Christmas shopping and tax revenues

Last night I thought of a way to explain how tax revenue can go up in a very simple way.  It can be compared to Black Friday in the retail world.  Okay, so you may be wondering how can people spending money in a shopping frenzy be compared to the government collecting taxes.  First of all, the reason it is called Black Friday is because until that day, retail corporations are in the red.  The amount of sales on this day is when they actually show a profit.  As you ponder that for a second, think of the reason why they show a profit, people spend money.  When they were afraid that people would not have the money to shop, they were concerned about being able to show a profit.  So, what do they do to increase their revenue?  Did they raise the prices so that they would make more money on the items that were sold?  Less items sold but at a higher price so they make money on what is sold?  Nope, they did the total opposite, they reduced their prices so that more people would come into the stores and shop.  They may not have bought as much as they did in previous years, but with more people spending money the stores did see a profit.  Thus, by lowering the tax rates the tax revenues will be raised because the lower tax rates will encourage companies to hire more people who will in turn pay taxes.  They will be producers and produce tax revenues rather than only consuming products paid for by tax revenues.

Here is a reminder of how taxing some higher cost items impacted the economy. http://wp.me/plU1X-tw

On a totally different subject here is one thing to remember about budgeting, they start at current levels and increase spending from there.  They spend the money in the current fiscal year to make sure they can show they need the money so they do not have to cut from current spending levels, even when budgets cuts are requested.

Also, for those who say that some should pay a higher rate, remember you can donate to the IRS.  Are you doing that or deep down do you think everyone else but you should pay more but you use the royal we?

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Paul Ryan makes economics make sense

The phrase by Jackie Gleason of How sweet it is keeps going through my mind today.  I really have no opinion about Paul Ryan as the pick for the VP.  I like him and think he is the best choice of the names I heard floated.   But, I really had not planned on writing a post about the VP pick.  The more I read the more I like him and am getting excited about the knowledge and experience that he is bringing to the campaign.  He was a economics major in college.  To me the brightest people can decipher all the economic theories and apply them to the world.  I pretty much got supply and demand theory and that was enough to get me through the required economic classes.  Dare I say that he is making being an economist sexy?

But, it was something else that dawned on me today that I wanted to post about.  I started this blog in October 2008 because I was frustrated by what was going on with the media’s reporting of the campaign.  I needed a place to vent.  When Obama won in November, conservatives began to look forward to 2012 when we could elect a Republican to replace him.  We are in the home stretch of the four years.  We continue to look forward to voting in November.  Now we have the names that we will be voting for.  Romney and Ryan.  Two men who have the experience that is needed to turn this economy around.   Looking Forward with Romney and Ryan to a better economy.

Taxation without Representation

We learned those words at an early age.  We learned about the tea parties at an early age.  We all have the mental image of a bunch of men dressed as Indians throwing boxes off of a wooden ship.  But, did we ever really grasp what was going on that caused the men to feel like they had no choice but to revolt and to show their anger by doing this?  I don’t think so.

Even now, as I have embraced the Tea Party ideals, I never really got it.  I read something this weekend about the Stamp Tax that suddenly made things fall in place for me.  The Stamp Tax was a tax on paper.  It meant that every single piece of paper was taxed no matter what its use.  Think about even in this digital age how much paper we touch on a daily basis.  What if you had to pay a special tax (on top of every other tax) for that piece of paper.  Now think back to how much paper was used 30 years ago and if all that paper was taxed.  Don’t just think of paper as sheets of paper.  Think about newspapers, magazines, books and how about playing cards.  Yep, a special tax just on those type things.  As I read this, I realized that Obamatax is exactly the same as the Stamp Tax, except it is a special tax (on top of every other tax) on medical devices.  You know, crutches, prescription drugs, OTC drugs, Tampons, and even band aids.  Remember that the Director of Health and Human Services has the ultimate authority to decide what can be done in regards to Obamatax.  If the tax isn’t there now, it will be coming to you soon.  Because that is the other part of it.  The reason for the taxes are to support the overspending by the government.  As they say history repeats itself.  Look up why the Stamp Tax was needed by England if you don’t believe that.

A tax by any other name is still a tax

So now that the Supreme Court has ruled  that Obamacare is constitutional based on Congress’ ability to tax.  Now, Obama is saying it is not a tax.  Does this mean that he is saying it is not constitutional and that it is not a law.  Ha!  It passed Congress as a tax bill.  Oh, and since it is not a tax, why the need for so many IRS agents to enforce getting this, um, penalty?

