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How Forrest Gump Would View the Tax Plan

GumpI’ve taken a number of college level economics classes. I found them enlightening and enjoyed them a great deal. However, I don’t pretend to be an economist. Admittedly, I sometimes get a somewhat inflated opinion of my understanding of economics when I compare myself to others who know little of the subject, but this isn’t a piece to be focused on the current resident in the White House.

Thirty-five years ago, I founded a computer software company. I’m proud to say that over the years, it grew to become a very successful enterprise. As you might imagine, I used my knowledge of mathematics, engineering, business and … economics on the road to success. As I look back on those years, I find that much of the current “tax plan” proposed by Trump’s minions doesn’t make a lot of sense to me. Aside from the fact that the lion’s share of the tax benefits go to the rich, there are other red flags that amount to nothing less than sleight of hand intended to appeal to and fool the gullible.

Time, space, and your patience don’t permit me to expound at length on the proposed tax plan. I did actually meet Arthur Laffer, the economist who is one of the chief proponents of the plan. His famed “Laffer Curve” of the Reagan years has been proven to be a failed theory. I suspect he’s misspelling his name too.  With the track record of his policies, I’m pretty sure his name is actually spelled Arthur “Laugher”. Nonetheless, I’ll stick with one particular aspect of the proposed plan – corporate tax rates.

I’ve heard Donald Trump proclaim that we are the most heavily taxed country in the world.  One phrase comes to mind when I hear this – bull shit! That’s patently false. It’s nonsense, ridiculous, drivel, rubbish. If the Trumpster believes that, he has no business in the White House. If he doesn’t believe it, he’s lying again. Then I hear the refrain that our corporations are the most taxed in the world. Again … pure, unadulterated crap. It’s entertaining when some of Trump’s supporters with the evolutionary remnants of a conscience are cornered, they admit that almost no corporation in the nation pays anything close to the highest tax bracket on the books. I heard a reasonable estimate that the average tax rate for a corporation in this country was somewhere in the vicinity of fourteen percent.

The propaganda ministers in the Trump administration know that in the ears of most Trump supporters, the “corporation” is an evil monster set on sucking the blood out of every hard working American patriot. They now peddle the concept that corporations must have their taxes reduced so they can give the profits to the middle class. Still evil, but now beneficently evil.

But this whole thing doesn’t square with my recollection of growing my small business. In fact, it’s diametrically opposite my experience. Here’s how it worked with me. There was a line where my corporate profits fell into a substantially higher tax bracket. Every year when I enjoyed a good profit, i.e., every year, my thinking changed as I approached the higher tax bracket.

I could either give my further profits to the government in the form of higher taxes or I could spend those profits on things like hiring employees, giving raises to existing employees or I could expense the profits on things that would grow my business, things like employee training.

If the next tax bracket were dramatically reduced, a big part of my incentive to grow the business would have been removed. I would have been more inclined to spend the profits on dividends for my stock holders (which in my case was me).

So by lowering corporate tax rates as proposed, corporations experience greater profits. Where are they going to put those profits? Here’s a hint … they’re not going to write checks and send them to the working people of America. The profits will go into the hands of the stockholders in the form of dividends. I happen to live in a sort of fantasy world on the border of Scottsdale and Paradise Valley, Arizona where a lot of people live in humble little 10,000 sq.ft. bungalows. Most people living in this neighborhood are not only struggling financially, even their servants are so poor, they can barely afford new tires on the Lexus. So if Trump’s tax plan dramatically increases corporate profits, they’re going to delight in their increased dividend checks. Maybe they’ll use the extra money to hire more servants and grow the economy.

However, the average Joe (remember “the plumber”?) doesn’t normally return home after a hard day of toil and pop a cork on a bottle of Dom Pérignon and review his massive stock portfolio. Quite the contrary, he’s the guy who’s trying to figure out how to buy groceries and pay the rent. Cutting corporate taxes isn’t going to help this guy. He’s just going to scratch his sweat covered forehead and wonder why the rich seem to be getting richer while he’s sinking deeper in debt.

Help the middle class? Run Forrest, run.

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Burn Baby, Burn

I remember it as if it was yesterday. The acrid smell of smoke wafted through air. The hot and humid night made sleep all but unreachable. The skyline glowed with the orange light of burning buildings. Yet, I laid there with eyes closed hoping to slip through the gates of the dream state. But it was difficult with the distant sound of machine gun fire, the rumble of tanks and armored vehicles less than a quarter mile distant. The 82nd and 101st Airborne Division’s troops had arrived, but the violence was irrepressible. The official death toll was rising, but from a reliable insider, I learned it was much higher than the public was led to believe. I was living in a war zone and frankly, it wasn’t a lot of fun.

US-RACE RIOTS-DETROIT

Near my home (AFP/Getty Images)

This wasn’t Vietnam. It wasn’t the Middle East. The year was 1967. The city was Detroit. Riots engulfed the city. A police raid on a speak-easy sparked one of the deadliest and destructive riots in the history of the United States. I was a young, married man with an expectant wife. We were afraid that if “the time” came, we’d be unable to get to the hospital. It was an exciting time.

