The American Dilemma and How We Can Fix It

Archive for the ‘income tax’ Category

THE TRUTH ABOUT “INCOME INEQUALITY”

Once upon a time my father received a notice that his tax return was being audited.  At the time he was a salesman and travelled the country extensively being on the road for forty or more weeks per year.  All of this was done by automobile – and one of the deductions which he correctly took was for expenses related to these trips.  Fortunately, my father was also a meticulous record keeper as well as being scrupulously honest.

Notwithstanding that he felt that unless he had made a mathematical error, which he thought was unlikely, he was confident that his return would survive anyone’s scrutiny, he was still nervous when he arrived at the IRS”s office for his audit.  But several hours later the auditor agreed that my father’s return had been honestly and accurately prepared and issued a “no change” determination.

But the next year he got another such audit demand and one the following year.  As was the case with his first experience these two audits resulted in the auditors’ accepting the original returns as filed.  But other than experiencing a nervous stomach and perhaps a little heart burn, my father learned and taught me a valuable lesson which Chief Justice John Marshall stated in writing a majority opinion in a tax case, “The power to tax is the power to destroy”.

There are several threats to achieving financial independence and even wealth.  They are inflation; lack of financial knowledge; bad management; and most importantly, taxes.  With the exception of taxes, the other three can be handled.  There are assets that increase in value even if inflation becomes rampant; a person can educate himself on how to invest his savings; if a manager who has been hired by an investor is not meeting expectations he or she can be replaced.  But no individual can control the amount of taxes that government extracts from his earnings.  That is a matter of policy and law, enacted by the Congress and signed by the President.

The left’s theory – or at least their major talking points – are that income inequality makes it impossible for people to compete on a level playing field and that in particular, women and minorities are disenfranchised from the same level of opportunity that, for example, white males, (and whites in general) enjoy.  Hence they push for a higher minimum Federal hourly wage – as though a person who has no financial knowledge will somehow break into the middle class and realize the American dream by earning a couple of extra dollars an hour.  People do not get wealthy or break the shackles of poverty by making ten, twelve or even fifteen dollars an hour.  People get wealthy because they have a unique talent or because they start their own business which grows and prospers – or, for the lucky few – because they inherited their money.

But one of the lessons that my father taught me is that, “It isn’t what you make – it’s what you keep” that determines a person’s financial situation.  No matter how much you make if you spend more than that amount, the conclusion will be financial disaster.  Just look at the Federal government’s balance sheet if you doubt that.  Or look at Curtis James Jackson III (better known as 50 Cent) who made several hundred million dollars and just declared bankruptcy.

But the left persists in making these arguments that we need to level the playing field so that everyone has equal opportunity to succeed and if they really believed in the hogwash with which they bombard us, it seems only logical that rather than a fifteen dollar per hour minimum wage we should simply decree it to be one hundred or one thousand dollars per hour.  Now that would have an impact.

So why stop at fifteen bucks when a higher number would be better?  The answer is that everyone realizes that having the skill set to be a burger flipper is simply not worth that amount of money in a free and open job marketplace.  And the reason that being a burger flipper makes the current minimum wage is that there are a lot of potential burger flippers out there who will take that job and do it in an equally competent manner as the present employee should he or she decide that his employer is engaged in “oppressing him”.

My first summer job was working for a company that wholesaled shirts.  I earned two dollars fifty cents per hour and worked a forty hour week.  Of my gross income I had to commit one dollar fifty cents for carfare to get to the job and get home.  And even then, Social Security and Federal and New York state taxes were deducted from my check.  (The City of New York had not yet implemented their own additional income tax on its residents).

Since I took my lunches to work with me, (provided courtesy of my parents) I was able to save most of my check for my college tuition.  And when I realized that it was only a three mile walk one way, I started getting up extra early to walk to my job rather than spend the fifteen cents on the subway.  Once a week on Wednesday I would, rather than bring lunch, treat myself to a slice of cheese pizza at the cost of fifty cents (sixty if I really splurged and ordered pepperoni on it).  I admit to feeling a little bit of guilt about indulging in the luxury of that hot and bubbly slice of pie – but, darn it was good.

The theory that those on the left (and those like Ms. Clinton who appear to be on the left to attract primary voters to her cause) espouse is that we can have the money to institute their social programs by merely getting it from those who have either a special talent or ability, have started a small business which might have grown and prospered or those who were fortunate enough to inherit their substantial wealth.

If we lived in a country in which the government, not the citizen, runs programs and determines who should have so much but not more than that, even confiscating all the accumulated wealth of those who have it in their possession currently and redistributing it to those who would like to have it, would “even the playing field” for a second – and then the same inequities would once again start reappearing.

Whether we like it or not, some people are more motivated, more talented, more intelligent and more creative than others.  And like the classic cream rising to the top, those whose wealth had been appropriated by the government would start over and within a short time would again become wealthy whereas those who had been the recipients of their former wealth would again sink back into poverty.

Well, that’s the scenario with a one time confiscation of the assets of the wealthy.  But even proposing that would take more brass than the left has in their admitted operational playbook.  So the reasonable way for them to proceed is to raise taxes on the rich – as a matter of “equity”.  After all, were it not for the government and the tears and sweat of the miserable masses, these people could never have achieved their success.  We all remember Obama’s famous, “You didn’t build that speech”.

According to the economic theories of the left, trickle down economics doesn’t work nor does it improve anyone’s life except for those doing the trickling.  And more importantly, their firm belief is that just because the wealthy worked hard, been creative and took responsibility for their financial future, they have an obligation to those in society who sat back, got fired from a multitude of jobs for performance and who believe the way to wealth is sitting home collecting unemployment while watching the soaps and eating potato chips, taking only a break from this in order to get out with fellow economic failures and picket outside the business du jour demanding a higher minimum wage.

Now it’s an interesting phenomenon that while conservatives believe that lowering taxes increases the number of businesses that are created and because of this may actually result in higher amounts of taxes collected because of higher GDP, they have an interesting ally in the State of New York – headed by Governor Andrew Cuomo (D) who comes from the left’s own tradition.

There is an ad being run by the state of New York which begins, “New York is changing the way we’re doing business by lowering corporate and individual tax rates.”:  The ad goes on to say that manufacturers who relocate to the state will receive a ten year exemption from paying any income taxes.  If I didn’t know better this sounds remarkably like a plan that could have been authored by President Reagan’s economic adviser, Arthur Laffer.

But if the conservatives in this country need further validation of their economic policies, perhaps the strongest example may come from the Commonwealth of Puerto Rico which is asking that Congress pass a law granting them the same ability to file bankruptcy as Detroit, another Democrat controlled stronghold.  Otherwise they warn us that there will most certainly be default on the debt obligations the commonwealth has issued.  But while waiting for Congress to act on this desperate request, the Governor has, among other proposals, found an interesting way to combat Puerto Rico’s insolvency.  He has proposed lowering the minimum wage for hourly workers on the island.

Talk about mixed (and confusing) messages.  No wonder we’ll be at $20 Trillion in “official” debt by the time Obama leaves office.  Well, he promised “Hope and Change” in his drive that landed him in the White House.  And by the time he leaves office, we may all hope that he’ll leave us with some change – even if it’s small change.

THE SINS OF THE FATHER

“Thou shalt not bow down thyself to them, nor serve them: for I the LORD thy God am a jealous God, visiting the iniquity of the fathers upon the children unto the third and fourth generation of them that hate me.”

Exodus 20:5 (KJV)

There are some conservative American Christians who believe that the government is conducting a systematic attack on their beliefs.  They point to an increasing volume of anecdotal evidence to support this claim.  But in light of recent events, perhaps they will have to re-examine their view.

It would appear that at least one governmental agency has taken the admonition in the above Scriptural verse to heart and has decided to act as God’s instrument to fulfill it.  It may come as a surprise to most of us but that agency is the IRS.  Perhaps IRS has misread the verse from Exodus and believes that it is the Supreme Being – or at least the Supreme Enforcer of Righteousness.

