Monday, September 24, 2012

Save Social Security and Medicare/Medicaid Your Damn Self

I find myself increasingly campaign-weary these days.  I'm awash in talking points and attack ads and blahblah.  One of the constant headaches is the constant harping on Social Security and Medicare and Medicaid.  Everybody agrees that these need fixing.  We've seen this coming for decades.  But they're just being used as tools of demogoguery.  Both sides are telling us how the other side wants to kill our grandparents.

Please.  Nobody wants to kill our grandparents.  Some of us want the programs to still be in place when we become grandparents.  But the current crop of grandparents frequently tries to stop that.  These programs are often referred to as the third rail of politics.  Not quite.  Old people are the third rail of politics.  This is because they're a large, growing, and reliable voting bloc.  They vote more than young people because their incomes are more likely to be affected by policy and they have more time on their hands.

I'm sick of slamming my head against that wall.  No matter who wins, no matter what we try to do to save entitlements, retirees will get in the way.  More ridiculous commercials with politicians pushing grandmothers over cliffs will be produced.  We've all been on the receiving end of a guilt trip from our grandmothers and grandfathers in our lives.  If a politician even imagines altering Social Security or Medicare, he gets a guilt trip from every retired person in the country.

Digging retirees out of their entrenched positions by charging the machine guns of the AARP seems like an exercise in futility.  Instead, I think regular people should take a different approach.  This means saving money and living right.  Maybe we can't change the programs, but we can take some of the heat off of them by taking better care of ourselves. 

A saw a story on the wires the other day.  We're getting fatter.  We'll be hugely fat in another few decades.  This needs to stop.  My own people are mostly responsible for this; obesity is concentrated in the South.  It's because we eat fried things and dead pigs.  For some reason, obesity is high amongst lower income people, particularly lower income minorities.  I find it strange that America is one of the few places in the world where one can be both poor and morbidly obese, but that's not the point I'm getting at today.  Lower income people will use Medicaid, and if they don't take care of themselves, the cost will be staggering.  Lower income people are also more likely to drink and smoke, which doesn't help.  The easiest way to save on medical expenses is to avoid getting sick.  We should all live better, and poorer people will do themselves a huge favor by not blowing their money on unhealthy habits.

I've blogged previously on my love of Southern food, but I don't make it a staple of my diet.  Fried chicken and barbecue are occasional indulgences for me, not nightly meals.  I cook my own meals rather than eating out.  I try to exercise four times a week for one hour, usually jogging.  It was rough at first, but I've made a habit out of it and have started to enjoy it.  Here's a hint.  Use an MP3 player and play loud and offensive heavy metal music while you jog.  The rage the music produces distracts from the pain and monotony of running.  Proper diet and exercise is my best medical insurance.

The other thing I'm doing is saving money.  I've worked in the financial field before, and I've always been surprised at how few people save for retirement.  Another wire story I read recently told me that 401ks had failed the country.  Not exactly.  They work fine, but most people don't take advantage of them.  So I'm starting.  If I put aside $500 a month until I retire, I'll have over a million dollars when I retire.  Assuming about 10% growth, which isn't that hard to do.

Granted, saving money is hard these days.  Many people claim they don't have money to spare.  But I find that there's more money to go around because I'm not blowing it on take-out, dining out, drinking and smoking, amongst other things. My fiscal diet and physical diet are intertwined.  I make a point of saving the money and it happens.

I'd love to see the government take a diet of sorts, but I'm not holding my breath.  I'll assume that Social Security, Medicare, and Medicare are inevitable train wrecks.  Let the politicians hammer away.  If the rest of us focus entirely on taking care of ourselves, mind, body, and bank account, we won't need these programs.  Maybe I'll use Medicare eventually, if it's still around, but maybe I won't need it until I'm 80 or so because I'll be in good health.  Maybe I'll collect Social Security, if it's still around, but maybe I won't need it because I'll have millions in savings.  If the government can save me, more power to them.  I think we'll all be better off if we make it unnecessary for government to save us.

Wednesday, September 12, 2012

Quranic Crybabies in a Grown-Up World

In totally unsurprising news, goofball Civil-War-moustached preacher from Gainesville, Florida has been tied to something offensive to muslims.  Again.  Apparently, some real estate guy in California made a movie that portrays Mohammed (a muslim no-no) as a crazy, child-raping, philandering, torturing, conquering whack-job (a big muslim no-no), and Gainesville preacher man was somehow in on it.  Also unsurprisingly, various muslims in North Africa, the Middle East, and Central Asia are pitching fits.

