Donny's Ramblings

Donny,
I have been at all levels of the income spectrum from making 15k a yr to yes making over 250k a year. Although this year with the economy its definately taken a big hit out of what I will clear this year. Since I am self employed with employees just as you are I think I also have an understanding how taxes affect business and people as well. I would say look not at what Obama says about raising taxes on the wealthy only but look at what he has voted for which is tax increases of all kinds. When he increases payroll taxes, or raises the limit on social security tax, or they increase the medi-care tax to pay for all of these programs it not only affects the employee but the employer pays more as well which limits money available for raises or other investments in people. I also remember him discussing his plan and I think his defination of rich was not the rich but someone making 100 or 150k I dont remember the exact number off hand. If I remember correctly the 250k number was a stretch to sound good. Well after taxes, housepayments, sending kids to college etc although that is not poor its certainly not rich. The reality is the people who pay all the taxes are not the rich because they will be able to hide their money or invest it in ways to not get taxed and its not the poor its the middle class who is getting the burden. I dont know if your aware but people right now who make less than 30,000 a yr with children under our current tax system not only almost always get all of the taxes back they pay in but many times with child tax credits and earned income credits receive additional money back they didnt even pay in. Most people who you and I would consider wealthy get their money from investments, or business they own which are generally funneled through vehicles such as s corps and llc’s to minimize taxes or that get taxed at a flat rate like capitol gains. Those who are struggling as you and I put it are generally not paying much in taxes and are getting that all back. It has been and always will be the middle class who get w-2 income trying to raise families and secure their future who bear the biggest tax burden. I think if you look at actually what Obama has voted for and not said and really look at his plan I think you will realize that his whole only raising taxes on the rich and lowering it on the middle class is the same tired thing Democrats say everytime. If you however check the voting records of McCain you will see he almost always votes for less taxes. I will be the first to admit both mccain and obama like almost all politicians stretch what they say to make themselves sound better and stretch their accomplishments etc. I would say just look at the voting record. The one thing I would say though is if you look at it logically you cant grow government like he wants yet decrease taxes. If you really want to decrease taxes you have to decrease spending and waste. Also, I would point out when you hear I just want to take tax levels back to where they were before W think back to when the type of tax structure Obama is proposing was in place. Those were the Carter years. Now thats a perfect example of a guy who cared more about people much like you say about Obama and someone I would say is a good man but yet a completely inept president. If you also look historically at how much we pay in taxes as a percentage of income and factor in sales tax, payroll taxes, state taxes, etc etc we now pay a much higher percentage than people did 50 years ago yet we have much more national debt and less to show for it. Housing and healthy insurance and basic necessaties take a higher percentage of the average persons wages than they did back then.(Both of those are facts that can be easily looked up and are well documented) So I would say our problem isnt that we need more taxes or that we even need more from the rich. OUR PROBLEM FOR THE PAST 20 YEARS IN OUR ECONOMY AND WASHINGTON IS OUT OF CONTROL SPENDING THAT HAS INCREASED YEAR AFTER YEAR WITH NO REGARD TO HOW MUCH REVENUE WE HAVE, OUR INCREASE IN GOVERNMENT PROGRAMS AND LAYERS OF RED TAPE AND REDUNDENCY IN DEPARTMENTS THAT TRULY ARE NOT NEEDED. THERE JUST IS NO REASON THAT WASHINGTON SHOULD BE SPENDING MONEY FOR PROJECTS LIKE A BASEBALL STADIUM OR BICYCLE PATHS OR VISITORS CENTERS IN LOUSIANA THAT SHOULD BE DECIDED AND PAID FOR BY THE PEOPLE IN THOSE LOCATIONS WHO WILL BENEFIT. WASHINGTON SHOULD ONLY SPEND MONEY ON THINGS THAT AFFECT AND BENEFIT THE ENTIRE NATION NOT GROUPS OR SEGMENTS WHO LOBBY THE BEST. To me only McCain/Palin can honestly make a claim and have the track record and voting record to be able to truly say they will try to change that. Obama/Biden have always voted to participate in the scratch my back ill scratch yours spend spend spend. They have never met a spending bill they didnt like. Its all in the voting records. If you want to know what Obama will govern like take a good hard look at Biden and the skeletons in his closet. There is a reason this man could never get serious consideration for president even though he has run several times. Look at how much the Clintons are distancing themselves and almost backhandedly supporting McCain/Palin. You have Hillary saying nice things about Palin and defending her. You have Bill coming out and saying good things about her husband and that he is impressed with him. Obama only has one thing going for him in this election and thats George Bush. Personally I’m looking forward to the debates because Obama has never been asked the hard questions and it will be interesting to see how he responds.

The basic idea on keeping taxes lower is that the market is the most efficient way to allocate resources (it’s classic assumptions such as “perfect information” are only for a perfect market — for it to be efficient only has to assume that the information is costly). Everyone uses their money unless they stuff it into a box under their mattress or the place of their choosing. If you put it into a bank, it will get reinvested. Raising taxes on only the wealthiest will decrease funds available for efficient investment (or perhaps consumption in which case the money is trading hands and someone is exchanging something of value for it, part of which will nearly always include labor). This has the effect of decreasing economic expansion which will affect the lower classes (i.e. labor supply). The US Luxury Tax failed for this exact reason. One of the effects was to drive yacht builders under. I’m not crying over the loss, but it’s a legitimate issue with taxation. This also has the effect of reducing sources for taxable revenue which, in turn, can decrease the amount of money the government receives. There is a diminishing return on tax increases. Also, we currently have a progressive tax system.

I think most folks share my stance that they don’t mind high taxes as long as the money is well-spent. In the northern woods, I say “the snow doesn’t plow itself.” Well-run and stable government is what enables a robust economy. That said, government isn’t exactly famous for being an efficient beast especially with all the pork-barrel spending. McCain [a.k.a. Palin's running mate] has proven in words and in action that he will work to sharply reduce in contrast to Obama. What’s more important than who is spending the money is that it’s done efficiently. However, who’s doing the spending is a major factor that determines if it’s done efficiently.

I know Doctors who worked their butts off and took tremendous risk (in a financial sense) to get through medical school. They did internships that paid them around $12/hour after they were done (required to gain the experience necessary to be a practicing doctor). Some are now making pretty nice paychecks, but that’s after a solid 10 years of next to nothing. Would they have invested 10 years of their lives and quarter million in debt if they had reason to believe taxes would go “sky higher”? When you consider the time value of money and the returns they could have gotten more quickly from just going to business school and much of the initial returns (i.e. pay) would probably be taxed at a lower bracket… let’s just say high taxes on “the rich” don’t always have the desired result. Sure, there is an element of service that goes into it. However, if you want the best talent in certain fields like medicine where people are willing to pay for that talent (do we want “A” quality doctors or “C” quality doctors?), then we need to leave the mechanisms in place that make this happen instead of “punishing” for how the income is clustered for highly specialized professionals.

It doesn’t work well for a democracy when a majority realize they can vote resources away from a minority and seize that opportunity. A progressive tax system is one thing, but I’m concerned with the exuberance shown for uneconomic social engineering. In practice, it usually backfires. One of the reasons is moral hazard, an insurance concept. If someone else is paying for the costs, a person is more likely to take risks. Holding all else constant, homes that have fire insurance are more likely to burn than homes that don’t. This is one of the issues in our health care markets. Likewise, one of the main reasons large entities (and it doesn’t get any bigger than the federal government) are too willing to spend on things that are not economical is because the people doing the spending don’t take the loss; the loss (i.e. cost) is pooled just like insurance.

At any rate, I question the morality of being generous with someone else’s resources. Government needs the resources to get its job done, but there is a strong case to be made for keeping government fiscally lean. That’s a lesson even big-government conservatives could benefit from.

I do agree with Obama on this point..

http://www.youtube.com/watch?v=Ec3aC8ZJZTc

I’d be careful before hanging my hat on what Frank Schaeffer has to say. The story with him is quite simple: His father was a great man–not just “an evangelist” but one of the most brilliant minds and compassionate hearts of this generation. (his household hardly qualified as a “strict fundamentalist household” as Frank’s own book “Crazy for God” will attest to). His father was definitely not of the “religious right” as his numerous books clearly show.

Unfortunately, Frank Jr. is not a great man. He’s a whining, lamenting, spoiled brat who has managed to not only alienate his former meal ticket, the “religious right” but has confounded people even in his new-found religious home of Orthodoxy. Pick up any one of his books. If you have the stomach to read long enough you find someone with an axe to grind, wrapping it all into provocative little barbs against all things Christian.

Frank’s Obama endorsement (or statements about evangelical Christians) is about as poisonous as Farrakhan’s. These endorsement figure right along with many other good reasons to vote for anything but Obama!

I haven’t had the pleasure yet to read all the comments to this blog, but I did read this blog.

I am also a pro-life Christian who is supporting Obama. I am not just doing it to NOT vote for McCain, but I have looked into both candidates and agree that Obama is the better choice. While many republicans are uncomfortable with Obama’s lack of experience compared to McCain I would present the idea that quality of experience matters more. Below I’m outlining things I’ve learned and observed from my research as well as the debates about both candidates that I think people should know about before they choose to vote:

Economic Crisis — while both candidates are supporting the bailout contingent upon some concessions, Obama has been stronger concerning his strategy to revive the economy. Not only did he publish a 6-stage plan on how he wanted to re-vamp the nations economy PRIOR to the stock market free-fall, but he also has come out we very specific plans as to what he would like the bailout to look like, as well as his intention to take care of lower and middle-class families. McCain’s economic plan is ambiguous and focuses on his special interest population: veterans. While I think it is important to support veterans, constructing an economic plan with this small populace at the center is dangerous for the rest of the nation.

