A Taxing Proposition

My aunt was a very cost-conscious shopper. I can remember, as a kid, riding all over town just so she could save a nickel on a loaf of bread or a dime on a gallon of milk.  Now, I’m not inclined to drive across town just to save a nickel, but I do want to get the best quality at the lowest price.  I don’t think any of us want to pay more than we absolutely have to for bread, milk, or anything else for that matter.

Now imagine, if you will, a store that charges you for a loaf of bread based, not on the cost of the bread plus any profit the store hopes to make, but on the size of your salary.  Would you shop there?  I know I wouldn’t.  What if the price of the bread and the size of the loaf were dependent on the size of your salary?  The more you earned, the more expensive the bread and the smaller the loaf?  Sounds crazy, right?

Unfortunately, that very thing happens.  Instead of paying for bread, consider how we are paying for our government through our income taxes.  The more you make, the more you pay.  And chances are good that the more you make the less government services and benefits you require so the less you get.  Recall that there is a large segment of the population that receives more benefits from the federal government than they pay in income taxes.  And if you are the thrifty sort that saves or invests the money you earn, an interest or dividends earned are also taxed--a double taxation.

Under our current tax laws, we punish the successful and the thrifty by taxing their gains.  Doesn’t that undermine the incentive to work, save, and invest?  And our tax laws are so complex that the IRS estimates that 16 hours is required to collect information and complete the 1040 tax form, or costs, on average, $152 for a tax professional to prepare the forms.  Add to that the cost of the IRS itself, more than $11 billion, and it should be apparent that our tax system is defective.  We tax those that work more than those that don’t, and the entity that reviews the tax collection costs billions to operate.

There are lots of ideas about how to fix the tax code.  Some say close the loopholes; others want a flat tax, a tax rate that is the same regardless of earnings.  Others want to raise the tax rate on the rich, although the definition of rich is a somewhat ambiguous, depending on who is lobbying for it.  These are all attempts to repair a tax code that is fundamentally flawed.  Personally, I like the idea of a national sales tax.

The Cato Institute (http://www.cato.org) has long been an advocate for a national sales tax to replace the current tax codes.  Their proposal is to scrap the individual and corporate income tax, the capital gains tax, and the estate and gift tax with a national sales tax on the final purchase of all goods and services at the retail level.  When you buy goods or services, a federal tax will be collected at that time, just as state and county taxes are collected now in most areas. Their proposal includes a universal rebate for every household that, in effect, exempts consumption up to the poverty level.

Furthermore, the state revenue departments of the 50 states could collect the revenue, which is sent to a small agency within the Department of Treasury to fund national assets.  The IRS would no longer exist; its budget available for other government agencies or left in the pocket of the taxpayers.  Because the national sales tax would tax only spending, there would no longer be a double taxation on savings or investments; this would make more money available for economic growth.  It would also simplify corporate taxes, negating the need for armies of accountants and tax lawyers and would make business capital easier to acquire, further stimulating economic growth.  Simply, if you choose to make a purchase, expect to factor in the tax.  If you don’t want to pay the tax, don’t make the purchase.

A national sales tax has a lot of attractive features.  It would make savings and investing much more attractive, stimulate economic growth, and virtually eliminate the IRS.  But there is one subtle feature of a national sales tax that I particularly find attractive.  Under the current tax code, taxes are withheld from your paycheck before you receive it, so it’s not obvious to most American’s just how much they pay in income taxes.  With a national sales tax, the cost of the federal government is printed on the receipt; everyone will know the costs.  When you see the cost of the federal government in each purchase, we may be more inclined to demand a smaller, more efficient government.  Do the research and then contact your Senators and Representative and let them know what you think about the IRS and a national sales tax.  Maybe, then April 15^th becomes just another day.

A Big Enough Stick?

“Can’t we all just get along?”  That was the question, or at least a paraphrased version thereof, that a coworker asked during a conversation about the Russian invasion of the Ukraine.  I expect the young to ask such a question--they usually haven’t yet discovered that world is full of mean, dishonest, and hateful people.  But this coworker is old enough to realize that, regardless of our actions, there are those that hate us and want nothing more than to destroy this country. 

