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Thursday, February 26, 2009

Do The Math On Taxes

Math Problem #1: Tax burden increase on Californians. Remembering all the rhetoric from Democrats the past several years about “the working family” and “saving/protecting the middle class” and the “working poor”, remembering their rhetoric let’s see how their huge tax bill they passed in Sacramento last week (with a few Republican accomplices) helped these families. There are tax calculators all over the web for you to put in your own numbers, here’s one to save you the Google search. If you take a reasonable middle class family, Mom and Dad both work—let’s say they are both teachers and while not new not yet at the average salary and make $45,000 each for a total of $90,000. They each have a car, let’s say a minivan and a small SUV or crossover worth about $25,000 each for a total of $50,000 and they also have two kids. Under the taxes just passed in Sacramento this family’s tax payments will increase by $1227.

Now let’s say there is a hip young professional with no kids, has his master’s degree and works for the state college system as a senior administrator pulling down $140,000 annually and drives a sporty BMW X5. With no kids and a higher salary the tax burden on this young man will increase $966 per year. Making 55% more money that our married family and with no children to support gives a tax advantage of $261 per year to Californians.

So next time you hear anyone from Sacramento talking about budgets and helping America’s or California’s families ask them if they voted for the tax increases in February 2009—if they are in office and a Democrat they did—and then know they could care less about families and “working people” as they are typically defined.

Math Problem #2: President Obama and the Democrats hit the national campaign trail hot and heavy in 2008 giving speeches about how they were going to also help the middle class and unless you were in the top 5% of income earners in the United States you would not see your taxes go up. This past week Obama began the tax talk and has spoken about increasing the marginal tax rate for America’s highest income earners to help pay down the deficit—including the $2 trillion they just added to the deficit with the Porkies I stimulus plan.

A few weeks ago Obama and Congress announced that they were going to cap the pay of individuals who are employed by firms who received TARP (Troubled Asset Relief Program—the $750 billion bank and Wall Street bailout from October 2008) to $500,000. This was met with widespread applause and happiness from many in America who feel that if the banks have gotten $350 billion of tax payer money—never mind that it was traded for stock—that those in charge should have their income capped at a “reasonable level.” Given that the former head of Merrill Lynch was seeking a $10 million bonus for leading his company into an $11 billion loss and extinction the sentiment is very understandable. But the universe operates on cause and effect and not every plan is perfect.

This plan has a few flaws however and this is where some math will come in. First the caps also apply to commissioned individuals—those on commission get paid based on what they earn for the company. With the new caps after a very successful broker hits his $500,000 limit with say Chase he can/will quit and go to Citi and earn his next $500k taking his clients with him. What will occur is a huge merry-go-round of talented sales people through Wall Street brokerages as they maximize their personal income under the TARP compensation limits. But this is just part of the flaw. Let’s get to the math.

Under the current tax tables individuals earning over $372,950 are in the 35% tax bracket. So capping income at $500,000 caps the marginal tax amount on earnings over $372,950 at $44,500 to use round numbers ($500,000 – 372,950 = 127,050 x 35% = $44,500). Given the numbers on Wall Street I am going to use for my math problem the number that 200 individuals have earnings over $5,000,000 and work(ed) for TARP companies.
If there are 200 individuals with income of $5 million their marginal tax amount is $1,619,500 (rounded up $32.50) per person, or approximately $324 million collectively. With Obama’s compensation caps these individuals will now pay $9 million in marginal taxes in the 35% bracket, a loss of approximately $315 million to the Treasury. Sniffing around the internet my estimates of 200 individuals and $5 million is very conservative and it is likely the compensation cap imposed by Washington on Wall Street will result in a loss of income tax revenue far greater than $315 million. But at least we all feel good about capping what those greedy b**stards make! Right?

Tuesday, February 24, 2009

Great Movie-Bad Movie What's The Difference?

On Sunday Night "Slumdog Millionaire" won the Oscar for Best Picture--and deservedly so. Leslie and I saw "Slumdog" a few weeks ago and we both enjoyed it immensely, converse to how I thought I would feel when we were purchasing our tickets.

