Why should a group of hard-working, innovative, and lucky(?) people be asked to contribute to the less fortunate, some of whom are lazy, unimaginative and unlucky?
Income Redistribution is an economic concept supported by nearly every economist; rightfully so. People who earn more, pay geometrically more income taxes than those who earn much less. Automobile insurance premiums are based on risk, with low-risk people paying much of the premium that high-risk people could never afford to pay. In many states, homeowners support schools and other municipal functions that renters use but are not required to support. High taxes paid by the more fortunate are used for social programs like welfare, school subsidies, etc. Tax exemptions for people with large families are compensated by single people or people with no children. Very little taxation credit is allowed for the wealthy to offset taxation by their charitable works. Corporations are taxed at rates which inhibit the growth which could create more jobs and less expensive products.
Part of the tax forgiveness for large families was conceived to keep birth rates high enough to meet future labor demands. (Germany actually pays citizens "kindergeld," depending on the number of children in the household. It's a billion-dollar social program that has failed miserably. Germany has been importing labor, mostly immigrants, for many years with no end in sight.) The subtle American approach has been equally unsuccessful.
Tax loopholes and political "pork" have created a class of very rich taxpayers who pay no tax at all; some corporations fall into this category as well. Close to one-third of all American banks (Subchapter "S" status) don't pay federal income tax.These individuals and corporations are not pulling their fair share of the load. Virtually all government spending is totally void of entrepreneurial concepts which could save billions annually. Political "pork" attached to virtually every bill passed by Congress cost taxpayers billions every year.
Unemployment compensation actually encourages unemployment and only serves as a bridge to full welfare. A working person pays taxes and contributes to the economy in many ways. A person on welfare only takes. When a person returns to the workforce, unemployment compensation should continue until the worker's first wage increase. (If it stops when a person is reemployed, the person feels a sense of loss; like working for "half wage.") When the worker receives a pay increase (longevity or promotion), unemployment compensation would be reduced by one-half of the pay increase. In this manner, the person realizes financial advancement while unemployment compensation is also reduced.
It's time to rethink the American income tax framework and social benefits in terms of the above. Should social programs, like taxation, encourage people to have children that they can't afford? Most states have a sales tax which intends to compensate for property and income tax shortfalls. Perhaps state sales tax could be restructured to be higher for purely luxury items and lower for necessities. A "flat tax" (everyone pays the same percentage of income, like 9%) may not be economically feasible, but incorporating some elements of flat tax into our income tax code may offer some relief to all taxpayers. Certainly, closing tax loopholes, which sharply reduce taxable income, would go a long way to increase tax revenues.
Certainly, the "haves" are responsible to support and nurture the "have-nots." Unfortunately, the American taxpayer isn't getting good value for a dollar paid into the system. "Have-nots" remain in that category far too long and become a serious liability to the overall system. The challenge is to help an individual move up the socio-economic scale and become a productive citizen who pays taxes and doesn't receive welfare (easier said than done, but nevertheless the goal). Essentially, if the word "social" precedes a program, it's broken and badly in need of repair. We owe it to ourselves and to the future of America.
Thursday, September 28, 2017
Saturday, January 28, 2017
Trump - The Grand Experiment
For as long as I can remember, I have wanted a President of the United States who was not politically beholden to party and financial benefactors. I grew up hearing that the Democrats were "for the people" and the Republicans were "for big business." Later, the "Liberal" and "Conservative" labels were born. I have struggled to avoid allowing myself to be labeled and have tried to vote for the individual whom I thought would be best for our country and our people. In the past couple of decades, I believe our leadership has focused on garnering the votes necessary to stay in office, continue their self-enrichment, and enhance their "legacy." No one was strong, willing or brave enough to do what was best for the country by resisting a congress full of people focused on the same egocentric values. Words like "principle" were overshadowed by a fanatic need for "political correctness." All things "political" rapidly became negative. It was time for a non-political person to take the reins and see where it would lead.
Enter Donald Trump. He made outlandish promises and filled his vision of America with "facts" that were either exaggerated or concocted. But were they? Can it be that Trump saw behind "facts" that had been themselves manipulated (generally subconsciously) to prove a point or support a political self-serving agenda? Statistics are tricky and can easily be corrupted through bad or incomplete data, computational error or misinterpretation. (Although 90% of people who have lung cancer smoke, 90% of smokers may not contract lung cancer.) Can Trump's instincts be so good?
