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Tuesday, September 11, 2012

Caught in a Loophole

10 a.m.  Saturday August 4, 2012
“Don’t forget, it’s tax-free weekend!” my mother hollered over her shoulder as she headed out of our house on Saturday, August 4th. 
My heart began to race, my palms became wet with sweat as, in my mind, I began rearranging my family’s whole weekend so that my husband and I could get to the stores before everything we needed was stripped from the shelves:  shoes and clothes for our ever-growing nine and eighteen year old boys, sheets for our oldest son’s new bed in his first apartment,  and something, anything else on the tax-free approved list we might need or be able to sneak into the cart: new pencils, pens, paper, folders, crayons, pens, erasers, printer ribbon, and the list goes on.  Maybe I could even load up on some new work clothes for myself and my husband whose field-boots were looking worse for wear these days. 
Use to be, I didn’t pay much attention to this money-saving holiday.  It wasn’t as though the savings didn’t matter, but, well, they didn’t matter so much or enough for me to give over a whole weekend (or even a few hours) to shopping in order to save what, for many of us, may only amount to a few dollars.  I don’t enjoy shopping , no matter what shape it takes – grocery or clothes or furniture or home d├ęcor; I simply do not relish traipsing through stores looking around for things I need and sometimes don’t.   
But this year, like last year, like the year before, things are different and, while I may not be saving the date on my calendar, I am willing to forgo a day at the beach to get the savings I can from these state-sanctioned tax-free moments in time.  Frankly, every little bit counts to just about every single one of us.  From the single beaten and battered penny found in a parking lot to the $13.50 +/- saved in taxes by shopping on a tax-free weekend, the money we can save matters and the money all of us can save on all of our taxes matters even more. 
This is why understanding the issue of taxation this election should be of paramount importance to all of us.  Surprisingly, however, many have no idea what this issue is about or what our presidential candidates propose doing to make a difference in our lives via our taxes.  It’s a downright dirty shame that this issue is so muddy, so little understood by so very many voters. 
But for many Americans the lack of lucidity surrounding this issue is no different from the lack of clarity surrounding any of the other issues up for grabs in November and on the table come January.   And this is the real travesty.   
Truly, those of us voting in this year’s presidential election for the next person to run our country for the next four years should know, inside and out, the issues the candidates for this position plan to address when in office and what they plan to do regarding those topics. For every single one of the issues on the table this election season affects every single one of us.  None of us is exempt from the effects of these decisions.
So, if when asked about the election you find yourself saying, “I don’t follow politics” or “I don’t know all the issues, I’m only concerned with . . . fill in the blank,” or “My vote doesn’t matter, so I’m not voting,” or any other answer that makes it clear you do not have enough information to make an informed decision, then be proactive in getting yourself educated about the upcoming election.  Here’s how to start:

Then, my dear 122 students, we can have a discussion.
Happy learning,
Dr. B.


  1. I have read both side concerning the tax issue. What makes sense to me is what was written in plain english. It does not make sense that a CEO of a company makes more, and his secretary makes less, but pays more in taxes. I only think this is a fair way of doing things. We would be all equal as a people, and not segregated by our pay and what we can and can not afford. Maybe I need to read it again, but it seems to be cut and dry to me

  2. Both sides (Republicans and Democrats) have the decisive different views on several issues. I think the big issue during this election is the economy, and on this issue, what sounds right to me, is to help the Main Street recover from this agonizing economy. We need to create more jobs, and I think the President started doing that in the past thirty months. To me, it does not make sense to lower taxes on the people in Wall Street, because we bailed them out when they were failing. It is about time they pay back to us, they learn from their past stupid mistakes and enforce the regulations. They are rich anyway. So, why not pay more taxes than the people in Main Street? After all, we all need a fair share.

    1. Padaro, when you say "why not pay more taxes than the people on main street", Are you saying that lower and middle class should pay more taxes?

    2. Natasha:
      Middle class people are part of Main Street. So, we should lower taxes on Main Street, and increase taxes on Wall Street (People who are making more than $250,000 a year).

    3. Piyabalo and Natasha,
      The two of you are addressing the same problem in similar ways. You are not in opposition. I believe you are both saying that the "we" is main street and that we need fairness in taxation to bring main street back to life? Correct?
      Dr. B.

