U.S. – Cuban Relations (Or Lack Thereof)

June 23, 2017

The recent announcement by the president that his administration will roll back the normalization of relations with Cuba as enacted by former president Barack Obama, reeks of political pandering to the very small, yet very vocal Cuban-American community in the delegate rich state of Florida. Ironically, when President Obama announced the easement of the embargo, Cuban-Americans were outraged, yet the Cuban people rejoiced.

America’s fifty year embargo against Cuba via commercial, economic and financial sanctions did nothing but hurt the Cuban people and kept the Castro brothers in power all these years as they blamed America for all their hardship. Making matters much more dire, Russia has announced they are planning on opening a military base in the island nation located only ninety miles off the coast of Florida.

Even more ironic, just days after the announcement by the president that he is rolling back Cuban relations to Cold War status, Raul Castro has confirmed his plan to not seek another term as president when his current term expires in 2018.

What could ever possibly go wrong?

Steven H. Spring
Earth

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Another Massive Tax Cut For Big Business And Billionaires

April 28, 2017

With the president boasting that his one page tax reform plan (i.e., massive tax cuts for both Big Business and the wealthy elite) is the biggest in history, one thing for certain is that this proposed legislation will add to the soaring national debt, as experts are already opining that it will add an additional seven trillion dollars of debt over the next decade. The administration is saying this tax plan will pay for itself via economic growth. However, that was not the case when George W. Bush cut taxes twice during his terms in office.

Politicians, corporate leaders and business pundits all whine how the present corporate tax rate of 35% is the highest in the world, yet they fail to mention the average, effective rate paid by all corporations is only 12.8%, hardly unfair. Many of this nation’s largest corporations pay little, if any federal tax, including Boeing, General Electric, Priceline.com, Verizon, American Electric Power, First Energy, Duke Energy, Con-Ed and FedEx, among many others. These same people say reducing the corporate rate to 15% will create jobs, however, it is demand that creates jobs. U.S. corporations have been sitting on record piles of cash the past few years, which has done nothing to stimulate the economy. The problem is the working man and woman have little, if any discretionary income, as they are barely getting by on minimum wage jobs. Now days, it takes both the husband and wife working full-time jobs to raise a family, whereas a few decades ago all it took was for the husband to be the breadwinner.

Why is it that nearly seventy percent of U.S. corporations are regarded as non-profits? According to the latest available Internal Revenue Service statistics that I could find, the percentage of non-profits has grown from twenty-four percent in 1986 to sixty-nine percent by 2008. Why the sudden surge in the number of corporations that consider themselves not-for-profit? This percentage is far higher when you add in sole proprietors and partnerships.

Congress needs to investigate why, in 1959 the IRS changed the wording of the actual law regarding the qualifications for tax-exemption status, when they had no legal authority to do so. I am not an attorney, nor a tax expert (who is?); however, the law as written by Congress in Section 501(C) of the tax code requires any entity not organized for profit, applying for tax-exempt status as a social welfare organization to be operated “exclusively” for the promotion of social welfare. Some non-profit corporations that do not seemingly meet the requirement of exclusively promoting social welfare are the NCAA, PGA, LPGA and the NHL. The NFL just this month announced they are giving up their tax-free status, as Major League Baseball did in 2007.

Or, how about Wall Street bankers, earning millions of dollars a year, pay a federal rate of only 15% because their income is counted as capital gains. I guess that “golden rule” is true, isn’t it? Our tax code desperately needs overhauled, but once again slashing taxes paid by Big Business, millionaires and billionaires is not the answer. Nor will it simulate the economy. President Clinton raised taxes and the economy roared. George W. Bush cut taxes twice and he left office with the worst economy since the Great Depression.

Do I feel sorry for U.S. corporations or the wealthy elite who earn billions of dollars, yet pay little or no federal tax? Hardly.

Steven H. Spring
Earth

An Open Letter To President Barack Obama

August 9, 2014

The following is a copy of my letter to President Obama regarding the dismal state of America’s rapidly aging and deteriorating infrastructure system;

August 8, 2014

The Honorable Barack H. Obama
President of the United States of America
1600 Pennsylvania Avenue
Washington, D.C. 20048

Dear President Obama,

Driving up to London this past weekend with my neighbor, on our way to Wal-Mart in search of their end of season discount perennial flowers, we noticed that State Route 42 was recently tarred and chipped. I told my neighbor that for a state route, this was pitiful. This relatively inexpensive way to temporarily extend the life of a deteriorating blacktop highway was what county engineers did to lightly traveled back roads. For a county engineer to do so on a state route is deplorable.

For a very long time now, this nation’s roads have been in terrible condition. The American Society of Civil Engineers, in their 2013 Report Card For American Infrastructure, gave an overall grade of D+ for the country’s infrastructure, with a grade of D for our roads. The engineers estimated that America needs to spend $3.6 trillion dollars by 2020 to upgrade our infrastructure to a “good” status, yet funding is anticipated to be half that amount.

I told my neighbor that I have written over the years that the best way to put America back to work, with good paying jobs is to rebuild our entire infrastructure system. I told him that when rebuilding the roads, we should replace all the existing sewer lines and bury all the electrical and telephone lines, going as far as to running fiber optics.

Yet, all Congress can do is to pass a somewhat temporary bill to fund the Highway Trust Fund through May of next year, mainly in the attempt to prevent a twenty-eight percent cut in federal highway funding. This nation can go to war seemingly every other week, all the while our country is falling apart at the seams. And Congress is content to watch it crumble.

Disgraceful!

Sincerely,
Steven H. Spring

C.: TalkingLoudAndSayingNothingParts3And4.WordPress.com
Speaker of the House John Boehner
Senator Sherrod Brown
Senator Rob Portman

Corporate Welfare: Tax Filing Deadline Day In America

April 15, 2013

As Americans celebrate both income tax filing deadline date and the one hundredth anniversary of the iconic income tax Form 1040 today, I write with just a bit of sarcasm, one only wonders what the financial health of the nation would be if only U.S. corporations would pay their fair share of taxes.  Although corporate profits are at all-time highs, U.S. corporate tax revenues are at forty-year lows.  America collects less in corporate taxes than all but two of the world’s thirty-four industrialized countries.  Corporate tax revenue as a percentage of Gross Domestic Product (GDP), that being the total market value of all goods and services produced over a period of time was more than seven percent in 1945 and more than 6 percent in 1952, both times during a period of war.  By 2012, this percentage had fallen to slightly more than one percent.  Individual tax revenue as a percentage of GDP has remained fairly constant since the Great Depression, fluctuating between seven and nine percent.

Offshore tax havens such as the Bahamas, Bermuda, the Cayman Islands, Monaco, United Arab Emirates & the Virgin Islands, for both wealthy citizens and corporations cost the federal government an estimated one hundred and fifty billion dollars each year.  In addition, this lost revenue is estimated to cost states another forty billion.  The average taxpayer paid an estimated one thousand dollars more in taxes to cover this loss while the average small business has to pay more than three thousand dollars to offset the loss of revenue by large corporations.  One need only remember that Republican presidential candidate Mitt Romney, once he files an amended return for 2011 if he hasn’t already done so, claiming the entire four million dollar charitable contribution instead of reporting little more than two million, all to make his effective tax rate a ridiculous fourteen percent on his nearly fourteen million dollars in earnings instead of an outrageous nine percent.

In 1986, twenty-four percent of American corporations were nontaxable businesses, thus paying no federal income tax.  By 2008, nearly seventy percent were.  The corporate tax rate is currently set at thirty-five percent, however as we are all aware, due to tax code loopholes and exemptions gained by high-priced lobbyists, many corporations actually pay far less than this percentage.  A recent study of Fortune 500 corporations found that on average these titans of industry paid slightly more than eighteen percent in federal tax, nearly half of the statute amount.  Many American companies with considerable profits abroad actually paid more taxes to foreign governments than they did in their homeland.

The following is an alphabetical list of American corporations that during the past five years have paid little, if any federal tax as a percentage of total revenue, some of which had a negative tax rate;

AIG
Allegheny Energy
Amazon
American Electric Power
American Express
AT&T
Bank Of America
Boeing
Broadcom Corp.
Carnival Cruise Lines
Chevron
Citigroup
Coco-Cola
Comcast
ConocoPhillips
Dell
Duke Energy
DuPont
ExxonMobil
Facebook
General Electric
Goldman Sachs
Home Depot
Host Hotels & Resorts
Mattel
Microsoft
NextEra Energy
NRG Energy
NVIDIA Corp.
Pacific, Gas & Electric
Pepsi
Pepco Holdings
Pfizer
TECO Energy
Valero Energy
Verizon
Wells Fargo
Xcel Energy
Western Digital Corp.

