Daniel Oliver has a great article on Forbes wherein he likens the late 1960s today. He goes on to document some of the similarities between those times and today and the outcomes from the monetary policies of the time. All anecdotal to be sure. However, many of us have been saying for the last 10 years that the path the federal government is on will lead us to economic ruin. Well, I don’t think we’re too far away from that day. Keep an eye on commodity prices.
Since the political class is so insistent on raising our taxes, I would support the following tax increase:
– 55% of the increase in a politician’s wealth between his first financial filing at the time he was elected and that at his death is taken and used to pay for retirement and health care costs of all the current and retired politicians thereby keeping their costs off the government’s balance sheet and out of operating costs.
Since the politicians see their wealth increase so much during their tenure, why shouldn’t those of us who put them there actually benefit from this?
Last week we heard from the Oracle of Omaha how thankful he was over the taxpayer bailing him out with TARP. As he said, because of TARP he’ll be celebrating Thanksgiving at his daughter’s house with a big turkey instead of McDonalds.
Yesterday, you have a Juliann Neher column in which she quotes Buffet’s statement that the rich should be paying more in taxes. I find this very odd given Mr. Buffet’s own profile.
Why do I find this odd? To understand, let’s look at the income levels that would be subject to the tax increases. As Juliann quote’s in her article, the liberals and many others would raise taxes only on the “rich” often quoted as those making more $250,000 per year if married or $200,000 if single.
We know that Buffet is a billionaire. How much would his tax rate increase? The answer might astonish you. But, that would be an increase of 0%. How can that be? Well, Mr. Buffett’s income from Berkshire is $175,000 per year. That’s right, $175,000 per year. Don’t believe me?
Well, look at page 7 of Berkshire’s Proxy Statement. The proxy shows Mr. Buffet’s income for the last 3 years which has been the same. Also, as is widely reported, Mr. Buffet is a big investor in municipal bonds. That would be tax-exempt municipal bonds. So, his interest income isn’t taxed, his income level would not reach the level of rich and he wants me to pay more in taxes.
Buffet is wealthy because he legally evades taxes. He invests in tax-exempt bonds and keeps his wealth in the form of untaxed capital gains.
Why don’t we let those that want a large federal government support it. Let’s see Buffet give the bulk of his fortune to the imperial federal government he supports and leave the rest of us alone.
After all, we all want to be rich like him.
Why do politicians promise to create private-sector jobs when they aren’t the ones who hire people in the private sector? How can a politician actually create a private-sector job? These are questions I ask people I know and people I run into. Their answers really demonstrate how little the average person knows about economics.
You’re seeing headlines in the MSM and quotes by the ruling class ridiculing corporations for holding vasts amount of cash and not spending it “to create jobs.” The answer is easy. To find the answer, don’t look at earnings reports showing glowing EPS growth. Instead, look at revenue and see if a companies’ top line is growing. If the company’s top line is not growing, i.e. more customers to serve, why would the business add costs?
The answer is: a business wouldn’t.
What is the reponse by the ruling class and MSM? Increase taxes on corporations and the rich because they can afford it.
Is their an answer that will cause businesses to increase their spending? Cut the size and scope of federal, state and local governments. Cut the regulatory burden (regulations only help governments and government employees).
The key words associated with the answer are cut anything government.
Well, it certainly seems like the Fed has decided the only real way to get out of this mess is through inflation. With the dollar in a free-fall and no support at all from any of the usual suspects, it appears that the Fed and the administration are happy with this decline.
Perhaps, they are thinking that the dollar’s free-fall will stoke foreign demand for U.S. products. What they seem to forget is the fact that we import most of what goes into the products we manufacture here. Therefore, you’re inflating the cost of the goods to be sold thereby increasing the sales price and taking away any price advantage a falling currency value might have provided you.
At this point, the only thing inflation will do is to bring back memories of the Carter years and stagflation.
As a CPA, I endeavor to keep up to date on the lastest and greatest from the rulemaking bodies, i.e. the SEC and the FASB. As the accounting standard setting bodies try to move U.S. GAAP towards international standards, one thing is becoming very clear. The FASB, like the current administration in Washington, doesn’t listen.
Similar to the professorial clique currently running the Obama administration, the FASB (and the IASB the standard setters for international standards) are full of people who have never had to implement a standard and would not know how to book a journal entry into a set of accounts if they had to. Not really listening to your constituents is a bad thing. Look at Obama’s approval numbers since his steamroll on health care.
I believe a similar thing is starting to happen with accountants. If we, the practictioners, don’t believe in the accounting fictions being created, how can we do our job. How can you sign a certification required by law on an SEC document that says you have reported numbers correctly when you don’t believe the underlying standards are correct?
One way is to get rid of the FASB and have the feds develop the accounting standards we use. While this might seem like a bad move, I know I can influence a politician and get him to listen. I wish I could say the same for those at the FASB.