Champagne Showers

Is it just me, or is it getting a little ridiculous watching grown men who earn millions of dollars playing a child’s game giving each other a champagne shower just because they earned a playoff berth as a wild-card team in Major League Baseball?  I understand it was quite an accomplishment for the Tampa Bay Rays to overcome a nine-game lead in the final month of the season to catch the Boston Red Sox, even coming back from a seven-run deficit against the New York Yankees in the final game of the season, but they have yet to win anything.

If the Rays are fortunate enough to win the World Series, they will give themselves four different champagne showers, one for clinching a playoff berth, one for winning the division series, one for winning the league championship and the fourth for winning the Series.

America has become a nation that gives trophies to every participant, no matter how deserving.  It no longer matters if you win or how you play the game, let’s give everyone a trophy.  Our excessive celebrations for every minute event have gotten out of hand.  Let’s save our celebrations for solving world hunger and bringing peace throughout the land.

Steven H. Spring

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Class Warfare? You Betcha!

President Obama preaches that he wants the rich to pay their fair share of taxes, while Republicans counter that he wants to “soak the rich,” arguing that the president is engaging in class warfare.  Two very different sides to the same argument, but which side is more rational and candid in this debate?  As always, one need only look at the facts to determine which party is telling the truth.

During the past three decades, the only income bracket that has done exceedingly well as far as inflation adjusted income and income tax  paid as a percentage of their income are the wealthy elite.  During this time span, income for the middle class has risen a trifling twenty percent, while income for the most affluent Americans has risen nearly five hundred percent.  On the other side of the coin, upper level income tax rates are at historical lows.  Currently at thirty-five percent, the top rate was as high as ninety-four percent during the war years of 1944 and 1945.  During the 1950s and early ‘60s, the top rate was ninety-one percent until President Kennedy lowered it to seventy-seven percent.  No significant changes were made until President Reagan lowered it to fifty percent, and then lowered it again twice more down to twenty-eight percent.  The first President Bush increased it back to thirty-one percent and then President Clinton increased it further to thirty-nine point six percent.  The second President Bush lowered the rate twice, lowering it to its present rate of thirty-five percent.

One thing to remember is that these rates are not actual rates paid in that income is adjusted by numerous deductions so that actual rates are much lower.  This is why Warren Buffett pays a much lower percentage of income tax than that of his secretary.  The number of pages to the Federal Tax Rules is nearly fifty-five thousand, which includes the tax code, tax regulations and IRS rulings.  The tax code alone is nearly seventeen thousand pages long.  Yet only one page is needed for the tax code, that being a breakdown of tax rates per various income levels.  All these other pages document ways for rich people and corporations to avoid paying their fair share of income tax.  Billions of dollars are being made by Wall Street barons and titans who are currently taxed at fifteen percent because their profits are presently calculated as capital gains and not properly as income.

Another thing to remember is that Republicans are always lamenting that raising the tax rates are, in their words, job killers.  Yet when President Clinton did so, the economy roared, resulting in budget surpluses, a decrease in the national debt and nearly twenty-three million jobs created, the largest number of jobs created by any president.  During the second Bush presidency, there were only a little more than one million jobs created, the smallest number of jobs created by any president who served at least one full term.

Republican politicians like to espouse that U.S. corporations are taking their high paying manufacturing jobs overseas because of the high rate of income tax imposed on them.  This again, appears based little on fact but propaganda.  The corporate tax rate is as low as fifteen percent for taxable income less than $50,000, is twenty-five percent for taxable income between $50,000 and $75,000 and fluctuates between thirty-four and thirty-nine percent for taxable income up to $18,333,333, after which the rate is currently at thirty-five percent.  However, once again if you look at the facts, many of this nation’s largest corporations pay little if any income tax, including GE, Goldman Sachs, Exxon-Mobil, Bank of America, Wells Fargo, Chevron, Boeing, BP, Citigroup, Massey Energy, Shell, Valero Energy or Fox News.  Corporate tax revenue is also at historic low levels when compared to the Gross Domestic Product, which is the key economic indicator representing the total market value of all goods and services produced in this country.

Class warfare?  You betcha, and it is being waged against the ever-decreasing middle class and working poor by this country’s wealthy elite.

Steven H. Spring

Fox “News”

Settling into my recliner this evening to finish reading the Op-Ed pages of today’s Columbus Dispatch, I started reading an article by Miami Herald columnist Leonard Pitts, Jr. entitled “Ignoring facts doesn’t make them go away” when I came upon his sentence “Later, in interviews with Fox ‘News’ and The Today Show…”  Quickly noticing that he used quotation marks surrounding the News of Fox News, my first thought was to fire off a quick email to Leonard to let him know that I noticed the quotation marks and understood the meaning.

However, before writing the email, I thought to check to see if Fox “News” uses quotation marks itself for some reason, maybe to emphasize that they are indeed a legitimate news organization.  At the time, I had MSNBC turned on, listening to Reverend Al while reading.  Grabbing the remote, I hit the channel down button to find Fox “News” and immediately came to the Fox Business News channel.  There, a man was being interviewed who claimed to be a small business owner who was criticizing President Obama for wrecking the economy with all his unnecessary taxes and regulations.  The man claimed that as a small business owner, he filed his business tax return only as that of an individual, stating that if his business had sales of $500,000 he had to claim $500,000 as income and pay tax on the entire amount.

