July 4,2009

No Better Country

One theme I keep hearing over and over is that, despite all our faults, there is still no other country in the world that is any better. That is true, but that is not the proper standard. That is a standard of mediocrity. We do not just need to be better than the other countries. We must make our country the best it can be. We must be a land of great opportunity and freedom.

We cannot allow our health care to be destroyed simply because the rest of the countries in the world have allowed their systems to decline.Just because other countries have outrageous gasoline costs, does not mean we need to. Just because other countries bow to special interests, does not mean we should. Just because other countries have taken away freedom, does not mean we have to. Just because other countries have over-regulated and under incentivized their businesses, does not mean we have to. Just because other countries have over-taxed their people, does not mean we have to. Just because other countries have adopted a socialist slant, does not mean we have to. There is no reason we should accept elections with no meaningful choice. There is no reason we should accept politicians who are not honest.

There is no reason to settle. We must not accept mediocrity when it comes to freedom and economic opportunity. We must be the best we can possibly be. It is dangerous to start settling simply because other countries are declining. America must continue to become stronger and better. A third party will force our leaders to respond to the people and move America forward.

June 19,2009

Taxes=Foul Mood

I'm in a bit of a foul mood - We just passed the June Estimated Quarterly Tax day.

The politicians seem to think I can afford more taxes, higher energy costs triggered by environmental taxes and a new health care system. They know it will cost me more, and they just do not care. My employer, like so many others, informed me that I need to pay more for my health care costs. Many employers are asking their employees to take pay cuts or unpaid time off.

Heres the real deal, if couple makes $200,000 they are likely to pay over 65% of that in taxes (direct and indirect); actually it's probably more if you count the share of corporate taxes they pay in the products they buy (but that's too complicated to figure). Let's assume the couple decides to defer $30,000 for retirement because they know social security won't be there for them; such amount will be taxed later. Thus, the net available is $170,000.

First, let me define direct taxes as government assessment:
Federal income tax and self employment tax-- $47,000
State income - $7,200
Local income - $4,000
Real estate - $4,000
Sales/hotel/entertainment taxes - $2,200
Excise (gas ($700), Cell phone/cable ($250), license plates ($150), soda ($50), licenses ($100).
Total Direct tax: $65,650 (33% of gross income; 38.6% of the income reduced by deferred compensation) cash out of pocket.

Now let's talk about some indirect taxes - by this such a couple would pay that the government pays for other people:
Health costs - insurance, deductable, co-pays - $20,000
Education costs - $20,000+
Charity - $8,000 to help fund things government doesn't (yes that's voluntary, but if not paid the government would have to fund)
Total Indirect tax: $48,000 (cash out of pocket)
$113,650 of $170,000 = 66.8% tax rate.

That will leave the couple with $58,350 net of tax and retirement. Because I calculated actual tax numbers, the fact that some items are deductable is irrelevant (i.e., any tax savings have been taken into account).

Take away some expenses to work gas, parking, clothes, etc. - at least $2,000 a year. Take away $1,800 a year for tutoring because the schools can't seem to teach the basics. If they pay their mortgage, utilities, insurance, auto, food and entertainment costs, that doesn't leave much for building wealth. If I am able to save a little that I can leave to my children, it will be de-valued with the inflation and or future taxes they will face due to these deficits. Hopefully, they do not smoke or drink alcohol, because that will add to their tax bill.

Why do these thoughts put me in a foul mood? I'm in a foul mood, because our tax rate is similar. I worked hard for my opportunities - I worked and sacrificed to do well in college and law school. I spent a year working in a factory, living at home to save money for school. I repaid my loans. My parents sacrificed to help me. When I was young and healthy I worked 11 to 12 hours a day. I work 9 to 10 hours a day, despite health issues. I bought life insurance, so my family would not be a burden, if something happened to me.

Now the government is telling me they want more. They want me to keep paying all these things and now want more. I'm sorry, but enough is enough!!