Trump seems to operate (and succeed?) by keeping opponents off balanced and not knowing where the next blow will land. He uses exaggeration to "prove" a point, then takes unexpected action. If you have something to hide, getting into a contest with Donald Trump is ill-advised. His attack on the American voting system is a great example:
For his going-in position, Trump says there were several million illegal votes cast (mostly for Hillary Clinton) during the recent Presidential election. Since he won the election, most say why bother to attack the results? He's created "concern" in those who might have benefited from illegally cast votes over the past 20 years or so and don't want the complete election process laid to bare. In a minor shift in his view of elections, Trump now talks of states' roles of registered voters containing many names of dead or otherwise ineligible voters. Although illegal only if they vote twice, "some" voters are registered in more than one state. Some states don't require a government-issued, picture ID for a voter to prove his or her identity and right to vote. There are other irregularities such as convicted felons voting, multiple votes cast by a single voter, registered voters who don't meet state registration requirements, etc. I believe Trump's goal is two-fold: (1) State voting administrations must clean up their data bases of validly registered voters and keep them current; (2) Every registered voter must be issued a governmental (state) ID so they can prove who they are at the time they vote. No ID, no vote. (Of course, the ID issuing process must be accurate and foolproof - no easy task.) The Democrats have complained about the ID requirement disenfranchising poor and minority voters (mostly Democrats). In these cases, simply issue the ID and bill the federal government.
Trump hasn't forgotten the days of "voters" being transported by train to multiple polling stations to cast their vote multiple times; the days of "a dollar a vote." It's certainly possible that voter cheating is far more sophisticated today. States need to step up and ensure voting integrity. After all, there's a lot at stake.
When Trump creates controversy or crises, the telling is often in those who scream the loudest and longest. In some ways, it's a form of intelligence gathering and a way of defining the parameters of a solution. The current row with Mexico is a case in point:
Trump has always proclaimed that Mexico will pay for the anti-immigration wall between Mexico and the U.S. Mexico has always denied it will pay for the wall. A 20% tariff on Mexican imports isn't feasible (and is passed through to the American taxpayer), but it is an eye-opening start. Controversial as it may be, the wall will probably be built and Mexico, however long it takes, will somehow pay for it. At nearly $25 billion a year, remittance income (Mexican income earned in the U.S. and sent home to Mexico) is Mexico's largest contribution to its gross national income, even outstripping oil income. Mexico can't afford to give up this important income and neither can U.S. companies who employ cheap Mexican labor. Therefore, there will be a negotiated settlement, probably resulting in much improved registration of Mexican workers who work in the U.S. A secondary aspect of better control is to stem drug smuggling which attaches itself to the flow of workers coming from Mexico.
Because of his non-political thought process, Trump often states his personal opinion, rather than that of the President. Since we have never experienced a non-political President, we can't parse Trump the person and Trump the President. The world is have difficulties as well and we'll all just have to struggle through the learning curve. As a person, he seems to think waterboarding is a valid form of interrogation. As a President, however, he's willing to defer to his staff. As a person, he thinks global warming is bunk, if not a Chinese-serving rumor, but as President, he's prepared to once again defer to his staff.
Trump the person may see NATO and the UN as ineffective organizations that sap U.S. taxpayers' money. As Trump the President, however, he will support these organizations, while trying to reorganize them to become more efficient, powerful and more directly serving U.S. interests. U.S. funding of the International Monetary Fund and our foreign aid packages will certainly come into deep review. Trump will not throw any world organization or U.S. ally under the bus but will focus on what good comes to the U.S. through association with them.
Although Trump may be motivated by power, egoism, patriotism and narcissism, he at least doesn't seem motivated by greed, re-election or legacy. He seems focused on fixing what he perceives as broken, but may not follow political protocol in the process. The consequences of his methods are new territory and remain to be seen. Whatever happens, I have enormous trust in our political system and structure (the Constitution, in short) to know that Trump or anyone else will never destroy the United States of America. He is one Grand Experiment that we must see to the end, because it could very well be the beginning of something huge! At least it won't be a boring journey.
