Republicans want to lower taxes, Democrats want to raise taxes.  Of course Republicans want to lower taxes for those who make up the largest portion of their voting base and Democrats want to raise taxes on people who probably will not vote for them anyway.  What’s up?  Should taxes be raised or lowered?

In 1968 I graduated with a degree in economics.  I had a C+ average in this major so listen up!

We have taxes for two reasons.  To raise revenue to pay for the functions of government that only government can supply.  We have taxes to discourage behavior that is deemed to be undesirable for the community (Smoking, drinking, making weird faces.)

Raising revenue to pay for government functions is important.  The question is who should pay taxes and how much should they pay.  In this country it is generally agreed that the wealthiest citizens should pay more than less wealthy citizens.  We have among our many taxes a graduated income tax which insures that the wealthiest citizens do in fact pay the highest rates. 

There are those that will play games with percentages and numbers and try to prove that the wealthy do not pay their fair share.  For instance a person could have an income of one million dollars a year and pay no income tax at all if his income is only from tax exempt securities such as municipal bonds.  Good point, except that this same individual could be earning an income of two million a year if he invested in taxable instruments.  The lower rate that government bonds pay out is in effect a tax.

In any event, to the question should taxes be raised or lowered, the answer is the tax rate should be at whatever level results in the greatest government revenues without producing a significant surplus.

If raising taxes discourages investment and hard work resulting in lower revenue then raising taxes is a bad idea.  Let’s take that to the extreme:

You earn $1000 a week and pay no tax on that income.  A new tax is instituted that imposes a 98% tax on every dollar earned over $1000.  Your boss asks you to work overtime for what now would be 2 cents for every dollar earned.  Would you volunteer to work overtime?  Probably not.  If no one works the overtime, that is bad for government revenues and bad for business which needs the extra labor.  Higher rates can mean lower revenues.

OR

If lowering taxes fails to increase incentive to earn and produce more, revenues will suffer.  Once again taken to the extreme:

You earn $1000 a week and pay 10% tax on all income.  A new tax rate is lowered to 9% on all earned income.  Would this lower rate encourage you to work more hours or take a second job?  Probably not enough to make up for the lower government revenue due to the lower tax rate.  In this case a lower rate means lower revenues. 

The issue of raising or lowering taxes should not be based on your political affiliation; it should be based on what will maximize revenues.  Sometimes taxes should be raised to meet this objective, sometimes they should be lowered.

The optimum tax rate for raising revenues varies with every income group and it is a moving target as various outside influences change.  Tax rates should not be set to punish success or to reward failure.  Tax rates should be set the same way industry sets prices, to maximize profits (revenue.)

If your vote is based on tax rates, you should vote for the tax position you believe will ultimately be the best at producing revenues.

The next issue is whom should have their taxes raised or whom should have them lowered.  Once again it all comes down to what will bring in the highest revenues.

As long as you raise taxes on the other guy and lower mine.

 

First They Came For The Billionaires

By Anonymous

First they came for the Billionaires.

I didn’t speak out; I’m not Bill Gates.

Then they came for the millionaires.

I remained mute; I’m not in that class.

Then they came for the Rich, however that’s defined.

My mouth remained shut; it still was not me.

Soon they came for the middle class; for now we were the rich.

I finally spoke up, but I was poor and nobody listened.

Kitchen Drawers

Kitchen Drawers

 

 Our new kitchen is finally finished.  One really cool feature is that the drawers all pull completely out.  The entire drawer when pulled out is easily accessible; even all the way in the back.  I remember drawers that you could pull completely out, except they would then fall out and empty their contents on the floor. 

The kitchen drawers I’m used to have stops to keep from pulling them all the way out and on the floor.  They pull out about three quarters of the way. If you want something in the back you have to feel for it.  To me, a drawer that pulls all the way out without spilling on the floor is very exciting.

I couldn’t wait to show this excellent feature to Mrs. Cranky. 

“Did you know the drawers pull all the way out?”

“So?  All drawers pull all the way out.”

“What?  No they don’t!  Most drawers pull only three quarters of the way out.”

“Ok and…?”

“And this is a really big deal.  The drawers pull all the way out!  Plus if you give them a slight nudge they close by themselves”

"Oooh that should save a lot of effort; no more drawer closing push!"

"It is really cool...these drawers are REALLY FRICKING COOL!!"

“Ok.  Whoop-dee-doo.  No need to have a drawergasm over it!”

DRAWERGASM?

Mrs. C. can take the shine off of chrome.

REMEMBERING 9-11-01 - a 2011 re-run

REMEMBERING 9-11-01

 

Ten years ago I was working for a large brokerage firm in Jersey City, New Jersey.  My office was on the fourteenth floor.  The side of the building facing east offered a clear view of the World Trade Center Towers across the Hudson River. 

September 11, 2001 was a beautiful clear crisp fall morning.  I commuted that day from Newark, NJ on the PATH, a train/subway that runs all the way to the World Trade Center.  I exited that morning at the Exchange Place stop, the last stop before the WTC, on what would be the last PATH train to the World Trade Center for 18 months.  I checked into my cubicle and immediately heard that a plane had just crashed into Tower One of the World Trade Center.

