Entries Tagged 'Stupid' ↓

The Silicon Valley is a fairly liberal place that has generally supported many of the Obama Administration’s moves, but yesterday  many in the tech industry do not seem happy about Obama’s proposal to effectively raise taxes on foreign income by billions of dollars.

Currently, U.S. based companies can defer corporate taxes on foreign income as long as they keep the income in another country.  Additionally, U.S. companies can deduct the foreign taxes and costs  they already paid against their income.  The Obama administration argues that this ships jobs overseas.  The problem with that argument  is that many U.S. based companies actually make more than 50% of their income from citizens of other countries.  Imagine if you are selling 1000000 units of something here in the United States, and you are selling 1000000 units of the same thing to the rest of the world, then you would absolutely need staff and offices in the rest of the world.  There is a Walmart in my hometown in China, and sure, it is staffed by Chinese people, but it also earns money from Chinese people.  Does the Obama administration think that taxing this Walmart more will bring those jobs to America?  That is absolutely ridiculous.  What it will do is that it would cut the profit margin of the Walmart in China, and the Chinese will have to suffer higher prices and they will probably just shop elsewhere.  This will reduce the competitiveness of American companies in other countries because other stores have to pay only the local taxes.

I really think this plan to enact protectionism via the tax code is really short sighted.  America has 5% of the world’s population, and a lot of the large multinational corporations have little room to expand in this country.  Just think of how many iPods and McDonalds you see everyday and you would understand that the United States is absolutely saturated with a lot of products and services and the growth rate for a company that stayed exclusively in the United States would not be as large as a company that sells to the rest of the world.  So why would the United States government punish corporations for making money from the rest of the 95% of the world?

Another consequence of this initiative that was not mentioned by the administration is that this will affect the stock prices of the bluest blue chips.  When you see those earnings per share numbers, they do include foreign earnings.  For example, Johnson and Johnson is a company that gets more than 50% of its earnings from foreign countries.  So imagine that half of its earnings suddenly had a tax of 30% compared to 2% the year before.  This will cut into the earnings per share significantly.  The result would be lower stock prices, and the further erosion of 401ks and pension funds.  What a great way to destroy more retirements.

The worst consequence is that large corporations could just pack up and leave the United States completely.  Just imagine all of the Silicon Valley greats like Oracle, Google, and Cisco reincorporating in another country with more favorable corporate tax systems and taking away tens of thousands of jobs permanently.  That would be a huge blow to the United States economy, and it may be irreparable.

So far, the reception to this plan has been somewhat hostile from many industry groups and foreign nations.  The Register in the UK states that “Obama declares war on Ireland” for its low business taxes.  In some ways, that is true.  U.S. based companies employ millions of people in foreign countries, and if the administration specifically targets foreign taxes, it is essentially targeting the livelihoods of these people.  It is also ridiculous to think that laying off foreign workers is good for America, because as the living standards of everyone else improves, they also purchase American goods.  If you take away those good paying jobs around the world, it is really worse for everyone.  The plan will supposedly raise $210 billion for the Treasury in the next decade, but at what cost to the global economy and America?

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I admit it. I watch a lot of TV, and this year I have had the unpleasant experience of turning on the tube to find President Obama when I expected some funny or smart show to come on. This has happened repeatedly in the last few months and it is scheduled to happen again on 4/29.

Because of Obama I had to watch Valentine’s Day episodes of popular comedies in the middle of March. I am sorry but it just feels out of context to see a bunch of hearts on St. Patrick’s Day and every show was just a little less funny. Next, I now no longer know which day some shows are on because several networks changed airing dates to accommodate Obama. Some shows are also trying to catch up by showing multiple episodes in the same week and that is just plain confusing.

I have no problem with President Obama being on TV. After all, he has important things to say, but is it really necessary to preempt prime time television every few weeks on every single network channel? What is wrong with a 6pm news conference when news is usually shown on TV? It is possible to communicate to the public on cable news, the internet, or radio so I think all of these prime time conferences are done at least in part due to Obama’s enormous ego.

