After the British surrendered at Yorktown, their band played The World Turned Upside Down. Sometimes looking at headlines I feel the same way.
Just today, Mattel apologized to China for recalling millions of Chinese made toys. Now this should disturb everyone. What exactly did Mattel do? Protecting american consumers. Chinese manufacturers were exporting goods that had health and safety problems (ie. lead paint). So why apologize. Because China had been upset that their goods had been recalled and Mattel with most if not all of their toy production in china was afraid of reprisals and was afraid of upsetting the golden goose. Does this show the power china has over companies? If anything, china should have apologized for sending such products to the US. However, china feels its contribution of cheap cheap labor is sufficient and any product should be satisfactory. China is thinking about retaliating against some US exports to China.
It was inevitable, the Chinese swinging their muscle around. Now that we are hooked on their cheap labor, they are going to take advantage. What can we do? Go back to good old American manufacturing before it is too late.
Saturday, September 22, 2007
Healthinsurance
This week some of the presidential candidates brought to the table their proposals on health insurance for America. I believe we are heading in the right direction. My thoughts :
Private: Not public monies nor government health but using the private insurance industry.
Required: All family units must have a health policy, one that they can specify to their particular requirements. However ALL policies should have some standard items, particularly oriented towards preventive medicine: free annual checkups, teeth cleaning, etc.
National: right now, states monitor and regulate insurers. Insurers need to be able to conduct business nationwide.
Portable: it is your policy you take with you no matter where you are employed. the company you work for might subsidize it but when you leave, you take it with you.
transparent: costs for services must be publicized and easily understood.
tax aspects: the 12000 deductible for health insurance should be incorporated.
low income: credits towards purchasing insurance should be given to those low income
if this can work out than elimination of Medicare and Medicaid through use of private insurers is a long term entity.
I believe the discussion is in the right direction but it needs to avoid governmental control and regulation (as in a National health care). A Universal coverage is okay as long as it is contained within the private sector
More later
Private: Not public monies nor government health but using the private insurance industry.
Required: All family units must have a health policy, one that they can specify to their particular requirements. However ALL policies should have some standard items, particularly oriented towards preventive medicine: free annual checkups, teeth cleaning, etc.
National: right now, states monitor and regulate insurers. Insurers need to be able to conduct business nationwide.
Portable: it is your policy you take with you no matter where you are employed. the company you work for might subsidize it but when you leave, you take it with you.
transparent: costs for services must be publicized and easily understood.
tax aspects: the 12000 deductible for health insurance should be incorporated.
low income: credits towards purchasing insurance should be given to those low income
if this can work out than elimination of Medicare and Medicaid through use of private insurers is a long term entity.
I believe the discussion is in the right direction but it needs to avoid governmental control and regulation (as in a National health care). A Universal coverage is okay as long as it is contained within the private sector
More later
moralhazard
Moral Hazard is a term used by economists to denote situation where people have no risk in an action. For example, let us say you have no deductible for auto insurance and no penalty for behavior. You are more likely to undergo risky activity than otherwise. Companies are likewise. If I know my parents will bail me out, buy me a new car, repair my old one, and not dock me for it, I am more inclined to engage in higher risk activities than if I had to pay so myself.
This week, the Fed cut the discount rate a half point to provide market stability as a result of the sub prime mortgage crisis. I do not believe they should have done so. They are creating a moral hazard for those firms who participated in risky behavior and have now set a bad precedent: go ahead and go for the high risk high payout situations and if problems occur, we will bail you out. Firms, like people, need to know they must pay the piper for their bad decisions.
This week, the Fed cut the discount rate a half point to provide market stability as a result of the sub prime mortgage crisis. I do not believe they should have done so. They are creating a moral hazard for those firms who participated in risky behavior and have now set a bad precedent: go ahead and go for the high risk high payout situations and if problems occur, we will bail you out. Firms, like people, need to know they must pay the piper for their bad decisions.
Wednesday, September 12, 2007
Immigration again
One of the major arguments immigration proponents use is that we are a nation of immigrants and all of us are descended from immigrants so what if they wanted to wall off the borders before your forefathers came? This is an apples to oranges argument. For most of us, our ancestoral immigrants came to the Americas in the eighteenth or nineteenth centuries. The U.S. was mostly a vacant land needing bodies to fill it, to farm it, to man the new plants that were going up everywhere. That was then. Now, the country is full. No new lands to discover. No new farms to plow. As far as the manufacturing plants go, is it merely a coincidence that the first public discourse and discontent on immigrant occurred in the 1920s when unemployment became real and personal? When companies were begging people to take jobs and immigrants could not do so quickly enough, that was find. But now jobs are still scarce . . . the imaginary 5% unemployment rate does not take into account those discouraged that they have stopped looking or the underemployed . . . if it were to do so, the rate would be closer to 10 percent or higher.
