Random Stuff
I’m taking a page from my compadre and posting a few random thoughts about the economy and the runoff election in Georgia.
First, there was a report issued by the National Bureau of Economic Research that states the US has been in a recession since December of 2007. That’s right, it’s taken almost a year for the NBER to figure out what the American public has known for quite some time. What was it that clued them in? Was the housing crash? The financial crisis/credit crunch? The drop in the Dow? Hard to believe that these academics are almost a year late in determining that we are in a recession. Further proof that you college folks shouldn’t take everything your professors say as gospel. Do they teach you some good stuff? Yes. Are they the foremost experts on every economical and political issue? No. They spend too much time patting themselves on the back for their perceived intellectual prowess to realize what’s going on in the real world.
Up next: Ford. Ford’s CEO, Alan Mulally, must have giant brass balls. He has stated that he will work for only $1 a year if the government supplies them with bailout dollars to keep the company afloat. That’s a very generous gesture. I’m assuming that it would be modeled after Ed Liddy’s contract at AIG ($1 in salary but loads of company stock). Here’s the problem. If Mulally really wanted to see Ford succeed, he would have cut executive salaries and reduced his own salary long before Ford hit rock bottom. Instead, he has waited until it looks like his company might not get the tax payers money and made one last desperate grab at our money. He sacrificed everything he could before he was willing to cut his own bloated salary. And anything over $0 is bloated for a man who has helped destroy one of the largest companies in the world through poor management. Sadly, I think that Congress will fall for this move and give Ford and the other automakers $25 billion of our money.
Finally, Georgia held its runoff election today between Democrat Jim Martin and incumbent Republican Saxby Chambliss. As of 9PM, Chambliss leads Martin 59% to 41% (50% of precincts reporting). This lead is good for 2 reasons. First, if Saxby retains his seat, then the Democrats will not have a super majority in the Senate. This is good for the long term health of our country. Nothing would be worse than a liberal president and more than enough votes in the Congress to back anything he wants to do (like expand social programs and government run health care). Second, and perhaps most importantly, there will be no more Chambliss and Martin campaign ads on TV. And after enduring 6 months of these ads, I’m sick of seeing them.
The Truth About the FairTax
Like my cohort mentioned in his last post, Democrats in Georgia (and likely in other states as well) are using inaccurate or incomplete information regarding the FairTax to misrepresent their opponents position regarding taxes. Since many Americans simply don’t bother to educate themselves on the issues in an election, most will see this ad and think that Saxby Chambliss wants to increases taxes by increasing the sales tax. And that’s not the case. Here’s a brief explanation of the FairTax. Eventually, I’ll do a detailed post (maybe around April 15th), but for now, here’s the basics.
The first thing you should know is our current tax code is incredibly complex. If you don’t believe me, try doing your taxes by hand next year (using Turbo Tax doesn’t count as “by hand”). The code is written in several thousand pages and can be confusing even for the smartest CPA’s to follow and know all the ins and outs of the code. The FairTax would eliminate all those complexities. It’s very simple to understand and easy to follow. When signed into law, the FairTax would repeal the: individual income tax, the alternative minimum tax (AMT), corporate and business income taxes, capital gains taxes, social security taxes, medicare taxes, the self-employment tax, estate taxes and gift taxes. All of those taxes (and the associated tax codes) would be replaced by a simple consumption tax – a single-rate sales tax on new goods and services.
This single-rate tax will be about 23%. Consumers will pay an embedded personal consumption tax (the 23%) at the retail level (it will not be imposed on the sale of used goods). Now you are probably saying “So the price of goods will go up 23% – how is this good?” Well, that’s not the case. Under the current tax code, companies are required to pay a corporate income tax. I hate to break it to you, but companies don’t pay income taxes – you pay them for the company. Companies embed their taxes in the price of the goods they sell (much like your trash pick-up company passed along the increased cost of gas to you by raising rates), so they are able to pass along their tax burden to you.
Under the FairTax, companies would no longer pay corporate income taxes. If they aren’t paying those taxes, then they have nothing to pass along to the consumer (you and I). By not having these corporate taxes (and some other stuff) embedded in the price of the goods you buy, the price of goods would drop by roughly 23%. Now where have we heard 23% before? That’s right! The tax rate of the FairTax is 23%. So, while you would see a 23% sales tax on goods, the price of goods would not increase (they would most likely drop slightly) under the FairTax plan.
