Tag: Tax

It’s Labor Day

Here’s the problem with the whole corporate tax equation. Our tax structure was set up with the idea business would be the driver of employment. Business has decided that’s not part of the deal anymore. Companies offshore and automate and do so to save every penny.

George Jetson at WorkIt’s Labor Day.

I grew up in an apartment complex financed and built by Local 3 of the Electrical Workers Union. I joke now about its Soviet style architecture and warmth, but places like Electchester were needed. The workforce in post-WW2 America was growing like crazy.

Our softball league used to march down 5th Avenue in the Labor Day Parade. It was a big deal in New York City.

It’s not even held on Labor Day anymore.

Labor is vilified today. Unions, more evil still.

All this has come to mind after seeing a Facebook post (then online shouting match) about American corporate taxes. My blood began to boil. Instead of joining the flamewar, let me vent.

Here’s the problem with the whole corporate tax equation. Our tax structure was set up with the idea business would be the driver of employment.

Charles Wilson, a nominee for Secretary of Defense in the early 50s and former GM executive famously said, “I thought what was good for our country was good for General Motors, and vice versa.”

He was right… sixty years ago.

Business has decided that’s no longer part of the deal. Companies offshore, centralize and automate and do so to save every penny.

At your place of employment are there now fewer people doing the same work as a few years ago? My guess is yes. You’re not alone.

When I was a kid, George Jetson drove to work and immediately put his feet on his desk. Wasn’t that our expectation? The future would be less work and more comfort.

That’s not how automation has worked. We have not been augmented. We have been replaced.

The list of non-human jobs grows by the day. Versatile robots and driverless vehicles? Certainly within our lifetimes.

What truly wasn’t expected was the optimization of tasks. Computers have made this possible. Companies learned how to make workers much more productive. None of this is done to the laborer’s benefit.

There was once a class of middle managers who ran departments within stores. WalMart, Home Depot, Target and all the rest have learned how to massively manage from a central location. When stores like Caldors and Zayers closed, that level of job disappeared too.

I grew up in the age of strong labor. The middle class was a good place to be. Hourly employees owned homes.

Our current economic and tax structure can only support a nation of haves and have nots. There are already not enough jobs to go around. And it’s like that in nearly all the industrialized world.

We need to make a decision. What kind of society do we want and how will we make that happen? What level of need and poverty will we accept and for how many?

Whatever the answer is, it’s certainly not what we’re doing now.

Taxes

orange_county_sealWe got a piece of real first class mail from the bank that holds our mortgage a few days ago. They wanted us to know we were a few grand past due on our real estate taxes.

Say what?

Yesterday they followed up with a phone call. You know they were serious, the CSR was here in the states.

It’s all true. The Foxes who’ve never once had a credit ding of any type (because I am not allowed to handle money) were 90+ days behind on our property taxes.

You’ve got to follow this closely, because it makes no sense. The tax collector doesn’t change the address for tax bills at the time a property is sold. It happens all at once, once every year.

I called the tax collector’s office in Santa Ana to straighten things out.

“Parcel number, please?”

The woman on the other end of the phone couldn’t use my address to find it. I was instructed to call the tax assessor’s office.

Back to the tax collector, now with the parcel number. Everything was explained. We’re good now.

I’m looking at the original pages that came in the mail. They’re marked up with names, numbers and notes. The arrows I’ve drawn since high school, maybe earlier, are scattered on the page. This could pass for 1968 Geoff down to the doodles.

The check, including the next property tax installment, is in the mail. It was suggested, if I requested the county would offer clemency on any penalties or interest. This must happen a lot.

On Taxes And Jobs

Our governmental policies and tax laws reflect an earlier, simpler time Back then more income meant more employees. Now not so much.

I’m not an economist. Duh!

Still some of what I hear over the federal budget battle seems a little hard to swallow. Specifically I’m talking about raising taxes and how that affects job creation. The mantra from Republicans is lower taxes go directly into more jobs.

As it turns out there was a tax decrease on airline fares this weekend. When the FAA charter wasn’t refunded the taxes and fees it collected expired. Let’s see how that worked out.

Airlines are tossing consumers aside and grabbing the benefit of lower federal taxes on travel tickets.

By Saturday night, almost all the major U.S. airlines had raised fares to offset taxes that expired the night before.