Judging by this partial list of tax dodgers, the energy industry must have really great lobbyists, as nearly half of those on this list are energy providers.

Steven H. Spring

Corporate Welfare: Why Does The U.S. Government Inflate The Price Of Sugar?

When I was a young boy, Grandpa would give me a dollar bill and I would go down to the local grocery store to buy as many candy bars as I could for him.  Naturally, I would always pick the candy that I liked best.  It would always take me a very long time to decide what to buy, as at the time most if not all candy bars cost only a nickel.  Nowadays, you are lucky if you can get one candy bar for a dollar.  Granted, that was a very long time ago, however, since 1789, U.S. policy and thus the price of sugar has been determined not by supply and demand, which is true capitalism, but by our federal government when Congress first imposed a tariff on foreign sugar imports.  The original intention of this tariff was to provide much needed revenue for this nation; however, it has also resulted in the U.S. price of sugar being historically higher than that of the world market.  Over the years, the American price of sugar has been double, triple or even quadruple the world price.  At one time, the U.S. price was twenty-one cents a pound when the world price was less than three cents.

It was announced earlier this week that the Department of Agriculture is thinking of purchasing 400,000 tons of sugar to artificially support falling sugar prices, which have fallen nearly twenty percent since last fall.  The pending purchase is thought to be a means of helping prevent sugar processors from defaulting on nearly a trillion dollars in government loans under a federal price support program.  Falling sugar prices are the result of a bountiful crop last year of both sugar beets and sugar cane in this country.  This acquisition of sugar would benefit those companies that turn the cane and beets into granulated sugar.  Pierson Bob Clair III, CEO of Brown And Haley, a candy maker and distributor based in Washington state has been quoted as saying, “Clearly, the USDA has made up its mind that Big Sugar is going to trump the American consumer.”

We, as a nation, profess to worship at the feet of capitalism, yet once again, it is consumers and taxpayers who pay the price for government intervention into the corporate world, be it price inflated tariffs, bailouts, subsidies or tax laws that allow huge corporations such as GE, Microsoft, Apple, IBM, Chevron, ConocoPhillips, Boeing, Mattel, ExxonMobil, DuPont or Verizon to pay very little if any federal tax.  I did not agree with Republican candidate Mitt Romney often, if at all during last year’s presidential campaign, however, I did agree with him when he stated “We ought to get rid of subsides and let markets work properly,” referring to the sugar industry during his campaign last year.   How does this industry get away with financial thievery?  The simple answer, as always the case, is money.  The sugar industry grows less than two percent of the total dollar valuation of all U.S. grown crops, however sugar lobbyists spend more than a third of the total of all American grown crops lobbying all the while Big Sugar campaign contributions to political action committees (PACs) are more than the total of all other American grown crops contributions combined.

For all the talk of welfare queens robbing this nation blind, living high on the hog all the while driving brand new Cadillac Escalades, it is corporate welfare that is truly a disgrace!

Steven H. Spring

Why Do So Many Intelligent People Say So Many Stupid Things?

Why do so many seemly intelligent people say so many stupid things?  Granted, I myself have been known over the years to make both stupid comments and remarks I have later regretted saying, not that I am implying I’m a smart person, however, the latest example of such foolishness occurred in an article that appeared in my local newspaper this past week by New York Times columnist David Brooks.  In his article concerning federal government revenue, spending and the proverbial fiscal cliff near economic disaster, Mr. Brooks stated that the typical American couple pays $109,000 into Medicare yet receive $343,000 in health benefits, thus in his words the hypothetical couple receives “free money.”  Many other commentators have made similar comments in the past regarding Social Security taxes paid versus retirement benefits received as well.

