Archives For taxes

About Those Greeks…

January 27, 2015

I see where the Greeks elected a new government this week to help them reduce austerity that was forced upon them by the European Union bailout.  This reminded me of a book I read a few years ago entitled “Boomerang” by Michael Lewis. One chapter in the book was about Greece. The book is very enlightening and well written. Here are some selected snippets about Greece.

2015-01-26_11-43-52The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year….

The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s. Greeks who send their children to public schools simply assume that they will need to hire private tutors to make sure they actually learn something. 

The retirement age for Greek jobs classified as “arduous” is as early as fifty-five for men and fifty for women . As this is also the moment when the state begins to shovel out generous pensions, more than six hundred Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on….

The Greek people never learned to pay their taxes. And they never did because no one is punished. No one has ever been punished. It’s a cavalier offense— like a gentleman not opening a door for a lady.” The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greek doctors reported incomes under 12,000 euros a year— which meant, because incomes below that amount weren’t taxable, that even plastic surgeons making millions a year paid no tax at all….

The problem wasn’t the law there was a law on the books that made it a jailable offense to cheat the government out of more than 150,000 euros but its enforcement. “If the law was enforced,” the tax collector said, “every doctor in Greece would be in jail.” I laughed, and he gave me a stare. “I am completely serious.” One reason no one is ever prosecuted— apart from the fact that prosecution would seem arbitrary, as everyone is doing it and that the Greek courts take up to fifteen years to resolve tax cases. 

Lewis, Michael (2011-09-28). Boomerang: Travels in the New Third World – Norton. Kindle Edition.

The quotes above give you an idea as to why Greece might be in the troubles it is. As the book implies actions have consequences and Greece apparently needs to learn that lesson.

Greece is the birthplace of democracy so let’s end this post with a quote from the ancient Greek philosopher Isocrates:

“Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress.”

Sounds kind of familiar doesn’t it?

Despite a wide coalition of business, labor, religious groups, farmers and others pushing for an immigration overhaul, many individual Republican House members who represent largely white districts have been unmoved.

SOURCE: Republican leaders to block US immigration measure – Yahoo News.

After so many years of a stalemated government there are so many things that need changes. We are stuck in the 20th century practices due to a small number of our congressional representative being frozen with the fear of change? There are just too many of us old white folks who are trying to hold back the tide of change when in comes to the demographics of our country. There are too many arthritic fingers stuck in the holes of the dam trying to turn back the inevitable.

I for one believe that our increased diversity as a nation is a good thing. Our country has always been defined as a nation of immigrants. That is what makes us unique in the world.

Another topic that needs some severe change is our tax system. It needs a complete overhaul in order to address the ever-increasing inequity of opportunity in this country. Until that is done the 1% will continue to gobble up what once went to others as their rightful portion of economic gains they help generate. Since the Reagan years too much of the tax code has been targeted at allowing the most wealthy among us to pay less and less taxes. The faulty idea was that if we gave the ultra-rich more money they would invest it and create new jobs.  In reality what has happened is that they park that extra wealth in off-shore accounts and then get into a bragging contest with others as to how much they have accumulated. One aspect of change that needs to be addressed immediately is how we fund our government.

Surprisingly I just might sound like some of my conservative friends with the remainder of this post.  It is just a matter of degree I suppose. Many of them see things in black/white where I see shades of grey.

Change is also needed at the other end of the economic spectrum. There are too many among us who don’t contribute at all to paying for our country’s expenses. Everyone should have some degree of ownership of our country.  I believe that everyone who earns a wage, or for that matter any income, should contribute to the tax base that keeps our country running.  And yes, there are too many who are gaming the system at both ends of the spectrum and they should be brought to task.

It does my heart good to see our government go after the Swiss banks who are helping the rich avoid paying their fair share. As the bible says to whom much is given much is expected. To shirk that responsibility is loathsome. Our government needs to go after these tax dodgers with an increased sense of seriousness.

There are too many people who are living off government doles who could easily join the rest of us as tax paying citizens. They fake back injuries to get on social security disability. They don’t really look for a job but instead collect unemployment. Now don’t get me wrong, I am not labeling everyone in these programs as gamers anymore than I am saying that all affluent people hide money from taxes.  We need to take a serious look at how these programs are administered in order to make sure that those who are truly in need get what they need but not those who are freeloading.

