In Wonderland

Sometimes when I watch the news I feel as if I’m Alice and I just fell through the rabbit hole.

As I arrived home from another stressful day of barely scratching out a living and working 12-14 hour days just to do it, I was greeted with our President and Secretary “Dodgy The Tax Dodger” Geihtner announcing a new corporate tax program.

As I watched …in disbelief I might add… Secretary Geihtner actually had the gall to admonish corporations who use LEGAL tax loopholes to lower their taxes. He then had the unmitigated nerve to state that the new law would give government the ability to collect back taxes owed by these corporations and wealthy individuals.

Now wait just one cotton pickin’ minute! Is this the same guy that didn’t pay his fair share until he was caught? Isn’t this the same guy that didn’t pay all of his back taxes owed because the statutes of limitation had run out on some of it?

Do we really live in a world where the Sec. Treasury who is supposedly the ‘brightest financial mind’ of our nation can’t even use Turbo Tax to properly file his taxes but is the one lecturing others on the tax responsibilities? Will the hypocrisy never end?

Making American Companies Less Competitive

But let’s look beyond the hypocrisy to the stupidity. While this idea seems to be a good one on its surface and will play well with the ‘class warfare’ types, you know the ones that want to crush the rich and curse the evil corporations, the whole thing will never work.

Here’s why. The rework of the tax code is supposed to ‘punish’ corporations that ship jobs over seas and ‘reward’ companies that create jobs at home. However the tax rate on corporations in our country is confiscatory. We have one of the highest corporate tax rates in the world.

Companies will just choose to move their operations completely out of the U.S. rather than be subjected to further government interference. On top of the regulations on CEO pay and other socialistic policies, more capital and more companies will leave our shores not stay here!

We Pay Anyway

But that’s not the real point is it? In my usual fashion I’d like to take the conversation to where it belongs and it’s a direction that you are not likely to hear from any normal news cast.

No matter how much corporation is taxed they never pay it. The cost of the tax is just reflected in the retail cost of the goods when they are brought to market. That’s right; we pay the tax, not the corporation.
Higher taxes and tightening loopholes will only lead to more companies leaving our shores. It will lead to less jobs here and it will lead to higher prices on everything. We pay anyway.

Evil Corporations!

Now I know that many of you know that I am self employed and as such I am ‘part of the problem’ in this country. After all, I don’t conform, I’m ambitious, I work hard and I’m independent. You can’t fit me a box so I must be ‘dealt’ with.

That’s right, I’m a CEO and I own an evil corporation. But I’d like to say something here. As a dumb hick from the Southside of Atlanta with a high school education, I’ve worked hard. I’ve taught myself and I’ve put a lot of sweat into what I do.

Over the past two years I’ve endured a huge amount of sacrifice and worked 60, 70 and 80 hour weeks without earning a single dime! I’m barely holding on, but I’m holding on. And when things turn around I deserve to make an unlimited amount of money because of my sacrifice. Who has the right to tell me otherwise?

The IRS and The Hospital

Well it seems that the IRS has the right to tell me otherwise. After years of paying my taxes on time, paying 7.5% of other peoples taxes (BTW – that’s what employers do, they pay 7.5% of someone’s wages to the Federal government for the privilege of having an employee, oh yeah, and don’t forget the additional 15% we pay on ourselves. Sound crazy? It is!)

….sorry, I digress…. I received a letter form the IRS saying that I owed back taxes called FUTA taxes for employee payroll from 2005. When I called I found out there was more, they believed that I operated my business out of California even though I’ve only been to that state once in my life, I could not get them to understand otherwise.

So what’s my point? My point is that the way I was treated was so unprofessional and so harsh that the stress sent me into a tail spin and I ended up in the hospital (that story will come soon, I’m writing it now so stay tuned).

You see, I am to be ‘dealt’ with as far as this administration is concerned. So for those of you who think I’m some conservative hack and guys like me need to be dealt with, watch what you wish for. I’m sure that when the government is finished with guys like me, they’ll turn on you.

