Saturday, October 18, 2008

Cruise Blog #2

The best T-shirt with a message that we've seen so far:
Procrastinators of the world ... Unite!

Most perplexing thing heard so far:
"The life rafts are unsinkable." Why don't they just make the whole ship in the same way that the life rafts are made so that we would not even need life rafts?

Thursday, October 16, 2008

The Myth about Corporate Taxes

Democrats generally favor tax increases. The last time a Democrat ran for president on a platform of cutting taxes, I was spending my days dressed up as Bat Masterson and struggling to learn long-division. So that you won’t question my mental health status, please understand that the year was 1960 and I was seven!

Of course, raising taxes is never popular. So Democrats almost always resort to class envy to advance their agenda of higher taxes. They are going to cut taxes for most Americans and only raise taxes on the filthy rich (defined in this year’s political debates as those making more than $250k annually ) and on greedy corporations. Don’t worry, average, hard-working Americans, you will not be affected.

For this post, let’s look at the idea of raising taxes on corporations. Imagine that a tax increase on corporations is implemented. One or more of the following effects will occur.

First of all, a company can simply pay the tax and accept a lower profit. With a lower profit, the company is worth less and the value of the company’s stock decreases. The net result is that individual stockholders have paid the tax.

The second thing that a company could do with a tax increase is to pass it on to consumers. This is inflationary and it means that consumers pay the tax through higher prices.

The third and final option for a company hit with a tax increase is to reduce expenses. This allows them to maintain profitability without raising prices. Since the biggest expense for most companies is wages and salaries, this is a logical place to look for savings. Even if wage and salary cuts are not made directly, expense reductions in other areas ultimately translate to unemployment somewhere. A company might, for example, reduce its advertising budget and this affects employment in ad agencies and various media outlets. Thus, in this third scenario, employees ultimately pay for the tax increase through reduced or stagnant wages and/or layoffs.

Lower profits, rising prices and job losses are the inevitable result of corporate tax increases.

A call by politicians for higher corporate taxes is really a call for a declining stock market, rising prices and increased unemployment – and all three impact average, hard-working Americans.

Now Democrats claim to be concerned about declining stock market values and unemployment and high prices for food and energy. Yet they are pursing policies that will create everyone of these problems.

According to Democrats, risky lending practices in the financial sector have caused recent stock market declines and impacted the 401ks of average Americans. Democrats claim that they will protect you from this sort of thing yet higher corporate taxes will create the same effect.

When oil spiked at close to $150 a barrel, Democrats rushed forward to blame manipulative oil speculators and greedy oil companies for a callous disregard of the impact on the budgets of average Americans. But a higher corporate tax is also a cost increase to a corporation and just as likely to lead to increased prices.

Unemployment has risen to 6.1% and Democrats blame this on the policies of the Bush administration and again claim to be terribly concerned about how this impacts the everyday American worker (forget the fact for the moment that unemployment averaged 5.1% for the eight years of the Clinton administration and has average the same 5.1% during the eight years of Bush). Well, empirical studies show that increasing taxes usually lead to job losses.

It appears to me that Democrats are only concerned about stock market declines and escalating prices and loss of jobs unless they are the ones causing them!

Of course, I’m not saying that Democrats want people to be hurt by stock market declines or increases in prices and unemployment. They don’t. But the danger of Democrat style liberalism is that it wants to be judged by its good intentions rather than its actual outcomes.

When Democrats tell you not to worry about tax increases because they are only going to be paid by others, rich corporations in this case, they remind me of the woman in England in WWII. She said that she would not be impacted by the bread shortage because all her family ate was toast! When the bread of corporations is sucked up in higher taxes, there will be no toast of rising profits, lower prices and abundant jobs that benefit all Americans.

The United States should eliminate all corporate taxes since such taxes are ultimately borne by individuals. Calling them corporate taxes simply disguises their true nature.

Greed and Taxes

We have been hearing a lot about greed lately – especially from politicians running for office.

A few months ago, the political types were demonizing greedy oil companies. The most recent scapegoat is the housing/mortgage market. The story line is that greedy individuals seeking ever more lavish homes succumbed to greedy predatory lenders and this has created a financial crisis.

