I've never been of the blogging type, but who gives a shit. I kind of just wanted to spit out what's on my mind and this seems like the best way of doing it. I'm not really aiming this at anyone, and I don't plan on many people actually reading this, but I wanted to preface some of my biases. I've always been a fair person, but there are some things in life that i'll always take sides with. First off, considering this is the last day before the election we'll go ahead and get it out there that I'm fairly conservative... no I did not say I was a republican or a mccain supporter... that's a different story. in fact lets put off this whole political situation until a little later. As far my other biases, they pretty much revovle around sports and the economy... in future posts i will make a list of my favorite sports teams and favorite athletes of all time, but for now i'll just give a short list of the teams and athletes i closely follow.. (in no order) uconn basketball, boston red sox, new york giants, new york islanders, la lakers, tiger woods, sergio garcia and all nba players that attended UConn. As far as biases towards the economy... laissez faire captialism and less gov't spending will get us on the right track.. if you want to argue that more gov't regulation on the pooling of mortgage backed bonds would prevented the economic fallout of '08.. let me know i'll educate you.
as a segway from the economy into politics i wanted to mention the effect on the raising taxes to the american people. most dems support obamas idea of raising taxes to the upper 5% or as obama likes to put it, raising taxes to people who make over 250k. this in effect would give him more money to put towards gov't spending. well... if you look at the laffer curve and the tax revenue statistics from the past.. revenue actually is not maximized at a higher tax rate. it peaks around a little over 30%. in laymans terms if you tax the rich too much, they will find a way to get around it. they are rich enough to hire tax lawyers and accountants to make sure they pull some sort of scheme to get around a higher net tax rate for them. what does this do? pretty much nothing. sure it sounds great during an obama rally when he preaches to the lower and middle class about how the top 5% income americans will pay for the government programs that mainly the lower class recieve the most benefits from. I sometimes wonder if people have forgot about the Progressive Income tax. I bet I could go around the US and ask college students if they know what it is and i'd put a million dollars on it that over half wouldn't know. If you make more money in the US you pay the gov't more, easy enough, but the progressive income tax means that the more money you make, you have to pay an even higher percentage of that income to the gov't. I am a firm believer in the progressive income tax, dont get me wrong, but to change the tax rates for only a top portion of the bracket? Does this not defeat the whole purpose of what this progressive tax rate system was set up for?
Heres another issue, and perhaps 10 times more important than the federal income tax debacle that is stirring. CAPTIAL GAINS TAX. If you're not aware what it is, heres a simple definition. If you buy a capital asset (most common here are stocks, bonds, mutual funds & real property) and then you sell it for a profit, you are taxed by the federal government on those profits.. based on how long you hold this asset is the determinant of how much you are taxed. Currently if you hold the asset for less than 1 year you are subject to a short-term capital gains tax of 35%. If you hold the asset for greater than 1 year you are subject to a long-term capital gains tax rate of 15%. The reason this long-term rate is so low is based on the idea that you & this country benefit from holding an asset of a longer period of time. This promotes investment into our economy, this tax is a reason why the american stock market has been so successful and we all know whether we like to admit it or not, when the stock market does well, the economy is doing well. While the US is in perhaps its worst recession since the great depression and the economy is hanging by a thread, barack obama has demanded the capital gains tax be increased to ATLEAST 20%. Where does he get this logic? Well he is a big believer in making sure the big company excecutives don't walk home with a smile on thier face. He knows that these executives essentially pay a lower effective tax rate than many americans because the majority of thier income comes from profits on long term capital gains which are taxed at 15%, by raising this tax rate he could have company execs pay a higher tax rate and then get more money for government spending? Oh wait, you forgot the fallout of one minor correction. How about the fact that an increase in the capital gains tax has statisically proven to cause inflation? Or the fact that this could potentially cause a major decrease in investing in our own economy. So Obama is saying that he is going to tax people more for investing in the stock market? The backbone of our economy? Will this deter investment in our own economy? That's a question that can be answered on your own bias. While it doesn't make much sense to me, I have always believed that someone who has made it as far as Obama has not made it here for no reason, so there must be some justification for his policy he has promoted. In MY own opinion I believe it is purely marketing tactics to bring in more voters in order to get him elected. While you may think "well isn't that what a politician does?" well... yes, but isn't a politician supposed to propose what he feels is best for his constituents? I think theres a line that needs to be drawn here. Does barack obama really believe that raising taxes for people making over 250k is best for this country? Or is it just because it appeals the the voters that he is trying to pull in? Does he really believe that the capital gains tax should be raised in order to make sure company execs don't walk home with too much money? Or is it just because it sounds appealing to the voters he is targeting? What voters is he targeting? mainly lower and middle class and in most of their situations these decisions do not apply to them personally. most do not make over 250k and those lower and middle class income levels that have capital gains are usually taxed at a lower captial gains tax rate because they fall in a lower income tax bracket. so why not support his policies? Exactly what he wants his voters to think. Do I think Barack really knows that his policies aren't the best for a better economy? Actually I do to an extent. There is no way that someone gets this far without having such knowledge. While he has proposed some drastic policy, I do not believe that he will completely follow through with it, cause in the end, he and his cabient will know better. Once he has taken office he will have so many fucking economic advisors he wont be able to breathe. Do I know something they don't? Nope, they know 100 times more than me and that's what ultimately in the end I'm not that nervous. One thing I've learned at Babson that is no matter how good or bad the product you offer is, the only thing that will matter is how it is marketed. If there is good press and marketing on a shitty product, you will still get GREAT sales... that is until you see how that product works. Well elections work the same way, Obama in my opinion has run one of the best marketed campagins in the history of the presidency. Granted he could work off of the mistakes of W, he used them perfectly. Everyone has bought into Obama and his sales are off the charts and they will show come tomorrow Novemeber 4th. But will all the voters want to return thier product come next year? We shall see how he works.