I like VDOT. I have friends who have worked there in significant positions. I like most of the VA highways on which I enjoy travel. I love their mission statement, "Keep Virginia Moving." What a great, simple, powerful mission statement. A model for the private sector. I love the newly resurfaced roads we enjoy this summer. I love the Richmond and Lynchburg bypasses. I've even written a business school case about VDOT.
That said, there are a couple of things that boggle my mind.
1. Richmond to Newport News. Every weekend throughout the summer the caribou migrations move down I-64 from Richmond to and beyond Williamsburg on their way to the annual relaxing grounds of OBX. Every weekend the traffic on I-64 is stop and go. STOP and GO on a freeway. It's been that way for 30 years since I've been here. WHY don't we/they widen that section of I-64? There seems to be the room to do it. WHY? WHY? WHY? PLEASE PLEASE PLEASE!
2. The Charlottesville Western By-Pass seems to be a joke. It is not enough of a bypass, won't solve the problem, and will just postpone the needed solution. First, if 29 is a major artery (it is), we should stop putting stoplights on it. We are becoming what Lynchburg was until they built their bypass. I once counted 29 stoplights on my way south through Lynchburg back in the day. Now there's only four. Four too many, but still only four.
* NO MORE STOP LIGHTS ON US-29! Unless they are on the "business" portion and not the by-pass. Build interchanges. Yes they are expensive. But in the long run, you end up having to build them or a more expensive by-pass anyway. Think ahead!
* Build a real by-pass around Charlottesville, not this piddling little thing, the current proposal. Of course, the problem is that there is no good place to build a by-pass around Charlottesville, the terrain doesn't invite. The Eastern Option starting farther north below Ruckersville just above Proffitt Road/Airport Road, run east then south parallel to 20 and around the upper reaches of Trevillian Mountain to connect to I-64 means expensive hillside cutting and blasting and a mess on Pantops. The Western Option means cutting across the upper reaches of the reservoir, between Charlottesville and Ivy and then connecting with I-64 below US-29 creating a short eastern jog to get back on 29. I favor the Western Option--but environmentalists don't. Build the Buck Mountain reservoir. You can't have too much water. Run the by-pass from north of Proffitt Road, past the airport linking it better, then looping westerly through farmland, over the upper reaches of the reservoir tributaries and then through Ivy to I-64. I know, "they" have already examined and discarded these two options. The current proposal however doesn't really do much. And it runs next to several schools. Let's put the trucks by the cows and horses and away from the schools... and build a real by-pass not a little coronary graft that won't do much..
Monday, July 16, 2012
Taxes
It REALLY annoys me that the tax situation in the US is a) so complicated and b) unfair. I suppose many people share that view. I pay 35% federal income tax. We have to hire a tax preparer who is an expert on all of the ins and outs of the latest changes in the tax code to ensure that we are paying our fair share---and not overpaying. People who have most of their income in capital gains tax are paying 15% federal tax. I don't think that's fair. Typically, these folks are on the wealthier end of the scale. I realize that I'm in the so-called "top 1%" of the income spectrum, however, there is a HUGE difference between 99.0 and 99.1% and 99.5% and the 99.9% folks. I am very annoyed that people making $5mm to $100mm a year off capital gains are paying 15% tax "so that we can keep the interest in investing in America alive." BS. We all should share proportionally in the support of the nation.
I believe (does anyone care what I believe?) that everyone, everyone, in our society should participate in the responsibility for supporting our nation and our economy. For me that would mean the following:
1. Every sitting member of Congress in a year when the budget was not balanced and the current deficit being reduced would become automatically ineligible for re-election. I know this is floating around the internet. Still I think it's a great idea. Members of Congress should not get special privileges regarding healthcare, income, tax treatment, etc. They are citizens like the rest of us. Lawmakers should not be insulated from the experience of the rest of us.