Well let’s look at some numbers.

In 2005, there was about $8.5 trillion in outstanding loans on residential property in America. This includes residential loans of all types like first mortgages, second mortgages, lines of credit, etc. Making some generous assumptions which probably overstate the payments being made, it looks like Americans forked over about $0.57 trillion in mortgage payments.

Approximately 32% of the population is renting instead of buying a home. While probably double counting in some ways, I again made assumptions that err on the high side to come up with a figure of $0.27 trillion in rent payments.

Therefore, between mortgage payments and rent payments, Americans were paying a total of $0.84 trillion to put roofs over their heads in 2005.

How much money do the same individual Americans give to the government?

Well, the adjusted gross income reported to the IRS by individuals was $7.5 trillion total in 2005 and the tax revenue collected by federal, state and local governments in that same year was $3.2 trillion.

My best estimate from a number of different sources is that corporate taxes account for about $0.5 trillion of the taxes paid to government at all levels. If you have read my previous blog, you’ll know that these corporate taxes really ended up being paid by individual Americans out of their pockets. Once again, however, I’ll be generous and ignore this for the moment.

Under these assumptions, we see that individual Americans paid $2.7 trillion in taxes out of their $7.5 trillion in income. This is a whopping 36%!

Thirty six cents out of every dollar of income earned by Americans went to the government while only 11.2 cents of every dollar ($0.84 trillion in mortgage and rent payments divided by $7.5 trillion of income) went to housing expenses!

Said differently, the government requires 321% more money from its citizens than is required by all of the Snidely Whiplashes (mortgage companies and landlords) in the entire country. Americans are spending more than three times as much money to support the government as they are spending for the places where they live!

So let me ask you this basic question: Who is greedier – the citizens or the government?

You hear politicians and media pundits talk about greedy individuals and greedy corporations all the time. But seriously, have you ever heard these people talk about “greedy government interests”? You’ve never heard them utter that phrase.

Yet greed is precisely the right word to apply to a governmental system that takes 36 cents out of every dollar earned and then still demands to take more! One of my missions in life is to get the phrase “greedy government interests” into the public domain so that more people will understand the true nature of government.

Because we are in the thick of a presidential campaign, the perennial debate about who should pay taxes and at what level is in high gear. Obama claims he will give 95% of wage earners a tax cut and he will only raise taxes on wealthy individuals (household income over $250k) and on big corporations. McCain also wants tax cuts for the majority of citizens (CNN showed that 93% of Americans get a tax cut under McCain’s plan) and he also wants to reduce taxes on corporations.
The question of who pays the tax revenue need to run the country is important. But I’m afraid that politicians use this question to distract us from asking a much more important and fundamental question – IS THERE ANY LIMIT TO THE AMOUNT OF MONEY THE GOVERNMENT SHOULD BE ALLOWED TO TAKE FROM THE CITIZENRY?

My answer is “Yes” and I think that government has already exceeded a reasonable limit.

Politicians claim that they will protect us from the greed of others. I think it is a smoke-screen to cover up their own avaricious demand for an ever increasing share of the nation’s wealth. I’m not so worried about greedy individuals or greedy corporations. What I want to know is who is going to protect us from greedy government interests?

Cruise Blog #1

I experienced the sunrise Monday morning the way that 70% of the world, geographically speaking, experiences it everyday – on the ocean. Debi and I are on a cruise to celebrate our 30th anniversary and the edge of the sun was just appearing on the eastern horizon at 7:49 as I came up on deck.

From horizon to horizon and for 360 degrees, there was not a speck of land or even another ship to be seen. I asked one of the ship’s officers how far we could see on a day like Monday with unlimited visibility and he told me that edge of the world was about 25 nautical miles away (that’s just shy of 29 statute miles for you landlubbers). As I turned slowly in a circle, I was looking out on almost 2,600 square miles of water that was devoid of human civilization!

