Tag Archives: economics

Turkey Tax Theory

For over 30 years I have insisted on cooking the Thanksgiving turkey. I say “insisted”. It is my right as the head of the family. As a man. I decide these things. I know better than anyone else how to cook a turkey, so I take control. End of discussion. (Right, dear?)

I have a very sound theory of turkey cooking. First, you buy a turkey.  Then you cook it. Simple. Common sense.

Of course some folks might look to socalled “experts” when it comes to cooking turkey, but not me. They look in cook books and on line videos and some even ask grandma. But not me. I have a theory and I am sticking to it.

Now, the cookbook “experts” will tell you to cook a turkey at 325 degrees for a certain length of time, depending on the size of the bird. So much for experts. I have been using my own theory for 30 years. Ignoring the experts.

Here’s my theory.  I get a 15 pound turkey. Now, the “experts” say that you should cook a 15 pound turkey at 325 degrees for 3-3 1/2 hours. Balderdash. My common sense theory says  this is a waste of time. I don’t want to wait 3 1/2 hours for a turkey.  So, using common sense and math (Well, a calculator) my theory says this.

Cooking a turkey at 650 degrees will shorten the cooking time by exactly one-half. So, my turkey will be ready at 1 1/2 hours or so. No reason to wait for 3 hours. Simple. To the point. Common sense. A theory any idiot can understand.

I have been cooking Thanksgiving birds like this for 30 years and EVERY year, I mean EVERY year, the turkey ends up charred on the outside, partially cooked on the inside and a smoking mess. There is always a problem with the smoke filling the kitchen and the smoke alarm going off. I solve that easily by opening windows and disabling the smoke alarm ahead of time. Clever. The volunteer fire department is on retainer.

Why does the turkey always burn? For the first 20 years I figured it was a bad batch of turkeys. Not my fault. So I tried every turkey under the sun. I cooked each of the following , in order:

Honeysuckle, Butterball, Jennie-O, Norbest, Shay Brook, Riverside, Foster Farms, Boar’s Head, Plainville Farms, Trader Joe’s , Nature’s Promise, Perdue, Smithfield, Organic Prairie, Carolina, Pilgrim’s Pride, Applegate, Private Selection, O Organics, Cooper Farms.

As fate would have it, every one of these turkeys ended up being defective. They all burned.  They all filled my kitchen with smoke. Sad. Very sad. I thought maybe you just can’t get a decent turkey nowadays.

But then I thought. Wait. Maybe it’s the oven. So, I bought a new oven. Nope. Same problem. No matter what turkey I tried or oven I tried the end product was the same. I know that if only I had the right turkey and right oven my theory would be proven. It is just a matter of time. No amount of evidence can dissuade me from my theory.

Which brings us to the latest Tax Plan.

In 1980 Ronald Reagan had a great theory. A SPLENDID theory. Increase spending on the military. Give money to the rich by lowering taxes and they will create jobs. The economy will BOOM and unemployment will disapper. So, he put the theory into practice.  George H W Bush called it “voodoo economics” and said it would not work. By 1982 the US economy had experienced a recession and unemployment had RISEN to 10.8%. The GDP declined 2.7%. Opposite of the growth expected. Still, despite the evidence, it was a good theory.

In 1990 there was another smaller recession. This time George HW Bush was president. He had run on the slogan of “No New Taxes”. A great theory. Unfortunately circumstances beyond his control led him to abandon that theory and call for “revenue increases” to stabilize spending.  But he still had a good theory.

In 2001 George Bush had a theory. If we cut taxes on the wealthy they will invest in US jobs. GREAT! Wonderful theory. So, Congress cut corporate and individual taxes to stimulate the economy.  And he theorized that we needed to de-regulate big business. Too many restrictions were just strangling these major corporate and financial institutions. So, de-regulate we did. Excellent theory. Of course, it would take a few years for the effects to be felt. But the theory was sound.

And the effects were the biggest recession since 1945. Growth tanked to a negative 5.1%. Unemployment rose to 10%. Big money investors with all that extra capital did not create jobs in the US. Deregulated financial institutions simply made bad loans with investors money and went bust. (Well, they didn’t go bust, they got bailed out. Another theory. Too big to fail… even when they do).

