(previously published in the Terre Haute Tribune Star, 10/9/11
TERRE HAUTE — How will we solve the debt problem? As solutions become framed in simple ways, which seems about the only kind of solutions possible in an age of sound bytes, Twitter, and low-information voters, it comes down to cutting spending or increasing taxes. Generally public opinion seems to support cutting spending and increasing taxes to solve the problem. No wonder the politicians can’t agree.
Of course, public policy gets into more knotty questions than do media polls. Whose taxes to raise? There seems to be overwhelming support on raising the taxes on the rich (whoever they are) but I can’t find any credible polling that asks the question, “are you willing to pay higher taxes.”
What to cut? Americans report that half of government spending is waste. Yet, significant majorities reject cutting the biggest spending: Social Security, Medicare, and the military. If half of government spending is waste, why not cut half of those?
I am concerned that as we reduce everything to the simple (simplistic at times) mechanics of a spreadsheet, that we forget about the impact of these decisions on people. To be really simple about it, raising taxes means taking from those who have it. Our current tax code, apparently, creates a situation in which half of households pay no federal income tax (this is debatable, but this seems to be the “truthiness” fact de jure). Assuming no tax system would actually tax a household into poverty, we can assume any tax increases are going to come from households that can “afford it.”
How about the cuts? Let’s leave aside military spending for a moment and focus on the big “entitlements” — Social Security and Medicare. Does anyone really think that Social Security is lavish? The problems with Social Security are not wastefulness or lavishness, they are largely demographic. When the Baby Boom generation has passed (in 2054 the youngest will turn 90), a good deal of the crisis will be over.
While increased taxes will fall on the “haves” the big cuts will fall onto the “have-nots.” Despite TV commercials that depict today’s seniors as affluent, the facts paint a picture of a more vulnerable population. Consider this statistical portrait from the 2008 Current Population Survey (note, these data are from before the onset of the Great Recession). The median household income for seniors (aged 65-plus) was $18,208; 9.7 percent of seniors fell below the poverty line. Social Security is the most common retirement benefit; 89 percent of senior households receive it. For 68.9 percent, Social Security accounts for half or more of their retirement income. For 26 percent, it is their only income. Average benefits for an elderly couple: $1,877 a month.
But what about pensions and annuities? What about those early retirees with fat stock portfolios? The trend toward early retirement ended in 1985, the trend has since reversed. Only 34.2 percent of seniors receive income from an employer-sponsored retirement plan. And the number of employers offering such plans are decreasing. What about assets? Fifty two percent of seniors derive income from assets. The median income from those assets was $1,054 per year.
What makes up the biggest expenditures for seniors? Not surprisingly, health care, and that is the target of the other big cuts. So, cuts to entitlements would hit a vulnerable population twice. And seniors feel this vulnerability. According to a study published by Demos.org in July 2011, economic insecurity among seniors is on the rise.
For those who say leave the current seniors alone and change these social safety net program for today’s 50 year olds (and younger), I quote from the same study:
In addition to rising costs of essential needs, especially health care and housing, today’s 50-year-olds are much less likely than current seniors to have a defined benefit pension that would provide a life-long secure income. Many of today’s workers are not offered a retirement account of any kind, and for those who do have an employer-sponsored 401(k) or other defined contribution plan, most are woefully underfunded. Social Security remains the primary source of income for most retirees and is the only secure resource guaranteed to provide income throughout retirement for many households (iasp.brandeis.edu/pdfs/From
BadtoWorse.pdf).
Tax increases and spending cuts may be equivalent on the spreadsheet but they are not equivalent on their impact on people. Proponents present them as moral imperatives to rescue our republic. While it may be a moral imperative to reduce the national debt, taxing the “haves” or cutting benefits to the “have-nots” are not moral equivalents.
Sunday, October 9, 2011
Monday, September 12, 2011
A 9/11 essay for the paper that got lost in the ether......
What impact has 9/11 had on the current generation of college students, who were in elementary and middle school 10 years ago? On 9/16/2001 and then two weeks later, another Indiana newspaper published two essays I wrote about 9/11. The first one was somber but hopeful. The press (and I) jumped to name the generation who would be defined by 9/11. The headline for that essay was “In the future, we must become more willing citizens of the world.” I predicted that the 9/11 generation would be dubbed the world citizen generation. I wrote:
If we are to vanquish terrorism as President Bush promised [… ] or to solve this most heinous of crimes as promised by FBI Director Mueller, it will require us to develop ourselves as world citizens. The ways of other people will have to be understood beyond how to sell them products and to exploit their cheap labor. A foreign policy based on human rights or American interests must evolve into a third option … a policy of “world citizenship building” beginning at home and expanding abroad.
I hoped for a more bottom-up movement beginning with young people who would see a third path outside the partisan barricades built by their parents and grand-parents. I envisioned young people intensely and keenly interested in the rest of the world. A generation that would not fail to correctly place Canada, Somalia, Israel, or Tibet on a map and be able to name the political leaders of those countries as well. Don’t go test the first 20-something you find, you’ll be disappointed. When I reread that essay, I shake my head at the gauzy idealism.
Two weeks later another essay was published headlined, “2004: A War on US.” It was a dark, fictional piece, set three years in the future. I wrote it as a warning of what the terrorists were trying to accomplish . As I reread it, unfortunately, some of it rings true today.
I wrote about a new growth in government, the Department of Homeland Security (nailed the name), about incredibly intrusive security (Homeland Security forces checking IDs in church narthexes), a significant economic downturn (surely our enemies weren’t working with Enron), how our dilapidated infrastructure was giving us problems, and that democratic movements had begun in the Arab middle east, although anti-American in sentiment (protesting the presence of over 2 million American troops).
