Category Archives: tax related issues

the cost of our system

Hidden taxes

Hidden taxes

We all aware of obvious of “upfront” taxes like sales, income, real estate, personal property and petrol taxes. What we many of us do not recognize are what I term “hidden” taxes. In a free market economy (a good thing) prices will adjust according to supply and demand and other market factors. In a competitive environment prices will tend to fluctuate. One example of a “hidden tax” is corporate income tax. Initially this appears as a good thing since companies make a lot of money and they should contribute to the running of the government. However, over time, much of this tax will be passed along to the consumer in pricing. So, who is paying the tax?                                                                                                                                                  My favorite “hidden tax” has to do with the cost of healthcare. Your elected representatives refuse to reduce this tax burden on you and this burden is much greater than the money you pay each year in income tax! Our current system for delivering healthcare is 2 ½ times the average of the EU countries and our overall quality of care is inferior.

“According to the IRS, Americans filed more than 150.6 million tax returns in 2015. During that year they also earned $10.17 trillion in adjusted gross income and had a total tax liability of $1.45 trillion. Some quick division means that the average gross income per return was $67,564 while the average federal tax hit was $9,655. That gives the average American family a federal tax rate of 14.3%.

However, the above figures above can be a bit misleading. Many low-income Americans actually have a negative federal tax bill thanks to the Earned Income Tax Credit. If you remove those returns from the equation then you are left with 99 million Americans who recorded an average federal tax hit of $14,654.” https://www.fool.com/taxes/2017/03/14/how-much-does-the-average-american-pay-in-taxes.aspx

The bottom line is that in 2015 the tax burden on families was $1.45 trillion while we spent $3.2 trillion on healthcare. Cutting this cost in half (which is possible) would more than cover our tax bill!

You ask why our costs are so high? There are several prior posts to this blog which detail the specifics, but to summarize it has to do which the many special interests that are profiting from the massive healthcare industry: Insurance administration & profits, obesity, RX companies (manufacturers & distributors), physician compensation, outrageous hospital charges and litigation.

This issue cannot be resolved by tweaking our broken system. We need to have the courage to admit that there are more effective system models out there and we should look at adopting the best features of systems that are effective and also provide a higher level of care. The only obstacle will be the special interests that are profiting for this massive “hidden tax” and their political influence is massive.

When is a tax increase not?

When is a tax increase not?

Keeping in mind, from the prior weeks post, that borrowing money to decrease taxes does not always result in a financial benefit the opposite can also be true. If the increase in tax is used to lower the deficit, or even better create a surplus, this accrues to the financial benefit of the tax payer. Thinking about your family unit it is akin to making a payment on a loan which reduces debt and also the amount of interest.                                                                                      A good example of this was the tax increase that was put into place by President George HW Bush. Keep in mind that as a Republican this action was political suicide. Not only did it set the table for his failed bid for re-election, it also created a significant split in his party. So why did he take this unpopular action? The simple answer is that it was in the best interest of the American people.                                                                                                                                             The economy was suffering and the national debt was rising. The action taken by President Bush initiated economic recovery and started the trend toward reducing the deficit. The unfortunate political outcome was that the results bore fruit during the tenure of President Clinton. The downward trend in deficit actually resulted in several years of surplus and a financial benefit to taxpayers.

                                     FY       Deficit   Increase in Debt   Deficit/GPD      Significant events

1991 $269 $432   4.3% Recession.
1992 $290 $399   4.4%  
1993 $255 $347   3.7% Clinton signed Balanced Budget Act.
1994 $203 $281   2.8% First Clinton budget.
1995 $164 $281   2.1%  
1996 $107 $251   1.3% Welfare reform.
1997 $22 $188   0.3%  
1998 ($69) $113  (0.8%) LTCM crisis.
1999 ($126) $130  (1.3%) Glass-Steagall repealed.
2000 ($236) $18  (2.3%) Surplus.
2001 ($128) $133  (1.2%) 9/11 attacks. EGTRRA.

The Ideal Candidate

The Ideal Candidate

In this week’s posting I am asking for a couple of special favors. I have penned a “white paper” on The Ideal Candidate and is much too long to include the entire narrative in this posting. My goal is to use it as the basis in facilitating a grass roots movement. If consider yourself a moderate independent, Republican, Democrat or a Libertarian I believe that you find the vast majority of this candidates position to your liking.

What I am hoping is that you will use the following drop box link to access the paper and take the time to read it (it is quite long). If you believe that a candidate with this Presidential platform is one that you would vote for in 2020, then please forward the drop box link to a minimum of 10 of your friends via Facebook or any form of social media. When you do this please ask them to: “Please take time to review the “white paper” at the following drop box link https://www.dropbox.com/s/d6leve5mb43p6tg/IPC.pdf?dl=0. If you believe that a candidate with this Presidential platform is one that you would vote for in 2020, then please forward the drop box link to a minimum of 10 of your friends via Facebook or any form of social media.” And do so using the text inside of the preceding quotation marks (“…..”).

Discussion and solutions in the following areas are included in the paper:

  • Election & Term Reform
  • The National Debt
  • The National Defense, Security & Veteran support
  • Healthcare
  • Tax Reform
  • Income Security
  • Energy Dependence
  • Climate Change & the Environment
  • Immigration Reform
  • Infrastructure
  • Social Security & Medicare
  • International Relations & Foreign Policy
  • Criminal Justice & Incarceration
  • Human Rights
  • Gun Control
  • Education
  • Illegal & Prescription Drugs
  • Population & Resources
  • Right to Life

Many folks will consider this approach naïve and they might be right. Going up against two heavily funded and entrenched Parties will be extremely difficult. Consider that our current approach to selecting candidates is the reason we find our country in such a mess. If each individual that reads the paper is willing to take personal responsibility for change then we can do it.

The part of the favor will require you to take some action. Obviously, the Ideal Candidate is now just hypothetical. That leads me to the 2nd favor. I am asking you to take at least one more of the following actions: 1. We need nominations for potential persons that are willing to adopt the platform. If you would like to nominate an Individual please send the nomination, with the word “Nomination” in the subject line, to sophiessoapbox@gmail.com. Please include the email address of the person you nominate. 2. If you have social media skills and would be willing to volunteer your services please send an email to sophiessoapbox@gmail.com with “Social Media” in the subject line. 3. If you are willing to assist with the campaign in your state please send an email to sophiessoapbox@gmail.com with “Volunteer” in the subject line. Please include your state in the email.