Hot Dogs at Filet Mignon Prices

When it comes to making decisions on how to spend money, people generally consider the value gained for the money spent.  Sometimes it makes sense to buy in bulk.  Other times it makes sense to put off buying something until it goes on sale.  A few extra dollars for a higher quality item may make good sense if you want it to last.  Sometimes people get tricked by a slick ad or a fancy logo into buying over-priced junk, but even then they do it because they thought they were buying quality.  When times get tough, people cut spending both on things they don’t really need and also through cheaper versions of the things they do need.  It’s just common sense.

One thing most people can agree upon is that you don’t buy generic flip-flops and pay a Nike price for them.  By the same token if you’re paying a Nike price, you expect to be getting the Nike product not something out of the Walmart bargain bin.  Yet when it comes to government, we the people are getting hosed.

“Almost Heaven” West Virginia doesn’t earn that nickname because the quality of life is almost heaven-like.  It earns that nickname because it’s being killed by the cost of its government and every day death is closer for the state.  Let’s take a look at the numbers.  These were compiled by U.S. News and World Report for 2017:

  • Overall Rank: #41
  • Overall Healthcare: #46
    • Public Health: #49
    • Health Care Quality: #49
  • Overall Education: #44
    • K-12 Math: #46
    • K-12 Reading: #42
  • Overall Infrastructure: #44
    • Transportation Infrastructure: #48
  • Overall Economy: #49
    • Economic Opportunity: #40
    • Employment: #50
    • Business Environment: #50

Wow.  For outcomes of that low quality, the people must be putting very little into government.  Surely, for bargain basement results the people are at least only paying bargain basement prices.  Oh, if only that were true.

According to the Tax Foundation’s Center for State Tax Policy’s latest rankings, the people pay a high price for what little they get:

  • State and Local Personal Income Tax: #18
  • Business Taxes: #18
  • Sales Tax: #16
  • Gasoline Tax: #18

Right now the Governor of West Virginia wants to raise taxes by nearly half a billion dollars and that’s only for the general budget.  He wants another quarter of a billion in tax and fee increases for a transportation infrastructure program.  It seems the only thing certain to come from that is that the state will rank even higher in the high tax rankings.

There would be some reasonable debate about whether to pay more to get more if the people were paying the cost of #18 and were getting the outcomes of #18.  Would it be reasonable to pay more and be at the cost of #12 if it resulted in outcomes of #12?  That’s not what choice the people of West Virginia are facing.  Right now they’re paying the government for filet mignon and getting served budget brand hot dogs.  All they can reasonably expect from paying more is maybe a brand name hot dog, but they sure as heck aren’t going to see the steak for which they paid their hard earned money.

The better question to be asking is why are the people paying the cost of being #18, but only getting the benefits of being at the bottom?  Where is all the money going?  If the people were only paying in at #41, they should rightly expect to get only #41.  That makes sense.  But when you’re paying for number #18 and getting only #41 or worse, something is seriously wrong.  In any other part of life if people paid a luxury price,they’d expect a quality item. If all they were able to get was a bottom of the barrel knockoff, they’d only be willing to pay a clearance level price.  Yet, since the people really don’t get much say in how much they pay verses how much they get, they’re basically paying for a Rolex and getting a knockoff.

In the last election, the candidates that said that taxes are too high already and people should be getting a better deal for their money won.  That resulted in a large majority for the Republicans in the legislature and a businessman in the Governor’s office.  When the election was over however, the new Governor changed his tune and began pushing for more taxes while the Republicans continued in their position that government should at least live within its means.  The legislature can’t do much about efficiency and quality in the delivery of government services as that is controlled by the executive branch.  All they can do is say no to tax increases, do their best to ease the burdens of laws and regulations and hope that the Governor will initiate efficiency reform in order to accomplish the same or more with no additional revenue.

