Explosive Expressions (Entries tagged as taxes)

Teabagging... In my town?

nospam@example.com (Jason Frisvold) — Wed, 15 Apr 2009 16:55:34 -0400

Initially, I found this teabagging thing to be pretty funny. I mean, far be it from me to say you don't have the right to protest. Hell, if you want to get out there and protest wearing white socks, or jump up and down about having to obey gravity, then by all means, don't let me stop you. So while I may ridicule the movement, I definitely believe in their right to have an opinion.

I did no, however, expect to drive home this afternoon and see them throwing one of these tea parties, right here in my town. Though, after thinking about it, maybe it isn't quite as surprising. Let me explain.

I live in a relatively small town. It's a nice area, moderately decent housing, low crime, and decent proximity to local markets. We even have a Walmart, go us. However, I wouldn't exactly categorize the area as high class. Middle class, maybe, definitely leaning towards lower middle class. Incomes are on the low end, with many residents on welfare and receiving food stamps. While some of the people in this area are educated, I'd wager that less than 50% have a college education. Overall, it's a typical small town in rural America.

After looking at what kind of town I live in, you may also find yourself amazed that people are out there protesting raised taxes. The only taxes raised at this point are taxes on those making $250,000 or more per year. And those aren't tax raises, but rather an expiration of the tax cuts that Bush put in place. There are very few people around here who can claim to have been able to take advantage of those cuts, and I doubt very much that they'll be out there protesting, especially in the rain. In fact, if you look out across the country at all of the protestors, the only ones who are possibly making that much will be the news people covering the news, and even then, only if they're the high powered anchors. So why are these people out protesting?

I'll hazard a guess as to why. Fear. The economy is in a tailspin, jobs are scarce, and people are looking for someone to blame. Blaming Wall Street has quelled them for a time, but now they want more. Wall Street is more of an abstract idea and it's tough to stay focused on. Obama, though, is a single person, and in the most powerful office in America. Obviously he has the power to fix things, and since he hasn't done it already, then he's obviously planning to make it worse. He's out to tax everyone to death so that only the rich are left! Obviously!

Seriously, though, taxes suck. They do! I hate taxes. I hate paying taxes over and over and over again. I pay sales tax, local tax, county tax, state tax, federal tax, school tax, school real estate tax, county real estate tax, and there are probably others I'm missing. At the end of the day, I spend more time paying taxes than anything else! I'd much rather keep all my money and spend it the way I want to. However, I'm also well aware that the government needs money to function. They provide the roads I drive my car on, the schools I send my kids to, the protection to live in a country like the USA, and more. To do all this they need staff, who like to get paid too. In short, they need to collect taxes in order to have the money to function.

So what's with all of this tax talk? Is there a legitimate reason to be upset? Are we missing something that the tea baggers aren't? Well, yes and no. Obama has a fairly large agenda, detailing healthcare reform, clean energy, tax reform, and more. These things all cost money, and that money has to come from somewhere. So, in a way, these people could be protesting what's to come, rather than what has already happened. Though, I'm not sure they see it that way.

One thing can be said, though. Times have obviously changed. When, in the last 8 years, have you seen a demonstration of this size, or any real size at all. Especially a demonstration against the government? You can bet that any such demonstration would have been declared illegal, or a threat to security, or some other nonsense. People would be arrested and gatherings would be disbanded. Need examples? How about all those people arrested at the Bush rallies when he was running for re-election? Now, go read Little Brother.. Yeah. That's where we were headed under Bush. I'm happy Obama's here, and while I don't always agree with what he's doing, overall, I support him. How about we demonstrate against something that actually affects us, rather than being lackies for the upper class.

21st Century Tea Bagging?

nospam@example.com (Jason Frisvold) — Fri, 10 Apr 2009 11:51:08 -0400

As the saying goes, there are only two certainties in life. Death, and taxes. There's not much you can do about the former, but you can fight, somewhat, against the latter. Apparently that's exactly what the Citizens for a Sound Economy is doing. They're calling it ... er... tea-bagging.. Yes, I said tea-bagging. No, please don't google it, unless you want to see both graphic and explicit examples.

Graphic and explicit? Yes. Tea-bagging has been a sexual term for a number of years. I'm not entirely sure why a conservative group such as the CSE is using the term. I find it hard to believe that they would willingly associate themselves with a term for a sexual act, so I can only guess it was an accident. What makes it even funnier is that Republicans, who seem to be embracing this movement, are "generally" religious, so I would expect them to find such an act offensive.

