Friday, June 27, 2008
Thursday, June 26, 2008
But that's not really the most important thing. To quote C.S. Lewis, "Christianity, if false, is of no importance, and if true, of infinite importance. The one thing it cannot be is moderately important." I believe with every fiber of my being that it really is true... and therefore of infinite, eternal importance. Presidencies, Supreme Court Appointments, even the entirety of America (whatever that has or will become), all those things are very temporary. Individual people, made in God's image--we last forever. "And we know that God causes everything to work together for the good of those who love God and are called according to his purpose for them (Romans 8:28)." That was true even when the Israelites were in the wilderness, it was true even when the early church faced genuine persecution, it was true when Shadrach, Meshach, and Abednego stepped into the furnace. And let's not forget that they acknowledged that God might choose NOT to rescue them from the furnace... but they knew He was able, and where their loyalties belonged (Daniel 3:16-18). So even if I think my country is on the verge of making some choices that will, in my opinion, lead to long-term negative consequences, I trust that God is good and knows what He is doing. I'd be a pretty pitiful excuse for a Christian if all my hopes and fears were tied up in the whims of the American voter.
(FOOTNOTE: I hope I don't come across as sounding like I think a few "wilderness years" for political conservatives is in any way comparable to actual persecution. But even if there WERE harsh persecutions--as there are in planty of places on this planet--that wouldn't change anything. Truth is truth.)
However, if Senator Obama is elected, he'll almost certainly appoint judges in the mold of Justices Stevens, Ginsburg, Breyer, and Souter--the four most "liberal" (or least "originalist") justices, all of whom voted with the majority. If McCain is elected, he has promised to appoint judges more like Chief Roberts, Thomas, Alito, and Scalia (the four who actually thought the rapist should meet the needle). The swing vote was Anthony Kennedy, ably stepping into the void left by the retirement of the previous swing vote, Sandra Day O'Connor. He is what passes for a "moderate" judge these days... meaning that he has no discernible judicial philosophy. It should be a maxim that if the court reaches a 5-4 decision with Kennedy as its linchpin (and particularly if he writes the majority opinion, as in this case), there's a good chance the opinion is screwy.
I've always thought that the six biggest reasons to vote against a President Obama were the six justices currently over the age of 67. Let's not forget our Civics 101: federal judges serve life terms. So if the next chief executive names two or three or six justices who are in their 40s or 50s, it's possible that even if said President only serves a single term, his influence could last a couple of generations. However, the logic runs the other way, as well. I heard Lanny Davis, a Clinton supporter, on the news a day or so ago, admitting that even though he preferred Hillary, his choice in favor of Obama boils down to the fact that there are 4 judges (the "conservative" ones) who probably would rule that Roe v. Wade was wrongly decided, given a chance. And Obama was the best-case scenario for keeping that from becoming five. (I find it interesting that the same folks who can't be bothered to find that raping a human being in childhood is as bad as murder also share the opinion that snuffing out the life of that same child in utero isn't really killing at all... there is, at least, a perverse consistency here.)
Now, don't get me wrong. A President Obama would SAY all sorts of correct things about protecting children. Just like he SAYS things about having empathy for the poor, backwoods, unsophisticated hicks like me who think that abortion is a sin. But he would pursue policies and make appointments that have the effect of making those words meaningless. I read a really thought-provoking piece over at NRO's Bench Memos that pointed out, I think correctly, that another Illionois Senator, Stephen Douglas (of the Lincoln-Douglas debates), did the same thing with regard to slavery, and Honest Abe called him on it.
There is, however, at least a small glimmer of hope for folks like me. As I have written elsewhere, I'm resigning myself to the very strong possibility that 1600 Pennsylvania Avenue will be the Obama residence in late January. But the two oldest judges are Stevens (80-something) and Ginsburg (77?), and they are both on the liberal end. So perhaps 4 or even 8 years of Obama might produce something like a status quo ante, kicking what I see as the worst-case scenario down the road a few years. I'll continue to pray that 70-year old Justice Scalia (my favorite--whose dissent in the child-rape case is, characteristically, several degrees of magnitude more sensible that Kennedy's majority opinion) continues to eat right and take his Geritol.