That’s what the people thought they would be getting when they elected billionaire businessman Jim Justice as Governor.  He promised he could reform the government, eliminate waste, bring efficiency, and make a better business climate so the people would have more economic opportunity.  It sounded good.  It made sense.  After all, a business that is struggling in the marketplace because its operating costs and price point are higher than the quality of its product will allow doesn’t raise the price higher.  It makes reforms.  It cuts waste.  It cuts inefficiencies.  It may even seek to lower its cost in order to regain its value in the eyes of the consumer.  That’s the business sense the people thought they were getting when they trusted and elected Jim Justice.  Unfortunately, that isn’t what they got.

What they got was a Governor who says basically: I’ll tell you just this, I know you’re paying for filet mignon and only getting hot dogs and that’s terrible, so I need you to pay for lobster or else I can’t even give you hot dogs but if you do pay for lobster, you’ll get your hot dogs upgraded to foot longs and you should be as happy as a fly on a cow patty with just that.

Published in: on March 16, 2017 at 3:41 PM  Leave a Comment  
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On Taxation

The issue of taxation is one that divides everyone.  If we are to have government perform certain functions, we have to provide a mechanism to fund that activity.  For the sake of simplicity, let’s put all the various forms of raising revenue through taxes, duties, fees, tolls, etc. under the same umbrella and simply call that “taxes”.  The argument for duties or fees or other forms of revenue collection are really the same as the arguments for different methods of direct taxation.  Those arguments fall into two main categories: tax everyone for common services and tax those who use a service for that service.  Within those two arguments are additional arguments related to progressive and regressive methods.  On top of all of those are the exemptions (to stimulate growth in an area) or targeting (to reduce a given activity) arguments based primarily on the factual basis that taxation of an activity discourages that activity.  From these six basic principles has arisen the most complicated, convoluted and miserable creation of mankind: the various tax codes.

“The federal income tax system is
a disgrace to the human race.”
– Jimmy Carter

Everyone should be treated equally under the law.  Such a simple statement can be agreed to by all, but result in completely different interpretations.  A simple flat tax on income could be considered to treat everyone equally, but it can be argued to take a greater portion of wealth from the less well off who have to spend the majority of their income just on necessities making a flat tax a proportionally larger part of their wealth.  Attempts to make the rate of taxation proportional to discretionary wealth are championed in the form of progressive income taxes with multiple tax rates.  There was a time in the 1950s when the top marginal tax rate was 91% and it seems impossible to argue that anyone being taxed at that rate while others pay nothing is a case of equal treatment under the law.  By the same token, taxing people for services they do not use and may not be eligible to ever use in order to benefit others who pay the same or less also goes against the principle of equal treatment under the law.  This is an argument often heard by those with no children or who have children in private school against having to pay to support public schools for the children of others.  The converse argument is that everyone benefits for an educated populace and it is equal treatment for everyone to pay.  The list of examples could stretch on for volumes, but it is sufficient to conclude that equality is not a term upon which everyone can agree when it comes to a practical application.

“To compel a man to subsidize with his taxes
the propagation of ideas which he disbelieves
and abhors is sinful and tyrannical.”
– George Washington

An argument often lost is the one related to choice.  Government at the consent of the governed is a basic tenant of the American system.  Taxation to support activities to which the majority or even a single person objects is to enable government without consent.  Of course it is a practical impossibility to have each individual citizen express a preference on every expenditure nor is it a sound idea.  Yet the idea that a person should have some choice in how much they can afford to or wish to provide to fund the government is a valid one.

“It would be a hard government that should
tax its people one-tenth part of their income.”
– Benjamin Franklin

The issue of how much someone can afford to pay is not as simple as the amount of money coming in as income.  Someone can be making a decent income but have the expense of children in college that someone else of the same income does not have.  The cost of living in one area can be vastly different than the cost of living in another such that two equal incomes have a very different standard of living.  Someone can be running their own business as an individual and have a large income but only a small portion of that income is profit and therefore has a very low net income.  Income does not necessarily define ability to pay.  Some could argue that the choice to have children and the expense of college was made and thus the reduction in net wealth shouldn’t mean a lower amount of taxation; someone else shouldn’t have to pay more because another chose to have children in college.  The one with children in college could however argue that others with lower incomes get subsidized college for which he or she is not eligible placing that taxpayer at a disadvantage in that no benefit is received from taxes that are being paid at a rate higher than those who did receive the benefit – essentially a double expense.  These issues are often addressed with exemptions, tax credits, deductions and a whole host of ways to try to undo the unfairness in the principal method of taxation.  Of course, each of those adjustments made to undo the harm to one class of taxpayers comes at the expense of a different class which does not qualify for that adjustment and could claim the same unfairness and unequal treatment as a result.