Remember, government does not create wealth and at some point those that wish to redistribute wealth will run out of other people’s money, that’s when they’ll come after yours.

BTW – I don’t owe the tax and I have proof. Do you think that matters to the IRS? The answer was and is a resounding …NO!...

Stay tuned for the unbelievable TRUE story of what happened when I called into IRS Customer Svc…. “Coming Soon”

Economics 101 - Raising Taxes Helps Nobody!

When I have conversations with close friends who may not agree with my fiscal conservative political view, I am always struck by one fact. Many of their views are formulated by an understanding of economics as described by the media.

And when I watch the major news networks and see their talking heads, I’m dumbfounded that these guys don’t have any clue about economics or the things they are reporting on.

It’s understandable that a majority of our citizens don’t understand economics but it is unfathomable to me that reporters who are supposed to investigate the stories they report on don’t have a clue.

I am going to attempt to strip the politics out of my statement but some will never see the truth of what I am about to say. For those people who are so partisan that you can’t get your head out the sand and see the truth then you deserve the totalitarian government that will one day befall us all.

There once was a Republican President that was followed by a Democratic President and they both ruined our economy. The commonality between their presidencies was a progressive tax rate with a mid range tax above 38% and the top rate above 50%.

Both these presidents believed in price controls and caused a calamity on commodities prices and production. Both presidents policies caused high unemployment, high interest rates and out of control inflation. Who were they? Richard Nixon and Jimmy Carter.

Further stripping away the politics from the economics of our country, there were two presidents, one Democrat and one Republican that lowered taxes, stripped away regulations and allowed the markets to work freely and the economy boomed. They were John F. Kennedy and Ronald Regan.

When we analyze the histories here we see that tax increases “on the wealthy’ or tax decreases “for the wealthy” has no sound economic strategy, it’s just pandering and populism to garner votes and power. The real story is that the way our progressive tax system works is not beholden to how we “feel” about the rich.

To read the rest of this post please visit my blog at http://brainsnotincluded.com/

(BTW - Who defines who the rich are anyway? That’s a scary thought…huh?)

Here are the real facts of the matter. We don’t just live in the vacuum of a capitalist economy. Our capitalist economy is part of the world’s greater Capitalist economy.

The truth is that we can’t detach our economy from the world economy no more than we can tax the rich into oblivion and expect to be able to lift up the poor to a higher status. Ever since we took our economy off the gold standard we stopped employing a Static scoring methodology and moved to a dynamic scoring system.

So what does all this gibberish mean? It simply means that we can’t punish the rich without punishing everyone. Two presidents, one Democrat and one Republican, proved that raising taxes and imposing heavy regulations on a capitalist economy will kill the incentive and motivation to work and produce.

They proved that less money comes into the treasury because every thing just stops. They proved what Thomas Jefferson said about government. Government cannot create wealth, it can only redistribute other peoples wealth thereby destroying it.

These same two presidents also proved what Margaret Thatcher said; The problem with Socialism is that you eventually run out of other people’s money. And a progressive tax system with a heavy handed government is very close to socialism.

Now on the other side of the equation we’ve had two presidents that employed a very different approach. One was a Democrat and the other a Republican and both lowered the tax rate to an optimum point to encourage, incentivize and motivate the populus.

These presidents created a robust economy and even with lower tax rates on ‘the wealthy’, they still managed to increase revenue to the treasury. This issue of whether to raise taxes or not has nothing to do with economics. If it did, we’d always keep taxes low.

No, the real issue is about feelings. Well, I for one am tired of feeling good about bleeding the rich for every red penny they have. I would much rather be happy because my own coffers are full and the economy is solid.

Let’s take the politics out of our discussion about taxation and let’s use real facts about how to get an economy moving and keep it growing. Higher taxes is not the answer!