Although 3500 people share the Pride with me (the Pride is the name of the ship we are on), I was pretty much alone on the uppermost deck of the ship at that moment. My first thought was that we were a little island of life in a vast and threatening ocean. That was true since I was thinking only of Homo sapiens. A few moments later my perception changed as I thought about life more broadly – we were an island of life in a sea that teems with life of unimaginable fecundity.

Regardless of how I defined life at that moment, it turned out that my life on Monday was vastly different than “normal”. My day was filled with things I find it difficult to incorporate in my everyday life. A healthy breakfast was followed by time to read and think and dream and connect with God. Then came a workout in the gym at the bow of the ship and an unusual two mile run with exactly half of it into a 20-knot wind and the other half of it with that same wind at my back thanks to the sailing ship. Then there was more reading under a completely cloudless sky. I even did some work. Later, I watched the last rim of the sun’s disk disappear into the ocean at 7:18 pm while enjoying a cigar and a glass of bourbon. Interspersed with it all were conversations with Debi about significant matters.

And I was struck also by the things that were absent from my life on Monday. No news. No talk radio and NPR to get myself exposed to both sides of the current political debates. No glancing around the house and stewing about the projects that are left unfinished.

Overall, Monday was a day of less stress and less anxiety combined with more contentment and more connection with people and more involvement with things that really matter. The experience left me wondering if I could turn Monday’s oddity into an everyday reality.

Saturday, October 4, 2008

What About Bob?

Thanks for the comments some of you made publicly on my last post – the one about hearing from God about becoming like a little child.

In addition to the public comments, I got a private communication that was profoundly honest and impactful. It raises some important questions and issues and I’d like to know what you think about it.

Let’s call this person Bob – not his/her real name. I’ll give you a redacted version of his comments (with personal info removed) and tell you some thoughts that I passed on to him. Most importantly, I’d love to see if any of you have any words of wisdom for him in his current situation.

Bob’s Email:
So I have been thinking a lot about your whole hearing God talk thing. It is not working for me. I am caught in a vicious cycle and I don't know what to do about it. I feel so guilty that I am still not over the [traumatic personal situation]. I know I have a lot of things going for me but I just can't get past it. I have been praying like crazy about it. I have prayed for [the situation], that God is working in [it]. I have been asking God to please let me see this situation through his eyes. What does he know or have in store for me that I am too blind to see right now. He doesn't even have to tell me what those things are but just tell me that [He is at work].

But then I have been reading "Walking with God" and there was a chapter that talked about [how we need to be willing to hear things we don’t want to hear before God will speak to us]. The Lord knows my heart. I know that I only want to hear from him that [the situation is going to get resolved in the way I want]. But any other plan, I really don't [want to hear about that]. I say I do...but it would be both silly and pointless to hide [my true desires] from God. It is not that I don't want to feel that way. I so desperately want to be able to trust in him ...

So then I try to pray about those things. Try the honesty approach. The true things I am feeling. Maybe God has something to say about those things. Still nothing.

So there is also a story in the book [Walking with God] that talks about how you can't start out asking questions like these when you haven't had a conversational relationship with God before. You need to start out small and build up to it. So I have been trying to do that. Going back to basics. Reading from the Bible, telling God what is happening throughout my day, taking time to just say hi. And while it helps to get through the day, still no words...not working. Really the only reason that I am asking the small questions is so that I can eventually ask the big question, the one I really want to know about. And God knows that too. Just going through the motions to get to an end result that I want.

In one of [Pastor So and So’s] sermons, he talked about how people use God. How we want Jesus to be a vending machine (just pick what you want) and how we treat him like a prostitute. Use him for your current needs and then go on your merry way. I don't want to do this. But I don't know how to stop feeling like I am feeling. And I don't know how to feel the way I am feeling and make any progress. I can't lie about how I feel about [the situation] but I can't get anything accomplished while I feel this way. Cycle. Back and forth. No end in sight. My inability to see anything clearly has become like a prison.

So I was thinking, if you can hear from God, maybe you could ask him about me. Ask him what I am supposed to do. I can't do it. If I can get over this hump then maybe I can start small with him from the beginning. I feel so ashamed that I can't do it.


