The Tax Cut Myth

I know this is going to be a hard sell.

Since time immemorial the tax collector has been universally despised. No one likes to see their hard earned money confiscated by the government for the common good. I know I take every deduction I am eligible for when I file. But we have been sold a bill of goods when it comes to lowering taxes.

We tried it in the 1920's. There was a boom, a bubble, and a bust. We tried it in the 1980's; another boom, bubble, and bust We have been trying it the last eight years, and you guessed it: boom, bubble, bust. Those who don't remember history are forever doomed to repeat it.

The theory is that if the rich can keep their money, they will invest in businesses that create jobs, more businesses, more tax revenue and greater wealth for the nation. It sounds like logic and common sense. But what really happens? Exactly the opposite!

Higher taxes create an incentive to reinvest profits into long-term growth.When taxes are relatively high, the only way to retain the bulk of the wealth created by a business is by reinvesting it in the business: factories, equipment, staff, research and development, new products.

During the Eisenhower administration, arguably one of our most productive periods, the corporate tax rate was in the 70% range. This meant that every dollar corporations posted as profit instantly turned into 30 cents. (Assuming they actually paid taxes on it)

Unless you really need the money for another yacht or mansion, you invest it the business and find ways to spend it that take it out of the taxable profit column but increase the value of the company.

When you plan for the long term; you need a happy, stable work force. It becomes worthwhile to pay good wages and offer decent benefits. Your employees, community and society prosper along with you.

The problem with low taxes is they change the business culture. Instead of responsible, sustainable investment, they encourage profit taking.

Suckers who run companies with steady, reliable profits became targets for takeovers by people who were willing to milk them for everything they are worth; leveraged buyouts, hostile takeovers, cut the work force, raid the pension fund, sell the assets, outsource production, issue junk bonds; who cares what happens in 10 years, you can make a bundle by screwing everyone else!

After they gutted American industry in the 80's, the rich folks had way too much money to play with, and they become greedy bastards. Investing in business is slow. You don't often get immediate returns on your capitol. Plus, it exposes you to the risks of the preceding paragraph.

This causes investors to look for the latest "hot" sector, where they can make a quick profit and move on. They find the area and flock to it. It heats up even more.

Joe Sixpack, who can’t afford to take the same risks the big boys can, sees people making tons of money quickly and easily, simply by buying and selling, and doesn’t want to miss out. He doesn't realize he already has by the time he gets on the bandwagon.

Sub-prime mortgages, derivatives, mortgage-backed securities, and other Ponzi schemes were all very profitable for a few people who got in early, but they do not create sustainable wealth. Just a boom, then a bubble….. Followed by a bust.

Tax cuts are the root of our economic distress. A responsible tax policy that creates long term investment in business growth is the rising tide that will lift all boats.

We Can ALL Go GREEN!

Well, I did not get very many comments or suggestions like I expected the last time I posted this (kudos to Grey Fedora for the helpful suggestions), so I am re-posting it. It is very long and worth printing off on, you guessed it, recycled paper. Read it carefully and you will see that everyone in your family and the office can participate in going GREEN. With kids and even the workplace you can make a game out of it to see who can be the most GREEN and whoever wins gets the incentive of your choice whether it be a nice dinner with the boss or extra allowance or phone time for the kids. The more fun and interesting you make it, the easier it is to show everyone how simple making small changes can improve the impact we all put on our environment everyday. So, without further ado, here is the post from last November:

I promised you all a post that gave you tips on transitioning your office and home into a more environmentally responsible place to work and live. In my research, I found a site, www.epa.gov/climatechange, that said it all and so I am copying the information from that site to this post. Remember, even a single light bulb change to an ecobulb can give you a savings of up to $93 a year. I did this in my own home and saw an instant savings on the power bill. From an average of $205/month, the bill dropped to $145 and I went a step further and unplugged all appliances such as unused televisions, computers, lamps, printers, etc. and it went down again to $91. What a savings. Did you know that a desktop computer uses the same amount of energy as a refrigerator? Surprising isn't it?

Actions You Can Take at Home:

1. Change 5 lights: Change a light, and you help change the world. Replace the conventional bulbs in your 5 most frequently used light fixtures with bulbs that have the ENERGY STAR and you will help the environment while saving money on energy bills. If every household in the U.S. took this one simple action we would prevent greenhouse gases equivalent to the emissions from nearly 10 million cars.
2. Look for ENERGY STAR qualified products: When buying new products, such as appliances for your home, get the features and performance you want AND help reduce greenhouse gas emissions and air pollution. Look for ENERGY STAR qualified products in more than 50 product categories, including lighting, home electronics, heating and cooling equipment and appliances.
3. Heat and cool smartly: Simple steps like cleaning air filters regularly and having your heating and cooling equipment tuned annually by a licensed contractor can save energy and increase comfort at home, and at the same time reduce greenhouse gas emissions. When it's time to replace your old equipment, choose a high efficiency model, and make sure it is properly sized and installed.
4. Seal and insulate your home: Sealing air leaks and adding more insulation to your home is a great do-it-yourself project. The biggest leaks are usually found in the attic and basement. If you are planning to replace windows, choose ENERGY STAR qualified windows for better performance. Forced air ducts that run through unconditioned spaces are often big energy wasters. Seal and insulate any ducts in attics and crawlspaces to improve the efficiency of your home. Not sure where to begin? A home energy auditor can also help you find air leaks, areas with poor insulation, and evaluate the over-all energy efficiency of your home. By taking these steps, you can eliminate drafts, keep your home more comfortable year round, save energy that would otherwise be wasted, and reduce greenhouse gas emissions.
5. Use green power: Green power is environmentally friendly electricity that is generated from renewable energy sources such as wind and the sun. There are two ways to use green power: you can buy green power or you can modify your house to generate your own green power. Buying green power is easy, it offers a number of environmental and economic benefits over conventional electricity, including lower greenhouse gas emissions, and it helps increase clean energy supply. If you are interested, there are a number of steps you can take to create a greener home , including installing solar panels and researching incentives for renewable energy in your state .
6. Reduce, Reuse, and Recycle: If there is a recycling program in your community, recycle your newspapers, beverage containers, paper and other goods. Use products in containers that can be recycled and items that can be repaired or reused. In addition, support recycling markets by buying products made from recycled materials. Reducing, reusing, and recycling in your home helps conserve energy and reduces pollution and greenhouse gases from resource extraction, manufacturing, and disposal.
7. Be green in your yard: Use a push mower, which, unlike a gas or electric mower, consumes no fossil fuels and emits no greenhouse gases. If you do use a power mower, make sure it is a mulching mower to reduce grass clippings (PDF, 8 pp., 1.59 MB, About PDF). Composting your food and yard waste reduces the amount of garbage that you send to landfills and reduces greenhouse gas emissions. See EPA’s GreenScapes program for tips on how to improve your lawn or garden while also benefiting the environment. Smart Landscaping can save energy, save you money and reduce your household’s greenhouse gas emissions.
8. Use water efficiently: Saving water around the home is simple. Municipal water systems require a lot of energy to purify and distribute water to households, and saving water, especially hot water, can lower greenhouse gas emissions. Look for products with EPA's WaterSense label; these products save water and perform as well or better than their less efficient counterparts. There are also simple actions you can take to save water: Be smart when irrigating your lawn or landscape; only water when needed and do it during the coolest part of the day, early morning is best. Turn the water off while shaving or brushing teeth. Do not use your toilet as a waste basket - water is wasted with each flush. And did you know a leaky toilet can waste 200 gallons of water per day? Repair all toilet and faucet leaks right away. See EPA's WaterSense site for more water saving tips.

Spread the Word Tell family and friends that energy efficiency is good for their homes and good for the environment because it lowers greenhouse gas emissions and air pollution. Tell 5 people and together we can help our homes help us all.

Actions You Can Take on the Road:

1. Buy smart: Before buying a new or used vehicle (or even before renting a vehicle), check out EPA's Green Vehicle Guide and the jointly-run EPA/DOE Fuel Economy Guide Web site. These resources provide information about the emissions and fuel economy performance of different vehicles. The Green Vehicle Guide provides detailed information on emissions (including Air Pollution and Greenhouse Gas scores for each model) and the Fuel Economy Guide focuses on fuel efficiency (including side-by-side fuel economy comparisons and a customized fuel cost calculator). These Web sites are designed to help you choose the cleanest, most fuel-efficient vehicle that meets your needs. There are a wide range of cleaner, more fuel-efficient vehicles available on the market today that produce fewer greenhouse gas emissions.
2. Drive smart: Many factors affect the fuel economy of your car. To improve fuel economy and reduce greenhouse gas emissions, go easy on the brakes and gas pedal, avoid hard accelerations, reduce time spent idling and unload unnecessary items in your trunk to reduce weight. If you have a removable roof rack and you are not using it, take it off to improve your fuel economy by as much as 5 percent. Use overdrive and cruise control on your car if you have those features. For more tips to improve your gas mileage, visit the Fuel Economy Guide Web site.
3. Tune your Ride: A well-maintained car is more fuel-efficient, produces fewer greenhouse gas emissions, is more reliable, and is safer! Keep your car well tuned, follow the manufacturer’s maintenance schedule, and use the recommended grade of motor oil. Also check and replace your vehicle’s air filter regularly. For more details, including potential savings from these actions, visit the Fuel Economy Guide Web site.
4. Check your tires: Check your tire pressure regularly. Under-inflation increases tire wear, reduces your fuel economy by up to 3 percent, and leads to increased emissions of greenhouse gases and air pollutants. If you don’t know the correct tire pressure for your vehicle, you can find it listed on the door to the glove compartment or on the driver's-side door pillar. More details are available on the Fuel Economy Guide Web site.
5. Give your car a break: Use public transportation , carpool or walk or bike whenever possible to avoid using your car. Leaving your car at home just two days a week will reduce greenhouse gas emissions by an average of 1,600 pounds per year. Whenever possible, combine activities and errands into one trip. For daily commuting, consider options like telecommuting (working from home via phone or over the Internet) that can reduce the stress of commuting, reduce greenhouse gas emissions, and save you money.
6. Use Renewable Fuels: Both E85 and bio diesel are renewable fuels that can reduce greenhouse gas emissions from your vehicle. E85 is a fuel blend containing 85% ethanol that can be used in certain vehicles called Flex Fuel Vehicles (FFVs). FFVs can be fueled with E85 or with traditional gasoline. There are approximately 6 million FFVs on the road today. To find out if you own one of them, check the inside of your car's fuel filler door for an identification sticker or consult your owner’s manual. If you own a diesel vehicle, consider filling up with a bio diesel blend such as B5, a fuel blend containing 5% bio diesel. Bio diesel is a renewable fuel made from agricultural resources such as vegetable oils. The Department of Energy’s Alternative Fueling Station Locator can help you locate both E85 and bio diesel fuel stations in your area.