Evidence for the more hopeful future is scanty. College students don’t study abroad as much as they could, but, how much of that has to do with the economy? When the costs are right, they go, and go eagerly. Students talk about joining the Peace Corps after graduation, but I am skeptical whether that has to do with the poor economy, too. After a surge in military recruiting following 9/11, aren’t things pretty much back to normal--exchanging military service for an education? Students volunteering and engaging their communities is increasing, but would it happen if colleges weren’t making volunteering a graduation requirement? Does it matter?
The darker vision, unfortunately, is in more evidence: revelations of torture; secret spying on American communications; plans to data mine Americans’ library and video habits; Abu Ghraib; Guantanomo. Perhaps some of these “un-American” ways also fuel the Tea Party’s wrath? We’ve adjusted with little resistance to increased and invasive searches before flying, to increasing levels of electronic surveillance, to increasing instances where we must prove who we are to more authorities, and while we reviled at Abu Ghraib, we shrug at Guantanomo.
In the end, I think, the effects of 9/11 on the current generation of children who witnessed 9/11 is mixed. I think they may be more curious about the world (beyond tourism) than their parents, but they have accepted as normal a more skewed balance of security over freedom.
If we are to vanquish terrorism as President Bush promised [… ] or to solve this most heinous of crimes as promised by FBI Director Mueller, it will require us to develop ourselves as world citizens. The ways of other people will have to be understood beyond how to sell them products and to exploit their cheap labor. A foreign policy based on human rights or American interests must evolve into a third option … a policy of “world citizenship building” beginning at home and expanding abroad.
I hoped for a more bottom-up movement beginning with young people who would see a third path outside the partisan barricades built by their parents and grand-parents. I envisioned young people intensely and keenly interested in the rest of the world. A generation that would not fail to correctly place Canada, Somalia, Israel, or Tibet on a map and be able to name the political leaders of those countries as well. Don’t go test the first 20-something you find, you’ll be disappointed. When I reread that essay, I shake my head at the gauzy idealism.
Two weeks later another essay was published headlined, “2004: A War on US.” It was a dark, fictional piece, set three years in the future. I wrote it as a warning of what the terrorists were trying to accomplish . As I reread it, unfortunately, some of it rings true today.
I wrote about a new growth in government, the Department of Homeland Security (nailed the name), about incredibly intrusive security (Homeland Security forces checking IDs in church narthexes), a significant economic downturn (surely our enemies weren’t working with Enron), how our dilapidated infrastructure was giving us problems, and that democratic movements had begun in the Arab middle east, although anti-American in sentiment (protesting the presence of over 2 million American troops).
Evidence for the more hopeful future is scanty. College students don’t study abroad as much as they could, but, how much of that has to do with the economy? When the costs are right, they go, and go eagerly. Students talk about joining the Peace Corps after graduation, but I am skeptical whether that has to do with the poor economy, too. After a surge in military recruiting following 9/11, aren’t things pretty much back to normal--exchanging military service for an education? Students volunteering and engaging their communities is increasing, but would it happen if colleges weren’t making volunteering a graduation requirement? Does it matter?
The darker vision, unfortunately, is in more evidence: revelations of torture; secret spying on American communications; plans to data mine Americans’ library and video habits; Abu Ghraib; Guantanomo. Perhaps some of these “un-American” ways also fuel the Tea Party’s wrath? We’ve adjusted with little resistance to increased and invasive searches before flying, to increasing levels of electronic surveillance, to increasing instances where we must prove who we are to more authorities, and while we reviled at Abu Ghraib, we shrug at Guantanomo.
In the end, I think, the effects of 9/11 on the current generation of children who witnessed 9/11 is mixed. I think they may be more curious about the world (beyond tourism) than their parents, but they have accepted as normal a more skewed balance of security over freedom.
Sunday, August 14, 2011
Experiencing the cultural concept of time
previously published in the Terre Haute Tribune Star, 14 August 2011
I spent most of July in Thailand as part of a unique study abroad program. Several ISU faculty and students joined faculty and students from two Chinese universities on a study abroad program focused on sustainable development, experiential learning, and community engagement. Our program moved across Thailand using four different universities as classrooms.
The administrators, faculty and staff from Suan Sunandha Rajabaht University, Chiang Mai Rajabaht University, Pibulsongkram Rajabaht University, and Rajabaht Maha Sarakam University were gracious and most helpful in making our program a success.
Do you experience time as an external force pushing you and others along like a river or the wind? Do you anticipate events, plan, and daydream about doing other things? Do you “chase the clock?” Or do you live in the moment, ignore the clock and focus on the experience? Do you eat when it is time or when you are hungry?
Psychologists tell us that different individuals experience time in different ways, but after nearly three weeks in Thailand, there is a significant cultural effect on how individuals experience time. Psychologists also tell us that daydreaming, reminiscing, and planning instead of “living in the moment” makes us unhappy. Perhaps this explains the seeming happiness and general contentment of the Thai people I met.
For instance, how often do you do one thing while daydreaming of doing another? Countless times this summer as I sat working, I thought, “this is a beautiful day, why am I not outside doing x, y, or z?” How many anticipate the weekend as we trudge through the week?
I asked many of our Thai hosts, as they took us to see Royal agricultural projects or grand historical and cultural sites, “if you weren’t doing this today with us, what would you be doing?” It is not that the words were not understood, but the concept seemed foreign. Each person I asked this answered similarly: “I am here doing this with you.” I don’t think this was Thai niceness, rather, I don’t think Thais comparatively evaluate the passing of time the way we do. “Today I am going with these Americans and Chinese to the Golden Teak Palace.” Whereas, an American might think, “I wonder how Jimmie Johnson is doing in the big race today, which I can’t watch because I am taking these visitors to the local museum.”