Enter Donald Trump. He made outlandish promises and filled his vision of America with "facts" that were either exaggerated or concocted. But were they? Can it be that Trump saw behind "facts" that had been themselves manipulated (generally subconsciously) to prove a point or support a political self-serving agenda? Statistics are tricky and can easily be corrupted through bad or incomplete data, computational error or misinterpretation. (Although 90% of people who have lung cancer smoke, 90% of smokers may not contract lung cancer.) Can Trump's instincts be so good?
Trump seems to operate (and succeed?) by keeping opponents off balanced and not knowing where the next blow will land. He uses exaggeration to "prove" a point, then takes unexpected action. If you have something to hide, getting into a contest with Donald Trump is ill-advised. His attack on the American voting system is a great example:
For his going-in position, Trump says there were several million illegal votes cast (mostly for Hillary Clinton) during the recent Presidential election. Since he won the election, most say why bother to attack the results? He's created "concern" in those who might have benefited from illegally cast votes over the past 20 years or so and don't want the complete election process laid to bare. In a minor shift in his view of elections, Trump now talks of states' roles of registered voters containing many names of dead or otherwise ineligible voters. Although illegal only if they vote twice, "some" voters are registered in more than one state. Some states don't require a government-issued, picture ID for a voter to prove his or her identity and right to vote. There are other irregularities such as convicted felons voting, multiple votes cast by a single voter, registered voters who don't meet state registration requirements, etc. I believe Trump's goal is two-fold: (1) State voting administrations must clean up their data bases of validly registered voters and keep them current; (2) Every registered voter must be issued a governmental (state) ID so they can prove who they are at the time they vote. No ID, no vote. (Of course, the ID issuing process must be accurate and foolproof - no easy task.) The Democrats have complained about the ID requirement disenfranchising poor and minority voters (mostly Democrats). In these cases, simply issue the ID and bill the federal government.
Trump hasn't forgotten the days of "voters" being transported by train to multiple polling stations to cast their vote multiple times; the days of "a dollar a vote." It's certainly possible that voter cheating is far more sophisticated today. States need to step up and ensure voting integrity. After all, there's a lot at stake.
When Trump creates controversy or crises, the telling is often in those who scream the loudest and longest. In some ways, it's a form of intelligence gathering and a way of defining the parameters of a solution. The current row with Mexico is a case in point:
Trump has always proclaimed that Mexico will pay for the anti-immigration wall between Mexico and the U.S. Mexico has always denied it will pay for the wall. A 20% tariff on Mexican imports isn't feasible (and is passed through to the American taxpayer), but it is an eye-opening start. Controversial as it may be, the wall will probably be built and Mexico, however long it takes, will somehow pay for it. At nearly $25 billion a year, remittance income (Mexican income earned in the U.S. and sent home to Mexico) is Mexico's largest contribution to its gross national income, even outstripping oil income. Mexico can't afford to give up this important income and neither can U.S. companies who employ cheap Mexican labor. Therefore, there will be a negotiated settlement, probably resulting in much improved registration of Mexican workers who work in the U.S. A secondary aspect of better control is to stem drug smuggling which attaches itself to the flow of workers coming from Mexico.
Because of his non-political thought process, Trump often states his personal opinion, rather than that of the President. Since we have never experienced a non-political President, we can't parse Trump the person and Trump the President. The world is have difficulties as well and we'll all just have to struggle through the learning curve. As a person, he seems to think waterboarding is a valid form of interrogation. As a President, however, he's willing to defer to his staff. As a person, he thinks global warming is bunk, if not a Chinese-serving rumor, but as President, he's prepared to once again defer to his staff.
Trump the person may see NATO and the UN as ineffective organizations that sap U.S. taxpayers' money. As Trump the President, however, he will support these organizations, while trying to reorganize them to become more efficient, powerful and more directly serving U.S. interests. U.S. funding of the International Monetary Fund and our foreign aid packages will certainly come into deep review. Trump will not throw any world organization or U.S. ally under the bus but will focus on what good comes to the U.S. through association with them.
Although Trump may be motivated by power, egoism, patriotism and narcissism, he at least doesn't seem motivated by greed, re-election or legacy. He seems focused on fixing what he perceives as broken, but may not follow political protocol in the process. The consequences of his methods are new territory and remain to be seen. Whatever happens, I have enormous trust in our political system and structure (the Constitution, in short) to know that Trump or anyone else will never destroy the United States of America. He is one Grand Experiment that we must see to the end, because it could very well be the beginning of something huge! At least it won't be a boring journey.
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