GW's Tax Increase

The deficit spending that the GOP has engaged in over the past six years has direct and immediate impacts on the American population. Everyone is talking about saddling future generations with taxes to pay the debt that has been incurred today, but Americans are having to pay the equivalent of higher taxes today to prevent themselves from being hit with even bigger taxes tomorrow to compensate for the deficit spending.

All financial advisors say that you need to start planning for your retirement as early as possible. The benefit of compound interest and maximizing your contributions to a 401(k) or IRA will assist in ensuring that you will be able to pay for your retirement when that day comes. If you do not start early, the compound interest will not have long enough to provide maximum benefits, and if you do not contribute enough money to the retirement plan, you will not get enough compounding to total the amount necessary for retirement. However, there is another element to this that is not being discussed: tomorrow's tax rate.

Today, you can put your money into a traditional 401(k) or IRA. Either allow you to deduct the contribution from your taxes. Thus, you get the benefit of saving pre-tax dollars and allowing the compounding effect to occur until you withdraw the money. When you withdraw the money after retirement, you will be required to pay tax on all the money withdrawn (contributions and earnings). The theory is that when you are working, you are going to be in a higher tax bracket than when you are retired and have no working income. This may not come true. Due to the deficit spending this administration has embarked on, when today's 30-somethings start retiring, Congress may need to significantly raise the tax rates to pay for the Social Security IOUs that have been accumulating since the Reagan Administration and crescendoing during this Administration as well as pay for all of the accumulated debt that has been incurred during the past six years. The end result is that today's tax benefit will become tomorrow's tax burden. Those who benefitted by deferring the tax consequences of the traditional 401(k) and IRA will get hit with a higher tax burden than if they had originally saved post-tax dollars.

Many retirement advisors are telling people to save money in a Roth IRA or the newly created Roth 401(k). These are post-tax dollars saved and when they are withdrawn no tax is paid. The net result is that people are having to pay more in taxes today, by not getting the tax deferred traditional retirement plans, so they can avoid having to pay the possible excruciatingly high tax that will be required tomorrow to pay for the fiscal mismanagement we are currently under.

No one explained to the tax payers that the tax cuts for the rich in 2001 and 2003 were going to immediately increase the tax burden of the middle class. This is the bait and switch in which the GOP consistently engages. Deceive the public into thinking that they will benefit by sending them a check for $300.00 and then increase their effective tax rate significantly, but don't tell them what you are doing until it is too late for them to stop you from giving significant benefits your rich country club buddies. Worse yet, most people do not have access to a Roth 401(k), so they cannot even protect themselves from getting hurt upon retirement. Shame on the Administration for continuing to undercut the middle class in this manner.

Sideline Suits

Last Monday during the Monday Night Football Game, Jack Del Rio the Jacksonville Jaguars Head Coach was wearing a business suit on the sidelines. One of the commentators mentioned that there are league rules the prohibit coaches from wearing suits on the sidelines, which apparently is true; however, Del Rio got an exemption in order to wear one. The San Francisco Coach, Mike Nolan, has received a similar exemption. These exemptions are for only a couple of games. The idea of prohibiting coaches from wearing suits is ridiculous and needs to be reevaluated.

George Steinbrenner, New York Yankees owner, requires that all of his baseball players cut their hair appropriately and cannot have beards. Additionally, each of them must wear a suit when they are traveling to a game. Steinbrenner requires that his players show respect and look respectable when they are seen in public. This is a stark contrast from what the NFL requires of its representatives.

The NFL does not allow suits on the sidelines because it wants the free promotion from the wearing of hats and sweatshirts. NFL Properties wants to sell its wears and apparently suits do not accomplish this. There is more to the game than how much money is paid for jerseys and other paraphenalia. The coaches and players are role models for many, and the way they look and act has a direct impact on the way others look and act.

A stroll through the criminal court on sentencing day is an indication of how influential the sports franchises are. When one is trying to make a good impression in an effort to obtain lienency, what they wear is important. However, virtually none of those who have been arrested and pled out to a crime or been found guilty are wearing a suit. Some are in sports jerseys while others are in jeans and a t-shirt. While many of the sports jerseys cost more than most dress shirts, they are not a substitute for a shirt and tie when that is what is appropriate. Educating people when a suit is appropriate and when street attire is appropriate is important. Having football coaches look and act respectfully when they are on camera could go a long way in providing this necessary education, just as Steinbrenner requires of his players.

New Late Policy

The next time you are stuck in traffic that you did not anticipate on your way to work and end up being a few minutes late consider the new Wal-Mart lateness policy. Wal-Mart employees, if they are going to be absent or late for work, no less than an hour before their shift starts, must call a central number. At that time they will receive a confirmation number and then they must call their manager and provide that confirmation number to the manager. If this is not done, or not done at least an hour prior to the shift begins, the employee will receive a demerit. After a certain number of demerits discipline including termination will result.