Most people when they hear from the IRS are, like Queen Victoria, “Not amused.”  There is nothing very funny about anything that agency does – or threatens to have the ability to do.  That sentiment has long preceded the obvious politically motivated refusal to give conservative organizations a tax exempt determination.

But even the IRS has reached a new low – leading one to believe that somewhere there really is a bottomless pit.  Thanks to an act of Congress, the former time limit of ten years that the agency had to collect taxpayer debts has been lifted.  And the IRS has wasted no time taking advantage of its newly extended abilities to reach into the taxpayers’ pockets.

The problem isn’t that the agency is collecting monies that a specific taxpayer has failed to fork over to them.  The agency feels that it is perfectly correct to collect those funds from the descendants of the taxpayers who originally incurred them.

Now this may astound you but there are apparently some “errors” which occur in the course of governing this great country.  In fact, there are quite a few of them which occur regularly.  In previous posts I made reference to how the IRS annually sends refunds to people who fraudulently claim that the government owes them money.

From sending millions in over 200 separate refunds to a single address in Florida or similarly sending half a million bucks claimed on 100 returns to one address in Bulgaria, the agency has shown its abilities in mastering the fine art of ineptitude.  But the current rampage against the taxpayer comes not from the IRS’ own inadequate procedures but rather from another federal entity.

If you’ve been amazed at how inept the roll out of Obamacare has been, it should be no surprise that the same agency which was responsible for that debacle, HHS is also the source for other mistakes which the IRS is trying to set right.  And the particular division of HHS which apparently screwed up is none other than the Social Security Administration.

SSA not only administers retirement benefits into which all Americans are forced to pay through payroll deductions or, in the alternate, on their tax returns.  But it also administers disability payments to workers who are (purportedly) unable to work due to physical impairment or mental issues.  The second of these two programs has been fraught with fraud.  Even SSA acknowledges that.

But while the erstwhile crooks who con the taxpayers out of their hard earned dollars by making false disability claims has increased substantially in recent years, there have always been some who made false claims or received benefits after they no longer qualified.  It is these people who are currently being targeted by IRS.  Or more correctly, it is their children who are being forced to make restitution for these “overpayments.”

Let’s think about this for a moment.  Purportedly, a person received payments to which he or she was not entitled – let’s say 40 years ago.  Then, for lack of anything better to do, someone in SSA noticed that their agency had made a $350 mistake.  And they decide that going after this will help relieve the national debt.  So they inform IRS that there is a balance due them for the mistake which they originally made.

But there’s a problem.  The individual who received this overpayment died ten years earlier.  Not to be deterred by this, the IRS has figured out that their child, who was four when this problem started, is still alive and has a refund due on her return.  So the IRS flags her return and deducts the overpayment to her parents from her return and sends her a notice, explaining why her refund is $350 short of what she was expecting.

I’m not sure this program will prove to be anything near the windfall either for IRS or SSA that pursuing and shutting down fraudsters who collect around $50 MM per year in bogus refunds receive would prove to be.  Frankly, I doubt it.

As this will do little to contribute to federal revenues, I can only assume that the IRS is adhering to the principles espoused in our quote from Exodus.  It will be interesting to see if some religious group decides to file suit to block this program, citing the once venerable precept of “Separation of church and state.”  Meanwhile, it appears that the sins of the father will indeed be heaped upon the children.  We’ll have to stay tuned to see for how many generations that will last.

FORM AND SUBSTANCE (MY MORNING AT THE IRS)

Once upon a time in America before there was such a thing as “e-filing” and people actually had jobs, we were consigned to self-report our annual financial activity to the IRS using plain old paper.  Those were dark, primitive days indeed.  With only a month to go until the Ides of April, I reflected back on those barbaric days and remembered an experience I had with that tax collection agency.

For once I decided to be proactive. I was not going to wait for the booklet to arrive in the mail. I was going to get the forms I needed to file my income tax return and get it done before midnight on April 14th.  Despite the blustery winter weather I was not going to be deterred.  I was on a mission.

As I prepared to leave the office I realized that I might be able to provide a benefit to my like-minded employees. So I explained that I was headed to the IRS to pick up tax forms and would be happy to get any that my employees needed. Several people spoke up and said that they would appreciate my doing that for them.