“The power to tax is the power to destroy.”
– John Marshall

Increasingly governments are looking at consumption based taxation.  These taxation methods are based on how much is spent rather than how much is earned.  If you spend less, you pay less.  The main arguments against consumption based taxation come in two forms: its regressive nature and its impact on economic activity.  Consumption taxes on essential items for living do result in a regressive system for the reason previously mentioned.  This can be circumvented in one of two ways: exempt essential items or provide a rebate for the amount of taxes paid on necessities.  Of those two methods, the first is the most frequently utilized because it is the easiest.  Food, clothing, etc. may be exempted from taxation.  While this method may be simple, it is not logical.  It makes more logical sense to calculate the amount needed to be spent for a individual to subsist and then provide a rebate for the tax upon 150% of that amount.  That treats all people equally while removing the regressive nature of the tax.  The second solves itself.  Consumption taxes hurt economic activity in one area if there is a neighboring area with a lower tax rate, thereby encouraging a shift in economic activity to the lower tax area.  They also hurt when the rate of taxation makes discretionary spending prohibitive.  While that can be seen as a negative to consumption based taxation, it can also be a positive.  The ability to circumvent high rates of taxation by shifting economic activity or abstaining from economic activity is a check on unreasonable levels of taxation.  Consumption based taxes become balanced with economic activity at a certain level, thereby identifying a revenue limit for government to function within.

“It might be demonstrated that the most productive system
of finance will always be the least burdensome.”
– Alexander Hamilton

Even with consumption based taxation, one maxim remains a constant: only people pay taxes.  Taxes on businesses are passed along to the consumer.  This a consumption tax must be only on consumer retail purchases or else it just compounds and raises the effective tax rate on the people.  Such a process requires that all businesses be registered with the government and their tax exempt identifier be used for each purchase to properly record exempt purchases and avoid fraud.  Advances in technology have made such a registry easily developed, used and maintained.  As this would apply to all non-persons, the exemptions for traditionally tax exempt entities would still apply.  It is only a matter of appearance that businesses would no longer pay taxes as the reality is that they already do not.  Treating the tax system in this matter would essentially eliminate the complications in the tax code, eliminate the need to file anything more than an individual rebate claim and treat all people equally without being regressive.

“Collecting more taxes than is absolutely
necessary is legalized robbery.”
– Calvin Coolidge

A side issue to this matter are so-called “sin taxes”.  These targeted taxes on certain products and services are put in place to not only raise revenue but also to reduce the targeted activity.  They are a type of self-destructive tax in that they seek to raise revenue through the destruction of that which the revenue is raised.  Whether they are placed on cigarettes, junk food, alcohol, gambling or whatever, the rationale is the same: to reduce the consumption of these items and to raise revenue to combat the negative effects on society as a whole by the use of these items.  If the rationale were put into practice, this would be a sensible method to deal with the societal costs of destructive activities.  Government should not strip people of the right to engage in an activity that is not infringing on the life, liberty or property of others.  Some activities however are more likely to result in unintentional infringement on the rights of others.  Thus the taxation of these things to provide revenue specifically to provide revenue to address the unintended damage of these activities makes sense.  Governments however do not restrict the revenue raised to this purpose.  They utilize it to fund other things, thereby creating a situation where the need for the revenue exceeds the intent to end or at least balance the consequences of a certain activity.  If gambling taxes are used to fund schools, then the government becomes interested in maintaining and even increasing the amount of gambling in order to fund the schools.  If gambling taxes are restricted to fund gambling addiction recovery programs and a proportional amount of law enforcement costs associated with gambling related crime, then the government has no interest in maintaining nor expanding the amount of gambling.