Thais are aware that they treat and experience time differently than we time-obsessed Americans. “Thai time” was on plain display when an interpreter asked the convener of the conference we were attending what time things would begin the next morning. The answer was typically Thai: “Definitely 8:30, maybe 9.” The conference began the next day at 8:45. The clock didn’t determine when things began, the conference began when the convener was ready and the speaker was in place, not a moment before or after that. The clock was mostly irrelevant. Schedules were only approximate and changes were not uncommon.
The needs of the moment dictate action. While crossing the country from west to east, the air conditioner in our van broke down. It was hot, and with a van full of people, it was very uncomfortable. Our driver, along with two other vans, all headed into a town to get our AC repaired.
If this were in the U.S., the others would have gone ahead, but we all stuck together. After a refrigerant recharge, we headed off. Thirty minutes later the AC failed again, indicating a need for a more extensive repair. Despite the unlikelihood of getting the AC repaired that day, the driver kept trying. We suggested just continuing on with the windows down, but the need of the moment was to fix the van. The driver kept seeking a repair until both our driver and host sensed the Americans were getting upset, changing the needs of the moment; now the guests were getting restless.
It is important to note, it was the Americans who were getting restless, not the Chinese.
For a few hours today I lived in the moment. I went for an early morning paddle on the Wabash. I didn’t think about the work I “should” be doing or the workplace crisis of the moment. Just what was in front of me, a heron or an eagle, the smooth glide of my kayak as it cut through the murky Wabash waters, and I deliberately forgot my watch.
Time was marked by putting the kayak in and taking it out of the water
I spent most of July in Thailand as part of a unique study abroad program. Several ISU faculty and students joined faculty and students from two Chinese universities on a study abroad program focused on sustainable development, experiential learning, and community engagement. Our program moved across Thailand using four different universities as classrooms.
The administrators, faculty and staff from Suan Sunandha Rajabaht University, Chiang Mai Rajabaht University, Pibulsongkram Rajabaht University, and Rajabaht Maha Sarakam University were gracious and most helpful in making our program a success.
Do you experience time as an external force pushing you and others along like a river or the wind? Do you anticipate events, plan, and daydream about doing other things? Do you “chase the clock?” Or do you live in the moment, ignore the clock and focus on the experience? Do you eat when it is time or when you are hungry?
Psychologists tell us that different individuals experience time in different ways, but after nearly three weeks in Thailand, there is a significant cultural effect on how individuals experience time. Psychologists also tell us that daydreaming, reminiscing, and planning instead of “living in the moment” makes us unhappy. Perhaps this explains the seeming happiness and general contentment of the Thai people I met.
For instance, how often do you do one thing while daydreaming of doing another? Countless times this summer as I sat working, I thought, “this is a beautiful day, why am I not outside doing x, y, or z?” How many anticipate the weekend as we trudge through the week?
I asked many of our Thai hosts, as they took us to see Royal agricultural projects or grand historical and cultural sites, “if you weren’t doing this today with us, what would you be doing?” It is not that the words were not understood, but the concept seemed foreign. Each person I asked this answered similarly: “I am here doing this with you.” I don’t think this was Thai niceness, rather, I don’t think Thais comparatively evaluate the passing of time the way we do. “Today I am going with these Americans and Chinese to the Golden Teak Palace.” Whereas, an American might think, “I wonder how Jimmie Johnson is doing in the big race today, which I can’t watch because I am taking these visitors to the local museum.”
Thais are aware that they treat and experience time differently than we time-obsessed Americans. “Thai time” was on plain display when an interpreter asked the convener of the conference we were attending what time things would begin the next morning. The answer was typically Thai: “Definitely 8:30, maybe 9.” The conference began the next day at 8:45. The clock didn’t determine when things began, the conference began when the convener was ready and the speaker was in place, not a moment before or after that. The clock was mostly irrelevant. Schedules were only approximate and changes were not uncommon.
The needs of the moment dictate action. While crossing the country from west to east, the air conditioner in our van broke down. It was hot, and with a van full of people, it was very uncomfortable. Our driver, along with two other vans, all headed into a town to get our AC repaired.
If this were in the U.S., the others would have gone ahead, but we all stuck together. After a refrigerant recharge, we headed off. Thirty minutes later the AC failed again, indicating a need for a more extensive repair. Despite the unlikelihood of getting the AC repaired that day, the driver kept trying. We suggested just continuing on with the windows down, but the need of the moment was to fix the van. The driver kept seeking a repair until both our driver and host sensed the Americans were getting upset, changing the needs of the moment; now the guests were getting restless.
It is important to note, it was the Americans who were getting restless, not the Chinese.
For a few hours today I lived in the moment. I went for an early morning paddle on the Wabash. I didn’t think about the work I “should” be doing or the workplace crisis of the moment. Just what was in front of me, a heron or an eagle, the smooth glide of my kayak as it cut through the murky Wabash waters, and I deliberately forgot my watch.
Time was marked by putting the kayak in and taking it out of the water
Sunday, July 10, 2011
What is the ‘business’ of our government?
Previously published in the terre Haute Tribune Star
Does the federal government need to be run like a business or by businessmen? According to a CBS News Poll (May 20-23, 2011) 75 percent of respondents said “large corporations” have too much influence on American life and politics today. “Business” is the most common occupation of members of Congress followed by lawyer (corporate lawyers?). Today, former occupation seems less meaningful than party label in working together and finding common ground.
This isn’t the first time that the business model has been held out as the solution to our frustration with the political process. The debate over running government more like a business or by business owners/managers usually centers on the differences in what government does and what businesses do. One thing seems clear, when it comes to debt, government, business, and families, are piling it on and on and on. The national debt might be over $14 trillion, but total individual, corporate and government debt is hovering around $57 trillion (Grand
father_economic_
report.com).
Our love affair with debt began in the early 1980s.
Nevertheless, serious people running for president hold up the business model as the solution to our various political, economic and social problems.
What is the goal or mission of the U.S. government? The preamble to the Constitution is the mission statement: “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.” Compare that to Ford Motor Co.’s: “We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.” Lest we forget what the bottom line of business is, I appreciate Dean Food’s no-nonsense mission statement: “The Company’s primary objective is to maximize long-term stockholder value, while adhering to the laws of the jurisdictions in which it operates and at all times observing the highest ethical standards.”
Manufacturing and selling cars at a profit is a more focused and arguably an easier goal to accomplish than perfecting the Union, establishing justice, insuring tranquility, providing for the common defense … you get the point.
The CEO of Ford can fire employees who don’t contribute to achieving the company’s mission. The U.S. president can’t fire Congress or the Supreme Court. We can argue whether the services government provides could be better provided by private enterprise, but an alternative to the current government requires a revolution.
A business owner can borrow money to expand or to invest in new technology to raise productivity. If the investment fails, the owner might be out of business. The U.S. president can borrow, too, but government can’t really go out of business although the president may be voted out of office. A business can try to change its customers by changing the mix of product or services. The president serves all citizens (or is supposed to). And while some in government seem to treat “the people” like employees, no matter how much a president might want to, citizens can’t be fired. CEO’s usually don’t tolerate employees working against them. U.S. presidents have no choice.
In many ways, clergy might have a better occupational skill set for being president than business executives, lawyers, physicians or school teachers (all former occupations of current members of Congress). Clergy head up voluntary associations with a broad and diverse mission similar to government. Managing and negotiating change in the church is challenging and dealing with factions a common occurrence. Experience organizing people for the “greater good” is an ongoing activity for religious leaders, not unlike what a president is expected to do.
President George W. Bush, the first president with an MBA, was an oil executive and owner of the Texas Rangers. His vice president also was a former CEO and at least six of his cabinet members were former CEOs. How soon we forget.
One interest group every Washington politician “owes” is their political party. Seems the primary goal of the political parties is to gain power and thwart the other side. Too many politicians focus on securing their party’s interests over those of the state, over the people, and over any sense of the common good.
Does the federal government need to be run like a business or by businessmen? According to a CBS News Poll (May 20-23, 2011) 75 percent of respondents said “large corporations” have too much influence on American life and politics today. “Business” is the most common occupation of members of Congress followed by lawyer (corporate lawyers?). Today, former occupation seems less meaningful than party label in working together and finding common ground.
This isn’t the first time that the business model has been held out as the solution to our frustration with the political process. The debate over running government more like a business or by business owners/managers usually centers on the differences in what government does and what businesses do. One thing seems clear, when it comes to debt, government, business, and families, are piling it on and on and on. The national debt might be over $14 trillion, but total individual, corporate and government debt is hovering around $57 trillion (Grand
father_economic_
report.com).
Our love affair with debt began in the early 1980s.
Nevertheless, serious people running for president hold up the business model as the solution to our various political, economic and social problems.
What is the goal or mission of the U.S. government? The preamble to the Constitution is the mission statement: “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.” Compare that to Ford Motor Co.’s: “We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.” Lest we forget what the bottom line of business is, I appreciate Dean Food’s no-nonsense mission statement: “The Company’s primary objective is to maximize long-term stockholder value, while adhering to the laws of the jurisdictions in which it operates and at all times observing the highest ethical standards.”
Manufacturing and selling cars at a profit is a more focused and arguably an easier goal to accomplish than perfecting the Union, establishing justice, insuring tranquility, providing for the common defense … you get the point.
The CEO of Ford can fire employees who don’t contribute to achieving the company’s mission. The U.S. president can’t fire Congress or the Supreme Court. We can argue whether the services government provides could be better provided by private enterprise, but an alternative to the current government requires a revolution.
A business owner can borrow money to expand or to invest in new technology to raise productivity. If the investment fails, the owner might be out of business. The U.S. president can borrow, too, but government can’t really go out of business although the president may be voted out of office. A business can try to change its customers by changing the mix of product or services. The president serves all citizens (or is supposed to). And while some in government seem to treat “the people” like employees, no matter how much a president might want to, citizens can’t be fired. CEO’s usually don’t tolerate employees working against them. U.S. presidents have no choice.
In many ways, clergy might have a better occupational skill set for being president than business executives, lawyers, physicians or school teachers (all former occupations of current members of Congress). Clergy head up voluntary associations with a broad and diverse mission similar to government. Managing and negotiating change in the church is challenging and dealing with factions a common occurrence. Experience organizing people for the “greater good” is an ongoing activity for religious leaders, not unlike what a president is expected to do.
President George W. Bush, the first president with an MBA, was an oil executive and owner of the Texas Rangers. His vice president also was a former CEO and at least six of his cabinet members were former CEOs. How soon we forget.
One interest group every Washington politician “owes” is their political party. Seems the primary goal of the political parties is to gain power and thwart the other side. Too many politicians focus on securing their party’s interests over those of the state, over the people, and over any sense of the common good.
Sunday, June 5, 2011
Why not cut tax loopholes and spec interest deductions?
Previously published on June 5, 2011 in the Terre Haute Tribune Star
I’m confused. I thought Republicans were all about low taxes. Why then is it a problem that only half of income tax filers are paying any income taxes? Isn’t this a good thing for a party that preaches a gospel of low taxes?
