The Importance Of A Permanent Tax Policy

In a previous post entitled, “The Government Encourages Small Business Owners To Fire Employees” I discussed how my friend Zach let go of one of his employees to make room to pay for potentially $30,000-$40,000 more in taxes in 2011 and beyond.  As you all know, the government won’t be squeezing small business owners anymore thanks to the tax compromise signed by the President on Friday Dec 17, 2010.

The tax compromise adds some $850-$900 billion to the Federal deficit over 10 years, which is a big problem if the economy and therefore revenue collection doesn’t pick up during this time.  Our children will pay for our excesses and that just doesn’t seem fair.  But what about Zach’s state of mind and his fired employee who is paying the price now?

I grabbed a quick beer with Zach last night and asked him how pumped he was that he no longer has to budget for increased tax expenses going forward?  “A little bit, but not so much“, Zach replied.  What a downer, I thought to myself as I believe a tax compromise is good for all Americans.

THE CONVERSATION

People Make A Lot More Money Than You Think

I want you guys to visualize a world where there is no media schadenfreude.  Imagine never reading stories debasing others out of delight in order to make the writer and you feel better about yourself.  My how nice the world would be!

The reason why there are so many negative articles out there is simply because there are a lot more people making a lot more money and doing much greater things than one realizes.  If you can’t make it on your own, it’s easier to just try and bring others down.  Don’t do that!

You know from a previous article that $60,000 to $75,000 is such a silly low range for what researchers and the media think is the ideal income level where happiness rises no more.  It’s so silly because that is clearly not the case if you ask anybody who has ever made more.  Is it a coincidence that researchers and reporters make on average not much more than $75,000?  Of course not and therefore it helps makes them feel better about their wages.  It’s perfectly rational.

THE SECRET MOVEMENT

Nature vs. Nurture: How Important Are Parents To Our Success?

Yale law professor and mother of two Amy Chua penned an incredibly fascinating article entitled, “Why Chinese Mothers Are Superior” on the WSJ.  Professor Chua is a first generation American who went to Harvard undergrad and then to Harvard Law School.  As a tenured professor teaching at the most prestigious law school in the world, I feel for her kids first and foremost!  Think about all the expectations that are put on them since her husband, Jeb, is also a tenured law professor at Yale.

Let’s say you had parents who walked 10 miles to school every day.  Do you think there’s a snowball’s chance in hell that you will have a car in high school?  You might, but you’d feel guilty every time you get behind the wheel and your parents will likely remind you as well.  In the end, you’d probably compromise and either bike to work, have your parents drop you off, or walk yourself.

Here’s a non-offensive excerpt from her article where she justifies calling kids names such as “lazy”, “fatty”, “worthless”, “stupid”, and “disgraces” when they aren’t performing up to par:

“As a parent, one of the worst things you can do for your child’s self-esteem is to let them give up. On the flip side, there’s nothing better for building confidence than learning you can do something you thought you couldn’t.”  Amy Chua

I agree with her quote, but I definitely don’t agree with calling one’s kids names to shame them into conforming.  The main issue I have with Amy’s view is that she pits Asian mothers against “Western Mothers” who are by default deemed inferior.  I would be incredibly insulted if I was a Western Mother because who is Amy to impose her dictator-like ways on me.  Amy talks in stereotypes all article long about how Asian children always seem to be gifted in math & sciences and music.  Amy argues that it is in fact no coincidence since Asian mothers are such master motivators and disciplinarians.

NATURE vs. NURTURE

Unemployment Checks Are The Best Form Of Economic Stimulus

I’m so excited, I can’t stand it!  So excellent to hear the White House agreeing with Congressional Republicans to extend tax cuts for 2 years through 2012!  As a concession, the Republicans agree to extend unemployment insurance for another 13 months.  That’s not quite the  “Shock & Awe Yeah” proposal I have of 260 weeks of unemployment benefits, but 155 weeks is still pretty damn good!

Deploying an enormous unemployment insurance safety net could very well jump start the economy or bring us back to socialism.  I take the former stance, as a bullet-proof safety net causes employees to work harder, take more risks, and be more creative since they no longer have to fear losing their jobs.

Getting 13 months of extra unemployment benefits after getting 99 weeks sounds like a lot.  That said, if you were unemployed, hell yeah you’d want to the extra 13 months!  Now that compromise is here between our nefarious, I mean selfless leaders in Washington, the next step is dealing with all this QE2, QE3, QE4 nonsense!  There are much better ways to spend $600 billion than buying back US treasuries to stimulate the economy.

THE NEXT STEP

Are Democrats Against A Middle Class Tax Cut Extension?

Senate Republicans blocked the middle class tax cut extension passed by the House earlier in the week.  There’s a lot of finger pointing by the Democrats who say that the Republicans are holding the middle class hostage.  Is that really the case though?  If the Democrats know their bill will get shot down by Republicans due to perceived inequality of only providing tax cut extensions for certain income classes, then in reality, it is the Democrats who are holding the middle class hostage for trying to keep pushing a bill which won’t get passed!  New legislation starts with the House and moves upwards until it finally hits the President’s desk to vote.

BLAMING GETS US NOWHERE