Wednesday, April 15, 2009

Thoughts on Tax Day

The sun has set on another April 15, and here in the eastern time zone, folks have 2 hours and 12 minutes to get their returns to the post office.

Hating taxes seems like the American birthright. The colonies severed the bonds of the mother country in part because of unfair taxation policy that treated the colonies like an 18th century ATM. Apparently, in the intervening years, we have lost the distinction between fair and unfair taxes. The Revolutionaries' problem with things like the Stamp Act wasn't that it was a tax. It was that it was a tax levied by by the British Parliament. Colonists questioned Parliament's authority to levy taxes on colonists without consulting with the colonial governments who handled administrative issues in the colonies. It wasn't even a matter of a lack of Parliamentary representation. Parliamentary representatives at the time represented the good of the British Empire as a whole, including the colonies. In a way, everyone was represented, and no one was. Procedures existed for petitioning Parliament for colonists to sit in Parliament, but the logistics of actually having a colonial delegation were nightmarish, and besides, the colonies never asked.

We make the mistake of teaching this level of nuance in high school, at an age where students retain very little information about anything that does not have a cute butt. As a side note, this is why we need to teach American History using less of Gilbert Stuart's portrait and more of Horace Greenough's 1841 statue showing George Washington half naked and ripped. Since taxation policy isn't sexy no matter how you slice it, opposition to unfair taxes became opposition to any taxes. The annual national grumbling on April 15 doesn't help matters. Kids grow up hearing mom and dad moan about taxes in the middle of April, and the dislike of taxation transmits to another generation.

People hate taxes. You know what people don't hate? The stuff taxes gets them. They like Social Security and Pell Grants. They like food and drugs that don't kill them. They like roads (note to the department of transportation: they like roads that don't sprout the same potholes like clockwork every October even better). They like those military snipers who took out the Somali pirates. All of that costs money, and money comes from taxes. You really want to Support Our Troops? Stop bitching at the very mention of a tax increase, since taxes are how we pay our troops, and if we don't have enough tax money, we can't pay the Troops.

I actually don't mind paying my fair share of taxes. I get a lot in return. The police come when I call. The township keeps the road in front of my driveway from flooding. A taxpayer-funded program got me into college, and federal student aid kept me there. Without taxes, I'd probably still be in a job where I showered when I came home to get the nauseating combination of fryer fat and cigarette smoke out of my hair. So I'm OK with taxes. Not OK enough to pay more than I need to, but I don't mind paying for all the stuff government gives us.

Here's the kicker, though: I don't actually pay taxes. At least not this year. We paid the usual FICA stuff for Social Security and Medicare, but our income tax this year was $0, even with a gross income that places us solidly middle class for a family of two. We have an honest-to-goodness accountant (not the people at H&R Block) do our taxes and consult with us throughout the year on the tax consequences of major financial decisions. He advises us of ways we can reduce our taxes, but has never suggested anything more exotic than planning IRA contributions to maximize the available tax credit.

During the campaign, Obama talked about raising taxes on people earning more than $250,000. People oppose this, mostly because we want to believe that one day, we will be that person earning $250,000 a year. It's April 15, the time of year where our financial lives are slapped before us in black and white. It's a great time to assess the reality of your financial situation.

Take a look at Line 22 of your 1040 form. That's your total income. How close is it to $250,000? Be honest. If you need to, take a calculator, divide 250,000/total income and see just how many years it takes you to earn $250,000, gross. If that number is, say, four, can you envision a realistic scenario wherein your income will quadruple before you retire? If this scenario involves winning the lottery, factor in that any jackpot less than $5 million still leaves your 20-year annuity payments below the $250,000 threshold. For you hourly workers, can you envision a scenario where you are making $120.19 per hour, every hour? That's what it would take for 52 forty-hour workweeks to put you over the $250,000 mark. Even if you put in 80-hour workweeks and worked through Christmas, the family vacation and the worst case of stomach flu imaginable, you'd still need a job that paid a dollar a minute.

While you've got the calculator out, divide 3,500,000 by your total income. The result is how many years you would have to save every penny you make, not even buying a stick of gum or a kilowatt of electricity for light and heat, to have your estate subject to the estate tax. Life expectancy is around 78 years. Do you really have that many years and that much financial discipline left?

With bailout numbers in the trillions getting thrown around, it is easy to lose persepective on just how much $250,000 is compared to what we actually make now. With all the bubbles being burst in the economy, I almost hate to be the one to burst this one. Fact of the matter is, though, most of us are never going to make a quarter million a year, nor are we going to have $3.5 million to leave to the kids.