When the list was compiled, there were 7 different forms (and Instruction Books) and a total of 37 copies that were required. I headed out on a snowy early March day to the IRS office at 230 S. Dearborn Street in Chicago.

In  the IRS’ lobby there was a large sign that indicated forms were available on the 17th floor. I went to the elevator, my list in my pocket.  Exiting the elevator – another large sign had an arrow directing me to the room where forms were available. I followed the arrow and went into the room.  Much to my surprise and delight, other than the two IRS employees who were behind the counter, I was the only person there.

I went up to the counter and pulled the list from my pocket. I waited patiently as the two employees discussed their dates over the weekend.  I waited politely at the counter – figuring that one of them would eventually deign to assist me.  After five minutes, the female IRS employee came over to the counter and said, “Can I hep you?”

I said, “Yes, please. I would like to get the forms and instruction booklets on this list.” I gave my handwritten list to her.

“Do you has a number?”

“A number?,” I asked.

“Yes. I can’t hep you unless you has a number.”  She pointed to the entrance of the room where by the side of the door I saw a rack of hard plastic numbers hanging on the wall– the kind you used to see in a butcher shop or bakery.

I said, “No, I don’t have a number but I’ll go get one.”

I came back with a number (1) and when I returned to the counter this woman looked at me as though I were new to the room.

“Do you has a number?”

“I do.”

She looked at the electronic display above the plastic cards and called, “Number 1.”  I handed her my number and my list.  She pressed the button under the counter to advance the number to “2”.

As she turned from me she took perhaps three steps and then returned to the counter.

She said, “I can’t fill this order.”

Thinking that the forms had not yet been printed I said, “When do you expect to get the forms in your office?”

She said, “We got the forms. But you only allowed to get five different forms and a total of 25 copies on one day.”

In a perverse way this made sense to me. I could see how it would be inconvenient if a person came in to get a large number of forms – thus holding up everyone else. But since I was the only customer I was willing to have her fill the first 25 items on the list and then wait in line, take another number and wait my turn for the rest.  I explained my plan and asked if that would be okay.

“No. You kin only get a total of 25 copies of the forms per day.”

My usual gentility and patience started to fade dramatically. So I said, “What if you fill the first 25 items on my list. I then go back to my office and ask my 71 year old secretary to walk a mile and a half in the cold and hand you the list to get the remaining forms. Would you give them to her?”

“Yep.”

“Now don’t you think that’s a little silly?,” I asked.

I don’t know if I struck a chord with her over my 71 year old secretary or what exactly motivated this woman, but without answering me, she turned away with my list and about 10 minutes later returned with my complete order.  Plus I got a bonus.  In addition to all the forms that I had requested she provided three additional ones. They were entitled, “FORMS TO REQUEST FORMS.”

I used to be critical of former Treasury Secretary Tim Geithner’s failure to pay his own taxes correctly. I mean, after all, he was the head of the Federal agency that has the IRS within its domain.

But as I thought back on this situation I realized that Sec. Geithner was probably innocent of any fraudulent activity.  The reason he failed to complete his return properly was – HE COULDN’T GET THE FORMS!

NOSTROVIA (На здоровье)

A long time ago it was grapes.  And then it was lettuce.  Back in the 70’s we consumers knew how to make our voices heard.  So we boycotted those commodities to bring pressure on the growers to improve the wages and conditions of the migrant farm workers.

Whether it was withholding our purchases from these products which ultimately caused the growers to increase the wages they paid their workers or some other factor I’m not sure.  But at least we believed that we had helped make a difference.

if you’ve read this blog for any length of time you certainly realize that I view life through a relatively conservative set of glasses.  So saying that I participated actively in the grape and lettuce boycotts might surprise you.  Let me set the record straight.

No, I did not have some major catharsis which switched me from a liberal view of life to one that was more conservative in nature.  Unfortunately, largely due to an extremely biased media, we have come to equate the terms conservative and uncaring as being interchangeable.  Nothing could be further from the truth.