When President  Obama left office unemployment was about 4%. A relatively stable rate. And there were no Obama-era recessions.So, the economy is back on track and continues to chug along. No reason to tamper with it.

BUT, we need to follow theories, not evidence. So, Congress is proposing the biggest tax breaks ever while proposing a massive increase in military spending . In 2015 the USA spent more on the military ($ 597,000,000,000 that’s billion) than the next 10 nations combined. The US spent more than the total spent by China, Saudi Arabia, Russia, UK, India, France, Germany, Japan, S Korea and Brazil…COMBINED). This is not to suggest the US does not need a strong military, but this seems a bit excessive. Spend more, take in less. Voodoo economics, anyone?

So, once again we are following a theory that has been shown to have no evidence supporting it, IF the goal is a stable , fair economic system. But the theory sounds pretty good.

For my part, I continued to use my theory to cook my Thanksgiving turkey. Despite the naysayers. OK, so it got burned again this year. No turkey for Thanksgiving. On the positive side, my wife has made a standing reservation for Thanksgiving at Hop Sing’s Chinese Restaurant.  She is  no theoretician. And I am developing a taste for Mu Shu Pork.

http://www.butterball.com/how-tos/roast-a-turkey

https://www.ranker.com/list/best-turkey-brands/ranker-shopping

https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

https://en.wikipedia.org/wiki/Read_my_lips:_no_new_taxes

https://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures

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Filed under Budget, Congress, Debt, Democrat, economics, Economy, Free Trade, GOP, jobs, Politics, Republicans, Society, United States

The Great Health Insurance Lie

The ongoing debate about about health care continues. Is the ACA better than Trumpcare? Is Trumpcare better because it includes more free market choices? Is Obamacare better because it covers 24,000,000 more people? What about the deficit.

And so forth.

But there is one fact, one truth, one absolute “know” that all sides of the debate seem to accept at face value. If you can disabuse yourself of this “truth” the health care issue can be solved.  There is one “given” that no one  from Sanders to Clinton to Trump to Cruz or any of their associates seems to challenge. That given is the following fallacy

Companies provide health insurance to employees. The government supplies health insurance to employees. Health insurance costs “job creators” billions of dollars a year.

False. Absolutely false.

There is not now, never has been and never will be any company or school district or government that provides health insurance to the employee.  Every employee from the highest to the lowest paid. In every industry. In every business. In every time period. Every employee has always paid and will always pay their own health insurance costs. Period.

Health insurance costs are not taken out of profits. They are not taken out of investors’ dividends. They are taken out of the employee’s salary. Every time.

Anyone who has ever been involved in negotiating contracts should understand this. As should anyone who has an understanding of basic economic theory. Every employer , whether public or private, has  an amount  of money that it sets aside for the “cost of labor”. Part of that “cost of labor” is benefits. One of those costly benefits is health insurance.

Does anyone think, really, that health insurance is some “gift” from an employer? Really? Never. The cost of health insurance is simply deducted from the employee’s salary as part of the “cost of labor”. The employee takes a lower salary and pays for his own insurance.

Does anyone really think that a business negotiates  a contract and then, out of the goodness of its heart, just adds on health insurance? Really?

Once you understand that you, as an employee pay for your own insurance you realize how vile the CEOs of companies like Hobby Lobby truly are. Hobby Lobby employees pay for their own insurance, yet the Supreme Court has decreed that the CEO of Hobby Lobby can dictate the kind of coverage the employee has paid for. Ludicrous.

So, next time someone tells you that their employer is “providing health insurance” and so the employer should be able to dictate what coverage they can have. Set them straight. Tell them they pay for their own insurance. And will continue to do so. Even though their boss may dictate what kind of coverage they get.

Your employer “gives” you health insurance. The big fat heath insurance lie. And another reason why we should have a single payer option. After all, the workers are paying for health insurance, shouldn’t they decide what option they want?

 

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Filed under ACA, Congress, Cruz, economics, Economy, government, healthcare, Hobby Lobby, logic, Obamacare, Politics, Society, unions, United States, workers

The Economy or The People?

Watching parts (I have a weak stomach) of the GOP debate on the “economy” I think I finally figured out the problem. I am slow, I admit.

