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Sunday, May 03, 2009

 
LotD

Going Dutch -- How I Learned to Love the European Welfare State.

"... does the cartoon image of it encapsulated in the dread slur 'socialism,' which is being lobbed in American political circles like a bomb match reality? Is there, maybe, a significant upside that is worth exploring?"

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0 comments | 9:54 PM |


Wednesday, April 15, 2009

 
Tea party

Seriously cranky as they made me late for my abs class. And then stood in my way when I was trying to get to the post office to pay my taxes. Maybe that was their point, but seriously. It's especially ironic that these protesters were using public gathering places, funded by taxpayer dollars, for their gathering.

Taxes are taxes and I honestly have no feeling about them one way or another. Certainly not enough to spend precious working hours when I could be proving my value to my employer and earning money to pay the taxes that provide for our brave armed forces, our roads, our schools, public servants including law enforcement, and help those who have lost their jobs somehow make ends meet when times are tough.

Do I wish sometimes my tax dollars were spent differently? Yes. But in the end, when I drive down our beautiful new 16-lane highway, I can only be grateful for what taxpayers bought that makes my life so much easier. It's an honor and a privilege to pay taxes.

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0 comments | 9:28 PM |


Sunday, April 12, 2009

 
Annual ritual

I just realized, in the middle of "The Amazing Race," that I need to make my annual pilgrimage to the US Post Office on the 15th. So now it's that last minute scramble to check and recheck my work (I actually did my taxes back in late January/early February), print out all documents, make sure they're labeled correctly, etc. I don't mind the actual prep; it's the post office bit that makes me a little bit insane. No fun at all. No wonder so many people conveniently "forget" that they owe taxes.

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4 comments | 8:51 PM |


Sunday, July 27, 2008

 
LotD

10 Bank Breaking Money Myths -- interesting article. I've heard of a lot of these lately, especially those about home ownership versus renting and the ability to deduct mortgage. It's only been recently through my own home-search that I've realized that those were myths in fact, and that renting is by far the better option for me. Also, the carrying a balance to maintain credit score? Amazing how many times I've heard that one as well. The only thing carrying a balance does for you is rack up the interest so that you're financing that Starbucks latte for years and years.

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0 comments | 11:10 PM |


Sunday, June 29, 2008

 
LotD

I still haven't received my stimulus payment, which is insult added to injury, since I didn't get a refund (wah!) either. But I was amused at how people are spending their stimulus payments. Mine, which I haven't received, has already been spent on a new starter and battery for my car, and the leftover went to an oil change and my recent excursion to Calgary. I don't think this is what W had in mind.

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0 comments | 10:23 AM |


Wednesday, April 30, 2008

 
The gasoline tax holiday

I've seen mention of a gasoline tax holiday here and there, and seriously, it's one of the lamest political moves ever. Today, taxes over all make up 13 percent of a gallon of gasoline; crude itself is 72 percent. Back in January of 2000, taxes (federal, local and state) made up 32.1 percent of the price of a gallon of gasoline and crude was 47.1 percent. The world price for crude back in January of 2000 was between $23 and $25. In April of 2008, the price has ranged between $103.46 to $118.53/barrel (ignore the hijinks during the day -- it's the closing price that matters). In January of 2000, the average price for a gallon of gasoline was $1.50.

If you look at January of 2000, we paid approximately 48 cents per gallon in taxes. Average price in April of 2008 is $3.50, and we pay approximately 45.5 cents per gallon in overall taxes. Federal taxes -- which is what the gasoline tax holiday is all about -- are 18.4 cents* per gallon so the rest of the 45.5 cents goes to local and state taxes. You slice out the 18.4 cents and you drop the price of gasoline to around $3.32 for about 3 minutes, because the fundamental problem still remains -- the price of crude is what's going up, not the taxes which are a fixed cost (not to mention it would be politically unpopular to raise taxes on gasoline, even though personally, I think it might be a smart idea).

