Category Archives: Politics

A lesson in basic tax policy

You see people making this mistake a lot.  Otherwise smart, successful people think that if they make just one more dollar, their tax burden will suddenly shoot up.

This is not, nor has it ever been, how our tax system works.  Here are the current tax brackets:

Marginal Tax Rate[6] Single Married Filing Jointly or Qualified Widow(er) Married Filing Separately Head of Household
10% $0 to $8,700 $0 to $17,400 $0 to $8,700 $0 – $12,400
15% $8,700 to $35,350 $17,400 to $70,700 $8,700 to $35,350 $12,400 – $47,350
25% $35,350 to $85,650 $70,700 to $142,700 $35,350 to $71,350 $47,350 – $122,300
28% $85,650 to $178,650 $142,700 to $217,450 $71,350 to $108,725 $122,300 – $198,050
33% $178,650 to $388,350 $217,450 to $388,350 $108,725 to $194,175 $198,050 – $388,350
35% $388,350+ $388,350+ $194,175 $388,350+

We’ll do a simple example of a single person.  If you make less than $8,700, you are paying 10% in taxes.  So if you made $5,000 last year, you paid $500 in taxes.  Your effective income tax will always be 10% if you only make $8,700.

Say you made $20,000, though.  What would your taxes be?  Well, that puts you in the 15% tax bracket, but you won’t be paying 15% total.  You will be paying 10% on the first $8,700 and 15% on the next $11,300.  That is $870 and $1,695 for each respective bracket for a total of $2,565 tax burden.  That makes your effective tax rate 12.8%.  Which is about what Mitt Romney pays despite the fact that he makes millions more per year than you.

So, no, if you’re making $390,000 a year instead of $388,000 a year, you’re not going to suddenly own the government a whole lot more money.  And no, there is absolutely no reason to decide to take a vacation just because you are going to advance a tax bracket.

There you have it.  The progressive tax system!  It’s the only tax system that is fair if your definition of fair is making sure your fellow citizens can do things like eat and sleep in a bed.  It’s not so fair if your definition of fair is my money is mine and I got mine jack!

Stupid Things Libertarians Say

This episode of Stupid Things Libertarians Say™ is brought to you by Ron Paul’s farewell address.  In it, he says:

Why have we allowed the federal government to regulate commodes in our homes?

Rand Paul must have heard his dad say this thousands of times growing up because he’s repeated it in Energy Committee Hearings:

The scary thing is there are millions of people in the United States that applaud this.  First off, who actually has ever had a toilet that didn’t work?  You do realize that you can hold down the plunger for a little while longer to allow more water to flush your massive dookie, right?  And really, should we be sending people to Congress that don’t know how to use a freaking toilet?

“But none of that matters!”, you say?  “Government shouldn’t be telling me what kind of toilet I should buy!”, you say?  Listen, this is not difficult.  Potable water is a limited natural resource.  It doesn’t obey state boundaries.  It doesn’t obey national boundaries.  It needs to be preserved.  Governmental regulations are all about preserving that water.  That’s it.  Flushing a toilet is an unfortunate, but necessary waste of water.  You shouldn’t be able to decide how much water you waste.  It is too precious.

Why austerity is a bad idea

Paul Krugman points us to the fact that the U.S., despite still not doing well, is doing better than all other first world nations.  The most obvious answer is that other countries have hopped full on the austerity bandwagon.  As Mr. Krugman is fond of saying again and again, it turns out that contractionary fiscal policy is contractionary.

National economics is a strange creature.  It generally behaves almost the exact opposite of what a family economic plan would look like.  In the middle of a familial recession (someone gets laid off, etc.), it makes complete sense to cut back on the cable bill, go on a diet, maybe even (god forbid!) cut the internet.  You also try to keep paying the things that matter for daily life; food, housing, health etc.  This is an experience almost every adult alive has faced at one time or another.  It also makes complete sense to try to apply what we know to something that, on the surface, looks like the exact same problem.  In this case, though, it ends up being a matter of knowing just enough to be dangerous.

At the national level, calling for austerity during a recession is like calling for a family to stop feeding itself.  In some instances, quite literally.  Republicans like Newt Gingrich are fond of calling Obama the “food stamp President” and it is true that the amount of money put towards food stamps has skyrocketed under Obama’s watch.  In a time of massive unemployment, Republicans criticize Obama for the government feeding its citizens who can’t afford food!  It’s mind boggling.  Especially because President Obama did absolutely nothing to cause the increase.  Eligibility rules haven’t changed, only the number of eligible citizens has.