The other argument used is that immigrants only take jobs Americans do not want to do. Let us paraphrase it correctly: Immigrants only take jobs Americans do not want to hold AT THE RATE OF PAY OFFERED. Research has indicated immigrants pull down the wages for a community since they are willing to work for much lower than regular Americans. Companies are smart and offer less with fewer benefits. But recent stories about ICE raids and companies needing to fill these positions have indicated a surge of American citizens applying for those jobs. So nix that argument too.
Companies should offer jobs to American citizens and pay a liveable wage before offering jobs to aliens. (If your regular citizen has a mortgage and pays utilities, he or she naturally needs more to live on than a mexican alien living twelve to a house)
Companies have a responsiblity to American citizens. They want to hire americans to get American productivity and creativity and know-how but want to pay Indian wages with Chinese health/safety/labor benefits. They cannot have it both ways.
The other argument used is that immigrants only take jobs Americans do not want to do. Let us paraphrase it correctly: Immigrants only take jobs Americans do not want to hold AT THE RATE OF PAY OFFERED. Research has indicated immigrants pull down the wages for a community since they are willing to work for much lower than regular Americans. Companies are smart and offer less with fewer benefits. But recent stories about ICE raids and companies needing to fill these positions have indicated a surge of American citizens applying for those jobs. So nix that argument too.
Companies should offer jobs to American citizens and pay a liveable wage before offering jobs to aliens. (If your regular citizen has a mortgage and pays utilities, he or she naturally needs more to live on than a mexican alien living twelve to a house)
Companies have a responsiblity to American citizens. They want to hire americans to get American productivity and creativity and know-how but want to pay Indian wages with Chinese health/safety/labor benefits. They cannot have it both ways.
Sunday, September 2, 2007
taxesagain
1) My take on the property tax situation is that people are up at arms for three main reasons.
a) There is a mismatch between what they are paying (property taxes) and the services these taxes go towards (that is, gas tax goes for highways, everyone knows that and it makes paying the tax more palpable; while elderly couples without kids are paying high levels of taxation mainly to go to schools)
b) The huge increases seen (50 to 100% or more) (most people understand their property values have gone up but these huge increases are undermining family economics and taxpayer morale at the same time) and;
c) A wonderment that if my taxes double, where is all that money going towards? That is, I have not seen government services double their quality so what am I getting for all that I am paying?
My suggestions for resolving this dilemma are as follows:
1) Realign the tax system. Some have cried out for totally abolishing the property taxes. I believe there is a purpose for it if it is reformed into a true user tax. I propose that property taxes be used for only those governmental accounts that are related to property: a) security (police, and criminal justice system including prisons and jails), b) fire protection, c) trash and waste, and d) local road maintenance. Perhaps a few more might be included (for example parks and bike paths since they enhance the value of your property) but these are the major items. As can be seen, a direct connect can be made to each of these. All are directly related to your property, your house or residence and the protection or increased valuation thereof.
2) Secondly, I propose that ALL property be taxed. This includes non-profits (including churches), all governmental entities, commercial as well as private. In addition, not just real estate but the value of all possessions on the property should be included (after all, a thief is as interested or more in the jewelry and computers that exist under your roof as your property alone). Notice ALL property . . . a church is protected by the police and fire, why should not it pay according to the value of its property. A property with a BMW and a JAG in the garage has more to protect than a similar property with two ten year old compacts in the garage, why should they not pay more? This means that renters would pay a tax on their possessions but not the residence.
3) A major problem that has come up in Indiana deals with property evaluation and reassessment. All property values should be considered at current market value (what an unaffiliated entity would pay for the property). Reassessment should be at the time of the sale (sale amount) or every 5 years. If after 5 years, a revaluation is made, the value upon which the tax should be paid should not increase beyond 10% per year until it reaches the new assessment level. Once again, the public does not argue that its property has gone up in value only that the increase is all at once and offers a dreadful sticker shock.
