Tag Archive: Taxes


To clarify, we don’t need uniform taxes in the essence of taxing uniforms, but by the way of making them equally applicable to everyone. Here is a brilliant synopsis by my friend Rex about how the current high tax rates on corporations really plays out. Hint: it’s not hurting “the rich.”

“Big Corporations have a huge advantage in raising capital because they can take people’s money and give them limited liability. Big corporation executives have huge advantages in tax rates because they can use incentive stock options to defer taxation on capital and tax most of their salaries at capital gains rates instead of ordinary income rates.

If a small corporation borrows from the bank, the shareholder will have to sign a personal guarantee, so the small corporation guy usually doesn’t walk away free when something fails like the big corporation guy. The preferred way for small corporations to raise capital is through prior earnings, but if the government takes half their earnings in taxes, or more, it gets very difficult for the small corporation to control its own destiny without having to resort to banks, brokers, underwriters, public shareholders, and everything else that will limit the way they can use their ideas, which they are usually pretty attached to.

Big income taxes, for those reasons, and others, are not a tax on being rich, but on getting rich. The middle class doesn’t want to stay in the middle class, and that’s the source of a lot of incentive, being able to do things your way and control your own destiny.

That’s what the income tax system is destroying in America, the economic liberty that brings a ton of innovation. That’s why big corporations do all the things to us we don’t like, because big government gives them unfair advantages. Living in a homogenized society may not be the most terrible thing, everyone working in cubicles with a 401k and doing it the way someone else wants it, but that isn’t what made America what it is. It was never meant to be a place where people were stamped out uniformly like postage stamps, standing in long lines at McDonald’s.”

So, high taxes don’t do anything to the already rich, but they sure do keep people down. This is one minor example of how the rhetoric doesn’t match the actual results of a policy. “Tax the rich” equals “keep people down and help the rich.”

Do you want policy that sounds good but hurts the average American? Or do you want policy that delivers?

Know where you stand.

I saw this picture on Facebook.

True Cost of Fast Food

This is a good example of the problem with government control of private industry. Why should I care if another person wants to eat garbage, smoke, drink, etc.? Why should anyone else care if I eat garbage, smoke, drink, etc? Answer: they shouldn’t, except on an individual level, as caring friends and family.

Now, since the toll of any bad behavior is foisted upon the tax payers, now I care, and so do you. Why? Because now we have to pay for other people’s bad choices, but the bad-choice-makers are shielded from the consequences because they are now “entitled” to health insurance, which, they are told (and is a lie) will translate into actual health care.

In addition, the government sanctions the poor conditions of feedlots and animals. If left to private industry, the public would force the producers to treat the animals better because there would be much more info spread around about the true conditions. As it stands, the larger corporations exert large amounts of influence at the capital because we have elected weak and corrupt leaders who allow money to influence their votes at the capital and in the states.

Don’t believe me? Ask people who try to sell fresh milk and the intimidation they get from the regulations pushed by the large dairy industry. They’ve almost managed to eradicate their competition.

It’s not so simple as blaming the food manufacturers. If they were scared of losing customer dollars, they didn’t have regulations and laws inhibiting true competition, and had to face the public honestly…as real capitalism dictates, we would have a truly different landscape. For example, supplements are not regulated by the FDA, yet they are regulated…by the consumers. If any product is bad, let me tell you, word travels fast. They are kept in line better than any FDA inspector could.

Then, if people were in charge of their own health, had to make sure they made good choices in an effort to get the best insurance price, like the real free market would dictate, again, we would have a truly different landscape of attitude and choices.

In that instance, insurance would have to compete, instead of follow the regulations for the most federally regulated industry, and the costs would lower. Instead, only the big boys are winning, and now with Obamacare, they will fall and the single payer system will replace them. Then people will care even more what I do and there will be laws that “regulate” your behavior and mine. It’s already started.

In the end, the problem is a corrupt society. We called on government to “take care” of problems that were better left to the free market. This began a long time ago, but has been increasing in intensity the past 50 years. Now, we have the equivalent of the government breaking our legs and then saying that we should be thankful for them giving us crutches and a band-aid.

The root issue is corruption and public complacency and ignorance. All other symptoms stem from that.

Socialism Making Poor Since 1917

First we have to start out with a little background. Socialism works off the initial premise that there is no such thing as private property. What you earn, what you own, your house, your clothes, all of it…not really yours. This is in direct opposition to our country’s basic laws on private property…as in, it exists and, aside from protecting us from enemies foreign and domestic, the government’s entire reason for existing is protecting our right to life, liberty, and private property. So, start there.

 

Now, we can move on to a statement from a self-avowed Socialist, who also happens to be an elected representative in our US House of Representatives, Bernie Sanders. (Gee, that’s not a conflict of interest, is it??)

“When Social Security was developed in the 1930s, its goal was to cut down on senior poverty. And when it was developed, 50 percent of seniors lived in poverty. Today, poverty amongst seniors is too high, but that number is 10 percent. Social Security has done exactly what it was designed to do.”

“I will be damned if they’re going to cut Social Security,” Sanders added.

 

First and foremost, we have to ask…WHY are so many people in poverty at this point? What terrible calamities have transpired that this is so??

 

Answer: The policies of the Federal Government had made people poorer than they would otherwise be.

 

People say the Great Depression started with the crash of 1929. Not so. There was already a recovery underway (a real one, not like the fake-y one we have now). Then, Hoover decide to “DO SOMETHING!” and threw a bunch of money at the problem (sound familiar? Stimulus, anyone?). Once he started that, things got worse again and stayed that way because of continued policies until they had to call it the “Great Depression.”

 

FDR came in and decided to keep on spending like a drunken sailor. This lead his very own Treasury Secretary Henry Morgenthau to say,

“We are spending more than we have ever spent before and it does not work. . . . We have never made good on our promises. . . . I say after eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”

 

So, we can see that, the spending helped nothing, and just made matters worse. To spend this money, it had to take it from the very people who would otherwise have been creating jobs and investing in the economy in a positive way, namely YOU. Yet, they talked like all this government spending was going to make things better!!

 

This is like someone bashing you in the leg, then mending it by covering up the wound without actually treating it, and telling you to be grateful they were there to save your leg while it festers and rots under the cover!

 

Now, back to Social Security. We now know that SS was made to “help” the poor, horribly oppressed old people, right? WRONG!

It was set up to not even take effect until years after it started (sounds like Obamacare!). They taxed and taxed, and said that 6 years later, people would start getting benefits. Well, not A LOT of benefits. Just a little. And, you had to be just about dead before you got them.  But, the promise of benefits seemed to make people feel better about living in crapola land.

Life expectancy rates at the time would have gotten you a whopping 3.8 years of benefits after paying in your whole life. Sounds great, right?!

Well, lives got longer and they didn’t really change the age level. Had they kept it in line with the original deal, people would be more likely to realize the scam being played on them, but it also would have been stable.

What they don’t realize at this point is that there is no way to sustain the payments they’ve been lead to believe they are guaranteed. But, the government has a nasty secret…

They’ve already spent your money, my money, the baby boomer’s money…you get the idea. It’ s ALL GONE. It’s now a Ponzi scheme of epic proportions. Bernie Madoff would be proud. They pay out benefits with the current tax dollars coming in. This is why there is the myth going around that SS would be dandy if all those pesky baby boomers would stop retiring (see the MYTH and the actual state of things below, courtesy of my friend, and man of extraordinary intelligence, Rex Rawlinson).

At this point, anyone who thinks that Social Security is going to stay on its current course is willfully ignorant. If you think it was made to actually help the government-impoverished old people, you can add that to the list of ways to be ignorant.

It was a gimmick. It’s still a gimmick. But, now it’s a gimmick that is actually bankrupting the entire nation, instead of just being broke in and of itself. If we tweak the gimmick by making people wait a total of two years to “retire” on SS, it could be extended. But, Socialists like Sanders, will always keep their heads buried in the sand.

MYTH AND REALITY BY REX RAWLINSON

MYTH: The Social Security Program was a success until baby boomers began retiring, and there were fewer people paying in and more taking benefits out. Actually, the original social security tax rate was 1% in 1937, increasing to 3% by 1949, on both employees and employers, total 6%, and benefits were not taxed. By 2013 the tax rate had increased to 6.2% on each of employees and employers, total 12.4%, and the base had increased from $3,000.00 to $113, 700. Gradually since 1937 the social security tax rate has increased over 6 times while the base has increased 37.9 times. That’s not a formula of success. Social security benefits, originally tax-free, are now subject to tax on up to 85%.

REALITY: SOCIAL SECURITY HAS ALWAYS BEEN A FAILURE. It has been broke from the first day it started, which is why social security taxes have always increased at a frightening pace. Look at it this way. You start selling balloons for a penny, and now you’re charging ten dollars a balloon. That’s the real social security story. Sure it’ll never go broke as long as you keep raising taxes to pay for it, but don’t blame it on baby boomers. This Ponzi scheme has been an expensive failure from day one.

