Welcome To My Blog!

I'd like to first say "hello" to everyone. I must lay down a single rule, and it's commonly known by many as the Golden Rule. Please treat everyone in here as you would want to be treated. I ask that no one "flames" anyone else, or say anything obscene or rude. This is a friendly discussions blog that pertains mostly to computers, music, politics, and religion, but not restricted to just these topics.

If you're looking for some computer help, then I highly recommend by starting with my first part in my series:
Computer Advice Part 1 of 9 - Hardware Terms

I also have a website I'd love for anyone to visit at http://webpages.charter.net/drkstlkr/

If you know someone who might enjoy this blog, then please send them an e-mail!

Tuesday, July 27, 2010



First of all, I want to make it known that I am no economist in any shape or form.  I'm using what little “common sense” and knowledge that I've picked-up along the way.  So, if I make an incorrect statement somewhere, please excuse my ignorance!  A lot of this is simply from personal observation.

I'm sure many people reading this have heard of “Reagan Economics”, which basically gives tax incentives to the rich and raise taxes on mostly the middle class.  This is suppose to help create jobs, and “share the wealth” from the top-down.  However, all I've noticed that it has done is create more wealth in the upper class, and furthering the distance of the upper class from the middle and lower-income classes.  To me, it's scary, because the technical definition of a 3rd world country is that there is no middle class.  You only have an upper and lower-income classes.  I know from personal experience, because I have visited a 3rd world country.  There is no middle class.

What makes me ponder our current economics is that the average worker's wages has changed very little compared to that of the average CEO of a fortune 500 company.  Let's go back in history a little...

In 1965, the average CEO was paid 24 times more than their average worker.  In 1980, the average CEO was paid 42 times more than the average worker. In 2008, the average CEO was paid 319 times more than the average worker.  Last year, in 2009, the average worker made about $30k/year ($30,000 per year), while the average CEO of a fortune 500 company made about $11 million per year.  How accurate are these numbers?  I tried using several websites, both “conservative” and “liberal”, and used the average of these.

Of course, we've been conditioned to think that these CEOs should make a horrendous amount of money.  They are usually very smart, went to the best universities, had the best education, and should be paid a lot of money.  But where do you draw the line?  Did you know that the CEO of Walmart makes more money in ONE HOUR than most of his employees make in ONE YEAR?  His average employee makes less than $15k/year, whereas he makes about $16k/HOUR!  Is he really worth $16k/hour?!  I will admit that Walmart has really grown and provided a lot of jobs for a lot of people, but let's take a look at bottom-up economics a little...

Most people would argue that “poor people” don't provide jobs, but they do.  How is that?  They don't own any businesses to hire people, so how is it that they provide jobs?  When most very wealthy people turn a profit, they put it into other things that make them more money, such as investments.  They, in turn, make other rich people (such as banks and stock holders) richer.  However, when the money is used by “poor people”, it's often put directly back into the system.  They pay bills and they buy stuff.  They shop more at Walmart.  If the CEO of Walmart would reduce his yearly wages and raised his employee's wages, many of these people would buy more products from their own company and others, thus bringing in more revenue,  increasing profits, build more stores, create more jobs, etc.

I know many of you are probably thinking that I am a socialist, but I'm not.  I'm all for capitalism, however, socialism was originally designed to minimize the known greed factor that's often created from capitalism.  Because capitalism promotes greed, it can often lead to overworking employees with less pay, and even reducing the workforce to turn a better profit.  Because of this, our United States government had to pass a lot of legislature to prevent the growing abuse of workers.  But socialism promotes laziness, because there's no incentives to work harder or perform better, because you will always make the same wages no matter what you do.  And eventually, the highest branches of a socialistic government still abuses their workers in the end, with similar results to unregulated capitalism.  So, both forms of economy definitely has its “pros” and “cons”.  Where is the happy medium and how do you create it?

Although it would be very unethical and unconstitutional to enforce any form of “maximum wages” caps or limits on anyone, the only way to levy fairness via government is through taxation.  You could go about this two different ways.  Many people would argue that creating a flat-rate income tax system would be more fair.  However, I think we should do away with income taxes altogether.  “What?!  How is that possible?!” you may ask.  Income taxes does nothing more than put a burden on the working class, both poor and rich, and promotes welfare.  Why work harder when a lot of it is taken away from you from the government?  Instead of income tax, the federal and state government should only have a sales tax.  I believe that this would promote several things.

First of all, you can do away with the IRS.  If all taxes are handled at the cash register, then the only regulations and law enforcement you'd have are illegal “black market” products imported into the United States from other countries.  It would remove most tax legislation and greatly simplify our complex tax system.  It can also be easily adjusted only when needed, and could be customized.  For example, let's take food.  If you want to reduce hunger and starvation in our country, lower taxes on grocery items and raise all other non-food products.  If you want to promote health, lower produce taxes (fruits and vegetables) and raise the tax on junk food.  You could get very detailed and complex with a sales-based tax system, or you can keep it simple.

Secondly, it promotes work.  How's that?  Now imagine this: when you look at your paycheck, you actually made what you earned!  There are no federal or state income taxes.  You bring home everything that you worked hard for!  To me, I think this would offer a little incentive to work a little more, without worrying that the government taking more.  I think it's ridiculous that the government taxes more when you work overtime.  Personally, I think that heavier taxing on overtime only promotes laziness.

Thirdly, EVERYONE pays taxes, including illegal immigrants.  With our current income-based tax system, many people aren't taxed either because of their income levels (both rich and poor), or they work illegally.  However, with a sales-based tax system, if anyone buys anything, they're paying taxes.

And lastly, a sales-based tax system would be more fair.  The more you buy, the more taxes you pay.  Assuming that rich people would therefore would pay more in taxes than the middle and lower-income classes on any products or services they buy since they may typically spend more.  I also think there should be an additional luxury tax on anything $250k or more, but let's just start with the sales-based tax system first, and worry about any additional details later.

I'm not condemning anyone for being rich.  It's the American dream, isn't it?  But you have better chances of winning the lottery than getting rich from nothing.  Enforcing wage caps isn't the right way to do it, either.  A flat-tax rate would be more fair, but I still don't think it would solve the problem.  The only ethical and constitutional way of fairness is through taxation.  Is a sales-based tax system the answer to all of our problems?  Probably not, but it would seem to be a better choice than the current income-based tax system we currently have.  So there's my two-cents worth.

Related Wikipedia Economics Article:

No comments: