Tax Deduction or Tax Credit (Refundable)

I love thinking in terms of “The Most Harm to the Most People” – it introduces an “outside of the box” viewpoint for governmental and political decisions.

Consider a Tax Deduction: You earn money and deduct something against it – paying taxes on whatever is left.  If you pay no taxes, a deduction has no effect.

Who pays no taxes?  Those who don’t earn anything; those who don’t earn enough (reach an arbitrary minimum amount required to trigger tax responsibility); those who are deliberately avoiding taxes by “flying under the radar” and operating within an “underground economy”; those who are outright criminals.  Keep in mind: Filing a false tax return, or failure to file, is a crime.  Also, voluntary participation is the most efficient form of economic redistribution – either: willing participants ensuring the social welfare of their neighbors, or dominant classes finding a covert means to defraud their neighbors.  When originally proposed, Social Security was intended to be an additional tax which (1) people would be happy to pay, and (2) they would never benefit from (get their money back from) – which is why the age was set to 65 at a time when half the world population was dead before they reached the age of 35.

In the matter of Deduction verse Credit, those who pay taxes at the HIGHEST rate gain the greatest benefit from a tax deduction – therefore we can expect the ruling elite to favor tax deductions, and that those deductions will comport with the usual expenses common to the elite.  As the elite have fewer children, they would NOT favor increasing that deduction to reflect real costs.  The elite buy expensive homes and subsidize them through mortgages on which the interest is deductible – a thirty-five percent tax rate reduces a ten percent mortgage rate to 6.5 percent (other taxpayers, the poor and middle-class, pay the difference through an effective increase in their taxes).  If the elite can earn seven percent on the borrowed money (that is, the money they have invested which could have been used, without affecting their lifestyle, to pay cash for the home) they are actually earning a profit while enjoying their home.  Most investors look for a return-on-investment which is three points ABOVE mortgage rates – they seek a return which includes compensation for the historic rate of inflation.

Looking at the example of a ten percent mortgage rate: The rate of return sought would be thirteen percent; they earn $13 on every hundred borrowed, deduct $10, which saves $3.5 (paying net $6.5 from earnings) and get an additional net of $2 from the inflation return adjustment.  Thus, the true interest on the mortgage is 10-2-6.5 or $1.5.  If the investment (stock value, etc) increases at inflation, it yields an unrealized, and compounded, gain of $3 per year – a real profit of $1.5 per year in the first year which is compounded every year thereafter for the life of the mortgage and then,  when the mortgage is paid off, yields an INFLATION ADJUSTED mortgage interest amount as profit thereafter.

If you have no cash reserve to invest in place of using the funds for the outright purchase of your home, or your income is insufficient to require payment of taxes, a tax deduction serves no purpose – yields no economic benefit.  With a graduated income tax, each deduction adds to a cumulative reduction of gross income and therefore has the effect of reducing both the applied tax rate and income to which it is applied.  This introduces a quadratic equation effect into the analysis which escapes easy description – however, the effect is to increase the subsidy to rich along a bell curve at which the peak is the optimum level of compensatory investment.  There is a point at which the benefits granted to the wealthy are counter productive – top down stimulation does not work to generate economic growth, when the wealthy are already at, or have retraced over, the optimal point.

On the other hand, refundable tax credits work from the bottom up.  They subsidize the poor, while  yielding an equal dollar-for-dollar benefit to the wealthy.  Universal Healthcare is a form of credit which only hurts the private insurance companies who benefit from the same demographic effects which motivated the Kaiser to introduce the original Social Security – all insurance is something the majority are not intended to benefit from.  Note that the wealthy oppose Universal Healthcare – the cost of private care is the same for rich & poor therefore the poor pay more of their real income for it ... it is, like tax deductions, regressive – benefitting the rich while increasing the cost to the poor.

NOTE: You will not see this in the media.  At best, there is a passing reference to it.  The members of the mainstream media are in the income brackets which benefit from regressive programs and therefore will not play their proper role of informing the masses of the realities of a situation.  In fact, they will often find secondary excuses to oppose any politician who speaks for credits.  If not for the leverage (borrowing to invest) aspect in the above mortgage example, insurance companies would promote refundable credits for Healthcare and other insurance payments – this would open their customer base.  However, in terms of most non-age based insurance, the poorer the person the more likely it is that they would require payments and therefore reduce insurer profits.

Tax CREDIT – especially refundable ones – are the most socially responsible approach to taxation.  The framers of the constitution determined that those who could afford property should pay taxes – all others should be exempt.  They also determined the tax rate should be fixed and therefore progressive in the amount paid – based upon the voluntary choice of the wealthy to acquire additional taxable property.  We have a system which pays the wealthy to increase their income – by increasing the burden on the less wealthy.  This is the essence of “The Most Harm to the Most People” – the elite few benefit by inflicting hardship on a less fortunate majority.

Those who care about their neighbors; those who honor the Golden Rule; those who will do for others as they would hope others would do for them, if roles were reversed, favor refundable credits and oppose deductions.  The side benefit of this is to make it more costly to partake in criminal activity or an underground economy – because any attempt to collect the credit would expose the filer to an audit, and provide law enforcement with an additional tool in the war on drugs or other criminal activity (through granting access via another enforcement agency).

ALL STATE INSURANCE targets dummies.

I remember a Johnny Carson show … where comments were made about “The Good Hands People” and how they failed their responsibilities to customers.

That goes back a ways…. but some things never change.

I’ve been watching an inordinate amount of TV … and seeing a wealth of the  current Alls State commercials … the ones that describe your teenage son as a self-absorbed dimwit who will destroy your property.  Given the apple doesn’t fall far from the tree, their target audience is IDIOT PARENTS … like you.

Then there are the commercials about deep fried turkey … and burning the house down.  Once again, obvious focus on incompetent idiots … which, again, tells us their target client.

The deer hitting the car – hold it, that’s car hitting the deer that’s just standing there … driver too dumb to hi the breaks or swerve out of the way … YEP!  All State is targeting the idiots.  The ones that will need insurance and, because it is clearly their fault, will NOT be able to collect.

There is a good reason NOT to utilize an insurance company whose unwillingness to honor claims dates to the early days of Johnny Carson & the Tonight Show.  Especially one which apparently overcharges for their policies (or they would emphasize low rates and fast claims adjustment – rather than your stupidity and the stupidity of your kids).

Prove you are the idiot All State is targeting … become a client. 

It’s Demographics -- STUPID

Politicians have taken credit for demographics, and, as I have mentioned before, they prefer to ignore demographic realities now.  Case in point: the realization that the Bush Tax Cuts did nothing to improve employment and job creation – as shown in these Bureau of Labor Statistics:

Number of Jobs Added [millions]
Bush, Feb. 2001- Jan. 2009: 1.1
Clinton, Feb. 1993- Jan. 2001: 22.7
Reagan/Bush, I Feb. 1981- Jan. 1993: 18.7
Carter, Feb. 1976- Jan. 1981:10.3
Nixon/Ford, Feb. 1969- Jan. 1976: 11.3
Kennedy/Johnson, Feb. 1961- Jan. 1969: 15.7
Source: Bureau of Labor Statistics, Seasonally Adjusted Nonfarm Payrolls

We all know about the baby boom, baby bust and related realities – but when was the last time they were a part of the Political Economic dialogue?

The Baby boom is the post WW2 period defined by the years between 1945 and 1966.  That is, in 2011, those who are between the ages of 45 and 65.  That is, we are discussing the Social Security shock which Bush 43 loved to rant about – the people he wanted to privatize so their savings would be destroyed by the current economic downturn which he caused. It is fortunate that the nation – THE DEMOCRATS didn’t buy into Bush’s stupidity. … But that’s another previously discussed issue.

The current discussion is about those job creation figures.  Let’s express them in terms of Baby Boom ages.

Number of Jobs Added [millions] by age of Baby Boom starting with the Vietnam era:
- Kennedy/Johnson, Boom in Progress and five years to go - 23: 15.7 new jobs added
Those who haven’t been drafted, or who have served, are now entering the job market.  The draft for Viet Nam actually served to slow the necessity for job creation – military aren’t counted, and many headed to college to avoid the draft & hence never entered the job market, thus no pressure for job creation.

- Nixon/Ford, Boomers are 3 - 30: 11.3 new jobs added as the Viet Nam era slows and some returning military transition into college where they join those who already entered, or are prepared to enter.

- Carter, Boomers are 10 - 35: 10.3 new jobs added …with the baby boom employed and starting families, in college or still in grade school.
- Reagan/Bush(41), Boomers are 15 - 47: 18.7 new jobs added … The bulk of the baby boom, the statistical hump, enters the work force and are employed created by the boomers who came before them.
- Clinton, Boomers are 27 - 55: 22.7 new jobs added … NOW we have the baby boom out of college (even those who when for PhD’s are in job market). The baby boomers are working, spending, and a baby bust has begun – with the resulting increase in discretionary income to squander.

- Bush(43), Boomers are 35 – 63 (working and retirement vested) : 1.1 new jobs added … Gee, retirement is a reality for the majority of the Boomers.  Need to put money aside in those last 20 years before Social Security … some have even opted for early SSI retirement at 62, or have retired at 55 (as teachers and others serving the younger Boomers – through choice or having accepted early retirement packages).

NOW REALITY SET IN.  Under Reagan/Bush America turned anti-immigrant.  There are no workers entering the economy seeking employment and those in the system are retiring and the nature of the remaining jobs has changed.  Consumer products are now imported – hence no  need for a domestic work force and therefore job creation is contracting to meet available workforce requirements.

This is where we return to “COLA” Cost of living adjustments for Social Security recipients.  We are seeing a GOP move, being considered by the Obama Whitehouse, to reduce the income needed to feed the economy … which is to say, the income that goes to the Baby Boomers who are now retiring as they turn 65.  This is a process which will continue for the next twenty years and which will peak within the next ten years.  Deprive COLA and surplus money to retirees within that period and the economy will collapse.  Pay attention to giving SSI recipients basic funds for the next twenty years, and a new generation will emerge that will carry the country forward with higher incomes and achievements.

One other reality which you’ve read here before: DO NOT LOOK TO NEW CONSTRUCTION as a measure of economic growth!   That worked until Reagan/Bush and even into Clinton, but there are no people to buy homes – the resale and renovation markets are going to prevail over the next decade.  After that, the Baby Boomers will be dying off and the housing markets will be glutted – housing prices will fall for structures that are not energy efficient and convenient to necessary services.  That house in the country will become very very cheap.  More so because there will be no young families, no schools – because we are in a baby bust.

In case you missed the point: Those born between 1967 and 1987 are NOT going to need to buy retirement homes. They will inherit them!

Kosher, Halal, or High Cholesterol

The first – contained in a Catholic Synod statement issued Saturday, 23 October 2010 – declared the covenant with Abraham “abolished by the presence of Christ.”  This statement was then clarified by the American archbishop, Archbishop Cyril Salim Bustros, heading the commission which issued the statement:  "For Christians, one can no longer talk of the land promised to the Jewish people… There is no longer a favored people, a chosen people; all men and women of every country have become the chosen people.”  To this was added that "chosen people" does not symbolize Judaic superiority, but  rather a right to inherit the Land of Israel and an obligation to the 613 commandments in the Bible.  As we know from the Pauline Peter/Paul doctrinal declaration, the archbishop has declared  that Jews follow Peter – the foundation upon which the church was to be built – and the Roman Catholic Church follows Paul.  Therefore as I proposed earlier, is prohibited from following any of the health codes – which brings us to a news story which appeared 24 hours later.

Consider the flood legend – and the fact that both our tribe, and the parental lineage which gave rise to the CMH, came from the Indus Valley region which is now Pakistan; now think about the devastating 2010 floods and consider a past version as a cultural memory which was used as the model for Noah.  Aside from the calendar we continue to use, Genesis tells humanity that the fruit of the trees shall be your meat – why not have meat be meat?  If we address that in the context of symbolism, where the eating fruit could result in their gaining god-like knowledge and wisdom, people, who apparently know what meat is, are told to turn vegetarian – or vegan, if the knowledge of sin is symbolic of avoiding the use of animal skins for clothing.  However, if we put aside the symbolic to focus on the factual, the introduction of fruit into the diet, and the de-emphasis of meat, meat fat – hence the introduction of dietary guidelines which reduce LDL cholesterol – is consistent with medical knowledge being both accumulated and demonstrated throughout the tribal journey.  In the  1972, when segments of American were becoming concerned over the chemicals and additives the Food and Drug Administration (FDA) was allowing in process meats a  kosher food producer, Hebrew National, began a highly successful advertising campaign.  The crux of the campaign was an itemization of some of the additives allowed by the FDA – including sawdust in frankfurters – followed by the statement, “we cannot, because we answer to a higher authority.”