Recently, I asked my father to sum up, in his words, the projected spending and tax cuts that the Congress now does with their budget numbers.

http://www.usdebtclock.org/

 

Keep in mind that most businesses project their budgets out 5 years when looking at the future of the company to get a feel for what can happen. They know that any shorter and they’ll miss the forest for the trees, and any longer out and their predictions will be as good as the weatherman’s are.

 

Here is my father’s response after expounding on the ridiculous notion of a budget “cut” that I discussed in the last post.

“Just when you think it can’t get any worse, it does.  About a decade ago, Congress went from a 5 year projected budget to a 10 year projection.  Never mind that we have never, ever projected even one year’s spending with any accuracy whatsoever.  The ten-year process allows discussion of truly phantom numbers because no congress can bind another’s decisions.  There will be at least four elections between what the budget projects and what is actually approved when the last set of elected officials vote the final installment.  There is no way to hold anyone accountable today for spending tomorrow.  Nice arrangement.”

 

You got that? They suck so badly at predicting spending and revenue, they EXTENDED how far out they’ll be wrong. It gets better…

“This also allows congress to project huge savings in the distant future.  Listen carefully—additional spending will always be proposed in the earliest one or two years while additional cuts will always be scheduled for the last year or two of the projection.  So on average, the budget will look sort of balanced.  It’s funny how those cuts never seem to materialize.”

 

Ok, so it seems that we have this GREAT system where the spending increases always happen, but the cuts? Not so much. Yet, they can CLAIM that they have made cuts. Klassy Congress…real klassy.

 

So, when they stand up and blather on about how “draconian” the cuts will be…they ALL know they are fibbing. Every single stinking one of them.But, they figure YOU are stupid enough to buy their crap. Well, are you?You can either keep on believing the MSM and those in government who spew this nonsense and shut your eyes to the truth, in which case, you are as useful an idiot as they wish you to be, or you can face the truth and WAKE UP! Then, wake up your neighbor. We have a country to save.

Bush-Obama Spending Spike

Can anyone look at this and not see how insane the spending is? And, the insanity gets worse when you see just how stupid those in government think you are. Read on.

 

Imagine you are doing your budget for next year. You want to know what your expenditures are going to be, roughly, and you use last year’s budget for a reference.

 

 

Each year you have added 5% increased spending, as a matter of course, no matter what inflation is, or any other considerations.  You just add that spending in there, yep, regardless of your income.

 

Well, your revenues (income) have increased each year some, but your spending has blown that out of the water. Now, it’s time to look at what needs to be done.

 

You already work full-time, and have a part-time job. Your wife works, and you’ve taken all the money you can from your teenagers who work, but you still are short. You figure you don’t need sleep! Your job performance won’t be affected at all, right??

 

Let’s presume your wife talks you down and you realize that your spending is what is out of control. (This will likely never happen in politician land, but just work with me). So, you decide to see about not spending so much, since you make $100,000 a year, but spend $146,000 each year.

 

Now, you come up with this amazing plan. Instead of increasing the budget another 5% next year, you decide to increase it only 2.5%.

 

Your kids go nuts!! What are you, crazy?? You’re cutting spending by HALF!!! How will we live?! What are you? Some kind of horrible guy that wants us to live in squalor and die on the floor?!

 

You see how your spending is NOT, in fact, being cut? You see how your spending is STILL INCREASING and that you will have to borrow even more money just to keep up with current levels of spending, let alone what you’ll add?

 

Yeah, that’s how our government does budget math, in part. The discussions of “draconian cuts”? Yeah, that’s percentages of cuts on the assumed increase.

 

Oh, and, there’s more to come, in future posts, about budgeting government style. Are you still going to buy into their lies?

 

You can either keep on believing the MSM and those in government who spew this nonsense and shut your eyes to the truth, in which case, you are as useful an idiot as they wish you to be, or you can face the truth and WAKE UP! Then, wake up your neighbor. We have a country to save.

Here’s the situation. There is THE FISCAL CLIFF!!! and it’s coming up. Republicans don’t want to raise taxes, especially since they are staking their reputations on this pledge that they made not to do that.

 

We have Obama, who says NO MATTER WHAT, there will be no deal without tax increases. (Of course, the lap-dog media only reports the Republican’s ultimatum, but whatever…).

 

Now, you and I know that it’s all about spending. The tax rates Obama and his guys (and gals!) are calling for will not even make a dent in the deficit, let alone the debt. The “draconian cuts” are a joke and are not the issue, or the problem, really.

 

So, what are we left with? An impasse, it seems. OR…

 

The Republicans could just walk away. Now, what does that entail? It means they say loudly and often, and to whomever will listen and then some, “Obama and Democrats. We quit this discussion. We will not agree to raise taxes, so you put together your proposal and we’ll be forced to vote on that.”