Just looking at the numbers that Mr. Brooks presented, one would tend to think this is why Social Security and Medicare are both nearly bankrupt.  However, two words completely repudiate Brooks and every other commentator who makes similar assertions: compound interest.  Maybe it’s my mathematical background with a degree in accounting from Ohio State University; however ask any homeowner how much they borrowed from a bank to finance their dream house versus how much they actually paid back.  As a general rule of thumb, a homeowner usually pays back three times what they borrowed during the course of a thirty-year mortgage.  If, for example a person borrows $150,000 to buy a home, they would eventually pay back $450,000, if not more during the course of thirty years worth of mortgage payments.  Granted, the term of the loan and interest rate applied greatly affects this example, but this assumption is generally true over thirty years.

The real reason why Social Security and Medicare are both going bankrupt is that Congress has routinely spent all surplus revenue it takes in every year in the form of FICA taxes instead of investing these funds in very conservative investments such as U.S. Treasury bonds.  With the average American working nearly fifty years before reaching retirement age, if the federal government had invested their payroll taxes paid in treasury bonds or similar investments, both Social Security and Medicare would be solvent for decades to come, if not forever.

Compound interest is a great thing if you are on the receiving end of the debt; however, if it is you who are paying it, interest greatly increases what you eventually pay back.  Compound interest earned on FICA taxes paid, if properly invested during the past seventy-seven years that Social Security has been in existence would have eliminated the financial dilemma now facing Congress.

Steven H. Spring

 

 

 

Only Ten More Days Until America Crashes Over The Proverbial Fiscal Cliff

Watching my fellow Buckeye and Speaker of the House John Boehner whine incessantly about how bad off millionaires have it in these troubling times, I am almost beginning to feel sorry for them.  Just look at poor Mitt Romney and think of what he and Ann could buy at Costco with the money he saves paying zero tax instead of nine percent, as he would under Paul Ryan’s proposed budget.  He should also be getting a big check from Uncle Sam, as you just know he has already filed an amended tax return for last year claiming the entire four million dollar charitable contribution instead of just half as he first filed to make his tax rate a somewhat less laughable fourteen percent.  However, one comment made by the speaker did catch my attention.  Boehner stated that President Obama will be responsible for the largest tax hike in American history if Congressional Democrats fail to approve his plan for extending the soon to expire Bush tax cuts for all income levels, however, he failed to state the obvious.

What Speaker Boehner really meant is that these two massive tax cuts, mainly benefiting the wealthy elite and signed into law during George W. Bush’s first term as president were the largest tax cuts in American history.  Since when is a soon to expire temporary tax cut a tax hike?  Only Republicans could spin that logic.  When combined with President Bush’s two unfunded and unnecessary wars, these tax cuts comprise a major portion of the record budget deficits that have plagued this nation the past seven or eight years.  Moreover, when combined with a stagnating automotive industry and collapsing housing and financial bubbles, these enormous cuts played a very large part in the economic chaos and deteriorating economy that plagues this nation to this day.

I have written for many years now that the next great depression makes the Great Depression look like part of the Roaring ‘20s due to the migration of manufacturing jobs, first to Mexico then to China.  It is hard for any economy to rebound when its entire work force is in sales or customer service.  This was the first time in this nation’s history that taxes were cut during a time of war, let alone two tax cuts during two wars.  Instead of cutting taxes, they should have been raised to fund these two wars, both the longest in our history and one still ongoing.  Longer than both world wars and our civil combined.  George W. Bush was once quoted questioning why his administration was giving another round of tax cuts to the rich.

It has been reported that Speaker Boehner’s “Plan B” tax proposal, which he evidently pull from the house floor himself last night, professes to be a moderate increase for millionaires but would actually decrease their tax liability, raise taxes on the working poor and cuts food stamps for the poor.  Instead of extending all tax cuts except for those income levels greater than one million dollars, they should all be allowed to expire.  This would be the only way to greatly reduce our annual trillion-dollar budget deficits.  Yet, very few politicians has the cojones to speak out against our disastrous fiscal policies.  Another tax adjustment to implement would be to remove the current cap on Social Security taxable income at $110,100.00.  Tax total income so everyone pays the same percentage.  The current cap restriction is very regressive and greatly favors the wealthy and as always at the expense of the working poor.

Only ten more days until America crashes over the proverbial fiscal cliff, which could possibly result in worldwide financial chaos, and Congress has left town for its Christmas break.

Steven H. Spring