Those who are holding up these necessary changes due to their stiffing fear need to step aside and let us get that work done… The sooner the better…

On top of that, higher-income taxpayers could see their itemized deductions and personal exemptions phased out and pay higher capital gains taxes — 20 percent for some taxpayers. And there are new taxes for them to help pay for health care reform.

There are different income thresholds for each of these new taxes.

An additional 0.9 percent Medicare tax, for example, kicks in on earnings over $250,000 for married couples filing jointly and $200,000 for singles and heads of household. Same for a 3.8 percent tax on investment income.

But the phase-out of personal exemptions and deductions doesn’t begin until $300,000 for married couples filing jointly and $250,000 for singles.

Taxpayers will still be able to deduct their medical expenses, but it will be more difficult for many to qualify. The threshold for deducting medical expenses now stands at 10 percent of adjusted gross income, up from 7.5 percent. There’s an exception, though, for those older than 65. For them, the old rate is grandfathered in until 2017.

SOURCE: Tax code changes will hit high-income Americans hardest | PBS NewsHour.

It is good to hear that at least some things are changing when it comes to asking the wealthy to pony up a little more of their mammoth discretionary income for the good of the country and for the basic welfare of its citizens. While these gains (you probably say loses if you are on the receiving end) are notable they is still a long way to go in this area…

GOP Is Not A Real Party…

October 22, 2013

“The Republican Party is not really a party. It doesn’t stand for anything except re-electing itself,” Stockman, who directed the Office of Management and Budget under President Ronald Reagan, tells Newsmax. “The neocons are only oriented to an aggressive, imperialistic foreign policy of big defense establishment and suppression of our civil liberties. That’s bad.

“The tax cons want to just cut taxes — any time, any day — regardless of the fiscal situation,” Stockman adds. “That has gone to an absurd length. The social cons, social policy people — the right-to-life issue and gay marriage and all of that — that’s irrelevant to governing a democracy in a free society.

SOURCE:  Former Reagan Budget Head Stockman Critical of GOP.

I have long agreed with Will Rogers when he said “I’m not a member of an organized party I am a Democrat”. The Democrats have always be a coalition of many factions.

  • There are those who think government is the solution to all problems.
  • There are those who want to give help to everyone whether they want it or not. 
  • There are those called “blue dogs” who want less government but not be destroying the social safety net. 
  • And finally there are those who want abortion to be easily obtained for those who “want to control their own bodies”. 

This hodgepodge of associations has long been the face of the Democratic party. Except for the last item they all seem to share a basic empathy that we should be there for one another. We should have each other’s back. The safety net that protects those caught in some bad times should be strong so that no one is totally destroyed either by their own actions or the actions of others.

And then there are the Republicans of the last couple of decades. You would think that the words in the quote above were spouted by one of the talking heads over at MSNBC but you would be wrong.  They came from one of the chief aids to then president Ronald Reagan. David Stockman invented “trickle down economics” or at least the current version of it. Trickle down is widely believed to be one of the primary reasons Reagan was elected. Give money to the rich and it will eventually trickle done to the poor. The other economic thought was that in order to raise tax revenue you must lower taxes.  Don’t ask me to explain that one but Mr. Reagan and Mr. Stockman thoroughly believed it. Of course it didn’t happen and Reagan turned out to be the first big deficit spenders of our time.

It is enough to say that Stockman was one of the founders of conservatism as it is practiced  up until recently.  The words in the quote are  pretty blunt that the GOP stands for nothing except getting re-elected. But of course that could also be said for the Democrats in congress as well. As Stockman points out

  • The neocons are only for a big military establishment and suppression of civil liberties.
  • The tax cons are only for cutting taxes even if it means stripping our safety net in the process. That fact does not concern them at all. 
  • The social cons are so fixated on “below the belt” issues that nothing else really matters to them.

The source article goes on to include several other dark sides of the current GOP but I will leave it up to you to see that if you want.  As for me I will stick to the first group with my tenuous political allegiance. At least until the GOP comes back to something resembling any level of compassion.