Tuesday, April 14, 2009

Bunny Thoughts

In another social media venue, my sister posed the question of why Easter, which is the more monumental Christian holiday, isn't as anticipated as Christmas. After much thought, here's what I came up with:

It all comes down to the date. It wasn’t until the fourth century that church leaders even decided that Jesus’ birth was something that ought to be celebrated, and by then, the exact date had been long lost (assuming anyone even took particular note of Jesus’ DOB in the first place). With only one easily overlooked temporal clue in the account of the nativity, basically, the entire calendar was the church’s oyster when it came to deciding a feast day for Christmas.

Pope Julius I (pope from 337-352) settled on December 25 for Christmas. Now, it wasn’t until 394 that non-Christian religions were actually outlawed in the Roman Empire, but the writing was on the wall by Pope Julius I’s time. Although the December 25 date runs contrary to the one textual clue for the time of Jesus’ birth, December 25 did have one thing going for it: Saturnalia, one of the big party days in ancient Rome. People don’t like to give up a good feast day.

Case in point: modern Christmas itself. In this multicultural, multi-religious society compounded by a legal mandate against state-supported religion, having a Christmas celebration in a government facility (e.g. public school) is legally untenable. Did people stop celebrating Christmas? No. They started calling it “Holiday” or “Winter Festival” or some religiously-neutral phrase, threw in a nod to Hanukkah and Kwanzaa, and carried right on as they did before. People grouse about a War on Christmas, of course, but when given a choice between not celebrating or celebrating while calling the celebration by the officially-approved name, even modern Christians choose Option B. Early Romans did the same thing; they kept Saturnalia, tossed in a Nativity scene and called it Christmas.

The other great thing about December 25 is that it is only a few days after the Winter Solstice, which is a big feast day in pretty much all of the cultures that Christianity spread into. As it had with Saturnalia, Christmas could basically absorb the solstice celebrations, even if they had to move a few days, and call it good.

Easter doesn’t have that advantage. The textual clues firmly tie it to Pesach. Of course, Christianity couldn’t really appropriate Passover traditions for the celebration of the event that marks the break between Judaism and Christianity. Once you establish ham as the traditional holiday meal, any ties to Passover are pretty much over, except for the date. Since Passover and Easter are tied to the lunar calendar, they are a moving target and can end up several weeks off from the vernal equinox. Thus, Easter didn’t have the same success co-opting the equinox festivities of pagan cultures they way Christmas overlaid itself on the solstice. They managed to get the Easter Bunny and colored eggs from Germanic tribes, but that was pretty much it. At least Easter picked up the bunny. Without the colored eggs and marshmallow chicks, Easter is a holiday about brutal torture. Not only is that not exactly greeting card material, if Easter were a video game instead of a religious holiday, states would be passing laws against selling it to children.

Friday, April 03, 2009

August Body, But August of What Year?

As with any episode of The Daily Show, the whole seven-odd minutes of this clip is worth watching, but the bit relevant to my commentary starts around 1:54.
The Daily Show With Jon StewartM - Th 11p / 10c
The Ever Spending Story
Daily Show Full EpisodesEconomic CrisisPolitical Humor

I'm about to type a sentence I never thought would come out of my fingers.
Can someone please hook these folks up with PowerPoint? Keynote? Open Office Impress? Something?
Now, I have never been a fan of presentation software, primarily because people tend to use it as a giant ass-backward teleprompter. In short, nothing any more useless than a giant blue placard that reads "$15,000,000,000,000" to impress upon us just how big 15 trillion is. The problem isn't that we don't know how many zeros are in a trillion and need it shown to us; the problem is that the human mind is only capable of comprehending numbers up to a certain point. After a while, more zeros are effectively meaningless, no matter what color the placard is.

As much as I loathe PowerPoint, this is the U.S. Senate in 2009. They should be using more advanced presentation technology than a middle school science fair circa 1992. Actually, circa 1992, we were already five years into the age of PowerPoint. My middle school was just a bit behind the curve. Why in the name of modern technology is our Most August Body still using easels and placards as visual aides?

I know we are in a budget crisis, but surely even an LCD projector, 100 thumb drives and the salary of a 14-year-old computer geek to run the projector--no, I don't expect senators to learn 20 year old technology--has to be less than the budgetary line item for printing all those giant placards. Those things don't come out of the inkjet by the receptionist's desk, after all.