Tuesday, June 24, 2008
The Laffer Curve (above) is the supply-side model in simple form. What it basically says is that at 0% tax, there is 0% revenue. And at 100% tax, there is a 100% disincentive to go to work, so there's also 0% revenue. On the bottom (unshaded) part of the curve, raising tax rates increases revenue. On the top (shaded) half, raising taxes actually has a negative effect on revenues, as at that level the disincentives to work, or the incentives to shelter income, cheat on taxes, move business offshore, turn down overtime, or other natural reaction to confiscatory rates "shrinks the pie." So, in theory, when top rates were 90% under JFK and he slashed them to 70%, the resulting increase in revenue was due to the fact that we were on the top side of the curve. Same thing with Reagan's cut from 70% top rates down to 28% (which gradually climbed back to 39% under Clinton). Bush's cut from 39% down to 35% produced a less-dramatic effect, not only because the cut was less, but because that rate is (presumably) further out toward the right side of the curve.
The trick is, we don't know where exactly that rightmost part of the curve lies at which revenue is maximized. It could be 35% (in which case we're perfect already). It could be lower. It could be higher. Again, I know that's supply-side heresy, but if we cut taxes to the point that revenue goes DOWN, then we may be making moral or political sense, but we're not making economic sense. It does NOT naturally follow that every rate cut is a good thing... or else the perfect tax rate would devolve to zero, at which point we have no revenue, either, and therefore no interstates or army. But, on the other hand, raising a rate just because some folks want to play class-envy games is only a good idea if it can be done without shrinking the pie and having the opposite effect of what is intended. And notice that none of this addresses other factors, like what is the maximum "fair" rate (I have already posited that in my mind, an effective rate of 33% is about where I'd stop... which may be achieved with a higher top marginal rate). Also, this doesn't address other issues like the child tax credit, the home interest deduction, or the elimination of the "marriage penalty," all of which are concerned with other factors besides revenue.
So, anyway, my point with regard to this upcoming election is this. McCain promises to make the Bush tax cuts permanent. (If that doesn't happen, they'll expire in 2010. This will result in a tax increase for almost everybody who pays taxes.) Obama says he wants to eliminate the $102,000 cap on social security taxes and also go back to the old Clinton rates. But Obama has already said he'd exmpt the folks making $102-250k from the first, and I'll bet a dollar to a doughnut that he'd find a way to raise the top rates without messing too badly with the folks in the lower brackets whose votes he needs. I oppose that, as it gets that top bracket into effective rates of over my "magic number" of a third, and also as I think that probably moves us into the area of shrinking the economy. My advice would be to stand pat on rates. They are awfully close to "Goldilocks" rates right now. Maybe undertake some reforms that help the "little guy" whose FICA bill is higher than his income taxes, like increasing the child tax credit and having it also count against FICA tax. But generally, I'd say that politicians should apply their own version of the Hippocratic Oath: "first, do no harm."
Now this changes a bit when you make serious money. Take that same family and make Dad a high-dollar radiologist pulling down $400k (and ignoring for a second that their itemized deductions would certainly be higher, if only for living in a bigger house). The first $23k is still tax free, then there's a chunk paid at 10%, at 15%, at 25%, at 28%, at 33%, and finally, the last $27,300 is taxed at the 35% level. Total tax is a little over $104,000. That $2000 in child tax credit seems a drop in the bucket to this guy (actually, it may phase out at his income level, but I'm too lazy to look it up). So he's paying $102,000 in tax, or about 26% effective tax rate (again, plus the FICA). So a quarter of his pay goes to Uncle Sam. He's also paying an additional 3% in medicare taxes on every dollar ($12,000) , and since he's self-employed, he's paying the max 12.2% (both sides of social security) on the max of $102,000 ($12,400). So the total hit on his wallet is 31%, BEFORE we eliminate the cap on social security earnings. If we eliminate that cap it jumps to almost 41%.