 

Then, they could be*cough, cough* sick on the day of the vote, vote “present,” like dear leader did so many times, or just boycott the proceedings publicly and with great aplomb.

 

This accomplishes three things:

1. The cliff will be dealt with in whatever manner the Democrats want. They will, once again, have no restrictions for their plan.

2. The Republicans won’t have to go back on their word, sort of. It’s honest enough for a politician, right?

3. The Democrats won’t have anyone to blame but themselves when it doesn’t work, and if the Republicans were smart (I know, I know…) they would shout this from the rooftops.

 

But, this is but a pipe dream. This requires that Republicans have a spine, which they don’t; that they have a firm belief that their way is better, which they don’t, apparently; and the political savvy to pull this off, which they have demonstrated they don’t. I mean, they didn’t even consistently and loudly report of the cover up about Benghazi when there was an American Ambassador DEAD along with three other Americans and probably the most important election in decades to win. You think they’ll get some intestinal fortitude over taxes? Think again…

 

However, if there WERE some kind of Divine Intervention and they all decided to follow this plan, this is what would happen: the Democrats would all of a sudden care MORE about partisanship than fulfilling their deepest desires. They would cancel the vote.

 

I ask you this: if you have a deep, core value, like not raising taxes in a time of economic trouble because you KNOW it will hurt people, do you really CARE if anyone else agrees with the idea? Would you really stop all votes to make sure some Democrats will agree with you before going ahead? No. You would cast your vote for no increase in taxes like a flash of lightning because you KNOW it’s the right thing to do. But, that’s the exact argument the Democrats use when they do things like cancelling the vote and complain about a lack of partisanship.

 

Because of this, you can rest assured that the Democrats do NOT want partisanship…they want someone to blame besides themselves.

 

You can know this is true because when they had control of both houses AND the white house, the Democrats did NOT get a measure passed that increased taxes solely on “the rich.” It failed 194 to 233. That’s a lot of Democrats who voted no, even though they needed ZERO votes from ANY Republican to pass that measure. Why would they balk then and yet have no compunction of accusing the Republicans of holding them hostage now that they have lost the House? Exactly. They needed someone to blame.

 

They should have kept in mind that, as the saying goes, when they point one finger at the Republicans, there are three pointing back at them.

 

Too bad the Republicans seem to only know how to navel gaze when faced with this situation. Good job guys*.

*I hope you’re catching the sarcasm in that statement. I was laying it on pretty thick.

Is “The Fiscal Cliff!!!” really about the tax rates for the top “RICH”? In a word, no.

 

The amount of money that would be collected from the people the Democrats call to have taxed (while the rest stay at their current tax rates) would be negligible, IF all the expected revenue were brought in as planned.

 

Watch this from my senator as to just how little this tax revenue this would bring in:

Now, the Mainstream Media would have us believe that all would be well if we adopted the Democrats’ tax hikes, and it’s the EVIL Republicans (who just won’t break their pledge to not vote for tax increases, those fiends!) that are holding the well-being of America hostage. OH, THE HORROR!!!

 

What they are missing is that  1. Obama just said there would be no deal unless tax increases were included (don’t hold your breath waiting for the MSM to berate him on this); 2.Tax increases tend to mean lowered revenue (e.g. income to the government from taxes). This is because the wealth goes into hiding (tax shelters, non-taxable bonds, overseas, etc.); and 3. that means less investment and fewer jobs.

 

So, the “middle class” might keep their current tax rates, but they’d have to have a job to enjoy them.

 

There is a Fiscal Cliff, but the government could confiscate ALL income over $200,000 and still only run the government for a month or so.  It’s the spending that will take us over the cliff…but that’s an unpopular fact, so it doesn’t get reported. Don’t be a pawn in the game. Know your facts and stick with them.

Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.
John Adams, ‘Argument in Defense of the Soldiers in the Boston Massacre Trials,’ December 1770
US diplomat & politician (1735 – 1826)

Some people seem to think that the money the government spends comes from some random magical place like unicorn butts. They talk about “the government” as if it’s a person, and it’s a nice one at that.

 

“OH, look,” people say, “that nice government is giving money to the poor!”

 

Well, that would be nice, if the money DID come out of thin air…or angel ear wax…or whatever, but the reality is, it comes from YOU and ME.

 

Now, it comes from you and me in the form of many, many, many types of taxes, and at many levels of government (state, local, federal), but in this post, we shall deal only with federal and only the income tax, for simplicity’s sake.

 

You have to realize that the money the feds take arrives to them because if you don’t pay, you will go to jail and they will come for you with guns.