2. Federal and State income taxes would be eliminated entirely, first reduced and then phased completely out over a ten year period...and replaced by...
3. Federal and State expenses should be converted into a national and state sales tax structure. I don't know what the % would be, but probably about 25% for the combination for both federal and state and to include basic health care for all people living in our society. Also applied to corporations and busineses. In this structure, everyone in the American economy, including those on welfare and those who are here illegally and those who are at the upper end would be participating in the support of the national strategy including health care, defense, etc., in a direct, proportional way. You buy more, you pay more tax in absolute dollars. You decide how much you want to enjoy and at the same time how much you want to contribute to the commonweal.
* The idea of a flat tax has been around for a while. Probably not going to happen for some reasons outlined below. But, jeez, our current situation is stifling. Complicated. Expensive to administer. Expensive to figure out how much to contribute. Large numbers of people not contributing.
* Some say this is a "regressive" idea in that the poor who receive welfare would be taxed when they aren't now. While that would be true, I believe that rich or poor, everyone should have some stake in the national game. This approach would greatly reduce the argument over entitlements and "rights." Even if you are on welfare, you would pay into the common fund, and you decide how much by deciding what you buy. If you buy a cheap car, you pay less tax. If you go to Lowe's and buy home improvement stuff, whether you are legal or not, you pay into the national pool. If you buy a $400,000 car, you pay more tax. You, the individual would decide what you can afford, but whenever there is a business transaction, a portion of that, a quarter of it for example would go into the national and state pools. Yes, I know, why pay out welfare then tax it? My answer is so that everyone in society is a participant in the citizenship part of supporting our national society.
* This shift would be a problem for many people. Those who have not been taxed at all would chafe. Those who are here illegally, would chafe. The tax preparation industry would chafe. Those paying 15% income tax would chafe. We'd have to figure out how to handle wealthy companies who don't buy much, ie in the services industries. We'd have to find ways to avoid continuously raising the percentage each administration, a law that would require the government to stay within certain limits. That limit might be a quarter, 25%. Okay you numbers guys, tell me, how much would it have to be today to cover our bills. If our current federal budget is about $4 trillion in a $14 trillion economy, then we might expect that something of the order of 30% should do it. Whatever that number is, it should be capped. AND see item 1 above, every year the government should stay within its means. If the GDP shrinks a little, so should spending.
* I learned recently that in India, a nation with about a billion people, only 35 million pay taxes. When I asked why, the answer was "All of the politicians are corrupt. If we pay taxes, we still don't get services." In the US, in a nation of 310+million, we have over a 100 million tax payers. That's better. But I worry that our middle class is eroding, that we have fewer and fewer tax payers, and that self-serving corruption is way too rampant in our society, both in the public and private sectors. We need to simplify and make more transparent the national revenue generating system. Flushing the income tax and instituting a national sales tax would help do that.
* The benefits would be many. Simplicity. Fewer entities to collect from (businesses only not every household.). The sense of "citizenship participation" would go up although some who don't pay now would be unhappy for a while, maybe even a generation. At first that would be a point of contention. Yet, discretion of tax paid would be squarely on the shoulders of those who participate in the economy. Everyone would be contributing to healthcare, to defense, to highways, to education, not just a "taxable" portion of society. If you want to be a hermit and not contribute, okay, but don't use power, highways, or the hospital. Everytime you buy something, you can say, I'm paying my taxes today. No quarterly estimates. No over payments. No refunds. Pay as you go.
* What about black markets? If you do business underground, you wouldn't be paying tax. The "IRS" and the FBI would shift their focus to finding and shutting down black markets. If you do business with black market vendors, you face prosecution.
* What about service industries? How would the financial services industries pay tax? This is a challenge, or maybe not. If we continue with the rationale of paying tax on what you purchase, companies would pay federal and state sales tax when they pay employees, when they buy human capital. This would have a dampening affect on wages and bonuses and salaries. If a company pays an employee $100,000, they pay a sales tax of $25,000 on top. But don't have to pay medical insurance.