I believe that it is every person’s moral responsibility to help our fellow man out as best we can.  That applies across both sexes and irrespective of race or creed.  I believe and always have that we are supposed to “Do unto others…” and that we are each others’ keepers.  I believe that is the message of true conservatism – however it may have been corrupted in practice or mis-stated on television.

For years I boycotted the products of Canada.  Not that I have anything against our friends to the north.  But I could never in my mind, after seeing several videos and the activity once in person (and that was enough) justify the slaughter of harp seal pups in front of their helpless mothers – all for the sake of human vanity.  That personal encounter left me sleepless for weeks afterward.

As a conservative (and a capitalist) I thoroughly endorse the concept of consumer boycotts.  If the basis of capitalism is making money, then withholding the lifeblood that sustains a company whose products we abjure, for whatever reason, seems a reasonable way to make our demands known and to instigate change on the part of the entity whom we consider an offender.

If you think about it, if we really wanted to force our lawmakers to implement a simplified and equitable tax code instead of spending generations talking about it, there is a simple way to achieve this.  This next April 15, if twenty million people simply refused to file their returns it would make a statement that would awaken even the most hard of hearing in the halls of Congress.  There is something to the concept of strength in numbers.

And that brings us to the topic of a boycott which is currently underway.  The target is Stolichnaya which we all know is a Russian vodka.  Actually, most of it that is produced for export is manufactured in Latvia (Premium Vodka) as opposed to the bottles which are produced in Russia and bear the labels (Russian Vodka).

The boycott began in gay bars in New York but have spread around the world to other such establishments because of the extremely oppressive stance that Vladimir Putin has taken regarding gays in mother Russia.  It is hard for me to comprehend Comrade Putin’s position.

This is not a matter of gay marriage (that is not anywhere near being on the table in Москва).  No this is simply a matter of human rights – and I would hope that people, whatever their sexual orientation, would come together solidly on the side of supporting those for everyone – including our LGBT brothers and sisters.

Perhaps the most difficult to convince in this struggle are those who self-identify as “conservatives”.  I can imagine what a member of the Westboro Baptist Church might do if they were to hear someone preach a sermon on the subject.  The result might be no different than the fate a gay man would expect in most of the Muslim world – death at the hands of an angry, righteous mob.

In St. Thomas Aquinas’ “Summa Contra Gentiles” he offers the following about God and His creation:

“For the virtue of a being is that by which he operates well. Now every operation of God is an operation of virtue, since His virtue is His essence, as was shown above. Therefore, God cannot will evil.”

If God cannot will evil, then certain other conclusions follow.

“[1] From this it appears that the hatred of something does not befit God.
[2] For as love is to the good, so hatred is to evil; for to those we love we will good, and to those we hate, evil. If, then, the will of God cannot be inclined to evil, as has been shown, it is impossible that He should hate anything.”

Well, the Stoli boycott has uncovered a worm in the Tequila (pardon the mixed metaphor).  The Latvian gay community has appealed to their brothers and sisters to stop it – for fear that their this might upset their tenuous position in their home country.  We always should be cognizant of unintended consequences when we embark on something like this.  Whether their words are heeded by their brothers and sisters in the U.S., UK and Canada remains to be seen.

Let me close with a small consumer tip.  I used to drink Stoli.  It is good vodka.  But if you want to have some excellent vodka at a fraction of the price all you need to do is the following:

Buy a charcoal-based water filter (such as a Brita).  Use this filter solely for the purpose of filtering vodka – unless you want your kids walking around all day half smashed.

Instead of purchasing a premium vodka, (Stoli or Grey Goose or such), buy your vodka in the 1.75 liter size (usually around ten dollars).  Gilbey’s and Gordon’s both offer a good product – among others.  Run it through the filter twice, then store it in glass bottles and put it in your freezer for later consumption.  You’ll be amazed at how this improves the flavor and resembles the taste of the premium vodkas that are on the market.

I know that those of you who are vodka drinkers out there will be thanking me for this advice later.  But until then На здоровье!  (And “chin chin” to boot).

PARADOIXCALLY SPEAKING

There were probably a number of reasons that Mitt Romney lost the election – the most important being that he received fewer votes than President Obama, plain and simple.