The “conversion” of Paul has been seen as a change in tactic to achieve a consistent, and clearly stated, initial goal – to stop non-tribal members from acquiring an understanding of that archived knowledge, and so prevent them from benefitting from it.  If we examine the dietary laws – laws which Pauline Christians are expressly prohibited from following – it becomes clear that they are consistent with a diet which lowers LDL cholesterol, reducing the material from which arterial plaque develops, thereby reducing the risk of atherosclerosis – with the benefit that healthy arteries increase the flow of oxygen rich blood throughout the body.  In terms of building the neural connections associated with the acquisition, storage and utilization of knowledge, an unimpeded flow of oxygen and nutrient rich blood to the brain is paramount.

The medical evidence now shows that arterial plaque begins to develop during childhood and adolescence.  While there are uncontrollable factors associated with the development of clogged brain arteries, diet is one of the most easily controlled factors.  In that context, a paper published in “Psychosomatic Medicine” (Vol. 49, No. 2 (March/April 1987)) made a high correlation in men between LDL cholesterol, plasma lipid variables, Type A behavior and hostility – the correlation in women, while still there, was significantly lower.  Another paper, in “Epidemiology and Infection” [(2010), 138:174-182, Cambridge University Press, doi: 10.1017/S0950268809990306], established “a correlation between national pig-meat consumption and mortality rates from chronic liver disease (CLD)” and determined that there was “a 10 kg higher national annual average per capita consumption of pork meat was associated with an increase in mortality from CLD of between 4 and 5 deaths/100 000 population.”  Of course, there is no way the Royal Scythians could have known this when, thirty-five hundred years ago, they barred all swine from their territory.  But with these facts in mind, let us consider this second news story – which deals with the closing of the kosher  division of an English meat packing firm whose major customer is McDonald’s.    

In response to queries as to their influence in the closing, a spokesperson for McDonald’s stated, “It is McDonald’s policy not to use meat that is religiously slaughtered, such as kosher or halal.  Following concerns that halal meat had been mistakenly used for some McDonald’s chicken products, the company asked all suppliers to ‘reiterate that their meat was not slaughtered in that way.’”  In fairness to the McDonald’s menu, it should be pointed out that the report was explicit in stating that beef consumption was not shown to be a factor in chronic liver disease mortality rates.  But there is still the issue of public health and exactly where McDonald’s stands on the use of pork, or pork products, which do adversely impact the liver.

In a related news story, the Auckland Hebrew Congregation and the Wellington Jewish Community Center issued a A statement pointing out that, “New Zealand recently became the first country in the world to outlaw kosher slaughter since the Nazis enacted similar legislation in Europe over 70 years ago. New Zealand Jews may soon be the only Jews in the world who can no longer eat chicken. Your children or grandchildren may never experience a Passover with chicken soup and matzah balls, or ask the meaning of the lamb shank on your family’s Seder plate.”

Taken together, it would appear that both New Zealand and McDonald’s have come down on the side of St. Paul and declared against the “higher authority” referred to in the 1972 advertising campaign; in the same way they have declared against slaughter standards which are certified to remove fat, and so remove a primary source of LDL cholesterol – which goes to secular, not religious, issues of public health and the joint contribution of government policies, and food industry practices, to growing obesity rates in industrialized nations.  It is also an issue which raises the also goes to the issue of why our genetic tribe chose to adopt dietary laws and practices which have been revealed to be scientifically and medically rational.  In terms of commerce, and free market decision making, our tribe has been linked to the creation of both the Silk Road to China and the Amber Road – which passes through the Russian Pale to Scandinavia.

In September 2010, Quick, a French hamburger chain trying to compete with McDonald's, began serving halal hamburgers in 22 of its 367 restaurants.  The decision by the French  franchise operation to go halal, or kosher, was made as means of raising its market share – which is one-third that of McDonald's – and was made after a six-month, eight restaurant, experiment in Muslim neighborhoods showed a doubling of business followed the hanging of certificates guaranteeing that their beef was halal.  Obviously, certified restaurants fall into the “higher authority” category with menu selections that are lower in LDL cholesterol.

In terms of available French cuisine, the Quick decision was simply emulating souvlaki shops and pizzerias which, for years, have been offering a halal guarantee.  Yet, it is  interesting that Rene Vandierendonck, the Socialist mayor of Roubaix in northern France, charged Quick with discrimination when it turned its Roubaix restaurant into a halal-only  – no similar charge was leveled at McDonald’s for its explicit refusal to cater to a potential clientele amounting to eight percent of their potential customer base (roughly five million in a total French population of sixty-two million).

In our journey we have seen socio-economic decisions based upon tribal identity, and how one of our tribe, Paul, set down a rule which had the effect of fulfilling his stated objective – to keep gentiles from being integrated into his orthodox Hebrew bloodline.  That rule, as expressed in 2010 by Archbishop Bustros, makes it clear that the “Church of Peter” follows Pauline doctrines.  Effectively, and explicitly, consigning the Ten Commandments, along with the other 603 which include health laws integrated into secular medical practices, to the Hebrews and denies them to those seeking Pauline salvation – unless, in addition to the faith requirement, all are adopted.

The heterozygote mutation which bestowed superior brain capacity, or process capacity, on the Ashkenazi, is believed to have occurred, or become evident, around the ten century.  In certain terms, it could be seen as establishing a new “Chosen People” – a genetic tribal lineage marked by increased cranial capacity, or data processing capability – in accordance with the thousand year period cited in The Book of Revelation.  In random terms, we could propose the period to extend from Paul’s death in 66CE to the 1066CE Norman Invasion of Britain under William the Conqueror.

In evolutionary-religious terms: A thousand years after the death of Jesus, evolution (the Creator) bestowed a heterozygote mutation upon the Ashkenazi-Levites.  In part it might have been due to their avoidance of pork, which would have increased blood flow to their brain and allowed additional synapse to grow.  Certainly they utilized what was available to develop their wisdom, knowledge and understanding.  In evolutionary terms,  nature chose the Levites (Ashkenazi Hebrew) to receive this mutational heterozygote advantage above all others in their genetic tribe and in the world.

It is easily explained in terms of the evolution and nature of the Yiddish language – and evolutionist could explain it in terms of event transpiring along the Roman German border region where the Jewish merchants were settled.

The cost of the heterozygote variation, if shared by both parents, was a twenty-five percent chance of a child receiving a double dose and dying from runaway neural development – conceptually, cancer of the neural pathways.  This was offset by a fifty percent chance of inheriting the beneficial mutation – with its higher intelligence potential – and a twenty-five percent chance of only average  Ashkenazi-Levite intelligence.  When, as we have seen, forced conversion was used to assimilate the Ashkenazi into the overall Germanic population, the first gentiles to experience inter-marriage received the benefit that their half-Jewish child had a chance to inherit the mutation – as high as twenty-five percent if one parent were a carrier.   Even with conversion and intermarriage, the sedentary patterns associated with gene flow would have served to retain remnants, or traces, of the mutation within a geographic region or community.   Thus, the Germans – particularly those in the eastern regions – would be expected to have higher IQ’s than other Europeans, or the Russians to their East. 

Archbishop Bustros is an idiot – and one of St. Paul’s pagan suckers – forever bared from the Salvation promised by those faithful to Peter.  And the European McDonald’s franchises are headed for serious trouble.  Not that the Jihadists are going to be any better off!   They have forgotten that the “People of the Book” are Islam’s brothers and within the Koran their equals – possibly superiors.  To attack them is to attack kinsmen and innocents – must the same as attack a mosque (which we all know Jihadists are prone to do). 

--- boy this was a long one ---

Murders caused by Geo. W. Bush

Note the peak deaths illustrated by this chart from “THE ECONOMIST” (online) and note the sharp drop in civilian deaths which followed the election of Obama.

On November second, the voters will decide if the party of murderers (GOP), or the party of those who treasure life (DEM) will control one, or both, Houses of Congress.

Readers of my blog – or newspaper column – will already know that I am betting on the murderers being the rulers & law makers of choice for the people of America.  The most Harm to the Most People – has always been the guiding force of the modern Republican Party.  It is now, as it has been for centuries, the guiding force of Evangelical Christians who now control that party, and the TEA PARTY.

If the GOP wins on Tuesday, you can be sure that you shall be the loser.