4) To counter the third concern: where did all the money go? I suggest a cap on the property tax as well as a cap on increased government take (that is, government spending cannot exceed 3% per year with anything over that refunded back to the taxpayers).
Since education has been deleted and the taxable items made more encompassing, it is highly probable that the direct property tax rates (typically 1 to 4% of the residential value) will fall drastically. And in addition, the public should be considerably more amiable to paying for services that can directly connect with the taxes.
Allocation of the monies. The state should institute the tax state wide and deliver the monies to the county. Each county and municipality should then have the option of including a local surtax. The county should be the fiscally responsible agent.
Where does education come in? If Property taxes are not to be used to fund education, then what? The relationship between income and education level is quite conclusive: the better educated one is, the higher one's income. Therefore, a better revenue provider for education should be the income tax . . . of a flat, minimal exemption variety. Education dollars should come through the state coffers via the income tax and flow directly to those eligible . . . students from K through grade 16 That is, each student would receive a voucher for his/her share that could be used for any state approved educational institute in the state . . . public or private. This means that while we are at the process of revising the tax system we might want to review the educational process as well.
What do you think?
Thanks for the opportunity to voice my views.
a) There is a mismatch between what they are paying (property taxes) and the services these taxes go towards (that is, gas tax goes for highways, everyone knows that and it makes paying the tax more palpable; while elderly couples without kids are paying high levels of taxation mainly to go to schools)
b) The huge increases seen (50 to 100% or more) (most people understand their property values have gone up but these huge increases are undermining family economics and taxpayer morale at the same time) and;
c) A wonderment that if my taxes double, where is all that money going towards? That is, I have not seen government services double their quality so what am I getting for all that I am paying?
My suggestions for resolving this dilemma are as follows:
1) Realign the tax system. Some have cried out for totally abolishing the property taxes. I believe there is a purpose for it if it is reformed into a true user tax. I propose that property taxes be used for only those governmental accounts that are related to property: a) security (police, and criminal justice system including prisons and jails), b) fire protection, c) trash and waste, and d) local road maintenance. Perhaps a few more might be included (for example parks and bike paths since they enhance the value of your property) but these are the major items. As can be seen, a direct connect can be made to each of these. All are directly related to your property, your house or residence and the protection or increased valuation thereof.
2) Secondly, I propose that ALL property be taxed. This includes non-profits (including churches), all governmental entities, commercial as well as private. In addition, not just real estate but the value of all possessions on the property should be included (after all, a thief is as interested or more in the jewelry and computers that exist under your roof as your property alone). Notice ALL property . . . a church is protected by the police and fire, why should not it pay according to the value of its property. A property with a BMW and a JAG in the garage has more to protect than a similar property with two ten year old compacts in the garage, why should they not pay more? This means that renters would pay a tax on their possessions but not the residence.
3) A major problem that has come up in Indiana deals with property evaluation and reassessment. All property values should be considered at current market value (what an unaffiliated entity would pay for the property). Reassessment should be at the time of the sale (sale amount) or every 5 years. If after 5 years, a revaluation is made, the value upon which the tax should be paid should not increase beyond 10% per year until it reaches the new assessment level. Once again, the public does not argue that its property has gone up in value only that the increase is all at once and offers a dreadful sticker shock.
4) To counter the third concern: where did all the money go? I suggest a cap on the property tax as well as a cap on increased government take (that is, government spending cannot exceed 3% per year with anything over that refunded back to the taxpayers).
Since education has been deleted and the taxable items made more encompassing, it is highly probable that the direct property tax rates (typically 1 to 4% of the residential value) will fall drastically. And in addition, the public should be considerably more amiable to paying for services that can directly connect with the taxes.
Allocation of the monies. The state should institute the tax state wide and deliver the monies to the county. Each county and municipality should then have the option of including a local surtax. The county should be the fiscally responsible agent.
Where does education come in? If Property taxes are not to be used to fund education, then what? The relationship between income and education level is quite conclusive: the better educated one is, the higher one's income. Therefore, a better revenue provider for education should be the income tax . . . of a flat, minimal exemption variety. Education dollars should come through the state coffers via the income tax and flow directly to those eligible . . . students from K through grade 16 That is, each student would receive a voucher for his/her share that could be used for any state approved educational institute in the state . . . public or private. This means that while we are at the process of revising the tax system we might want to review the educational process as well.
What do you think?
Thanks for the opportunity to voice my views.
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