“The government’s view of the economy could be summed up
in a few short phrases: if it moves, tax it. If it keep moving,
regulate it. And if it stops moving, subsidize it.”
– Ronald Reagan

Given the arguments presented, the model taxation strategy is a consumption based system placed solely on individuals with a calculated rebate and potentially additional targeted taxes on specific items that have significant unintentional societal costs, such taxes to be restricted in amount to covering the actual costs associated with the items and treatment for those addicted to them.  Under such a proposed method of taxation, individuals would be encouraged to repair rather than replace, garden, save and otherwise reduce consumption in order to reduce taxation.  This would be most likely with those on fixed incomes and others with tight budgets.  One could even receive more in rebate than one actually spent and thus have a net negative tax rate.  Government would have a restricted source of funding that would remain linked with economic health.  Attempting to raise the rate would only reduce the economic activity and result in no change in revenue.  While lowering the rate would increase economic activity and thus result in no change in revenue.  Government would be forced to keep its expenditures in direct relation to the economic health of the society.  As the economy grew, so would government revenue, but if the government implemented policies that hurt the economy, it would see its revenue decrease in equal proportion.  Tying the government to the health of the economy is a valuable check on the power and actions of government.

“Whether taxation should extend only to property,
or only to income, are points on which opinions
have not been uniform. I am inclined to think
that both should not be taxed.”
– John Jay

What should not be done is to tax in multiple methods at one and the same time.  Taxes on income and then on consumption is just double taxation on the same money.  Taxes on businesses are passed on to consumers and then the consumer transaction is also taxed resulting again in cumulative taxation.  These types of hidden and duplicative taxes are little more than a way for government to increase revenue without the citizen knowing the true rate of taxation.  Government should either tax income, or consumption, or property, but not more than one so that the rate of taxation is obvious to the citizen and the citizen can thereby vote for and lobby representatives from an informed position.  No targeted taxes should be levied on one thing in order to fund unrelated government activities or subsidize another.  Government should not “pick winners and losers” through tax exemptions, but rather implement a tax structure that treats all people equally without being unduly regressive.

Published in: on March 7, 2017 at 4:31 PM  Leave a Comment  
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Ready to get ready

We’ve all heard the TV preachers run through their pep rally type calls for a commitment to Jesus Christ.  Are you ready to open your heart to Jesus?  Are you ready for the Lord to work miracles in your life?  Are you ready to embrace the love of Jesus?  Are you ready for the healing spirit of Christ in your life?  To each question, the congregation shouts out affirmations.  Why then doesn’t the Holy Spirit descend into each of them?  Why doesn’t the Holy Spirit descend into you while you eagerly watch on TV?

It can be a bit of a letdown for us when we reach out to the Lord and are met with silence.  Our hearts are not automatically filled with love and joy.  Our bodies are not cured of all their ills.  Our concerns and worries are not lifted from upon us.  We came.  We said we were ready.  God didn’t answer.  We turn away.

Anyone who has children knows that you can call out to them, “are you ready?” and you’ll get told they are but when you take a look, they’re not.  Why did you say you were ready when you don’t even have your shoes on?  Why did you say you’re ready when you can’t find your jacket?  The answers to those questions contain a variety of convoluted logic and excuses and explanations.  The point is that they weren’t really ready even though they basically thought they were when they answered.  Better stated, they were ready to start to get ready.

That’s how it often is for us.  Are you ready to surrender yourself to Jesus?  Are you ready to embrace God’s love?  Are you ready for Jesus to work miracles in your life?  You may say yes, but God knows the truth.  Sometimes we are really ready, but oftentimes we’re not.  We want to be ready.  We’re ready to get ready.  But, we’ve not really prepared our hearts for the Holy Spirit to dwell within them.