    4. This is correct Dr. B. I do belive that less fortunate people (Main Street) should pay less taxes than their conterparts (Wall Street). This has been Obama policy. On the other hand, Romney wants the opoosite of this. To him, Wall Street should pay less taxes. This seems unfair to me.

    5. This is correct Dr. B. I do believe that less fortunate people (Main Street) should pay less taxes than their conterparts (Wall Street). This has been Obama's policy. On the other hand, Romney wants the opposite of this. To him, Wall Street should pay less taxes. This seems unfair to me.

    6. Correct for me too. People who make less should pay less. Who in their right mind wants to keep people down, why do we even have these upper, middle, lower class brackets?

  3. As unorthodox as this may sound, I believe we need a political mind, vice a person with business acumen, in office. The reason being that each has a different way of thinking. It appears to be obvious to me when I look at and compare Obama and Romney. The political-minded Obama has a vision of the "whole". While the business-minded Romney does not. When comparing the two in terms of their tax policy plans one can see the huge difference between the two views. So, the question is would you rather have a political mind or a business mind making decsisions for the nation's tax policies?

    Edgar A.

    1. Edgar,

      I could not agree more. And I believe you have an astute comparison here. Right now, we need a vision for the whole, for we must all be considered when it comes to moving the economy forward. The economy is driven by all levels of society and it takes an idea of us working together for the good of the "us" to make the economy work. Thank you for the the level-headed view.

      Dr. B.

    2. I agree as well that we need to have a person who understands both sides. I think that when people think of Romney and money, they think of greed. He wants to keep all the money for people like himself. He can only understand one way of thinking, because he only knows one way, always making more money his whole life. I am not saying Mr. President has never seen the upeer class way of loving, or that he always been poor. I do think he understands what is really going on being from Chiacago be has seen things on his own first hand. maybe even people in his family, or his extended family. People act a certian way according to how they were raised.

  4. The growth of the national debt during the Obama is the direct result of the actions of W.Bush. The debt continues to grow due to Bush's unnecessary wars and tax cuts that benefit primarily the wealthy. Now Obama is trying to bring society back down to were we need to be all equal. Bush raised the taxes on the middle class to pay for a war and lower the taxes on the weather so they would help him fund the war. Why should one class have to pay more in taxes when I make less and the ones you make more pay less were is the logic behind that. To me this is just like the time when the military was not going to receive pay. But the people in congress whe were. The men and womean who fight for the country wont get pay but the ones that sit behind a desk and pass bills will still get there check. It the same for the middle class we are the ones running the country and our taxes are higher then the ones that tell us what to do. Makes no sense.


    1. Yanda,
      G.W.Bush never raised taxes. His Father did, but that was what got us on a more fiscally solvent position and gave Clinton the "On Paper" surplus some like to brag about. G.W.CUT taxes.
      Here are the basics. It can be found on Wiki, or many other sites (Just Google G.W. Bush taxes). During his first term (2001–2005), he sought and obtained Congressional approval for tax cuts: the Economic Growth and Tax Relief Reconciliation Act of 2001, the Job Creation and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. These acts decreased all tax rates, reduced the capital gains tax, increased the child tax credit and eliminated the so-called "marriage penalty", and were set to expire in 2011.
      Bush was a tax cutter. These cuts, coupled with the war after 9/11, and the Medicare drug benefit program. The Medicare expansion was an unfunded mandate, but it greatly improved the program for Seniors. It alone was several Trillion. Even with all this, the deficit under Bush was approximately 450 Billion.
      The debt was just under 10 Trillion when Bush left office, and that was accumulated by everyone preceding Obama. Obama has added 6 Trillion alone. His average deficits run 1.5 Trillion annually, the majority of which has been in increases spending. Actual unemployment, the U-6 number, not the BS touted as 8.1 percent, is over 15 percent. U-6 includes the number of those who have stopped looking for work, and those who have had to take low paying or part-time jobs to survive after losing their employment.
      Right now commercials run saying Romney will raise middle class taxes. If you take the actual time to research the issues you will see that new levels of dishonesty have been reached by an incumbent trying to stay in power. I will never say that both sides don't engage in stretching the truth to a point, but outright lying is a new low.
      And by the way, if you actually do some research, you will find that with respect to Federal Taxes, the "RICH" pay the lion's share in this country (90 percent come from them while 47 percent pay NO Federal tax). The percentages are not lower than the middle class. The 15 percent rate on dividends is low because the original earnings have already been taxed. Even at that, the average family making 50-90K only paid an average of 7 to 9 percent rate. The ONLY way you see tax rates get higher is by adding payroll taxes like SS and MEDICARE, which is dishonest, since the "RICH" already pain into with the original earnings.
      Rick Craig