It was a time of turmoil and tumult as our nation was being transformed and awakened. Vietnam, civil rights, a music revolution, the space age, and people were turning on, tuning in, and dropping out. I was already pretty open-minded, even for a twenty year old. But it was hard to understand what’s happening on the inside when you’re looking in from the outside. I had friends in the inner-city. I spent time in the inner-city. But the fact is … I was a young white boy of some privilege cast into a bizarre reality and the best I could do was guess about what I was seeing and hearing.

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Trump’s Trolley Kills Five

trumpyWell, America … you have murdered the trolley workers. Their blood is now on your hands. Let me be clear; a minority of Americans can rest peacefully, albeit, fearfully. They at least tried to pull the lever. They just couldn’t get enough help from their fellow Americans who “voted their consciences” or didn’t vote at all.

Ok, I get the feeling your face is dressed in confusion. “What the hell trolley is he talking about? Who died?” Let me back up and explain.

The “trolley problem” is a well-known thought experiment in the field of ethics. You remember ethics? They used to be common in the halls of government in this country.  In the trolley problem, you are confronted with a serious dilemma.

A trolley car is out of control and careening down the tracks where five workers don’t see or hear it coming. If nothing is done, the five workers will assuredly die. You see this and happen to be standing by a large lever. If you quickly pull the lever, the trolley will be directed onto another track where you see one worker who will unquestionably be killed. Do you pull the lever to save five lives at the expense of one life?

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A Death in the Family

graveNo one’s getting out alive. One of the few constants in the universe is that there is an ultimate end to everything. If we’re to believe all of the philosophical euphemisms surrounding death, we shouldn’t fear it. It comes to all things. The Second Law of Thermodynamics is inescapable. All things are ultimately buried, even if only metaphorically.

When the end comes, whether it be expected or a sudden and shocking event, the process of grieving begins.  People deal with their grief in different ways, some constructive, others not so much. In her landmark book, “On Death and Dying”, Elisabeth Kubler-Ross spoke of what she called the five stages of dying: denial, anger, bargaining, depression and acceptance. Although she directed her words to those who were dying, the five stages also apply to those forced to grieve the loss of a loved one.

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Marco Rubio Plays with Cuban Balls

Cuba Highlights (4 of 243)After more than fifty years of shear idiocy, President Obama has taken a giant step toward normalizing relations with Cuba. Senator Marco Rubio of Florida has publically opposed the action. He’s definitely got more chutzpa than I could muster even after my fifth Cuba Libre. He actually stands before the cameras and spews his rubbish with a straight face. It’s a performance worthy of an Academy Award or maybe even a seat in the U.S. Senate. He’s not alone. Other two-faced politicians (John McCain for one) have expressed opposition to the move.

“It rewards the oppressive and brutal dictatorial regime of the Castro brothers” sayeth the Rubio types. “We must intensify the embargo so they’ll move toward democracy” intones the straight faced senatorial comedian. “The people of Cuba want the same freedoms we have here and without the embargo, they won’t get them” he says.

His arguments carry a lot of weight with me because I know he stands firm in his conviction that we should not do business with countries that don’t have an appropriate level of freedom and democracy. Oppress your people and you’re not doing business with us. Continue reading

Six Weeks of Communists, Libertarians, Capitalists and Socialists

I’ll avoid the conclusions; they are for you to reach. I’ll just present the observations. Over a period of six weeks, I spent my time in roughly equal parts in Cuba, the Dominican Republic and Puerto Rico.

Cuba proudly proclaims itself a communist state. For fifty years, it has delighted in being the booger on the lapel of Uncle Sam’s fine and festive coat. Billboards all across the island remind Cubans of their communist and socialist heritage and strength.

The Dominican Republic appears to be as libertarian as any state in our hemisphere. Government regulation is minimal. The regulation that does exist doesn’t seem to be strictly enforced unless it serves to protect the individual rights of those in power. The common man in the D.R. has individual freedom whether he likes it or not.

Puerto Rico is a “possession” of the United States and shares our capitalistic ethos, system of government and economic structure (whether the people want it or not). It is exactly as it is in any other part of the United States except that the climate and geography are completely different, the history and heritage bear little similarity the rest of the U.S., its culture, music, dance, food, etc. are Latin, it is more racially homogenous and the people speak a different language. Other than that, it’s Ames, Iowa all over again.

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On the Failure (Success) of Cuban Communism

The first time I visited Cuba, I was just three years old. A young man named Fidel Castro had just graduated from college with a degree in law. Carlos Prío was president of a corrupt Cuban government. Bautista had not yet taken power. Even though I was a small child at the time, I still have some vivid memories of the Cuba of 1950, the narrow streets, the open stores and markets with meat hanging overhead, the sandy beach and a friendly police officer who carried me on his shoulders. This early experience in Cuba undoubtedly had a great impact on my lifelong love and intrigue with this beautiful Caribbean island.

Less than twenty years later, I had embarked on a career as a news reporter, writer and broadcaster. Thanks to the acrimonious relations between the United States and Fidel’s communist Cuba, I could no longer visit the island. Propagandists on both sides of the fence painted lurid pictures of their evil neighbors ninety miles away. As a reporter, I learned pure, unbiased, objective reporting was sometimes a noble goal, but was impossible to obtain. As often as not, it wasn’t even the goal. The news was and continues to be distorted with intent by the government, corporate sponsors and biased news reporters. I can guarantee you that our views of Cuba, the embargo and the people of Cuba are colored by the lenses we’re forced to look through as we try to interpret the island that has been taboo to Americans for more than fifty years.

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