Tuesday, November 28, 2017

Thanksgiving Traditions

Happy Thanksgiving to those whom I did not see in person this past week.  We were able to entertain family on both sides of the marriage, some on turkey day itself, and some on Friday.  All in all, wonderful food, company and conversation.

In addition to the traditional Thanksgiving turkey dinner with all the trimmings, we engaged in some other events that have become synonymous with this day of thanks. 

Last minute food and drink shopping Wednesday evening

Mimosas in the morning before company arrived

Macy's parade on TV

NFL Football on and off throughout the day

Eating until full, and then eating some more

Falling asleep on the couch

Turkey soup

Desserts, desserts, desserts

Thanksgiving, or at least the way we celebrate Thanksgiving, is uniquely American.   But we are not the only country that has established a day of thanks.  For a quick primer on how some other countries recognize and acknowledge Thanksgiving, click on link below.


One new tradition in which I did not participate, was Thanksgiving night shopping.  Obviously, the concept of shopping for Christmas gifts on the day after Thanksgiving is well established in America.  Black Friday is the unofficial start of the holiday shopping season, the season in which retailers hope to generate enough sales and profits to move their ledgers "into the black" as opposed to being in red which equates to losing money.  For a more detailed historical perspective on how black Friday earned its name, click on the link below.


Anyway, as I said, we did not end our Thanksgiving feast early, or chase our relatives out of the house, or turn off the NFL, or cut short dessert, to drive to the local mall for any of the various blockbuster or door buster sales that began Thanksgiving evening.  My recollection is that this new tradition, Black Friday sales beginning Thanksgiving night, is only a few years old. 

Perhaps, being the procrastinator that I am, I have even less interest in shopping on Black Friday than most, let alone Thanksgiving night.  Perhaps, as the middle class continues to find its buying power shrinking, we have little choice but to rush from the comfort of our homes on Thanksgiving to find the best deals possible.  Perhaps, for those who have made the "business" decision to open the stores on Thanksgiving night, the pressure to satisfy the insatiable greed of the stock holders and corporate boards, outweighs their instinct to allow their employees to more fully enjoy the holiday.  Perhaps America is really about money, pure and simple, and all the posturing about family values and traditions is just window dressing for the rich to enjoy the fruits of the labor of the working class.

Or perhaps, we really don't understand the meaning of thanksgiving, or Christmas for that matter.

I would imagine that if twenty years ago 100 Americans were asked if stores should be open on Thanksgiving, most would have responded negatively, perhaps even thinking the idea of shopping on Thanksgiving un-American, or at least not very family friendly.  I wonder if a new poll of 100 Americans asking if stores should be open on Christmas would react just as harshly.  Let's hope that the idea of shopping Christmas night, to get a head start on the after Christmas sales, does not occur to the Wal-Mart family or any such large retail chain.  Sadly, I wish I could say it will never happen, but I would have thought that about shopping Thanksgiving evening as well.

In the meantime, take a moment to count your blessings and, when the holiday rush seems overwhelming, take a moment and remember the reason for the season.


Monday, November 13, 2017

Means testing not Mean Policies

There has been a lot of discussion lately concerning the GOP tax reform push.  Ostensibly, this was advertised as the first real tax reform since the 1980's.  The tax code is too complicated, which it is.  There are too many loopholes, which there are.  Taxes are a burden to the American worker and the business community.  Hm, not so sure about that one, but I will circle back later.

History seems to indicate that the buying power of the average worker has been eroded, beginning with high inflation rates during the 1970's, followed by tax cuts to those in the upper income brackets, a surge in the availability of cheap labor throughout the world, the ease of corporations to move their "headquarters" to where ever taxes were less, and the focus away from quality goods at a fair price to selling whatever generated the highest profit. 

Certainly, some of the above will not be fixed by lowering tax rates for the biggest corporations and richest individuals, but instead will increase the burden on everyday people who will be faced with tax burdens passed from federal to state to local (the real trickle down economic theory), or cuts in basic services to the neediest among us, or both. 

I recently mentioned to a sibling that I do not find my tax burden all that high.  Perhaps I am lucky, perhaps I am misinformed, but with mortgage, SALT, education, and charity deductions, along with the standard deduction per head, I find my final tax rate to be more than acceptable, if I consider that my taxes pay for

- environmental safeguards
- a strong military
- a mostly free interstate highway system
- relatively safe food sources
- reasonable health care costs and access to above average health care providers
- education system up to 12th grade
- security of knowing social security and Medicare will assist the navigation of my senior years when income will be static
- much more that I am sure I could list if I spent more time

Now, of course, we can all debate on how to distribute those tax monies.  More here, less here, etc.
But, are we really not getting our monies worth? 

In the past I have proposed a floor for all tax rates meaning that if the rate for your income is 35%, you may take deductions down to 20%, no more.  Perhaps the only bracket that can result in 0% rate would be for those whose income puts them at the poverty level or below, but I would eliminate tax credits that result in people receiving a refund greater than the tax they have paid.  The tax system should be just that, a system designed to collect the monies needed to run the government, not a system for helping the poor.  Those programs should exist on their own, paid for by the taxes collected!

As an enhancement to the floor tax rates, there should also be means testing for most, if not all of the tax breaks.  Certainly one home owners should have a mortgage deduction.  Perhaps even a partial for a second home.  But nothing after that.  This is especially true for the hundreds of business expenses that can be written off.  The neighborhood hardware store should be able to take full advantage of tax credits to help him/her create a successful business.  But mega-corporations don't need all those advantages.  Means testing would put a scaled limit on all those tax write-offs so that all businesses up to a certain size get the same credit in actual dollars.  Once the top of the scale is reached, credit ends. 

It is well known that upper middle class tax payers end up paying a higher percentage of their income in taxes than the very rich.  With some type of floor philosophy along with means testing, no individual making $150K per year should ever experience the dubious distinction of paying a higher tax rate than Warren Buffet or General Electric.

Can we spend a little less at the federal level?  Of course, all large entities have fraud, duplication, inefficiencies, and outright misappropriations.  But we cannot continue to behave as if deficit spending can go on infinitum.  The dam will break, eventually, and it will be the middle class who will bear the burden of its collapse.  For all the talk about kneeling or standing for the anthem, and who is more patriotic, who isn't, perhaps it is time to link the patriotism question to the tax rate one is paying.  To me, wearing a flag on one's lapel while stashing millions of dollars off shore in a tax free haven negates the meaning of the flag pin.  Perhaps, instead of railing at athletes who kneel during the anthem, the president should publish a list of the richest people who pay the least taxes!

Oh, that's right.  President Trump brags about how little taxes he pays!!

A true patriot might realize that every dollar saved to enhance one's wealth, every dollar written off to improve earnings shares, every dollar withheld from the government so that one more big house, or car, or diamond ring can be purchased, is one less dollar paid to our active military soldiers, one less dollar for veteran care, one less dollar for border security, one less dollar for local police, one less dollar for teaching supplies, one less dollar for choose your favorite government provided benefit. 

As for the tax burden preventing American business from thriving, well, yes, small businesses are undoubtedly hurt by the tax system.  This should be the litmus test for any tax reform.  Does it help the small businessman and middle class worker more than anyone else?  If not, then tax reform is just another money shift to the top.  Did we learn nothing from Reaganomics?

Means testing not mean policies.