Tax disincentive

There are two certainties in life: Death and taxes. And a third, “if it sounds too good to be true, it isn’t true”. But there is also another truth. Politicians, bureaucrats and their backers (the news media, bankers, billionaire investors, or celebrities), all stir up chaos for their opponents, whip up groups of like-minded people by pretending to care for them, and make all sorts of speeches promising better times ahead.


The only difference between death and taxes is that death doesn’t get worse every time Congress meets.

Will Rogers, via Brainyquote.com

While people my age have heard all this nonsense before and are less inclined to go along, the palaver is not meant for my age group. Psychological journals, in various published studies, revel in the obvious. Young adults between 18 – 27, are more idealistic, much less structured in goals, exhibit more fluid work ethic, and are more motivated by income “fairness” and other talking points they read on social media. By the time men and women reach their Thirties, with stable jobs, goals, and families, these issues, rhetoric, and ‘social-justice’ activism become much less an influence. But the common talking points in social media and in politics today is how unfairly wealth is distributed. As a child, I was raised that hard work, skilled effort, ethics and morals would, over time elevate my station and economic success. There was plenty of room for anyone to become wealthy and provide for their families without blaming and taking from others. What changed?

Paying their “fair” share?

In 2019, I fear that people who have contributed to the economic well-being of the country for the least amount of time or produced the least amount of economic goods and services are being made fools of, by the wealthiest, least added-value members of society: politicians and bureaucrats funded by taxpayers. It is not that young people are in any way less important or less credible in their contributions and feelings, but forty percent of the Congress is far wealthier than those they represent. While every taxpayer in the United States can voluntarily contribute more to fund the Government, donate to charities for causes they feel strongly, and volunteer to aid those they feel are under-served, are there any who voluntarily give more than they are legally required? But most demand that Government support causes and constituents that are better served through local donations. And despite all the rhetoric we hear, does any public servant reside in public housing, use public transportation, or donate salaries and perks to the underprivileged?

Many, like one of my old college buddies, are worked up frequently about the lack of fairness and greed exhibited by members of a certain American political party, though there is plenty of blame to go around. Tonight, I am more worked up by my miscalculation on our annual income tax returns for Federal and State. We owe a large amount of income taxes due to the change in the approved deductions and income limits for other deductions. This is due to the “Trump Tax Cut” enacted in 2018. Researching the new tax policy, there are two ends of the economic spectrum that are benefiting, though the wealthiest Americans are benefiting far more.

Who benefits from the new tax plan?

With change in the standard deduction, doubling it to $24000 for those who file a joint return, many do not have to file complex returns. While there is some who think that increasing the “standard deduction” will reduce the incentive to make charitable contributions by lower middle-income workers, the tax policy really changes the taxes owed by the higher wage households- reducing the graduated scale of highest earning workers from 39 to 37 percent. And if those individuals are business owners, the rate may drop to 20 percent.


The people are hungry: It is because those in authority eat up too much in taxes.


Lao Tzu

For those caught in the “middle”, such as older taxpayers whose grown children are no longer family deductions, their seniority at work may elevate their incomes to higher tax brackets, and all the expenses of living and home ownership, there are disincentives to continuing to be an employee. But retirement also may come at a cost. Withdrawals from qualified retirement plans prior to age 59.5 incur income taxes and penalties. Some states like California tax retirement pensions, and with public service pensions largely unfunded, these states increase taxes to provide benefits and sacrifice the maintenance of infrastructure – roads, schools, and vital services.

Entrepreneurs and tax sense

Like many, I chose security of being an employee over most of my working life. But being a “worker” and not a “business owner” in 2019 has its tax disadvantages. Fair, ethical, and legal provisions used in the last twenty years have been significantly changed. While younger workers at lower wages and with young families may find some benefit from new tax provisions, others in the “Middle Class” are not as fortunate. Older, still working, married adults with now-adult children, who may still be providing for certain of their needs – no longer can claim them as deductions for tax purposes. Those fortunate to own homes in high property tax states, are limited in the amount they can claim federally- basically paying taxes a second time on the same income. Others, such as small business owners have complex tax rules to follow. The “Trump Tax Cut” seems to be flawed.

Some regulations should have come with bold print. With retirement savings such as employer 401K plans, IRAs and healthcare savings accounts available, these come with certain stipulations. Pre-tax income placed in flexible health spending accounts must be used within the calendar year or are lost; certain employer health plans can place pre-tax earnings in an account which can grow year after year, even into retirement, but must be used for medical expenses – or are taxed heavily. And for higher wage earners, traditional Individual Retirement Accounts, money invested for the purpose of reducing income taxes does not provide the immediate benefit sought.

The wealthiest Americans are fairing a lot better in 2019 than before. While true that the top 20 percent of all wage earners contribute the largest share of the revenue to fund the Government (50 percent of working Americans pay little income tax, while three percent contribute most of all), the overall taxes for those wealthiest Americans – many of whom are business owners – dropped significantly. I’m beginning to think that wealthy politicians are being disingenuous. They are not feeling nor acting in private like the outraged they claim to represent.

