A Short ECON101 Lesson about Taxes

A Short ECON101 Lesson about Taxes

Right now, the US Congress is hashing out a “tax reform” set of bills intended to change the ways taxes are confiscated from American workers and savers.  Those on the Left often refer to “tax cuts for the rich”, showing their basic envy of people who actually EARN their livings in the real world.  Republicans, in the majority in both the House and Senate, and in possession of the White House, consider it their responsibility to reduce the tax burden on working and saving Americans.

The concept of “revenue neutrality” was originated by Democrats who are horrified at the thought of Government receiving one fewer cent of its lifeblood from those Americans who pay income taxes (currently just slightly over 50% of Americans).  A young member over at Ricochet opines that the current tax scheme MUST be “revenue neutral”, as the Federal Government is already overdrawn on its accounts and can’t tolerate any reduction in its “income”.

That is not true, and here’s why.

Reductions in Tax Rates, especially for high-earners, always result in more revenue for the government (small and large business owners keep more of their earnings, add employees to their payrolls, and create more taxpayers). Why is this so hard for people to understand? This is Econ 101. And why, oh why, should the all-mighty Government not shrink? Why can’t waste be eliminated from all levels of Government? The less Government confiscates from your paycheck, the more you have to spend, and save!

The problem is that those in Government do not trust their fellow Americans, who pay their salaries from their own legitimate earnings, to know how to allocate their own money. “Revenue Neutral” is a crock!

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I wasn’t going to do a Thanksgiving post this year…

I wasn’t going to do a Thanksgiving post this year…

But it’s just too important for me to miss.  We (hubby and I) have so much to be thankful for, this year and every year.  We both have been incredibly fortunate to have kept our jobs all through the financial crisis period after 2007, and even advanced.  Hubby will celebrate 38 years at Big Aerospace Company in January, and I will celebrate 10 years at Supplier to Big Aerospace Company on January 2.  I was absolutely convinced that I would be toast when our big layoff came in November of 2008, since I had been there less than a year, but nope, I was spared.  We sure had something to be thankful for that year!

We are so lucky to have been born in this Greatest Nation on God’s Green Earth (hat tip to Michael Medved), whose exceptionalism nurtures native-born and immigrant alike.  We have been allowed to make our own way, choosing our own careers and living arrangements, with minimal interference from the Big Brother State (even though it was touch-and-go during the Obama years).  And we never take for granted all the benefits of living in a country governed by a Constitution which protects our right to Life, Liberty, and the Pursuit of Happiness.  No country, ever, in the entire history of humanity on Earth has ever been as prosperous and free as the United States of America, and I give thanks for that every single day.

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This year, I give special thanks to God for the tenuous health of my brother-in-law, who suffers from end-stage liver disease.  He is on the waiting list for a liver transplant, which could give him many more years of life.  Just think, this benefit has only been available for tens of years, and was developed right here in the USA (along with many other places).  It has been difficult for brother-in-law, but he is still around and livening up the holiday meal.

We give thanks for our beautiful cat, Kikyo, who keeps us smiling with her antics.  I love sitting, reading, with her on my lap purring.  Even when she has to go to the vet for a checkup, she explores the exam room and captivates the tech and the doctor.

Warm Cat
Kikyo, keeping me warm while I read

I was born and raised in the Pacific Northwest, one of the most beautiful places on the planet, and I never forget how magnificent our mountains, lakes, and prairies are.  We travel all over the state in our private automobile, taking advantage of our Liberty.

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Diablo Lake from Overlook on Highway 20

Winding Road
Winding Road-Eastern Washington State

We give thanks for our fellow men, who help us every day, who build, maintain, and inspire all the infrastructure around us.  Whenever we drive over Stevens Pass to Leavenworth on US Highway 2, I always marvel at the ingenuity of the road-builders whose work enables us to drive in comfort many miles without even thinking about it.

We thank God and our families, friends, and fellow Americans, past and present, for allowing us to prosper, and live comfortably in the greatest, most unusual nation ever conceived by men on Earth.  Oh, yeah, and thanks to God for putting us on this beautiful planet in the first place!