Eric Cantor, House Majority Leader, is, as politicians do, willing to “sin” if it can be called something else. (To be fair, President Obama sought to decrease taxes on low-income families rather than creating a “spending” program to address those challenges.) Cantor signaled his willingness to eliminate loopholes and special interest tax deductions to create a “pro-growth tax proposal” that would modestly increase revenues. As is usually the case, specifics are missing, which “loopholes” and “special interest deductions?”
Tax-cutting mania began in 2001 with the “Bush tax cuts.” These cuts reduced tax rates across all income groups. It also created additional ways to reduce taxable income through contributions to retirement plans and increased the standard deductions for those married but filing jointly. The Heritage Foundation, at the time, proclaimed a panacea of good outcomes by 2010 resulting from this major tax stimulus plan (remember they were meant to be temporary until the economy picked up):
n Under President Bush’s plan, an average family of four’s inflation-adjusted disposable income would increase by $4,544 in fiscal year (FY) 2011, and the national debt would effectively be paid off by FY 2010.
n The net tax revenue reduction, after accounting for the larger tax base that would result from higher employment and faster economic growth under the Bush plan, is $1.1 trillion from FY 2002 to FY 2011, 33.4 percent less than conventional static estimates.
n The plan would save the entire Social Security surplus and increase personal savings while the federal government accumulated $1.8 trillion in uncommitted funds from FY 2008 to FY 2011, revenue that could be used to reform the Social Security and Medicare systems and reduce the payroll tax.
I didn’t see any concern that these cuts might produce a situation, a decade later, where half of filers paid no taxes. These predictions were prior to 9/11, two wars paid for with borrowed money, and the financial meltdown of 2008. Keep such things in mind when rosy predictions for the future for other major, if not radical, changes are offered from ideological think tanks.
The “average family of four” seems to be the benchmark for profiling the middle class. Deloitte Tax shows how the average family of four paid no income taxes in this last tax year:
n $50,000 minus (the standard deduction of $11,400 and four personal exemptions of $3,650 each — $14,600) equals $24,000. Federal income tax liability on $24,000 is $2,769. But with two kids under 17, the family qualifies for two $1,000 child tax credits. President Obama’s “Making Work Pay” credit adds $800 because the parents filed jointly. Result? A $31 check from the IRS.
According to Walletpop.com the five most common deductions are as follows: 1) home mortgage interest; 2) charitable donations; 3) income taxes paid to state, county, and municipalities; 4) real estate taxes paid; and 5) medical and dental expenses. The five most common tax credits, according to Walletpop.com are as follows: 1) child and dependent care expenses; 2) education credits; 3) earned income tax credit; 4) first-time homebuyer credit; and 5) the Making Work Pay credit.
Are any of these the “loopholes” or “special interest deductions” that House Majority Leader Cantor indicated the elimination of to create a “pro-growth tax proposal?” Two deductions and one credit are for housing. Is the special interest group homeowners or the construction and real estate industries? Or both? The Making Work Pay credit is for low-income filers; don’t charitable contributions benefit them, too? How about the 41 states with income taxes (whose residents can deduct from their federal income taxes)?
I agree with Mr. Cantor. Let’s eliminate all the special interest deductions and loopholes from the income tax codes (for both individuals and businesses). Here is how we can identify the special interests: if there is a lobbying organization or any group funneling money to politicians or who fund issue advertising that favor a credit or deduction, that is a special interest and it goes. Bye-bye mortgage interest deductions, ethanol subsidies, agricultural subsidies, education credits and the deduction for charitable contributions. And many, many, more.
I’m confused. I thought Republicans were all about low taxes. Why then is it a problem that only half of income tax filers are paying any income taxes? Isn’t this a good thing for a party that preaches a gospel of low taxes?
Eric Cantor, House Majority Leader, is, as politicians do, willing to “sin” if it can be called something else. (To be fair, President Obama sought to decrease taxes on low-income families rather than creating a “spending” program to address those challenges.) Cantor signaled his willingness to eliminate loopholes and special interest tax deductions to create a “pro-growth tax proposal” that would modestly increase revenues. As is usually the case, specifics are missing, which “loopholes” and “special interest deductions?”
Tax-cutting mania began in 2001 with the “Bush tax cuts.” These cuts reduced tax rates across all income groups. It also created additional ways to reduce taxable income through contributions to retirement plans and increased the standard deductions for those married but filing jointly. The Heritage Foundation, at the time, proclaimed a panacea of good outcomes by 2010 resulting from this major tax stimulus plan (remember they were meant to be temporary until the economy picked up):
n Under President Bush’s plan, an average family of four’s inflation-adjusted disposable income would increase by $4,544 in fiscal year (FY) 2011, and the national debt would effectively be paid off by FY 2010.
n The net tax revenue reduction, after accounting for the larger tax base that would result from higher employment and faster economic growth under the Bush plan, is $1.1 trillion from FY 2002 to FY 2011, 33.4 percent less than conventional static estimates.
n The plan would save the entire Social Security surplus and increase personal savings while the federal government accumulated $1.8 trillion in uncommitted funds from FY 2008 to FY 2011, revenue that could be used to reform the Social Security and Medicare systems and reduce the payroll tax.
I didn’t see any concern that these cuts might produce a situation, a decade later, where half of filers paid no taxes. These predictions were prior to 9/11, two wars paid for with borrowed money, and the financial meltdown of 2008. Keep such things in mind when rosy predictions for the future for other major, if not radical, changes are offered from ideological think tanks.
