Wrong Turn ?

Check out this excellent article I read a couple of weeks ago in the New York Times about corporate taxes. After reading the article it left me shaking my head wondering when things went astray.

A CEO begging for tax shelters crucial to the company bottom line, employees urged to divide their time evenly between ensuring compliance with the law and looking to exploit opportunities to reduce the taxes the company pays, company lawyers and lobbyists involved in rewriting portions of the corporate tax code and the list goes on and on.

I bet hearing about this type of thing would be frustrating to our president. It will take a monumental effort to get things back on the right track if it isn’t already too late !

A Star Is Born

Tonight Kish and I went down to the Ohio State campus, to the Scarlet and Grey Cafe, to watch the debut performance of Jack Doran, son of Dr. Science and the Lovely Anita.  It was like old times as we paid an $8 cover charge and sat on somewhat rickety stools in a dark bar to enjoy some live, local music.

Jack played six songs, accompanied only by his own acoustic guitar, and he did a wonderful job.  All of the songs were his own creations, and he played and sang them with the assurance of a seasoned veteran.  It must have been difficult to play with proud parents (and their friends) crawling all over the establishment taking pictures and video, but he pulled it off.

It was fun to go down to campus and to catch a bit of the music scene.  Before Jack took the stage we watched an all-female band named, I think, Scrimshaw the Mariner.  They were quite entertaining as they deftly played banjos, ukeleles, guitars, washboards, and an instrument that looked like a breathing apparatus and also sang some a cappella pieces.

From our brief exposure tonight, I’d say the local music scene in Columbus is alive and well.  Great job, Jack!

Ya Think?

Former Michigan head football coach Rich Rodriguez has told CBS Sports that you could look back and conclude that his leaving West Virginia for Michigan was “a mistake.”

Rodriguez had been successful at WVU, which was his alma mater.  When he decided to leave for Michigan, he earned the everlasting enmity of Mountaineer fans and became embroiled in litigation about his departure.  At Michigan, he quickly made some gaffes that hurt his reputation and, of course, his record with Michigan was dismal — marked by blowout losses to archrival Ohio State, a pathetic record in the Big Ten, and a crushing defeat in the Wolverines’ bowl game this year.  Rodriguez became the whipping boy for a huge swath of Michigan fans and was drummed out of his job after only three seasons at the helm.

So yes, I think you could fairly say that Rodriguez’s decision to take the job at Michigan was “a mistake”– just like you could say that the captain of the Titanic made a “minor navigation error” and Marie Antoinette’s comment about eating cake was “ill-advised.”

Who Is This Guy? (The Revenue Side)

The next part of President Obama’s approach to the budget deficit, outlined in his April 13 speech, addressed what he called “tax expenditures” and “spending in the tax code.”   At the outset, he said he regretted agreeing to extend “tax cuts for the wealthiest Americans” only a few months ago, but explained that he did so “because it was the only way I could prevent a tax hike on middle-class Americans.”  He added that “we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society” and declared:  “I refuse to renew them again.”

The President next said the tax code is “loaded up with spending on things like itemized deductions.”  He agrees with “the goals of many of these deductions, from homeownership to charitable giving,” but “we can’t ignore the fact that they provide millionaires an average tax break of $75,000 but do nothing for the typical middle-class family that doesn’t itemize.”  He then called for “limiting itemized deductions for the wealthiest 2 percent of Americans.”

Finally, he said “we should go further,” and Congress should “reform our individual tax code so that it is fair and simple — so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford.”  The White House fact sheet that UJ linked to recently phrases the issue more bluntly — it says: ” the President is calling for individual tax reform that closes loopholes and produces a system which is simpler, fairer and not rigged in favor of those who can afford lawyers and accountants to game it.” (The emphasis is in the fact sheet itself.)

These remarks are, commendably, more specific than the President’s remarks on spending and health care.  He wants to raise the current tax rates on high income earners (by not “extending” those rates) and he wants to “limit” deductions for the wealthiest 2 percent of Americans.  It is interesting that the President now regrets a decision he made only a few months ago, but it is even more interesting that he seems to equate “income” with “wealth.”  The federal income tax only addresses “wealth” if the wealth produces taxable income.  The notion that individuals who are taxed at the highest tax brackets are all “millionaires and billionaires,” as the President suggested, is preposterous.  Instead, many of those people are simply productive workers in two-income families — small business owners, professionals, and so forth — who are reaching the peaks of their earnings potential while at the same time they are putting their kids through college and trying to save for retirement.  The notion that such people are “the wealthiest Americans” who have somehow gamed the system is ludicrous.

I’m all for making the tax code simpler and fairer — but does anyone really think President Obama is well positioned to do so?  His health care legislation is already producing volumes of regulations that are of breathtaking complexity.  And this is not a President who has shied away from advocating tax breaks and incentives for causes that he agrees with — like green energy.  A better course, I think, would be to get away from deductions altogether.  I’d like to see an end to special tax treatment of donations to charitable and religious organizations and the non-profit political groups, right and left, whose vile advertising makes TV watching during the election season so revolting.  Our tax policy should not encourage such groups.

And consider the intemperate language of the White House fact sheet quoted above.  It actually suggests that our federal tax system is “rigged in favor of those who can afford lawyers and accountants to game it.”  Does the President honestly believe that the federal tax system that he has presided over for two years is “rigged” and “gamed” by “lawyers and accountants”?  If so, why hasn’t he done something about it before now?

Who Is This Guy?  (The Health Care Side)

Who Is This Guy?  (The Defense Side)

Who Is This Guy?  (The Spending Side)

A Statue For Jesse Owens

Many people may be surprised to learn that the most legendary athlete to compete at The Ohio State University was not a football player — instead, it was track-and-field star Jesse Owens.  On Thursday, on one of the few sunny days we’ve had recently, the University unveiled a new statue of Jesse Owens at the southwest corner of Jesse Owens Memorial Stadium.

Owens’ athletic achievements were extraordinary.  Most people know about Owens’ Olympic accomplishments, but his efforts the prior year at the Big Ten championships (at that time still called the Western Conference) were equally amazing.  On one day — May 25, 1935 — Owens equaled the world record for the 100-yard dash and broke the world records for the 220-yard dash, the 220-yard low hurdles, and the long jump.  Four world records in one day!  At the 1936 Olympics held in Germany, Owens then reached iconic status by winning four gold medals in the heartland of Nazism and disproving Adolf Hitler’s racist Aryan superman myths.

When many of us think of the model for an athlete, we think of Jesse Owens, who performed exceptional feats under enormous pressure and did so with grace and class.  Many of the pampered, steroid-using, self-absorbed athletes of the modern world would do well to study Jesse Owens and learn from his example.  Perhaps this latest tribute will help in that regard.