I am lucky to have a broker handling my retirement account that is young, energetic and loves his job. He is almost never wrong; but, has been a little off on his timing. For example when the stock market was at around 12,000 he called and told me to send him an email to authorize him to sell what he thought best if the market hit 11,033, the next day he was selling. At that time he told me that there was a good chance the market would go to the 7,000’s. It took a little while; but, the market just closed around 7,000. He called me Friday, the 27th to advise that he did some more rearranging because the market will hit 5,000 and there was very little support between 3,000 and 5,000. He advised that the 3,000 mark is not definite but a concern, the 5,000 is a given. He also said that the computer models that his brokerage firm uses covers every single scenario including the depression and as they plug in their numbers it keeps coming up depression. I was told that at some point 3,000 or 5,000 there will be a slight lateral movement and modest increase in stocks, 500-800 point improvement, then in about 2-3 years we will get slammed with inflation.
I am not a person who scares easily; but what we discussed was scary. The 800 billion bailout will actually cost about 3 trillion with interest on top of the 11 trillion (largest debt package in the history of the country) for a total of 14 trillion in debt. We have gone off the gold standard and now depend on just paper and promises. One of our biggest debt holders is China (who recently said, “we hate Americans”). Their complaint is that with our dollars facing steep devaluation the billions and billions they are holding will become equally worthless. The Chinese and Arabs that are holding much of our paper very well could dump our dollars for something better. When that happens and when they stop loaning us money the prediction is about 20-30% inflation because the money will be worthless.
No one in their right mind wants to see Obama fail. Like him, dislike him, support him, or do not support him; the future of our country is in his hands. If he fails we all fail and our country fails. One of the problems is, so far, he has been all show and no substance, it might sound good but it will not feel good. From what I’ve been told “wall street” sees that there is no substance to what he is pushing. In other words our economic system is capitalism, Obama is pushing socialism. The stock market is not geared for socialism and that is one of the reasons our savings and retirement accounts/investments are heading down.
I am saying these not to slam the president or promote scare tactics like the liberal democrat socialists do; but, to simply pass along a scenario that is unfolding right before our eyes
Saturday, February 28, 2009
DITZY CHICKS
We have a new vocal group in Exeter that I call the DITZY CHICKS. Their main song is, give me all your money, give me all your money, give me all your money, honey. It seems that Maggie, Julie and Donna as they are known to non spending music lovers have one thought in mind and that is to spend money; YOUR MONEY/OUR MONEY.
At the Exeter deliberative session there seemed to be a steady theme of spend, spend, and when your bored let’s spend some more. They want us to authorize up to 4 million dollars in matching funds to finance projects that the town either has voted down in the past or the project was withdrawn so the voters would not vote it down, like the new town office building proposal. No matter how you look at this 4 million is still a lot of money to raise on our property tax camel’s back system; referencing the straw that broke the camel’s back.
We are now in a trend, nationally and locally; where when you’re in debt, spend your way out of it. At face value this does not pass the common sense test or the smell test.
As a country we are so far in debt that what is facing us can only be described as catastrophic in nature. We are facing a depression that makes the 1930’s look like a minor monetary correction. This is not the scare and fear tactics put out by the democrat socialist liberals who blame everything on George Bush (who was not a fiscal conservative). Bush’s spending habits got the republicans in trouble because they did not have the courage to stop or even slow down the spending train. Bush is gone and the socialists have taken over, this will probably put the death nail in the American way of life as we know it. Unfortunately, the U.S will probably be facing bankruptcy with U.S money close to worthless, especially if the Chinese and Arabs dump U.S dollars.
So whether it is on a national level or our musical local level, I predict we are in trouble.
At the Exeter deliberative session there seemed to be a steady theme of spend, spend, and when your bored let’s spend some more. They want us to authorize up to 4 million dollars in matching funds to finance projects that the town either has voted down in the past or the project was withdrawn so the voters would not vote it down, like the new town office building proposal. No matter how you look at this 4 million is still a lot of money to raise on our property tax camel’s back system; referencing the straw that broke the camel’s back.