Obama Lied; The Economy Died

Obama Lied; The Economy Died

The title of this article is one powerful statement and I was in shock when I read it. It’s the title of an article written by a conservative author, Tony Blankley.

Before you cry foul! Remember that liberal Democrats used the saying Bush Lied; People Died as the center piece of an entire campaign, not just an article in a newspaper …much more incendiary rhetoric I’d say.

Blankly, playing on this same theme makes some very good points in his op-ed piece in the Washington Post. He posits that Obama ran as one ‘thing’ but is really another.

Take the Preisdents message of ‘change’ as example #1. Obama ran on the promise of change in Washington. His stated goal was a more civil tone and more bipartisanship.

However, what we see happening is Obama and his Democratic cohorts ramming legislation down the throats of the Republican minority. His side is using tricks like only issuing legislation in printed format (not electronic) and expecting thousands of pages to be digested and voted on in just days of review.

When legislation is opposed, the President says; ‘We were elected, it’s our turn.’ And when the Republicans decide not to vote for legislation they haven’t had time to review the Obama team calls them obstructionist.

What change? Sounds like the same ole Washington to me!

There’s more, Obama professed to be for fiscal responsibility and no ear marks. Here again he has lied. We have only to look at the huge stimulus package which was one giant earmark made into law and had nothing to do with stimulating anything!

Other examples of Obama’s lies exist as well. The omnibus spending package with over 8,000 earmarks in the billions of dollars is being pushed for passage. The President says its last year’s business, BUT, if that’s true then why wasn’t it passed last year.

This is another example of the big lie. Obama claims to have inherited the Deficit and he did inherent some of the deficit but in the two months since he’s been in office, he’s tripled the size of the deficit.

The constant, persistent and now accelerated growth in spending and government regulations is killing the markets and slaying our economy. Obama ran to the center as a fiscally conservative Democrat in order to get elected, what he’s become is a Harry Reid and Nancy Pelosi tax and spend style liberal!

Obama Lied; The Economy Died; how very apropos.

Shut Up and Get Out of the Way!

There ...I said it! The talking heads in the government need to just shut up and get out of the way. What gives me the right to be so pointed? Well I'll tell you.

I have a unique perspective, being one of the few people in the mortgage industry that didn't go gonzo and make loans to every breathing Jack that walked through my door. I didn't get rich off the housing boom and I wasn't part of the "problem."

I sit everyday watching the stock markets, analyzing the bond market and reading about the mortgage backed securities market trying to give my clients some direction about where interest rates are headed. Right when I think I see a trend developing, BAM! something happens that causes huge volatility in the market!

That 'something' that causes volatility and turns good markets into bad is usually very simple to identify. It is a press conference. Not just any press conference, it's usually a press conference by the President or one of his newly appointed minions.

Case in fact, on Tuesday, February 10, 2009, Sec. Tres. Geihtner has a press conference to announce how the Treasury plans to move forward to 'fix' the crisis, the markets tank and theirs huge volatility everywhere. It's not directional, it's just panic selling without solid trends. It's mindless and crazy.

So what's going on? Well the markets begin to settle and everyone is becoming comfortable. In many cases trends are forming and they are good trends, Whew! We can breath a sigh of relief right?

Wrong! Before a good trend has a chance to take hold and before the capitalism side of our capitalist economy can begin to do what it does, someone from the government announces some new spending, printing or borrowing plan that throws everything out of whack again.

The markets can fix themselves with some oversight and some slight tightening of regulations. But before a real fix can take hold two things have to happen!

One, the government has to Shut Up! Stop telling the markets what your going to do and start listening to what the markets are saying. Step two, is to supply the markets with what they say the need! THEN..... GET OUT OF THE WAY!

If the government officials would quit trying to get face time so they can claim credit for the fix then the fix would come a lot sooner. I for one am tired of seeing the people that got us in this mess claim that they have the fix to get us out.