Whether that was due to the fact that 6 million voters were so unimpressed with our choices that they “disappeared”; whether it was that Gov. Romney and the Republican party took the mid-road and failed to interest conservatives in his campaign; or whether it was a function of a well-run and well-executed campaign of demonizing the governor for his being financially successful doesn’t really matter.

I wanted to consider the third of those possibilities in this post – that Governor Romney was perceived as being unable to relate to the needs and concerns of the ordinary citizen because he is wealthy.  And therein lies a paradox.

If you look at the roster of those whom we elect to Congress (and continue to re-elect) you will find a Who’s Who of millionaires.  That doesn’t seem to deter the voters in their districts from returning them to office.  Apparently the voters don’t have the same concern when it comes to a Rep. Nancy Pelosi or Sen. Harry Reid to name just two.  But the list of millionaires in Congress includes multitudes of members affiliated with both major political parties.

While Congress boasts the lowest approval rating in U. S. history, for some reason we hate the institution but we love our own representatives and senators in it.  Of course, that line of thinking leads to our re-electing a collective assembly of people, many of whom are incompetent, self-serving, just plain corrupt and, of course, wealthy.

But let’s move to addressing the issue of the anger over Governor Romney’s accumulated wealth.  Those with a liberal agenda cite this as “prima facie” evidence of his lack of concern for the common man and an outgrowth of his lack of compassion.  He and his kind should be stripped of the income that they are receiving through their paying Federal Income Taxes at a  more “equitable” (i.e. higher) rate.  And, of course, these new found funds should be added to the public dole for those unfortunates who have not demonstrated any ability to succeed on their own.

Raising taxes on the rich is a cornerstone of the Obama plan for restoring fiscal order to our very dis-ordered financial house.  It is the major element causing the stall in negotiations as we hang at the edge of the “fiscal cliff”.   Everyone who has looked at this “solution” agrees that if we were to implement the President’s proposal, it would only raise enough revenue to chip away at 7.5% of our annual budgetary deficit.  But let’s ignore the facts and assume that this would actually eliminate the entire deficit.

If that were the case, then the salvation for our economic mess would be due solely to one group – the wealthy whom the President and the voters excoriated in the recent election.  But if we don’t allow people to become wealthy by dis-incenting people from creating successful businesses, then we will have eliminated the possibility of having any saviors whom we can fleece in the future.

We’ve already started to see an exodus of successful entrepreneurs move to other countries where they receive more favorable tax treatment.  There is no reason to expect that those who were clever enough to make fortunes are not smart enough to protect them from government encroachment and will choose to live in a more welcoming environment.

And when the last of those who are creative have gone, what then will become of those who have been trained to be dependent on the revenue they provided so that they could receive their monthly government-issued stipends?  Will they like rats, suddenly deprived of an adequate food supply, turn on their fellows and devour them?

That is the paradox that may soon be resolved.  I wonder if the answer will be one for which we are prepared.

DIRTY LITTLE SECRETS

What really is in Mitt Romney’s years of tax returns that he has not released for public gawking?  Apparently only he, his wife, their accountants, the IRS and Sen. Harry Reid really know.

You may recall that about a month ago the good Majority Leader of the Senate made the declamation that “he had proof” that Mitt Romney hadn’t paid any taxes for ten years.  Having laid that unsubstantiated bombshell on the public, there has been nothing further forthcoming from Sen. Reid on the subject.

Frankly, neither I nor the intelligent segment of the American public really cares whether that is true – other than to point to the incredible stupidity of our massive tax code which no one can understand – including Treasury Secretary Timothy Geithner, who failed to pay his own taxes correctly.  The Tax Code should be overhauled so that it is not only equitable but understandable to the average Jane Citizen.

A few days ago Sen. Reid was “involved” in a six car collision here in Las Vegas.  Not only was his vehicle damaged but two that were being driven by Capitol Police and two Metro Police cars, all four of which were “escorting” him were involved.  Now I do not know if the Senator was at fault in causing this accident since the media coverage conspicuously avoided describing the circumstances surrounding it.  But if the Senator’s driving skills are as compelling as his ability to bringing a budget to the floor of the Senate, I think that is a good possibility.