 

Even if you owe a smallish amount, but don’t fork it over, they will take ALL your stuff. Your house, your car, your furniture…and sell it at auction to get their money. They are not kidding around. They are like the mob, but legalized.

 

Okay, so we know where the money comes from. Frederic Bastiat was a French writer who told us how to check and see if the government is doing right or wrong with the money it squeezes out of you this way:

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn’t belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

To translate: if a law allows those in government to take what belongs to one and give it to another, and it would be illegal for a regular citizen to do it, then it’s theft. Let’s do an example.

 

Let’s say I see some poor people on the street. I want to give them money but I have none to give. So, I take my gun and hold up someone on the street, take that money and give it to the poor people. Is that illegal? (Hint: YES) Then, it’s illegal for the government to do it, too.

 

Now, some (I can hear you saying it!) will say, “That’s like Robin Hood!” No, no, dear reader, it’s not. Remember, Robin Hood was taking back the taxes the evil king had squeezed out of his subjects  and giving them BACK to the peasants. Once again, it was the government that did the plundering!

 

Let’s go back and look at the initial scenario of the government taking money from YOU and giving it to ME because I make less money than you. Uh-oh. Looks like plunder…

 

So, the next time you hear on the news that the federal government will “help” by giving money to some “cause” or “invest” money in something, aside from national defense or one of the other things listed in the US Constitution that they are allowed to do, understand that they only got it by stealing it.

I live in a school district that used to be very, very poor. So, the state and the feds, in their infinite wisdom, made other school districts pay them money. My district was on board with this idea! It was FAIR, you see.

 

Fast forward a couple of decades and now we are flush. We are in the Eagle Ford Shale area, and, much to the chagrin of eco-spazoids and Obama, have lots of petroleum type substances on lots of private land being sucked out of the hard shale ground.

 

With that prosperity comes revenue. With that tax money come the unintended consequence of “reverse Robin Hood.” You guessed it, now the district has to give its money away to other districts!

 

They are sooper happy about this! Ecstatic, even, I…oh, wait. No. That’s not true. They’re actually very upset.

 

This election, they had some proposals on the ballots making sure that they get to choose how to spend their money, dash it all! They want to make it so they spend the money on students that come to their schools because it’s NOT FAIR that they should have to write a check to the state and have them distribute the money. They got that money fair and square, they say.

 

Oh, the irony! Because when they were getting the money, they were all about how it WASN’T FAIR that they didn’t get to spend the money they were getting from other districts as they saw fit.

 

Fiscal karma, I guess. Still sad for the kids. This type of thing is yet another reason I home school.

Profit? Or Profit MARGIN?

(Note: this post was co-authored by my beloved husband, Kristian Carter.)

Here’s the deal…when discussing how much businesses make, there is a HUGE difference between how much profit they make and what their profit margin is.

 

However much a company makes (call it Widgets, Inc.) is called profit. This is just the total amount of money this company makes by selling widgets. Inventive naming, I know. 😉

 

BUT, there is a column next to the “income” column that most businesspeople detest. It’s, in simplified form, “money we have to spend to operate this business.”  This column* contains all of the costs associated with that company: labor, raw materials, rent, utilities, etc. Yep, they have to pay money to make widgets!! You’d think this would be a no-brainer, but most people talk about profits, not profit margins.

 

(*Yes, yes, I know labor is its own column, but I’m trying to keep it simple! Stick with me, here!)

 

Let’s delve into Widgets, Inc. a little more. We find that they have made $3.4 million last year alone! They must be ROLLING IN THE DOUGH, right? Oops, not so fast.

 

They had to pay $4.1 million in costs!! Bummer. Many companies will have some money in reserve or can borrow money to carry them through a period of rough times. However, if business does not improve, the reserves will be depleted, and the company may become too risky for additional loans. Too bad Widgets, Inc. will likely be closing their doors. Their CEO gets no more paycheck (as well he or she shouldn’t…look at those numbers!), people will be fired, and no one gets to buy another widget from them. Sad.

 

If Widgets, Inc. were Apple, people would be ever so slightly ticked, no?

 

So, when discussing how well a business is doing (and for politicians, how much to tax them), think about what happens when the margin is negative. No way to tax a closed company (though, I’m sure they’ve wracked their teeny brains to find a way…).

 

Now, when people discuss the EVIL OIL COMPANIES and their OBSCENE PROFITS!…ask yourself this: what is the profit margin?

 

To get the answer, buy some stock in any company that has anything to do with the oil industry. You will be sad that you will never get rich. They are all almost always on the verge of making no profit margins.

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