I truly wish accepting the Lord and receiving His grace in my life were as easy as just saying I’m ready.  If only a sprinkling of Holy Water on my body or an anointment of oil on my head would open some divine doorway in my heart to allow the Holy Spirit to flow into me and fill me with joy and comfort.  Wouldn’t that be great?

I attended a funeral once and the preacher said that the deceased lady had a personal relationship with Jesus.  He went on that anyone who had one too knew what that meant.  Then he said, “If you’re not sure if you have one, you don’t.”  That was the moment that I first learned that my knowledge of God and the Gospels didn’t really amount to anything.  I wasn’t sure if I had a personal relationship with Jesus and that meant I didn’t.  He was right.

It wasn’t until a few years later while I was sitting in church that the first awakening came to me.  The sermon wasn’t anything spectacular.  God just knew that I was ready.  I’d been going to church and thought I was ready for quite awhile and never really felt a relationship.  Now, here I was sitting on a pew listening to a fairly generic sermon on the parable of the two sons from Matthew 21 which concludes in Matthew 21:31, “Which of the two did what his father wanted?” “The first,” they answered. Jesus said to them, “Truly I tell you, the tax collectors and the prostitutes are entering the kingdom of God ahead of you.”  All at once, I was struck by the immensity of God’s love through Jesus Christ.  Here Jesus said that these other sinners would get into the kingdom of God ahead of, not instead of, those questioning him.  Even those who crucified His only Son could enter into His kingdom.  That’s a level of grace, love and forgiveness beyond me.  God is so far beyond me.  Through that opening, that crack in my love of myself, the Holy Spirit filled me.  I finally understood what it meant to have a personal relationship with Jesus.

Don’t think that I’ve been walking around ever since with a feeling of love and grace upon me.  Don’t imagine that I’ve seen all the burdens of life lifted from my shoulders.  Don’t suppose that I’ve been cured of all my ills.  It doesn’t work like that. At least not for me as I am right now.  Maybe God is waiting for me to truly be ready for more.  I think I am, but God knows me better than I know myself.  I may never be truly ready to surrender myself until the day He calls me home.  Or, I could suddenly find myself once again filled with the grace of God and the love of Jesus Christ just a moment from now.  As they say, “The Lord only knows.”

Do not be disheartened if you are searching for God but haven’t found Him.  Do not be let down that your prayers seem to go unanswered.  Do not give up when you open your heart to Jesus and it continues to feel empty.  Do not despair.  As Jesus said, “And surely I am with you always, to the very end of the age.” (Matthew 28:20).  Just as you would not take your child outside without shoes or jacket even when that child says “I’m ready” but you stand nearby with love until your child is ready, neither will the Lord take you when you’re not fully ready even when you say you are, but will be there with you waiting until you are.  God is not ignoring you.  God knows that, just like dragging out your child into the cold without shoes or jacket, more harm can be done than good by moving your spirit before it is ready.

This doesn’t mean that you should just sit and wait.  Your children’s shoes would remain off and the jackets remain lost if there wasn’t a push to get ready.  Being ready to begin getting ready is the first step.  That you are ready to seek God and are ready to begin to open your heart to God’s love and are ready to have the blessing of a personal relationship with Jesus are all wonderful things.  There are things you need to do in your own soul before you’re truly ready for the Holy Spirit to dwell within you.  Just as the child hadn’t yet realized the shoes were not on or the jacket was not found, we don’t yet realize what about ourselves needs to be readied before we can go walk with the Lord.

Reading God’s Word, doing all in your ability to live by His law, seeking Him through study and more importantly through fellowship with those who have received His grace, are all ways you can ready yourself to receive it yourself.  I can’t tell you when or how it will happen.  I still am working on it more for myself.  All I know for certain is that it will happen.  I have felt it and know that there is more to come.  I have reached the point at which I truly have faith.  Only God knows when I will be ready for more and when you’ll be ready.

 

Published in: on March 2, 2017 at 12:14 PM  Leave a Comment  
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