This is an egregious policy for even the most responsible of people. All parents know how likely it is that a child will not cooperate in getting ready in the morning and getting dropped off at the daycare resulting in being a few minutes late to the office. This cannot be anticipated an hour in advance. Also, anyone who commutes to the office knows that unexpected traffic can occur, causing some ont to sometimes up to an hour late, and despite appropriate due diligence a person can be late a number of times in any given time period due to the unexpected.

Now couple the ordinary difficulties of getting to work on time with the people who work at Wal-Mart. The low wages the Wal-Mart pays can result in people not owning a telephone because they cannot afford one. This prevents them from calling the required number an hour before work. Additionally, a number of people who work low wage jobs do not have reliable vehicles or take public transportation such as a bus to work. The car can unexpectedly break down and public transportation in many areas is far from being reliable. These kinds of problems are not known an hour prior to work. They are also confronted with childcare issues and the standard traffic congestion that we are all confronted with.

This policy appears to be a system designed to have employees live in fear of losing their jobs. It is nothing more than a strong arm tactic so that managers can laud something over the heads of already demoralized employees. Having employees live in fear of their continued employment is not conducive to having a productive workforce. It is when employees feel comfortable in their surroundings and feel that they are contributing to something good that they will have the incentive to work hard opposed to doing just enough to get by. Wal-Mart apparently does not seek to have such an environment.

Of course, the more animosity it shows toward its employees, the more likely it is that the employees will leave and less likely Wal-Mart will be successful in finding replacements. Word gets around about where is a good and bad place to work. The good employees will know they do not want to work in a place like Wal-Mart and the bad employees will be late often enough that they will be fired. That does not leave too many people to work at the store.

Employers need to start taking lessons from Wal-Mart as to what they should not do such as skimp on health benefits, continuously cut wages to benefit the bottomline and now force employees to live in fear of their jobs by instituting bad beauricratic policies that are bad on paper and bad in practice.

The Big Three Healthcare

Recently there was a meeting of the Big Three with GW. While the agenda was not provided to the public, it was speculated that one of the topics was going to be the pinch the car manufacturers are feeling due to their healthcare costs. As previously discussed in this blog, GM has to increase its sticker price by approximately $1,500 per vehicle to pay for health insurance for its workers and retirees. This places GM at a business disadvantage since its major competitors, Toyota and Honda, do not have the $5 billion per year health insurance bill and can price their vehicles at a lower cost. Business is finally realizing that they are at a disadvantage due to the current health insurance system. Until universal healthcare is implemented in the United States, U.S. companies will not be able to compete in a global market. Maybe the politicians will begin to listen now that the business community is supporting universal healthcare since it really is good for business and the economy.

Box Store Healthcare

Maryland passed a law requiring that stores with a specific number of emplolyees and making a specific amount of sales was required to provide healthcare to its employees. The law was pointed at the box stores that pay subprime wages and cuts costs by not offering healthcare to its employees. The law was relatively recently struck down by a Federal District Court and Maryland has taken an appeal. The Federal District Court determined that a federal law, ERISA, preempted the state law and, therefore, the state law could not contradict or alter the ERISA requirements. While the Court may be correct on the legal analysis and it may be upheld on appeal, the issue has been squarely confronted by the states and calls to arms will likely rise to the Federal level requiring that Congress act.

A Berkeley Study concluded that tax payers are subsidizing Wal-Mart. The Wal-Mart employees do not receive health insurance and when they get sick they end up at the emergency room. (for more infomation on Wal-Mart Healthcare) Joe Taxpayer ends up flipping the bill. Thus, the cost for low prices is higher taxes to pay for the corporate subsidies Wal-Mart receives. Maryland's law sought to end these subsidies.

A number of other states were considering similar laws and they likely will not pass these laws until resolution is brought to the Maryland case. At that time, they may try to tailor new laws to the court ruling or they may start to put pressure on the Congress to amend ERISA to allow for the state mandates or they may call upon Congress to pass a similar law to Maryland's. Of course the latter is better than the former since it would impose a universal solution opposed to the piecemeal solution that would result from state by state laws. Further, Wal-Mart and other companies would be knowledgeable of all of its obligations under a universal federal law opposed to having to interpret each state law and trying to find the loopholes available in the various state laws, which will inevitably be found and exploited (better to pay the lawyers than the workers apparently.)

With a Democratic Congress Wal-Mart should be concerned that this type of legislation will start to get traction. While the Democrats are not enemies of business as they were once perceived to be a popular policy change such as this is the very type of issue they campaigned on to get elected and the new Congress should take this issue up as one of its first pieces of legislation. In the meantime, Maryland is right to continue the legal battle and attempt to salvage its healthcare law.

Why They Lost

This administration apparently believes that the voters are stupid. Rumsfeld's recent statement that the the strategy in Iraq is "too complex" for mere mortals to understand shows the contempt this administration has for the voting public. To assume that those who have a vested interest in the strategy, namely those who may be called to serve and those with family members serving, and those who follow the administration military decisions, are too stupid to understand the strategy is fatal to any elected official.