But, since in his eyes it is not a tax but a penalty, I figured it was time to look up a few definitions to see what the difference will be.

from merriam-webster

Penalty

1
: the suffering in person, rights, or property that is annexed by law or judicial decision to the commission of a crime or public offense
2
: the suffering or the sum to be forfeited to which a person agrees to be subjected in case of non-fulfillment of stipulations
Tax
1
a : a charge usually of money imposed by authority on persons or property for public purposes
b : a sum levied on members of an organization to defray expenses
So, the words don’t have the exact same meaning.  Although there are a few who would argue that they suffer when they pay taxes.  It wasn’t until I began to look at the thesaurus that I found something interesting.  It has to do with the word fine, which means to penalize in a financial way.  In the list of synonyms I saw the word tax.  So, I can say either that Obamatax will penalize someone who doesn’t buy health insurance or Obamatax will tax someone who doesn’t by health insurance.
They can use penalty and penalize to describe it but when it comes down to the meanings of the words still end up meaning tax.  You can pick a word to make it sound better but the definition of the word doesn’t change.
Or perhaps rather than calling it a penalty or a tax, it should be called what it is…corporate welfare to the 1%.  Thanks occupiers, you got what you wanted by being played by the 1% as they begged you not to protest against them.  Please don’t throw me in the briar patch, oh yeah that story is no longer being taught since historical stories aren’t politically correct.

Yeah let’s protest against big corporations and post status updates using our ipads

I really wasn’t going to pay that much attention to the protests on Wall Street because all kids misguidely get behind some big issue and protest it. I know I did on several occasions. It is part of having a big heart and wanting to change the world. The problem is that without life experiences the world is not understood enough to get how to change it. You want to change how a corporation is run, become a shareholder and make your voice heard on who joins the board and how much the c level is paid. Learn accounting so you get what is going on so you can explain the changes you want to make to the tax code so that corporations can be fiscally responsible to this country. Finally, spend time learning the history of this country so that you can logically explain why you believe what you believe and why the changes you want to make would benefit the country. Here is a hint of how not to do it. Don’t go hang out on Wall Street with your friends wearing the latest $200 jeans and using your brand new ipad. Ask your parents what they gave up for you to have the latest electronic equipment and to get a good education. Maybe that education will help you see that you are protesting against the very brands you are using on a daily basis, including UPS since you are requesting donations to be sent to their office.

Great Post from Teresa Start the Revolution Without Me

Let’s look at his picture of how they are spending their time protesting on Wall Street at Legal Insurrection

Sadly, as I think about their protests, I am reminded of when Wall Street was bombed in 1920 and the World Trade Center in 1993 and 911. I wonder if these events even cross their mind while they are protesting.

Is the government holding back the private sector from doing what they do best?

I saw part of a commercial on tv last night for a news channel.  It bothered me, but I couldn’t quite put my finger on the reason why.  It kind of reminded me about privatization, which was a really big topic back in the 90s.  To put privatization in very simple terms, it is the idea that it is better for the government to contract for work to be done than to do it themselves because the government can’t be experts in everything.  Thus, it makes more sense for an expert to provide the service.  Also, it can be most cost effective.  At the time one area where privatization was growing was in managing prisons.  If you look at how a prison is run and how it makes sense for one company to provide the services in various areas rather than having each city, county, state have to basically provide the same services but on a much smaller basis then you can see why privatization was viewed as the direction governments needed to go.

So back to the commercial I saw.  It had to do with a bridge that can only be built by the government, thus, the reason why we need to watch that channel because they see the need for the government to provide things like bridges for us.  Finally, I realized the problem with this idea.  Have you noticed what happens when a bridge is built or a road is built.  The government contracts with a company that specializes in road building or building bridges to do the work.  Perhaps a government will do basic work, but ultimately they will find an expert to do the work.  Thus, while this commercial was about the need for government, government eventually needs the private sector to do the work.  Come to think of it, sadly the point of the commercial was that the private sector wouldn’t invest in building bridges thus that is the reason the government is needed.  Perhaps, if the government would allow the private sector to do what they do best, the private sector would invest in bridges.  As a side note, if you look back at roads, ferries and bridges back in the Colonial times, they usually were built and maintained by private citizens.

Here a plant, there a plant, here the union, there the union

Here are two news stories that happen to be headlines in the same paper on the same day.  I haven’t quite decided how I want to connect them together so I decided to let you the reader do so.

The first is http://www.tennessean.com/article/20110731/NEWS0201/307310092/GM-collected-17-million-from-TN-jobs-then-left?odyssey=tab|topnews|text|FRONTPAGE

The one thing that comes to mind with this is that if it was a grant, if it wasn’t used based on how they were supposed to use it, then shouldn’t the money be returned to the state?

http://www.tennessean.com/comments/article/20110731/BUSINESS/307310046/UAW-revving-up-unionize-South

The question that comes to mind regarding the union is that if a plant decides to unionize does that mean that the union can decide to support other union members with more seniority that want to transfer to this plant, thus causing current employees to be laid off to make room for union members with more seniority?  It has been years since I studied unions so I don’t know the answer to it.  However, you have to wonder how much the union will look after the current employees when they have union members who live in Tennessee and other states who are no longer employed.  Also, I know that in right to work states, you don’t have to join an union but how does that work at an automotive plant if some are union members and some are not.  It seems like it will cause more problems than it will solve, especially when it doesn’t seem like the employees are the ones who are looking for the union to help them…more like the union needs more members to help their pyramid structure, as in need more dues to feed the top echelon.