Monday, January 30, 2017

Our Next Recession

Are you ready for massive price increases form the hidden Trump tax proposals? Two maybe coming that will result in higher prices and most people will have no clue why the prices are going up, yet they are being told something else.

The first is the “Wall Tax” the people is being told the beautiful great wall will be paid for by Mexico, Well guess again. It will be paid b=for by the American Taxpayers and consumers. President Trump has proposed a 20% tariff on good imported form Mexico to pay for the wall. How to tariffs work. The importer and not the exporter pay tariff payments, called duties. So any goods coming into the USA the person bringing them in pays the tax.  So when the beer disturbers brings contain a truckload of Coronita the US Beer buyers pays the tax and what does he do but passes it on to the supermarket who passes it on to the consumer. Guess what it’s not a direct pass on but an increased pass on. If the tax was a $1.00 a case by the time it gets to the supermarket it may be $1.50 a case. Each hand adds its mark-up. So we the American people will pay for the wall.

Another fall out of this plan. Will be the impact on Mexico as Coronita gets to be to expensive and people switch to an American beer, unemployment will go up in Mexico and more people will figure out a way to come to the USA to work in the American Beer factory. Do you for one minute think a wall will keep them out? They will come on a visit visa and never leave.  This will happen to a lot of industries in Mexico.

Another problem parts and factory items made in Mexico will cost 20% more so we will have new factories built here. Great you say, no I say, as these will be total automated factories with few workers if any.  In fact it will hurt the rail and trucking industry, as the haul from Mexico is now a short haul from the US factories.

Instead of a wall we need to develop more of Mexican industries so people do not want to cross the border but stay home. Wouldn’t you rather stay home?

Now we come to the even more sinister tax the Border Adjustment Tax.  This is where imports would “adjust” our tax bill by no longer allowing deductions on imports. Here is how it works, when a business buy an item to resell the cost of the item is considered an expense, and then they add the cost of doing business and expenses to get a cost of goods sold. When they sell the item the difference between the selling price and cost of good sold is their profit.  Simple business 101. Now the adjustments. Under this plan the cost of the item they import is considered zero so the profit goes up and therefore taxes go up. Let take a simple example. A shirt made overseas costs the importer, store,  $10 and the cost of selling it is $5 so the initial total cost is $15 and the store sells it for $20 thus making a profit of $5 that they report on their income taxes. They then pay income tax on the $5.00. Simple except with the adjustment tax, now the cost they can claim for the shirt drops to zero, still add the cost of selling $$5.00 but now when they sell it the profit on the books jumps to $15 and they have to pay income taxes on the $15. Now do think the business owner is going to pay the extra tax and not charge you. Lets assume the President get his tax cuts and the business tax is 15% so the tax just went from 75 cents to $2.25 or an increase of $1.50. So the storekeeper has to raise the price to $21.50, wait he now has to pay more tax on that extra $1.50 so watch the price will go to $22.00. Yes you will be paying more. Will this increase shirt production in the USA, of course not. Will it cause inflation, of course it will.  Will you buy one less shirt a year or make some last a little longer before they go to Goodwill, you bet it will.  Now think about the price of a car made overseas. Just add some zeros to my examples instead of a $20 shirt how about a $20,000 or $30,000 car or that great new TV you wanted to buy that costs $1000.00. Well maybe next year.

Just watch these tax proposals cost you a lot of money and do nothing to make America Great again in fact put America into another recession.

Wednesday, January 25, 2017

President Donald Trump and Draining the Swamp

Today we are meeting with Fred who has lived in the swamp for about 75 years and is rather large at about 750 pounds and is about 19 feet long. While he prefers to being left alone he has consented to this rare interview.

Fred it is very nice of you to stop by for this talk today, I was rather surprised when I heard you wanted to meet a member of the press. Usually your species like to stay hidden from view and people so what brings you out today?