We are now in a trend, nationally and locally; where when you’re in debt, spend your way out of it. At face value this does not pass the common sense test or the smell test.
As a country we are so far in debt that what is facing us can only be described as catastrophic in nature. We are facing a depression that makes the 1930’s look like a minor monetary correction. This is not the scare and fear tactics put out by the democrat socialist liberals who blame everything on George Bush (who was not a fiscal conservative). Bush’s spending habits got the republicans in trouble because they did not have the courage to stop or even slow down the spending train. Bush is gone and the socialists have taken over, this will probably put the death nail in the American way of life as we know it. Unfortunately, the U.S will probably be facing bankruptcy with U.S money close to worthless, especially if the Chinese and Arabs dump U.S dollars.
So whether it is on a national level or our musical local level, I predict we are in trouble.
Friday, February 13, 2009
WHAT'S WRONG WITH BROAD BASED TAXES
Many of our town warrants have a similar article this year calling on our elected officials to withdraw any pledge they might have made to oppose any broad base tax. This is not put forward by any friend of the taxpayer. It is most likely one of the many groups that exist on the public largesse. More importantly, you should be armed with reasons why the broad based taxes are wrong for New Hampshire.
Property Tax is usually the largest tax that most citizens pay. It has grown so much because of school spending. School spending in many towns is two thirds of the property tax. The state and federal contributions together make up between 40 and 50% of the school revenue, but that is never enough. For the past two decades, school spending has doubled every ten years. That’s about an 8% annual increase. Controlling school spending is the key, not seeking other revenue.
New Jersey had very high property taxes. A governor promised the people if only you would pass an income tax, we could reduce the property tax. They passed it several years ago in New Jersey. Now that state has both the highest income tax and the highest property tax of the 50 states. A similar result has happened in Connecticut and Maine, no real reduction in property taxes.
State budgets need reliable revenue. Income taxes do not provide this. When times are good incomes grow, so do state revenues that rely on same. Less state spending is needed in good times. But if the money is there it will be spent. New programs are created with new constituents who feel that they are entitled. Eventually, there is the inevitable downturn. More state revenue is needed to pay for programs like unemployment, welfare, Medicaid, and so on. But the revenue is vastly reduced since the higher incomes are often the first to see losses. This actually happened in Colorado in the 2001-2002 time frame. Colorado depended for 60% of its revenue on an income tax. Total revenue fell by 19%. With all the fixed costs in state government, such a loss represents a disaster. Bond rating agencies like to see “Rainy Day Funds.” Those funds should be a reflection of the volatility of the state’s revenues. For New Hampshire, we have been satisfied with attempting to achieve 5% for that fund. This is an approximation of what we have experienced in year-to-year revenue fluctuations. It has always been difficult to put away that much money in the good years. To attempt to try for any amount larger would be an insurmountable task. I don’t see how any government could ever achieve 19%.
Our Department of Revenue handles about 200,000 tax reports annually for all types of revenue. There are over 600,000 federal income tax filers in New Hampshire. If the Department of Revenue got into the income tax business you can see that they would have to vastly expand. Our constitution says, “Each man must pay his fair share.’ That has always been interpreted to mean no graduated tax, the same rate for all. No relying on a percentage of federal as some states do. Our filing would be more complicated.
Sales Tax:
As our surrounding states passed sales taxes, more and more of their citizens came to shop in our state. Our border towns and cities have particularly benefited. A survey a few years ago found that retail jobs were 12% of our workforce as compared with 9% in our neighboring states. If we passed a sales tax even close to our neighbors’ rates, many jobs would go away as we lost that out-of-state trade. Stores would close and as many as 30,000 jobs could be lost just in retail, a lesser number in wholesale. These jobs are frequently an entry level job for our youth as well as part-time for mothers and retirees. What would replace them?
