News-Record.com

Protectionism, regressive taxes, and no social safety net.

Interesting.

I was reading this morning about a former head of Coca Cola paid one year a salary of $100 million .. but he only took $5 million right away .. so $95 million was deferred from taxes and invested for him - becoming de-facto IRA / 401K contributions.

Because he didn't actually take the cash - Coke paid an extra $300,000 in corporate taxes - since they could not use the deduction would normally associated with a paid salary ..

Let's see (in simplified terms): Coke shells out $1,300,000 less $175,000 [35% deduction for the actually-paid salary] or $1,125,000 .. the Feds get [say 35% of $5 million or] $175,000 ... and the CEO gets "a mere" $3,250,000 ($271,000 per Month TAKE HOME) .. plus $95,000,000 into a tax free shelter .. all due to a 1974 law that allows this foolery.

Had it been the a group of us being paid the same $100,000,000 ... it would have been different ... and who do you think picked up the difference between the $175,000 he paid and the $35,000,000 we have to pay? Yep .. us.

ALSO .. do you think Your IRA / 401K advisor would be hire to manage the $95,000,000 portfolio he was paid for justthis one year's wervice? No? Why not? Think maybe he got the better advisor, leaving the chaff to advise you? How well did your portfolio do last year?

Now I'll agree Government must run like a business .. which Is why I supported Cheney on 2000 - figured he'd run the country like a business ...

... and I'll agree "greedy politicians" ... bla bla bla ...

... and I'll agree "Without manufacturing jobs" ... bla .. bla .. bla ...

... and I'll agree "endless money pits must be cut" ... bla .. bla .. bla ...

... and I'll agree "Americans must pay their fair share" ...

... but if the LTE really wants to "stop making it the burden of the cash-strapped homeowner", she needs to look for "government bailouts" well beyond NAFTA and CAFTA Freddie, Fannie, HUD, AIG, banks, automakers, social welfare ...

... bla .. bla .. bla ...

REDO:

Let's see (in simplified terms): Coke shells out $135,000,000 less $175,000 [a 35% deduction for the actually-paid salary] or $134,825,000 ...

PS .. I'm sure this "producer" was worth every penny ...

"Take assets, pay off trillions they borrowed without taxpayers’ consent"

What are we talking about here? Roads? Ted Stevens massage chair? Army bases? The national mall? No clue!

Actually in her confused ramblings there was an idea that I agree with. I think our national representatives should take a pay cut until the economy turns around (not to the extent that she proposes).

An essence of good leadership is shared sacrifice. It is said that Teddy Roosevelt when he took San Juan Hill (actually Kettle Hill) he didn't say "Charge". He said "Follow me".

What we need right now are leaders that will share the sacrifices that all of us are having to make right now.

A self imposed pay cut would speak volumes to the American people.

Won't happen though.

Pity. It would pay off handsomely for both them and us.

Oh, for pity's sake. The last thing we need is for government to run like a business. We tried that under Cheney, and look what we ended up with.

Government is not a business. It is not created to make a profit for shareholders.

Its role is to govern, and provide services to taxpayers.

What we need is responsive government. Politicians are so overwhelmed by self interest due to business influences, often competing with one another, that we can't get anything done.

Running it like a business makes it a business, and we don't need any more of that.

Should it be more efficient? Oh, heck yes! Government needs to stop hamstringing itself with rules and regulations that keep it from doing its own job.

Rules and regulatios are good in small doses--I'm not say deregulate everything (we saw what a disaster that was for air travel and securities). What I am saying is, don't try to make a rule for every circumstance, and don't get so focused on rule making, no one can do any work.

Give people authority, then let them do their jobs. Hold them accountable if they screw up. The biggest problem in government right now is 1) no one will make a decision because it's easier not to, and 2) no one is accountable for what they do AND fail to do.

That's what has to change.

I recommend 2 good books on this subject by the same author, Phillip Howard: Life without Lawyers (2009), and the Death of Common Sense (1996).

Panacea-

Thanks for making sense of this wildly incoherent blog.

Personally, I don't care what our political leaders make in terms of salary, as long as they are up to the task at hand. I am FAR more concerned about what they make serving as consultants or sitting on the boards of the companies that are effectively running this country into the ground. It is this money that is undermining our leaders' ability to properly govern.

Ms. deLong: your letter is full of soundbites and cliches, and short of details and specifics. I may not be the smartest person on this planet, but do I understand correctly that 1) you bemoan the loss of industry in our nation yet are railing against the bailouts? 2) by your statement "Americans must pay their fair share and stop making it the burden of the cash-strapped homeowners" you assert that 'Americans' and 'cash-strapped homeowners' are two mutually exclusive classes of people? 3) you are concerned about struggling Americans, but as Rahrah pointed out, you are against social safety nets?

Most peculiar indeed.

"A self imposed pay cut would speak volumes to the American people."

Or even a pay freeze. But no, they voted for a pay increase instead. That speaks volumes Sir Firefly.

http://thehill.com/leading-the-news/with-economy-in-shambles-congress-gets-a-raise-2008-12-17.html

"Government is not a business."

Agreed there Panacea. No business could stay afloat with the amount of debt incurred by our govt., unless it's a business that is bailed out by govt., thus incurring even more debt.

Anyone up for buying a Chrysler vehicle backed by a US Govt. warranty?

That alone would make me steer clear of Chrysler products. Glad I bought a Ford last year.

All that is necessary to make sound government out of the pig's breakfast it has become is to follow the Constitution.

Pretty much every financial problem we have is due to the federal government overstepping its Constitutional authority. Regardless of your preference for fault, Wall Street or bankers or poor people defaulting on loans, the feds have no authority to be in the housing or mortgage business. Anyone with half a brain can see that they always make a mess of anything they try to "fix".

Take education, for instance. We didn't have an education problem until the feds decided to "fix" it. Results: we went from near the top, worldwide, to near the bottom.

Medicine? Same story; we didn't have a "health care crisis" until the feds started "fixing" it.

Retirement? Social Security is nothing more than a Ponzi scheme run by the government. The unfunded mandates of SS, Medicaid, and Medicare make today's trillion dollar deficits look like chump change. We are headed for economic disaster because the feds got involved in those programs, and like they always do, they screwed it up royally.

The Constitution was written so as to severely limit the power of the federal government for that very reason. The Founding Fathers were wise enough to realize that unlimited power would lead to politicians playing one group of voters against another, using taxpayer money (the only money the government has) to buy votes and stay in power. Events during my lifetime have proven them right. The government can't find its ass with both hands, democrat or Republican.

Fair Tax: so easy the Treasury Secretary can do it.