June 8,2009

Lowering the Age for Drinking Alcohol - It's time for some common sense

The time has come to bring our alcohol consumption laws into the 21st century. Just as prohibition of the 1920s failed miserably, our current drinking laws are out of balance and failing miserably. We have let dramatic events, such as car accidents, dictate illogical laws. First, let me say, we need to keep, enforce and even strengthen drunk driving laws. With that said, we cannot have our young people subjected to outdated laws. At age 18 years, we have decided that young people are to be treated as adults for purposes of contracts, fighting wars, buying cigarettes and voting. However, we have established a line that they are not responsible enough to buy, possess or drink alcohol. Where is the common sense in that?
Not only have we drawn that line, we enforce it with laws that place heavy penalties for violations. Those laws define underage drinking as a crime and create a record for people caught. In severity, the offense in Ohio for a 20 year old drinking a half can of beer is equivalent to the offense of domestic violence. Where is the common sense in that?

The cost and resources being consumed to enforce these laws is incredible. The damage done to records of otherwise law-abiding citizens is unwarranted. Some college presidents have recently begun to realize this. We throw our kids on college campuses where some can and some cannot legally drink. We know that many will violate these laws. We are setting them up for failure. Where is the common sense in that? The irrational nature of the laws is magnified when you consider that the penalties for a 17 year old drinking are less than those of a 20 and a half year old, because the 17 year old's violation is a juvenile offense. The message is if you are going to drink, do so before age 18 or after age 21. Where is the common sense in that?

I understand the reason for the laws. We do not want irresponsible drinking young people driving cars and we believe that if alcohol is legal for 18 years olds, it will be more readily accessible for younger teens. How about some common sense laws to address those concerns? First we should not assume all young people will act irresponsibly. In fact, if 18-21 year old drinking did not involve the risk of legal penalty, they may be more likely to get designated drivers or call responsible adults if they got in a difficult situation. Second, we should enforce laws for those who violate the driving laws. To prohibit an entire group from one activity, because some may engage in another activity simply does not make sense. Third, the young teens already have access to the alcohol. Let's enforce the laws against the people who provide alcohol to those under 18 - establishments, parents and of age adults. Those are the ones committing the more serious offenses.

Let's draw the line at 18, where we draw it for almost all other things, and enforce those laws against the providers and drivers. There is something wrong when we allow a young man or woman to die for our freedom, but we treat them as a spouse abuser if they drink a beer. Let's focus on the education and enforcement with respect to young teens. Resources are scarce in today's world. Let's use them more wisely and treat our 18 year olds as adults. If they are responsible enough to vote, have credit cards and enter contracts, we must allow the opportunity to act responsibly when it comes to alcohol. We need to do a better job of transitioning our young people into adulthood. Throwing them into a system that encourages them to pick and choose which laws to obey and disobey because they are illogical does not ease that transition. Please note that I am not encouraging or excusing disobedience of the laws, I am suggesting that we work to change the law so that it makes sense and meets the needs of our young adults.

June 1, 2009

Minnesota Senate Race

The Minnesota Senate race is a good thing regardless of whether Al Franken or Norm Coleman wins. A third candidate had some impact. Some will say that he took votes from Coleman and handed the election to Franken. Therefore, some might argue the result is bad. However, whenever there is more choice it is a good thing. He was a candidate who appealed to a good portion of the middle - 15+%. They were able to exercise their privilege when neither the Republican nor Democrat met their standard.

The problem in that particular race is with vote-counting processes, not the fact that there was a third candidate. It is important to understand that strong third-party candidates will enrich the election process with a greater exchange of ideas and more accountability. Some will try to use the problems with vote-counting to argue against third parties. That is simply misplaced blame.

A candidate that wins by a couple hundred votes, assuming they want to get re-elected, will be more responsive to the people. They will not be as extreme as they otherwise could be. The person elected will be held accountable. A third candidate takes control away from the two parties who have destroyed the primary election process by hand-picking candidates. The middle often has no voice. Instead there are the extreme right and extreme left. As voters get more comfortable with third candidates, they will have even greater impact.