The proposed federal gas tax holiday would go from Memorial Day to Labor Day, which is approximately four months. Indulge me and pretend for a moment that the price of crude doesn't go up during the driving season. So someone like me with a fuel-efficient vehicle and a 10-gallon tank who fills up four times a month would save somewhere around $30 for the duration of the gas tax holiday. I can save that much by just eliminating two dinners out a month or heck, just waking up early enough so I don't take the toll road to work. And note from the exercise above -- it's the price of crude that's causing the pain, not the taxes. And crude's going to keep on going up and up unless we change our behavior, and that's not going to happen at all.

The taxes go to a highway fund that helps with road construction. When you have no funds, you have no road construction. When you have no road construction, you lose jobs. We don't want to lose jobs so we have to make up that shortfall *somewhere* and guess where the money comes from? Ding ding ding if you guessed China or some other foreign entity. The US is so deep in debt right now that China et al essentially owns our collective butt and that doesn't help with the value of the dollar.

So, in a nutshell, the gas tax holiday is stupid because:

1. In the grand scheme of things, most drivers won't be saving that much money to make a significant difference in their economic situation

2. Reducing the price of gasoline through government intervention will not change behaviors; instead, a reduction will influence people to drive *more*, thus driving up the price once again, essentially negating whatever savings might have been gained through the gas tax holiday

3. The US has to borrow money to finance this hare-brain scheme, which means we, as a nation, we're even deeper in debt and while I'm no economist, I'm pretty sure that doesn't help with the weak US dollar

I want to point out that crude is priced in dollars and for every 10 percent decrease in the value of the dollar, crude rises $4. I haven't figured out the exact way our debt figures into the devaluation of the dollar -- I only know how it impacts my daily life. What we need is a stronger dollar, less consumption on our parts, and then maybe we'll see a meaningful impact in the price of fuel. But the gas tax holiday, now that's just stupid pandering by politicians -- including *my* candidate -- who really want to be president.

Taxes on diesel are approximately 24.4 cents, so if you're driving a diesel vehicle you'll save around $40 for the gas tax holiday

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0 comments | 8:41 PM |


Sunday, April 13, 2008

 
The tax man cometh

So I'm finally finished my taxes and now it's a question of just getting everything addressed and mailed off (certified, of course). Some people have been surprised that I've waited this long to mail my taxes, but here's the deal -- I owe Uncle Sam money, and I'm in no hurry to turn it over to him. I did my taxes back in January, discovered the sad truth, and have been sitting tight ever since. Of course, there's the thought that if I owe taxes, that means I've had income this year. Still, that's minor consolation when it comes to actually paying up.

I did learn something new while doing my taxes. I've always taken advantage of a particular tax "savings" strategy for the last few years and I've always thought I've made a smart financial move. Well, come to learn this year, I've been an idiot and a fiscal nicompoop. In a nutshell, to save $1 in taxes, I had to spend $7 and the net loss to me is $6. If I went to any thinking adult on the street and said, "Hey, if you gave me $7, you could save $1 on your taxes, how about it?", the any thinking adult on the street would laugh in my face and walk away. I should note that the $7 that I "gave away" for every $1 wasn't for the purpose of owning tangible property, so I'm essentially out assets all for a measly savings; I'd have come out ahead if I'd just taken the tax hit. Clearly, I won't be doing this again next year. Live and learn, I guess.

I think the same thing is true about a house about how you get a break for the mortgage, and I haven't done the math, but I think it's the same concept as my "learnings" above. Yes, homeowners get a tax deduction, but it's something like you have to pay $1 to get 33 cents back on your taxes. I mean, it's better than not getting the 33 cents back and if you're going to buy the house anyway, then it's moot and maybe even a bonus, depending on your circumstances. But the more I think about it, the tax arguments for buying a house seem kind of nicompoopish.* There's an interesting article here that basically says depending on your house, location, equity, etc., the tax benefits of a mortgage payment can vary. With my luck, I'll be the couple in Akron, OH, who get absolutely no tax benefit from owning a home.

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0 comments | 8:40 PM |


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