[Featured Image by Michael Ramirez]

Giving “Transformation” a bad name: why I’m not doing a photo challenge this week

Giving “Transformation” a bad name: why I’m not doing a photo challenge this week

In the past 8 years, two major events have totally soured me on anything that bills itself as a “transformation”.  The first one happened back in 2008, when Barack Hussein Obama was elected president.  His mission, stated boldly before the American people during his campaign, was to “totally transform America”.  He basically was dissatisfied with the way the United States was founded and had developed, and he did his level best, in his eight years in power, to bring that about.  From his first “apology tour”, to the fight to socialize the medical care industry with Obamacare, to the tight leash on the banking industry with Dodd-Frank, he succeeded fairly well.  And we, the American People, are still feeling the adverse effects of that success.

Excuse me, but America did not need to be transformed, and we are now a demonstrably weaker, less-satisfied, and less-capable country.  More and more ordinary citizens have felt the yoke of Big Government ruling their everyday lives.  The US economy has been hobbled by more intrusive regulations, and no, you were NOT allowed to “keep your health plan” or “keep your doctor”.  Millions of self-employed and small business owners lost their medical plans all at once, and were forced to purchase unwieldy, very expensive, “approved” plans that did not meet their needs.

Barack Obama learned very well from his Communist father that America was a nasty place, where black people were mistreated at home, and abroad; and other countries were beaten down by that terrible US foreign policy.  He did his best to make the majority of Americans (those of us who are white and US-born) feel guilty for oppressing all those downtrodden (illegal) immigrants.

So that ‘s the first Transformation that has made me cringe whenever I hear the word, and prevented me from ever again supporting anything that bills itself as transformation.

The second major event took place at my place of work, a medium-sized company that makes items for the aerospace industry.  In late 2014, the company hired a new chief executive, who came from a huge conglomerate.  With him, he brought other executives, and a big plan to totally transform our factory to make things more efficient and profitable.  In October of 2015, our plant underwent a “total transformation” of the factory floor and production processes.  The plant was basically shut down for what was supposed to be a week and two weekends, but ended up as two full weeks, and minor shutdowns over the next year.  We employees were issued safety gear (hard hats, vests, steel-toed galoshes, safety glasses), and were directed to help move things around where needed.  I spent a day helping pull up carpet tiles, but mostly stood around and watched. Oh, and the Customer Service department, while we were destroying and rebuilding the factory (while not engaging in any production), was in a conference room taking new orders from our customers at normal lead time.  No mention of the factory shutdown-they were basically lying to our customers about when their parts would be ready.  More on that later.

Those high mucky-mucks from the head office were convinced that they knew exactly how to run our factory, and they changed everything with NO input from us peons.  Big noisy machines, which had been behind a wall, were brought out into the main factory, so production employees who assemble small parts now had huge machines right next to them.  The ambient noise level in the factory rose by 100%, and many of us were forced to wear earplugs so we could hear ourselves think.  Production procedures were altered so operations were done in different order, and components that used to be stored close to the production areas were moved back to the main stock room.

Well, funny thing, that total transformation was a fiasco.  Production levels suffered, on-time delivery plummeted, and we had a bunch of unhappy customers.  Many of the new production procedures had to be reversed when they were found to make the process worse instead of better.  And now, two years later, some of those big noisy machines are being moved back behind the wall!  Over the past two years, dozens of employees quit the company, and those of us who are left are forced to take on more and more of their work.

So you can see why anything that is billed as a total transformation makes me frown these days.  Sorry, but no photo challenge this week.  I have had enough of transformation.

On This Labor Day…Proudly Working and Supporting Myself at Age 68

On This Labor Day…Proudly Working and Supporting Myself at Age 68

Today is a holiday for me.  At age 68 (two years past my full retirement age of 66), I am working full-time (actually, more than full-time with all the overtime I put in), at a job I love, and with a side interest for my professional association.  As a Planner/Buyer for an aerospace company, my job is vitally important to the smooth functioning of my company, and I never worry about becoming irrelevant or being laid off. Yes, even at my advanced age, I make a difference every single day.  There have been layoffs large and small since 2008 when I was hired, but after I survived the bloodbath at the height of the financial crisis, I think I’m pretty safe.