“Well, I am very concerned about the new President after all I have heard that he wants to “drain the swamp” and it’s my home and I don’t want it drained. Look I have been here for 75 years and my family has been in this area for about 37 million years. If he drains the swamp where would I go. The only other place where gators live is in China and don’t if you know this but my Chinese cousins are much smaller and speak a funny language. Very strange bunch. From what I hear the President does not like the Chinese either”.

Fred I think you got the story wrong the President didn’t want to drain your swamp, he was using the concept of a swamp as a figure of speech.
“Then what is he talking about – a swamp is a swamp”.
Fred he was talking about the political people in Washington DC the nation’s capital that run the government.
“Now your confusing me even more, don’t forgot we gators have a very small brain and what a you said makes no sense. I didn’t even know there was a swamp in Washington, my swamp atlas doesn’t show any swamps above Georgia. You mean he wants to get rid of Congress.”
You have an atlas?
“Of course it is the Atlas of Swamps of the World – I have the new 6th edition”.

Fred the DC swamp is not a true swamp it’s a figure of speech meaning like a swamp with people in it not doing their job. No not Congress, the people who run the various federal agencies. The President believed that the former government was not listening to the people and not doing their job. He had a lot of voters convinced of that. What do you think?

“Well, I am very concerned that President Trump is going to drain my actual swamp to drill for oil and not his make believe swamp. Just look at the people he is hiring to be in his government. All very rich people who did not get to be rich by being nice to people or the land. Those kind of people step on people and could care less about rules that get in their way. Did I hear right the other day he stated up two pipelines to move more oil? Do you realize what a pipeline would do to my home? I also understand he has said he is going to remove rules and regulations. That will hurt even more. And that Congress for years now they have done nothing but blame the other side”.

Why do you say that? “Well as I see it a rule or regulation was put in place when someone did something wrong. Just look at the acid levels in my water”.

Ok Fred what does acid levels have to do with regulations?

“OK I said I am not very smart but I do know the acid levels have gone up over the years and it plays havoc on my skin. My dermatologist has confirmed it to me. The reason is very simple as we see an increase in pollution, that is burning fuel, more cars, etc. that pollution sends sulfur into the air, when it rains, and it rains a lot over the swamp, the rain mixes with the sulfur forming sulfuric acid and the level of acid in the swamp goes up. If he removes more regulations I see more pollution and even more acid, not good. Now he has said he is does not believe in global warming. But I do, as you know I like it to be very hot since I am cold blooded. I have noticed the temps getting warmer each year also the water level has been going up. I know in the few years I have had to move my land base three times to higher ground”. “So if he removes regulation, the pollution will increase and that is not good”. “Now about that Congress, instead of getting anything done, they just sit around and blame each other for what the other side is not doing. I don’t understand how people can keep voting in the ones that want to stop everything. I wish I could vote but the voter id laws have ruled me out since I don’t have a real address”.

Fred you have a dermatologist?
“Of course Dr. Croc is great. For years I could not afford him but a few years ago a new insurance came into being and now I see him every six months.”
“Yes it is run by the National Park Service and DNR. But I fear that it may be going away. You see I don’t have steady income and without it I will lose the insurance. I would have to go back to the old barter system. By that I mean I would have to bring the Doc a couple of chickens or a dozen fish for my treatments. It not as easy to catch them at my age”. “Speaking of rangers a few have told me they may be losing their jobs, something about them being moved to the border with Mexico to act as police as the President build a wall to keep Mexicans out. How dumb. So instead of walking across the border they will fly over it or come by boat. They also told me the new President is not going to set aside more land for national parks. I see more and more factories popping up, more pipelines, highways and now we are talking about real draining of my swamp”. “Sad,sad,sad”. “Then without the DNR and Rangers who is going to protect the wildlife, no one, so the hunting will be like in the 1800’s that my grandfather used to talk about, just a war on wildlife so rich women could have nicer purses and shoes”.

