DarkStar Spouts Off

Tax Fairness?

This calculation is amazing.

If someone makes 5 times as much income as someone else, should they
pay 5 times more in taxes? That surely meets Clinton's definition of
fairness. Higher income individuals make more and they would then pay
much more in taxes (indeed, 5 times more). It is doubtful that the
higher income individual gets 5 times the benefits, but his higher
taxes make it possible to provide government benefits to lower income
individuals.

The wealthy would pay much more in taxes if everyone paid the exact
same percentage of their income in taxes. You don't need higher tax
rates on those who earn more money. Even marginal tax rates that
declined with income would still ensure that higher-income individuals
paid more taxes.

Possibly Democrats are relying on people not realizing how quickly
Federal income taxes rise with income. Suppose that you have two
married couples with two children and no other deductions. The only
difference between these two couples is that one makes $60,000 per
year and the other makes five times more, $300,000. The $60,000-a-year
couple would face a federal income tax bill of $1,466 this next year
if the tax rates remain unchanged (the calculations using TurboTax are
available here). The $300,000 a year couple faces a tax bill of
$71,134. That isn't five times more in taxes to match their 5 times
greater income. It isn't 10 or even 20 times more in taxes. It is 49
times more in taxes.

If you think that this is unusual, try adding on education and
childcare expenses or other credits and deductions that are only
available to lower income individuals. The Alternative Minimum Tax
also makes if much harder for higher income individuals to benefit
from taking deductions.

Why should a couple that makes 5 times more money pay 49 times
more in federal income taxes?

That really is not the way things should be taxed.

 

Fannie, Freddie did not cause the housing crisis

Fannie, Freddie did not cause the housing crisis

This is an old theme, but it bears repeating when new information is presented. The right keeps blaring that liberals caused the housing bubble by showering money upon poor people through Fannie Mae and
Freddie Mac. So it must be repeatedly countered. I have no love for Fannie/Fred. Almost nobody other than the Wall Street Journal's editorial page was more critical of them than me in the years leading up to the disaster. They were ghastly government/private mutants, with taxpayers taking on all the risk and shareholders reaping incredible profits until the end.

But the fact is that they played a relatively minor role in the subprime bubble. They got into subprime only after they started losing market share to Wall Street, which was leading the subprime and Alt-A parade. They never had more than 13 percent of their originations in subprime. The table below shows the action. It's from a new "autopsy" of Fannie and Fred, of which the NYT's Economix blog has a good summary.

The vast majority of loan defaults have not been made by the poor. And Fannie & Fred weren't lending much to low-income folks anyway.

Honda Hybrid Batteries, Suck...

That's the title I'd give the article, along with the subtitle "Honda Hides the Facts".

When Honda Motor Co. rolled out its latest-generation Civic Hybrid, it was sold as the automaker's green car of the future.

But five years into production, Honda has discovered that its high-tech batteries can die years early — a potentially expensive flaw that the automaker has been addressing with a software update that many owners claim has made the car less environmentally friendly.

Jason Marchesano, a computer consultant from Overland Park, Kan., said the battery in his 2007 Civic Hybrid started losing its ability to hold a charge last year. Rather than replace the battery, which was under warranty, Honda loaded a software program into the car's computer that he said made the car sluggish and slashed the vehicle's gas mileage.

When he complained again several weeks ago, Honda installed a second software update, cutting efficiency further. Today, he gets 33 mpg, compared with 45 mpg when the car was new.

Marchesano and other hybrid owners fear that Honda has decided to sacrifice their vehicles' performance in order to avoid the huge cost of replacing thousands of faulty batteries, which are still under eight- or 10-year warranties and cost as much as $3,000 each to replace.

I'm just saying, again, that hybrids, with their advanced batteries, aren't all that they are claimed to be. There is still that nasty factor of how these batteries will be disposed of, and that goes for CFL lights as well.

Let Me Get This Straight

President Obama is trying to talk the G20 countries into keeping their spending in place. And, rightly, the SOCIALIST countries in Europe are saying HELLTOTHENO and maybe the USA should be focusing on
deficit reduction.

What's wrong with that picture?

AT&T Gives Verizon and Android More Business

Just give Verizon and Android more money.

