Friday, September 28, 2012

Romney and the "47%"

The Romney statement concerning the “47%” is accurate in terms that 47% of the Americans with income pay no federal income tax.  Federal income tax is totally different from Social Security and Medicare taxes which are subjected to wage income only.

I have been voting since 1974. In all these years, I have yet to receive any mail from a democrat.  In the state of Indiana in order to vote in a primary, you must identify party affiliation and this is determined by which party you “believe” will vote more for.  This information is available from the Indiana Election commission and is used by all parties to determine who to target campaign information.  Since I have never voted in a democrat primary, no democrat has ever sent me information on their campaign. Does this democrats will not represent me, absolutely not?  It just means with their limited resources, they are going to reach out to voters they may be able to sway.  Romney’s reference to the “47” is a blanket statement where it would be difficult to change many within this groups’ minds.

I did not take it personally and in fact it changed my view of Romney. I like a candidate who I can understand and a candidate who makes this type of statement shows he is a logical thinker.  What I cannot stand or illogical politicians who promise many things and have no idea how to deliver.

Romney had not proposed detailed plans which I can accept.  A detailed plan by one person will not represent the congress.  What I like is his conceptual ideas and his basic premise of what governments’ responsibility is.

Our tax code is a mess.  We have different forms of income with different tax rates that apply.  However, many think all income is created equal when in fact it is not.  Wage income, for the majority, is pretty predictable. You work so many hours and you get paid at a particular rate. Interest and dividends are some one predictable, but subjected to change based on the economy.  Capital gains are defined as short and long term.  A person invests money in some entity with the objective of making a profit. Sometimes you win and sometimes you lose. Capital gains are most likely the most un predictable income of all.  People invest in the unknown when there is something to gain. If there is no incentive to invest, less investment will be made, leaving people to take the save choice, banks or mattress.  This option decreases velocity of money through the market.

Right now our economy has lots of money sitting on the side lines because no one knows what taxes will be, how congress will handle deficits and world markets. We are in uncharted waters.  We need a person who understands math, knows that you cannot create something from nothing and that simply moving a chair from one side of a ship to the other does not make things different.

I would like to see all deductions eliminated and the tax rates lowered to achieve the same revenue.  I do not support deductions for mortgage, charity, healthcare, personal losses, etc that are found on schedule A.  What a person spends there money on, is up to them and they should not be subsidized by others. All we are doing is making the tax code more complex.

The child tax credit and tax credit for higher education are also unnecessary.  Those without children are subsidizing those with children. Those making use of the higher education tuition credit are being subsidized by those who are not seeking higher education.  In simple terms, those who make use of these tax credits are receiving investment from others who do not benefit from their investment.

One last parting comment. The last general federal budget surplus was in 1957, 55 years ago. Every year since 1958 the US congress and President have authorized spending more than federal general revenues.  It is not right to borrow money for appropriations, we the current voters want, but do not want to pay for, so we borrow the money and pass the bill until our children and grandchildre

NBC-33 Debate poll results from 2002