I am far from being an expert on taxes; however, I did receive a Bachelor of Science in Business Administration degree with a major in accounting from The Ohio State University and worked for ten years as an audit supervisor with the Auditor of State of Ohio.  My first thought was if he is preparing his own tax returns, he has a fool for a client.  I seriously doubt that a small business owner has to report total revenue as income without deducting any and all legitimate business expenses.

I quickly hit the channel down button one more time to get to Fox “News.”  What was airing on that channel was maybe even more alarming.  It seems that Fox “News” is still peddling gold, which is selling just less than its all-time record high.  The number one rule, and maybe most important in investing is buy low…sell high, not vise versa.  I know that in times of duress in the stock market, people buy gold; however, this precious metal just set its record high only three days ago.  Unless the stock market completely tanks, and investors put all their money into gold, I would stay away from any investment selling at their all-time record high.  I know that the Dow Jones dropped another 391 points today, falling 3.5%, but one must remember that it is only off 7.29% for the year, no reason for mass panic.

I never did find out if Fox “News” uses quotation marks to promote itself.  I was laughing too hard!

Steven H. Spring

House Speaker John Boehner

House Speaker John Boehner, a fellow Buckeye, stated yesterday that “tax increases destroy jobs” and that there is only one option to reducing the budget deficit and national debt: “spending cuts and entitlement reform.”  Giving the speaker the benefit of doubt, Representative Boehner must be forgetful of the recent history of our country’s debt problems and not simply ignorant of the facts.  President Bill Clinton, who raised taxes, left office with a record budget surplus of $230 billion and an economy that was thriving.  Eight years later, President George W. Bush left office with a then record budget deficit of $482 billion after mortgaging the country’s future with two massive tax cuts and two wars, both of which were and still are unfunded.

Until President Barack Obama assumed office and faced the pending financial crisis that many economic experts felt could rival the Great Depression, seventy-five percent of the entire national debt originated from just two presidents, Bush and his economic guru, Ronald Reagan.  President George H. W. Bush was right on target when, as a candidate running against Reagan in 1980 referred to Reagan’s financial policy of supply side economics as “voodoo economics.”  How right he was.

The Republican Party has become the party of just two solutions to every problem, massive tax cuts mainly benefiting the extremely wealthy and gutting benefits to Social Security, Medicare and Medicaid.  To understand who has the Republican Party’s best interests, one need only remember that George W. Bush passed a law making it illegal for the Department of Human Services to bargain with pharmaceutical companies over the price of the prescription drugs it buys.

Republican Congressmen have sold their souls to Grover Norquist and his advocacy group, Americans For Tax Reform, by pledging not to raise taxes no matter how dire the economic circumstances.  For this reason, the twelve member Congressional super committee whose purpose is to find ways to cut at least $1.2 billion from the budget deficit over the next decade will accomplish very little, if anything as all six Republican members have signed Norquist’s pledge.  Why anyone who is not financially affluent would vote for congressional representatives and president running under the banner of the Republican Party is beyond me.

Steven H. Spring

Governor Rick Perry & Social Security

Governor Rick Perry, the current frontrunner among Republican presidential candidates, in recent weeks has called Social Security a failure, a monstrous lie, unconstitutional and a Ponzi scheme.  The Texas governor is wrong on all four accusations.  The only reason Social Security is facing possible financial trouble is because Congress has spent the annual surplus of revenue versus expenditures all these many years instead of wisely investing these funds.  If nothing is done to the current program, Social Security is expected to pay full benefits until the year 2037 and pay seventy-five percent of benefits until 2084.

One way to make this entitlement more fiscally sound is to remove the current income cap of $106,800 in payroll FICA tax.  Why should someone earning a million dollars or more pay the same FICA tax as that of someone earning a little more than a hundred thousand dollars?  Removing the current cap would guarantee complete solvency of this program for the next seventy-five years.

Turning Social Security into private retirement accounts would be a disaster waiting to happen.  To expect the vast majority of Americans to have the capability to invest their retirement income on the whims of Wall Street is foolhardy.  Investing wisely in Wall Street is a very complicated process and requires constant studying of the market and evaluation of an individual’s investments.  I first stated studying the stock market back in my Navy days in the late ‘70s, when the Dow Jones stood at 700.  Just because it is now just shy of 12,000 does not mean that everyone who invested in the market became rich, or made money for that matter.  The NASDAQ is off fifty percent from its record high days in March of 2000, when the high-tech bubble burst.  I think Boomers getting ready to retire are thankful that Republican politicians were not able to convince the country that investing their entire retirement income in the stock market a good thing.

One question I would love to hear anyone ask Governor Perry or any other Republican candidate for president who espouses that Social Security should be dismantled is “Do your parents receive Social Security benefits and are they grateful for this socialist program?”  The answer, assuming any candidate is fortunate enough to have their parents still living, would be a universal “yes.”

Steven H. Spring