4. I think every person living in the United States has a "right" to basic medical care. Which leads to the question, "Does anyone have any kind of 'right?'" A group of friends had an active debate about this over breakfast recently. One view was that there are no rights and that anyone who cannot make it in the Darwinian world should be put out on the "hillside" and become food for predators. If you cannot support yourself, tough. Jeffersonian principles of life, liberty and the pursuit of happiness immediately came into the debate. I believe that we live in the richest country in the world and that we should be able to provide basic healthcare for every citizen. We'll get back to "basic" in a minute. If we weren't such a rich country, we might not be able to offer that kind of basic security to our citizens. But we are. Are we citizens of a nation, or just independent, self-centered wealth accumulators?
* What kind of society does one want to live in? I want to live in a society in which there is music, art, history, compassion, freedom of religion, freedom of speech, freedom from basic disease, freedom from bodily harm. I don't want to have to create all of that for myself--by playing the piano, reading history, providing my own fire protection, arming and defending my home (like I saw in South Africa where each home had a high fence, guns, and other things needed to be an "island,") and building my own highways. I like the blessing, the good fortune, the opportunity, of being born an American.
* I think America should, like every nation, have a charter. A charter for me includes a purpose, a vision, core values, a strategy, and short-term operating goals--all decided by leadership. I am appalled at how many nations, and how many companies, don't have charters--and hence they drift. I believe that an American principle is that we strive to help those who cannot help themselves. That's the kind of America I want to live in. I also am deeply offended by those who take advantage of our system--whether it be the capable-of-working welfare recipient or the person making $100mm and pays only 15% taxes. If the POTUS cannot clearly state the mission of the USA, a vision for the USA, a set of core principles, a set of strategies to reach the vision, and clear short-term goals, shame on him/her. Same for any head of state or CEO.
* Inheritance. Should you be allowed to give your children a silver spoon? It's bad for them. You earned it and you love them, and they didn't earn it. All gifts, charitable donations, and bequests would be taxed at the normal rate. Contributions to the following would be tax free: public schools (ie, anyone who qualifies intellectually can attend), hospitals, long-term care facilities for the infirm, mentally ill, and aged, fire departments, rescue squads, and public police departments. If you bequeath your estate to your kids, the government takes the sales tax rate off the top, (25-30%?) If your child is the CEO of one of the groups listed just above, perhaps you can donate to that organization.
* Given our wealth and success, I think we should be able to offer every citizen the following basic health care: annual physicals with resulting advice, immunizations, treatment for broken bones, infections, flus, allergies, and other common ailments, mental disorders in the form of medication and a place to sleep, and accidental injuries. I don't think (at the moment) that the commonweal should have to, be required to, pay for artificial sustenance of life. Clinics either government run or sub-contracted could be funded from the sales tax. Yes, this would mean that no one has a right to a kidney transplant. If you want medical care beyond the basics, you have to save and devote to it.
6. Education. I believe every American should have access to reasonably priced education from 1- 12. Tuition for education at all levels should be tax free up to a certain level. Public schools offer free education for all from grades 1-12 funded out of sales tax revenues. Tuition for college is tax-free up to a Congressionally agreed upon state university average. Tuition above that is taxable. If you go to Harvard, you pay more tuition and tax on that tuition or you get scholarships--or the school lets you in free. You don't have to go to the school in your "district." Property taxes disappear. You pay tax when you buy your home. Your childern can go to whatever school they wish; you will likely choose the better schools. Schools will be challenged to offer better education to attract more students. Schools will be paid per student out of the sales tax commonweal.
I realize that many of these ideas are controversial and that few if any of them are likely to happen given our current history, legal structure, economic structure, and political structure. And frankly, my views are still evolving.