So what does this rant have to do with finance or business? Well, the TV networks are definitely losing millions of dollars with each prime time intrusion by President Obama. These two upcoming weeks are especially important because it is what’s known as May sweeps. This means that many shows are having their season finales so advertising is generally more expensive. Also, the sweeps ratings are important to every show since they are used to determine advertising rates for the next season. These prime time interruptions are really hurting the major networks and the shows they are airing. It also hurts the local network affiliates in every city and town in America who receive ad revenue from the shows they air. Most of all, the revenue loss will hurt the workers at these broadcasters and shows. If a company is forced to lose millions of dollars every few weeks they are bound to cut some personnel. Also, many of the new shows that are trying to establish themselves are hurt by the constantly shuffling scheduling, and every cancellation of a show is equivalent to the cancellation of hundreds of jobs.  So believe it or not, Obama’s decision to schedule his news conferences during prime time instead of say 4pm or 6pm is truly hurting people.  I think one of these networks should just stand up to the White House and say no and I am sure that network will get more viewers than the rest because they would be showing something different.

By now I can already predict what Obama is going to say on the news conference because he generally says the same thing over and over. First, he will say something to the effect that we are in a difficult economic crisis and everyone needs to work together. Then he will say that he has cut taxes for 95% of Americans and he is cracking down on the greedy bankers. Finally he will end up with the cliche that there is hope for America. Basically, Obama is continuing his campaign and since he is president now he has the power to get primo prime time coverage for free!

I am definitely not the only one mad about these prime time TV interruptions. It may seem silly that I care about TV so much, but it is my leisure time that Obama is sacrificing for his own ego. After working 8 to 10 hour days, I think millions of Americans deserve to be shown something that makes them happy for 20 minutes to an hour. Millions of people want to escape from the reality of this horrible economy and real life just for a little while, and Obama is taking that away when he can choose not to. So I don’t think it’s stupid to say that if your President really cared about your well being he or she would leave your favorite shows alone. News conferences belong on news channels, and not during Chuck or Bones.

Here is an idea, if Obama seriously wants to be on TV on prime time so often then he should just get his own reality show. I am sure that will have great ratings and actually add to the coffers of the network that snags it. At least that would stimulate the economy instead of taking money away from broadcasters.

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The last two weeks have been incredibly busy for me because the entire engineering team was working on an important major release of our software. We all worked multiple weekends and nights and finally the software is out! As a reward we got to have five days floating holidays for the extra time we worked. I am taking one of those days off today just to unwind a bit, and also work on our dreaded taxes.

I already entered our W-2s and 1099s into the tax software and it looks like we owe quite a bit of money. The reason is that we adjusted our W-4 from single to married at the end of 2007. Strangely enough, this made our paychecks bigger for the duration of 2008, but we actually owe more taxes than when we were single because of the marriage tax penalty. Basically, we withheld less, and we owe more. So we may owe $4000 to $6000 for last year. This is not that bad because we actually needed the cash during the year to complete the home purchase. We also have the cash to pay for the taxes so it is not a dire situation. From my calculations we should be fine with the same W-4 status this year because our mortgage interest deduction will be around $6000 for the year and it will basically be a wash. Last year we only made two mortgage payments and a couple months of property taxes so the deductions are not very large.  I think the optimal thing to do is to owe a little bit of money every year in case the government needs to give out an IOU.

Nevertheless, paying taxes is always pretty depressing. I did a bit of math yesterday and our biggest monthly expense is actually our taxes and that is pretty sad. In fact, the amount we are required to spend on taxes every month is more than our rent and food money. Ironically, all of this money is mostly wasted by the government on bailouts upon bailouts.

Additionally, I am not a citizen, but a  permanent resident of this country, but the IRS states that I should be taxed like any other citizen working here.  I am fine with that since I have the same work opportunities as citizens, but for me it is truly taxation without representation.

Anyway, I should pull out all my various tax statements now and start working.  This is quite depressing indeed.