Our mix of over twenty revenue sources has kept our revenue less volatile than almost all other states. It would be counterproductive to change now. Also our property taxes for home owners are only 50% of the base. The rest is made up of business property and second homes. If we saved a billion dollars in property tax and replaced it with income tax, the homeowners would be disadvantaged. They would be saved only half of the billion, but they would have to make it up without help from the businesses, which already pay business profits taxes and/or business enterprise taxes, and the second home owners, who already pay the income tax at their first residence. That saving for home-owners could lead to an average doubling of their total taxes.
Please support the pledge.
Ken Weyler
Ken is a long term republican state legislator from Kingston spending years on Finance. Ken is also the Rockingham County Republican Chairman
Property Tax is usually the largest tax that most citizens pay. It has grown so much because of school spending. School spending in many towns is two thirds of the property tax. The state and federal contributions together make up between 40 and 50% of the school revenue, but that is never enough. For the past two decades, school spending has doubled every ten years. That’s about an 8% annual increase. Controlling school spending is the key, not seeking other revenue.
New Jersey had very high property taxes. A governor promised the people if only you would pass an income tax, we could reduce the property tax. They passed it several years ago in New Jersey. Now that state has both the highest income tax and the highest property tax of the 50 states. A similar result has happened in Connecticut and Maine, no real reduction in property taxes.
State budgets need reliable revenue. Income taxes do not provide this. When times are good incomes grow, so do state revenues that rely on same. Less state spending is needed in good times. But if the money is there it will be spent. New programs are created with new constituents who feel that they are entitled. Eventually, there is the inevitable downturn. More state revenue is needed to pay for programs like unemployment, welfare, Medicaid, and so on. But the revenue is vastly reduced since the higher incomes are often the first to see losses. This actually happened in Colorado in the 2001-2002 time frame. Colorado depended for 60% of its revenue on an income tax. Total revenue fell by 19%. With all the fixed costs in state government, such a loss represents a disaster. Bond rating agencies like to see “Rainy Day Funds.” Those funds should be a reflection of the volatility of the state’s revenues. For New Hampshire, we have been satisfied with attempting to achieve 5% for that fund. This is an approximation of what we have experienced in year-to-year revenue fluctuations. It has always been difficult to put away that much money in the good years. To attempt to try for any amount larger would be an insurmountable task. I don’t see how any government could ever achieve 19%.
Our Department of Revenue handles about 200,000 tax reports annually for all types of revenue. There are over 600,000 federal income tax filers in New Hampshire. If the Department of Revenue got into the income tax business you can see that they would have to vastly expand. Our constitution says, “Each man must pay his fair share.’ That has always been interpreted to mean no graduated tax, the same rate for all. No relying on a percentage of federal as some states do. Our filing would be more complicated.
Sales Tax:
As our surrounding states passed sales taxes, more and more of their citizens came to shop in our state. Our border towns and cities have particularly benefited. A survey a few years ago found that retail jobs were 12% of our workforce as compared with 9% in our neighboring states. If we passed a sales tax even close to our neighbors’ rates, many jobs would go away as we lost that out-of-state trade. Stores would close and as many as 30,000 jobs could be lost just in retail, a lesser number in wholesale. These jobs are frequently an entry level job for our youth as well as part-time for mothers and retirees. What would replace them?
Our mix of over twenty revenue sources has kept our revenue less volatile than almost all other states. It would be counterproductive to change now. Also our property taxes for home owners are only 50% of the base. The rest is made up of business property and second homes. If we saved a billion dollars in property tax and replaced it with income tax, the homeowners would be disadvantaged. They would be saved only half of the billion, but they would have to make it up without help from the businesses, which already pay business profits taxes and/or business enterprise taxes, and the second home owners, who already pay the income tax at their first residence. That saving for home-owners could lead to an average doubling of their total taxes.
Please support the pledge.
Ken Weyler
Ken is a long term republican state legislator from Kingston spending years on Finance. Ken is also the Rockingham County Republican Chairman
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