There used to be three people with  my job title at the company, and over the years the other two left the company, and I took on their work.  So I am literally doing the work of three people; very competently, I might add.  One of the principal values I live by is being a productive member of society.  I made a mid-life career change (from hospital pharmacy technician), and I feel like I’m just hitting my stride, with many productive years ahead of me.  I don’t feel old, and people tell me I don’t look my age <grin>.  My boss appreciates my work, which is gratifying.  And I can guarantee that my coworkers and other internal customers will miss me while I’m on vacation next week.  As of today, I have no intention of retiring any time soon.

Since 1999, I have been the Business Survey Chairman of ISM-Western Washington, the association of purchasing managers.   Putting out the Survey every month keeps my finger on the pulse of the local economy, and provides excellent economic information to the local and national press and economic community.  I get enormous satisfaction out of this work, and I intend to keep on doing it, even if I retire from full-time employment

So, on this Labor Day, give a wave and thanks to those who keep the world turning around, food on the table, and planes in the sky.

We knew the managements of Facebook and Google were Liberal

People are probably quite familiar now with the big story of how a Google software engineer was summarily fired for circulating a memo around his company, positing the viewpoint (taking into account verifiable scientific studies that confirm this) that a reason why more women don’t work as software engineers could be that most women don’t want to be software engineers; not that the evil male empire is preventing them from becoming software engineers.  Google circulated memos in opposition, and their reason for dismissing their engineer was that his memo “violated company policies”.  Here is a link to a post on the Ricochet Main Feed.  Maybe you’ll want to join.

Just recently, the Daily Caller newsletter published an article discussing the participation of Google and Facebook in a gathering called “Netroots Nation”, a meeting of a variety of far-left techies.  It seems that this “net roots” group will be ganging up on a pro-life organization.  A Ricochet member did this, which is absolutely perfect:

NetrootsNationGoogle-331x600

[Editorial Comment.  If your organization protests a group that is “pro-life”, what does that make you?  Why, it makes you and your organizations and your sponsors “anti-life”, or “pro-death” (here’s looking at you, Planned Parenthood)]

The Daily Caller story also referenced a video, with the Google name changed to Gulag.  You may never think of Google in quite the same way again.  I have stopped using Google for my internet search.  I use DuckDuckGo instead, and it works just fine.  You already know that I do not use Facebook.  Here’s just one more reason why.

The Governor of the State of Washington needs to be Committed

The Governor of the State of Washington needs to be Committed

For years, we residents of the State of Washington have been hearing about the woes of our largest state psychiatric institution, Western State Hospital in Lakewood (south of Tacoma).  This institution has had numerous escapes of dangerous inmates, reports of employees attacked by inmates (and sometimes attacking, themselves), and staff shortages and resignations.  Once, a court commissioner nearly put Cheryl Strange, the Head of Western State Hospital in jail for not admitting an obviously insane patient who had been picked up by local authorities.  The Federal Government, which contributes funds to the running of the hospital, has threatened to withdraw support if the hospital can’t improve its operations.  This institution has been a hot mess for years!

So, today, the Governor has appointed a new head of the state Department of Social and Health Services (DSHS), which has had its own problems for many years (mistreated foster kids, elder abuse, high staff turnover, very high caseloads for social workers).  And that new head of DSHS would be…wait for it…Cheryl Strange!  So the state now has a head of the most-stressed cabinet institution, who has already demonstrated failure to handle the huge institution she has been responsible for for years!  It is my considered opinion that Governor Jay Inslee needs to be committed to Ms. Strange’s former institution, so he can see how really competent his new head of DSHS really is.

Some thoughts on the King County (WA) Ballot Proposition 1, “Sales tax for Cultural Access Program”

Some thoughts on the King County (WA) Ballot Proposition 1, “Sales tax for Cultural Access Program”

Here is the text of the ballot measure on the primary ballot in King County, Washington, that includes Seattle and surrounding suburbs.

King County
Proposition No. 1
Sales Tax for Cultural Access Program

The King County Council passed Ordinance No. 18513 to establish and fund a cultural access program. The program would expand access to arts, science, and heritage programming throughout King County. The program would include cultural education in schools and transportation to cultural venues for public school students. The program would also provide funding for cultural organizations to expand programming, including to serve diverse and underserved populations. The cultural access program, including administrative costs, would be funded by a county sales tax increase of one-tenth of one percent for seven years beginning January 1, 2018.  [Emphasis mine]

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Last night, and at a concert last week, the Marketing Manager of the Seattle Chamber Music Festival urged us in the audience to vote in favor of this addition to the Sales Tax in King County.  Being a Cultural Organization, the Seattle Chamber Music Society would get some funding from the sales taxes.  Vote King County a higher sales tax, so we may have some of those funds.