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Today the Obama administration started the previously announced mortgage rescue plan.  I wrote a detailed summary of the plan on Wise Bread.  Simply put, I think it is a pretty ridiculous plan.  The portion for responsible homeowners to refinance was already in place.  I can prove this because I got approved for a Fannie Mae streamline refinance in January before the plan was even announced and there was no appraisal at all on the refinance which means that they did not care about the loan to value ratio.  The new stuff is all in the incentives for modifying loans for people who cannot pay their obligations. So basically if you have good credit and you have been paying on time you are just stuck with higher tax bills to fund the program for people who has not been filling their obligations.  Great deal.

Anyway, I was going to write a pretty long rant about the new gargantuan Obama budget, but this article at American Spectator called Obama’s Fantasy Budget by Peter Ferrara  said a lot of the things I wanted to say.  Here are some of the main points in the article that  I was going to write about:

• Obama is raising the budget from $3 trillion in 2008 to $4 trillion in 2009.  This is a 25% increase.
• Obama is growing the national debt by $2.7 trillion this year.  This is a growth of 27% in one year over the collective debt of the United States for the past 200+ years.
• The deficit for this year is the largest ever at $1.75 trillion, which is more than 12% of GDP.
• Obama pulls out a nebulous $2 trillion budget cut over 10 years for winding down the wars, but this is barely half of his first year’s budget.
• Obama is keeping his promise of raising taxes for high earners, and also trying to limit the deductions they can take.  The money will be used to give refunds beyond what some tax payers pay.  Basically, a good amount of people could be paying no taxes and receiving extra tax refunds.
• Increased taxes on energy companies will creep into consumer energy costs.

The funny thing is that Obama said that he is going to cut the deficit in half in four years.  I wonder if he means he will cut the deficit he creates.  The bottom line is, a bigger budget is absolutely not a better budget.  It is incredibly difficult to create a budget for an entire national government, but the sheer size of the government allows the president to find more areas to cut.   The problem is that I do not think a small and efficient government aligns with the Obama administration’s agenda.

Finally, all of this money is not free.  It will come from the backs of Americans in one form or another.  Even the poorest who will get tax rebates will be affected in some way either through higher prices or less employment due to higher business taxes.  The deficit also indicates that the government cannot collect enough tax revenue, so don’t expect the tax hikes to stop at those who earn over $250,000 a year.

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Before I begin, I will flat out admit that  Idiocracy is a pretty stupid film overall.  The premise of the movie was that imbeciles were procreating at a faster rate than highly educated people so after 500 years the whole earth was filled with idiots.  They created giant piles of trash and watered their crops with energy drinks.  It was a dumb movie, and my husband said he felt stupider after watching it.

The first time I got reminded of Idiocracy was when we watched Wall-E in the theatre.  These two movies both had giant piles of trash and also a very similar ending. The main difference was that Wall-E’s protagonists were cute little robots.  After watching that movie my husband said, “Idiocracy ruined Wall-E for me”.

This week I remembered the story of Idiocracy again after reading about Nadya Suleman.  Nadya Suleman is the mother of the now famous octuplets.  Apparently she now has a total of 14 kids.  Three of her older six kids are disabled so she’s receiving food stamps and money for them, and she funded her invitro treatments with her disability payments.  She is unemployed and now Kaiser is demanding money from MediCal to pay for the care of her octuplets.

I totally believe that everyone should be able to have as many kids as they want, but people need to understand that kids are huge responsibilities financially, physically, and emotionally.  An understanding these of responsibilities is what prevents a lot of folks from having a lot of kids, and this was illustrated in the movie Idiocracy.

So what’s my point?  I actually do not believe that book smarts is totally hereditary so I think it is possible that parents that are considered to be “dumb” can have very successful children. Basically, I do not believe that the world in Idiocracy would actually become a reality.  However, I am pretty annoyed by people who are perpetually unemployed and have  kids just to milk the system and collect welfare checks or discounted housing.   If you intend to provide for the kids you have and find a way to do it then there is nothing wrong with having tons of kids.  In fact, I admire the Duggar family of Arkansas a lot for what they are doing with their brood of 18.

With that said, if Nadya Suleman gets a reality show I think I would puke, because that would be true idiocracy.

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