I had seen a few trailers for "Slumdog" and heard and read various reviews that created a judgement for me that I would not like the movie all that much. While we are admonished time and again not judge a book by its cover, or a movie by its poster, we all do make judgements based on what we hear, what we read, and what we experience. And this was the case for me and "Slumdog." Hearing the plot line of a Mumbai orphan playing and winning round after round on the Indian version of "Who Wants to Be a Millionaire" I cringed somewhat. How, I thought, can this movie be getting such positive buzz for an Oscar? Surely it must have some covert leftist-Hollywood-PC speak message, a la "Inco(herent)nvenieth Truth" with a plot like this to get so much attention.

We happened into the movie because of few of the others on our list had already started, or were starting at a time we both knew were late enough to ensure my sleeping through much of the film. Thankfully "it was written" that we see the movie. Despite my not trusting the plot line to be able to carry the movie and be worth the $7.5o price of admission, I was carried along from scene to scene to scene throughout the entire film. It was masterful how director Danny Boyle strung together the past and present of young Jamal, so much so he won the Oscar for Best Director. What I saw as a weak plot line Boyle saw as an opportunity to push and pull his audience through Jamal's life until the very end of the movie. Great directing, scriptwriting and acting make almost any plot masterful, "Slumdog Millionaire" proves the point.

So what happens when the opposite occurs? What happens when you have a really good plot line, a pretty good actor but crappy directing and a crappy script? You get "The International" starring Clive Owen. Again the vagaries of the babysitter's arrival, drive time and starting times pretty much dictated that Leslie and I took in "The International" on our date night last week--"Milk" had already started (although we later figured we would have made the start as evidently UA runs more previews than Regal) and I won't enter a movie after the first scene has started, and "The Wrestler" was a guaranteed night-night for Dennis with it's starting time. Dennis had some serious nap time with what was chosen anyway--and did not miss a thing. The plot of "The International", a mega-world bank starting wars so it can finance both sides, hiring contract killers for those who get in the way, could be a great movie--in great hands. Unfortunately this movie has about three good scenes and when it finally ends you just say, "Huh? That's it?"

What the difference between a great movie and a bad movie? It is not the plot. It is the production, a great movie combines the right director, actors, and script and they will make the plot work well. A bad movie is missing one or more of those ingredients.

P.S. A modern theater does not hurt though. We saw "The International" at the Marketplace in Long Beach; after the plush comfort of our usual Edwards 349 screen big seat, tiered seating theater watching a movie at the Marketplace is akin to sitting in folding chairs in the lunch room with a sheet separating your "theater" from the one next door.

Saturday, February 21, 2009

Politicians Say The Darnedest Things

Attorney General Eric Holder, State Senator Alan Lowenthal, Governor Arnold Schwartzenegger

This past week three politicians had some real doozies, two I thought were just plain dumb statements and the third has caused quite a stir from some on the right but I thought it was truthful. Here they are, you be the judge.

First come California State Senator Alan Lowenthal (D) on the floor of the Senate during the marathon session to pass a bill to bridge the cash crunch facing the state. As you may recall the bill was held up because our state wisely requires a two-thirds majority to pass tax hikes and the Democrats needed three Republican Senators to vote for the bill on the floor. What Lowenthal said was, in my opinion, not only quite dumb but very indicative of why California has the constant fiscal problems it does.

“It doesn’t matter how we got here.” Our state is on the verge of bankruptcy, tax payers are not receiving refunds from money already paid to the state, workers are being furloughed on an every other Friday basis, a $42 billion deficit is on the horizon, and “it doesn’t matter how we got here.” Um, yes it does; it matters very much how we got here and the fact that Lowenthal, and no doubt plenty of other Democrats in Sacramento and across the state, think it does not matter is about ninety percent of the problem. We got here because despite holding out for less spending increases the past five years Republicans were still unable to stop a 40% increase in spending by Democrats—enabled by our SaysHeIsARepublican Governor. It matters because willy-nilly without concern as to the future our gerrymandered-term-limited-Democratic dominated Assembly and Senate spent money like whores in a lingerie store on pet projects and pork benefiting their main financial contributors: unions, particularly public employee unions. Mr. Lowenthal it does matter and it will matter and if you and your colleagues do not recognize this then please step aside and let someone else with an understanding of cause and effect take your places.