When we are concerned that more voter choice is a bad thing, then we ought to consider our priorities. In such a case, we are allowing the parties to dictate the elections rather than the people. If the process is opened up we allow the people to demand candidates with broader appeal rather than the "lesser of two evil" results for which we currently have to settle. Will this sometimes result in the loss of Republican seats? Hopefully! Will this sometimes result in the loss of Democratic seats? Hopefully!

May 15,2009

Not now, Maybe not Ever

It's time to start standing up for our economy and our ingenuity. Now is no time for a "cap and trade" system. First, our economy is fragile at best and the middle class simply cannot absorb additional costs for energy in the name of global warming prevention. Second, the global warming science is inconclusive at worst and suspect at best. Third, the "cap and trade" proposals are just too complicated and subject to too many opportunities for fraud and the other problems associated with a big time government program. Fourth, unelected agencies, such as the EPA, would be given significant discretion and power in establishing standards and administering the program. Fifth, the federal program will take more power away from the states. Finally, even with this program, the maximum impact is only several hundredths of a degree by 2050. Note: we are to a certain extent guessing what all is in this massive bill (900+ pages), as good summaries and straight answers are hard to find.

Let's define, at least in general terms, some of the "cap and trade" provisions. The bill first lowers carbon emissions levels. It then provides allocations and units of allowances which the government auctions and then can be sold or traded among various carbon dioxide emitters - the idea being that the level of emissions is capped, but how they end up being used can be shifted by a secondary market. The bottom line is that by all accounts energy costs will go up by at least $1,500 per year. I don't know about everyone else, but with increased health costs, 401k market hits and the start of inflation (seen in gas prices and elsewhere) and a frozen salary, I'm working harder for a whole lot less net spendable income. In addition to that, I keep hearing that we need to shift more wealth to the "non-workers" of the world. Of course, the "cap and trade" program will contain relief to help the poor absorb their portion of the increased costs. Thus, the American taxpayers get to pay their own share as well as the share of others.

Cap and trade will cost the middle class thousands and the next generation many opportunities. It comes back to less freedom and less property. In addition, we, as Americans are being forced to pay to protect the environment for the world. The rest of the world economy is not necessarily on board with this relief which puts us at a disadvantage in the world economy. Again, it just isn't the right time. You can argue that we should pay more because we use more energy, but much of that use has benefitted the whole world in terms of technology advancement, food and more.

Maybe it's too much of a gamble, but I would prefer to wait and see where we are 10 years from now. First, we will then have more scientific data on the global warming issue. Second, if we put our engineers on it, I am confident that we can have the emissions and energy problem solved in the next 10 years. We took 30 years off from the issue where we didn't push for a solution. It's now time to push.

I would rather trust private enterprise to solve the problem than put together another complicated government program that gives significant power to unelected agencies and takes significant money from the middle class.

May 10, 2009

Get Ready

Get Ready - food is next. Next up for government regulation, leading to less freedom, less selection and higher costs, is agriculture. You can expect this administration and Congress (and some states) to begin attacking our farmers on three fronts: (i) environmental issues (including the reduction of cattle because of the gases they release), (ii) energy and (iii) the treatment of animals. These issues will lead to significantly higher food prices and more farmers going out of the business. As a result, we will have less selection and a less secure food supply.

We already have a very small percentage of businesses supporting food production for our country and the world. They should be applauded and encouraged rather than burdened with laws and regulations pushed by special interests who know nothing about farming, or the need for an inexpensive and abundant food supply.

In addition, as a result of a few highly publicized but very isolated incidents, a new round of food safety regulations will be coming online in the near future. Again, these will have marginal impact, but will be very costly. All the while, the terror threat to the food chain will be ignored.

The New Enterprise Party will work with farmers to insure that: (i) only necessary and reasonable regulations will be retained/enacted with respect to both the environment and animal treatment, and (ii) the business of farming will be protected and preserved. In addition, the regulation of the entire food chain will be examined to make sure that the food supply is safe and secure. The environment can be protected with reasonable regulations. We have a strong food supply system, and we will preserve that system so that we continue to have supply and selection at a reasonable cost. Watch for regulations, legislation and high budget voter initiatives over the next 18 months.