  5. Dr. B, (Part I)
    Returned a couple of days ago from our 20th Anniversary trip, spend 9 days in the Greek Islands. I hesitate to say this as I might be thought of as “Rich.” While I applaud your effort to get students to do a little research prior to voting, it takes much more than clicking on a few links and reading someone else’s synopsis of a candidates position.
    I am going to break from the “Lemming mentality” and put up a different point of view. I use the term Lemming not as an insult, but because this is the mindset people achieve from only digesting biased sound bites and opinions of 99 percent of those on the idiot box news channels. True understanding only comes from living, past experience, and multi-sourcing facts, figures, and data, and then thinking for ones self.
    Addressing the issues in play here almost gives me a headache. First is the common thread of equality. The documents governing our country say “…that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” Nowhere in the Declaration of Independence does it say that equal outcomes are guaranteed, only equal rights to pursue happiness and liberty. It also states that the government derives it’s power from the people, not the people getting power from the government. I am proud to live in and have fought for these freedoms.
    If income equality is what you desire, then I suggest relocating. A man named Karl Marx coined the phrase, “From each according to his ability, to each according to his need.” He was a founder of Communism. Communism and Socialism breed nothing but Class Warfare and sloth. Why should I break my back to get ahead so my success can be given to others who do not? Granted there are those in need genuinely, but there are better ways to fill that gap. Why do you thing Communism failed? Because eventually you run out of other people’s money (that’s paraphrasing a great woman…Margaret Thatcher).
    Let’s look at Capitalism. It’s not perfect, and sometimes it can be harsh, but when the government meddles in it, like here in America, that’s when problems occur. I will take a businessman over a politician ANYTIME. Politicians are what got us here in the first place. Everyone cries about Wall Street and then blames Bush for the economic collapse. Sorry to bust your bubble, but it wasn’t. The Community Reinvestment Act and associated Affordable Housing Act that began in 1977, under Jimmy Carter, and continued meddling by politicians caused it. The push started under Clinton to get more minorities in houses. Forget the fact that they had bad credit or no down payments, politicians, Democrats, started pushing the banks. They were even threatened with government action if they didn’t comply. The FED even published a small book telling the how to “dumb down” the requirements and use A.R.M.’s (adjustable Rate Mortgages) to qualify the normally unqualified. Enter Freddie Mac and Fannie Mae.
    By 2001 Bush was in office and the practices continued. Barney Frank and the committee were telling everyone that things were great. Up starts the housing bubble as more and more people, unqualified buy houses. And as a side note, it was Frank’s boyfriend running Freddie Mac. In 2006, Congress started smelling something funny and Bush tried to reform the practices. By now the Democrat’s had the majority and it was impossible. Big banks only played by the rules they were told to use by the government. Freddie and Fannie guaranteed the loans, so how could they lose? The banks weren’t completely dumb though. They packaged the loans into MSB’s (Mortgage backed Securities). The buyers knew it was a risk, but what the heck, the government guaranteed them. And by the way, all this time the complicit FED kept interest rates artificially low making it easier to sell even MORE homes to unqualified buyers.

