OT Are taxes killing us financially?

F. George McDuffee wrote:


Well Ok but something very much like these sorts of sales has been underway in the States for several years now. BoneHead Kucinich is selling an $8.6 billion dollar revenue stream to Wall Street to cover his deficit. Ohio will be getting around $800 million. It's going to be done as a bond issue which means that if the bond is a 20 year note, somebody besides Ohio's tax payers will make a pile. Furthermore, if the revenue stream doesn't materialize the bond still has to be paid even without the cash flow. That's a pretty good deal when you consider that the State of Ohio really can't default. They shouldn't be discounting the cash flow beyond what the Federal Treasury does by much.
--
John R. Carroll




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On Thu, 24 Mar 2011 12:01:56 -0700, "John R. Carroll"

===========Indeed, and this seems to be a rampant and rapidly increasing problem, and a development/variant of the banned SILO/LILO abusive tax shelters.
For years the clamor has been for "government" to be run more like business, which in many cases is not a bad thing, but not when the businesses being emulated are Enron, General Motors, Global Crossing or IndyMac/Countrywide.
For example the city of Chicago sold the rights to its parking meter revenues. http://blogs.reuters.com/felix-salmon/2009/11/24/chicagos-parking-deal-revisited / http://www.reuters.com/article/2010/11/04/chicagoparkingmeters-debt-notes-idUSN0455874120101104 http://newsblogs.chicagotribune.com/clout_st/2008/12/aldermen-deba-1.html
Wisconsin, with its recent public employees labor relations problems is another government that is seeking to sell off vital assets, AKA "eating the seed corn." http://www.nakedcapitalism.com/2011/02/wisconsins-walker-joins-government-asset-giveaway-club-and-is-rahm-soon-to-follow.html <snip> 16.896 Sale or contractual operation of state-owned heating, cooling, and power plants. (1) Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b). <snip> also see http://rortybomb.wordpress.com/2011/02/21/the-less-discussed-part-of-walkers-wisconsin-plan-no-bid-energy-assets-firesales /
While the distinction is seldom made in the US, this problem appears to be based on the failure to clearly differentiate between "government" and "state" in that the governments are selling what belongs to the state,as the government is technically the "administrator" for the state, with no clear title or mandate to sell or otherwise dispose of, i.e. fraudulent conveyance, and is yet another example of why it is no longer safe to rely on "ethics" and "social control" to limit our politicians actions, but detailed laws with severe criminal/civil penalties are now required. http://en.wikipedia.org/wiki/Fraudulent_conveyance and/or "SALE OR RECEIPT OF STOLEN PROPERTY" http://www.lectlaw.com/def2/s001.htm
FYI http://www.istockanalyst.com/finance/story/5007318/another-voice-us-will-go-bankrupt
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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F. George McDuffee wrote:

Government being run as a business isn't just a bad idea, it contravenes the purpose of government in a modern society. You end up destroying that which any government's are established to create, stable and broadly prosperous societies.
This is by design. "Cutting the Fat" in the corporate world equals the most inhumane disenfranchisement of the "unproductive" poor. Upward mobility wouldn't exist. You wouldn't want to take such an approach to its logical conclusion.
Not even "business" would be interested in investing in a country governed by corporate rules or driven by corporate purpose as policy.
What people hear is that business executives are somehow better at governance. History leaves absolutely no doubt whatsoever that this is patently false. For one thing, CEO's that end up in elected office quickly learn that they need the cooperation not just of their like minded fellows but a certain willingness on the part of their political adversary's.
Very few are able to cope or adjust to that reality. A recent and notable example is Gov. Ahnahld here in California. The guy is one of the most astute players in the business world but didn't get a great deal done as Governor.
He's a wealthy, succesful, square head that resented the Legistlatures failure to march to his well orchestrated directives. The few things accomplished had the overwhelming support of his political opposites. There were a couple of exceptions but it's just a couple, as in maybe 2. Ahnald as deply offended that the rest of the world didn't percieve his genius.
Professional politicians, on the other hand, promising to bring the boardroom to office are promoting a deliberate misconception.
They are intending to bring privatization and not the discipline that voters believe they are casting ballots for.
In the end, what ends up being privatized are the big fat profits to be had. What is public remains public and that is the losses. That is exactly what you'd want if your name was Blankfein, Dimon, or Pandit. A CDS without premium payments.
The generation that preceded what has been called the "Greatest Generation" is very different than their sons and daughters. Truman, Marshall, FDR and even the likes of pols such as Rankin watched as prosperity in the land turned to ash in front of their eyes. Homes and farms were repossed right and left en mass. One third ogf the adult population roamed the country looking for work. "Big Government" picked up the pieces under their legistlative guidance in the form of Acts like the Serviceman's Readjustment Act of 1944, the creation of the TVA and Rural electrification projects. Most people don't know it but Herbert Hoover created what became Fannie Mae. The generation of Truman, Rankin, George Marshall and FDR believed in government and were highly suspect of business. They rightly saw the results of the market's gone wild and appreciated that reality.
Their successors, on the other hand, knew their government largely through experiences in the armed forces. Endless attacks that weren't either explained to them and seemed pointless in many instances. Supply chain management that sent men into combat in the dead of winter without even basic necessities such as winter shoe packs. That generation saw their success not as the result of government efforts but in spite of same.
This is the great contraction of our times. A financial bounty the likes of which the world had never seen and hasn't seen since enabled a nation of renters to become homeowners. People with no hope whatever of furthering their educations went to college by the millions and entered the work force to build upon the inventions of war.
They created the greatest, most prosperous culture the world has ever known on the basis of huge government investments in them while nurturing a profound distrust not of the corporate world but of their own government. They knew the poverty of the 30's and had no experience beyond the "nobody had any money" culture. The knew nothing of the "Roaring 20's" and lost prosperity. They were too young to have such memories.
The "Greatest Generation" instilled this distrust of government in their children and it also pervaded their peer group. The result was Ronald Reagan first as Governor of California and then President of the United States.
Then in their progeny in the visage of George W. Bush. Neither man reduced either the size or scope of government and the mess W. left behind is truly a wonder to behold.
Think about that for a minute. American's elected a man to lead their national government whose philosophy espoused the following:
Reagan famously declared at his 1981 inauguration that "in the present crisis, government is not the solution to our problem; government is the problem."
Reagan then went on to prove exactly that during the course of his two terms in office, not by fixing anything but with a huge demanstration that he was just correct. His governance was poor at best and a disgraceful failure of leadership at worst. The less said about Bush, the better but results count and America will be living with the fallout of the result George W. Bush delivered for a generation or more.
There you have it George.
--
John R. Carroll






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On Thu, 24 Mar 2011 19:13:45 -0700, "John R. Carroll"
<snip>

<snip> ===========Ah the English as she is spoke...
This is correct assuming that the transnational "bad seed" spawned from corporate aberrations such as Gulf+Western [aka Engulf+Devour] with their "buy, ruin, sell" business plan represent "business," which most unfortunately they increasingly appear to do. http://en.wikipedia.org/wiki/Gulf%2BWestern
I was referring to an earlier era where US companies made money by manufacturing things that people wanted/needed at a cost they could afford and developed/invested significant amounts in accurate cost accounting, inventory control [anyone remember MRP?], and methods/manufacturing engineering, not to eliminate employees, but rather to make them available for additional operations and expanded production as there was a skilled and unskilled labor shortage in the 1960 and early 1970s.
As I indicated in other postings, accurate data on governmental operations and spending is critical if any progress is to be made in resolving the current and continuing crisis. It was in the sense of collecting and collating data w/ accurate and timely reports that I suggested that government could be more like business. Additionally government needs to examine their operations, simplify these where possible, and introduce much greater use of computers/automation. The quill pens and parchment used to transcribe the same date over and over again have got to go. General Motors is a prime example of what occurs when an organization attempts to operate w/o accurate and reliable cost accounting and simply "wings it."
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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On Thu, 24 Mar 2011 07:56:11 -0700, "John R. Carroll"
<snip>

Indeed these are in the absence of spending/personnel caps. First pay off the debts and fund the pension plans, possibly by purchase of annuities, then when this is done, after many years, try gold, silver, investment in state owned LSTR power plants or financing of municipal plants, investment in coal liquefaction plants and thorium/REE recovery from coal fly ash.

The bond market is many times bigger than the stock and/or commodities market, and the US governmental bonds are the largest chunk of the bond market, thus the government is not only an investor, but the prime speculator and market manipulator, e.g. FRB interest rates. <snip> -- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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F. George McDuffee wrote:

The Fed is a private business George. They don't issue US Government debt. The Treasury Department does that.
What you are suggesting is more of the sort of investment we currently have in GM rather than less. The best thing to happen to GM, and by coincidence the US tas payer, was the Toyota hubub. Soemthing cause by a misstatement by the DOT Sec. in a fit of pique. You wouldn't want to see that in the market on a permanent basis. People would stop making investments in the US unless the US government was a partner. We'd look like China.
It isn't necessary to have a rainy day fund if you can issue your own debt and sell it. I also isn't a good idea to do away with public debt completely.
What is a BAD idea is to think or act as if public debt is either good or bad in and of itself. It isn't. It's what you get that counts in the end. Were that not the case, nobody would ever take on a mortgage.
--
John R. Carroll



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On Thu, 24 Mar 2011 10:38:33 -0700, "John R. Carroll"
<snip>

<snip> ========While technically correct, it is also a huge dodge to avoid the constitutional requirement than "money" issued by the government *MUST* be backed by gold or silver.
As the government no longer issues paper money, and the FRB is not officially part of government their notes don't have to be backed by anything.
I do question how the government is avoiding the gold/silver backed requirement for the coins they churn out at the mint. At this point they are attempting to get rid of the penny as the metal content, now mainly zinc, is at or above the nominal value of the coin. Solid copper pennies were withdrawn years ago. Compressed chicken $**t would seem to be a suitable and appropriate replacement material.
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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F. George McDuffee wrote:

I would simply argue that the FRB is actually a fourth branch of government, George, and it's an argument I'd win.

The Congress passes laws allowing it. They just don't get much attention since we are no longer on a metallic standard and haven't been for some time.

Works for me!
--
John R. Carroll




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On Thu, 24 Mar 2011 19:27:57 -0700, "John R. Carroll"
<snip>

<snip> Operationally yes, and now probably the most powerful of the 4. Legally no, which shields them from several pesky requirements such as FOIA requests unless you are prepared [translation: have the money] to fight all the way to the SCOTUS.
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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wrote:

That's not in the Constitution, George. All it says is "coin," and Congress has the power to set the value of any coin. The gold and silver business applies to the states.
As for paper, that was settled in the "Legal Tender Cases": Knox v. Lee, (1871), and Julliard v. Greenman (1884). They were based largely on Congress's power to borrow "money" and to coin it. It's considered an inherent power.
--
Ed Huntress


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On Wed, 23 Mar 2011 14:57:36 -0500, Ignoramus29973

Got too much money? Fine! I strongly urge you to donate half your wealth, but only if you specify that it is to go toward the _federal debt_. Atta boy!
-- You are today where your thoughts have brought you; you will be tomorrow where your thoughts take you. -- James Lane Allen
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29973.invalid> wrote:

You are a smart guy Ig.
That is exactly the problem...spend and don't tax.
Warren Buffett admits to as much and says we need to tax MORE.
That is why I was so against the tax cuts that the Republicans shoved down our throats at the end of last year.
TMT
The flaw in your thinking is; the more money you give the government the more they will spend. And they won't spend it on reducing the debt. Mikek
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amdx wrote:

Furtunately, that hasn't historically been the case. Properly funding government has lead to a good balance between income and spending throughout the years. We didn't get into trouble until "Debt doesn't matter/Laffer Curve-Trickle Down" government policy got into the mix. Voodoo econ 101 is the real problem. That and the people that still believe in it regardless the facts or result.
--
John R. Carroll



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Just 11 years ago, the government was running surplus and used it to pay down debt.
The flaw in your thinking is that the government is not an annoying, overspending relative; it is us. It was voted in by us for our benefit. Whether it lives up to the hope is a good question to ask.
So, I want expenses to match revenues.
i
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Reducing the _debt_ is politically difficult- Scrooge like behavior.
Increasing the debt is like getting a new credit card, you hardly notice the minimum payments for a while and the politicians can play Santa Claus, and they're long gone by the time the bills come due.
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Ignoramus29973 wrote:

Yeah! For years, I have paid almost NO taxes, and have been wondering WHY? This year, business has been REAL good, some of my customers got a bundle of ARRA money to spend, and sent some my way. So, I am only going to get a little back this year. At least I didn't get caught under-paying.
But, many years I have losses in investments or Pico Systems doesn't make much, then it offsets income from my "day job". The home office expense and a large family help, too.
I can't say what the percentage is yet, still working on it. I use the program "tax cut", it does what the accountant does, for less than 10% of their fee. I still have to assemble all the records, then just type into the right forms. I don't do their stupid "interview", it is a huge waste of time, I just import last year's data and then enter all the new data. At one time I had over 50 items on the depreciation schedule, now I just have about 4. Automatically carrying just that data over from year to year saved me many hours.
Jon
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I have a reason to have an accountant, and feel that the accountant expense may be my best investment.
i
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On 03/24/2011 01:36 PM, Ignoramus24155 wrote:

OK, I had one some years ago, and was NOT impressed with what she did for me. It took a lot of time to prepare info and go back several times with more info. She WAS a great help in SETTING UP my business, however, and getting me through all the procedures the first time.
Jon
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I had one like that too, she only cared about getting a check from me.
This one, though, is very good, I had him for 10 years and I am very happy.
i
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On 03/24/2011 02:32 PM, Ignoramus24155 wrote:

No, its not like that. The real problem was that once I had the records together, and that was the largest effort, filling out the forms, even manually, was quite straightforward. With a computer program, it is almost trivial, and also checks a bunch of things for inconsistency.
For a long time I kept my ledger on paper, and now I have been using a spreadsheet that makes it easier to total everything up. I tried out a cheapie ledger program but didn't like it.
Jon
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