Even at the extreme (Bill Gates, Oprah) end, the effective rate never quite reaches 35%. It may be 34.9999, but some tiny portion is always taxed at the lower levels. And of course, right now these guys still cap out on the Social Security at $102k, which diminishes as a percentage as you add millions and millions of dollars to the equation. Again, if you eliminate the cap, they'll be at near 50%.
Okay, that's all the math. What's the point? I know this comes as a bit of conservative heresy, but I don't think we're really over-taxed, at least not most of us. I have no empirical data to back this up, but my heart and my gut tell me it's immoral for the government to take more than about a third of what anybody earns. But even for the guy in the top 1% of taxpayers at $400,000 income, that's not currently the case. Again, eliminating the FICA cap makes it so. But as it stands right now, our system is very progressive (the top half of taxpayers pay over 96% of the total income tax revenues, and the top 1% of earners pay 39% of the total take), but with even high-dollar people not getting the shaft at anything like the confiscatory rates of the 1970s and before. What's more, this is a much higher percentage of total tax revenues paid by the top 1% than when the top bracket was double what it is now. So, on the one hand, I don't think we really need a new round of tax cuts for "fairness" reasons, but on the other, I don't think we need a hike on the evil "rich," who are already paying plenty and are right on the edge of where my "fairness threshold" kicks in.
BTW--All the numbers about taxes in this post came from the tax tables at Wikipedia. That, and my TI-35+ pocket calculator.
Okay, I promise, just one more nerdy post about tax rates and I'll try to come to a point.
Notice I haven't given hardly any opinions yet, just a basic primer for this stuff. More to come.
Thursday, June 19, 2008
So I celebrated my release by knocking out 2 miles in a little under 16 minutes within about an hour of getting home from the doc. The backside feels OK. The rest of me feels like I haven't run in two weeks and I'm carrying about 8 extra pounds. The only cure for that, I guess, is 2 more miles tomorrow and Saturday, then threes all next week, and then getting back into real running by July.
Thanks to all who have shown concern or prayed on my behalf.
Wednesday, June 18, 2008
Many people mistakenly think they are saving their own money in Social Security. That's not true. The 6.1% of your income that is deducted for FICA, plus an additional 6.1% your employer provides (which is really a camoflauged tax... your employer could pay that same money to you if it were not required by the government, and the self-employed pay both sides) are immediately paid out to the retired and disabled of today. There is a generational understanding that part of my generation's income will help take care of today's elderly, and my students and my children will one day do the same for me. Unfortunately, that math goes awry in the year 2047... the inflow won't cover the outflow. And it's worse than that. Supposedly there has been a "surplus" accumulating in the years where inflow exceeded pay-outs. We should start drawing down that surplus in the year 2018. Sadly, the government has been spending the surplus for years--all that's in the "trust fund" is IOU's from the government to itself. If your business did that, you'd be guilty of fraud.
There are only two possible solutions to this problem within the current framework, either alone or in combination. Either take in more or pay out less. These can be camoflauged. Raising the retirement age or slowing the rate of annual increases are both just sneaky ways of paying out less. So is means-testing. And raising the current cap ($102,000) on which FICA tax is paid while maintaining the same 12.2% rate is simply a hidden tax increase. Both are likely necessary. The problems are largely political--any attempt to slow or limit benefits is opposed by the AARP, whose demographic is the largest bloc of likely voters. And raising the limit on which tax is paid opens its own can of worms. Right now, what your benefits are is linked to how much tax you paid in. Since benefits are capped, so is maximum tax. Even though the "rate of return" on your "investment" in Social Security is awful, at least it is theoretically fair. If we raise the cap on the tax, should we also raise the benefits of those who pay the most (and likely need the help the least)? If not, we're just admitting that what once was a safety net is now yet another wealth-transfer program from those who earn to those who do not.