And I dare you to tell me there's a whole new crowd in charge now and they didn't have anything to do with this mess, come on....I dare you... ;-)

To One Sided

Okay, I just realized something. I've been to one sided. I'm bashing the so-called stimulus plan, referring to it as a huge chunk of pork. It really is nothing more than one giant 'earmark' written as a law.

But that's not the point I want to make today. Along come the Republicans and they band together and not a single Republican votes for the bill. They rant about the pork and they rave about the lie Obama supposedly told about working with both parties.

The one thing they don't do is offer any viable solutions themselves! Tax cuts is cannot be the end-all/be-all answer for the Republican Party every time their is an economic crisis. The answer must be radical change, but not in the way that the dems want. More spending is NOT the answer either!

These guys just don't get it! We need real change! Change, real change, would be the elimination of the tax code as we know it. You want to talk change, let's change our economy from a spending economy to a saving economy by installing the Fair Tax! That's real change.

Change would be the elimination of Corporate Taxes. Everybody talks a good game about bringing manufacturing jobs back to the U.S. but nobody is doing anything about it! Imagine if corporations didn't pay any tax at all! (well they don't really, we pay the tax in the form of higher prices on goods and services)

All that money would be enough to make up for the extortion large manufacturers pay to the Unions. That's CHANGE!

Nobody gets it. Obama hasn't changed anything yet, he's just changed who's in charge. We still have the same old politics. The Republicans need to quit complaining and start offering us something real.

Just pinning the bad ideas on the Democrats so that they get full credit when these ideas fail ...and believe me, they will fail... is not good for America. If Republicans want to be seen as more than obstructionist, then they need to propose real and radical change!

"Change we can believe in", it's what Americans thought we voted for, now can we get some please?!

Taxes Must Be Voluntary?

Timothy Geithner is approved or as the next Sec. Tres. Who is Geithner? If you believe what many senators and congressmen and women have said about him, he's one of the most important appointees to be considered since the Carter Administration!

Geithner's resume is long and distinguished and it's true that he's not dolt. You don't get to be the President of the New York Region Federal Reserve without having some solid smarts!

But here's my problem. Mr. Geithner has had some tax problems, as in, he didn't pay them. That's right, he 'avoid' paying some taxes through an accounting error.

When pressured about how he managed to miss calculate his tax liability to the tune of more the $40,000, Mr Geitner was more than disingenuous. He blamed the mistake on the fact that he uses Turbo Tax to calculate his return and 'the program' must have missed something.

Here's the interesting thing, the mainstream media gave him a pass. His lofty stature and humongous brain are just to important to America in this critical time. So much for objectivity int he news media.

My problem with this entire situation is not that he miscalculated his tax burden by more money than many people make in a years time, my problem is with the nonchalance he displayed in dealing with the issue. I have a real problem with this 'big brain' not being able to figure out his taxes or at least being smart enough to understand that NONE of us can figure them out and that's why we have to pay others to do it for us!

Let's up their correct, let's hope his 'big brain' can get us out of this economic mess and the country moving again!

A Tribute to a King

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

In our nations great history, we started out with these words emblazoned on a piece of parchment. Our forefathers boldly presented this document, the Declaration of Independence to a despot that enslaved through high taxation and a self proclaimed 'divine right' to rule.

While our country was born on this proclamation, it's dream was never realized by all who lived on American soil. Many peoples were burdened with a very real slavery that was hidden from the light by the guise of States Rights.

This contradiction would be partly solved by a great man who would become president, Abraham Lincoln. Yet even the War between the States (the civil war) could not fully resolve the inequality that slavery in America had caused.

It would not be until many, many years later that a man would come along that could so capture a world with his message that we would all stand up and take notice. With his Christian teachings, his Gandhi type insistence on non-violent protest and his spell binding oratory, Doctor King inspired a nation to recognize a heinous truth.

http://www.youtube.com/watch?v=PbUtL_0vAJk

As a nation we were forced to recognize our prejudice. Doctor King died for his cause, martyred by a mad man, but his legacy lives on. Today we honor a King, Doctor Martin Luther King.