The “average family of four” seems to be the benchmark for profiling the middle class. Deloitte Tax shows how the average family of four paid no income taxes in this last tax year:
n $50,000 minus (the standard deduction of $11,400 and four personal exemptions of $3,650 each — $14,600) equals $24,000. Federal income tax liability on $24,000 is $2,769. But with two kids under 17, the family qualifies for two $1,000 child tax credits. President Obama’s “Making Work Pay” credit adds $800 because the parents filed jointly. Result? A $31 check from the IRS.
According to Walletpop.com the five most common deductions are as follows: 1) home mortgage interest; 2) charitable donations; 3) income taxes paid to state, county, and municipalities; 4) real estate taxes paid; and 5) medical and dental expenses. The five most common tax credits, according to Walletpop.com are as follows: 1) child and dependent care expenses; 2) education credits; 3) earned income tax credit; 4) first-time homebuyer credit; and 5) the Making Work Pay credit.
Are any of these the “loopholes” or “special interest deductions” that House Majority Leader Cantor indicated the elimination of to create a “pro-growth tax proposal?” Two deductions and one credit are for housing. Is the special interest group homeowners or the construction and real estate industries? Or both? The Making Work Pay credit is for low-income filers; don’t charitable contributions benefit them, too? How about the 41 states with income taxes (whose residents can deduct from their federal income taxes)?
I agree with Mr. Cantor. Let’s eliminate all the special interest deductions and loopholes from the income tax codes (for both individuals and businesses). Here is how we can identify the special interests: if there is a lobbying organization or any group funneling money to politicians or who fund issue advertising that favor a credit or deduction, that is a special interest and it goes. Bye-bye mortgage interest deductions, ethanol subsidies, agricultural subsidies, education credits and the deduction for charitable contributions. And many, many, more.
Sunday, May 29, 2011
STEIGER COUNTER: Exploring the sights, cuisine of Vietnam, Korea
Previously published in the Terre Haute Tribune-Star, 5/29/11
TERRE HAUTE — Last month I traveled to Vietnam and Korea on ISU business. We were fortunate that our travel schedule permitted time to explore the environs around our hotels, a chance to experience Hanoi, Ho Chi Minh City (formerly Saigon), and Seoul, on foot.
Walking in Hanoi and Ho Chi Minh City is not like walking in New York, Chicago, or even Terre Haute. At 6 a.m., Hanoi comes alive. As the train rolled into the nearby station, the scooters begin moving. At times, it seems the entire population is in motion, mostly on scooters. There isn’t much traffic control in Hanoi and the scooter drivers don’t pay attention to it anyway, including driving on the sidewalks. Pedestrians beware! Hanoi is a traffic libertarian’s dream.
A student from Hanoi or Ho Chi Minh City would find Terre Haute “familiar.” The French influence was once very strong in Vietnam. No more. Despite our difficulty deciphering signs (few were in English), we did quickly figure out that the ornate French buildings were government and Communist party buildings. The Vigo County courthouse, other than its colors, will look familiar to our future Vietnamese students.
Both Hanoi and Ho Chi Minh City are on rivers. Ho Chi Minh City had a busy waterfront and the Saigon River is a major transportation artery. We negotiated an hour-long river tour on a rickety, leaky, wheezy engined boat (plus a refreshment) for about $10. On one side of the river was a modern city with one of the most beautiful new skyscrapers I’ve ever seen. The other side of the river was “struggling.” We turned up a creek and it was like transporting back to a “simpler” time. Within sight of a modern city were people living with no plumbing, maybe a generator, and eating what they caught from the river. Sound familiar?
Our first stop in Hanoi was at the U.S. Embassy where embassy officials, among other suggestions, warned us off eating at the street cafes and to avoid fresh, uncooked vegetables, lest we tempt dire gastronomic reactions. When I visit another country, I don’t want to eat where tourists eat. I’d rather eat where the “locals” eat for a more “authentic” cuisine (not made for tourists). So, I ask hotel staff to recommend places for me, but always with a qualifier, “where do you eat?” The assumption being they’d eat their local “authentic” cuisine.
Just around the corner from our hotel, we found this Vietnamese restaurant complete with a bar and a white table cloth dining room, but we chose the outdoor patio dining, complete with child-size plastic chairs and tables. (Somehow I doubt the embassy would have approved.) I’m just over six feet and 200-plus pounds and I could hear some snickers as I sat on my kindergarten-sized chair. No one spoke English, menus were in Vietnamese and without pictures. We pointed to what other patrons were having and enjoyed a nice Vietnamese dinner complete with ice for our beer. We didn’t intend to become “regulars” there, but the other restaurants were Chinese, Indian, or KFC (common in Vietnam). It was even harder to find a Vietnamese restaurant (U.S. embassy approved, anyway) in Ho Chi Minh City. There you can eat in a German bierhaus, Thai, Chinese, Indian, even a place that had cheeseburgers, and KFC.
In graduate school I had several Korean friends who introduced me to many spicy and pungent foods. In Seoul we found Japanese, Chinese, and Indian restaurants, Dunkin Donuts, and Outback Steakhouses. Some colleagues took us to lunch at an upscale Korean buffet complete with spaghetti, broccoli cheese soup, New York cheesecake, sushi, and a Korean cold salad of baby octopus and cucumbers. Our quest for biminbap was achieved when our colleague in Seoul took us to a small second-floor walkup Korean restaurant.
What will Vietnamese students think of Terre Haute’s cuisine? If one asked me for a recommendation of a good restaurant, but one where I eat, presumably for authentic American (Terre Haute) cuisine, do I say La Isla? “American food” is from all over the globe. Sure American food is a big steak and a potato, a hamburger, and chicken fried steak with mashed potatoes. Yet, so is the Chinese buffet, the pizzeria, Pino’s, and The Saratoga. What about the Umi Grill?
