Question of the Day|
How legitimate are so called sin taxes and are they just another way for government to fulfill its own sin of overspending or is there merit?
Click here to post your answer and let Charles know what you think. He will air some on the Payne Nation radio show.
Hey Mama, is it true what they say,
that Papa never worked a day in his life?
And Mama, bad talk going around town
saying that Papa had three outside children and another wife.
And that ain't right.
- The Temptations
Heard some talk about Papa doing some store front preaching.
Talking about saving souls and all the time leeching.
Dealing in debt and stealing in the name of the Lord.
It's interesting how people line up behind politicians and political parties out of habit or odd obligations but when it comes down to it we all abhor certain actions from other people. The Temptations' timeless hit "Papa was a Rolling Stone" had a couple of lines that always reminded me of government, especially the government in control today. I keep hearing that same sort of storefront preaching these days about how the administration can save our souls while transforming the nation into one that's "fair" and everyone gets to dip into the honey pot even if they put in no elbow grease.
President Obama talks about taking from the rich through higher taxes on investments via the healthcare law, letting the Bush tax cuts expire and gimmicks like the so-called Buffett Rule. Of course this would only be the tip of the iceberg, as the ultimate goal is to fund a welfare nation that simultaneously discourages the notion of being rich in the first place. Hence the disdain that drips when Obama talks about Romney "maximizing profits" for investors in distressed businesses. Of course none of those companies that Bain assisted could have survived without cash and management infusions.
But this is all about distracting because we don't have to wait to see what government in general or this administration in particular would do with money taken in the name of its hapless citizens.
In 1998 four tobacco companies came to a settlement where they agreed to pay $206.0 billion to 46 states over the next 25 years. Money paid combined with cigarette taxes collected since then has tallied $244.0 billion. A huge chunk of that money was supposed to go to educate smokers and would-be smokers in order to dissuade smoking.
The states spend only $8.1 billion to control use of cigarettes but the Center for Disease Control said the number should have been $29.2 billion. That doesn't sound fair to me.
The problem is these states have their own habit that they can't seem to kick and it's a spending habit. Of course the biggest spending habit in the history of this nation is taking place at the White House and in both instances they all deal in debt and steal in the name of the Lord or something supposedly altruistic. I think any irresponsible spending by government is despicable but when they support that habit with attacks on good people it's a sin. Households earning $250,000 a year should be the model for everyone, looked up to and promoted, not scorned and attacked. Investments that save businesses and keep people employed must be encouraged and applauded, not painted as something nefarious.
There is nothing more nefarious than hijacking productivity, except stealing from those that can least afford any financial hits.
Punishing or Helping Poor People
I had a debate last Friday with smart people from both sides of the political aisle and they agreed they like the idea of taxing cigarettes. They think it stops smoking, so it's a smart idea. Yet, it's clear that it's not such a deterrent that billions of dollars a year aren't still spent on smoking. The fact of the matter is such taxes crush opportunities and dreams more than any form of lower education and racism ever could. In all honesty people are being punished for being addicted or dumb (depends on your perspective) to pay for government spending run amok and everyone takes a cut, from the federal government to states and cities.
On Friday the state of Illinois voted to hike its cigarette tax another $1.00 because it was in such a rush to help poor people:
"Today's action will improve the health of our people and lower the burden of smoking-related conditions on our Medicaid system, while helping to fill the $2.7 billion Medicaid shortfall and stabilize the system for those that need it"
Gov. Pat Quinn
I get that in the end people that don't smoke will have to pay medical bills for people that do smoke but these taxes are bogus. The money doesn't go into a special fund to pay those medical expenses. This summer to light up in Chicago it will cost $11.00 a pack. That's cheap compared to New York. In the Big Apple taxes alone are $5.85, bringing to total cost to $14.50. I have a godson in the Bronx and each parent smokes a pack a day. If there were no taxes on cigarettes they would have $76,869 saved over an 18 year period, or enough to send their son to college and break a cycle.
Of course if they didn't smoke at all they would have $190,530. That's an amount that changes lives. Everyone is accountable for their own actions but it's a flat out lie that the government, from top to bottom, gives a damn about poor people or smokers and it sees its feign caring as a way to spend more and more money. For all the talk of going after the rich, the true enemy of the poor is government and its great assistance program including taxes for your own good. When the hell will people wake up to revolt against government dealing in debt and stealing in their name?
It should be known that the states that spent the most money on cessation and prevention programs saw the biggest decreases in cigarette smoking. For those that like sin taxes as a deterrent at some point you will probably feel its sting unless you don't use gasoline, eat fast food, drink sodas and nosh potato chips. It will not stop there.
Recently big banks agreed to fork over billions of dollars for robo-signings, with a large piece going to help homeowners. The vast majority of that money is going toward state budgets and spending plans that have nothing to do with housing or helping victims.
Follow Up To Salina Kansas 1872
A couple saw me talk about the eighth grade exam and sent me a great email suggesting maybe the test was for teachers and not students. It is still a tough test. Along with materials to back up their conclusion they included this fascinating piece that provided rules for teachers.
Rules for Teachers 1872
1. Teachers each day will fill lamps, clean chimneys.
2. Each teacher will bring a bucket of water and a scuttle of coal for the day's session.
3. Make your pens carefully. You may whittle nibs to the individual taste of the pupils.
4. Men teachers may take one evening each week for courting purposes, or two evenings a week if they go to church regularly.
5. After ten hours in school, the teachers may spend the remaining time reading the Bible or other good books.
6. Women teachers who marry or engage in unseemly conduct will be dismissed.
7. Every teacher should lay aside from each pay a goodly sum of his earnings for his benefit during his declining years so that he will not become a burden on society.
8. Any teacher who smokes, uses liquor in any form, frequents pool or public halls, or gets shaved in a barber shop will give good reason to suspect his worth, intention, integrity and honesty.
9. The teacher who performs his labor faithfully and without fault for five years will be given an increase of twenty-five cents per week in his pay, providing the Board of Education approves.
CEO Pay and Shareholder Value
According to AP the typical CEO paycheck was $9.6 million, up 6% which is a lot less than Alex Rodriquez made with the Yankees and corporations had a better year. But there will be a lot of saber rattling and finger-pointing in this era of class warfare and hatred toward the profit motive. There was a piece out immediately after this report that pointed out it would take a minimum wage worker @ $7.25 one month shy of 9,096 years to make what David Simon made last year. For me that makes it pretty clear - make sure you aren't working at minimum wage for the next 9,000 years.
While I dislike the fact politicians are going to jump on this news its shareholders that need to decide if the payouts are egregious - and they need to be more vocal if they want to continue to be part owners.
In the top ten these are guys you really can't be angry with.
On the other end of the spectrum, investors in these names should have a serious beef. I will say I haven't looked into details of all these pay packages and often they accumulate over time but a quick glance shows a much different experience for the CEO and the shareholder. By the way, these are legendary names and some even consider Mulally a corporate hero - but he's going to have to turn the stock around.