Another option often floated is private accounts... taking some portion of the 12.2% tax and investing it (maybe in t-bonds, or an index fund) in the taxpayer's name. The rest would fund the current system, but that part would become "your" money, and even be able to be left to your heirs. I find this a very attractive option, as those who die youngest pay tax their whole life and never collect. This is especially true of African-American men, whose average life expectancy is about the same as the retirement age... this means that the average black man pays a huge tax his whole life that will once day be spent by an elderly white woman (who have the longest life expectancy).
Personally, I don't think Social Security will ever "fail." The politicians won't allow that to happen. They'll nibble around the edges, hiding the tax increases and benefit cuts as best they can, constantly kicking the issue down the curb. Sadly, many Americans (especially those at the bottom of the income scale) pay more in FICA tax than they do in income taxes. My family does. We'll gradually pay more and more, and tomorrow's retirees will receive less and less by comparison to today. Some high earners will subsidize the system and will possibly receive nothing... but we'll call that "fair." Don't like it? Tough. Entitlements are here to stay.
At 5 AM, I woke up and decided to sneak into the living room and catch Sports Center. Good news--Boston won by 39, the biggest whipping ever administered in the finals. (The previous record of 35 points was held by the '65 Celtics, once again over the hated Lakers.)
I don't really like the modern NBA that much. "My" time was the mid to late 1980's, when Larry Bird and Magic Johnson were in their primes and Michael Jordan was the up-and-comer. I have often joked that I feel the same way about the NBA and politics... I haven't really liked the players or the game since '86. However, I make a slight exception for the San Antonio Spurs (my oldest son's favorite team), because they were the only team that still played what I would call solid, fundamental, team basketball (I'm happy that's what he likes, too). And now, this year's Celtics. They won with hustle, with grit, and with the best defense in the league.
The last time the Celtics (my team for as long as I've been watching b-ball) hoisted a banner was June of '86. That was month before I met my wife. It's been a LONG, LONG time. The last time they beat the hated Lakers was '84, when Magic choked. The evil team from the west coast won in '85 and again in '87, when injuries decimated what had been the greatest Celtic team of the modern era. Those were the only 2 wins of LA over Boston in 10 (now 11) head-to-head finals. So it's especially nice to have this latest win come over LA. And even better that the modern incarnation of LA is led by Kobe Bryant, my least favorite player since Bill Laimbeer (scratch that... I think I may even like Bill better than Kobe). Kobe represents all the things I hate about the modern game--immense ego, me-first mentality, huge individual stats at the expense of team wins, flashy offense over fundamentals, and an above-the-law attitude off the court (Kobe is, after all, a rapist). To see the workmanlike, much-less-heralded Paul Pierce shut him down is just icing on the cake.
I probably won't buy a t-shirt or hat to commemorate the championship. But for today, at least, I'm a proud Celtics fan.
Last night, Mrs. Sal remarked as I was getting in bed, "you look a little thicker around the middle." I protested, but finally decided to prove to her that it was all in her head by climbing on the scale. The result: 146 pounds. Admittedly, I had been eating junk food all day (and had just polished off all the leftovers of a particularly good ice cream dessert she made). And admittedly, I've had a week of getting 3 solid meals of camp food (including such things as biscuits and gravy for breakfast). Worse, thanks to my back injury, I haven't run in over a week, and only have one short run in the past two weeks. But still... that's only a pound less than my lifetime high, and it happened quick (I was 138 the week before camp).
What I guess this means is that I've finally reached a point where I need to run and/or watch my diet. That's no fun. And more than anything, I want to get on the roads and burn some of this poundage off. Hopefully, Dr. Lowery will give me the go-ahead to start working out again tomorrow. With the lower back still hurting, I'm hesitant to even do a sit-up until cleared. For now, I'm just bummed.