I erred in thinking that local Vietnamese and Koreans would show an ethnic allegiance to their cuisine. I don’t. So why should I expect them to.
TERRE HAUTE — Last month I traveled to Vietnam and Korea on ISU business. We were fortunate that our travel schedule permitted time to explore the environs around our hotels, a chance to experience Hanoi, Ho Chi Minh City (formerly Saigon), and Seoul, on foot.
Walking in Hanoi and Ho Chi Minh City is not like walking in New York, Chicago, or even Terre Haute. At 6 a.m., Hanoi comes alive. As the train rolled into the nearby station, the scooters begin moving. At times, it seems the entire population is in motion, mostly on scooters. There isn’t much traffic control in Hanoi and the scooter drivers don’t pay attention to it anyway, including driving on the sidewalks. Pedestrians beware! Hanoi is a traffic libertarian’s dream.
A student from Hanoi or Ho Chi Minh City would find Terre Haute “familiar.” The French influence was once very strong in Vietnam. No more. Despite our difficulty deciphering signs (few were in English), we did quickly figure out that the ornate French buildings were government and Communist party buildings. The Vigo County courthouse, other than its colors, will look familiar to our future Vietnamese students.
Both Hanoi and Ho Chi Minh City are on rivers. Ho Chi Minh City had a busy waterfront and the Saigon River is a major transportation artery. We negotiated an hour-long river tour on a rickety, leaky, wheezy engined boat (plus a refreshment) for about $10. On one side of the river was a modern city with one of the most beautiful new skyscrapers I’ve ever seen. The other side of the river was “struggling.” We turned up a creek and it was like transporting back to a “simpler” time. Within sight of a modern city were people living with no plumbing, maybe a generator, and eating what they caught from the river. Sound familiar?
Our first stop in Hanoi was at the U.S. Embassy where embassy officials, among other suggestions, warned us off eating at the street cafes and to avoid fresh, uncooked vegetables, lest we tempt dire gastronomic reactions. When I visit another country, I don’t want to eat where tourists eat. I’d rather eat where the “locals” eat for a more “authentic” cuisine (not made for tourists). So, I ask hotel staff to recommend places for me, but always with a qualifier, “where do you eat?” The assumption being they’d eat their local “authentic” cuisine.
Just around the corner from our hotel, we found this Vietnamese restaurant complete with a bar and a white table cloth dining room, but we chose the outdoor patio dining, complete with child-size plastic chairs and tables. (Somehow I doubt the embassy would have approved.) I’m just over six feet and 200-plus pounds and I could hear some snickers as I sat on my kindergarten-sized chair. No one spoke English, menus were in Vietnamese and without pictures. We pointed to what other patrons were having and enjoyed a nice Vietnamese dinner complete with ice for our beer. We didn’t intend to become “regulars” there, but the other restaurants were Chinese, Indian, or KFC (common in Vietnam). It was even harder to find a Vietnamese restaurant (U.S. embassy approved, anyway) in Ho Chi Minh City. There you can eat in a German bierhaus, Thai, Chinese, Indian, even a place that had cheeseburgers, and KFC.
In graduate school I had several Korean friends who introduced me to many spicy and pungent foods. In Seoul we found Japanese, Chinese, and Indian restaurants, Dunkin Donuts, and Outback Steakhouses. Some colleagues took us to lunch at an upscale Korean buffet complete with spaghetti, broccoli cheese soup, New York cheesecake, sushi, and a Korean cold salad of baby octopus and cucumbers. Our quest for biminbap was achieved when our colleague in Seoul took us to a small second-floor walkup Korean restaurant.
What will Vietnamese students think of Terre Haute’s cuisine? If one asked me for a recommendation of a good restaurant, but one where I eat, presumably for authentic American (Terre Haute) cuisine, do I say La Isla? “American food” is from all over the globe. Sure American food is a big steak and a potato, a hamburger, and chicken fried steak with mashed potatoes. Yet, so is the Chinese buffet, the pizzeria, Pino’s, and The Saratoga. What about the Umi Grill?
I erred in thinking that local Vietnamese and Koreans would show an ethnic allegiance to their cuisine. I don’t. So why should I expect them to.
Monday, April 25, 2011
THE STEIGER REPORT: Imagine being able to designate where your taxes go
Previously published in the Terre Haute Tribune Star, 4/24/2011
TERRE HAUTE — Earlier this month, the U.S. Supreme Court ruled in Arizona Christian School Tuition Organization v. Winn that permitting individuals to divert $500 of their income taxes ($1,000 for a couple) to a Christian State Tuition Organization was legal.
You read that correctly, tax money going to a Christian State Tuition Organization (individuals can contribute money to such an organization which in turn then supports the tuition of students attending Christian schools). No, this essay is not about “What about Jewish, Muslim, or Hindu State Tuition Organizations?”
Neither is this essay about what appears to be an obvious violation of the establishment clause of the Constitution. That could be the case. The Supremes didn’t address that. Instead, they ruled that the taxpayers who brought the suit did not have standing to do so. They punted the whole question of the establishment clause but probably made it very hard for anyone else to challenge such arrangements as “taxpayers.” Perhaps when Arizona refuses to recognize a Wiccan State Tuition Organization tax credit and a Wiccan brings suit, the Supremes will be forced to address the more obvious problem with the arrangement.
And neither is this essay about the ongoing march of the Roberts court to narrow access of citizens (unless they have property rights) to the courts for constitutional grievances.
This essay is about something completely different. It is about the radical idea of letting we taxpayers designate where our personal tax monies go in our respective state budgets.