There are a myriad of reason why we, the people of the United States, are hated or disliked by others.  Some of the reasons are truly because of our military actions, but most are because of our belief in democracy, our prosperity, or our religious freedoms.  In fact, the first two targets hit on 9-11 were the World Trade Center Towers, most assuredly not military targets, but symbols of the prosperity of this country.  Regardless, there are those out there that wish to bring harm to the people of this country.

In his recent State of the Union address, President Obama stated that, “America must move off a permanent war footing.” He further stated that our security and leadership “depends on all elements of our power -- including strong and principled diplomacy.”  This sounds good but what happens when diplomacy doesn’t work.

In order for diplomacy to work, all parties must be willing to negotiate in order to reach a peaceful settlement.  That willingness to negotiate is motivated by some logic or reason.  It may be a motivation to avoid war or economic sanctions, or simply to avoid embarrassment. The motivation may be economic or other gains. A more powerful motivation is the threat of military action by the other party.

Theodore Roosevelt, who won a Nobel Peace Prize for bringing about a peaceful conclusion to the Russo-Japanese War, had a foreign policy characterized by the phrase, “speak softly, and carry a big stick.”  The idea behind this policy is negotiating peacefully backed by the threat of military action.  Roosevelt described this as, “"the exercise of intelligent forethought and of decisive action sufficiently far in advance of any likely crisis".

Unfortunately, President Obama’s policy seems to be “speak brilliantly and hope no one calls your bluff.”  He promised dire consequences if the Syrian leader crossed “the red line”, but every time the line was crossed, nothing of consequence occurred.  Furthermore, the Russians threatened action against the US if the US took action against Syria without Russian or international approval.  Obama backed off.  Russian involvement concluded when an agreement was reached for Syria to remove or destroy its chemical weapons.  Obama appeared to be “all talk, no action” and Russian leader Vladimir Putin came out looking like the hero.

When the diplomatic mission in Benghazi, Libya, was attacked and the US Ambassador and three others were killed, the Obama administration at first claimed the attack was a protest over an anti-Muslim film. Once it came to light that the Obama administration’s State Department could have prevented the attack, the President, Secretary of State Clinton, and others seemingly swept the whole mess under the rug.  And it appears that the press, by not vigorously pursuing the story, held the rug while Obama swept.    President Obama promised that “no act of terror will go unpunished.”  Eighteen months have passed since the attack; are we currently trying to find those responsible for the attack?  Or this more “all talk and no action”.

Now Russia has “annexed” Crimea, sending troops into the area.  The US responded by announcing a boycott of the G-8 summit in Russia, suspending trade negotiations with Russia and increasing US military presence in the region, six F-15 fighters to  Lithuania, 12 F-16 fighters and 300 soldiers to Poland.  A senior Russian diplomat said, in response to US actions, “What can one advise our U.S. colleagues to do? Spend more time in the open, practice yoga, stick to food-combining diets, maybe watch some comedy sketch shows on TV. This would be better than winding oneself up and winding up others, knowing that the ship has already sailed ... Tantrums, weeping and hysteria won't help.“

President Obama has pulled our troops from Iraq and publicly announced a time-line for withdrawal from Afghanistan.  Since we left Iraq, Al Qaeda’s presence there has increased.  In the weeks before a Afghanistan presidential election, the Taliban have increased violent attacks in an effort to disrupt voting.  And one has to wonder what will happen in Afghanistan after we leave.  Will the Taliban make a comeback or will the Afghan leaders be able to rein them in?

To add insult to injury, President Obama’s budget proposal for 2015 includes severe cuts to the military--cuts which would leave the military at lowest level since 1940.  Defense Secretary Hagel, in his testimony to Congress, blamed Congress for the mess.  The truth of the matter is the budget cuts are based on budget agreements that Congress passed and Obama signed. Hagel says that the budget “recognizes the reality of the magnitude of our fiscal challenges, the dangerous world we live in, and the American military's unique and indispensable role in the security of this country and in today's volatile world.”  With these cuts, will the military be up to the challenge of protecting America?  Will our adversaries try to take advantage of a smaller military?

