Dear Unca Warren

Dear Warren:

I now know I will never be a billionaire.

See, I always thought that, in addition to luck, and drive, and knowledge, a prospective billionaire had to be smart.

I’m sometimes lucky. I’m a Type A so I have drive. I’m a pretty fair researcher so I have knowledge. Unfortunately, I’m pretty smart. I know this because my mom told me so. More important, all of my teachers told me the same thing (usually as part of the sentence, “Dammit, Dick, you’re too smart to have pulled that boneheaded stunt“).

Apparently, I’m also too smart to be a billionaire.

Speaking of boneheaded, I see that you haven’t figured out that we, you and I, already pay a higher income tax rate than your secretary does. See, we own the companies that pay us the dividends so we’ve paid up to 35% of that profit to your friend Barry right off the top.

Sort of an old-style Las Vegas skim.

Since your friend Barry claims many corporations pay zero taxes, let’s pretend that we own a real small business C corporation that really pays real rate of 17.5%, half the official rate for the companies he says pay nothing.

17.5%

Now your friend Barry wants to raise the dividend tax rate from the current 15% to 39.6%. Next, he has already planned the phase-out of deductions and exemptions; that raises the rate to 41%. Don’t forget to add the 3.8% investment tax surcharge in ObamaCare, and the dividend tax rate next year will be 44.8%.

But wait. There’s more!

Before we get there, I nearly forgot that you and I are almost old enough to be thinking about retirement. Did you know that about three of every four dividend payments go to those who are over 55? Heck, more than half go to the really old peeps. The ones who are older than 65.

We also forgot the 17.5%.

Forgetful we are.

Add the 17.5% corporate tax rate plus 44.8% dividend tax and the the total tax on our corporate earnings passed through as dividends will be … 62.3%.

Your friend Barry gets almost 5/8 of what we make; we get 3/8.

I think we need to jack up your secretary’s tax rate.

That’s the Buffett Rule, right? It’s only fair you know.

Your partner,
Dancing


P.S. Since I’m a smart feller, I figured the original Buffett Rule was “charge people fairly.” The way to do that, of course, is not to tax income that has already been taxed and then to make sure that everyone, rich and poor, pays the same tax rate.

By the way. I wrote the Flat Tax column when I was still in my 40s and you had just collected your first Social Security check. It was a smart policy then and still is today.

Cockroaches Can Save Us Money!

Even as Repuglicans have abandoned the state of palmetto trees for the state of palmetto bugs, we must ponder the age old question of giant carnivorous insects, why do cockroaches fly?

Our Keys cockroaches rarely fly; they train the smaller shore birds to bring them food.

We spray the land and the air which explains a lot about our personalities. We used to have a fleet of DC-3s but those as well as the bat tower on Sugarloaf Key have been mostly abandoned. Now, the Mosquito Air Force has an $7.4 million hardened hangar at Marathon-Florida Keys Airport that allows them to fly any helicopter in rather than towing it. They built the hangar to save us money! All those ‘cides haven’t touched the “palmetto bugs,” though.

Are flying cockroaches smarter than people?

RED CROSS FINED OVER BLOOD SAFETY
Health care issue. The U.S. Food and Drug Administration fined the American Red Cross $9.59 million because 16 of its facilities failed to comply with blood-safety rules. More than 15 months ago. The FDA found “significant violations” in 2010 including inadequate “managerial control,” record-keeping, and quality assurance but there were no serious health consequences for blood recipients.

The fine will save us money. Won’t it?

KEYS RESIDENTS URGED TO VOTE
School tax issue. Monroe County Schools have been recently built and renovated, yet over $9 million remains in the capital improvements budget, that is currently needed for operational expenses, in the everyday classroom.

If voters approve the measure, 0.5 mill of the capital ad valorem tax will be moved to the operating budget to pay for teacher salaries, classroom supplies, and school athletic programs. Some $9 million is up for grabs. .

“Failure to pass this measure means that existing taxes will be frozen in capital accounts, and not available to pay the daily costs of running our schools,” past Superintendent John R. Padget wrote.

The Monroe County Democratic Executive Committee “urges all Democrats — and all voters — to support passage of this referendum.”

Sure. It will save us money. Won’t it?

Our elected reps want to move millions of taxpayer dollars around in an effort to save us money.

Let’s see. If we take money from the Red Cross at their offices over here, that means they have to charge more for blood at the hospital over there. Oooh, bonus. Health care costs go UP.

Maybe we should take money from the building fund so our general tax rates go down a hapenny. Oooh, bonus. When the roof blows off the (newish) building, we can write BONDS to pay for that.

Perhaps we could take money from the Social Security Trust Fund so our general tax rates go down. Oooh, bonus. Our grandchildren have to buy 401Ks.

Oh, wait. We already did that.

I learned at least half a century ago that when the used car salesman offers to “save you money,” hold onto your wallet ’cause you’re going for a ride.

Are flying cockroaches smarter than people?

Could be. Their Social Security seems sound since there are still more shorebirds than bugs and they haven’t even once tried to convince their prey to like being eaten.

Persembe Peeves

No new taxes, right? The acting administrator of Agricultural Marketing David R. Shipman announced a new federal tax of 15 cents per tree on Christmas Trees to pay for a new Christmas Tree Promotion Board. Tree farmers sell about 25-30 million real Christmas trees in the U.S. each year

Radio guy said we should call our Congress Critter and Senators. I would but they are all ultra liberal drinkers of the Obama Kool-Aid.

The Board will run a “program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry’s position in the marketplace; maintain and expend existing markets for Christmas trees; and to carry out programs, plans, and projects designed to provide maximum benefits to the Christmas tree industry … [to] enhance the image of Christmas trees and the Christmas tree industry in the United States.”

THREE POINT SEVEN FIVE MILLION DOLLARS.

I guess we should thank our lucky stars it isn’t $3.75 Billion.

We’re Number One!

“I’ve been trying to figure out why businesses aren’t insisting on single payer healthcare,” my old friend Enola “Fanny” Guay said, “and I realized it’s because we’re all in this great shift into being corporate serfs.”

Although I’’ve known Ms. Guay for nearly 50 years and know how proud she is of her experiential learning, I also know she can be a bit blinded by her ideology. She’s a second generation member of Helen and Scott Nearing’s back-to-the-land movement in Vermont. The Nearings bought an old farm house and built a simple, self-sufficient lifestyle here, far from big government and rampant consumerism. Their descendants are now the power brokers and consumers of Montpeculiar.

Fanny Guay really really really believes in single payer. “All Americans have a constitutional if not a moral right to health care,” she says, “and a single payer plan would cover everyone by default for doctors, hospital, preventive and long-term care, mental health, reproductive, dental, vision, prescription drug and medical supply costs.”

Be nice if we knew how to pay for that.

“We won’t need as much money under single payer,” Ms. Guay said. “With all the patients under the single system, the payer has clout. The VA, for instance, gets a 40% discount on drugs because of its buying power. This monopsony explains why drug prices in other countries are lower than here. That’s how Medicare forces hospital and doctor costs down as well.”

Be nice if we knew how to pay for that.

“See, there is already plenty of money in the system now to pay for it because we already pay for health care.”

Erm, no. Rutland City Treasurer Wendy Wilton’s analysis shows that there is no pot of gold in taxpayer pockets.

She looked at all current state revenues. The property tax, already earmarked for education, is maxed out. Vermont is number four in the nation in property taxes, and just .05% behind number three Connecticut. (The property tax raises 42% of the state revenues.) General sales taxes plus the tariff on gas and booze runs a close second, raising 30% of revenues. State income tax, no longer coupled to federal, is likewise maxed out.

Vermont may grow rocks but there’s no more blood in the stones.