Next up comes our Governor, Arnold Schwarzenegger (R-sort of). After the catastrophic bill was passed he called Sacramento legislators “courageous.” Um, no it was not courageous it was in fact quite cowardly. Cowardly because it addressed none of the systematic problems that created not only this fiscal crisis for our state but guarantee future fiscal crises. Cowardly because our elected officials refused to face down those who bought their seats for them with millions and millions of dollars of campaign contributions and tell them they had to give something up for this state to get on the road to financial health. Cowardly because they know the system remains broken and rather than actually be somewhat courageous and fix the problems they passed them off to the next generation of lawmakers, and the one after that, and the one after that. “Courageous” is one of the few adjectives that would come to mind for me when it comes to describing our state government and its approach to their fiscal duties. Cowards hide problems or blame them on someone else, that is what our state legislature has done, again.

Finally is a statement made this week by Attorney General Eric Holder. During a speech for a ceremony celebrating Black History Month, Holder spoke about race relations in our country and said the American people“are essentially a nation of cowards.” Important in framing this topic is that Mr. Holder is black This through Hannity, Limbaugh, Coulter and many other talking and writing heads on the right into a snit. Comments ranged from “maybe he did not notice we elected a black man as President” to “perhaps he has forgotten that even forty years ago he would not have been able to eat in many of the restaurants in the city where he gave this speech” to “this is just like Michelle Obama saying she was not proud of her country” blah, blah, blah. They rose up and essentially said the Holder’s comments were dumb.

I happen to agree with Holder’s comments, when it comes to race relations and dialogue we are cowards. I know I often am. I am a coward because often in a group I will not say what I want to say, or will change it because I do not wish to offend, or worse be labeled. Race dialogue in this country has become almost non-existent unless given by the Jessie Jacksons, Al Sharptons or Rev. Wrights who shape the dialogue by castigating all that is not their version of black-white relations. Often those, who are not people of color—i.e. white—attempting to speak about race, or have a dialogue inevitably make a statement or use a word or somehow have their comments intentions misunderstood and are torn apart by those with an interest in perpetuating racial divisions (see Jackson, Sharpton, Wright, et al). While trying to have an honest dialogue those who disagree with their viewpoint will attack them, will label them racist, will demand retractions and dismissals. Against this backdrop of possible repercussions, fear is created for many white people who then become afraid to discuss race relations and openly ask questions and share their thoughts and feelings. So yes Mr. Holder we have become a nation of cowards, what are you going to do to change this? How are you going to give me the courage to speak my thoughts without fear of retribution, labels and misconstruing of my comments to fit someone else’s agenda? How will you allow open and honest dialogue between all blacks, all Asians, all Hispanics, all whites? It is easy to label someone and dismiss them because of the label—a favorite tactic of some commentators on the left. It is much more difficult however to create and respect an environment of openness that allows everyone to speak their opinion, to learn other’s opinions, and come to understand that unity does not mean uniformity, nor agreement.. Unity means the ability to live together, respect each other and be able to have discussions, conversations, disagreements and experiences together—openly, freely.

Two dumb statements and one truthful statement. Two statements that foreshadow more of the same bad governance in our state and one statement that, if properly interpreted and acted upon, can forever change our nation and our ability to interact and live in Unity.

Thursday, February 12, 2009

California Voters: Please Tax Me! Enrich Yourselves!

My friend John Greet has been very consistent for the past few years commenting on various blogs and websites, and now as a regular contributor to the Long Beach Post, that we as citizens deserve the government we get because that is who we elect. And he is right. Unfortunately, the minority must live with the bad decisions of the majority, as they see them, especially in the State of California.