That said, I'm still very annoyed at the complicated nature of our income tax system, at the rich who are able to find ways to avoid taxes legally, at Congress who puts us further and further into debt as a nation, at the crime rates we see, and our inability to administer our affairs with efficiency, fairness and compassion. Yes, I believe America is still the best place in the world, for me. Yes, I'm grateful I was born in the USA. And yes, some of the things we do and have done embarrass me.
My core principles underlying the above are:
1. Have a charter for your nation. If you don't, you are derelict.
2. Don't spend more than you have. Debt is debilitating--regardless of what they teach you in finance class. Debt is an open-vein on the body politic.
3. Everyone should participate in the building and support of one's nation proportionally to their means. This builds commitment and national pride. There is, should be, no free lunch.
4. Every US citizen should have the promise (all it a right if you wish) of liberty, basic health assurance, and basic education. My colleague says he "owes" his children "straight teeth and a college education. After that, they are on their own." Our government, I believe, owes us liberty, basic health, basic education, and after that, we have some foundation for making our own luck and futures. No one has a right to be rich. Yet given our history, we can and should offer our citizens some basic foundational asurances.
5. We should be compassionate toward those who did not ask for their situation. Reagan putting the mentally ill out on the streets was cruel. Reagan building up our national strength was wise. Which birth defects should the commonweal cover regardless of socio-economic status?
6. We need to simplify in a major way our national revenue system.
7. A strong, free, middle class is essential to the long-term health of the USA.
So, I am thinking out loud, wrestling with many issues. Issues I care about. Issues my colleagues and friends care about. I invite your comments below. If you have a better logic, a better alternative, let/us know about it. Don't just criticize, that's too easy, just give me/us your better alternative. With some data if you can. May the peaceful parts of Mother Nature be upon you.
I believe (does anyone care what I believe?) that everyone, everyone, in our society should participate in the responsibility for supporting our nation and our economy. For me that would mean the following:
1. Every sitting member of Congress in a year when the budget was not balanced and the current deficit being reduced would become automatically ineligible for re-election. I know this is floating around the internet. Still I think it's a great idea. Members of Congress should not get special privileges regarding healthcare, income, tax treatment, etc. They are citizens like the rest of us. Lawmakers should not be insulated from the experience of the rest of us.
2. Federal and State income taxes would be eliminated entirely, first reduced and then phased completely out over a ten year period...and replaced by...
3. Federal and State expenses should be converted into a national and state sales tax structure. I don't know what the % would be, but probably about 25% for the combination for both federal and state and to include basic health care for all people living in our society. Also applied to corporations and busineses. In this structure, everyone in the American economy, including those on welfare and those who are here illegally and those who are at the upper end would be participating in the support of the national strategy including health care, defense, etc., in a direct, proportional way. You buy more, you pay more tax in absolute dollars. You decide how much you want to enjoy and at the same time how much you want to contribute to the commonweal.
* The idea of a flat tax has been around for a while. Probably not going to happen for some reasons outlined below. But, jeez, our current situation is stifling. Complicated. Expensive to administer. Expensive to figure out how much to contribute. Large numbers of people not contributing.
* Some say this is a "regressive" idea in that the poor who receive welfare would be taxed when they aren't now. While that would be true, I believe that rich or poor, everyone should have some stake in the national game. This approach would greatly reduce the argument over entitlements and "rights." Even if you are on welfare, you would pay into the common fund, and you decide how much by deciding what you buy. If you buy a cheap car, you pay less tax. If you go to Lowe's and buy home improvement stuff, whether you are legal or not, you pay into the national pool. If you buy a $400,000 car, you pay more tax. You, the individual would decide what you can afford, but whenever there is a business transaction, a portion of that, a quarter of it for example would go into the national and state pools. Yes, I know, why pay out welfare then tax it? My answer is so that everyone in society is a participant in the citizenship part of supporting our national society.