Now, I haven’t gone through the full FairTax plan, but that’s by design. I just wanted to address the incomplete information in Jim Martin’s campaign ad. Jim Martin is correct that the FairTax plan supported by Saxby Chambliss will implement a 23% increase on everything we buy. What it leaves out is that this same plan will abolish the income tax burden on corporations – a burden they pass along to you and I. By eliminating this, the prices of goods and services will drop by roughly 23% (if not more). So the 23% would be a wash in terms of the price you will be charged for retail goods.
Be on the aware America – politicians are trying to deceive you. They will use your ignorance against you by passing off lies and half-truths as fact. Don’t let them get away with this – be informed about the issues. Time to educate yourself, America.
(PS – I’ll do my best to educate you, so check back later for a complete break down on the FairTax. In the mean time, check out www.fairtax.org or The FairTax Book by John Linder and Neal Boortz.)
Liars and snakes…
So this morning I heard a country jingle on my local News-talk station that caught my ear. Mainly because there was no way that it was ‘bumper music’ in the middle of a stack of commercials. So, I decided to turn it up and listen. That, I believe was one of the shortest amounts of time that I have taken to become absolutely enraged to the point of profane verbal outburst… good thing the kiddos were elsewhere. It was a jingle for Jim Martin, Democrat hopeful for the office of Senator in my home state of Georgia. He is currently running against the Incumbent Saxby Chambliss, who despite his conservative title is not one of my favorite politicians. (Something about voting for an unnecessary and undeserved government bailout that has done, and will do NOTHING for the economy… but that is a different post altogether). Today’s target for the high caliber load of vitriol that I am packing is Mr. Martin. The jingle capped what has been a growing ire with Jim (from here on out I’ll use his given name because he is unworthy of the respect that is implied with any title, even one as benign as “Mr.”) throughout the campaign season. I watched the first of his ads on TV with slack-jawed amazement. You know, now that I think about it, all these ads were paid for by the DSCC (Democratic Senatorial Campaign Committee) and were ‘not approved by any candidate or candidate’s committee”. Whatever. He’s the beneficiary and has said nothing to the contrary… guilty by complacency. The ad accused Saxby Chambliss of supporting a 23% tax INCREASE on everything that we buy, and then went on to ‘calculate’ what that would add to a bag of groceries, a tank of gas, and (my favorite) a trip to the movies… cause nothing says ‘basics of living’ like a $20.00 trip to a theater. Idiots. Now, here’s the fun part… it’s all a lie, and here’s how:
The 23% tax ‘increase’ that they mention is called the ‘Fair Tax’ and would REPLACE all the taxes that you pay on those items anyway. The tax is revenue neutral (meaning that it would not increase or decrease the amount of income the government received versus the present iteration of ‘income confiscation policy’). I’ll let Beezer be the one to post on the guts of the Fairtax, since finances are his arena, but if you want to know more about this INSANELY GOOD idea, hit the website www.fairtax.org and learn something. You could also buy The Fair Tax Book (which is a very entertaining and informative read) by Neal Boortz and John Linder. But I digress…back to the lies…
So the driving point of the commercial is that Saxby wants to ‘add‘ a 23% tax to all these things, which is a purposefully untruthful statement. That folks is the reason that Democrats must be stopped. They are, as demonstrated here, entirely dependent upon deceit, fallacy and the ignorance of the US populous to gain office. Never mind all the positive effects that this new tax policy would have, they must oppose it, vilify it and demagogue it at every opportunity because its fundamental principal is that the government would no longer have control over WHO pays more taxes. Did you catch that? The power returns to the people… For a political party that is currently trying to undo the very letter of the Constitution and make it an instrument of governmental plunder and punishment, the idea is absolutely poisonous. ‘Jim’ (and David Scott, another catastrophically ignorant Democrat representative from Georgia) are both equally guilty of LYING to the public. How can this not disqualify them from office? Oh that’s right, their constituents are completely inept at explaining or even describing how the US government is supposed to operate under the Constitution. I mean, ‘David’ (the same rule applies) replaced Cynthia ‘Slap a Capitol Guard’ McKinney… so we know what kind of voters we’re dealing with. They have a long track record of Constitutionally ignorant, financially self serving decisions in the voting booth. These men disgust me beyond words. There aren’t keys on this keyboard to describe how this infuriates me… but then again, the truth doesn’t require foul language. These people deserve tar and feathers, not power and respect. For the sake of the nation, keep them out of office, I beg you.
Update – Here is the ad: