Sunday, October 21, 2012

A New Tax Code

A New Tax Code for the United States

  1. Preamble
  2. Income Tax
    1. Determinants
    2. Margins
    3. Deductions
  3. Sales Tax
    1. Amounts
    2. Exemptions
  4. Process for Receiving Taxes
  5. Process for Making Tax laws
  6. Punishments for tax fraud
  7. Where the Money Goes

The tax code is long, onerous, and complicated, this will be a simplified version for the United States of America no longer than 15 minutes long to raise the amount of revenue necessary for government functionality. It will prevent the amount of loopholes in the tax code which are used by corporations to rip off the American People. This means that at a reading rate of 100 words per minute, this tax code, including the preamble, is limited to 1500 words.

Income Tax

Filing statuses
  • Individual File - An individual may file individually.
  • Family - A married couple can file with their minor children on the same tax form.

Income tax will be determined by the sum of income from wages, stocks, bonds, interest, dividends, gambling, game show winnings, rental income, and tips, before tax breaks. This includes all domestic and foreign income under these expenses. Short-selling stocks does not get a deduction. Taxes.

  1. People will pay no income taxes on income up to the cost of living in their state.
  2. People will pay 5% on all income from 100% up to 150% of the cost of living.
  3. People will pay 10% on all income from 150% up to 500% of the cost of living.
  4. People will pay 15% on all income from 500% up to 1000% of the cost of living.
  5. People will pay 20% on all income from 1000% up to 1500% of the cost of living.
  6. People will pay 25% on all income from 1500% up to 2000% of the cost of living.
  7. People will pay 30% on all income from 2000% up to 3000% of the cost of living.
  8. People will pay 35% on all income from 3000% up to 4000% of the cost of living.
  9. People will pay 40% on all income from 4000% up to 5000% of the cost of living.
  10. People will pay 45% on all income from 5000% up to 6000% of the cost of living.
  11. People will pay 50% on all income from 6000% to 7000% of the cost of living.
  12. People will pay 55% on all income from 7000% to 8000% of the cost of living.
  13. People will pay 60% on all income from 8000% to 9000% of the cost of living.
  14. People will pay 65% on all income from 9000% to 10000% of the cost of living.
  15. People will pay 70% on all income equal to and above 10000% of the cost of living.
  16. The cost of living will be determined by the cost of transportation, food, utilities, and housing for different family sizes. Utilities is defined as average cost of water, electricity, and internet. This will be determined by the Bureau of the Census annually for every state and region. People’s cost of living will be determined by their region that the Bureau of the Census will determine. Each region needs to have a similar cost of living and economy. The cost of living paid for each household will be determined by the head of household, spouse, and number of minors residing in the same place.

  1. The value of money spent on post-secondary education will be fully deducted from the income tax until no tax is owed. Money used for sending out scholarships that are dispersed will also be fully deducted until no income tax is owed. Schools that this money can be spent on must have a transfer/graduation rate equal to or greater than 50% and 50% or more graduates should be employed at least part-time by one year after graduation. The Department of Education will monitor schools that fit these requirements.
  2. The value of money you spent on health care will be fully deducted, and money can be earned through this credit if the value of health care exceeds the taxes owed before exemptions. Expenses on vitamins or vacations do not count. You can include any medical expense you pay for any person. Life insurance, baby sitting, maternity clothes, nutritional supplements unless prescribed by a doctor, cosmetic surgery, toothpaste, teeth whitening, food, and weight-loss expenses are not deductable.
  3. There will be a deduction equal to State Income taxes. You cannot get money back for this.

Sales Tax
There will be a sales tax in the United States in the following margins. It will function as an income tax on businesses which is forwarded to customers in slightly higher rates.
  1. A 2% tax will be charged on the gross profit in America on every business with operations in the United States.
  2. A 50% tax will be charged on the net profit of every business whose CEO is an American citizen. The net profit will be determined by the cost of wages, rent, and business supplies. There will be a $100 break for every American employee who worked over 1500 hours in a calendar year until there is no net income tax owed.
  3. A 10% tax will be charged on the sales of cigarettes and cigars along with the 2% general sales tax.
  4. A 2.5% tax will be charged on the sale of alcohol along with the 2% general sales tax.
  5. A 20% tax will be charged on the sale of firearms along with the 2% general sales tax.
  6. A 10% tax will be charged on the sale of ammunition for firearms along with the 2% general sales tax.
  7. A 10% tax will be charged on the services of tanning salons.
  8. A 20% tax will be charged on the sale of any vehicle having less than 10 miles per gallon on the highway along with the 2% general sales tax.
  9. A 15% tax will be charged on the sale of any vehicle having between 10 and 15 miles per gallon on the highway along with the 2% general sales tax.
  10. A 12.5% tax will be charged on the sale of any vehicle having between 15.1 and 20 miles per gallon along with the 2% general sales tax.
  11. A 10% tax will be charged on the sale of any vehicle having between 20.1 and 30 miles per gallon on the highway along with the 2% general sales tax.
  12. A 5% tax will be charged on the sale of any vehicle having above 30.1 miles per gallon along with the 2% general sales tax.
  13. $5.00 per ton will be taxed on every amount of coal mined.
  14. 10% of the price of electricity coming from a coal plant will be charged by the federal government.
  15. There will be a $0.05 tax on every gallon of gas sold.
  16. There will be a $0.10 tax on every gallon of diesel sold.
  17. There will be a $0.10 tax on every gallon of Jet fuel sold.
  18. There will be a $0.10 tax on every gallon of aviation gasoline sold.
  19. There will be a $0.05 tax on every gallon of aviation karosene sold.
  20. The sale of hydrogen for a fuel cell car will not be taxed.
  21. The sale of cars that use fuel cells as their primary source of power will not be taxed.
  22. Anything sold at a college store will not be taxed.
  23. Any organization registered as a charity or religion, being that their goal is to make no profit, and give over 75% of their earnings to people in need will not be taxed. All organizations will be required to present their budget to the IRS.
  24. Non-corporate organizations whose primary purpose is to preserve environmental and/or historical treasures in America or internationally or are based to help education and give over 75% of their earnings to their cause will not be taxed. All organizations will be required to present their budget to the IRS.
  25. Organizations that are religious and have not donated any money to a political movement will not be taxed. All organizations will be required to present their budget to the IRS. Religious organizations that donate to political campaigns will be treated as businesses.

There will be no Corporate Income Tax.

Where the Money Goes

  1. 1% of all revenue of the Government of the United States will go into a fund for spending in years where a deficit is run. This will be held by the Federal Reserve for future use. This fund may not be tapped without an Executive Order when spending is greater than income. This money may not be used in any year where Spending is equal to or less than revenue.

Process for Making Tax Laws
The Process for making a tax law code change lies in the power of Congress. The Internal Revenue Service, Courts, and President may make no change without the approval of a simple majority of both houses of Congress.

Punishments for Tax Fraud
Any American citizen convicted of lying the IRS on their income will have committed a felony and lose the right to vote for the rest of their life. They will lose the right to run for office. They will be incarcerated for 10 years in a Federal Prison with no bail and charged ten times the amount that they owed and didn’t pay. People have one year to correct mistakes.

A business that cheats on taxes will be fined one hundred times the amount of taxes owed from previous years. Companies have one year to correct mistakes.

In case of a balanced budget
If the Budget receives a surplus, the lowest tax bracket will be removed.

Tax code Restrictions
The entire tax code will not be more than 1500 words long.

A note:
Combined with the rest of the Utilitarian Party Platform there is no need for any more deductions for income tax. Education and Health Care will be provided like they are in every other first world measure. People will have enough money to have a house, as they do now, and public transportation will return to America.

In the case of a surplus the money will first pay off the debt early, if there is no debt, it will be sent back to the people.

Contract From America, a critique

I was accused today of being someone who could join the tea party and that I didn't know what it stood for, so I decided to learn what it is for, and here is what I found on the Contract from America:
  1. Identify constitutionality of every new law: Require each bill to identify the specific provision of the Constitution that gives Congress the power to do what the bill does.
  2. Reject emissions trading: Stop the "cap and trade" administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.
  3. Demand a balanced federal budget: Begin the Constitutional amendment process to require a balanced budget with a two-thirds majority needed for any tax modification.
  4. Simplify the tax system: Adopt a simple and fair single-rate tax system by scrapping the internal revenue code and replacing it with one that is no longer than 4,543 words – the length of the original Constitution.
  5. Audit federal government agencies for constitutionality: Create a Blue Ribbon taskforce that engages in an audit of federal agencies and programs, assessing their Constitutionality, and identifying duplication, waste, ineffectiveness, and agencies and programs better left for the states or local authorities.
  6. Limit annual growth in federal spending: Impose a statutory cap limiting the annual growth in total federal spending to the sum of the inflation rate plus the percentage of population growth.
  7. Repeal the health care legislation passed on March 23, 2010: Defund, repeal and replace the Patient Protection and Affordable Care Act.
  8. Pass an 'All-of-the-Above' Energy Policy: Authorize the exploration of additional energy reserves to reduce American dependence on foreign energy sources and reduce regulatory barriers to all other forms of energy creation.
  9. Reduce Earmarks: Place a moratorium on all earmarks until the budget is balanced, and then require a 2/3 majority to pass any earmark.
  10. Reduce Taxes: Permanently repeal all recent tax increases, and extend permanently the George W. Bush temporary reductions in income tax, capital gains tax and estate taxes, currently scheduled to end in 2011.
The first part is already done by the Supreme Court, 5 of 9 have been appointed by Republicans.
I am going to ask the conflict theorists question for the second point: Who benefits from no restrictions on oil emissions? Oil companies.
I agree with balancing the Federal budget, but I have looked at it and except for massive cuts from the Department of Defense, it can't be done. This is something Republicans have never been behind for the past 30 years.
Simplifying the tax system. First of all, my economics textbook (written by Bush advisor Gregory Mankiw) claims that flat taxes (what they are calling for) is by its nature a regressive tax. I would prefer a progressive tax structure based on the cost of living with rates from 0% to 50% where 99% of Americans will pay less than 15% and it will be modified by states' cost of living, and capital gains will b one taxed as regular income. That will balance the budget. The Tea Party doesn't support that, it says so in the Contract from America.
5. Every department (except for the Department of Defense) is already audited. This is a moot point. Why haven't the Tea Party members of Congress (a majority in the house) proposed a bill to do this? Curious...
6. Limit the growth of federal spending, does this take into account potential disasters? If we limited ourselves from growing our services in the face of disaster, how would the government cope?
7. According to the World Health Organization, The United States pays an average of $8361 per capita on health care in 2010. Norway and Switzerland were about the same. Canada paid $5222 in 2010. Our health statistics, birth mortality, life expectancy, and others according to the CIA don't show an increase over other nations. The statistics show that our current private health care system doesn't benefit the average American. Our current system only benefits the insurance industry. They don't specify what they would replace Obamacare with.
8. If we generated our fuels domestically, they will be the same companies that drill abroad. Nothing will really change there. It will still be the same companies, and our domestic oil production is at an all time high right now. Houston Chronicle
9. Reduce earmarks. If the tea party is so against earmarks, why haven't they done anything about it? This is not the real goal of the tea party.
10. Reducing taxes. I agree and disagree here. In order to do some things efficiently, we need to do them as a country, and that means we need the government to raise money. Most of these Bush tax increases go to the rich. This is not going to benefit most tea party people.

I disagree with all ten at some extent. I wish to offer counter-proposals (that I wish Occupy would have embraced) on the same topics that are actually at issue. I have also addressed a few corruption issues that the Tea Party fails to addre
  1. Move off of fossil fuels and embrace Hydrogen fuel cells as a mode for fueling transportation. They are competitive, and fulfill Adam Smith's requirement that there be competition in a market for supply and demand to work. This will drive down the cost of transportation. They also are 100% domestic.
  2. Demand a balanced federal budget. Cut subsidies to lobbyists and make a strong simple and progressive tax code.
  3. Simplify the tax system. Make a tax system ranging from 0% to 75% of income (most Americans won't see their tax rates go up, down probably) and put in two deductions, one for all education expenses, and one for all health care expenses. As the budget is balanced, put the lowest rates into the 0% category to encourage growth from the bottom of the income ladder. Short-selling stocks will not make your taxes go down!
  4. Expand Medicare to cover all Americans. This will bring down our cost of health care by providing primary care for people who need it so that instead of going to the emergency room they can get early treatment which is less expensive. After doing this, Medicaid and Tricare will be fully abolished.
  5. Audit the Department of Defense.
  6. Reduce earmarks by making all elections publicly run, publicly financed, and outlawing lobbying through money in Congress. The Tea Party has not embraced this.
  7. Abolish the federal handouts to the Real Estate industry by abolishing the mortgage tax deduction to raise revenue, or decrease taxes.
  8. Stop sending money to nations that abuse human rights like Israel, Egypt, Saudi Arabia, and historically the Islamic Emirate of Afghanistan, Iran, and Iraq. Only send developmental aid that builds the nations capacity to grow and gets average people to be economically sustainable.
  9. Elect the President through Instant Runoff Voting. Elect Congress by the Single Transferable Vote using the Gregory Method. Abolish the Senate which was only created to preserve the interests of the politically established. Increase Congress to 750 members in the one remaining house.
  10. To save money, legalize marijuana. Legalize LSD. Legalize ecstasy. Increase taxes on cigarettes. This will save money and generate revenue.
Those will actually balance the budget. Most people will see their taxes decrease, the only people who will see more taxes are the ones who are paying 15% on million of dollars of income. The Tea Party doesn't support this, but it is the only honest way to balance the budget without cutting military spending.

Thursday, October 18, 2012

Dear Green Party,

Dear Green Party,

I like your platform. I think you should have seats in Congress and should make your proposals in Congress. I think Jill Stein would be a decent President, but there is one thing that keeps me from voting for you.

I didn't see a single Green Party candidate running for office in the primary elections in Washington State. You could have won seats into our legislature and start making real changes. You could do the same thing in Oregon and California, the ballot access laws aren't that restrictive. You have a lot of good ideas regarding domestic economics and you should move your party to getting seats in Congress to make a real difference in this country.

My impression is that you don't understand how our system works. Even in the unlikely instance where your Presidential candidate was elected President, you would not have support from Congress, because you don't run candidates for Congressional elections. I would like a third party, I would like it to be the Green Party, but I can't vote for you if you don't run for office!

I will be voting for Barack Obama this year, I have seen a real campaign from him, and he has made real progress. I have seen signs and campaigning by the Libertarian candidate Gary Johnson, and I have seen no advertising from the Green Party, and I live in one of the most progressive parts of the entire country. Please campaign harder.

Please run for as many state legislature seats as you can. If you can get seats in state legislatures you can start pushing for your reforms in the halls of power. Or at least propose initiatives to get the ranked voting option on the ballot in several states. I would love to see ranked voting for all elections someday.

Once you file candidates for state level positions, you will very probably get my vote, but by running a Presidential candidate who doesn't campaign a lot and acts as a spoiler to the Democratic Party with the way our election currently is, I cannot vote for you if you will not try to get seats in Congress.

Forgo the Presidential race in 2016 and focus on getting seats in State legislatures for the next few years, you will very probably get my vote. Until then you are no more than a fringe, like Occupy that did the same mistake. The Tea Party had a plan and ran candidates and unfortunately made progress on the corporate agenda. Please be like the Tea Party in strategy and get things done, don't be like Occupy who are no closer to actually overturning Citizens United then they were a year ago on October 15, 2011.


Wednesday, October 17, 2012

Only one thing can kill America

There is a lot of talk about America being on decline since 2008, since Obama was elected. We blame immigration, a growing economy in China, American-owned companies that build things in China exporting crap here, how the government isn't making the price of oil drop (a call to socialism), and other poppycock excuses for why "America is in decline". This cannot kill America. None of these can. However, i have the plan for anyone who wants to kill America, a simple plan, and something that is already in progress.

Pessimism, nihilism, the world is doomed, there is nothing we can do about it, and every growth in America's infrastructure is impractical. Nationwide calls for doomsday. This takes a number of forms. Here are a few of the most dangerous:

  • While we reward the military industrial complex with $100 billion dollars of welfare annually, and hundreds of billions of unaccounted dollars in tax breaks to the wealthy through a very low capital gains tax, and send $10 billion a year to Israel to bomb Palestine, and in the past have sent money to Saudi Arabia, the Muhjadeen, Iran, Iraq, Egypt, and other nations we are allies with, we cannot afford to build our infrastructure because it is "too expensive". To build something in this country that would stimulate our economy for less than hundreds of billions in corporate welfare and rewards to lobbyists annually, we cannot afford to build a first world train system, and we cannot afford universal health care, and we need to cut money to education. Because God Forbid we might actually give our own people the skills they need to succeed in a global economy, that's what the Chinese do!
  • America is generally in decline. Things are worse than they were before. This is depsite the NYSE being at an all-time high, our GDP at an all-time high, our GDP per capita being one of the highest in the world, and other general non-biased marks that show things really are not nearly as bad as people seem to believe. I have yet to find a marker that actually shows America is in decline relative to ourselves, even though there a lot of markers that show the formerly undeveloped world is developing rapidly.
  • Corruption isn't as big an issue if you talk about it with regards to lobbyists, but Obama is a Muslim! (just quoting the conservatives I know)
  • We can't do anything to build our nation. We are doomed.
This will kill America. Immigration has been happening for 400 years and it has yet to kill our country, other nations have developed before, alongside, and after us and that has never once truly hurt our economy. Our debt per GDP has been higher than before, and there is no correlation between debt and economic vitality. I made a previous post showing how this correlation is false. Corruption can do it, but it relies on a people that is unwilling to make a difference.

America is only in decline if its people let it. I do not accept the following myths:
  • Our size prevents us from building a world-class mass transit system. Tell that to Stalin. This is poppycock. We send enough money abroad to build the world's best high-speed rail system. We need to sort out our priorities. What do we really get by arming Israel's military? The old fashioned term is false friends. America does a terrible job at choosing allies, like the Muhjadeen.
  • Debt is killing our economy. Tell that to Japan and the UK, two of the largest economies in the world that are still growing relative to population growth.
  • The Military Industrial Complex is a necessity, tell that to General Dwight David Eisenhower who uncovered Auschwitz.
  • People who are poor are lazy. There is no evidence for this.
  • America's deficit is growing under Obama. Reality is quite the opposite in fact. I've blogged about this, the CBO has a different story to tell.
In a perfect world we would try Rupert Murdoch for slander by convincing so many Americans that their votes don't count, and his network telling downright lies on a daily basis. The bullshit this network tells has moved even to what was once considered "left-wing media". How often does the media talk about local government? How often does the media cover legislation in Congress? How often does the media take a really hard look at the budget and what the President proposes, as Presidents have done since Washington?

America is only in decline if we let it. I choose to instead of firing Americans, to increase unemployment to stimulate our economy, to provide jobs rebuilding our crumbling infrastructure. Bridges in Minneapolis should not collapse for no reason... BUT IT DID! We need to rebuild America.

Tuesday, October 16, 2012

Fact-Checking the Presidential Debate

Question 1: College tuition
Romney's Response:

Obama's Response

Question 2: Can the Government lower the price of gas? What is the Department of Energy doing?
First of all, the government does not set the price of oil, that would be a communist system of government and our energy production is a truly free market.
Obama: By increasing efficiency we will cut the demand for oil and we are going to start doing more renewable energy to cut the costs.
Romney: Obama cut in half the number of oil permits on Federal land. Says he believes in renewable energy. Says we don't need the President blocking progress. "virtually impossible to build a coal plant" says we need to take advantage of all energy sources, including coal. "North America" energy independence. Our energy is "low cost". More drilling, more licenses, bring in the pipeline from Canada.
Obama: Romney's claims are not true. We have increased energy production. Calls out Romney for being against coal as a governor and now being in favor of it.

It all comes back to except for the government setting the price of oil by setting a cap on gasoline, the only thing the government

Question 3:
Romney: Will reduce taxes on the middle class and cut the deficit.

Obama: Wants to give middle class and poor families tax relief.

Romney: Bring down corporate tax rates so they can hire more people. Jobs are leaving because of Obama. (not true)

Obama: Cutting taxes for everyone and eliminating the estate tax and corporate tax code changes will cost $5 trillion. Romney wants additional $2 trillion for the military. He wants to continue Bush Tax cuts, $1 trillion. That is a total of $8 trillion, he also wants to cut the deficit, and not raise taxes on the middle class.  We haven't heard from Romney what he wants to do to pay for the tax cuts.

Romney: "Of course they add up" I balanced the budget as governor. I ran business. $4 trillion of deficits, $5 trillion in deficits. 4 consec

Question 4: How are you (Romney) different from President Bush?
Romney: I don't believe Washington, DC can determine who can have contraception. These are different times. It wasn't possible to get all of our energy during Bush's time from America. I will crack down on China. I will expand Free Trade with Latin America. I will get us to a balance budget. I understand how hard it is to start a small business. I want to keep taxes down on small business. I want regulators to see their job as encouraging small business. I find Obamacare troubling because it keeps small businesses from starting.

Obama: We have seen 31 consecutive months of job growth. I will create even more through my plan. His plans are the same sorts of things that got us into debt, and don't remember Romney invested in companies that invested in China and is invested in companies that are building surveillance equipment in China. We have signed 3 trade deals, and a task force for trade that goes after anyone practicing unfair trade and have done far more. We have won every case. When I said that we need to go down onto bad tires from China, Romney said we were being protectionist. Bush called for immigration reform. Bush never suggested we eliminate funding to Planned Parenthood, but they are on social policy.

Question 5: Mr. President, what have you done to earn my vote?
Obama: We have gone through a tough 4 years. I said I would cut taxes for middle class families, small businesses, end the Iraq War, and go after the people who attacked us, put in health care reform to protect Americans from insurance companies, that we would rein in the excesses of Wall Street, and I have done all of that, we have created 5 million jobs, we have saved the auto industry. That is why my programs are focused on putting people back to work, so we are controlling our own energy of today and the future, the point is I have kept most of them, and the others are not for lack of trying. I suspect Romney will keep his promises. When Congress signed a no tax pledge, Romney said me too. When Congress said we will cut Planned Parenthood, and end Obamacare, Romney said me too even though Obamacare is like Romneycare. This election is about whose promises will allow your family to go to college and that the government will be there for you.

Romney: I think you know the past four years haven't been that good and the next four years are like the past four years. He said by now we would have unemployment do 5.4% by now. He said that by now he would reform Social Security and he hasn't even made a proposal. He said he would file an immigration bill but he hasn't. He said he will cut in half the deficit and he hasn't, he has doubled it (bullshit). He said that health care would decrease but it has increased and Obamacare will raise the health care premiums. The unemployment has not been reduced. 23 million people. (bullshit) The economy is growing more slowly this year than in the past two years. Reagan created twice as many jobs. The only reason the unemployment seems a little lower (bullshit) is because people have dropped out of the work force. We have a record to look at.

At this point I stopped watching because I can't stand how many lies Romney is telling.

Romney hasn't said one thing in the first hour of the debate, as he is saying about the increase in unemployment, the deficit, and all that, I am looking it up with the Bureau of Labor Statistics and all of his unemployment claims are wrong. As I am looking at the budgets the President has proposed for the past four years, the deficit has gone from $1.5 trillion to $1.3 trillion, to $1.1 trillion (even though Congress planned for $1.3 trillion), and is planned to be $0.9 trillion next year. If the current trend of a $200 billion deficit reduction continues we should balance the budget by FY 2017. Don't take my word for it... here is the Wikipedia on this year's budget which has links to the original sources for all the budgets back to the early 90s by following the links on the bottom:

Vote for Obama if you value honesty. Vote for Romney if you.... I really don't know why you would vote for Romney. He is definitely the most dishonest major candidate in all of American history. Vote for Obama.

Tuesday, October 9, 2012

Is Fox biased? Part 1

So, after talking to some Republicans I know I decided to check out Fox News and see what they were saying. I looked at their front page to try to find the most inflammatory article, and nothing beat this one: where it claims that Republicans were barred from speaking at a public high school originally. I couldn't believe the bias that it was claiming the school board had. If this was true, it was a totally unethical action by the school board. It also then claims that after the registration that they did allow Republicans to come following the local outrage, but the title, "School Lets Dems Register to Vote, Not GOP" doesn't reflect this because after parental complaints they did. The title is biased in that it doesn't reflect this. It then continues to the outrage! which is the other half of the article. That is bias.

Given my past experiences with FOX News, I decided to search for similar stories on Google news, and came up with a similar story from the Tampa Bay Times.

Biased? You bet it is.

More to come later.

Monday, October 8, 2012

If you aren't decided yet, here's all you need to know.

So, i was just watching a collection of eloquent speeches (yeah...) by Mitt Romney, and I know that it is by DailyKos which is liberal, but still fair.

After doing some intense discussions with some Republicans I know that cutting $50 billion from the budget will not eliminate the $900 deficit, I decided to see what FOX News had on Obama:

That should be enough.

If you want to know what Obama stands for, I recommend the following: on Native American rights on the National Debt, solutions, and its implications on taxes and where the economy grows from on gay marriage on Iran

If you want to know what Romney stands for, I recommend the following: on gay marriage on the national debt and the birther movement (the debt is actually just over 100% of GDP) on taxes, including a little from Obama. on Israel, including

Hopefully this can help make voting a little easier.

I have already made a post "Obama v. Romney" which did this, but here is some more information on important issues:

On taxes, if you support a tax code which is progressive, where those who don't make a lot can save for the future and where the rich pay a larger percent of their annual income than others, vote for Obama. If you support a tax code where poor people making the cost of living pay income tax, and tax cuts for capital gains, different industries like oil, and the lowest effective rate for millionaires create the lowest rate for millionaires in the developed world, vote for Romney.

On Iran, if you want to unequivocally give unconditional support to Israel no matter who actually strikes first, vote for Romney. If you do not want to invade Iran, vote for Obama.

On Gay marriage, if you believe the government has a role in determining who can and cannot get married, vote for Romney. If you believe that marriage is a human right and the government should allow gays and lesbians to get married, vote for Obama.

On the national debt, if you think the debt should be fixed thoroughly through cutting the budget and through no tax hikes, vote for Romney. If you want a balanced approach with a more progressive tax code and keep services the government provides to working-class families, vote for Obama.

Please subscribe through Google Reader or a similar service for updates! If you know an undecided voter, please share!

Sunday, October 7, 2012

Consider the Budget Balanced.

I was just reading a summary of government expenditures and how to balance the budget from the Congressional Budget Office here:

Of course, the 2013 Budget is here:

So, when I looked at the budget reduction options most of them don't cover the full $901 billion deficit that is anticipated over the next year, and will overwhelmingly hurt middle class, poor, and military families. Even eliminating weapons procurement from the Department of Defense will eliminate only $100 billion from the deficit, keeping it really high at $800 billion. I once thought it was more, but actually no, not this year. Sorry liberals, that won't fix it.

Other options were to hurt college graduates with higher debt rates which will hurt their spending as young adults and hurt the economy. Eliminating home weatherizing was suggested which is a very small amount of the budget, and if expanded and it saves every household only $100 per year to save electricity, assuming 50 million households receive the credit, you would be taking $5 billion out of the economy annually as a recurring cost. Increasing health care costs for veterans just doesn't seem right and won't fill the hole. Eliminating subsidized loans for graduate students with an aging population will create a shortage of medical doctors and researchers, China is doing the opposite and look where they are with GDP growth over 9%.  Eliminating intercity rail subsidies will make us even more dependent on our cars and oil. Restricting Pell Grants will take away the best path out of poverty into the middle class we have, hurting Americans, the recipients by condemning them to a live of poverty, and all businesses by limiting their options on highly skilled employees. None of these will fill the hole, or if they were all done they would decimate consumer spending nationwide.

Adding a public plan to health insurance will help all families have extra cash to stimulate the economy, but won't fill $900 billion overnight.

In other words, there is no way to balance the budget by cutting expenditures without hurting the economy.

To get a clear picture, we need to look at he largest parts of the budget. I am going to leave out everything that gets less than 5% of the deficit, so everything that gets less than $45 billion is automatically excluded because the impact would not be enough to truly balance the budget if we took the elimination Tea Party route. Also, I am not including mandatory because by definition, they are mandatory and cannot be cut. Only discretionary is on the table in reality, so discussing mandatory spending is a moot point. So, that leaves the 40% of the $3.8 trillion budget that is possibly up for cutting, or $1.51 trillion. In order:

  • Department of Defense $666.2 billion, 74% of the deficit, 44% of discretionary spending.
  • Net Interest on the debt: $246 billion, 27% of the deficit, 16% of discretionary spending.
  • Department of Education: $67 billion, 7% of the deficit, 4.4% of discretionary spending.
  • Department of Veteran's Affairs: $60 billion, 6.7% of the deficit, 4.0% of discretionary spending.
  • Department of State: $56.1 billion, 6.2% of the deficit, 3.7% of discretionary spending.
  • Department of Homeland Security: $54.9 billion, 6.1% of the deficit, 3.6% of discretionary spending.
  • Central Intelligence Agency, $52.6 billion, 5.8% of the deficit, 3.5% of discretionary spending.
Everything other category's discretionary spending is less than 5% of the budget. These 7 categories add up to $1.2028 trillion, which is more than enough to cover the debt, and that is also 80% of the discretionary budget. The remaining 20% of discretionary is about $300 billion, so not enough to make a substantial difference in the budget. Let's look at the costs of cutting one of these.

Department of Defense would eliminate a lot of contracts for private companies, and only $100 billion goes to that from the DOD this year anyways, the rest is in operations. There isn't a lot that can be cut at this point in the political climate so discussing is hypothetical.

The interest if we put it off will have to paid later at compound interest, increasing the amount of money that will be paid later through the marvel of compound interest.

Cutting education funding will hurt future economic growth by harming the youth of America, stagnating it.

Cutting the DVA will cut medical services to veterans.

Cutting the Department of State will hurt America's ability to make a difference in global affairs.

Cutting the Department of Homeland Security will hurt the Coast Guard, and eliminate resources for customs and immigration control. Not a possible deduction in this political climate.

Cutting the CIA will hurt the intelligence of our government and ability to make decisions.

With all these extra costs, where is the cutting going to come from without negatively effecting real Americans? Sure, maybe there are some efficiency issues that can be fixed in one department or another, but most of that has already been done.

So, if you can't balance by cutting expenses you need to increase revenues. The second suggestion alone fulfills this by decreasing deductions. The CBO prediction gives predicted revenue gains from 2010-2014 by eliminating several tax breaks and we would need $4 trillion for those four years according to their prediction. I understand that this data is old, but it still demonstrates where the largest tax breaks are and if done today will fulfill balancing the budget.

  • If the government handout to the housing mortgage industry in the form of the mortgage tax was eliminated, $500 billion would be raised over 4 years.
  • If Capital Gains were taxed as regular income using the changes the CBO puts in place, another $400 billion would be raised over 4 years. Another concern I have is they are only raising them by a little bit which produces this. If they were taxed as regular income (but still calculated by subtracting the purchase price of course) the benefit would be much larger.
  • Increasing taxes on the top three brackets by 1% would yield $3 billion the first year which would grow.
These come closer than cutting costs, but not close enough. Here is what I would recommend nowadays, I made an earlier post a few years ago but there were some problems with it, and it was too complex:

  1. Radically change the tax code. Make the brackets go from 0% on all income up to the cost of living depending on the state the person lives in in 5% intervals up to 50%. Put in tax breaks for things that help the economy, education, health care, voting, local taxes, and money used to start a small business. The amount people pay for each bracket will be set to the cost of living for each state to help poorer states develop and poor people in rich states be able to get to a comfortable life style and be beneficial to the economy and improve their own lives. This is needed to balance the budget. The education discount will include scholarships if they are acquired because when students don't have to pay for school after school they have more money to be financially secure during their 20s and 30s.
  2. Tax capital gains as regular income because that tax cut makes our tax code in reality quite regressive. Why should capital gains get in effect a 50% tax break, for those people who invest well? Good investors are still going to make far more than everyone else, and in the meantime the federal government is missing a vital piece of revenue. This should cover the deficit.
  3. Keep Social Security and Medicare. Seniors and their families need to know that they won't be in poverty. To put the burden of taking care of seniors whose investments didn't pan out on their children is not a way to increase opportunity to young people in America. Social Security helps the economy.
  4. Eliminate the corporate income tax, because it is forwarded on to customers in the form of higher prices. Most economists left or right agree on this.
  5. Legalize, tax, and regulate marijuana. This will decrease state expenditures on prisons and increase revenues for the government. It will also take away a major cash crop for drug cartels. A win-win.
  6. taxing inheritance at 50% on all inheritance greater than 50 times the cost of living will discourage wealth concentration which hurts the economy.
It really isn't that difficult. You only need to stand up to the lobbyists.

Updated on October 8th.

Saturday, October 6, 2012

How to bring down oil prices, with no socialism

As I woke up today, I saw a Facebook post from one of my friends complaining how gas prices are too high (as we all are). I then made the connection between oil and banking. The Glass Steagall Act that passed in 1933 separated commercial banks and securities, so that the places where people's money was put to invest was not in a high-risk environment, to prevent the money of ordinary people being lost when investments do not pan out.

