Wednesday, November 28, 2012

fixing America's problems

fiscal cliff, tax hikes, taxing the "wealthy" their fair share...UGH!!

Alright, I'm probably going to piss off a few folks with this post, but I have to say what I'm going to say buckle up. I'm not asking anyone to agree with me, though if you do, that's fine. I am merely offering a humble opinion based on what I deem to be common sense. If you disagree with me, that's fine as well, you are more than welcome to your own opinions...this one happens to be mine.

Here are some light facts that have gone grossly undisputed: America has borrowed trillions of dollars, our politicians regularly spend way more than is brought in, and a fiscal cliff is looming in the distance.

What exactly is a fiscal cliff? I sincerely have no idea. It probably is some random term created by a spin-saavy politician to inject fear into our hearts and minds. What it means, however, is that the country is in a world of shit, financially speaking, if we don't truly fix the problems that have created it.
When the deadline arrives, if there isn't policy in place that changes the course of things, taxes will go up (for all of us) and spending cuts are eminent. This is going to happen because we will have no choice. The "bills" are coming due and there will be no other way to pay them if these things don't happen. As I understand it, these things were postponed by policies put into place during President Bush's term. This only postponed the problems, pushing them all to a back burner until they simply had to be dealt with, and by someone else entirely.

So what are our duly elected leaders doing about it? Well...negotiating, which means, for the most part, not much of anything. More than ever before we need for our politicians to put the needs of the country as a whole in front of the needs of the handfuls of constituents that will potentially re-elect them. We need for our elected officials to step up and do the right things. Instead, what we will more than likely get will be a bunch of political rhetoric that passes blame back and forth, and nothing will really be done to solve the problems...which generally seems to be overspending. There will also be lots of "negotiating" that will, in reality be the result of several politicians bickering over whether or not they want to make key spending cuts that will most certainly affect their ability to get re-elected.

The finger pointing needs to stop...along with several other things.

So let's look at the tax situation...
There are miles and miles of tax code. If you have ever tried to read any of it, you know exactly how dizzying and overwhelming it can be to understand it. Our taxation system is completed screwed up, and keeps getting worse by the year from all of the loopholes, and the loopholes to close the loopholes that are created by politicians so that everyone feels like they are getting pinched but no one really gets pinched too bad as to want to not live here anymore.
The guidelines by which the multi-tiered system we have in place now is...well...highly antiquated. I'm sure that at the time it was all laid out, there was far less inflation and the threshold for the upper tier of taxable income seemed like a whole lot of money to make on a yearly basis. Perhaps the entire thing should be re-scaled to accommodate and account for all the years of gradual inflation. To simply say that we need to tax the "wealthy" so that they will be paying their "fair share" is childish and ludicrous at best. For many hard working Americans who find themselves in the position of making just enough money to be in that upper tier, the thought of paying more in taxes is downright painful. Those particular people who just barely make enough to be taxed at the highest levels, they find themselves in the awful position of finally, after years of hard work and dedication, being able to comfortably provide for their families, only to hear that they are considered to be (overly) "wealthy" and now have to be taxed even more. I can assure you that those who find themselves just above that threshold don't consider themselves to be "wealthy" by any stretch of the imagination; especially if they have kids of any age, but even more so if those kids are getting their college education on mom and dad's tab.
For years when I was much younger, I made shit money. I doubt that I broke the poverty level for several of those years. During those years when I was somehow getting by on less than 15K a year, someone who made over $50K a year seemed "wealthy". I'm sure that to someone who is barely getting by at $50K, the appearance of wealth begins at $100K. To someone at $100K, that semblance of wealth is $200K. However, wealth is all relative to what you are currently making versus what financial commitments you are responsible for versus how much you are actually able to save and put aside for savings and/or retirement.
Truth is, I don't have that much more financial flexibility now than I did when I was earning below the poverty level many years ago. I still have bills that still have to be paid. I still have to budget my money wisely. What little bit of financial flexibility I do possess is not as a result of making more money than I used to, but rather the result of wiser choices and greater responsibility with my finances. As far as taxes go...because I have always been considered "self-employed", I have always been hit with the highest tax liability allowed...which translates into losing over half of my income to taxes by the time federal and state agencies got their share of my hard-earned money.
True, we need tax reform...but not in the way that Capitol Hill would have you believe is fair and just taxation.

To better describe where we currently are, I think a decent analogy is in order...

