Republicans Pushing for Tax Increase

Just when I was getting ready to vote republican this next election cycle (for the first time in my life), they go and play politics with the American People's lives:

http://www.foxnews.com/politics/2010/09/17/expiring-tax-cuts-hit-taxpayers-level/

Here's the deal: Obama wants to extend the Bush tax cuts for 97% of Americans. We can debate the benefits/disadvantages of taxing the rich later, but I can't imagine much debate from intelligent people on the goodness of keeping taxes lower for 97% of America in this current economy.

In an attempt to win electoral support, John Boehner (Republican leader in the House) is saying he wants an up or down vote on extending 100% of the Bush tax cuts. He's doing this so he can accomplish one of two things:

1) Keep the tax cuts in place for the wealthiest of Americans.

or

2) Go into the November elections saying to the other 97% of Americans, "See, Obama raised your taxes."

It's dishonest and bad for America. Both sides, Republican and Democrat, can agree on keeping tax cuts in place for 97% of us. Why don't the Republicans just come out and support that? They can then have their fight over taxes for the wealthy.

Of course, they will lose this last argument because the majority of Americans support higher taxes on the rich (I see both pluses and minuses to this but that's for another discussion). Considering how Republicans have been hammering Obama over not listening to the majority of Americans on health care, they know what a hard time they'll have keeping tax cuts for the wealthy if they don't force it through with this up/down vote.

It's disgusting and if I get a tax increase in January, I won't be blaming the Democrats, the blame will be placed squarely on the shoulders of the Republican party.

Conservative vs. Liberal

I've been super busy the past month building my cell phone repair empire but I feel obligated to post something. So here it is:

What makes someone conservative, and what makes someone liberal?

Conservatives believe that the government should stay out of our personal finances but should actively engage itself in our personal morality.

Liberals believe that government should leave people to decide their own moral standards but want an active role in taking our money.

So there you have it. There is no such thing as a party of "small government". Both parties want government actively engaged in our lives - just in different ways.

Bad Logic

This kind of populist rhetoric just makes me angry:

"At least within this past decade, employers didn't feel any pressure to have to hire more workers and entice them with higher wages," says Harry Holzer, a former chief economist with the Labor Department...

This was from a story on NPR. To NPR's credit they point out:

"Employers...have to concern themselves with total compensation packages – not just wages."

This is what people need to realize: For the past decade workers' compensation has not been stagnating, it has been increasing significantly but almost all of that increase is going into their health care costs.

Again, we need to get rid of the idea of companies paying for their employees' health care costs. Then you would see a significant rise in employee pay and, in my opinion, a pretty significant drop in health care costs and, hence, health care insurance costs.

Prisoners of War...Really?

So I've been thinking about this whole business with trying "terrorists" in military courts. I use quotes around "terrorists" because if we are to treat them as foreign combatants what we're really calling them is "warriors". A title I hold in far too high esteem for the men that indiscriminately try to kill innocent civilians around the world, treat women like dogs in their own countries, and who riot over cartoons.

I'm not following along with the 70%+ of Americans that think that Khalid Sheik Mohammed (one of the masterminds of 9/11) or the Christmas Day underwear bomber should be given the reverence of enemy combatants. They're not. They are thugs and criminals that should not be afforded the rights of military combatants.

I think that most Americans believe that if we try these guys in military courts we can somehow completely disregard any rights for them at all. That's not the case. Now I'm not a legal expert but it would seem obvious to me that if you label them as military combatants, we're expected to give them the rights afforded prisoners of war under the Geneva convention.

Do we really want to do that?

Again, I'm not an expert but I think the following few provisions of the Geneva convention are pretty clear:

Article 109

...Parties to the conflict are bound to send back to their own country, regardless of number or rank, seriously wounded and seriously sick prisoners of war, after having cared for them until they are fit to travel...

Article 115

No prisoner of war on whom a disciplinary punishment has been imposed and who is eligible for repatriation or for accommodation in a neutral country, may be kept back on the plea that he has not undergone his punishment.

Article 118

Prisoners of war shall be released and repatriated without delay after the cessation of active hostilities.

In other words, these articles all dictate that a prisoner of war: Has to be released if he's terminally ill even if he hasn't finished his sentence and, as soon as the "war" is over, he has to be sent home.

Is that what people really want? I don't. I prefer to see these men locked up for the rest of their lives regardless of the outcome of our battle with Islamic Terrorists.

So please, everyone, come to your senses and realize that these men are not soldiers, they are murderers and criminals and we should treat them as such.

GOP Wants to be Bribed, Too

Feeling left out in the wake of the attempted Democratic bribery of Mary Landrieu and Ben Nelson, the Republicans have decided to show that they, too, are not only happy to seek bribes but will actively pursue them:

Read this story about Republican senator Richard Shelby from Alabama.

Here's the Cliff's Note version: He is holding up legislation on 70 nominations on the house floor until the rest of the senate approves some earmarks for his home state. If this is the way business is done in Washington (by either party), we need to seriously considering reforming the way legislation gets through the House and Senate.

Small Business Tax Relief

The two or three people out there that read this blog probably already know this but just in case you're someone that randomly stumbled across this insightful blog, let me tell you one thing about myself: I, along with one other person, own a small business (we fix broken iPhones). This was our first full year as a business and by my own standards, I think we did alright.