First, it's okay to be angry.  Plenty of movie makers have made Christians look like idiots over the years.  I get the outrage.  I've also seen the YouTube trailers, unlike most of the protesters.  The movie insults Islam with its content.  It also insults one of America's greatest religions (Hollywood) with its atrocious production values.  These actors don't have the skill to be in a low budget porn movie.  WWF wrestling is Oscar material by comparison.  And I briefly felt the urge to set fire to the movie studio that produced this, because it seemed like it might actually be a public service.

But I got past that.  That's what adults do.  I have no problem slamming the filmmakers for their idiocy, but that's all I'm doing.  Initially, that's all the aforementioned fit-pitching muslims did too.  Loud, but peaceful protests were launched.  Then some schmucks in Egypt decided to scale the U.S. embassy walls and tear down the flag.  This is when protestors (normally just annoying pests) become agitators trying to intimidate us into silence.

This sort of reaction is all too common.  The slightest insult to Islam results in riots and violence.  It also results in dimwits flaunting their ignorance as to how the real world works.  A 19 year-old in Egypt demanded that the movie be banned immediately.  Sorry kid, the free world doesn't do censorship.  Graffiti in Egypt read "If your freedom of speech has no limits, may you accept our freedom of action."  If "freedom of action" means you're just going to protest, knock yourself out.  Because it's free speech.  But if freedom of action is a threat of violence, you might want to remember that our freedom of action includes Predator drones.

Slightly more disturbing is the reaction of some officials.  The American Embassy's statement was “We firmly reject the actions by those who abuse the universal right of free speech to hurt the religious beliefs of others.”  Abuse the universal right to freedom of speech?  Wrong, fellas.  The amendment exists precisely to protect this type of speech.  That's why crosses dipped in urine and images of the Virgin Mary covered in feces are protected speech.  It's offensive, but ideas that people find offensive are allowed, because sometimes they produce positive results. 

For example, there was a time where the idea of a woman or a black person voting was offensive to many.  Should we have shut down Women's Suffrage or the Civil Rights Movement because some people were offended?  Being provocative is use of free speech, not abuse.  The only abuse of free speech is not exercising it.  Having said that, I'm not unsympathetic to the embassy's position.  They were trying to distance themselves from the film in order to avoid retaliation.  Not that it worked, but I get why they tried.  They were trying to avoid getting killed.  I generally try to avoid death as well.  But we should not sacrific the Constitution on the altar of diplomacy.

The most violent incident occurred when some extremists in Libya, a country we helped liberate, used the confusion to attack our consulate in Benghazi. They killed the ambassador, a man who played a significant role in the liberation of Libya. There's gratitude for you.  But several pundits decided to pin the blame on us.  There are too many to list (use Google, you'll find them easily), but the most egregious is liberal pundit Sally Kohn, who tweeted "It's simple: US Ambassador is dead. Would still be alive but for reckless anti-Islam film. Doesn't excuse violence. Did provoke it."  We brought it on ourselves. 

This is an excuse common amongst husbands who beat their wives.  Of course, plenty of muslim extremists are okay with wife-beating.  There's a little more to this, though.  Reports now say that the attack on the ambassador was planned long before this.  So Sally Kohn is wrong, we didn't bring it on ourselves.  This was just nutjobs doing nutjob stuff.  The riots were in response to the movie, but not the attack. 

But the key point here is that we should not be forced to avoid speaking our minds because we're afraid some crazy guy is going to light a fire.  Protests are okay, but vandalism and assault are not.  No one who believes in free speech should allow themselves to be intmidated into silence.  If we remain silent because we're afraid someone will get violent, we've sold out the Constitution.  If anything, we should keep being offensive so that the loonies of the world will learn to handle it like the decent people of the world.

Douchey preacher is a douchey.  Most people agree on that.  But in the free world, douchiness is not illegal.  Countering offensive speech with other speech is how adults handle it.  We don't set fires when some random guy does something stupid.  We don't have riots when the a preacher burns Qurans on purpose, and we certainly don't do it when soldiers burn Qurans by accident.  These things happen in the free world.  You can't throw a temper tantrum every time it does.  Grow up.

9/11 - Move On, Never Forget, and Don't Nitpick About It

Today was the eleventh anniversary of the 9/11 attacks.  TV, newspapers, and the Internet were full of stories about the attacks and memorial services all over the country.  Twitter was flooded with #NeverForget tweets.  We shouldn't forget, and I don't think any of us will.  But I've started to notice some ugliness in some places, and some silliness in other places.