I’m not sure who the occupant of the last car was, but you can be pretty certain he was a Republican who had not yet participated in early voting.

Throughout this campaign, President Obama’s ads have leveled charges that Mr. Romney isn’t “paying his fair share” – or more accurately – “his fair percentage.”  This makes for good sound bytes and gets people riled up and angry – which has been a hallmark of the achievements of the Obama campaign.

People who couldn’t, with or without the use of a calculator, tell you what percentage 87/299 is,are totally stoked by this inequity.  The fact that Mr. Romney and his wife paid $3 Million or so compared to their $10,000 doesn’t seem to impress those who buy into this rhetoric as being “fair”.  Again, you can hardly lay the blame at Mr. Romney’s feet when it deserves to be leveled against those who wrote the code under which he made his contribution to the welfare of the nation.

Frankly, if I had been an advisor to Mr. Romney, I would have simply said, “Show them the returns and let them have fun with them.”  I would also have used that as an opportunity to address the fact that we need, not to revise, but to re-do the tax code.

Just think about all the jobs we could eliminate at the IRS, and H & R Block and public accounting firms if we had a flat tax.  We would no longer need those handy dandy tax software preparation programs nor would the firms that provide them need software developers.  And the amount of paper that we would save!  We could cut back on the number of loggers and employees at paper manufacturers as well, even as we were saving some of our remaining trees and forests.  And let us not forget that with the reduction in advertising all these tax preparation services, we could slash quite a few jobs in the media as well.

Earlier today I put up a post, “What’s Sauce For The Goose Is Sauce For The Gander”.  And given all the criticism which has been leveled at Mitt Romney and his tax returns, I thought it was only fair to turn the tables and look at some “dirty little secrets” that President Obama is keeping from us.  Specifically, I refer to his college transcripts.

Let me begin by saying that when it comes to the subject of Donald Trump, the most complimentary thing I can say is that he must be suffering from a perennial “bad hair day”.  I watched one episode of “The Apprentice” and was mildly horrified at the glee with which he pronounced the fatal words, “You’re Fired”.  I don’t care for the gentleman – but his offer to contribute $5 Million to a charity of President Obama’s choosing if he reveals his college record does underscore a point.

If the President has nothing to hide, why is this such a deep, dark secret?  For exactly the same reason that I believe Romney should have just given us his tax returns to diffuse the subject, the President could put to rest all the innuendos regarding himself by revealing the contents of his academic background.

It troubles me when unsubstantiated statements are made about anyone – including President Obama.  If those statements are intentionally fabricated with the intent to do harm to another, they are called liable and slander.  No one should be subject to that sort of calumny – and when those assertions lie about the shoulders of the person who is the leader of the free world, it does him and all Americans a tremendous injustice.

I have read several pieces which claim that when the President was at Occidental College, he attended as a “foreign student” from Indonesia under the name he used at the time, Barry Sotero.  Further, these reports indicate that he received grants to attend as a foreigner.  I do not know, nor does anyone other than the President and the Registrar at Occidental College whether this is true.  But if it is then it is certainly disturbing.  And I believe that the American people have the right, and the President has the responsibility, to put these matters to rest.

I try to keep my own counsel and share those things about myself with friends whom I trust when there is a reason for them to know.  I think that is good advice for most of us to follow.

But if you’re a public figure, there is a slightly different set of rules.  We should have the confidence that those in public office are telling us the truth about their personal life experience and conduct so that we can fully get behind them and support their efforts on behalf of the country.  Anything less is both unproductive and unpatriotic.

I find being on the same side of an issue with Mr. Trump to be a little disquieting.  But I must admit that he does throw down an interesting gauntlet.  I hope that President Obama takes it up, collects the $5 Million for his favorite charity, and puts to rest the suspicion and ends the talk about his “Dirty Little Secrets”.

WHY JIMMY DURANTE COULD NEVER HAVE BEEN PRESIDENT

Some of my younger readers may be unfamiliar with Jimmy Durante.  That is unfortunate as he was one of the more important comics and radio personalities of his era.  But beyond his professional career he was much more – a truly charitable and loving human being.