Taxes — This is a point where candidates greatly differ. McCain wants to lower taxes for everyone. That all sounds well and good, but the motivation for his lowering taxes for the wealthy is to use it as an incentive to keep their business stateside. Our history, however, proves that even with enormous tax breaks most businesses will continue to outsource because it is simply cheaper and easier to do so than to re-organize and reform their business to function within the United States. Also, lowering taxes for everyone while we are creating the largest deficit in history with 2 wars and a bailout proposal is absolutely ridiculous.
Obama’s tax position is that families making less than $250,000 per year (which is 80% of us) would get a tax break, and those above (considered wealthy) would experience a modest tax increase. This would be party contingent on how the bailout bill pans out, and would be subject to decrease again once (if) the economy levels.

I read one person commented earlier that this tax structure wouldn’t work because it would ‘trickle down’ to the masses because ‘that’s how our economy works’ but I would like to rebut this with pointing out that this is how we would LIKE it to work — unfortunately, for as long as we have tried to employ the ‘trickle down’ model of economics it has proved unsuccessful and opens doors for the kind of predatory economic schemes that have been happening. Not only that but schemes like sub-prime mortgages have been happening over and over. In fact, this is the third time that this kind of economic strategy has been used at such a large scale within the stock market that it has negatively effected our economy. In the 1980s it was with junk bonds… 1990s it was with the .com corporations… and now it is with sub-prime mortgages. The things all these three have in common was how they were carried out — people over-valued the product they were selling, sold it in mass and once the money people said they were creating to pour into the market never showed up, the market bottoms out. It was imaginary money to begin with. .com especially, where companies weren’t even selling anything, just trading advertising rights and coming out a wash. Their revenue came from investors of stocks, but their starting value was 0. Once the stated value caught up with the actual value, the bottom fell out of it. All of this is to say that Obama is presenting a new structure for the economy that includes shirking off a broken system and redistributing wealth to benefit the economy as a whole.

The War — It’s simple. McCain wants the war to continue and is even implying his intent to aggress on Iran and Russia if they were to continue to be antagonistic. He is a strong military leader, but the catch to that is that he leads with military first instead of a last resort. Obama was opposed to moving into Iraq and sees the value in strong negotiations and foreign relations. He has no qualms about taking a strong position about the threat of Iran, N. Korea and Russia, but he is far from mounting an attack. I’ve heard many people who are in favor of the Iraq war vocalize that they think Obama would be a pushover and would always be against war no matter the threat. The debates on Friday proved that to be untrue — Obama himself laid out a sequence of events that would need to take place in order for him to authorize a new war (in his example he used Iran). His opposition isn’t to war entirely, but to miscalculated, impulsive and costly wars. Obama’s plan for extraction from Iraq is a thoughful and careful one, and I think a PLAN is what we need — instead of messianic diatribes about victory at all costs.

Healthcare — Frankly it makes no sense to me why universal healthcare would be a reason not to vote for Obama. It seems like people (and I’ve noticed more frequently, Republicans) flinch at the idea of socialized govt programs. I understand wanting to shy away from socialist, communist and fascist ideologies, but the fact is that universal healthcare has worked for many nations rather successfully; and providing healthcare for those who can’t afford it can cause a ripple effect for our economy and nation’s development. Obama isn’t proposing free health care for everyone — but he is in favor of every single person having the care available for those who need it, and aren’t denied the ability to live and survive because they don’t have $500,000 to pay for a surgery nor does their employer offer affordable and comprehensive health packages. McCain doesn’t seem bothered by the healthcare system and is (once again) concerned mostly with veterans when it comes to this issue. It is of concern when someone running for presidency is in the habit of looking out for ‘their own’ primarily.

As for the positives and negatives about the personal lives of both candidates (and their running mates) it is obvious that McCain and Palin have had many more bumps in the road and have made a considerable amount of bad/selfish/deceitful decisions during their careers. From extra-marital affairs, accepting personal financial gifts, track records of deregulation for the stock market and mortgage bankers, one of their lobbyists still on the freddie mac payroll, the ‘bridge to nowhere’, Palin’s abuse of earmarks as mayor of Wasilla, publishing outright lies in their campaign ads about Obama, and the repeat ‘cancel my campaign’ stunt that McCain pulled in 1999 and in again in 2008.. there is much more reason for skepticism with their campaign. I have managed to leave out dozens of accounts of smear campaigns that have not been verified but are still suspect for both McCain and Palin and make me speculate to their integrity.

I know that many people who are apt to vote the party line are not easily swayed by most of what I’ve said.. but I would hope that people would understand that Obama has proven himself to be a man with more integrity, he has prepared and considered thoughtfully his position on the important issues, he has picked a running mate who is somewhat unlike him to help him develop areas where he is still lacking and present new ideas (as he stated his reasons for choosing Biden when he was interviewed by Rick Warren) and he really has the intent to help the floundering citizens of this country succeed and turn America around.

342 Million Dollars.. in 116 earmark (pork barrel spending)

is what Biden has asked for this year ALONE.. for his teeny state of Delaware..

change/hope/fiscal responsibility indeed.

I’m sure that type of guy will really challenge Barack’s positions..

(should we tax then spend or spend then tax?)