If people want to participate more fully in the “American Dream”, operating a successful business seems to be the vehicle to do so in 2019 and into the future. Except perhaps in California, or should the country decide to follow the anti-capitalist and anti-constitutional policies that have been voiced since the President’s election. A look at statistics indicates that the country is not in jeopardy of an economic crisis as some suggest. In the United States in 2017, the median family income was $61,000; in California, $81, 000, according to the US Census Bureau. While there are many who are at the extremes in California and elsewhere, there are many who have gained wealth and property through operating successful businesses.

Paying closer attention to income tax, balance sheets, and government policies that affect income is necessary. But that comes with age and the acquisition of property. All the rest is just politics.

no fear

Every motivational program I have heard or subscribed to since my mid-Thirties, has quite sensibly detailed a method to improve finances, marriage, or speaking in public. Several were focused on succeeding in leadership and/or business. Some gave ideas on raising confident and capable children, and others focused on achieving a healthy work/life balance. Most of these were in relation to a Spiritual foundation. While everyone I know who engage in these self-improvement workshops, get something from them, those who diligently apply themselves and are undeterred by resistance, seem to thrive. But am I alone in being stuck in old routines, jobs, or commutes, because of “fear of change”?

Thirteen years ago, I began working at a company located almost forty miles (one-way) from my home. For a few years there was the prospect that a subsidiary a few miles from home would have a position I could transfer into. The subsidiary was closed. Moving was not an option; not just the expense of a new home, but my teens and spouse had strong ties to the local area. As I got older, I made excuses that I would not find stable work somewhere reasonably closer. The issue is that I did not apply consistently or obsess about finding a different job. This goes against my experience, spiritual training, even rational common sense. Do I hate change?

Do others have this dilemma? Do many live with constant economic instability and change, because they prefer the “life” in “work-life balance”? In my mid-Twenties, in between periods that I eventually made a Navy career, I enjoyed not being serious about work. I had heard stories of people who were so driven to always be at work, they became ill or suffered cardiac arrest when they no longer had the constant adrenaline jolts of the job (stress). But I recall being so fearful of “starting over” that I remained stuck for years in something I probably was less suited for than the horses I cared for when a high school student, or the university where I participated in work-study. When the one co-worker told me she was leaving after a year because of her commute (twenty miles), I empathized.

Perhaps metathesiophobia is a covered condition in the employer’s health plan? However, to relieve this condition I might have to make a change in my work-life balance. And I fear hate the idea.

Don’t participate in bullshit – be pure in your heart — joypassiondesire

Whenever you hear someone complain – don’t join them in their negative rampage. Complaining doesn’t make anything better – you are better off being quiet than joining them in their complaining. Even if it is socially accepted and expected of you to join in when someone complains, it is never of value. You always have […]

Don’t participate in bullshit – be pure in your heart — joypassiondesire

Carrying water

def. Carry water for (someone) 1. To serve, assist, or perform menial or difficult tasks for some person, group, or organization.

Ten years ago, as a retired Navy Senior Chief, the first thing I had to adapt to was my immediate loss of seniority and status. The tradition and status acquired over twenty-five years meant little to the non- military working public. As in most professions, a job in the commercial technical sector is judged only on your performance. Meeting the required output of widgets particularly at the fiscal end of the Quarter when the resources, software, or parts needed to meet the quota finally become available. Packing up an expensive piece of equipment and hustling it to FEDEX, or renting a delivery truck and driving it a hundred miles to another facility, is somewhat like carrying water for my boss.

Unless you have been working in the manufacturing world for a number of years, as an older technician, it seems that adapting to rapid changes – in technology, in workforce culture, and in tasks each employee is asked to perform, is more difficult. In engineering, procedures often lag product development. Cross-training peers is often as much how much they observe as giving them polished instructions. For some, it is jarring to be hindered by processes or lack of information, or age, or when she has been willing to “come out of retirement”, but is feeling her contribution is wasted.

Additional study, asking specific questions, and bringing one’s strengths to the job is necessary. Willing to do whatever is required, despite not being in a “job description”, helps the overall mission of the company. Working with a curmudgeon is difficult.

I have found that courtesy, whether toward peers, couriers, janitors, IT support, or supply clerks is repaid in kind. With more than a quarter-century of military service, working initially with folks cleaning toilets, and later reporting to Admirals and senior Government executives, character and a dedication to excellence count toward career success.

grinders and coffee

Mention grinders to an older Navy veteran, generally brings to mind the large parade ground we marched around in Bootcamp.  But “grinder” also means a particular type of sandwich. In Southern California, while there are different names: submarine sandwiches, hoagies, and grinders, there are some places that are vastly different than the franchises that pop up everywhere.  And in El Cajon, California, not far from my home, is an institution 50 years in the making, The Grinder.

I actually only stopped in Thursday night at the request of my son, a Vocational Nurse working the evening shift, for a sub specifically made there.  It might have been my first visit though I have lived in the area twenty years.  After a long workday and a long, rainy evening commute,  but I would drive an extra few miles for a sandwich.