NEW YORK (AP) -- In time for the widely expected launch of a new iPhone model, carrier AT&T Inc. is pulling in the reins on data usage by its customers with smart phones and iPads.The sole U.S. carrier of the iPhone is introducing two new data plans, starting June 7, with limits on data consumption. They'll replace the $30 per month plan with unlimited usage that it has required for all smart phones, including the iPhone.

With the change AT&T is adopting a carrot-and-stick approach to assuage the data congestion on its network,which has been a source of complaints, especially in cities such as New York and San Francisco that are thick with iPhone users. The new plans will take effect just as Apple is expected to unveil the next generation of its iPhone at an event Monday in San Francisco.

For the sake of their network, I understand the data caps. But this will not be seen this way by consumers.

If You Don't Have Gold, Guns, and Farm Land, You're Hosed

Auction of Spanish debt close to failure

By David Oakley

Published: May 19 2010 03:00 | Last updated: May 19 2010 03:00

Spain came close to its first debt auction failure yesterday, highlighting the funding problems for weaker eurozone economies.

The government's difficulties in selling €6.44bn ($7.96bn) in one-year and 18-month bills sparked worries over its 10-year debt auction tomorrow.

It planned to issue €8bn yesterday, but only just attracted that amount of bids, with yields at record highs. This prompted debt managers to reduce the size of the sale by €1.56bn. Normally a government bill auction would be covered at least 1.5 times.

Steven Major, head of fixed income at HSBC, said: "The Spanish auction was very disappointing and does not bode well for further issuance. It's becoming more apparent just how difficult it is for Spain, which is a big worry so soon after the launch of the international rescue package.

I'm going home to cry...

BP On The List

I like Amoco gas. It seems to do well in the car that I have and the car that my wife has. For as long as I have been driving and putting gas in the care, Amoco gasoline has always treated my cars well.

So, it is with much sadness that I have to add BP to the list of companies I boycott.

Have You Noticed?

Have you noticed the media is now talking up the "possible" need for cut in services or a raise in taxes? Of course that means the media is talking up raising taxes. Right now, the talk is VAT tax but more is in the works.

More later...

[ UPDATE ]

From Bernanke 4/7/2010:

That brings me to two interrelated economic challenges our nation faces: meeting the economic needs of an aging population and regaining fiscal sustainability. The U.S. population will change significantly in coming decades with the combined effect of the decline in fertility rates following the baby boom and increasing longevity. As our population ages, the ratio of working-age Americans to older Americans will fall, which could hold back the long-run prospects for living standards in our country. The aging of the population also will have a major impact on the federal budget, most dramatically on the Social Security and Medicare programs, particularly if the cost of health care continues to rise at its historical rate. Thus, we must begin now to prepare for this coming demographic transition.⁶

...

To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above. These choices are difficult, and it always seems easier to put them off--until the day they cannot be put off any more. But unless we as a nation demonstrate a strong commitment to fiscal responsibility, in the longer run we will have neither financial stability nor healthy economic growth.

Paul Volcker on the VAT and energy tax (4/7/2010):

White House adviser Paul Volcker said the United States may need to consider raising taxes to control deficits.

He also said a European-style value-added tax could gain support. 

The former chairman of the Federal Reserve who is an outside adviser to President Barack Obama, said the value-added tax "was not as toxic an idea" as it has been in the past, according to a Reuters report.

Volcker made the remarks at a New York Historical Society event Tuesday night. Volcker also suggested that a carbon or energy-related tax may become necessary to bring the budget back into check. 

The Cost of Health Care

This is the result of the taxes expected they now have to pay.

Insurer Prudential Financial Inc. said Monday that it will take a $100 million charge in the first quarter in relation to the recent health care overhaul legislation.

The life insurance and annuities provider said in a regulatory filing that it will take the charge against earnings in the first quarter.

Prudential joins a growing list of companies that have said they will take accounting charges because of the health care bills. AT&T said last week it would take a $1 billion charge in the first quarter. AK Steel Corp., 3M Co., Caterpillar Inc., Deere & Co. and Valero Energy have also said they would take smaller charges.

AT&T is taking a $1 billion charge; $1 billion.

Where Is The Incentive To Work

Will someone answer a question for me? If this goes through, what happens to the incentive to work?

The Obama administration plans to overhaul how it is tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday.

Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be the amount of unemployment insurance, for three to six months. In some cases, administration officials said, a lender could allow a borrower to skip payments altogether.