I'll start with the ugliness.  I've been seeing an increasing amount of "Move On" and "Get Over It" stories.  Naturally, most of this is in the form of anonymous internet postings.  This is fringe stuff, but I keep seeing more of it.  It's usually the mewlings of extreme leftists or the febrile meanderings of conspiracy theorists.

The extreme leftist types don't see the way the country united after 9/11 as a positive thing.  Instead, they see our memorials as an excuse for jingoism and neoimperialism.  Pardon my French, fellas, but horseshit.  The country with the most liberal immigration policy in the world cannot be considered jingistic.  And I'll believe America is an empire on the day I get my first tribute payment.

The conspiracy theorists believe that we planned 9/11 to excuse invasions of other countries and domestic spying.  There certainly has been some overreach in those areas.  But we're out of Iraq, and attempts to spy on citizens are frequently called out in the press and in the courts.  The "evidence" of the conspiracy theorists usually revolves around showing video of the towers collapsing, and claiming that the collapse could only be caused by a planned demolition.  These spurious claims have been easily and laughably debunked by experts.  So horseshit to you guys too.

The fact that the country united after 9/11 isn't a bad thing.  It shows that we can still work towards a common purpose, something that doesn't happen often enough these days.  To see this as something nefarious seems like anti-American nut rhetoric.  I hesitate to accuse anyone of anti-Americanism because I know there is a potential for abuse.  Like accusations of racism and socialism these days, it's frequently thrown out by someone who has nothing more intelligent to say.  But I can think of no other reason for it.  How else can one explain seeing a negative in the greatest strength of America: our ability to come together in a crisis.  This unity is why we should never forget 9/11.

Now for the silliness.  This morning I saw a story about how CNN was too busy covering the Kardashians to have a moment of silence at 8:46 AM, when the first plane hit.  Enter manufactured outrage.  Granted, everything Kardashian is inherently silly.  But I don't think we should obsess too much about how other people remember the time of the first impact.  I didn't remember either.  There's a reason for that, but in order for that to make sense, it's important to know what I was doing on 9/11.

I was working in a call center in Atlanta at the time for a financial services firm.  The center was open 24 hours, and I worked the night shift.  So I didn't even wake up until mid-afternoon.  It was a fairly typical day for me.  On my way to work, I turned on the radio and put in a CD.  While the CD was going in I heard a brief mention of an attack on the Pentagon, but it was so out of context I assumed it must be some talk radio pundits speculating on some obscure "what if" scenario.  The likelihood of an attack on the Pentagon seemed ludicrous.  Also, I was driving through Atlanta traffic, so I wasn't really paying attention.

When I got to work, I knew something was wrong.  People weren't moving like they normally did.  They huddled in small groups, whispering amongst themselves.  There was a vibe there of general wrongness.  Then I saw the overhead TV monitors, always tuned to CNBC to watch the market.  But today they showed the towers in flames.  I was stunned.  It was beyond imagination.

I spent the next few hours trying to find out what happened to a few friends I knew in New York.  They didn't work in the towers, but they worked in that part of town.  Fortunately, they were all fine.  For the rest of the shift, all we could do was sit and watch the reports.  I don't know if we could have brought ourselves to work, but there wasn't anything to do anyway.  The markets were closed.  Our Virginia office, a stone's throw from the Pentagon, was completely shut down.  All we could do is watch the reports in horror and wonder how and why this could happen.

Over the next few days, our horror and outrage would turn to hope at seeing solidarity as members of Congress huddled on the steps of the capital to sing "God Bless America".  Our rage would gradually turn into determination when we heard the President's address a few days later.  We all felt unified and a strength of purpose.  It's important that we remember that feeling of unity, especially now that we face different crises.  That unity can be dangerous if we lose ourselves in it (we got a little carried away in subsequent years), but it's a force for good when done responsibly.  And unity is something we lack these days.

I never knew that the first plane hit at 8:46 AM, though.  I was asleep at the time.  That's why it's not such a big deal for me.  And when I woke up this morning, I didn't even realize it was 9/11.  When I saw the news, I noticed that the memorials were there, but less so than in previous years.  That's why CNN would show a Kardashian at 8:46.  Not because they've forgotten, but because we're moving on.  Not in the nasty, heartless way spewed by extremists.  We're moving on in an entirely natural, and entirely healthy way.  I'm not worried that we'll ever forget.  That's a lesson I learned from my parents.  They can both tell me exactly where they were when they heard JFK was assassinated over fifty years ago.  Fifty years from now I'll remember where I was when I heard about the 9/11 attacks, assuming I'm still alive.