Small planes routinely traveled up and down the river showing the NYC skyline to tourists.  When we heard of the crash, most people assumed one of these planes had lost control and crashed. 

I went to the cafeteria for coffee and a roll wondering if anyone was hurt in this crash.  The cafeteria’s windows faced east to the NYC sky-line.  Looking out the cafeteria’s windows at the tower, it was apparent this plane was no Piper Cub. 

Somewhat disturbed by what I saw, I turned to pay the cashier when I heard gasps and then shouting, “SHIT, OH NO, HOLY GOD, ANOTHER PLANE FLEW INTO TOWER TWO!!”

I turned to see the result of the second crash.  Tower Two was struck and on fire.  Immediately it became clear what was happening. Terrorists! Arab Terrorists! Those “holier than thou, we know better than you, the great Satan accusing, Jew hating, backward, stupid, violent religion of peace and love, fanatical, perverted, sick faction of the Muslim world” TERRORISTS!

We were in the tallest building in Jersey City, not a likely target, but at this point everyone thought anything was possible.  The building was evacuated along with almost all of Jersey City and all of downtown New York.  Outside, in a daze, I merely watched the two towers burn.  I was numb.  I did not know whom I knew who worked in those towers, but I knew there would be friends and acquaintances that were in danger.

Staring at the buildings, there was what appeared to be a blast at the base of one of the towers.  It was huge.  I thought, “Oh my God, there must be hundreds of workers, cops, and firefighters around that blast.”  Someone yelled “the tower is gone.”  “No way, I thought.”  It was just hidden behind the first tower, but I could not see it.  Gone.  One of the towers was just gone.  I used to work across the street from the towers.  I used to exit from the PATH train every day under those towers.  Thirty three years before, I watched those towers being built.  I watched Philippe Petite tightrope walk across those towers.  I watched a human fly climb to the top of one of those towers.  I watched a sky-diver chute to the ground off one of the towers.  Gone!  One of the towers was gone.

Dazed, I simply turned and began to walk.  Walk away from the river.  Walk toward home.  Walk away from the destruction, from the horror I was not able to comprehend.  I met a face I knew and we walked together.  I did not know his name. I knew he worked on my floor; he was some small familiarity in a world turned upside down.

We walked to Journal Square, the center of Jersey City; perhaps we could catch a train or bus to home.  I occasionally turned to see the towers…tower.  Half the way to Journal Square I turned to look at the remaining burning building just as it crumbled slow motion to the ground.  I felt as if I was in the middle of a bad action movie.

 

We reached Journal Square to find there were no trains and no buses.  Cell phone service was almost zero. 

We went into a small café.  A TV was on and there was talking about a plane attack in Washington, and a fourth plane unaccounted for.  What was going on?  When would it end?

The next few hours were a blur.  My “friend” managed to get through to his father on the cell.  His father drove to Journal Square.  They gave me a ride home.  It took several hours as some bridges were closed and the traffic was jammed. 

When I got home I learned that a close friend worked on the 92^nd floor of Tower One.  I knew he worked downtown; I just never knew where.  I later learned that a co-worker, a broker on the American Stock Exchange, was at a breakfast meeting at the “Top Of The World” restaurant on the top of Tower One.  Weeks later I learned of another person I used to work with every day for two years had just taken a new job at the World Trade Center.

Three thousand people dead.   On 9-11-01 I thought it would be at least ten thousand.  Three thousand people, one a good friend, two acquaintances: I felt a New York-downtown kinship with all three thousand.  The towers themselves had a life for me.  They really were not pretty.  They were New York City - ugly, functional, and big.  If ever there were New York City in-your-face-attitude buildings, they were the twin towers of the World Trade Center.  GONE.

Ten years later, the trade center is being rebuilt.  One huge “Freedom Tower” is being raised.  Downtown New York keeps on.  Is it a mistake to rebuild?  Will the new Tower just be a target?  Perhaps, but then we will rebuild again.

 

We will not capitulate to people who decapitate.  We cannot worry how we act or what we say for fear of upsetting a group that will kill cartoonists because they do not like the cartoon.

I am pretty sure they do not like us.  I am pretty sure there is nothing we can do to make them like us.  I do not want them to like us.  Their own kind will bring them down.  There are good people who will grow tired of the message of hate that is keeping them under the boot of the fanatics.  Their women will see that other cultures do not treat women like property.  They will see other people are free; they will want to be free.  When they see there is hope for better things, for a better life, they will rise in mass and spit in the face of the fanatics.

In years to come people around the world will come to Downtown New York.  They will visit the hallowed grounds of the World Trade Center and stare at the Freedom Tower.  They will know that this was where insanity reached its peak; this is where lunatics showed their true colors.  They showed the colors of hate, the colors of destruction, and the colors of death because death is what they desire.  This is where the rest of the world watched and the rest of the world rejected their colors. 

This is where the civilized world rose up and the civilized world said NO!