The world is full of people willing to do us harm.  But our President should be willing to stand up to these people and protect Americans and American interests around the world.  Flashy rhetoric and empty threats won’t cause a determined enemy to back down.  And if the President does decide to swing the big stick, will it be big enough?

Walk Softly and ...

another post from John Galt

I saw beauty today.  On my walk to a meeting, there were six deer lying in the morning sun next to the office building.  Though they must have trusted me in order to stay put, they were still cautious.  Their eyes kept me in their periphery, they were listening to my footsteps, and they were spring-loaded to respond if I violated their space.  I contrast this moment of beauty and caution against the discord between the US and Russia over their aggressions in the Ukraine.  America sits cautious, but trusting, that Russia will do the right thing and not challenge our peaceful co-existence.     

If I trend recent events, I discover that we have regained a sense of peace every time Russia has crossed into another country, and then receded.  Afghanistan and Georgia come to mind.  After each invasion, we exhibited our disagreement, but we didn’t escalate the situation.  Although tensions are now higher than ten years ago, the US has maintained a healthy relationship with Russia.  We remain cautious, but trusting.  But, are we spring-loaded to respond if Russia continues its aggression?

Unlike the past events, we are no longer considered the baddest dog on the block.  Our “sleeping giant” status has been sissified.  I don’t think anyone fears involving us in their conflict.  This has nothing to do with our military talents or available technology.  We still have the smartest, toughest military.  We just don’t have the leadership in the White House that strikes fear in the world that we just might pull the trigger and unleash our military might.  I’m not saying we should add to the conflict.  But, I recall all the situations in my life when my words or my bearing kept situations from escalating and kept bullies at bay.  Perceived weakness is a magnet for bullies.  So, wasn’t the US’s self-assured swagger what kept other countries from provoking us in the past?

Now, our swagger is broken by unemployment, a struggling economy, political in-fighting, Presidential rules of engagement levied on our military, Department of Defense budget constraints and our elected leaders’ squeamish mentality toward leadership.  Our President has apologized to other countries for our past behaviors.  He assumes that global battles will be handled fairly. However, a group hug won’t ease world tensions.  The meek may inherit the earth, but they will also get stomped in the school yard.  Just think of the middle-school playground.  It was the meek kid that the bullies targeted.  The bully knew they would win or at least humiliate the meek kid.  Well, we are the meek kid on the world’s playground.  Not only will the bully target us, but so will his third-string minion if we keep carrying our hat in our hands and telling everyone that we won’t fight back, we don’t have the resources to fight back and our leaders won’t be willing to pull the trigger.  A moral code is vital for our leaders; war is bad because war means loss of life.  But our leaders also have a moral obligation to use our strength to protect the weak and the oppressed. 

I grew up in the times of duck-and-cover and having drills to hide under my desk in case of a nuclear strike.  Our leaders kept a level head while understanding and implementing a show of force.    My kids are fearful of the next world war.  So am I.  We all have too many tools of destruction in the tool box.  There is a lot of crazy in some of the world leaders’ decision paradigms.  There are dictators seeking power.  There is a lot of unrest in the world we live in.  What I’d like to see our leadership adopt is a walk softly and carry a big stick mentality to keep us safe.  It worked well in the past.

This country is beautiful in the early morning light.  But the shadows sometime hide things that may require us to respond in force.  In our desire to be a peaceful nation, we should also be prepared for conflict.  Negotiation and non-military solutions should be used.  All the while, our leadership should walk softly and carry a big stick.  I’d suggest a stick made from a live oak from Texas.  Texans know how to walk the walk and you should hear them talk the talk.  And, you never know who is carrying a gun.

The State of the Union

I started the year on a positive note, but quickly became so disgusted with our government and our society that I had to take a break from writing. I'm back and I hope what I post makes you think and act. 

President Obama recently gave his State of the Union address.  The US Constitution, Article II, Section 3 requires that he give a State of the Union to Congress, but it does not say in what form or specify details on the content.  Ever since Woodrow Wilson, US Presidents have given the State of the Union in the form of a speech to a joint session of Congress.  Nearly all of them take the form of an argument in favor of the president’s policies, emphasizing what seems to be working and ignoring or placing the blame on someone else for what isn’t working.