While it makes really good fodder for commentary, what's really going on here? Why is Senator Vitter trying to make this a national holiday? Well, to start, the protest is being compared to that of the Boston Tea Party, which protested taxation without representation. The difference here is that this "tea party" is to protest higher taxes. However, the CSE, while claiming to represent consumers, actually gets most of its funding from major corporations. In fact, it was originally formed by parties associated with Koch Industries, a massive private corporation dealing in oil, fibers, paper products, and more. It appears, at least to me, that the CSE has the corporate interest at heart, rather than the consumer.

But what about the movement itself? What are these guys fighting against? Big spending? Bailouts? High taxes? These are all things worth fighting, and I agree that something needs to be done about them. You have to remember, however, that we are currently going through a unique period in history. Banks are failing, industries are falling, and the world economy is in turmoil. Blame for the current crisis is being bandied about, falling on both the current and former presidents. Personally, I believe that while a lot of the blame falls on our former president, it goes back even further than him. I can't say there's a lot of blame for the current situation that should fall on Obama, though. And before you label me a liberal socialist, let me explain.

First of all, this crisis started before Obama was elected. Once it started, it gained momentum and the economy continued to crumble after Obama took office. If you remember, Bush really didn't do much beyond the bailout to help the situation. In fact, it appears that the bailout itself was a joke. Regardless, since Obama has been in office, things have gotten progressively worse, as expected. Since he's been in office, he has made some missteps, but overall, I think he's done one hell of a job of getting things under control. There's still a lot more to be done, but I think we're generally headed in a positive direction now. The economy will not fix itself overnight, though. We're in this for the long haul and I don't expect things to get better for at least another year or two.

In the meantime, we need to keep an eye on what's happening. Protests are, to be sure, a great way of making lawmakers and citizens aware of the issues. I'm not sure that these "tea parties" are all that useful, though. For starters, the only tax increases I've see thus far are on businesses and people who make a lot more money than I do. I don't make $250,000+ a year, but I'd be willing to pay higher taxes if I did. Of course, I'm sure those that do will be quick to point out that I'm only saying that because I make less. Regardless, I don't see a problem with higher tax rates for those with a higher income. It only seems fair to me.

So before you start sending tea bags to the white house, or protesting in the street, make sure you know who you're helping out if you do.

EDIT: Rachel Maddow barely held it together reporting on this.. I have to provide video:

You got your tax cut in my stimulus!

nospam@example.com (Jason Frisvold) — Fri, 06 Feb 2009 15:05:09 -0500

This whole stimulus thing is getting a bit out of hand now... My wife and I spent some time talking about it last night and I think we both agree that while stimulus is needed, it's being handled very poorly.

From our perspective, the economy works kinda like this. Your average person spends money on necessities such as food, clothing, etc. In a good economy, people tend to splurge a little bit and by better cuts of meat, higher quality clothes, etc. When the economy sours, they tighten the budget a bit and settle for the generic brands. But, no matter how you look at it, the necessities of life continue to be bought and paid for.

Those necessities, in turn, provide income for the local businesses and provide paychecks to the workers. Those workers are often the same people that are paying for the necessities in the first place. And so the cycle goes on. During an economic downturn, businesses don't bring in as much and may have to reduce the workforce in order to stay in business.

So now we have the unemployed. Unemployed people can obtain money to buy necessities in two general ways. First, they can apply for unemployment, assuming they had a previous job for a certain period of time. Or, they can apply for government assistance. The latter is, essentially, free money, though there are often strings attached. Of course, my personal opinion is that there are not nearly enough strings attached, but that's another story.

Now the unemployed have money to get necessities, which pays the workers, etc. The cycle is a little bigger, but still functional. Of course, because these people are unemployed, they tend to save as much as they can, effectively hoarding their money when they can. This is difficult, at best, but they really don't have any other options. The job market dried up because of the bad economy, so getting a job is out of the question.

All of the actors above pay taxes in one form or another. Generally, those on government assistance don't pay taxes because their income is too low, but they still pay sales tax, real estate tax, etc. Those on unemployment still pay normal income tax.