Leaked Papers – reality exposed

On the infamous Sept 11th, 3,000 people were killed and the World Trade Center destroyed.  This was an act of criminals – professional murders who have no regard for innocent life, and who support the murder of their daughters by what they refer to as “honor killing”.

President George Bush decided to use this criminal act in two ways – first (under the cover of clear lies) he attacked a nation, Iraq, for the sole purpose of murdering its leaders … who he felt had insulted his father.  In December 2006 Bush authorization resulted in the murder of 3,800 civilians – who, like those in and around the World Trade Center, were innocent of any wrong doing.  In total, (as revealed by recently leaked government reports) Bush ordered the murder of “more than 100,000 dead from 2004 to 2009”.

Americans can be very proud of the President they twice authorized to murder innocent people.  Those who authorized (voted for) this murderer are themselves morally responsible for those deaths.  To compound the matter, they fully support Bush – and continue to support his elected backers - when Bush specifically declared the 9/11 murders to be irrelevant with regard to both their own actions and the actions taken in Iraq & Afghanistan.  It now turns out that the Bush Administration and GOP leaders knew full well where Osama Bin Laden,the criminal mastermind behind 9/11, was and that he – along with his criminal leadership - was the living in secure luxury.

Bin Laden is happy, Bush is now collecting his Presidential Pension (and also happy – laughing all the way to the bank protected by the personal security guards America provides at a cost sufficient to provide medical care to a significant number of the people paying the bill), and nobody cares.

How many more innocent people will Americans murder?  At what point do the historians decree that America entered the twenty-first century as the ultimate terrorist nation?  Do you even care?

MORE STUPIDITY – ignoring reality

On Sunday, 12 September 2010, a George F. Will article declared “Americans have good reason not to believe in Obamanomics“.

Interesting!  After the Bush deficit rocketed up, Will declares Obamanomics has achieved this: The American people “owed slightly more when the recession began, when household consumer debt was $2.6 trillion. The painful but necessary process of deleveraging is proceeding slowly: Such debt has been reduced only to $2.4 trillion.”  So the deficit has ceased its increase and been reduced by a very real $200 Billon.  Think about the percentage rate of deficit increase needed to get it to double in eight years – when the starting point was a projected surplus (thanks to Clinton) which would go for decades and eventually make the nation debt free and an unstoppable global economic powerhouse with the credit available to buy any nation.

As Will said, “Never have so many of us owed so much” – of course he fails to credit Bush and Reagan for this.  Instead he bemoans the fact that Obama’s view of economics has actually begun to reduce the national debt.  Obviously, Will just doesn’t get it!

Obamanomics seems to be working.  There is a bad housing market; much unemployment – and a total disregard for the fact that anyone with an ounce of brains knew this was going to happen at this time – and knew it forty years ago when we recognized the Baby-Boom was turning to a Baby-Bust. 

FIRST:  The Baby-Bust generation has no need to expand the number of housing units created for the Baby-Boomers … They are inheriting the homes of their parents, occupying the city residences while their parents retire to their country vacation) place.

Then there is the many houses that are simply empty – empty because they should have been filled by immigrants (like those who entered the USA after WW2) who the GOP wants to and has successfully kept out.  In addition, because the GOP has downplayed the need for conservation and underwritten the drilling for domestic oil – artificially depressing energy costs, and setting us up for disaster in fifteen years or so – there is no need to demolish the older housing stock and build new energy efficient housing.  We will – there will be a housing boom – but it will over a decade before it begins, and longer before the idiots notice.

SECOND:  The Baby-Boomers are retiring or dying.  the economy and economic models are bound to change – this is a period of adjustment which will continue for five years before it stabilizes.  Then we will see a period of fifteen to twenty years  before the first Baby-Buster creates a need for a new model to accompany their retirement.

If we don’t get our economic house in order –- if we don’t reduce the deficit as a percentage of GDP to the levels it was at prior to Reagan – we can happily look forward the the failure of the Great experiment.

The right-wing evangelicals will get their war, and their KING, and their slavery … but they will be dead and it will be our great-grandchildren who will have to endure and correct.

There is one eternal truth: Those who wish the Most Harm to the Most People will not cease in their efforts – because they are helped by intellectuals like George F Will.   Intellectuals who refuse to use their mental capacity to recognize what is being done, and needs to be done.