President Obama’s 2014 State of Union address was no different.  He spoke of the new jobs created during the past four years, implying that this is the result of his policies.  He bragged that, “our deficits cut by more than half,” while failing to acknowledge that the deficit is larger now than when he took office. He also pointed out that more than nine million Americans have signed up for health insurance or Medicaid coverage, a seemingly positive sign for his Affordable Care Act.

The President’s speech was not all sunshine and rainbows, though.  He did point out that the economic inequality is greater and that upward mobility has stalled. But, he assured us that he has proposals that will speed growth and strengthen the middle class, and he is willing take steps to enact these proposals, with or without action from Congress.  He also stated that he is willing to use his authority to protect our pristine federal lands and strengthen protection of our air, our water, and our communities.

I allow that the President’s State of the Union is based on his perspective.  But, I have a different perspective, so I believe the actual State of the Union is much different than the President’s view.

I see a Senate that, until late last year, failed to pass a budget every year since 2009.  I see a Congress and President that are willing to expand government to provide more social insurance and increase deficit spending to unsustainable levels.  I notice a President and Congress happy to increase the extent to which the federal government is involved in the everyday life of its citizens.   But do they make our lives better?   The EPA significantly increases the number of regulations with which businesses must comply, yet the rationale for these increases are based on unproven science or no proof of benefit is forthcoming.

At the President’s urging, Congress has passed a set of health insurance coverage laws that may benefit a small segment of the population, but increase the health insurance premiums for many Americans.  Additionally, the many people who previously had health insurance have been dropped by their carrier because the government has judged their policies as substandard.  Furthermore, because of the nature of the laws, many will lose jobs or have work hours slashed so employers can avoid costly penalties.  Medicaid eligibility was expanded to allow more people to receive health care at taxpayer expense.

I regard many of the things happening within the Obama Administration as abuses of power.  The targeting of conservative organizations by the IRS, and the failure of the Administration to enforce immigration laws, yet suing a state that tries to enforce those laws are just two examples.  The President stated in his State of the Union address that he is willing to use executive power to bypass Congress if it doesn’t pass legislation that he wants enacted.  He’s altered the work requirements of the 1996 welfare reform act and postponed enforcement of certain provisions of the Affordable Care Act.  Even his Attorney General, Eric Holder, stated in a New York Times interview that state attorneys general do not have to enforce laws they disagree with.  If the US Attorney General, who is the chief law enforcement of the United States, says others do not have to enforce laws, do citizens have to obey laws they don’t agree with?

Other actions, such as the FCCs proposal to monitor print and broadcast media organizations, the NSA’s surveillance and collection of phone data, and the National Labor Relations Board’s case against Boeing for moving part of its manufacturing to a non-union state are other examples of abusive or, perhaps, illegal government behavior.  But wait, that’s not the most disappointing part of the State of the Union.

What disappoints me is the state of our American society.  We are more divisive racially, culturally, and ideologically than ever before.  We won’t engage in open and honest discourse over issues such as race, economics, or culture for fear of offending others.  We are so afraid of being labelled “racist’, “hate monger” or “bigot” that we shun any chance to honestly discuss issues and we miss opportunities to find solutions to problems.

Far too often, I hear people speak of tolerance and embracing diversity, yet when someone has an opinion that runs counter, tolerance goes out the window.  If a person wants a smaller government that provides less social insurance, is he really a terrorist or anarchist, as members of Congress have suggested, or is he a concerned citizen who may have something of substance to say?  If a Christian does not embrace the gay lifestyle, is he a hate monger?  Or perhaps he is merely living by the tenants of his faith.  If a Muslim does not embrace the gay lifestyle, does that change things?  What about a wealthy business owner, who worked and scrimped and saved to get where she is today? Is she a greedy “one percenter” or is she an example of someone achieving the American dream?  Name calling and ugly labels have replaced intelligent and articulate communication.