We did about $120K in sales and walked away with a profit of about $40K. Now that's not going to make us rich (remember, we have to divide that profit by 2), but I feel that that's a pretty good start for a first year business. On top of that, we run our business really lean so, of that $40K in profits, the business has about $20K in cash in the bank.

I don't give you these numbers to brag but rather to illustrate a very, very important point: While we have been successful so far, we are far from rich business owners. Yet I spoke with our accountant yesterday and discovered that we are going to owe about $15K in taxes to the federal government (social security, medicare, and income tax). In other words, we owe over a third of all our profits to the federal government.

Now that might not be a big deal if we made 1/2 a million dollars in profits, but given our actual profits, that puts us in a serious cash flow problem. Why? Because we are in the process of trying to start up a retail space. That means we need to buy a significant amount of inventory and we would like to hire a few employees. By reducing our current cash on hand from $20K to $5K, the federal government is severely hampering our ability to grow as a company.

If President Obama and the Democrats are serious about helping today's economy to recover and regrow, they really need to make sure that small businesses like mine - new, small, growing, and limited on resources - have an easier time succeeding.

My solution? (Because I hate it when people just point out problems without offering some sort of solution.) I think new businesses should be excluded from the full 15% payroll tax. One option might be something like this: 0% the first year, 5% the second year, 10% the third year, and the full 15% after that. This would give startup businesses the chance to really grow at a time when cash flow is absolutely critical.

So, if in 3 months we don't have 5 or 6 part-time employees working for us, you can blame the federal government for limiting our growth.

Why I Was Wrong

Last week I read of President Obama's plan to add a 15% tax to very large banks (those with over $50 billion in assets). Being a capitalist to my core, I assumed this was a bad idea. "The banks will just pass that on to their customers," was my thought.

I believe I was wrong.

I have to give thanks here to a friend of mine that discussed the issue with me. The conversation went something like this:

Me: Can you believe this tax? The banks are just going to pass that extra 15% on to their customers.

Friend: Actually, that's not true.

Me: What? I thought you studied economics? You should know better.

Friend: If the tax is assessed across all bank, you may be right. However, in this case, the tax is only being levied on banks over $50 billion in assets. That means those banks can't just pass on the tax or they give a competitive advantage to smaller banks.

Me: I see.

That's roughly how the conversation went and in the end, I have to say that my opinion was changed and I am now in full favor of this tax for a few reasons:

1. This whole thing about banks being too big to fail really makes me mad. Unfortunately, the way the system works today, it's a reality. We can't let an institution that holds a trillion dollars or more of US assets just go belly up. It would be devastating.
2. If we can agree on item 1) then the only solution is to make sure that banks don't get too big to fail. Yes, I realize this is a bit antithetical to capitalistic beliefs that I hold, but the fact is that banks are different from most other economic entities. They are a center point of the US (and the world) economy. By guaranteeing them the government will bail them out if they screw up, they lose the incentive to be cautious. This is a very, very bad situation as the past 18 months has shown us.
3. There are three basic options to limit the size of banks: Tons of government regulation that will be confusing, expensive, and ineffective; have the government force a break up if they get too big; or a tax policy that either discourages enormous banks from forming or provides a competitive advantage to their smaller competitors.

I don't think government regulation is generally effective (people are very smart about finding the loopholes) and I'm very opposed to the government breaking up just about any business. So that leaves the tax code as the only real option (as far as I'm concerned).

By levying this 15% tax on big banks, their growth will slow because they can't pass that cost on to consumers. If they try, it will drive people to smaller banks. Likewise, it will discourage mergers between mid-size banks because, if they go over the $50 billion threshold, they will be put at a disadvantage.

In short, I'm going to have to support this idea even if I don't support Obama's populist rhetoric to try to get it passed.

Bad Coffee Mug Design

I'm taking a break from political discussion to comment on coffee mug designs. After all, this blog is called THINK pickle so let's think about this for a second...

I'm having a cup of coffee in my favorite coffee shop and I just discovered something. The design of their coffee mugs is backwards. The mug has a small diameter on the bottom and a large diameter on the top. While aesthetically pleasing to gaze upon, it is horrible inefficient at doing one of it's two major tasks at hand.

The task in question is keeping my coffee warm. A well known fact amongst even high school physics students is that a larger surface area to volume ratio means more rapid cooling. By having the larger diameter at the top of the cup, we have created that larger surface area to volume ratio. This means my coffee, which, like my women, I enjoy hot, is cooling too fast.

There's also a secondary problem with this design and it relates to the second function of a coffee mug: To contain the beverage. As anyone that has tried to take a sharp corner in an SUV at a high speed knows, things with a high center of gravity tend to tip over. By having a higher diameter at the top, my coffee mug contains the bulk of it's volume, and hence, its center of gravity, up higher. This means my coffee mug is more likely to tip over. Not good for a hot cup of coffee (or in this case, a rapidly cooling cup of coffee).

In conclusion, while the "small on the bottom, big on the top" design may serve busty Hollywood actresses well, it has no business being the design of a coffee mug.