    Rick Craig (See Part II)

  6. (Part II)

    Jump to 2008. The artificially created housing bubble begins to collapse. It was so widespread, worldwide in fact, that OMG…..we must bail out the banks!! Since the government caused it anyway, why wouldn’t they? The banks should have been allowed to fail. People are underwater because they bought more than they could afford and then took out home equity loans to buy even more goods than they could have normally afforded. Greed put folks in dire straights just as much as the economic collapse.
    So if your looking for someone to blame, take the saddle off Bush and do your due diligence and learn something. He had his faults, but causing this wasn’t one of them.
    Any of you working hard enough to get A’s in Dr.B’s class? What say we take some of your points and help out the lazier students and everyone gets a C? How’s that for equality?
    As for taxes and paying a fair share, the tax policies were good enough until the current class warfare divisiveness begun by the president. Even if you took ALL the money from those making 250,000 and up, you couldn’t run the country for even six months. Not to mention you’re killing the job creators. How many poor folks create jobs? As far as Romney and taxes, he has proposed lowering tax rates for all. More money in the pockets equals more spending equals more jobs. If you don’t like the lawful tax policies, look into, really look, the Fair and Flat Taxes. Half the country pays NO Federal Income tax, and many of those get money back from the EIC (Earned Income Credit). Talk about living somewhere for nothing. They pay S.S and Medicare, but those will be gone in a decade or so unless they are changed. S.S is already paying out more than it takes in. It was NEVER intended as a retirement plan, but politicians have used it as a political football.
    Our problem is a spending problem. There is a difference between the deficit and debt. 16 Trillion and climbing. The fat has to be trimmed somewhere. A lot of places actually. Food stamps have doubled since Obama took the work requirement out, quadrupled since he took office. More than 5 million have been added to the disability roles since he took office. All those “created” jobs are imaginary. We are running over a Trillion in deficit EVERY year. That goes straight onto the debt. Borrowing 42 cents per dollar spent.. Want to run you house that way and see how long you are solvent? More money taken in means more to spend for them. It has to STOP.
    And what is the plan for change by the current president? There is NONE. Same as there was no budget for the last three years from the Democratic Senate. If you haven’t really looked into either program, you’re wrong. At least Romney has put forth a plan, albeit demagogued and lied about with straw man arguments.
    Something else to think about is foreign policy. This mess now is the worst debacle since the Iran Hostage crisis in 79, which by the way is the last time we lost an Ambassador. Anyone that followed the incident sure knew that it was planned and the dumb film had nothing to do with it. It took a week for the storytelling to stop, from everyone except the guy in charge.
    I could go on and on. Trickle down economics works. I lived it. The president doesn’t get to change history and say it didn’t. Voter ignorance is what gets people like him elected and will kill this country. If you want something, work for it. We are guaranteed equal opportunity, not equal outcomes. Personal Responsibility is a term not used often enough these days. Take responsibility for your life and expect the same of others.
    I’ll take a business man any day.
    P.S. I dislike RINO's as well. I am Conservative, tending to Libertarian.

    Rick Craig

  7. Part III (Couldn't help it)

    Lastly, programs like SS and MEDICARE take over 42 percent of the budget. Welfare programs take another 14 percent. That's 56 percent of the budget in entitlement programs, the majority of which is unfunded. Workers pay in to SS and MEDICARE through payroll deductions, but 3-4 years after retirement they have used everything they contributed. It is truly a giant Ponzi scheme.
    If you really want to look further here is a link:

    For a country founded on hard work and individual liberty and freedom, there is a growing number of takers, and a declining of contributors. The president has even stated that the Welfare Class will be a majority voting block that will elect politicians. It was at a speech at Loyola University. It sure seems to me that he's worked hard to make it one since taking office. Problem is, for the whole country view posters claim to espouse, that is not the answer. The country needs jobs, lots of jobs, and a sense of something actually on the horizon each day. Four years later and 6 Trillion more in debt, it's time for a different approach, a balanced the budget, and someone that can give us opportunity, not BS.


    1. This comment has been removed by the author.

    2. Hi Richard,
      I am always thrilled to find you here and still working to provide a cogent argument. And there are a number of issues you cover within your posts with which I firmly agree and other issues you raise to support your point with which I take issue. The first and perhaps the most important idea you attempt to address is the clarification of equal opportunity vs. equal outcome. This is an important point for all of us to consider and understand. Perhaps, you will clarify how equal opportunity to individual outcome is achieved in our country? What policies are in place to ensure that we begin (all of us, women and men, race and ethnicity aside) on a level playing field? For me, this is still an interesting and often overlooked aspect of our discussion of these issues as covered in your post.