Most disappointing of all is our willingness to sit by and let government expand beyond its constitutional boundaries.  I’m not sure why this is happening.  Could it be that we don’t want to work and provide for ourselves and prefer that someone else provide the care and feeding and other “free” stuff, even if it means a loss of liberty?  Are we so envious of others’ accomplishments that we would rather take or destroy what they’ve earned instead of earning it ourselves? Perhaps we are so acclimatized to mediocrity that we simply rather wallow in stupidity and ignorance instead of trying to make a difference.

Yes, my vision of the State of the Union is much different than President Obama’s.  And I fear that if we don’t do something to change the present state of the union, the future state of the union will look a lot like the dystopian society that Orwell presented in the novel 1984.  I plan to fight that future by being an informed and active citizen and voter.  Will you?

Happy New Year

It’s a brand new year, which means many are trying hard to keep their New Year’s resolutions.  Many of the resolutions people make are directed towards self-improvement such as losing weight, being more organized, or managing time better.  Some resolutions are geared towards dropping bad habits, such as quitting smoking or drinking less alcohol.  Many resolutions are geared towards improving personal finances or career improvement.

I’m not sure how many people make New Year’s resolutions but a 2007 study showed that 88% of people who make resolutions fail to keep them.  Frank Ra, author of A Course in Happiness, states that “resolutions are more sustainable when shared, both in terms of with whom you share the benefits of your resolution, and with whom you share the path of maintaining your resolution.”

I am making only a few resolutions this year but I want to share them in hopes that I will be successful in maintaining them.  My resolutions are:

• Spend more time in prayer and spiritual study
• Let the people who are important to me know of their importance to me more often
• Spend more time finding joy in my everyday existence and dwell less on the ugly
• Spend more time with the people who matter and less time with the people who don’t
• Be more polite and nice to people
• Be more patient

 It’s a short list but I believe it to be a challenging list of resolutions for me.  I ask for your encouragement and prayers in maintaining these resolutions.  And I hope that 2014 brings you peace, health, and prosperity, as well as success in keeping your resolutions.

Happy New Year! 

A War for Power

Recently, I hiked the Shiloh National Military Park as part of a Boy Scout outing.  I had been there before and had learned about Bloody Pond and the Hornet’s Nest, that there were over 23,000 casualties and that the battle was a turning point of the War between the States in the West.  One statistic mentioned by the park ranger surprised me.  He stated that 90% of combatants at Shiloh did not own slaves. One of my Scouts wanted to know why they were fighting if they didn’t own slaves?  I wondered that same thing.

I did some research and found that the park ranger’s data, while true, skewed the picture just a little bit.  War is a young man’s game so most of the combatants had not yet amassed enough wealth to buy slaves.  However, only about 25% to 30% of combatants came from slave-owning households, but some of these soldiers served in the Union Army.  So what was the point of the war?

Northerners, especially those of the Republican Party, wanted to prevent the spread of slavery into the western territories, not abolish it.  Southerner slaveholders did not want any restrictions on the spread of slavery.  Slavery was the source of their wealth and power; 60% of the wealthy Americans were slaveholders in the South.  Any restrictions would limit their power and wealth.  But, while the rich and powerful benefited from slavery, many in the South were harmed by a slave economy.  The small farmer couldn’t compete with the large plantations due to higher labor and production costs.  Some economists believe that the slavery actually stifled economic growth in the South. So why did people hurt by a slave economy fight to continue it?

Today we have a group of rich and powerful who want to continue a way of life that benefits them but not the public at large.  When there is an increase in government social programs, politicians benefit because they can provide “free” services and programs that “benefit” large numbers of voters.  Because of their largesse, they help ensure their re-election because the recipients are likely to vote for them again.  The more they are re-elected, the greater their seniority and the greater their power.  They will continue to approve increased government spending and pork-barrel legislation that that will help their re-election, regardless of the benefit or harm to the American people.

However, the benefits are not free and the pork-barrel legislation costs real money; all are paid with the taxes and fees collected from wage earners and business owners.  When higher taxes, increased regulations, or greater entitlement program spending stifle the economic growth, they blame the greedy rich or the big business for not paying enough taxes. They pass legislation in the name of helping the poor, but as many economists will tell you, these social programs, such as Obamacare and higher minimum wage laws, actually stifle the economy and limit the job opportunities for poor.  So why do those hurt by these policies and actions continue to vote for these politicians?