The first question by the Fox Business/ Wall Street Journal panel exposed the issue pretty clearly. Should the minimum wage be raised to $15 an hour? Which is about $31,000 per year according to the panelist.

The answer, across the board, was NO. It would hurt “the economy” to raise the wages of people now making maybe 7 or  10 or 12 bucks an hour. It would devastate the economy to have poor working people making a little more to spend.

Trump, by is own admission a billionaire, sees nothing but ruin if a fast food worker were to get a few more bucks. And Carson agrees.  The end of the US “economy” as we know it. Catastrophe.

Another question asked by the panelists was about the great disparity between a CEO average pay and that of one of his workers. It used to be 20 to 1. Now it is 300 to 1. I don’t think any candidate ever actually responded to that one. The non answers were clear. No problem.

So, what seems clear to me now (as I said, I am slow) is that the GOP candidates have a completely distorted world view of what an “economy” is and what an “economy” does. Or is supposed to do.

Simply put, an economy is how goods and services are organized and distributed in a given society. The purpose of an economy should be what? To be organized so all members of a society have a chance to benefit from the wealth of that society. If not, then we must assume the “economy” has, as it’s central purpose, the organization of goods and services to benefit only a portion of the society.

The GOP concept of an “economy” seems to accept the second concept, that the economy should be organized to help only portions of society.. The economy to them seems to mean only one thing. How much profit is generated for the investor class. While they talk about “job creation” they are really talking about cheap labor so that investor profits will be higher. Not job creation so workers can have a decent life. Or participate in the overall economy in the broadest sense.

Now there is nothing wrong with investors making a profit. That is how the capitalist system (flawed though it is)  works. Since investors are allowing others to use their money  they deserve a reasonable return. But what is not reasonable is defining the “economy” ONLY in terms of investor profits. It skews the argument and is not a realist view of what an economy is all about.

When the GOP candidates say that a higher wage for workers hurts the “economy’, what they mean is a higher wage for workers cuts into investor profits. Which is true. Of course, taken to it’s logical conclusion one could argue that slavery is the best system for the “economy” because it reduces all labor costs for the investor. Hence, a slave economy, by definition, would be the “strongest” economy under the GOP world view. Tried that once, if I recall.

The GOP candidates, with real concern for the plight of poor Americans, pointed out that 1 in 5 kids now live in poverty. But their solution to this is NOT to raise the minimum wage so these children and their parents can escape poverty. Somehow, this system of keeping poor people underpaid is “good” for the economy. And it is, if you define the economy as the GOP does. A system designed to promote investor profits.

For the Democrats the challenge is simple. Help folks understand that the GOP definition of the economy is narrow and incomplete. Not evil. Not anti- poor.  Not racist. But simplistic and wrong. An economy is more than profits for investors. It is a system that is supposed to work for ALL members, not just a few.

A productive economy is one that is balanced so that workers who provide the labor to create profits benefit from that labor. And they benefit to such an extent that they can take advantage of the wealth they create. Investors also benefit by making a reasonable rate of return on their investments. A balanced system that recognize both halves of the equation.

Back in the days when the CEOs made only 20 times as much as the average worker the economy was better than it is today.  Investors made good profits and paid their fair share of taxes. Guess what? The economy worked for most people. Yes, some were poor. But the investor class did ok.  Not a single member needed food stamps.