I'm moving on too, which is why I had to be reminded that it was 9/11 today.  The helplessness I felt when it happened is long gone.  The lesson I'll remember, that we all should, is that no matter how bad things get, America can unite and bounce back.  When we hear naysayers and nutjobs bashing 9/11, we should remind them of the tragedy and the fact that we unified and overcame it.  And when someone else forgets a moment of silence, just let it go.  They haven't forgotten the attack.  They've just gotten over the pain and loss, and don't feel the need spend so much time on ceremony.  It's not a sign of inconsideration; it's just a sign of healing.

Wednesday, September 5, 2012

Estate and Gift Taxes - A Waste of Time

A couple of my tax nerd friends (I have a few) were debating the estate tax the other day.  Apparently, if Congress doesn't do something the estate tax will go to 55% on all estates over 1 million dollars.  Right now, the tax is about 35% on estates over roughly 5 million dollars.  Predictably, the liberal tax nerd said "the rich need to pay their fair share".  The conservative one said "it's class warfare."  Nice job spewing the talking points, fellas.  Also, nice job missing the point.

The estate tax produced about 17 billion dollars in revenue in 2010.  It's bastard step-child, the gift tax, produced about 3 billion dollars.  It's all right here.  Total tax revenue was about 2.3 trillion.  So these two little taxes are less than 1% of tax revenue.  This is not unique to 2010; the estate tax has been a tiny portion of revenue (never more than 2.5%) since the 1960s, and the gift tax has always been the bastard step-child.  This is also according to stats compiled by the IRS.  We're not going to balance any budgets with these two little taxes.  I wonder if we even need them at all.  Are they worth it?

Estate planning is big business.  Millions are spent on estate lawyers and accountants and tax shelters and blah-di-blah-blah.  Maybe if no one played these games, we'd have more revenue.  But the bigger problem, I think, is that the estate planning parts of the tax code (which involve various types of trusts and other assorted nonsense), make the tax code way more complex than it needs to be.  Is 1% of revenue worth all of this trouble?

There's another cost as well.  There were two high profile cases that I remember (and god knows how many low profile cases) of rich people renouncing their citizenship and moving overseas to avoid estate taxes.  I'm talking about Denise Rich, ex-wife of tax-cheat Marc Rich, and Eduardo Sevarin, a co-founder of Facebook.  They took their money with them, and that hurts us. 

Make no mistake, I think both of them are incredible douchebags.  Renoucing the country that gave you the opportunity to become rich is both ungrateful and ungracious.  But what they did is perfectly legal, unlike Ms. Rich's ex-husband's shenanigans.  Several politicians, such as Senate Majority Leader Harry Reid, have proposed writing legislation to penalize this behavior, but I say hell no.  The onus is on us to entice people to come here and stay here.  This is a free country.  We should not construct a regulatory Berlin Wall to keep people here.

Had both stayed they would have continued to earn income and pay taxes. Then, they would have spent or invested their money.  Spending money results in income for individuals and businesses, which are taxed through income taxes.  If the business is a corporation, it pays corporate taxes.  All businesses have payrolls, so there would be payroll taxes.  Investing in businesses would help businesses grow, generating more of the three taxes.  And these taxes produce real money.

Individual income taxes are half of the total revenue.  Payroll taxes are 35%.  Corporate taxes are smaller than these (12%), but not insignificant.  All three combined are 97% of tax revenue.  Ms. Rich and Mr. Sevarin could have generated millions in taxes each year.  But they bailed out to avoid a tax which would have been prohibitive for them, but insignificant for the government.  The amount we would have received over the remainder of their lives would exceed what we might have gained when they died.

So axe the estate tax.  It a big hassle, and it's not a big revenue source.  This might take money out of the pockets of estate lawyers and CPAs, but that's too bad.  The demand for their services is artificial.  It's produced by regulation, not by actual market demand.  While we're at it, let's axe the gift tax too.  It was designed to prevent people from giving their estate away to avoid estate tax.  But estate taxes aren't that much, relatively speaking, to begin with.  Getting rid of these taxes will encourage people to keep their money here, where it will be spent and invested.  This will grow the economy and produce far more in tax revenue than the estate and gift taxes ever could.