      Now, As I am working to provide a forum for discussion on this issue and not my own opinion, I will not further "respond" to what you've written. I will let my students do that. But what will be required is equal research into the topic by anyone responding to you. As well, as I stress in class, everyone do make sure your sources come from both sides, then analyze and weigh the differing numbers and interpretations of the system those numbers represent. If possible, to your work particularly Rick, can you offer a source other than ""
      Keep 'em coming,
      And students in 122 and 311, do offer Rick a response or two.
      Dr. B.

  8. Doc, (Part I)
    I used Heritage because they are one of the few sites that evaluate the data without purposefully adding bias into the results. That particular article has 28 sources cited and many are from government offices like OMB, CBO, and Congressional studies. I do read a lot of other sites though. I’ve even been known to look at HuffPO or Mother Jones when I need a laugh. ☺
    I want to be sure I understand what you are asking about beginning on a level field. Since you stated women and men, race and ethnicity aside, I will assume that EEO, Affirmative Action (Reverse Discrimination) and others are a given. With that in mind, I will give you my view. Life has a lottery. None of us has a choice to whom or where we are born. Parents come from all walks of life. Unless all children are taken from their parents at birth and educated equally by the state, then pushed in to specialties where they excel, the answer is NO. That is the only way complete equality comes, and by the way the old Soviet Union did just that.
    What we do have is freedom to choose and control our own destinies to a large degree. Today’s children have a far greater chance at success than our ancestors that immigrated here. They persevered and many succeeded. If they could, so can anyone else. Everyone has access to school and an education. What they choose to do with that is up to them. Almost every school has access to computers for students; many even have them to be checked out for the year. For those that are not college material, and not all are, contrary to popular opinion, there are tech schools. The government, via the taxpayers, provides all these.
    Whether the education is of any quality might be another matter. The US spends more per child than any other country in the world for lower quality education. Once again the government has interfered in a state function and botched it up. The Department of Education is not even constitutional. Education is a state function. Every time something happens the answer is to throw more money at it. Never the less, this is no fault of the kids, just another “lottery” issue. The solution here is school vouchers. Parental/child choice in which school to attend has been shown to greatly increase the quality of education, and lessen the price. An example of cost is: “The average cost of tuition per pupil in a catholic elementary school is $3,383 while secondary education costs $8,182. Parents who choose to send their children to Catholic school still pay for a public school education with their state and local taxes. In 2010, the public education system spent approximately $10,614 per pupil.”
    The biggest inequality, as I mentioned earlier, is parents. Every parent should want better for their children than they had. The sad truth is that many don’t. I honestly don’t have an answer for that, other than not allowing idiots to reproduce (I’m not serious, not about the solution anyway).

    Rick...See Part II

  9. Part II
    The answer comes with something from my first post, and that’s personal responsibility. I don’t care where you come from; we are all responsible for the choices we make in life. The government has 47 training programs to assist people in education themselves as adults. There is no accountability and plenty of overlap, but they are there to be used. (CATO)
    There is no substitute for hard work, and THAT will get you ahead in life.
    Not everyone will be rich, and that’s O.K. You have the shot to work for it. Some of us will work harder than others because of the circumstances we were born into. Others will not.
    My father grew up in the East End of Cincinnati. His family was on government aid, and his father drank a lot. He and his five brothers and sisters used to go to the “Fresh Air Farm” in the country every summer, courtesy of the government. He used to tell us about that and the big blocks of government cheese when we were small. He graduated tech school in small aircraft engine repair, and then went to work at a gas station. He and my Uncle were heavy drinkers and content where they were. My mother graduated from Marshall College. She was a teacher then a draftsman for G.E. in Cincinnati. My father met her when he was set up on a blind date with her roommate. HE decided that he wanted to see her and things had to change, so he found a job at a laundry driving a route delivering linen to restaurants. They went out, got married, and as we came along my Dad worked and looked and found a job for an industrial chemical company as a salesman. He was gone 3 weeks a month, but he took care of us. He moved up through several jobs until the early 80’s when he was earning 45K; great money then, especially for a tech school grad. He gave us a better life than he had as a kid.
    My long-winded point is that there is no complete equality. There never has been, and never can be as long as we are free. We are born into all sorts of circumstances, but all have the chance to work hard, make the right choices, and give better than we got.
    If you don’t like where you are, you can either blame your parents for having you, or grab your bootstraps and pull.