Sunday, October 2, 2016

You Really Need to Consider the Facts

We're coming down to the wire for this election and people make their minds up based on sound bites, mostly which have little or no basis in fact.

If our education system was doing the job it was set up to do all the lies and innuendos could not work. Here are a few points which I would bet most people don't know or understand.

Regarding our almost 20 Trillion dollar debt. To think about a number so big is in itself mind-boggling. Now to put this into context. The Fed has held down the interest rate for all these many months. How does that enter into the economy, into your life? Well just think about this. At the beginning of Obama's term in office, many retirees or soon to be retirees had their retirement savings in bonds, in CD's, in Treasury bills. Their plan was that the interest from these investments would be their retirement income. Holding the interest rate to almost zero has demolished these plans. Consider a person with $300,000 in his/her retirement plan. When the interest rate was 6% that meant a yearly income of $18,000. That plus social security meant an income that could support a modest lifestyle while maintaining their capital.  When the interest rate fell to and settled on less than 1% it devastated their retirement and many of these people are now forced to continue working well into their 70s and 80s.
 401's. Most young workers probably think that the 401 retirement plans have always been there. Actually the programs was first established in 1978 and since that date has had many tax isssues. In the beginning it was strictly for executives and high earners. By 1983 nearly half of large employers either were offering or planned to offer the plan and by 1996 there were over 30 million participants.It wasn't until 2006 that automatic enrollment took effect so many current retirees did not have the 401 as an option. The only vehicle left for investment for many is the stock market which has been artificially inflated because of all the money printed by the Treasury and for which there is no place for it to go other than the stock market or overseas.  

It is only because the Fed has held the interest rate down that Obama has even had a chance to brag about his economic success. Looking again at the national debt of almost  $20 Trillion dollars. Think what would or will happen when the interest rate on that debt rises. If it goes up by even 1% that would be an additional $200 billion dollars per year, if it increased by 3% that would be $600 billion dollars per year. According to budget information from the www.insidegov.com we are currently taking in $3.34 Trillion and spending $$3.95 Trillion for an annual deficit of -$616 Billion. When the interest rate goes up by even 1% that would mean a deficit of -$816 Billion which will further bring down our economy.

Remember when Obama took office the national debt was about $10.7 Trillion which was the accumulation of all the Presidents from Washington throught GW Bush.

Now to current promises and plans within the campaign. When Hillary says she will tax the wealthy everyone on the left cheers. Remember this, when a politicial talks about the tax rate they are talking primarily about the rate on "earned income". That is on wages and salaries, it is NOT on investment income which is where the wealthy earn their money. When she talks about taxing the rich by raising the income tax rate she is really not talking about all her rich cronies.
When she talks about raising the estate tax rate again she is not talking about the rich because the rich have their own tax attorneys who set them up with foundations and every other conceivable loophole that is in the tax-code and they therefore do not pay any estate tax when they die. The current federal estate tax exemption is $5.43 million which lets most American taxpayers off the hook.
The point I am making is that all these "big Deal" promises or charges are false.

The biggie this morning is that Donald Trump has not paid taxes in years. First, of course, as an employer he pays a great amount of tax as an employer, he pays the employer share of FICA, workers comp, unemployment tax, and on and on. He pays for all the regulations which the Federal Government imposes on business and which Obama has created in abundance. He pays huge amounts in Real Estate tax throughout the country on property he owns. I think most of us would love to have, as our income,  just what Trump pays in taxes.
Trump had some tremendous  business losses in 1995 and which in turn created carry back or carry forward losses for Federal Income tax purposes. The tax law gives the taxpayer the choice of carrying back 3 years or carrying forward 15 years. This is law, perfectly legal and used everyday.
It is perfectly fair but most people will never know or understand this when a soundbite is running across the headlines saying Trump has not paid taxes in years.

Trump says dumb things sometimes and he is without a doubt very very interested in telling us about his successes but let me ask you to do this. Compare what Donald Trump has accomplished to what Hillary Clinton has accomplished. Trump has earned what he has in the Capitalistic Market Place. He has been out there winning by using his intellect and his ability to do deals and by keeping his eyes on the bottom line. He has earned it. Hillary on the other hand has lived her entire adult on the back of taxpayers, she has never contributed to the economy in any way shape or form. And now since she and Bill left the Whitehouse broke (in her words)  they have managed to accumulate billions of dollars on speech making and writing books that don't sell. Can you really believe that? If so I would love to hear your explanation.

I hope this will give some people food for thought or ammo for arguing their point. Remember when you don't know something...look it up. Just ask Seri...she may not know everything but she knows a lot.



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