Here are some of my thoughts and questions about this ballot measure.

  1.  King County is the most liberal political unit in the state of Washington.  The residents of King County, and Seattle, rarely saw a tax they didn’t like.  The city of Seattle has numerous times voted to tax its property owners additionally for schools, the homeless, family programs, transportation,  ad infinitum.
  2. The liberals who live in King County are always bemoaning the “regressive” taxation scheme in Washington State, whose Constitution forbids an income tax, and its reliance on sales taxes, which disproportionately fall on the “poor”, “low-income” portion of the population. {An aside–the Seattle City Council has just voted unanimously to institute an income tax on its wealthiest citizens, knowing full well that this is illegal and will be held up by lawsuits from day one}
  3. The Sales Tax in Seattle has already broken the 10% level, and is approaching 10% everywhere else.
  4. If this measure passes, everyone in King County will be paying an extra $.01 in sales taxes on everything they buy.  Yes, those poor, underserved community members will also be paying that extra sales tax on everything they buy, in order that they may have “improved access”, whatever that means, to “cultural programs”.  There is no way to exempt the low-income from paying this additional sales tax.
  5. The money collected from this additional regressive sales tax, will cover “administrative costs”, as stated in the ballot measure above.  Did anyone opine on what percentage of the money collected will go for administration?  Administration includes the costs of collecting the money, allocating it to a special account, deciding which organizations will receive money, and deciding how much will go to each organization.  Employees will have to be hired (and paid, and provided with benefits including pension), to develop an application form and procedure, and then to evaluate the applications as they are received, to decide how the money collected will be spent.
  6. What happens when the cost of living in King County rises by the amount of this additional sales tax on everything you buy?  Might the increase in the cost of a new car discourage someone from buying a new car in King County?  The surrounding counties of Pierce, Snohomish, and Kittitas will not be raising their sales taxes, so a certain amount of purchases of expensive items might go to another county.  Those low-income residents of King County might have to defer purchases into the future, or not buy at all, since their income would not rise to cover the additional expense.  It has been shown that those who advocate for higher taxes rarely take into account the behavior changes that happen when someone experiences an increase in their cost of living.
  7. Who decides which cultural and heritage organizations will receive money from these new “access” funds?  Do faceless bureaucrats in Seattle decide how to allocate this money?  Do they solicit input from the arts community?  Do they give money to organizations whom they know and patronize themselves?  Do they favor the “charity of the month”, like the Gay Pride organization, or the Seattle Symphony?  Do they give money to the ACT Theater, which promotes liberal causes and puts on productions which take gratuitous slaps at a president they don’t like?  Will they be funding the “Resistance”?  Will they solicit input from ALL the people who will be paying higher taxes for the next seven years?
  8. What do they actually mean by “Access”?  Is there an implication that access is now denied to some of the “underserved” population?  Do they know who the underserved are?  How do they determine who is underserved?  And exactly who makes that determination?  What do they mean by “diverse”?  People of color, people of oppressed ethnic groups, people of sexual minorities?

My guess is that those promoting this new tax have not given any consideration to many of my points above, especially the one about our regressive tax system here in Washington State.  They think that everyone will just happily pay more for everything they buy, knowing that those underserved, low-income populations will benefit from their largesse.  It will make the relatively wealthy residents of Seattle feel good, knowing that they are helping those underserved populations get a dose of “culture” that they are being denied now.  Starting in the late 1960s, cultural programs in the Seattle Public Schools were reduced, in order to pay for busing students across the city for desegregation.  These days, the Seattle Public Schools have all sorts of programs devoted to sex-education, environmental education, and “white-privilege” education; and their dropout rates are much higher than they were in the 1960s.  Also, these days 40% of the schools budgets go for administration, eating up funds that could be spent on art and music in the schools.

It will be interesting to see how the residents of King County vote on this new sales tax proposal.  I do not live in King County, so I don’t get to vote on this measure.  But if it passes, I will do my best to spend as little as possible in King County.  See, people DO change their behavior in response to economic incentives.