The new push, which the White House is scheduled to announce Friday, takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment. While the initial mortgage crisis that erupted three years ago resulted from millions of risky home loans that went bad, more-recent defaults reflect the country's economic downturn and the inability of jobless borrowers to keep paying.

The trouble, today, in many homes with teenagers and young adults is the parent or parents don't push the idea of their children working. As such, many just don't grow up and learn to support themselves.

So, I ask, again, if you have no reason to fear not being able to make your house payment, what incentive do you have to work?

The Dominoes Are Starting To Fall

The dominoes are starting to fall.

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.

Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances.

“When the level of the trust fund gets to zero, you have to cut benefits,” Alan Greenspan, architect of the plan to rescue the Social Security program the last time it got into trouble, in the early 1980s, said on Wednesday.

So, are you invested in precious metals, lead, and personal weapons?

Surprised?

Are you surprised?

March 25 (Bloomberg) -- More than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report.

The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a joint report today. The figure, which measures payments at least 30 days late, climbed to 57.9 percent for changes made in the prior 12 months.

I'm not. If you couldn't afford the loan before, what makes anyone think you can afford it after "modification"?

Closing Schools

The KC school closings have to be done from all of the reading I've done about it. It's the future of all cities and, as demonstrated in Baltimore earlier this week, it is already happening in Catholic school. Now is also the perfect time to address the structural problems of urban public schools that the schools CAN address.

http://www.google.com/hostednews/ap/article/ALeqM5itXI7J7kJ7Eka6sEx9IofeKycRqgD9ECGDNG0

KANSAS CITY, Mo. — Kansas City School Superintendent John Covington says the decision to close almost half the district's schools was difficult and painful but "unquestionably the right thing to do."

The Kansas City school board voted 5-4 Wednesday night to close 29 of the district's 61 schools in an effort to stave off bankruptcy. The schools will close at the end of the school year.

During a news conference Thursday, Covington thanked the board for its vote. He said the district was spreading itself too thin by educating less than 18,000 students in 61 schools.

Despite the close vote, Covington says he's confident the board and district administration could work together to complete the massive restructuring, which includes laying off 700 employees, including
about 285 teachers.

More later.

[ UPDATE ]

If schools are barely filled, you can't continue to keep the school open without shifting school children around. If the children get shifted around, then it seems some people are going to have to be shifted around and/or fired. The administration HAS to be reduced.

It's a good opportunity to remove non-functioning teachers, but I bet the oldest teachers will be the ones who are let go, because the oldest teachers are the most expensive.

Financial Cosa Nostra

Goldman Sachs, to me, is THE Financial Cosa Nostra. Here is what I wrote in comments on P6's blog the other day:

Goldman Sachs is hard core gangstah.

They are set up to "help" Greece to prevent Greece from defaulting, meanwhile, they are shorting Greece, betting that they will default.

Same with the U.S. financial meltdown.

Pure. Gangstah. Ish.

So, I felt quick satisfaction when I read this:

The financial tumult now unsettling Europe came to Washington on Thursday, as Federal Reserve Chairman Ben S. Bernanke said that the federal government is looking into the role U.S. banks may have played in the Greek fiscal crisis.

The Federal Reserve and Securities and Exchange Commission are seeking information about whether Goldman Sachs and other U.S. firms helped set up financial transactions over the past decade that effectively hid the amount of debt Greece was taking on. Another potential issue is whether banks and hedge funds, by taking big bets that Greece would default, are creating a self-fulfilling downward spiral for the Mediterranean nation.

"We are looking into a number of questions related to Goldman Sachs and other companies and their derivatives arrangements with Greece," Bernanke said, testifying before the Senate banking committee on Thursday.

Addressing concerns that financial firms have been engaging in trades to bet on a Greek default, Bernanke said that "using these instruments in a way that intentionally destabilizes a company or a country is counterproductive, and I'm sure the SEC will be looking into that."

But, then reality smacked me around harder than Al Sharpton smacked around Tavis Smiley.

The SEC? The same regulatory body that was told, multiple times, about Bernie Madoff and did nothing? Oh, well.

Same ole, same ole.

Spouting Off On: Enslaving Our Children To Debt

Something I wrote earlier today to an email list:

The reason why I have some alignment with the Tea Party is because with all of the government spending, we are destined to burden our children with the debt being amassed under our watch. For those of us who have been in serious debt and have worked our way out of it, I view the use of the word enslavement as being appropriate.