The American public is a lot of thing including apathetic, disinterested, busy and suffering at the hands of government decisions to cut back on various social programs. One thing it is not is stupid. The strategies that are being implemented in Iraq are far from being too complex for the average American to understand. There is nothing confusing about Cheney's statement that the insurgents are in their last throws, Bush's statement that he want's Bin Laden dead or alive and his statement during the debates that he does not give Bin Laden much thought, or other administration statements indicating that (1) we should expect immediate result from their brilliant decisions and (2) there is no coherent strategy except the "stay the course" mentality that has been the policy from the beginning.

The GOP has blindly followed the administration into the war. At no time has the GOP controlled Congress or Senate tried to call the administration to account for any of its actions. There were never questions about why the administration was firing generals who said things that were true but not part of the scrpt they wanted to read from. There were never questions as to why the soldiers were not being provided the proper equipment. There was never a question as to why Haliburton and Bechtel were receiving huge contracts. There were never questions as to why the cost has topped $10 billion per month. This lack of independent thought by the legislature and the contempt the administration shows the general public comes through in an election. The results of this past election provided the just dues to the party that does not believe in the people's ability to question the war and understand that those who are in charge of the military do not know what they are doing.

Potatoes From A Box

We are all busy. With the boss’s demands, the long commute, shuttling kids between activities, community service and other obligations, the day is stretched thin, and as a result sacrifices are made. Everyone needs to prioritize. They need to determine what activities they are going to focus on and what they are going to drop by the leeway.

For many families, dinner together has been dropped. When dad works late, mom is picking up junior from soccer practice and sister is being shuttled with the neighbor friend to dance class, many families do not have an hour in the four o’clock to eight o’clock zone to get together at a single dinner table. This is a reasonable sacrifice considering everyone can have a healthful dinner without sitting at a single table at the same time; however, if marketing and items in a grocery store are any indication, many families are not ensuring that there is a healthful meal to be eaten for dinner.

Among the ready to eat items being advertised is a bagged pot roast. Apparently everything someone needs for a pot roast is in the bag: the roast, vegetables, gravy mix, potatoes, everything. All the person has to do is add water and throw it into the crockpot and go. There is something seriously wrong with this concept. Pot roast is about the easiest meal that anyone can make. Cut up a few vegetables, wash and slice a few potatoes and throw the roast into a crock pot for ten hours. It is perfect for the busy family. It can be put into the pot in the morning before anyone goes to work, and it will be hot and cooked when the first person gets home. The simplicity of the meal makes the idea that some families are making it out of a bag appalling.

Of course pot roast is not the only easy to make item people are buying in a ready made form. Potatoes have for years been available in an instant form. Either through power or sliced and dehydrated for potatoes au gratin these may have been one of the first ready to eat boxed meal sold to the masses. It is disappointing since these are easy items to make. Why is it that we have concluded that we do not have ten minutes to boil some potatoes or slice a few potatoes and add the basic ingredients needed for potatoes au gratin?

These kinds of food items are hurting us more than they are helping. First they cost more than the raw ingredients. Second they are all high in preservatives and sodium and other food stuffs that nutritionists and doctors warn us against eating. By having bad eating habits, we are reducing our efficiency at work causing us to work longer hours and be away from home more. It is only through proper nutrition that a healthful living can be achieved. Moreover, it is unlikely that we as a society are actually so busy that we cannot spend the ten or so minutes that are necessary to make basic healthful meals for ourselves and families. There is just no reason why we need to continue eating potatoes out of a box.

School Days

A typical school day for public school highschool students begins slightly before 8:00 a.m. and goes until about 2:30 p.m. This is less than seven hours of class time minus time for the students to eat lunch. Thus, there is approximately five hours of actual education time for students and a number of high school students have a period or two for a study hall during which they are not receiving lectures. One of the basis for justifying "No Child Left Behind" was to determine which schools were failing and assist the United States in rising in the international statistics. Creating new tests will not benefit the schools; rather, we need a complete overhaul of the way we address the education process. First we need to start spending time educating students. A six hour day with study halls is not sufficient time for students to be educated. This is a nominal part of the day and the amount of time students can spend learning needs to increase. There is no reason that students cannot have their academic day go from 9:00 a.m. to 5:00 p.m.

The second basic change that needs to occur is the academic year needs to be lengthened. Most schools have only 180 days of class. Students get holidays throughout scattered throughout the year and are out of class by the end of June. With so much time out of class, students are not reaching their maximum potential of learning. There is no reason for a mid-winter break or a spring break and the reasons for having long summer breaks is obsolete. We are no longer an agricultural society and the students are not needed on the farm. Thus, we need to make the academic year a minimum of 220 days with only a short break (two weeks) between academic years. This will allow students to spend more time in the classroom learning opposed to out of the classroom forgetting their texts.

If we want to rise in the international rankings we need to look at what the other countries are doing to out educate the US. The most basic items are that they require the students to actually sit in class during the day, not just a nominal portion of the day, and they require that the students spend the majority of the year in the classroom, not just six months. Lets require our students to start spending time learning opposed to being on break and start trying to compete on a real basis with the international community with our education system.