We need to do the same thing with oil in America. Currently in oil, companies can produce, distribute, and retail gasoline from well to pump, without ever needing to hire another company in the process. This is dangerous because it raises the costs of entering the market. When Exxon, Chevron, BP, and ConocoPhillips can control the entire process of drilling, distributing, and selling the oil to customers, the costs of entering the market become extremely high. This is a major problem. It is prone to other companies leaving the market, and those are the only oil companies that have large operations in America on the Fortune 500 list, excluding conglomerates like Koch Industries. It means that it is hard to enter the market, which hurts competition, which means they can set the prices anywhere they want.

This hurts the American economy. I propose that like Glass-Steagall we put a regulation on the oil industry to separate the three stages of the oil industry so no company can produce, distribute, and retail the entire process on a drop of oil so it must be moved between companies. This will bring down the costs of entering the market and make it possible for local companies to compete, which will bring down the cost of oil. When there are a lot of different companies working on it.

  1. The first level will of course be the producers. These people will drill the oil and then sell it to:
  2. The second level who will be the distributors. These people will move the oil around the country and sell it to:
  3. The third level who will be the retailers. This is where small Mom and Pop gas stations will be able to set up operations so that there can be real competition.
By having multiple distributors, the producers will sell to the distributor with the lowest price. There will probably be distributors in local regions, competing against larger distributors, and by offering the lowest price to the retailers and competing with other distributors, the price should come down. By changing the economy so that producers can't distribute, it will be possible for small start-ups to start drilling wells in many places, which will create competition, which will bring down the initial price of oil. This means the distributors will purchase from the producers with the lowest price, creating an incentive to bring the price of drilling oil down and keep it down. The retailers will not be owned by one corporation, and will be something that can be extremely local. It will be easier for small gas stations across America to be owned by a single local family to be economically viable. When they buy from the distributors, they will have a lower initial cost and can bring the price of oil down below $2/gallon. Some people will also foresee the coming of an alternative energy economy based on hydrogen (Which is the only alternative fuel for transportation I see real potential in given production costs, distribution, and fueling time. It also works pretty much everywhere.) and put in hydrogen pumps at their stations which will create the infrastructure they need, which will diversify America's energy consumption, and bring down the demand on oil hence the price. Because hydrogen is far more abundant than oil and far easier to get, it will not have the problems that oil has currently of high prices, be able to compete with oil, which will bring down the cost of transportation nationwide, which will bring down the cost of everything else. Not to mention it is also better for the environment!

This is a real economic stimulus for America. Break up the oil companies! We don't trust them. Anti-trust!

Friday, October 5, 2012

The differences between first world and third world nations

I am currently reading a book called "Who Stole the American Dream" by Hedrick Smith and am very impressed with how he has put it together chronicling the change of America's economy from where unions and management worked together and people made a living wage with health care benefits (maybe one reason universal health care took so long to be adopted in the United States.) and although I have been extremely skeptical of the anti-globalization movement despite having a lot of friends who are anti-globalization in their economic views, I can see a lot of points on how this new economy has hurt America and we need to change the system, the alter-globalization movement which I believe has the right answer. Fighting systems have never worked outside of all-out war. Working within systems are what caused the middle class to grow so much from the 1950s to 1970s, my family included. I have written out some ideas on what really causes economies to grow and be stable, which originally started with looking at Indonesia and wondering why it is not growing rapidly like India or China, and that train of thought led me to the following treatise:

A Healthy Economy is an economy where there is a more equitable distribution of wealth and GDP growth meets or exceeds population growth. A more equitable distribution of wealth increases the payback of new investment and improving the average quality of living. By comparing different countries, this is what appears to be the important difference.
  1. It should be easy to start a business. This allows prices to drop for consumers, and allows people to make enough to live by creating incentives to pay workers more. If people are not paid enough, the incentive to create a business of their own increases, and if there are more businesses in a market, there is more competition for the most competent workers. The invisible hand is able to work. According to the World Bank, there is a fairly strict correlation between this and economic growth. (Ease of Doing Business Index and GDP Growth)
  2. It should be easy to do business, but there should be regulations to prevent exploitation of workers. If workers are exploited their lives are worse. Also, their quality of work decreases for the employer. However, providing incentives for workers to work efficiently and making sure they are healthy increases productivity and allows both owners and workers to come out better off than a dog-eat-dog approach. Henry Ford agreed with this because he had the opinion that the people who built his cars should be able to afford their product and his company was extraordinarily profitable for him. He would now be treated as a radical, Marxist, America-hating, socialist Michael Moore emulating Commie spy in today's political sphere. (Ease of Doing Business Index and GDP growth)
  3. Public goods should be publicly owned, countries that have public oil pay the least. (Price of oil in various countries and economic growth vs. Oil production)
  4. The country should invest in its natural resources for energy. It should be self-sufficient when it comes to power and not prey to global corporations. Renewable energy is the easiest way to fulfill this. Some countries (eg. Equatorial Guinea) have seen their economies turn around completely by gaining control of their economies. 10 years ago Equatorial Guinea was one of the poorest, but after finding oil they are middle-income. They are self-sufficient in terms of energy. By not controlling their energy countries in Europe and the United States (which do not have enough oil to sustain their standard of living) have their economies controlled by foreigners. (Economic growth vs. Oil production)
  5. Taxes should give people the ability to improve their lives, especially the poor and middle class. Movement between classes should be high. Most businesses are started by these two groups. Bill Gates was middle class when he started Microsoft, Sam Walton was the son of Farmers. The government should balance the budget in most years to prevent paying a substantial portion of future revenue to debt that goes mainly to the rich investors who can afford many bonds. This ties in with the first point. (Standard of Living and Starting a Business Index in Europe and the USA vs. Central Africa)
  6. There should be a strong financial sector with regulation to prevent abuse. Most small businesses begin through a loan from a bank or credit union. Reasonable investment should not be burdened by unnecessary regulation. This is the ingredient that requires the most balancing and liberalism (will to modify).
  7. It should be easy to export goods to get goods inexpensively. This makes the global economy more efficient when done well. This is only achieved when the right to organize and ability to start a small business is universal so that there is competition for wages in countries that are usually exported to to prevent exploitation. Without that requirement it can become exploitation. See points 1, 2, and 5.
  8. Health care and education should be free and public. This allows the middle class to grow their nest egg more than otherwise as Henry Ford felt was reasonable along with other historical business owners. A healthy middle class is the bedrock to every strong economy. A healthy middle class in good times makes bad times shorter. No middle class makes economies stay in depression. Compare Scandinavia, Greece, China, India, Indonesia, and any Central African nation.