But beyond feeding its citizens, there’s a whole lot the government can and should do to help people get back on their feet.  Where this would give the most bang for the buck is repairing our crumbling infrastructure.  The government should be borrowing as heavily as possible right now to fund that.

I know what you’re thinking, “But…but…but, what about the debt!  It’s a very high number!”   It’s true.  But in the situation we’re in, it’s a meaningless high number.  Say someone came up to you and offered you money.  All you have to do is give it back in ten years.  In fact, they’ll actually let you keep a little bit of it without paying it back.  That is the situation the federal government finds itself in now.  The government should be taking as much of that offered money as possible and invest it in our infrastructure.  This will provide jobs to a segment of the population that needs it most and give them money to spend which will immediately give the nation economic returns.  Our improved infrastructure will facilitate economic movement.  Which will, in turn, grow the economy.  This is a no brainer!

Then, when the economy is back on its feet and we are close to full employment once again, we look to the debt.  When times are tough, the government should be spending money like a sailor on shore leave, when times are good, the government should be pinching every penny to save for the next rainy day.  That’s not an easy thing to wrap your head around.  Economic models show that it works, though.

I used to like John McCain

Prior to 2004, I thought John McCain was a pretty stand-up guy.  Reasonable politician.  War hero.  Sane.

Then, of course, the re-election campaign of George W. Bush happened and all those adjectives I once used to describe him fell, one by one, to the wayside.  I have read many articles since then saying that John McCain was never the person that I once believed him to be and that his image was sculpted to make him look stand-up.  I don’t know if I was just naive or if he actually did change since then, but boy is it disappointing.

The latest episode in “How is John McCain disappointing me now?” comes courtesy of the Benghazi non-troversy.  He has been the most vocal member of the Senate on the need to get information about what happened in Benghazi this past September 11th.  So what do you do when you want more information?  You skip the classified briefing on the issue, of course!  You see, if McCain actually went to the meeting he’d  have to stop complaining that there isn’t enough information about Benghazi.

John McCain has become the archetypic Republican.  White.  Male.  Old.  Angry.  Or maybe that should be stereotypical.  He has turned into (or always has been) a man who doesn’t care about anything except hurting the man who, as far as McCain is concerned, usurped the presidency from the rightful heir.  Him.

Back in 2000, I would have gladly voted for John McCain if he were the Republican candidate.  Now, I’m glad that I never got that chance.  I cannot think of anything worse than a vindictive man as President of the United States.

What to expect from Obama’s second term

As the dust settles from the election, events are taking shape that give us a glimpse into what to expect for the next four years.  I believe these will include the following:

  • Detonation of the Austerity Bomb (aka the Fiscal Cliff) – The lame duck session is almost guaranteed to not get terribly much done and Boehner will have a tough time selling anything Obama has to offer before the new year.  The good news is that, despite the scary names, January won’t see us suddenly in a giant hole that we can’t get out of.  What we will probably see is a severe downturn in the stock market that will be a great buying opportunity for people with money because we will have…
  • A “Grand Bargain” budget deal in January – Grand Bargain is in quotes because Obama will get most of what he has been asking for for over two years.  Tax rates for the very rich will go up, tax rates for the rest of us will stay the same or go down.  Corporate tax rates will go down.  Various loopholes will be closed.  Lots of wasteful programs will be cut or eliminated.
  • Comprehensive immigration reform – This will be to his second term what Obamacare was to his first term.  In a word, HUGE!  Major Republicans are already talking about the willingness to compromise on an immigration bill.  This is mostly because this election has taught them that they can no longer rely on white people to win elections and that demonizing brown people and attempting to suppress minority turnout is antithetical to winning the Presidency.  I don’t think this legislation will pass until after the midterms, though, because there will be a…
  • Status quo midterm elections – Republicans will probably keep their numbers in the House and gain a few seats in the Senate.  This is mostly because Republicans have done an awe inspiring job of redistricting at the state level to preserve House seats and the inordinate amount of Democratic Senate seats that will be up for grabs.  There is also the fact that this election will be the last hurrah for the angry white contingent of voters.  The midterms are usually more about anger than about policies and Republicans excel at fomenting anger in their constituency and Democrats can’t be bothered to turn out in large numbers.
  • The economy will markedly improve – The signs are all there that the economy will continue to improve.  I expect it to pick up after a year or so and the Great Recession to be in our rear view mirror by the end of Obama’s second term.
  • The housing industry will grow quickly – Since the housing bust, construction of new homes has fallen way behind population growth.  As the economy improves, we can expect a mini housing boom to get us back to the level we need to be to house our growing population.  This looks like it may have started already.
  • More of the same stellar performance from the stock market – The first four years have been very good for people in the stock market.  I expect the next four to be the same with the economy continuing to grow.
  • Obamacare fully implemented – This is a no-brainer, but deserves to be mentioned.  The world will not end.  The United States will be just as socialist as it has been since Roosevelt.