My Response:
I feel so badly about your situation. I know what it is like to live in pain and confusion and it is the pits. Here are some thoughts (in no particular order):

You are completely healthy spiritually because you recognize that you can’t hide your true thoughts and feelings and wishes from God. I finally figured this out two or three years ago. I realized that, while it is wrong to lie to others and unproductive to lie to myself, it is actually impossible to lie to God.

I love your honesty. I love that you are free to say that hearing from God is not working for you. I love that you are acknowledging that you’ve got desires and can’t just ignore them. I love that you refuse to pretend that you are willing to hear any answer to your dilemma when you know you are not.

I think Eldredge is wrong when he talks about the need to be willing to hear any answer before you can hear from God. We just can’t fake that. I think you are on the right track with the “honesty approach” and I would just keep on with that at the moment. The Psalms are full of people who cry out to God and demand action and intervention. They were not “neutral” and willing to hear just any old answer.

As to why you haven’t heard anything, I have several thoughts. First, you and I are new at this and it takes practice. You wouldn’t play golf like Tiger Woods if you went to a golf course. Everything takes practice – even spiritual things. For example, teaching is a spiritual gift but teachers study and get training and find their gift developing over time. With most of the things I’m asking God about, I hear only silence. Hearing from God is still a fairly rare experience for me but I’m going to keep practicing. I’m new to this whole endeavor.

Secondly, there is a massive (though unseen) spiritual battle that is swirling around us all the time. Demonic forces don’t want us to hear from God and they have a lot of power in this world. Daniel prayed and fasted for three weeks before he got an answer from God. When an angel showed up, he told Daniel that God sent him to answer Daniel’s prayer from the moment he first prayed. The three week delay was caused by rebellious, demonic forces that kept the angel from getting through right away. There is always stuff going on, both human and demonic, that we have no control over.

I also think [Pastor So and So] was at least partly wrong with the vending machine/prostitute analogy. We Christians sometimes fall into a trap of saying things that sound pious but are really just a bunch of damned nonsense when we stop to think about it a little more deeply. [Pastor So and So] does not do so very often but I think he succumbed in this case.

C. S. Lewis has much better insight into this issue of going to God with our needs. In the introduction to The Four Loves, he talks about how he came to conclude that our love for God cannot be divorced from our needs. He says …

"… in ordinary life no one calls a child selfish because it turns for comfort to its mother; … Every Christian would agree that a man's spiritual health is exactly proportional to his love for God. But man's love for God, from the very nature of the case, must always be very largely, and must often be entirely, a Need-love. This is obvious when we implore forgiveness for our sins or support in our tribulations. But in the long run it is perhaps even more apparent in our growing – for it ought to be growing – awareness that our whole being by its very nature is one vast need; incomplete, preparatory, empty yet cluttered, crying out for Him who can untie things that are now knotted together and tie up things that are still dangling loose … It would be a bold and silly creature that came before its Creator with the boast, 'I'm no beggar. I love you disinterestedly.' … And God will have it so. He addresses our Need-love: 'Come unto me all ye that travail and are heavy-laden,' or, in the Old Testament, 'Open your mouth wide and I will fill it.'"

Back to the demonic – the guilt and shame you feel is absolutely demonic. That is not coming from God and is a sure sign that sinister forces are at work.

I’m rambling a bit but here is another thought: I don’t think that God has some pre-set plan for [resolving your dilemma]. I think there are things about the future that even God does not know because they depend on the free choices of people and angels and demons. Even if God wants to [resolve the situation the way you want it resolved], it might not happen due to choices that others make in the matter. While this is a somewhat controversial view, there are well-respected and credible theologians who would agree with this perspective.

At any rate, it seems like a dangerous time for you right now. The enemy is always quick to use our pain and disappointments against us and against God. He is there right there with his accusations disguised as our own thoughts: “God has abandoned me.” or “God must be really angry with me.” or “This just proves that there is no God – I’ve just been engaged in wishful thinking.” Etc. So, I’ll be praying about this aspect of the issue

Of course, I will ask God about anything he might want to say to you. .


Your Thoughts:
How about you? Are there any thoughts that you’d want to pass on to Bob about his anguish or my response to it?