Ok, so once we get into this cycle of tightened budgets and unemployment, how do we break it? Well, the "perfect world" answer is to just spend more. Stop tightening your belts and start spending what you have. And that will work, but it's against human nature. The problem is, FUD (Fear, Uncertainty, and Doubt) are the guiding lights of the times. Fear of losing a job, uncertainty and doubt about the future all help to kickstart our built-in self-preservation instincts. How do we protect ourselves? Well, if we need to have money to survive, we start hoarding whatever we can. That way, we have it later, just in case.

Right, so let's make more money available then. But how? How about tax cuts. If we cut taxes, that reduces the amount people have to pay, giving them more disposable income, right? Yup, exactly right. But, because those people are still unemployed, human nature says they'll merely stuff that new income away with the rest to make sure they can survive for the forseeable future. Make no mistake, tax cuts help, but the average person will just squirrel away the money, not spend it.

How do we get people to spend their money then? We've given them more, but it did little or no good. What will it take? Well, jobs is a good start. A person with a job tends to feel more secure as opposed to one that does not. This is true even if the job they have is not completely secure. The problem is, jobs are scare because no one is spending. Because no one is spending, there's no demand for products. No demand for products means that businesses don't need workers to produce or sell those products, so they don't hire anyone.

Crap! We're still stuck in a rut! What now?

How about we create some jobs? Ok, great. How the hell do we do that? Force manufacturers to make more stuff? Well, you can't really do that, now can you. But we can create demand for products by buying them, right? But we don't want to just buy stuff to create jobs, we should probably put that stuff to good use. And how can we do that? By building and repairing our infrastructure, of course.

If the government spends money on repairing roads, renovating buildings, and other such activities, it creates a demand for raw materials. This, in turn, creates demand for workers both for the manufacturer of the raw material, as well as for the business being tasked with the infrastructure job. Workers get money, spend money, create demand, etc. Overall, this reduces the tightness of the market a bit.

So infrastructure spending is the answer then, right? Well, sort of. From my point of view, we need to attack this thing on multiple fronts. Jobs won't open up instantly, and people still need to survive today. My wife has come up with a plan that she believes will work. Let me lay it out briefly.

First, create a bill that handles the tax cuts. Obama ran on a platform of tax cuts, and this would let him live up to that promise. Simple enough, tax cuts for those making under $250,000 per year. That's it. Nothing else. Push it through and see what happens. Democrats should approve because that was Obamas platform. Republicans should approve because they seem to like tax cuts. Additionally, this gives Obama street cred and political capital to spend later.

Second, create a bill that extends support for those out of work. Add additional time to unemployment benefits. Extend welfare, food stamps, and other government aid. Put a time limit on it! We don't want this forever, just for the immediate future. Push this through. Not sure how much trouble this one would be, but I don't think it would see much contention as there are existing provisions in the current stimulus bill to do this already.

Last, infrastructure. Infrastructure comes in many parts. There's traditional infrastructure such as roads and buildings, park maintenance, etc. That will likely be the destination for most of the stimulus money. Jobs created here would be on road and maintenance crews, industrial jobs, etc.

There are other areas that can be tapped as well. For instance, the existing fleet of vehicles that the government uses can be converted to hybrid and eco-friendly vehicles. Obviously a one-shot replace everything approach would be foolish, but there are likely a lot of vehicles due to be replaced. And, of course, those vehicles need to be built, so car makers have jobs. An added benefit here is increased demand for hybrid/eco-friendly vehicles which can lead to additional research in the area, producing better vehicles, etc.

How about modernizing government buildings? This includes items such as adding infrastructure to the building for network connections, modern telephone equipment, etc. In addition, the buildings can be made "greener" by using alternative lighting, heating, and electricity sources. This adds a benefit of ecological responsibility to the equation. Jobs here would be in construction, HVAC, IT, etc.

And there may be other areas that can be tapped as well. Care has to be taken, however, to prevent foolish spending from being added. First of all, spending that is not directly stimulus related should be ejected altogether. Second, let's concentrate on items that will generate long-term jobs and inject capital into the economy in a rapid manner. So, for instance, as important as some people think digital television convertor boxes are, I don't see this as something that will generate long-term jobs. Screening and preventing STDs? I don't think that has a place here either.

There's a lot to be done, and I think there's a clear path to saving our economy. But, if we squander the opportunity we have now, we may not get another. So please, let's get this right. Let's not have another bank bailout situation.