Actions You Can Take at the Office:

1. Manage office equipment energy use better: Office equipment and electronics use energy even when idle or on stand-by. To save energy and reduce greenhouse gas emissions at work, always activate the power management features on your computer and monitor, unplug laptop power cords when not in use and turn off equipment and lights at the end of the day. Consider using a power strip that can be turned off when you're done using your computers, printers, wireless routers and other electronics.
2. Look for ENERGY STAR qualified products for the Office: When buying new products for your office at work or at home, get the features and performance you want and help reduce greenhouse gas emissions and other harmful air pollutants. Look for ENERGY STAR qualified office equipment, such as computers, copiers, and printers, in addition to more than 50 product categories, including lighting, heating and cooling equipment and commercial appliances.
3. Ask your office building manager if your office building has earned the ENERGY STAR: ENERGY STAR-labeled buildings provide safe, healthy, and productive environments that use about 35 percent less energy than average buildings. Their efficient use of energy also reduces the total operational cost of the building.
4. Use less energy for your commute: Switch to public transportation, carpooling, biking, telecommuting and other innovative ways to save energy and reduce greenhouse gas emissions on your way to and from work. Encourage your employer to offer commuter benefits that address limited or expensive parking, reduce traffic congestion, improve employee recruiting and retention and minimize the environmental impacts associated with drive-alone commuting. If you do drive, find out the fuel efficiency of your vehicle using EPA's and DOE's fuel economy Web site, and make more environmentally-informed choices when purchasing your next vehicle by using EPA's Green Vehicle Guide.
5. Reduce, Reuse, Recycle: Recycle office paper, newspapers, beverage containers, electronic equipment and batteries. Reducing, reusing, and recycling in your office helps conserve energy, and reduces pollution and greenhouse gas emissions from resource extraction, manufacturing, and disposal. You can reduce, reuse and recycle at the office by using two-sided printing and copying; buying supplies made with recycled content; and recycling used printer cartridges. For your old electronics, investigate leasing programs to ensure reuse and recycling or donate used equipment to schools or other organizations.

Actions You Can Take at School:

Students:
1. Bring science to life: Explore the Climate Change Kids Site and watch Climate Animations that bring to life the science and impacts of climate change. The site also provides games that help students, their parents and their teachers learn about both the science of climate change and what actions they can take to reduce greenhouse gas emissions.
2. High school students check your school's climate impact: High school students can investigate the link between everyday actions at their high school, greenhouse gas emissions and climate change. Using EPA's Climate Change Emission Calculator Kit (Climate CHECK) (WinZip of Excel spreadsheet, 3.4 MB) students can learn about climate change, estimate their school’s greenhouse gas emissions and conceptualize ways to mitigate their school’s climate impact. Students gain detailed understandings of climate-change drivers, impacts, and science; produce an emission inventory and action plan; and can even submit the results of their emission inventory to their school district.
3. Get Involved your College or University: College students can play an important role in reducing greenhouse gas emissions at their colleges or universities by reducing their emissions from energy they use in dorm rooms. Students can also work with school administrators to: increase energy efficiency on campus, reduce their school's greenhouse gas emissions by using green power, create a campus climate action plan , or develop an inventory of their school's greenhouse gas emissions.

