.comment-link {margin-left:.6em;} <$BlogRSDURL$>

Thursday, January 24, 2008



Call me cynical if you will, although I prefer being tagged as a skeptic if I am categorized by my view of political pronouncements. Frankly, I follow my father’s advice, when he told me to believe nothing that I read or hear, and only half of what I see. If I cannot prove a statement by any politician to my satisfaction, I consider it a misrepresentation at a minimum, or an outright falsehood at the worst. And when it comes to politics, there are more falsehoods than exaggerations.

One of the most repeated claims today by many in politics is that the tax cuts initiated by President Bush benefited the wealthy and major corporations, with little or no benefit to the middle class and lower income people. These tax cuts are due to expire in 2010, and the only constant I am hearing from the Democratic candidates is that they all intend to allow these cuts to expire. The current leadership of both the House and Senate, now controlled by Democrats, agree with the candidates and want these “unfair” cuts to expire.

I am not stuck on stupid, so I understand that if you give the same break to the middle class that you give to the upper income population, the wealthy will keep more money than me, as they have more to begin with. Cut the taxes on my middle class income at the same rate as someone in a much larger income bracket, and they will get greater benefit in actual dollars saved. However, my skepticism comes into play when politicians say that the middle class was not treated equally with upper income taxpayers by these tax changes. It took me ten minutes to establish the facts to my satisfaction, and I challenge others to follow my example, and see for yourself what happened when the tax rates were adjusted under the Bush tax changes.

Step 1 – Pull out a copy of your Federal tax return for 2002, the last year before the changes to the tax rates took effect. Write down just two figures; your taxable income and the amount of tax you paid.

Step 2 – Divide the amount of Federal tax paid by your taxable income. This will give you the actual percentage rate of taxes you paid in 2002.

Step 3 – Pull out a copy of your Federal tax return for 2006, the most recent year where the revised tax rates have been in effect. Again, write down just two figures; your taxable income and the amount of tax you paid.

Step 4 – Divide the amount of Federal tax paid by your taxable income. This will give you the actual percentage rate of taxes you paid in 2006.

Step 5 - Subtract the 2006 tax rate from the 2002 tax rate. Did the rate go up or down?

Please let me share the actual results of this exercise when my wife and I did this. In the interest of full disclosure, we used our 2005 Federal return, as that was the last full year I worked before retiring halfway through 2006.

In 2002, on a decidedly middle class income, we paid a Federal rate of 17.9 percent. In 2005, we paid Federal taxes of 13.6 percent. Our tax rate had dropped 4.3 percent. In other words, our Federal tax burden was reduced by a substantial 24 percent. Actual income was not a factor, as our taxable income had only gone up 1.6 percent from 2002 to 2005. There also was no change in dependants (our five children are all adults), nor any significant change in any other deductions or credits as evidenced by the very small increase in our taxable income. During that three year period, my income remained flat, and my wife received only a modest raise.

The bottom line is that the tax cuts had a sizable impact on the Federal taxes we paid, and that impact was beneficial. Should we elect a presidential candidate committed to allowing these cuts to expire, with a sympathetic congress that also believes these favorable cuts should go away, I have no doubt that my wife and I will pay more in 2010 than 2009, even if there are no new taxes or raises in existing taxes, simply because we would go back to the 2002 rates. Before you nod in agreement when you hear the candidates talk about unfair tax cuts, please take this simple five step test yourself, and then decide if what you are being told is true or not.

When considering how my wife and I will vote in 2008, one factor that will come into play is simply this. If we have a Democratic President, and a Democratic congress, they have already told me that my taxes will go up 24 percent. This may be one time when candidates are telling us the truth.

Tuesday, January 08, 2008



A good friend of mine, Anne Lieberman, wrote an interesting piece at her blog on the differences between the Republican and Democratic candidates for their respective party nominations for President. You can read it here. http://bokertov.typepad.com/btb/2008/01/democrats-are-m.html

It got me thinking about the method my wife and I use to select candidates that we will support, in both local and national elections. We do try to achieve agreement, so that our votes don’t offset each other, and usually wind up with the same candidate. I thought I would share this method of selection, in hopes that it would assist some of the undecided voters facing the very serious task of exercising the most important right we have, that of selecting the people who will represent us, and make decisions affecting our lives, our city, our state and our nation.

In the interest of full disclosure, we are both registered as Republicans, but never vote strictly on party affiliation. Rather, we make every attempt to be objective, and base our preference on actual positions. Before retirement, my years as a financial analyst and system administrator have had a profound impact on the way I make decisions of importance. Therefore, this method may prove useful to any reader, regardless of political persuasion.

We each make a list of the ten issues that are most important to us, and can actually be affected by the candidate for whatever elective office we are rating. We rank these ten issues with a weighted score of 1 to 10. The most important issue has a point value of 10; the least important has a point value of 1. A perfect score on all issues would result in a score of 55 points from each of us. I would mention at this point that no candidate for any office we have rated ever achieved an individual score of 55, let alone a combined score of 110. Using all informational assets available, we research each candidate’s position on these issues. Since we are both Chicago born skeptics, we not only look at statements, speeches and position papers from the current campaign, but also view their past positions and voting records, to determine their commitment to their present positions.

After we have each worked separately, and scored the candidates appropriately, we combine our scores for each candidate. If there is any significant disparity in our selection, we discuss where the divergence lies, and work to resolve the differences. Usually, we are able to agree on a single candidate, and vote accordingly.

We do have several simple rules to our methodology. One is that we will not vote for any candidate who scores less than 56, out of a total of 110 possible combined points. This rarely happens, but is not unheard of. In the 1996 presidential election scoring, Bob Dole scored 48 on our combined ratings, and Bill Clinton scored 45. After discussion, we agreed on a write in candidate, and voted neither Republican nor Democratic in that election. On each issue, there are only two possible point values. For example, if the issue is illegal immigration, and it is rated as the third most important to us, the candidate can either get an 8 or a 0 from each of us. In other words, we either agree with the candidate’s position, or we don’t. There is no equivocation or ‘spinning’ in our system. We leave that to the politicians.

I don’t make the claim that this is a perfect system, but it does work for us. It provides us with at least a semblance of objectivity rather than partisanship, and induces us to research candidates on their records and positions, rather than rhetoric and personality. The most important aspect, at least to my bride and I, is that we can and do discuss politics with each other without rancor or argument. That two contentious Chicagoans remain married after 42 years shows that logic based decisions, rather than emotionally based perceptions are better, even if less than perfect.

This page is powered by Blogger. Isn't yours?