Think about it. Empower taxpayers to designate each year the proportional distribution of our taxes to the state budget. Instead of trusting our ridiculous politicians to be statesmen or to balance interests, we could relieve them of that burden (and power). If politicians believe we can navigate complicated things like a retirement investment portfolio, mutual funds, and Medicare Part D (and our tax forms) why not let us designate how much each of our personal dollars goes to education, public safety, road repair, poor relief, and parks and recreation?
If we extend this to the federal level we, the taxpayers, could directly decide how much of our personal taxes go for corn subsidies, sugar subsidies, oil company subsidies, or for research, environmental protection, food and drug safety, education, Medicare and Medicaid.
Admit it, this is a great idea. The more concentrated is the power to make these decisions, the easier it is for special interests to influence (or buy) our money! Some expensive tickets and a ride on fancy corporate jets seem enough to buy the votes of many legislators, but try buying the favors of 100 million taxpayers.
No doubt special interests would run all kinds of campaigns to woo we controllers of the purse strings, but they would have to do it in the open, and while it may appear sleazy for our legislators to be seen in the company of lobbyists, the same would not be true for we individual taxpayers, since it is OUR money, not theirs.
Few dispute the upside of large group decision-making (some call it the market). There are probably about 100 million taxpayers; who are we to say they are wrong if they decided to defund corporate welfare but fund earned benefits like Social Security and Medicare?
Screw the polls. Politicians read them self-servingly anyway, and they seem to read elections even worse. Look at the overreach of the Democrats following 2008 and now we are seeing the overreach of the Republicans in 2010. Give us, the voters and taxpayers, the power to fund or defund, not indirectly through rigged elections but directly through control of our personal taxes. Talk about local control!
The fact is that not nearly as many people vote as could, but I bet if people could designate how their tax monies were to be spent, we’d see virtually 100 percent participation in that.
Both conservatives and liberals rally to the call of “power to the people.” The politicians in charge may change, but are we satisfied with the results? If we could designate how our individual tax monies are spent, we would have no one but ourselves to blame. To a large extent, the politicians would be irrelevant (and wouldn’t that be a good thing?) and instead, our neighbors become much more relevant. (All the more reason to get to know them!)
I imagine the day when I can decide: more money for lower tuition at our colleges and universities or more money for another weapons system that the Pentagon doesn’t want?
TERRE HAUTE — Earlier this month, the U.S. Supreme Court ruled in Arizona Christian School Tuition Organization v. Winn that permitting individuals to divert $500 of their income taxes ($1,000 for a couple) to a Christian State Tuition Organization was legal.
You read that correctly, tax money going to a Christian State Tuition Organization (individuals can contribute money to such an organization which in turn then supports the tuition of students attending Christian schools). No, this essay is not about “What about Jewish, Muslim, or Hindu State Tuition Organizations?”
Neither is this essay about what appears to be an obvious violation of the establishment clause of the Constitution. That could be the case. The Supremes didn’t address that. Instead, they ruled that the taxpayers who brought the suit did not have standing to do so. They punted the whole question of the establishment clause but probably made it very hard for anyone else to challenge such arrangements as “taxpayers.” Perhaps when Arizona refuses to recognize a Wiccan State Tuition Organization tax credit and a Wiccan brings suit, the Supremes will be forced to address the more obvious problem with the arrangement.
And neither is this essay about the ongoing march of the Roberts court to narrow access of citizens (unless they have property rights) to the courts for constitutional grievances.
This essay is about something completely different. It is about the radical idea of letting we taxpayers designate where our personal tax monies go in our respective state budgets.
Think about it. Empower taxpayers to designate each year the proportional distribution of our taxes to the state budget. Instead of trusting our ridiculous politicians to be statesmen or to balance interests, we could relieve them of that burden (and power). If politicians believe we can navigate complicated things like a retirement investment portfolio, mutual funds, and Medicare Part D (and our tax forms) why not let us designate how much each of our personal dollars goes to education, public safety, road repair, poor relief, and parks and recreation?
If we extend this to the federal level we, the taxpayers, could directly decide how much of our personal taxes go for corn subsidies, sugar subsidies, oil company subsidies, or for research, environmental protection, food and drug safety, education, Medicare and Medicaid.
Admit it, this is a great idea. The more concentrated is the power to make these decisions, the easier it is for special interests to influence (or buy) our money! Some expensive tickets and a ride on fancy corporate jets seem enough to buy the votes of many legislators, but try buying the favors of 100 million taxpayers.
No doubt special interests would run all kinds of campaigns to woo we controllers of the purse strings, but they would have to do it in the open, and while it may appear sleazy for our legislators to be seen in the company of lobbyists, the same would not be true for we individual taxpayers, since it is OUR money, not theirs.
Few dispute the upside of large group decision-making (some call it the market). There are probably about 100 million taxpayers; who are we to say they are wrong if they decided to defund corporate welfare but fund earned benefits like Social Security and Medicare?
Screw the polls. Politicians read them self-servingly anyway, and they seem to read elections even worse. Look at the overreach of the Democrats following 2008 and now we are seeing the overreach of the Republicans in 2010. Give us, the voters and taxpayers, the power to fund or defund, not indirectly through rigged elections but directly through control of our personal taxes. Talk about local control!
The fact is that not nearly as many people vote as could, but I bet if people could designate how their tax monies were to be spent, we’d see virtually 100 percent participation in that.
Both conservatives and liberals rally to the call of “power to the people.” The politicians in charge may change, but are we satisfied with the results? If we could designate how our individual tax monies are spent, we would have no one but ourselves to blame. To a large extent, the politicians would be irrelevant (and wouldn’t that be a good thing?) and instead, our neighbors become much more relevant. (All the more reason to get to know them!)
I imagine the day when I can decide: more money for lower tuition at our colleges and universities or more money for another weapons system that the Pentagon doesn’t want?
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