Educators:
1. Teach students about climate change and ecosystems: Use the Climate Change, Wildlife and Woodland's: A Toolkit for Teachers and Interpreters to learn about the science of climate change and its potential effects on our nation’s wildlife and their habitats.
2. Engage middle school students in estimating emissions: Enhance critical thinking skills by introducing the Global Warming Wheel Card Classroom Activity Kit (PDF, 1 pp., 86 KB, About PDF) to middle school students. A hand-held wheel card and other resources help students estimate household greenhouse gas emissions in order to encourage students to think about ways to reduce their personal, family, school and community contributions to climate change. If you are an informal educator, simply use the Global Warming Wheel Card as a part of your field activities.
3. Learn from other educators: Investigate what other schools and organizations are doing to educate their audiences on climate change by clicking on Educators’ Links, a searchable database offering links to resources such as lesson plans, videos, books and toolkits.
Administrators
4. Save money and the environment: The least efficient schools use three times more energy than the best energy performers. By partnering with the highly successful ENERGY STAR for K-12 program, school districts can serve as environmental leaders in their community, become energy efficient, reduce greenhouse gas emissions and save money!
5. Estimate your emissions and take the challenge: School Administrators can also work to reduce their school's greenhouse gas emissions by developing an inventory of their school's emissions or by taking the 2006 College and University Green Power Challenge.
6. Reduce, Reuse, Recycle: Recycle school or classroom paper, newspapers, beverage containers, electronic equipment and batteries. Reducing, reusing and recycling at school and in the classroom helps conserve energy, reduce pollution and greenhouse gases from resource extraction, manufacturing and disposal. You can reduce, reuse and recycle at school or in the classroom by using two-sided printing and copying; buying supplies made with recycled content; and recycling used printer cartridges. For your old electronics, investigate leasing programs to ensure reuse and recycling or donate used equipment to schools or other organizations.

I think you will all agree that this site provides a lot of useful information and I hope that it inspires you to go GREEN. If anyone would like to suggest more useful ways to go GREEN, please use the comment section.

More to come

This blog has sure been quiet the past month, I hope this means everyone has had a happy and safe holiday season, filled with friends and family memories. But now the real work of cleaning up after the Bush Administration begins.

Yesterday, Bill Richardson withdrew his nomination for Secretary of Commerce amid a grand jury investigation. James Carville over on Newsmax predicts a streak of Democratic scandals. Carville points out it is simple math: More Democrats in elected office increases the likelihood of scandal.

The difference needs to be in how the scandals are handled. So far, the Democrats seem to understand this. John Edwards, Eliot Spitzer, now Bill RIchardson; with the exception of Governor Blagojevich, and William Jefferson, most Democrats caught with their pants down or their hands in the till quickly remove themselves from the public eye.

When they don't, it is the Democratic leadership that puts pressure on them to step down. William Jefferson was stripped of his committee memberships by his own party, Democrats are leading the resistance to seating Blagojevich's Senate nominee.

Defending Tom Delay, Trent Lott, Larry Craig, and Ted Stevens cost the Republicans dearly in the court of public opinion. The party must be like Caesar's wife; beyond reproach. Like the military academies, you don't lie, cheat or steal, nor tolerate those who do.

Another of Carville's predictions was especially interesting:

A "near catastrophic ideological rift" in the Republican Party. "There is no obvious Republican leader on the horizon, and the party is caught between its Southern/talk-radio base and the rest of the country on whether they should oppose or cooperate with [Barack] Obama's administration. The combination of the lack of an obvious leader and the general political combustibility of the Republican Party will lead to a dangerous fissure that will plague it until the 2012 election cycle."

I have another name for the southern/talk radio base; I call them "the proudly ignorant," and the alliance between them and the fiscal conservative wing of the Republican arty has always been uneasy.

Perhaps nowhere could the rift be seen more clearly than last year's Republican Convention. It was like watching a schizophrenic relative; John McCain could have been anybody's doting grandfather, then Sarah Palin's lunatic rants. You never knew which Republican party you would get on any given day. I have Republican friends who voted Obama because the concept of President Palin scared the hell out of them. They have sown the wind, and are now reaping the whirlwind as the crazies demand a place at the table.

Right now, the Republicans are in the same position the Democrats were after 2000 and 2004, in danger of becoming a minor, regional party.

This is no time for complacency. As Republicans found out in 2006 and 2008, there is no such thing as a "permanent majority." By recognizing the problem, they have already started to regroup. They realize the tried and true formula of turning out the religious right and the racist voting blocs, plus a little voter suppression doesn't work anymore. Demographics overwhelmed them. Look or them to start hiding the crazier elements, and an appeal to moderate, thinking people.

The best thing Democrats can do now is govern effectively, get some programs that help Americans passed through, and cut out the Cancer of scandal from among themselves before it becomes inoperable.

Happy 2009 Everyone.