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Thank you Mr Yoder

Congress recently passed a giganormous spending bill. It was for over 1.1 trillion US dollars. That’s a lot of paper. In numbers it looks like this 1,100,000,000,000. That is more M and M’s than you can shake a stick at.
A lot of that loot goes to luxuries like food stamps, housing for the poor, homeland security, etc. But thanks to Congressman Yoder of Kansas, a fiscal conservative, some of that loot may be coming my way. Kansas, as you may or may not know, is now facing millions of dollars in debt as a result of the “Tax Cuts for Billionaires” program instituted by GOP governor Brownback. Have no fear, like Christie of New Jersey, Brownback intends to raid the public employees pension plans to make up the difference. It worked for Christie. Fiscal conservatism at its best.
But, back to Yoder.
Congressman Yoder was able to slip the Citibank bailout provision into the new budget. Written by Citibank and debated by …well…by no one. No time to debate. It was slipped in at the last minute. (Where are the howlers who were screaming at Obamacare because they only had 6 months to read it before the vote?) This provision allows Citibank (and others) to make those risky bets on certain derivatives and have those bets covered by the US taxpayer if they go bad. The same risky bets that helped lead to the financial meltdown and bailouts of..oh..many, many years ago. I can’t remember. Was it 1929 or something like that. Ancient history. Couldn’t happen again.
At any rate, I assume that because corporations are people that means people are corporations. Makes sense to me. Right?
So, as a corporate entity I plan to fly to Vegas. Las Vegas, Nevada.
I will take my life savings (too embarrassed to give you the amount) and place is all on number 43 . One spin of the roulette wheel. Win and I am a millionaire. (Well, maybe if I win 8 times in a row). All my money. One risky bet. What could be better? This….
And the best part is this. If I win, I get to keep my winnings. Hurrah!. If I lose I will claim I am a bank. I will claim I made a risky bet. The taxpayers will cover my losses. Then, guess what ? I can simply bet again.
So, thank you, Mr Yoder of the bankrupt state of Kansas. Thank you for looking out for the little guy.
Las Vegas, here I come.

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I LOVE the IRS

It is April 16. Tax day has come and gone. I can finally admit it. I am a Revenuephiliac. I love the IRS.

I fear this admission will rain down anger upon my being. I will be hated more than Gandhi at an NRA meeting. Vilified more than Al Sharpton at a gathering of the White Aryan Nation. Be more harshly treated than Sarah Palin at a MENSA Convention.

But I confess. I love the IRS. Very Un-American, I know. But that’s the way I am. And here’s why.

The IRS is under attack. And has been for many years. The money budgeted for enforcement has been declining. Since 2002 the IRS budget has actually declined by 17%. Fewer agents means that the chances of getting audited are less than 1% for most folks, about 20% for millionaires and less than 1% for businesses. Some politicians, like Ted Cruz, have publicly stated they want to do away with the IRS completely. So, as a champion of the underdog, I take up the banner of our tax police. Seriously. They have a banner.

As the financial support for the IRS has waned on the one hand, fraud and corruption have skyrocketed on the other. Who could of guessed ? Fewer cops, fewer arrests. The Center For Tax Justice estimates that for every dollar spent on funding the IRS the US brings in $10 dollars in revenue that would otherwise be lost. WHAT ? A federal agency that makes money ? Others estimate that with long term modernization the actual investment return is closer to $200 for each dollar spent today.  There are BILLIONS of tax dollars going uncollected each year. Over $280,000,000,000 in overdue taxes will never be collected according to an IRS study from just a few years ago. And it is getting worse.

It has been a longstanding tradition to hate taxes. It is as American as racism or homophobia, to be sure. The nation was founded by tax dodgers. The Boston Tea Party was not a protest against free speech…it was a tax protest. And probably justified. Why pay taxes to those guys across the ocean? The Whiskey Rebellion? Same thing. Except this time it was why pay taxes at all. So, we have a solid history of being tax avoiders and tax cheats. All the more reason for the IRS.

After all, the IRS is nothing more than the domestic equivalent of our military or police force. And who can hate the troops? Or the police? They uphold the law, go after lawbreakers and make sure everyone plays by the same rules.  They support the democratic process and the rule of law.  They help collect the funds necessary to keep the nation moving ahead. They are the cop on the beat. The Marine standing guard over the flag.

Of course some taxes are pre-collected. The tax on the McDonald’s counter worker and the non-unionized VW assembly line worker. The cop. The teacher. The engineer. Anyone who works for a living. These shmucks can’t cheat on their taxes, and probably wouldn’t anyway.

Who could be against the IRS ? Tax cheats? Crooks? Organized crime? Money launderers for drug cartels?

Who benefits from a weak police force ? The honest citizen or the criminal?

So, join me in this IRS lovefest. Write your congressman. Ask for more money and better enforcement of our tax laws. What better investment is there? A $10-200 return for every dollar spent. In the end, if ALL taxes are collected, won’t you and I pay less? Won’t the honest citizen get a break?

Revenuephiliacs Unite! You have nothing to lose but your friends! And you might save a few bucks as well.

 

 

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