California has a majority of voters registered as Democrat, and a shrinking minority (around 35%) of registered Republicans. With the exception of the Governor’s office, where the personification of a Rino holds office (Republican In Name Only), Democrats control the State of California from local through Federal offices. They were elected by the people, so they rule the people. Up and down the state we are in financial crisis due to the year after year after year increases in spending: new programs, new mandated spending for all levels, more employees, all have added up to budget deficits for public coffers.

It has become somewhat de rigueur to blame the national economic crisis on the budget problems, and to this I say “Bunk.” Particularly in Sacramento, the state was headed into financial crisis before any whiff of trouble was approaching the credit markets and Wall Street. Why? Because state legislators, enabled by our governor, kept spending more and more and more money. It has been well documented that the past several years when state tax revenue increased 20% our elected officials increased state spending 40%--and that is the fault of the national economy how?

So now the legislator and the governor have reached a compromise to balance California’s budget, they did so by raising taxes on the highest taxed people in the country by $14.4 billion per year—for up to five years. The reports say that there would be $15 billion in cuts—which many would take to mean cuts in spending. This is a ruse, spending by the State of California for the coming fiscal year will not go down $15 billion from the year before, in fact it goes up.

How does this happen? A budget is a projection of revenue and spending. If a department is budgeted to receive and increase in funding from $100 million from the current $90 million it receives now and instead the budget is revised to only increase the department’s budget to $95 million then that department can say, “Our budget was cut $5 million.” Sure, but you are getting $5 million more than you did before so your revenue has increased. This is happening all across the budget negotiations, and the $15 billion in cuts is consisted by almost half of it being no reductions in spending but rather cuts in the projected increases to departments and programs.

Only in Sacramento does it make sense to tax taxes, and that is what is in this budget proposal. If you pay the state $1000 in taxes the state is going to tax that payment, a “surcharge”, of up to 5%. So after you pay your $1000 you can add an additional check for $50. Already the highest income tax in the nation, the state of California will now tax its taxes—genius.

Gas prices too high, the highest in the Continental U.S. with the highest taxes at the pump? So what pay more, the proposal adds $0.12 per gallon. Already the highest sales tax in the country add an additional 1% to all your purchases that are taxed—and look for that list to expand.

So where does this $14 billion go? Well most of it will go to state and public employees since payroll is far and away the biggest item on every budget. And how many public employees are losing their jobs because of this budget? How much is the legislator and top level employees of the state seeing cut in their pay? State employees already enjoy more paid holidays than any other workers—currently 14 days off for paid holidays on top of their vacation and sick days. The proposal has deeply upset the public employees’ unions because it has the audacity to cut two of the paid holidays from their calendars, so now they get one paid day off every month on top of their vacation and sick days.

Looking back on my life I realize that perhaps the biggest mistake I made was not going to work for the State or a public entity when I graduated from college in 1984. I would now be approaching twenty five years of service and at the age of 46 be eligible for a very comfortable retirement package and still young enough to start a second career—most likely as a consultant to the state, counties or cities at higher pay than I received in salary. Because of the give aways over the years to the public employees unions they have incredible job security, you almost have to kill someone to get fired and even then the union would file a grievance, lifetime retirement and benefits and guaranteed pay raises as your union dumps millions of dollars into campaign contributions of the Democrats who control all the purse strings from El Cajon to Mendocino.

California voters will not learn their lessons. In 2010 up and down the ballot a majority will vote merely by looking for (D) next to someone’s name, or the name they are most familiar with after being inundated with flyers, postcards, mailers and phone calls paid for by the unions. You don’t think union money matters in California? Ask Jenny Orepeza why she lost to Laura Richardson for a seat in the United States Congress.

So we will continue to be governed by politicians suckling on the union teets for campaign contributions and looking for their next job when they are termed out. We will see more growth in government, more people subsisting on government hand outs, higher payrolls for government workers, and more taxes for the people of California.