Could it be that, much like 150 years ago, we have been lead to believe by those in power that the way of life we’ve known for so long is the “best” for them?  Are we misled by the media, like we were 150 years ago, that the status quo is good and any change would be catastrophic instead of an improvement?  Or, are we simply too uninformed about the actions of our elected officials and consequences of those actions to make responsible decisions in the voting booth?

Increased government spending and increased reliance on government largesse has grave consequences.  The greater our dependence on the government, the easier it is for the government to take away our rights and freedoms.  History is replete with examples of this, but we must stop history from repeating itself.

To stop this, we must limit the power of the politicians.  We put these politicians in office with our votes and we can remove them from office in the same manner.  We must be well-informed voters and vote for candidates that will back legislation that benefits the whole country, increases economic opportunities for everyone, and decreases reliance on government subsidies and benefits.  Government policies shouldn’t benefit only select groups.

The war ravaged the South and it took nearly 100 years to recover economically.  Let’s avoid the consequences by fixing the problems now.  Be an active, well-informed voter and vote for what is best for the country.

Dream Big

Another post by John Gault

Do we dream big?  Do we settle?  At what point along our journey do we give up?  I never thought I’d be where I am in life.  My beginnings were humble, growing up on a farm.  Now, I work on teams with high-energy, scientist and engineers.  It wasn’t a quick or painless journey to arrive at this point in my professional career.  I worked really hard at it.  I’ve built my expertise by growing from the lessons learned from one project to apply them to the next project.  Honestly, I never dreamed big enough.  I never considered this career.

I wonder where we would be as a country if each of us dreamed big, then applied ourselves to making that dream a reality.  Fulfilling dreams often requires a lot of hard work and tenacity.  We, as a society, spend a lot of time talking ourselves out of our dreams before we start.  We can build an extensive list of why our plans will fail just to justify accepting where we are and why it is our destiny.  Either we don’t have enough money, live in the wrong time or place, don’t know the right people or haven’t been blessed with the skills.  We then settle, wrap ourselves up in the comfort of mediocrity and pass through life as an inconsequential member of society.  

Not that we don’t each influence outcomes, affect others or hold a job, and raise a family.  But shouldn’t we aspire for more than Andy Warhol’s 15 minutes of fame as a measure of a successful life?  Accepting the “hand you’re dealt” is a copout.  We each have gifts, skills and abilities that can change the world.  I wonder, if you picture yourself on your deathbed, would you be satisfied that you accomplished all that you wanted and you were ready to go?  If not, list those things that come to mind and build a plan to accomplish them. Build your bucket list, no matter how unlikely you are to accomplish them.   

Another important measure of a life is realized when you ask yourself who will be with you at the end of your life?  Will you be surrounded by a roomful of people that love you?  If not, grow or fix those relationships.  Holding a grudge is such a waste of time and energy.  I know some people that are experts at holding grudges for the tiniest slight.  I’ve watched this behavior fester and grow, depriving those people involved of happiness and opportunities.    

So, do we settle or do we aspire for greatness?  Could you dream even bigger?  Do you have plans to accomplish everything on your bucket list?  I’m building my bucket list.  I want to travel the world.  I haven't bought tickets, but I have a list of places I want to see and I am saving money towards that goal.  I’ve researched travel, languages, customs and maps.  Also, I’ve got a list of projects to do when I have more free time.  I’ve done my research, found some college classes to take to hone my skills.  Now, my priority is finding ways to positively influence others and to build relationships.  I hope to help others grow towards their potential.  I hope to remove barriers and find solutions.

I’ve started dreaming big again.  Once I retire, I don’t want to live on my past accomplishments.  That makes me a has-been, which is only slightly better than a never-was.  I think I will go back to college.  I plan to volunteer in areas that revitalize the dreams of our senior citizens and grow the dreams of our youth.  There will be more, I just haven't dreamed it all yet.  

So, what are your dreams?  More importantly, what are you doing about them?