When I had serious credit card debt, and realized that paying what I thought was a lot, was really paying a few dollars over the credit card interest and fees, I felt like a slave. What are we doing to our children?

In Maryland, when O'Malley gained office, the first thing he did was spend down the rainy day fund to the legal minimum. He then gave raises to people in his cabinet. This was despite the fact the outgoing governor said there was a multi-million dollar structural deficit coming.

The next year, O'Malley kept up the spending spree along with the state assembly. He said he "cut" government by not filling open positions but filling new positions. They then has a "special session" to cover the debt where they raised the sales tax and put slots on the next election ballot. They also used one year inflows into the government from the federal government to hide the deficit.

This year? No new taxes, but again the budget included one year inflows from the federal government. Now, ALL state legislators are saying they are going to have to "revisit" the budget next year -- AFTER THE NEXT ELECTION CYCLE -- and that "deep cuts" and "revenue enhancements" will have to be a part of the "discussion." This means, they are going to raise taxes.

This is happening on the federal level only it is much much worse. And, seriously, I wonder, and fear, the idea that future tax increases as well as the use of "fees" and other things, will negatively affect my living standard just because I'm "wealthy", whatever arbitrary level that is.

The AMT is unfair and will hit the middle class hard. The congress-criters know it and don't do anything to seriously revamp it because they depend on the money the AMT brings in.

This CAN'T continue. Greece is our future.

And I haven't even mentioned Social Security going into the red much sooner than estimates given, or the under funding of pensions, or the under funding of the government pension insurance, or...

Comments R Me: I'm Not Gloating

This is what I wrote in the comment section on a post by P6:

Simply put, the congress-criters start the session, pass so many laws that I bet you can cross the street, eat a nice meal, fart afterwards, come back to where you started, and you have broken a number of federal laws.

The congress-criters, in their bids to maintain power, send pork the way of their supporters, and create programs that need to be funded, for life because there is rarely, if ever, a sunset provision. The costs of these things builds up and builds up and builds up to the point where taxes are going to have to be raised, and there is ALWAYS a point where those who get hit by the taxes, start to do things to avoid them. Even the "every day man", who can, itemizes his income tax return to get more money back/pay less taxes.

Add that to the fact that the Social Security tax income limit is going to have to be removed, and then they are going to have to raise the minimum age, AGAIN, and probably means test it, so that it doesn't go bankrupt, and the mutual fund 401(K) market has to go boom with the continued sale of stocks for retirees, and you have yourself a coming generational war that is coming that will not be pretty.

I'm really not gloating. I just hope you smart people take off the ideological rose colored glasses and look at the reality of the situation.

We're being screwed in our backsides without benefit of AstroGlide.

One World Banking Tax?

http://www.breitbart.com/article.php?id=CNG.0bad2cbd08a59bba35eea63e3cbaa8c5.9a1&show_article=1

Britain stepped up its push for a global tax on financial transactions Monday as part of broad plans to reform the banking sector following the financial crisis, amid concerns that the US may act alone.

Prime Minister Gordon Brown insisted that his proposal for an international levy on financial transactions was "gathering support around the world," a day after Chancellor Alistair Darling hit out at US proposals.

Meanwhile Paul Myners, the financial services minister, said international agreement on an extraordinary bank levy "would be the most important legacy" of the state-led response to the financial crisis.

Over. My. Dead. Body.

Playing For Keeps

This is an example of playing for keeps.

Personal friends of employees at Google, Adobe and other companies were targeted by hackers in a string of recently disclosed cyberattacks, raising privacy concerns and pointing to a highly sophisticated operation, security experts said.

Cybersecurity experts analysing the attacks said the hackers spied on individuals and used other sophisticated techniques, making them extremely difficult to stop. The disclosures come amid renewed alarm over cybersecurity after Google said it had been the target of a series of cyberattacks from China.

Think about how much information is on the Internet grid. Think about the number of businesses that have been blackmailed by cyber thieves.

This happened just because Google said something, publicly. What else is happening we don't know about?

Financial Gangstahs!!! [ Updated ]

You offer "financial packages" that you tout are safe, and actually spend time and money pushing as sound investments. MEANWHILE, you perform financial transactions that essential BET AGAINST the financial packages that you tout as safe.