It was not a fancy place.  A video game table of the sort I had not seen in thirty years  was against the wall.  On the walls, were  Navy-themed art, a Bible quote,  articles on the history of this deli, a plaque honoring fifty years, and pictures of local kids.  But the one I noted just before ordering was the image of the late Chief John Finn,  Medal of Honor recipient (Pearl Harbor) on the wall. The kids working there know whose picture it is.   San Diego County is a military community, and El Cajon in the part known as “East County” is home to a large population of veterans going back to the Second World War.

“where do we eat and what show do we go to?”

On date night, quickly planned,  even the retired Senior Chief’s understanding wife may have felt a grinder was sub-expectations.  The mall was packed with Friday-night families.  As it turned out, a little pastry and coffee with live music at a coffee house we like was perfect.  We knew the music and lyrics; the acoustics were okay, and probably because the band and their fans are all about the same ages,  they concluded at a reasonable hour on a Friday night.  7:30 is almost bedtime.

So much for foodies partying into the wee hours (7:30PM)

fourteen

What was your biggest accomplishment when you were a teenager?
When I was fourteen, I was responsible enough to arrive at my assigned work at 4:45 AM daily, load a hay wagon, and then feed 80 horses. And in the late afternoon, repeat it all again. I was determined to trade labor for horseback riding lessons. That was on a dude ranch in Arizona where I learned responsibility, animal psychology, ranch operations, and customer service. That was forty years ago. Every generation hears how their predecessors “walked uphill in the snow, both ways, to school and back”. In an age where many are fixated on social media, feel subject to hardship and discrimination without government mandates, and may be emotionally scarred because of others’ contrary views, it is not universal. It may only be a minority opinion.

Becoming an entrepreneur at the age of ten, Noa Mintz, at age sixteen founded a New York City childcare agency, (vetting nannies)and was among those entrepreneurs under age 18 featured in Fortune magazine (2016). Eugenie de Silva, starting at the University of Leicester (UK) in 2015, graduated age 16, from Harvard, through distance learning, with a Masters in Liberal Arts. A pilot, Mason Andrews, completed a circumnavigation of the globe in 2018, as the youngest to do so – at age 18.

And then there is the young Dutch woman, Laura Dekker, who at 14 set off in a sailboat to circumnavigate -solo- the world in 2011. She had been born to a sailing family, and had been dreaming of sailing the world since the age of ten. She had the support of her parents, but had to fight the Dutch authorities in court to be permitted to get underway. For more than five hundred days she navigated and explored the places along her route. A film produced by National Geographic presents her video record of her travels.

film trailer at http://www.maidentrip.com

And finally, there is Jordan Romero, who at age 13, with his father, reached the summit of Mount Everest, in 2009, and by the age of 15 years, 5 months , became the youngest person to climb the Seven Summits (the highest peaks in each of the seven continents).

From circumnavigating the globe, climbing mountain peaks, graduating from a most prestigious university, or becoming a successful entrepreneur, children who attempt the difficult, and refuse to have their dreams quashed, demonstrate that if you have a dream and are determined to succeed, you can. Leave the participation trophy to others.

immigration kon and tiki

One of the major issues in North America and European countries today is immigration. Politics and basic economics drive the debate, regardless of which side one supports. Perhaps it is worth considering – by all parties – for thousands of years, new arrivals brought talent, art, foodstuffs, and skills in navigation, or farming, or just hardiness. There were no aid agencies or politicians, and the adaptable survived. Across vast distances and different continents, it is no wonder that these were first undertaken by sailors, military men, and adventurers.

Long before I became a Sailor, I recall reading the adventure of Thor Heyerdahl, a Norwegian zoological researcher and explorer. It was then twenty-five years after an impressive 1947 voyage his team made across the Pacific Ocean. Compared to the modern warships in which I traversed the Pacific Ocean, Heyerdahl – and by experiment, pre-Inca natives, constructed a thirty-foot boat, of reed and balsa-wood. With a banana-leafed thatch cabin and a single-mast, six men departed South America. If modern man, in a post-war world might feel exposed – a hundred miles at sea, no sign of land and no birds in the sky, what were the first explorers possibly thinking. I thought this with experience of riding a ship 530 feet (161m) at the waterline, feeling the speck he was in comparison to the ocean.

Thor Heyerdahl’s point in the mid-Twentieth Century was to test that people might have settled Polynesia not from Asia, but from the east – South America – fifteen hundred years ago. A second settling might then have come from North America- British Columbia – by way of Hawaii, five hundred years later. Through radio-carbon dating, sweet potatoes which originate in Central and South America, were subsequently (1991) found by archaeologists in thousand-year old sites in Polynesia. (Since 2005, scholars debate which group came first – Polynesians to Hawaii or Hawaiians into Polynesia).

If you have not read Thor Heyerdahl’s account, Kon-Tiki, and you have a bit of the ocean-adventuring spirit, I suggest adding this to your list. I intend to revisit his story. Perhaps while eating a sweet potato.