Tomorrow, 46 years from his great speech in Washington, we honor his legacy as we inaugurate the first black man to become president of this once prejudice and dividend nation.

Even with all the economic problems and the anger and divisiveness and strife around the world; Today, on this very special day, I am proud to be an American!

http://www.youtube.com/watch?v=gdJ7Ad15WCA&feature=related

Tax Cuts For the Rich? Oh No!

That's right, you heard me, tax cuts are coming ... or continuing .... depending on who you are listening to. The Obama administration has signaled that tax hikes are definitely off the table and that tax cuts may actually be needed to get this economy moving again.

Amazing isn't it? Looks like our new President is a very savvy politician and a pretty bright guy. We were all worried that his Tax the Rich mantra during the campaign would ruin the country.

As it turns out, it may have been a ploy to keep his liberal/socialist base pumped up and headed to the polls. When in reality he has had a mindset to rule as a centrist all a long.

The thing I love here is that even a democrat is acknowledging that lower taxes stimulates the economy and creates growth. But while they talk about the need to lower the taxes to get things moving again, they still signal that taxes will need to be raised in a couple of years.

The argument is that spending cuts alone will not be enough to stem the tide of a rising deficit. I say hog wash! Spending cuts alone stemmed the tide of rising deficits in my household. Was it painful? You betcha! Was it necessary? Damn straight!

According to an article on MarketWatch.com, tax stimulus that give tax payers $500 at a time doesn't stimulate the economy because we (the consumer) just put that money in the bank as savings. However, lower tax rates that can add $10-$20 per week to a paycheck add just enough money that it doesn't get saved and increases consumer spending.

http://www.marketwatch.com/news/story/Tax-perks-stimulate-economy-coming/story.aspx?guid=%7BDD44159D%2DD4AD%2D45C7%2D8AE6%2D5B765653CDA5%7D

So here we go again! Spend, Spend, Spend! Note in the article that 'saving is bad'. The implied message is that spending is good. However, in that very same article some economist state that saving IS good and we should encourage it.

In the end, even though there is a glimmer of hope that someone in D.C. 'gets it', it appears that the inmates still run the asylum .... So, I'm going to save, save, save and hope that these idiots finally get a clue. Until then, watch your wallets, their safe for now, but at some point the government is coming and they will force you to give them your last thin dime!

Reality Mirrors Fiction - A Political Nightmare

A recent article in the Wall Street Journal references one of the best libertarian books of all time. The book was written by Ayn Rand who immigrated to the U.S. from Russia in the early 1950's.

Rand's book, Atlas Shrugged, is reviled by liberals and revered by every non-liberal that reads it. The book poses a simple hypothesis. What happens to society when government attempts to control the markets?

Throughout the book those that are successful continue to produce. They find ways around the government barriers set up to 'level' the playing field. The world is divided into the producer and two other categories.

The other groups are those that do nothing and those that identify opportunity to use the government rules as a tool to line their own pockets. (Sounds eerily familiar, it's just like what is going on with our government and economy today doesn't it.)

Ayn Rand used her unique insight and experience from communist Russia to build a captivating and realistic story of what happens when governments attempt to control incomes and what happens when the producers and innovators in society finally give up and throw in the towel.

This book is no easy read. At over 1,000 pages most people will not even attempt to read it. However, when surveyed, a majority of people who have read it said it was one of the most influential books in their lives. It rated second only to the bible.

I would posit that it should be mandatory reading for every high school senior prior to graduation! If you haven't read the book I encourage you to do so.

If you aren't going to read under any circumstance I implore you to at least read the great Wall Street Journal commentary about the book. Here is the link to the WSF article: http://www.facebook.com/ext/share.php?sid=44251878044&h=z8mMm&u=lH3EK