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.

honorable service

The current President of the United States pardoned a sailor this week who had been convicted and sent to prison for violating regulations protecting national security. , He took pictures of his submarine’s propulsion compartment which is a classified area.   Without knowing the particulars, it seemed to the President that the punishment of imprisonment and a discharge,  in light of other government employees who also had taken an oath to support and defend the Constitution and nation, was  – in this current climate – oppressive.  In the last several decades, access to classified information and equipment  was granted to personnel specific to their position and job; it required thorough training, a thorough personal investigation, and continued exemplary conduct.  Individuals in the military who deviated from this lost their access, were subject to punishment, and in extreme cases, based on a courts martial, sentenced to prison.

Perhaps the President was taking issue with the previous Administration’s handling of cases in this regard.  As we all are aware there was a former candidate for President who had a non-government server with classified information (hacked?),  lied about it, and influenced those charged with investigating this breach of national security.    A member of the military who intentionally broke the law by transferring secret information to Wikileaks was imprisoned, but also was given ‘transgender’ treatment,  had his (her) sentence commuted and was released.  An earlier contractor employee, Edward Snowden,  who transferred classified information and fled to Russia, is still lauded by those who have questionable “honor”.

In 2014,  both the then-President of the United States and his National Security Advisor declared a soldier returned from Taliban custody, served with “honor”.  Bowe Bergdahl, was later convicted by courts martial for desertion, by walking away from his unit in Afghanistan willingly.  He was given a dishonorable discharge.  In these prior cases, the climate that was established by those critical of the United States and set about ‘radically transforming” the culture and laws, rewriting history,  only served to embolden adversaries and weaken American respect in the world.

From the bruhaha over the prior Administration’s FBI dossiers and NSA surveillance of  private citizens (then-candidate Trump’s staff),  backroom deals with cash for Iranian mullahs, to the still-implausible blame game for the murder of an ambassador and security staff  in Libya after Gaddafi’s overthrow, the term “honor” is not very apparent.   Career service members of the United States armed forces understand it.

If we as Americans can respect each other, resolve our differences through the ballot box and offer a hand up, it can change.    No human being has risen above the temptations of power, greed, lust, or other “sins”, but what is corrupting this generation is the added ambivalence to what served this nation’s unity for two centuries – family, a common language, common ideals, and a positive view of the future.

dont-tread-300

So what does “serving with honor” mean in 2018?   Those of us who have served honorably know what it means.   If you perform your job to the best of your ability.  take care of those in your unit,  treat people with respect,  understand and follow authority,  practice self-control, and represent the best of an American (speaking to Americans) , a person can say they “served with honor”.  Those who have the added spiritual values, understand that theirs is a higher commitment but the same understanding of honor.   We have raised our families to know what it means.  Not everyone who has served  or continues today to serve the nation, in the armed forces, law enforcement, fire and rescue services, or in the spiritual “front lines” has the same understanding, when it comes to politics, economics, or community,  but those values that we trained to in the uniform of the United States still have meaning: Honor, Courage, and Commitment.

Falling star

It is a stressful time to be a General Officer in the United States Armed Forces.  An Army Major General,  Ryan Gonsalves, was on the short list to get his third star,  or promotion to Brigadier General, when he abruptly inserted combat boot in mouth.  An article asserts he made some colorfully blunt and condescending assessment of a Congressional delegation and particularly offended a female staffer.   He should not have been so colorful.  Perhaps he could have watched “A Few Good Men” for insight in how not to be condescending.

One gentlemen I know summed it up well.  For millennia, men have used power to obtain sex; however, in the same time, women have used sex to obtain power.  At the extremes we have seen abuses. Effective warriors in history, such as Alexander, Charlemagne, Ulysses S. Grant and Omar Bradley were effective leading people and changing the course of history.   However, I would think that a general in the second decade of the Second Millennium would have some acumen.  For the last two hundred years, the United States military has had civilians making policy, authorizing budgets, and setting priorities for national defense.   Many times this has been contrary to the advise of the seasoned warriors who know that adversaries and potential adversaries respect the threat or the actual implementation of force.

Yet a parent’s advice to a child aggrieved about many things should still be a fundamental truth. Apparently, the wisdom of picking one’s battles carefully was not heeded by this general.  Perhaps he reflects the current Commander-In-Chief in that regard.  And unfortunately it seems, this general officer has learned that indeed, the “pen (to strike his name from consideration) IS mightier than the sword”.