* This shift would be a problem for many people. Those who have not been taxed at all would chafe. Those who are here illegally, would chafe. The tax preparation industry would chafe. Those paying 15% income tax would chafe. We'd have to figure out how to handle wealthy companies who don't buy much, ie in the services industries. We'd have to find ways to avoid continuously raising the percentage each administration, a law that would require the government to stay within certain limits. That limit might be a quarter, 25%. Okay you numbers guys, tell me, how much would it have to be today to cover our bills. If our current federal budget is about $4 trillion in a $14 trillion economy, then we might expect that something of the order of 30% should do it. Whatever that number is, it should be capped. AND see item 1 above, every year the government should stay within its means. If the GDP shrinks a little, so should spending.
* I learned recently that in India, a nation with about a billion people, only 35 million pay taxes. When I asked why, the answer was "All of the politicians are corrupt. If we pay taxes, we still don't get services." In the US, in a nation of 310+million, we have over a 100 million tax payers. That's better. But I worry that our middle class is eroding, that we have fewer and fewer tax payers, and that self-serving corruption is way too rampant in our society, both in the public and private sectors. We need to simplify and make more transparent the national revenue generating system. Flushing the income tax and instituting a national sales tax would help do that.
* The benefits would be many. Simplicity. Fewer entities to collect from (businesses only not every household.). The sense of "citizenship participation" would go up although some who don't pay now would be unhappy for a while, maybe even a generation. At first that would be a point of contention. Yet, discretion of tax paid would be squarely on the shoulders of those who participate in the economy. Everyone would be contributing to healthcare, to defense, to highways, to education, not just a "taxable" portion of society. If you want to be a hermit and not contribute, okay, but don't use power, highways, or the hospital. Everytime you buy something, you can say, I'm paying my taxes today. No quarterly estimates. No over payments. No refunds. Pay as you go.
* What about black markets? If you do business underground, you wouldn't be paying tax. The "IRS" and the FBI would shift their focus to finding and shutting down black markets. If you do business with black market vendors, you face prosecution.
* What about service industries? How would the financial services industries pay tax? This is a challenge, or maybe not. If we continue with the rationale of paying tax on what you purchase, companies would pay federal and state sales tax when they pay employees, when they buy human capital. This would have a dampening affect on wages and bonuses and salaries. If a company pays an employee $100,000, they pay a sales tax of $25,000 on top. But don't have to pay medical insurance.
4. I think every person living in the United States has a "right" to basic medical care. Which leads to the question, "Does anyone have any kind of 'right?'" A group of friends had an active debate about this over breakfast recently. One view was that there are no rights and that anyone who cannot make it in the Darwinian world should be put out on the "hillside" and become food for predators. If you cannot support yourself, tough. Jeffersonian principles of life, liberty and the pursuit of happiness immediately came into the debate. I believe that we live in the richest country in the world and that we should be able to provide basic healthcare for every citizen. We'll get back to "basic" in a minute. If we weren't such a rich country, we might not be able to offer that kind of basic security to our citizens. But we are. Are we citizens of a nation, or just independent, self-centered wealth accumulators?
* What kind of society does one want to live in? I want to live in a society in which there is music, art, history, compassion, freedom of religion, freedom of speech, freedom from basic disease, freedom from bodily harm. I don't want to have to create all of that for myself--by playing the piano, reading history, providing my own fire protection, arming and defending my home (like I saw in South Africa where each home had a high fence, guns, and other things needed to be an "island,") and building my own highways. I like the blessing, the good fortune, the opportunity, of being born an American.
* I think America should, like every nation, have a charter. A charter for me includes a purpose, a vision, core values, a strategy, and short-term operating goals--all decided by leadership. I am appalled at how many nations, and how many companies, don't have charters--and hence they drift. I believe that an American principle is that we strive to help those who cannot help themselves. That's the kind of America I want to live in. I also am deeply offended by those who take advantage of our system--whether it be the capable-of-working welfare recipient or the person making $100mm and pays only 15% taxes. If the POTUS cannot clearly state the mission of the USA, a vision for the USA, a set of core principles, a set of strategies to reach the vision, and clear short-term goals, shame on him/her. Same for any head of state or CEO.
