Security - precautions taken to guard against crime, attack, sabotage, espionage, etc.
Freedom - the power to determine action without restraint.
The two are actually opposites. For example, I am free to go for a bike ride almost anytime that I'd like. But I have to get my bike out of the garage first. I keep it in the garage for security, so that it won't get stolen. But that step of security limits my freedom to a certain extent.
All steps taken to ensure security also limit freedom.
Total freedom would be a complete lack of security and total security would be a complete lack of freedom.
I therefore believe that there must be a balance between the two, having neither total freedom nor total security. However, I feel that it is better to favor freedom of security.
The TSA is supposed to keep us safe when we travel by air. They are taking measures to provide security that at the same time take away freedom. The reality is that at least 95% (maybe even 99.9%) of those who fly are law abiding citizens that have no intentions of hijacking an airplane or doing any harm to any of their fellow passengers. Yet 100% of passengers are subject to searches.
The reason for this is because they cannot tell if a passenger has any intentions of doing harm or not.
While I feel that some measures have gone further than they need to and I'd like to see policies changed to be closer to what they were prior to the terrorist attacks of September 11th 2001, I do understand that some level of security is needed for such travel.
Adding cameras on every street corner and drones in the sky to keep an eye on everything would certainly increase the security within our country. But I feel that it would come at too high a cost and oppose any such measure. Freedom should not be infringed upon so brazenly. When it is to be infringed upon, it should only be done with the utmost care and consideration and needs to be done in a manner that does not violate the constitution.
This country was founded based on freedom, not based on security. Though it would be foolish of us to do away with all measures of security, it is my belief that there are some measures that could be done away with. We do not need to create a new law every time somebody finds a new method to harm another human being. (physically or otherwise) When it comes to laws of the land, less is more and we should consider that when casting our ballots.
Saturday, May 26, 2012
Saturday, May 12, 2012
Where I stand - on raising taxes on the wealthiest Americans
Disclaimer: I am using simple figures for the purposes of demonstrating the differences between investing in a business versus in a money market account. Actual tax rates may vary and returns are not guaranteed.
I often run across people that look at tax rates alone and state they feel it is unfair that wealthier people pay a lower tax rate (though higher dollar amounts) than they do. While I understand the feeling, I can't help but think they are not looking at the big picture. I am one of the lucky middle class that gets to a pay a high percentage in taxes. It may seem in my best interest to support raising tax rates on anybody that makes more money than I do, but I do not support the position and I'd like to explain why by offering the following scenarios:
Scenario 1 - Someone with one million dollars puts that money into a money market account that gives them an annual return of 5%, for a profit of fifty thousand dollars. That amount is taxed at a rate of 15%, for a total of $7,500 that gets sent to the government and $42,500 going back to the investor.
Scenario 2 - Same situation as above, but the tax rate has been increased to 20%. Now $10,000 gets paid in taxes with $40,000 going back to the investor.
In this instance, we see that raising the tax rate on wealthy Americans would result in more money being generated for the government.
Scenario 3 - Instead of using a money market account, that same person uses their million dollars to start a business and hire ten people. Half of the money is spent on equipment, which has a 6% sales tax rate, for $30,000 in sales tax captured by the government. Each employee gets paid fifty thousand dollars and pays taxes on their earnings at a rate of 20%. Each of the ten employees ends up paying $10,000 to the government, for a total of $100,000 dollars to Uncle Sam from the employees. The venture succeeds and the investor recovers their initial investment, plus a profit at a rate of 10%, for a total profit of $100,000. That profit is taxed at 15%, for a total of $15,000 going to the government and $85,000 going back to the investor. Combined taxes from the investor, sales tax and the employees of $145,000 paid to the government as a result of the new business.
The first scenario is clearly not ideal for the treasury, as it results in only $7,500 being brought in. Raising the tax rate to increase that amount seems ideal to the short-sighted person. However, we can see that the third scenario results in quite a bit more money being sent to the treasury.
In order to get that third scenario, investors much be encouraged to take risks and start new businesses versus opting for safe harbors for their money.