With these 8 principles of economic prosperity, there should be an index that fully encompasses all of these to show the type of economic growth built on actual growth and an increase in demand, like was the economic ideology between 1933 and 1981 in the USA when we had our longest period of economic growth. All should be weighted equally and the results will tell where sustainable and shared economic growth exists.

How do we work towards a more equal society, where work is rewarded, and people can make their lives better if they are willing? I have a two step idea that if done should work.
  1. Invest in your local economy. Grow small businesses at home and don't work for businesses like Wal-Mart that take most of your money outside of your local economy and give it to their investors alone. You won't be able to be completely self-sufficient, especially in terms of food, but by investing in your local economy and not companies like Monsanto that practice unethical business practices of preying on people you can invest in your local economy growing small businesses. This would cause the profits of large companies to shrink and they would see drops in stock prices.
  2. As a gigantic movement, truly Occupy Wall Street when the prices are low. Purchase stocks in gigantic companies and spread your shopping around large businesses and small businesses. The prices will rise if everyone does this, and we can fire the CEOs and Boards of Directors that adopt the dog-eat-dog fighting business mentality with the traditional compassionate leadership that works with unions and pays their workers living wages. As owners of those corporations we can direct them as a gigantic movement with millions of people. We need to invest in all companies, even Monsanto and Exxon Mobil which rightfully have the disdain of millions, because only then can we bring down the price of oil that is holding our economy back and end abusive business practices. Fighting from the outside is futile. Espionage however is historically highly effective according to the Art of War.
This will make it so that the middle class can grow, to grow consumer spending. Let America Be America Again.

All votes outside of Washington, DC matter

I have done some statistical analysis on America's elections and found some interesting trends. is the spreadsheet.

  1. Texas is not as solid Republican as politicos believe it to be. With a voter turnout of 45% in 2008, the lowest in the nation, it would have taken only 5% of the population for it to have a majority Democratic vote. Given that Hispanics and African Americans are the groups that vote the least nation-wide, this is very possible that Texas could vote for Democrats for Congress and the Presidency in the near future if their turnout rose.
  2. Washington state, a "solid Democratic state" would need only 600,000 more votes to vote Republican which would bring voter turnout up to 70%. Most states would need smaller amounts than these
  3. Washington DC is the only place that has votes in the electoral college where changing affiliation is practically impossible because in order to increase the Republican votes would bring the total number of votes above the number of residents of voting age.
  4. Missouri will become the most unreliable state if their voter turnout increased because it would have needed less than a tenth of a percent of eligible voters to change from Obama to McCain.
  5. Arizona, the founder of the new voter discrimination laws, with only an increase of turnout of 4% of the population would vote Democrat. This is doable.
  6. Wyoming, Oklahoma, Idaho, Utah, Alaska, Alabama, and Louisiana are the only Republican states that would need a voter turnout increase of over 10% of their populations to vote Democrat. All others are below the 10% mark.
  7. Vermont would need an increase of 25% of their population to vote Republican. Hawaii would need an increase of 20% of their eligible population. They are the most solid Democratic states (excluding DC)
  8. Democratic states in general tend to be larger than Republican states and would need a higher increase in turnout to vote Republican than most states.

The lesson to take away from this is that every vote counts. Even if your state hasn't voted differently for decades you should still vote for President, Congress, your Governor, and State Legislators because many key races in this country are very close and every vote can make a difference.

Monday, October 1, 2012

A pig is a pig by any other name

Whatever you call it, laissez-faire, Reaganomics, austerity, corporatism, or something else, that model of economics supported by many politicians is inherently flawed. The solution this philosophy consistently has to unemployment is to fire public sector workers and bust unions. No incentives for hiring workers, no eliminating barriers to starting small businesses, no health care to those too sick to work, no training for tomorrow's inventors, and cutting basic math, economics, civics, and science from public schools increasing the time the unconnected intelligent youth have until they can start their own businesses successfully.

Austerity teaches that if unemployment is high you increase it, if small business are too rare you limit access to funds by eliminating banking insurance (the opposite approach saved the American financial sector and through that the whole economy in 2008). If this is right it would imply the solution to a drink being too cold is to put ice in it or if your meat is overcooked to keep cooking it, and that -1+-1=0. That adding to a problem will solve it. This is nonsense.

The bloggers of economics that have millions of followers need to start broadcasting this. Suicides are up in Southern Europe. The countries practicing austerity have seen their unemployment rates go up over the past two years and suicides are rising. Lives of real people are at stake in this experiment that is as unsuccessful as it was between 1929 and 1933 when America did the same thing. The longer it is done the longer the recovery will be. This is very not funny. Wake up world. All the data you need to prove this is free on google data.