We can stop this cycle. Call, write, email, knock on the door of every Republican legislator in Sacramento and tell them if even one of them votes to pass this proposal, or any proposal with tax increases, you will not give the party one cent, you will not vote or volunteer for any currently elected Republican, you will essentially help crash the party in this state (which looks like it has already happened).

We pay and the politicians get re-elected for more junkets, lunches, dinners and royal treatment from those buying their votes. John Greet is right, we deserve it.

Tuesday, February 3, 2009

Chili Lime Marinade Made Easy

I love to barbecue (or grill, I use the terms synonymously knowing that barbecue is a type of food in some regions and how it is prepared in others--if you have an issue then you have issues). I love to experiment. I love to experiment with food and flavor combinations for my barbecue. This weekend I hit a homerun on a new technique that many may already know, but it was new to my un-culinary-educated experience.

Some of my favorite marinades and basting liquids contain lime juice--fresh lime juice from the limes on our tree in the front yard (a "Mexican" or "Key-Lime" tree). The limes are just smaller than a golf ball with incredible flavor. Squeeze one on a piece of tri-tip or a butterflied chicken and bliss is found.

Grilled chili peppers is also one of my favorites from the outdoor cooker, I love the flavor and the spice they bring to a tortilla filled with any grilled meat. With kids the flavor and the spice can sometimes be too intense so I have had to cut back on how many, and what type, of chilies I like to use. Until Saturday.

I was listening to a radio program and the on-air expert (not Melinda Lee who I very much enjoy) was explaining how the heat in chili peppers is cut by acid and if you soak them in acid they will retain their flavors and loose much of their heat. Perfect! I like acids: citrus juices, alcohol, vinegar (in smaller doses than Leslie) and was excited to try a new technique.

Saturday afternoon to prep for my Super Bowl chili I cut the stems off and just scraped out as much of the seeds as I could in jalapeno, Anaheim and banana peppers. Then I put them in a Ziploc with the juice of two of our small Mexican limes. Making sure the juice got inside the peppers I put the bag in the cold-box overnight.

Sunday morning when I opened the bag to retrieve the peppers for roasting I was hit with the wonderful aroma of chilies and lime--it smelled fantastic. Not one to waste something that smells that good I quickly rubbed my pork loin chops with salt, pepper and house rub, placed in a bag, poured in the chili-lime juice and vacuum sealed the contents. Into the cold-box until after church to marinade.

I grilled the pork over the mesquite and without basting the flavor of the chili-lime marinade was terrific. There was little heat, but not too much, and to be able to enjoy the flavor of the chilies without worrying about the heat was a plus.

The pork, the roasted peppers and the left over chili-lime all went into the chili pot for what may have been the best SB Chili I have made in the almost 25 years I have been making it.

Try it, bag of chilies and lime juice then use to marinate chicken, pork, tri-tip, fish--you'll love it!

Monday, February 2, 2009

Mall Cop Worth A Rental

With one kid dropped off for a Friday night slumber party and one in tow we headed to the movies. Our initial plan was for Leslie and I to take our youngest to "Inkheart"--which I had not heard of until I IMDB'd it on the Blackberry. Having read the plot synopsis I was not enthusiastic, not against going but not thrilled either. At that point Jenna said, "Can we go see Paul Blart instead?" "YES!" was my response--once we saw the PG rating of course.

While I am sure that somewhere in my future "Inkheart" lies, for Friday we enjoyed several laughs viewing Paul Blart: Mall Cop.

Kevin James does a great job playing the role of hypoglycemic, overly serious security officer (not "guard", there have been a lot discussion about this, I'm sure you've read about it...). His physical comedy is very good, and his abilities with the Segway are quite impressive. While it takes a while for the movie to get going, once it does it had Leslie and I laughing out load several times and our almost seven year old in stitches.

If you are looking for something deep and moving pass on Mall Cop, if you want just some simple laughs and fun for the family--or if you are a Segway nut--grab a handful of Pixie Stix and see the movie. Depending your fiscal tolerance this is a borderline pay at the theater versus putting on your Netflix cue for future home viewing.