This is the reason that some people are opposed to raising taxes on the wealthy. It isn't because they want to allow the wealthy to keep more of the money that they make, it is because they want to encourage the wealthy to take those risks. If someone with one million dollars will end up with a net increase that is roughly the same by either taking on risks or by playing it safe, they will play it safe.
We need wealthy people to invest and take on risk to help grow the economy and create jobs.
I often run across people that look at tax rates alone and state they feel it is unfair that wealthier people pay a lower tax rate (though higher dollar amounts) than they do. While I understand the feeling, I can't help but think they are not looking at the big picture. I am one of the lucky middle class that gets to a pay a high percentage in taxes. It may seem in my best interest to support raising tax rates on anybody that makes more money than I do, but I do not support the position and I'd like to explain why by offering the following scenarios:
Scenario 1 - Someone with one million dollars puts that money into a money market account that gives them an annual return of 5%, for a profit of fifty thousand dollars. That amount is taxed at a rate of 15%, for a total of $7,500 that gets sent to the government and $42,500 going back to the investor.
Scenario 2 - Same situation as above, but the tax rate has been increased to 20%. Now $10,000 gets paid in taxes with $40,000 going back to the investor.
In this instance, we see that raising the tax rate on wealthy Americans would result in more money being generated for the government.
Scenario 3 - Instead of using a money market account, that same person uses their million dollars to start a business and hire ten people. Half of the money is spent on equipment, which has a 6% sales tax rate, for $30,000 in sales tax captured by the government. Each employee gets paid fifty thousand dollars and pays taxes on their earnings at a rate of 20%. Each of the ten employees ends up paying $10,000 to the government, for a total of $100,000 dollars to Uncle Sam from the employees. The venture succeeds and the investor recovers their initial investment, plus a profit at a rate of 10%, for a total profit of $100,000. That profit is taxed at 15%, for a total of $15,000 going to the government and $85,000 going back to the investor. Combined taxes from the investor, sales tax and the employees of $145,000 paid to the government as a result of the new business.
The first scenario is clearly not ideal for the treasury, as it results in only $7,500 being brought in. Raising the tax rate to increase that amount seems ideal to the short-sighted person. However, we can see that the third scenario results in quite a bit more money being sent to the treasury.
In order to get that third scenario, investors much be encouraged to take risks and start new businesses versus opting for safe harbors for their money.
This is the reason that some people are opposed to raising taxes on the wealthy. It isn't because they want to allow the wealthy to keep more of the money that they make, it is because they want to encourage the wealthy to take those risks. If someone with one million dollars will end up with a net increase that is roughly the same by either taking on risks or by playing it safe, they will play it safe.
We need wealthy people to invest and take on risk to help grow the economy and create jobs.
Wednesday, May 2, 2012
Where I stand - on earmarks
I am against them.
I think that earmarks are both part of the massive spending problem that we have as well as a gross misuse of power. I find it very ironic that so many people say that do not approve of the job congress is doing, and yet keep voting back the same people. It's like everybody is pleased with their own representatives and displeased with others. What that suggests to me is that many people feel that earmarks in general are bad, but as long as they benefit me they are okay.
An earmark to set aside money to buy a copy of my book for every school in the country would beyond a doubt benefit me. But I would have to oppose such an earmark because it would still be an earmark. We all need to lead by example, especially in this regard.
It is said that charity starts at home; Responsibility should as well.
I think that earmarks are both part of the massive spending problem that we have as well as a gross misuse of power. I find it very ironic that so many people say that do not approve of the job congress is doing, and yet keep voting back the same people. It's like everybody is pleased with their own representatives and displeased with others. What that suggests to me is that many people feel that earmarks in general are bad, but as long as they benefit me they are okay.
An earmark to set aside money to buy a copy of my book for every school in the country would beyond a doubt benefit me. But I would have to oppose such an earmark because it would still be an earmark. We all need to lead by example, especially in this regard.
It is said that charity starts at home; Responsibility should as well.
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