Tuesday, September 04, 2007
SOME THINGS DON'T MAKE SENSE
IRS Rules
It is noted that the young man who caught Barry Bonds’ record breaking home run ball is liable for taxes based upon the market value of the ball, even if he chooses not to sell it. Since the ball is estimated to be worth about $500,000, he could owe $200,000 in taxes. Where will he get that unless he sells the ball? Most of us would agree that he should owe the taxes if and when he sells, just as does the winner of a lottery, but this is a little crazy.
Then there is the situation of some people who are about to lose their homes through foreclosure, because they cannot pay their mortgage payments. In instances where their property has depreciated in value below the mortgage level, lenders have been wise enough to forgive that portion to keep the client in the home and paying a payment he can afford. What does the IRS do? It says that the client in trouble owes immediate taxes on the loan loss forgiven by the bank. That doesn’t make much sense.
Free Trade and the Economy
Our manufacturing jobs have been going overseas at a distressing rate. Our middle class union wage jobs with pensions and health benefits are disappearing. What are we getting in return? Apparently our gain is cheap merchandise at discount stores, much of which is either defective or hazardous. China is making our toys with lead paint, our toothpaste with antifreeze, and our pet (and human) food with toxic content.
Strangely enough, it is not only our cheap clothing and sneakers coming from Southeast Asia, but also our expensive designer labels are made there. So, apparently there is even a larger profit margin in high priced things that are made cheaply. Mexico says that they make most of our car parts, and that it doesn’t matter where the cars are assembled. Does assembling a car in this country with either an American or a foreign brand name on it somehow make it American?
Should America be running a huge trade imbalance, shipping our capital overseas to pay for consumer goods? Is there something wrong about two-thirds of our $750 billion in currency being held overseas? Do we want really want an “even playing field” foreign trade policy? Won’t that lead to an even standard of living with our third world trading partners? Why not erect tariffs to protect our economy?
Infra-structure
We are suddenly conscious of the need to repair or replace thousands of bridges. We realize that we have been shortchanging highway development, bridges, water management, flood control, city utilities, prisons, and other public services. Road user taxes have not been changed in decades, while the price of gasoline has increased in multiples. Social Security and Medicare face shortages in reserves.
Where have our priorities been? The eyes of our leaders and our lawmakers have been principally on tax cutting and fighting foreign wars.
The private sector has been no less shortsighted. Their focus has been on the bottom line, but not for their small stockholders or the small owners of mutual fund shares. Rather than paying dividends, they have looked to increasing the value of stock, as a tax deferral for big holders, and to enhancing the power of their major owners and managers through acquisitions. Lucrative hedge and private equity funds remain untaxed.
With major oil companies amassing obscene profits, why are we short of refineries and pipe lines to supply consumers? Could it be that unchallenged mergers have led to an oligopoly? With electric utilities prospering, why have we not made progress toward a “smart grid” guaranteeing uninterrupted service throughout the nation? Is there something to be learned from the fact that the world’s richest man is in Mexico, amassing his $59 billion from profits after being granted the monopoly on telephones, and later on cellular phones, by the government.
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Yes, indeed there are a lot of things in this land which do not make sense for the average citizen, and there are more which do not make sense as national policy. There are things which do not make sense in our regulatory environment. Perhaps it is the lack of effective regulation.
Dr. Edwin E. Vineyard, AKA The Militant Moderate
It is noted that the young man who caught Barry Bonds’ record breaking home run ball is liable for taxes based upon the market value of the ball, even if he chooses not to sell it. Since the ball is estimated to be worth about $500,000, he could owe $200,000 in taxes. Where will he get that unless he sells the ball? Most of us would agree that he should owe the taxes if and when he sells, just as does the winner of a lottery, but this is a little crazy.
Then there is the situation of some people who are about to lose their homes through foreclosure, because they cannot pay their mortgage payments. In instances where their property has depreciated in value below the mortgage level, lenders have been wise enough to forgive that portion to keep the client in the home and paying a payment he can afford. What does the IRS do? It says that the client in trouble owes immediate taxes on the loan loss forgiven by the bank. That doesn’t make much sense.
Free Trade and the Economy
Our manufacturing jobs have been going overseas at a distressing rate. Our middle class union wage jobs with pensions and health benefits are disappearing. What are we getting in return? Apparently our gain is cheap merchandise at discount stores, much of which is either defective or hazardous. China is making our toys with lead paint, our toothpaste with antifreeze, and our pet (and human) food with toxic content.
Strangely enough, it is not only our cheap clothing and sneakers coming from Southeast Asia, but also our expensive designer labels are made there. So, apparently there is even a larger profit margin in high priced things that are made cheaply. Mexico says that they make most of our car parts, and that it doesn’t matter where the cars are assembled. Does assembling a car in this country with either an American or a foreign brand name on it somehow make it American?
Should America be running a huge trade imbalance, shipping our capital overseas to pay for consumer goods? Is there something wrong about two-thirds of our $750 billion in currency being held overseas? Do we want really want an “even playing field” foreign trade policy? Won’t that lead to an even standard of living with our third world trading partners? Why not erect tariffs to protect our economy?
Infra-structure
We are suddenly conscious of the need to repair or replace thousands of bridges. We realize that we have been shortchanging highway development, bridges, water management, flood control, city utilities, prisons, and other public services. Road user taxes have not been changed in decades, while the price of gasoline has increased in multiples. Social Security and Medicare face shortages in reserves.
Where have our priorities been? The eyes of our leaders and our lawmakers have been principally on tax cutting and fighting foreign wars.
The private sector has been no less shortsighted. Their focus has been on the bottom line, but not for their small stockholders or the small owners of mutual fund shares. Rather than paying dividends, they have looked to increasing the value of stock, as a tax deferral for big holders, and to enhancing the power of their major owners and managers through acquisitions. Lucrative hedge and private equity funds remain untaxed.
With major oil companies amassing obscene profits, why are we short of refineries and pipe lines to supply consumers? Could it be that unchallenged mergers have led to an oligopoly? With electric utilities prospering, why have we not made progress toward a “smart grid” guaranteeing uninterrupted service throughout the nation? Is there something to be learned from the fact that the world’s richest man is in Mexico, amassing his $59 billion from profits after being granted the monopoly on telephones, and later on cellular phones, by the government.
-------------------
Yes, indeed there are a lot of things in this land which do not make sense for the average citizen, and there are more which do not make sense as national policy. There are things which do not make sense in our regulatory environment. Perhaps it is the lack of effective regulation.
Dr. Edwin E. Vineyard, AKA The Militant Moderate