Durante was born in New York in 1893 and passed away in 1980.  He was the youngest of four children born to immigrant Italian parents and dropped out of school in the eighth grade to become a full-time ragtime pianist.

He was active in vaudeville and wrote a song which became his theme song, “Inka Dinka Doo.”  That, together with the nickname, “The Schnozolla” because of his oversized proboscis and his television signoff “Goodnight Mrs. Calabash, wherever you are,” (as he admitted years later, a tribute to his first wife who had passed away), were his signature trademarks.  As were his gravelly voice and unique punctuation of speech.  He was, during his time, an American icon.

Jimmy Durante never had children of his own, which was unfortunate since he loved kids so much.  But he found an outlet for this love by raising money for children who needed medical help or were abused.

A devout Roman Catholic, in 1958 on the Feast of the Assumption, he was presented with a three foot tall cup by the Al Bahr Shriners Temple.  The inscription read, “JIMMY DURANTE THE WORLD’S MOST FAMOUS COMEDIAN.  It’s bigger than your nose, but smaller than your heart.”

Durante was actively involved in raising money through the Fraternal Order of Eagles for “his kids”.  He regularly appeared at Eagles’ conventions and fundraisers, performing for free and refusing reimbursement for travel expenses.  When he made a plea for contributions, he would say, “It’s for da kids.”

So why would Jimmy Durante never had made it as a candidate for President of the United States?  If the current climate and thinking prevailed during his lifetime, his very acts of charity might have undermined his election to the White House.  Or so it appears to this writer based on the unfortunately irrelevant buzz over candidate Romney’s tax returns.

Let me be honest, I had hoped but didn’t expect, that this campaign would be about substance.  Well, my hopes might have been dashed but my expectations are intact.

So, since so many of the (very, very many) ads which camp Obama has been airing point to Mitt Romney’s tax returns as a reason that people should not vote for him, I thought it might be interesting to put this whole income tax business in perspective.

Implicit in the ads is the suggestion that by paying 14% of his income, there is something nefarious going on with Mr. Romney’s responsibility as a taxpaying citizen.  Of course, that is never said in the ads – but that is certainly the clear implication – at least to this viewer.

There is something definitely wrong with our tax code.  We’ve discussed this in numerous posts.  The President thinks we can “fix” it by raising the amount we charge upper income tax payers.  This is roughly the equivalent of trying to stem the catastrophe that befell New Orleans as a result of Hurricane Katrina by having a few thousand people stand outside in the downpour, each of them holding a thimble to collect the waters.

The system is convoluted and unfair in many ways to many taxpayers.  It should be scrapped and something that is equitable and understandable should replace it.  Just think of the supernumeraries at the IRS whose jobs could be eliminated and the consequent reduction we would experience in bloated bureaucratic salaries – a great first step toward balancing a budget.  But that may be then and this is now.

As long as we have to deal with the framework of tax payments under the current law, let’s look at the reason that Mitt Romney pays at such a comparatively low rate.  Most of the discussions I’ve heard on this subject deal with his paying at lower capital gains rates, a form of income which holds a preferred status under the current law.  That is in part true.  And the reason that capital gains are so treated is that they represent a return on investment, a return on risk capital, the risk capital that catapulted America into the greatest economic dynamo on planet Earth.

But setting aside that economic argument, there is one other thing that “distorts” Mitt Romney’s income tax rate.  That is the amount of his charitable contributions.  By my math, if Romney chose not to give away a penny each year rather than the $3 Million or so that appears on his returns, his effective income tax rate would just about double to 28%.  But that would still leave him and his wife with well more than $2 Million in their pockets – even after paying taxes on this money.

When Jimmy Durante appeared without accepting any fees for entertaining during his fundraising events, he “Did it for da kids.”

While I don’t have any special insight into Mitt Romney’s mind, perhaps the reason that he and his wife are so generous is that it is for the pure and wholesome virtue of giving for the sake of giving.  Would that we had more citizens who were like-minded.

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