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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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It’s Time for Lee to Surrender Again

HistoriansRobert E Lee say Robert E. Lee was humble and gracious in his act of surrender at Appomattox in 1865. It’s time he and his worshipers do it again. Bow out and be gone. As did Grant, I’ll let it pass without harboring feelings of vengefulness. I promise I won’t carry a grudge. Quite the contrary, I continue to carry the same respect for those parts of reality that command respect. After all, many of my ancestors fought for and with Lee on the battlefields of Fredericksburg, Chickamauga, and many others.

As an avid student of history, the era of the Civil War has long been one of my burning passions. As a child, I was regaled with stories of my family’s participation in the conflagration that was the American Civil War. Many amongst my clan rooted in the hills of southeastern Tennessee, northern Georgia and western North Carolina referred to it as the War of Secession. Some still do. Many of my progenitors served in the 7th Tennessee Infantry and fought gallantly under Longstreet and Stonewall Jackson. I have long been intrigued researching my family’s involvement. Most of the stories can be found in the history books or other records buried in the archives. Some are available to me only because they’ve been passed down verbally from generation to generation.

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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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Making Amerika Great One Swastika at a Time

aunt-beulahBy Aunt Beulah

Aunt Beulah is a former comatose pseudonym who woke from her slumber when the country lobbed a grenade through her nursing home window.

Is it not refreshing to see America and its citizens finally paving The Path to the Moral High Ground? It’s about time we jumped on High Horse and galloped over the Constitution of the United States of America. Just between you and me, I feel the US Constitution and Bill of Rights, not to mention the Declaration of Independence, are pretty lame. After all, the Founding Fathers of this country couldn’t even be bothered to establish a State religion or mention Christianity at all in any of these documents. I’m almost positive that was an oversight, although I can’t be sure as I wasn’t there and there was no Twitter. Perhaps they were sidetracked while separating church from state and couldn’t find their way back to the pew to ask for guidance. Damn Deists. Horrifying Humanists. Sensible Secularists.  What were they thinking by leaving the construal of those documents to the commoners?!

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The Media Circus is Back in Town

A Florida couple was murdered. Their family and friends mourn. Byrd and Melanie Billings were found shot to death in the bedroom of their Beulah, Florida home. Inarguably, it was an outrageous act of perversion. As if the sickness of the crime isn’t adequate in of itself, the media has turned it into a cross between a TV melodrama and a reality show. The true sickness is in the media’s willingness to turn the event into circus proportions and in the American public’s willingness and anxiousness to gobble up every gory detail.

The most egregious instances of the media peddling the disgusting details come from the tabloidal networks masquerading as “news” channels. Not surprisingly, the drivel mongers at FOX News lead the way. I had the ill-fortune of having lunch where FOX was broadcast as if the food wasn’t bad enough already. As I ate, I watched as “Urgent Update” followed “Breaking News” with all the nonsense the dirt hounds could dig up. Based on the extent of the coverage, one could easily have been convinced they were watching the aftermath of the assassination of a major world leader. Michael Jackson was known all over the world. This coverage rivaled Jackson’s and who knew the Billings family outside of Beulah, Florida?

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Teaching Pigs to Wrestle

Monday I spent the morning in a board meeting discussing mundane but critical matters that should not need to be addressed, but, due to the creativity of the human race and its uncanny ability to wiggle through loopholes, inevitably must be addressed. Just as nature finds ways around obstacles such as the Claymore mines of pesticides, antibiotics and natural disasters, so humans dodge rules, regulations and Arizona Revised Statutes.

Never build flexibility into covenants, conditions, and restrictions. They turn around and bite you on the butt like a ferocious bear market. Not unlike a total lack of regulatory policies.

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