That means instead of passing along the savings, the airlines are pocketing the money while customers pay the same amount as before.

American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details differed. Most of the increases were around 7.5 percent. – San Francisco Chronicle

Maybe the airlines looked at this tax decrease as too temporary to use as a hiring trigger, but using it as an opportunity to charge more seems unconscionable.

Unfortunately, I also understand why it happened.

Businesses are there to make money. I can’t say I blame them. They’re doing what they’re supposed to do. But we can’t look at them as what they are and through rose colored glasses simultaneously.

Our governmental policies and tax laws reflect an earlier, simpler time Back then more income meant more employees. Now not so much.

One of the major reasons for a spike in unemployment is fewer people are needed to produce the same work product. When you call a company for service or help and have your problem fielded by computers (or lower paid workers somewhere halfway around the world) you’re seeing a cause for unemployment firsthand. Companies are benefiting from this increase in productivity. They’re keeping that gain all to themselves.

A company’s interest is best served by producing a good or service for the minimum price. Maybe their interests and our society’s interests aren’t aligned anymore?

If we want more employment we’re going to have to add incentives that recognize full employment isn’t the employer’s natural goal. Certainly we’re going to have to take another look at incentives that actually work against full employment.

When banks swallow banks or AT&T swallows T-Mobile will layoffs follow? Unemployment costs our economy. Who’s paying for it? I sense it’s not the swallowing bank or AT&T. In the end our economy picks up the tab. The cost is shifted from them to us.

I agree with Republicans who say we shouldn’t penalize job creators. We shouldn’t. So maybe it’s time job creation itself was part of the equation in who got tax breaks. Not everyone deserves a break.

Prove you’re a creator and I’ll do what I can to help you. Otherwise, pound sand.

Like I said, I’m not an economist. However, I recognize BS when I see it.

The Mysterious ITunes One Percent Tax

The funny thing is I wouldn’t have bothered looking had the tax not been as small as it is! What tax is 1%?

A few days ago I bought two games for my iPhone. EA had a 99&#162 sale. I couldn’t resist.

Today the receipt came via email (which Gmail thought was spam and not really from Apple). Added to my $1.98 purchase was 2&#162 for tax.

The tax rate works out to 1%. Connecticut’s sales tax is 6%.

Apple has a physical presence in-state. There are a few Apple Stores. That normally means they must charge state sales tax.

There’s no explanation on the receipt beyond “tax.” Something is weird.

I entered “iTunes tax” into Google. A few other people have asked the same question I’m asking, but with no good answer. Some were in states with no sales tax!

From the search results it’s also obvious lots of states would like to tax iTunes purchases, but as far as I see don’t.

A search on the iTunes support page also produced no info.

The funny thing is I wouldn’t have bothered looking had the tax not been as small as it is! What tax is 1%?

Now this 2&#162 charge will drive me crazy!

I Hate Preparing My Taxes

Of course the real problem is I always feel I’ve forgotten something or screwed up something. My favor? Their favor? Who knows? Any mistake is money plus or minus.

tax return info on the table.jpgFiling taxes! Is there anything we do more painful or difficult? I hate it and I’m getting a refund. I’d be suicidal if I had to cut a check as well.

For the past few years we’ve been using TurboTax. I logged in, found my account and then realized there are probably online coupons to save money. I found one and reentered the site, but it was too late. TurboTax would only allow me to pay the full price.

Helaine asked if it was worth it to try and undo the $3? No. But this is like the cell companies giving long messages on voicemail so you’ll use more minutes, right? TurboTax rakes in an extra $3 thousands… maybe hundreds of thousands of times. It adds up.

They also charge much more to do Connecticut’s taxes than the federal forms. Let me restate: They also charge much more to do Connecticut’s much shorter and simpler taxes than the federal forms! All the info and questions are already filled-in.
I guess their cost per filer is greater, but this is a little nuts–and by a little I mean a lot.

We only go through this once a year so it’s tough to remember the specific details, but the user interface seems to be a little more sophisticated, more helpful each year. It’s a mature app but they’ve found ways to improve.

Of course the real problem is I always feel I’ve forgotten something or screwed up something. My favor? Their favor? Who knows? Any mistake is money plus or minus.

As the process ends TurboTax invites you to use Mint. The choice is Helaine’s as she’s Secretary of our Treasury, but it might not be a bad idea.