Imagine that you and ninety-nine other random people of all demographics, creeds, and age are standing at the edge of a very large field that contains tons of fruit and vegetables that are ripe for the picking. The farmer who owns the farm has agreed to allow every person one full hour to go out and pick as much produce as they can carry, and that produce shall be what they use to provide for their families for an entire year.
A small number of the one hundred people are elderly, sickly, or with small children and are basically unable to work so it is agreed that everyone who is going out and picking will collectively contribute to the welfare of those who cannot fully provide for themselves.
You, and everyone who is picking, go out and pick your produce. Everyone who goes out and picks brings back varied amounts of produce. Some only bring back fifty pounds. Some manage to bring back over a hundred pounds. You happen to be very smart and strong and drag a small cart out into the field and manage to bring back over two hundred and fifty pounds of fruit and vegetables back to the edge of the field. It seems that several others were very enterprising as well and have brought similar amounts.
You already were aware that you would be giving away some of your produce to help those truly in need, but upon returning to the barn, the farmer informs you that there were more than several able-bodied people who simply refused to go out and work. Instead, they sat back and did nothing, all while claiming to not be able to go out and work. The farmer informs you that you and the few others that picked over two hundred and fifty pounds of food will have to give over one hundred pounds (that's 40% by the way) of the produce you just picked to help compensate and feed those who simply decided they wouldn't go and work. This, of course, leaves you with just one hundred and fifty pounds of produce to feed your family with for the whole year.

A flawed analogy, I know...but it does illustrate a few simple points. you still think that the wealthy are not paying their "fair share" of taxes? For some of you, I will concede to the notion that we will have to agree to disagree.
So let's approach it this way...Why don't we all pay the same percentage amount in taxes? Do you get pissed when someone in church tithes less than you (provided, of course, that everyone is tithing 10%)? No. Of course you don't. You understand that ten percent is ten percent no matter what.
What if we used a similar approach to taxes? How about an amount that manageable by all...say 15%? No exceptions. Everyone would be paying the exact same percentage...and regardless of how the money was made.

Only then would everyone would be paying a fair share.

The formula for calculating it all would be simple...
Question A: How much money did you make last year?
Question B: What is 15% of the answer to question A?
Ta-daaaaah! The entire U.S. Tax code could be reduced to one, mind-numbingly simple page.

What about corporate taxes, you ask?...Almost as simple.
Question A: How much money did your company make last year?
Question B: How much money did your company have to spend to earn that money? (and corporate profit bonuses paid to executives don't count!)
Question C: Subtract answer B from answer A. This is your company's taxable income.
Question D: What is 15% of the answer to question C?

Damn...I think I just used common sense to reduce both the personal and corporate tax codes to one short page of mind-numbingly simple, logical rules.

Ahhhh....but this leads us to the next part of fixing America's issues...SPENDING CUTS!!!

We, the people, in order to have a better grip on our lives without having to rob Peter to pay Paul, have to budget ourselves. We know about how much money is rolling in on a regular basis. We know about how much money is going to be rolling out. We know that we have to set some aside for that rainy day. We know that we can't spend more than we bring in...
Common sense, right? I agree.
Why can't our politicians do the same thing with our national budget? Oh's because they haven't balanced a budget for our country in twenty years!! Yep, that's right!!
I'm not saying we should do away with some of our entitlement fact I'm saying we should keep them, provided that we can find money in the budget to pay for it all. The basic problem is this...our politicians keep finding more ways and places to spend our tax dollars. However, we don't really have any more money coming in than we did last year. If we ran our household budgets like our government runs our national budget, we would all be homeless, unemployed and broke as hell by now!! If our elected officials treated our national budget with the same care that some of us have to treat our personal budgets, we would see a whole lot less unnecessary spending. Some senator would go to the hill demanding money for his new entitlement program, and the folks in charge of the dough could tell that senator the same thing that was told to to Kevin Klein's character in the movie "Dave"..."Find the money in the budget, and you can have your program."

Sure, this country needs to have a budget and stick to it. Sure, there are plenty of government programs to cut money from. Sure, we could make military cutbacks, however, I don't believe it would be prudent or wise to cripple our military's ability to properly defend our great nation. Sure, we could cut and cut and cut...but the inherent problem still remains. Politicians are not being forced to maintain and live by a balanced budget. They are also not stopping the creation of new entitlements. We need to quit creating new ways to spend the tax dollars that are not coming in. We have allowed a new, socialized health care system to be passed and soon to be put into action, but with no real way to pay for it. I'm not going to argue whether we do or don't need ObamaCare...I'm simply going to point out that our politicians allowed it to be passed without first having the funds to pay for it.
When will our politicians learn to use good judgement and common sense, and quit approving spending for new entitlements? Hopefully before we are all being taxed at much higher than 40%.

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