Monday, June 16, 2008
I think most of us define "rich" as "somebody who makes significantly more than me." But I'm looking for a number. Once I have a little feedback, I'll try to incorporate that into my piece on taxes. I'll start... just as a guess, I'd say that for a family (mom, dad, 2 kids), it would be a struggle to make less than about $50k (which is right at the national median income). Let's say $4000 a month before taxes. And I'd say that once you hit about $120k ($10,000 a month before taxes), you shouldn't be hurting too badly. Both of these numbers assume reasonable expenses (i.e. a mortgage about 25-33% of your take-home pay, maybe a car payment... obviously, if you stir in either especially frugal management or expensive toys like boats or luxury cars, that throws things off a bit). What do you think?
PS-I'm talking about gross income here, not taxable income... it may very well be that if we call $120k the start of "rich," they may only have to pay tax on $90-100k; likewise, the family making $48k may only have to pay tax on $25k or so when all deductions, exemptions, etc. are taken into account.
The next day was "games day," which involves running all over camp and performing various feats of derring-do. At the beginning, I did OK. But after about an hour or so, I was incapacitated by jolts of electric-style pain up and down my back. I had to limp back to the nurses and fess up to having a more severe injury than I had originally admitted. Our camp nurse (Becky) and resident pharmacist (Morgan) were real pros--they instantly diagnosed the problem and set me up with proper treatment. They also provided just enough "loving harassment" to ensure that I showed up as scheduled for anti-inflammatories and ice treatment every few hours. By the end of the week I was a little bit better.
I had hoped to get in to see my favorite orthopedist today (Monday, one full week after the initial injury). What I really, really want is a timeline and a plan to get me running again without causing any further setbacks. Unfortunately, the first appointment he has available is Thursday. I'm already feeling a good bit better... it's quite likely that by the time I see him, it will be a formality (and a copay). I am, however, going to take Nurse Becky's advice and take it easy (no running, no lifting, and regular doses of aleve) until I'm cleared by a pro. All I really want is to be able to run again, and soon. I can see my summer mileage goals slipping away.
Friday, June 6, 2008
Forgetting that, for a few minutes, congratulations are in order. First, to Obama for successfully becoming the nominee. Other factors aside, less than 60 men (and still no women) have ever been the nominee of the Democratic party. That's pretty good company! Secondly, to Obama and all of us in this great country for proving that the days when a black guy can't win are over. If anything, Obama's race has been part of his positive appeal, not a negative. I don't see how anybody can fail to be happy about that (and if, in the end, he should happen to lose a fair fight to John McCain, I certainly hope we won't fall back on the tired old line that the country "just wasn't ready"). And finally, a collective sigh of relief--it seems that the Clinton years are finally behind us. I can't say I'll miss them. I have joked ever since the very beginning of this process that I was in the ABC (Anybody But Clinton) camp. I may worry a great deal about what will happen if either of the other two candidates wins. Either way, I'm going to have some serious policy disagreements with the president. But I won't start at the outset with the belief that our country's leader is low-class, shady, and dishonest. Not that McCain or Obama could not either one turn out to be a disaster--even a source of scandal. But either of them will start with a clean slate and a presumption of good character. I couldn't say that about a Clinton (and let's not forget, you always get two for the price of one).
There are, of course, serious policy differences between Obama and McCain. There are areas on which they are similar (immigration, global warming). But they are diametrically opposed on Iraq, on abortion, on taxes, on judges, on negotiations with Iran, and those are just the big ones. Wouldn't it be nice if this campaign were all about which of those choices were the best for the country? Sure, there will be talk of flip-flopping, of Rezko and Wright, of the Keating Five. That's unavoidable. But for now, I'm reasonably optimistic about what it'll feel like teaching the basics of this campaign during first term of next school year. I sure hope I'm right.