* Inheritance. Should you be allowed to give your children a silver spoon? It's bad for them. You earned it and you love them, and they didn't earn it. All gifts, charitable donations, and bequests would be taxed at the normal rate. Contributions to the following would be tax free: public schools (ie, anyone who qualifies intellectually can attend), hospitals, long-term care facilities for the infirm, mentally ill, and aged, fire departments, rescue squads, and public police departments. If you bequeath your estate to your kids, the government takes the sales tax rate off the top, (25-30%?) If your child is the CEO of one of the groups listed just above, perhaps you can donate to that organization.
* Given our wealth and success, I think we should be able to offer every citizen the following basic health care: annual physicals with resulting advice, immunizations, treatment for broken bones, infections, flus, allergies, and other common ailments, mental disorders in the form of medication and a place to sleep, and accidental injuries. I don't think (at the moment) that the commonweal should have to, be required to, pay for artificial sustenance of life. Clinics either government run or sub-contracted could be funded from the sales tax. Yes, this would mean that no one has a right to a kidney transplant. If you want medical care beyond the basics, you have to save and devote to it.
6. Education. I believe every American should have access to reasonably priced education from 1- 12. Tuition for education at all levels should be tax free up to a certain level. Public schools offer free education for all from grades 1-12 funded out of sales tax revenues. Tuition for college is tax-free up to a Congressionally agreed upon state university average. Tuition above that is taxable. If you go to Harvard, you pay more tuition and tax on that tuition or you get scholarships--or the school lets you in free. You don't have to go to the school in your "district." Property taxes disappear. You pay tax when you buy your home. Your childern can go to whatever school they wish; you will likely choose the better schools. Schools will be challenged to offer better education to attract more students. Schools will be paid per student out of the sales tax commonweal.
I realize that many of these ideas are controversial and that few if any of them are likely to happen given our current history, legal structure, economic structure, and political structure. And frankly, my views are still evolving.
That said, I'm still very annoyed at the complicated nature of our income tax system, at the rich who are able to find ways to avoid taxes legally, at Congress who puts us further and further into debt as a nation, at the crime rates we see, and our inability to administer our affairs with efficiency, fairness and compassion. Yes, I believe America is still the best place in the world, for me. Yes, I'm grateful I was born in the USA. And yes, some of the things we do and have done embarrass me.
My core principles underlying the above are:
1. Have a charter for your nation. If you don't, you are derelict.
2. Don't spend more than you have. Debt is debilitating--regardless of what they teach you in finance class. Debt is an open-vein on the body politic.
3. Everyone should participate in the building and support of one's nation proportionally to their means. This builds commitment and national pride. There is, should be, no free lunch.
4. Every US citizen should have the promise (all it a right if you wish) of liberty, basic health assurance, and basic education. My colleague says he "owes" his children "straight teeth and a college education. After that, they are on their own." Our government, I believe, owes us liberty, basic health, basic education, and after that, we have some foundation for making our own luck and futures. No one has a right to be rich. Yet given our history, we can and should offer our citizens some basic foundational asurances.
5. We should be compassionate toward those who did not ask for their situation. Reagan putting the mentally ill out on the streets was cruel. Reagan building up our national strength was wise. Which birth defects should the commonweal cover regardless of socio-economic status?
6. We need to simplify in a major way our national revenue system.
7. A strong, free, middle class is essential to the long-term health of the USA.
So, I am thinking out loud, wrestling with many issues. Issues I care about. Issues my colleagues and friends care about. I invite your comments below. If you have a better logic, a better alternative, let/us know about it. Don't just criticize, that's too easy, just give me/us your better alternative. With some data if you can. May the peaceful parts of Mother Nature be upon you.
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