Lloyd Blankfein, the chief executive of Goldman Sachs, took the brunt of the questions, especially on his firm's practice of selling mortgage-backed securities and then betting against them.

"I'm just going to be blunt with you," Angelides told him. "It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars."

Blankfein replied: "I do think the behavior is improper. We regret the consequence that people have lost money in it." Later, though, he defended the firm's actions as "exercises in risk management."

DAMN! THAT'S GANGSTAH AND THAT'S WHAT THE FINANCIAL MAFIOSOS ADMITTED TO DOING WHEN THEY APPEARED IN FRONT OF CONGRESS!

Baltimore City Gets Slapped

Baltimore City officials sued Wells Fargo saying their "predatory lending practices" led to the decline in the city.

A federal court judge on Wednesday dismissed Baltimore's landmark lawsuit against Wells Fargo & Co., saying it was "not plausible" that the mortgage giant triggered millions of dollars in damages, as the city claimed, by causing increased foreclosures through racist, predatory lending.

"The alleged connection is even more implausible when considered against the background of other factors leading to the deterioration of the inner city," U.S. District Judge J. Frederick Motz explained in a six-page memorandum opinion accompanying the dismissal order. He pointed specifically to Baltimore's "extensive unemployment, lack of educational opportunity and choice, irresponsible parenting, disrespect for the law, widespread drug use, and violence."

I think the people who brought the suit need to be slapped around a lot and then PERSONALLY made to pay court costs.

WT???? I.R.S. Hypocrisy

[ UPDATED ]

This is the definition of hypocrisy.

The I.R.S. wants to regulate tax preparers to "reduce errors".

The Internal Revenue Service plans to test, register and screen people who get paid to prepare tax returns, stepping into a virtually unregulated business on which millions of Americans depend for crucial financial services.

The agency wants to crack down on preparers who do shoddy or fraudulent work and create a way for consumers to make more informed choices -- though the moves could increase the cost of having tax returns prepared.

Yet, the I.R.S. question error rate error rate for questions answered is, I think, 40% 20%, AND, it has been ruled that if you base your return on answers the I.R.S. gave you, and the answers were wrong, you are still liable for the tax AND penalty if the I.R.S. audits you and finds the error!

Industry Town Question

Name any "company town" that hasn't gone into despair after "the company" left. You can change company to industry and come up with examples.

I'll start off with a question that can be used to generate the answer I'm seeking.

What cities and/or towns in North and South Carolina haven't gone into despair because of the loss of the textile jobs?

If you can't come up with an example, then my follow up question is, why do some people seem to expect Detroit to be any different?

Just asking...

"Wealth" Question

If you are not invested in gold and precious metals, and by invested I mean you actually have the gold or precious metal, and not in the form of jewelry, do you really have any wealth?

The U.S. dollar is fiat money.

So, do you have faith in the existence of your 401(K), 403(B) when you need it?

Maine Does Health Care

Maine Finds a Health Care Fix Elusive

Maine’s history is a cautionary tale for national health reform. The state could never figure out how to slow the spiraling increase in medical costs, hobbling its efforts to offer more people insurance coverage. Many on Capitol Hill have criticized national reform legislation for similarly doing little to tame costs.

To Ms. Snowe, Maine’s past shows that change, while needed, should be incremental because mistakes are common. This is among the reasons she opposes an immediate public insurance option. “I mentioned to the president that people can’t digest everything at once,” she said in an interview.

To conservatives, Maine proves that government efforts to strictly regulate the nation’s health insurance market are doomed. Many of the reform proposals circulating on Capitol Hill have already been tried in Maine.

“These reforms are very well-intentioned, but in reality they have yet to produce the promised results or even be financially sustainable,” said Tarren R. Bragdon, chief executive of the Maine Heritage Policy Center, a conservative research organization in Portland.

A state does some of the same things that congress wants to do, and the costs still rise, yet congress says these are the things that will bring down costs?

You've Been Jacked By The State

This is just wrong.

Reporting from Los Angeles and Sacramento - Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners -- holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear.

Technically, it's not a tax increase, even though it may feel like one when your next paycheck arrives. As part of a bundle of budget patches adopted in the summer, the state is taking more money now in withholding, even though workers' annual tax bills won't change.

Think of it as a forced, interest-free loan: You'll be repaid any extra withholding in April. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less.

This is straight UP gangsta!

Who is to say the state won't issue an IOU on your refund?