In fact, CNN ranked Vermont number one, numero uno, primo supremo, in the tax wars with a total state and local tax burden of 14.1% of per capita income. That’s far more than New York (13.8%), New Jersey (11.6), or California (11.5) or even Florida (10%).

“That does seem high, but we are a small state and we have a great quality of life.”

Can’t hide from the facts. Vermont will need another payroll tax.

“But we don’t need new taxes!” Ms. Guay said. “We just need to tap the insurance premiums we’re already paying.”

Ms. Wilton found that the state will need a new 14.5% payroll tax but is still going to run $300 million yearly budget deficits even with that new tax. She believes the Shumlin Administration is over-estimating the cost savings a single-payer system can deliver.

She also believe the Shumlin Administration is playing hide the walnut with how much they will have to raise taxes this year, next year, and the year after that, and so on ad infinitum.

The new Vermont legislative session begins Thursday. Guess what’s first on the agenda.

Ms. Guay wondered “why businesses aren’t insisting on single payer healthcare.” Pretty simple, really.

  • Gov. Shumlin’s plan will drive the couple of remaining insurance companies out of business here.
  • Gov. Shumlin’s plan will make it illegal not to provide health insurance to all employees.
  • Gov. Shumlin’s plan will double the size of government (which doubles the size of taxes) overnight.
  • Gov. Shumlin’s plan will drive the couple of remaining Vermont employers out of business here because a business can’t do business if they can’t predict how much their taxes will go up every year.

And no business wants to be legislated into being sort of a serf to the state.

Be nice if we knew how to pay for all that.

 

SODDI

Ex-presidential candidate and Vermont’s former governor, Howard Dean told Bob Schieffer this morning that George Bush and the Tea Party caused the financial crisis.

Some other dood did it.

The SODDI defense, sometimes including “Plan B,” comes up in a criminal trial when there is no question that a murder, assault, or theft happened, but somebody else was in the room as a convenient fall guy. “Black guy, big head” actor Steve Harris liked to say in the television legal drama The Practice. The Other Dude can often remain unnamed, just a wraith who creates reasonable doubt. The real Plan B is invoked when the Other Dude gets a name.


AAA Rating

Republicans in Congress and on the street, of course, blame President Obama for all of the nation’s problems. “Hold the line,” Jim DeMint told Speaker John Boehner.Some other dood did it.

One of Rufus’ good friends, the very liberal born-again Zoroastrian musician Tom Minor, posted a Youtube video showing “How The Bush Tax Cuts Blew Up The Deficit And Debt.” It has easy to understand pictures, he wrote, “for all your friends who try and sell the BS that this debt is Obama’s fault.”

Some other dood did it.

If George Steinbrenner were still alive, how long do you think Barack Obama would last as the manager for the hated (in Vermont, at least) New York Yankees? I reckon he’d get tired of keeping power hitters Reid, McConnell, Inouye, Durbin, and Kyl, Boehner, Cantor, Pelosi, McCarthy, and Hoyer on the payroll when they couldn’t do anything but fumble.

Some other dood did it doesn’t work on the diamond.

Howard, and Jim, and Tom all missed the boat. They should have used the Shaggy Defense.

Reggae artist Shaggy’s number one hit song It Wasn’t Me portrays a man who asks his friend Shaggy what to do after his girlfriend caught him with another woman. Shaggy’s advice is to deny everything. Say “It wasn’t me,” despite all evidence to the contrary.

The Shaggy Defense described singer-songwriter, arranger, performer and record producer R. Kelly’s position when charged with child pornography after cops found a video of Mr. Kelly having sex with an underage girl. “You say that was me on camera, butt naked, face hanging out, banging on the kitchen floor? Nope. Wasn’t me.”

Worked in court.

Probably wouldn’t keep the manager or the players on the roster in the real world, though.


Citing the ongoing deficits and the unlikelihood that the current crop of politicians would ever solve them, Standard and Poor’s downgraded the United States debt from AAA to AA+ yesterday. It is the first debt downgrade in U.S. history.

I know. S&P must be the Other Dood.