Friday, August 20, 2010

The Daily Note - Speaking of Taxes Part I

A revisit of a series that may be very timely for today, as Congress will reconvene considering taxation for the coming year of 2011. This 4 part series I wrote beginning of 2009 and I did not know then how bad it will get but, unfortunately, some lessons need to be learned again and again.

Speaking of Taxes, Part I : Global Euphoria Is In!

The future is here! Global Euphoria is in! All other thoughts are anomalies. Fascinating isn't??

Some 3 years ago, unemployment was at a low, incomes were at the highest, even higher than 1999/2000 during the dot com tax revenue collection, and yet the economy according to the news broadcasts was BAD. Everyone was using the "R" word (for recession) and Congress was trying to have the Administration admit it. Listening to the TV reports then was like being in a different country than I was reading about. In those days I was deep into news headlines and reports reading roughly 2000+ headlines daily and many of which I read in depth as to the story. I was also deep into keeping people out of tax hell, something I continue do.

The reality was that tax revenues were at an all time high from all sources, which continued to tax year 2007. Three years of record high tax revenues collected from individuals and from corporations that was hardly noticed if reported at all by the media. How can it be so if we were in such bad economy? You don't pay taxes on borrowed money, you don't get to deduct interests on loans other than your mortgage and yet.. record tax revenues went not only to the federal government but to states as well. So how come they're broke? It's simple, because they spent it like drunken sailors who think the next paycheck is only 2 weeks away and they have no care in the world. That's the group you've entrusted with your hard earned dollars to be responsible about your well being and assure your future.

That is precisely how most of the Congress talks and walks. Correction: they talk as if they're kids in their first year away at college and they act as if there's more where that came from so what the hey.. let's whoop it up! Well, no more I hope. They won't notice that they're slowly strangling the golden goose, selling the cow and forgetting what came from both. Of course now that the revenue is reduced, they can think of only one way to solve this catastrophe and that is to raise taxes! The rich should pay! You can tell by what they do that they hold themselves guiltless for what has emerged as the greatest economic catastrophe since the 1970's. NOT DEPRESSION as so many would like to scare you with.

Yet scared you should be because the 1970's and early 1980's were no pretty years: 9.9% unemployment, 18-20% mortgage interest rates, not to mention record property taxes in California, plus high inflation. Ohhhh goodies.. just what we want again.. right? But hey remember: 4% unemployment was bad, inflation below 3% was bad, mortgage interest rates were bad at below 6% according to your media. It's what they were selling as a bad economy. We were all living in the streets homeless the way the media painted it.

My point is that if you don't think things through for yourself, you can be made to believe anything. So next time you're told to feel euphoric about an event or to feel morose about another, please take the time to check it out. Most likely than not, as with the markets, it's just an opinion based in fact .. or not.

What's been created is a government that on every level will reach into your pocket at every opportunity for your "greater good" to which you said: "Yes we can!"!!

Thanks for Reading

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