All in all, not a bad eight years for a Kenyan anti-colonialist socialist.

Happy Veterans Day!

It is strange to use the adjective “happy” when talking about Veterans Day.  It is, in my mind, the saddest of U.S. holidays.  Partially, it’s the weather.  It’s November, it’s normally cold and grey.  But beyond that, I think it’s because this is the only holiday that celebrates the still living.  It sound like it should be a happy occasion except for the fact that we fail our veterans so miserably.

Veterans Day has become a way for us non-veterans to feel good about ourselves.  Oh, look at me, I’m thanking a veteran, my work here is done!  This is not nearly enough.  Veterans face issues, both visible and invisible, that most of us cannot possibly imagine.  Thank yous don’t fix these problem.

What can we do?  Well, the unemployment rate for post-9/11 veterans is still over 10%.  We can do things like call our Republican representatives and senators and tell them to stop blocking jobs bills for veterans.  We can contact our representatives and ask them to increase funding for research into prosthetics.  We can tell them that, when we send our people to war they should be accompanied by armies of psychologists and we should make counseling for soldiers in the field mandatory.  We can volunteer in shelters and soup kitchens and other places where veterans are disproportionately represented.

Veterans are sent to war by a political class that doesn’t think about the repercussions of war.  They are used in war by generals that, by necessity, think of them as tools in a toolbox.  They are spit back up by war into a society that hasn’t changed while they have.  We owe it to them to give them politicians who have something to lose by a declaration of war.  We owe it to them to give them the tools they need, both physical and mental, to survive the wars we send them to.  We owe it to them to provide them the support they need when they return from war.

We need to redefine Veterans Day.  Let it no longer be a day of thanking veterans.  That should be every day.  Let it be a day of looking inward and asking ourselves what we have done in the past year to support those that sacrifice so much for so little.  This year, we have failed them.  We have a year to go.  Let’s get to work.

I was going to write a blog post summing up the election…

But Ta-Nehisi Coates has already done so better than I ever could.  No surprises there.

By the way, if you don’t read everything Ta-Nehisi Coates writes, you are a horrible human being.

Romney team “shell-shocked”?

I find this article baffling.  Either that or the article explains a whole lot.  Romney and Ryan were surprised they lost?  They always had a chance of winning, but it was pretty obvious that chance was slim at best near the end.  Even when they had better odds, they never had more than a 50% chance of winning.  And yet, after losing they’re “shell-shocked”?  If true, the suspension of disbelief in the campaign must have been at astounding levels.  Either that or the Republican war on science had even infected Romney and Ryan.

Although, it would explain why the self-described “numbers guy”, Paul Ryan, can release a budget and claim it will solve all of our country’s budgetary ills when even a cursory look at his numbers shows them to be a sham of the highest level.  For Paul Ryan, 1+1 has always equaled 3.

Romney’s a little more difficult to figure out.  Is it possible that Romney isn’t a numbers guy?  Despite all evidence to the contrary (his business record, etc.), I have to conclude that he isn’t.  My theory would be that Romney has always just been a good manager of people who makes good decisions when surrounded by people who know their stuff.  It’s never been an issue in his business career because people who know how to hire people who know their stuff were hiring the right people.  A national campaign works differently.  There is a whole group-think aspect to the campaign that doesn’t exist in the same way it does in a business.  The result being a bias that leads you to draw people to you that are telling you what you want to hear instead of those that are telling you what you need to hear.  The result being that you make good choices based off of incorrect information.

 

Obama’s policies have been great for the gun industry

Despite coming into office in the middle of a horrible recession, President Obama did everything in his power to assure the gun industry thrived in this environment.  This consisted mostly of him getting elected.  Gun sales have gone up 10% every year since his election.

With his reelection, the markets are expecting this growth industry to continue to grow apace.  Gun manufacturing stocks are up mightily today in anticipation.  But will you hear Republicans praising Obama for making sure the gun industry stays strong for at least another four years?  Noooooo.