“Say I am getting very hungry talking to you, I heard that Big Bird is being thrown off TV, do you know where he is going to be living, he would be a tasty meal, last a few days, I love leftovers. Well talking about this has made me even more hungry so I am going to take off and swim around looking for a wild turkey or some turtles to grab a snack”.

See you later Fred, thank you for the interview, hopefully we can do this again. Next time I will bring some extra chickens.

Tuesday, January 24, 2017

A few alternative facts!

“At the top of President Donald Trump's agenda for his discussion with congressional leaders Monday night: relitigating the campaign, including saying "illegals" voting deprived him of a victory in the popular vote.”

"That was the largest audience to witness an inauguration, period."
 Sean Spicer on Saturday, January 21st, 2017 in a press conference

Donald Trump had biggest inaugural crowd ever? Metrics don't show it.

TV ratings: Trump inauguration sinks 18 percent from Obama's in 2009

In response to The White House petition, Donald J. Trump advisor Kellyanne Conway tells This Week that Donald Trump "is not going to release his tax returns"

And this is just the first few days, a lot more to come. 

REAL FACT- Only 51% of the voters in Carmel, IN voted for Trump. 

Saturday, January 14, 2017

Another Failure by the Republicans

In 2005, newly elected Gov. Mitch Daniels needed a couple of billion dollars to help fund “Major Moves,” his 10-year plan for building and fixing roads throughout the state.  He started out by selling the Toll Road for $3.8 billion, which was about $1 billion more than expected. Then rounded this up to about $10 billion for both new roads and $5.8 billion to fix and maintain our existing roads.

I am sure you all remember "Major Moves" a ten year program. Maybe we should now rename this "Major Failures". What ever happened to the part about preservation and maintenance, of current roads. Based on the infrastructure failures it appears this was never accomplished. 

The state and Mitch’s program never lived up to his promises and now the legislators expect the citizens of the state to foot the bill for Mitch’s failed program with an increase in taxes to fix our roads.  

So here we are no longer getting revenue from the Toll Road, bridges that fail and you know when your back home in Indiana by the bumpy ride.  

Friday, January 6, 2017

Donald’s massive hidden tax is coming.

Get ready for a massive tax increase that will effect the middle and lower income class and you will never know it is coming. you will never know you are paying it, but it is coming.

Here is how he is doing to do it.

He is going to place tariffs on products made in China, Mexico and who knows where else. A tariff is a tax on imported goods and it is paid by the importer. It is used by government to protect various industries or business from completion by a source outside that country. Lets say you want to make sure you continue your steel capability so you tax cheap steel coming into your country so your steel companies can make money and stay alive. Now Donald is saying he is going to slap tariffs on goods form these countries not to protect business here but to punish them for having low wages and producing goods to be sold in the USA.

End result many of the items China now makes are no longer made in the USA so each of these items with a 35% tax on them means the stores are going to have to pay more and charge more.  Look at Wal-Mart a lot of their products they sell come form China; all of those will jump up in price. You are going to pay more and at the same time the government is going to collect that tariff money or better known as a hidden tax.

The price of a car is going to zoom up even those made in the USA. Why? Car manufacturing is no longer a made in one country but rather of parts made everywhere. So a part made in Mexico or China is going to have a 35% jump in cost and do you think Ford or GM are not going pass it on? They will and up goes the price. The US Government has just increased the cost of a new car and you are going to pay the tax. But your never going to know it, unless Ford or GM tells you what they pay in tariff taxes. They won’t, because if they did a twitter attack would be launch against them.

Get ready to pay this new tax after all he needs the money to build his wall. Mexico is not going to pay for it as he promised you they would, so the money will come from your pocket. Or maybe he will have tourist tours of the wall and charge for the tour just like China does for its Great Wall.  

Oh and by the way do you think China and Mexico are just going to sit back and do nothing. No they will raise tariffs on US products and our farmers and high tech manufacturers will take a big hit. 

Sorry but that is the way it is.