Archive for February 2013

Robbing Peter to give Paul an electric car

Energy efficiency credits have been extended. That’s great for homeowners, who can get credits for putting in energy efficient storm windows and doors, as well as high efficiency heat and air, and get a credit for it on their income taxes.

However, there’s a dirty side to the green energy credits as well.

If you have an electric car and you put a 220 volt charger in your house, you can get $1,000 credit for it.

That’s just wrong.

What the government is doing is picking winners and losers. And the electric car is just one example. When one energy efficient industry gets a credit, the others complain to get one too.

The government offers credits like solar energy, giving that industry an unfair advantage. Next thing you know, the wind power people get jealous, so they get a credit, too. Then the geothermal people get jealous. There’s another credit.

The fact that they’re picking winners and losers is bad enough. But where do you think the money’s coming from? We’re all paying for it in our taxes.

So people are more inclined to get that electric car, because the government will take some of everyone else’s money and give it to them as a $1,000 incentive.

The simple truth about the fiscal cliff

red sticker hello my name is tax increase conceptOn January 1, 2013, the bill commonly known as the Fiscal Cliff Bill was signed into law. So why is that such a big deal?

There’s some confusion about whether taxes increased or not. Technically, taxes only increased for married people whose income is over $450,000 annually, and single people whose income is over $400,000 annually.

However, the reality is that everyone’s paycheck is going down. What happened is that Social Security went back to the rate it’s always been.

For the last two years, as an employee you got a break from your normal Social Security tax rate. For years and years, the rate has been 6.2%. But for the last two years, you only had to pay 4.2%. Once the bill passed on January 1, you were back to paying the normal rate of 6.2%.

That may not make you feel much better. It still feels like a tax increase because you’re net pay is going down. But technically, it’s not a tax increase. It’s just back to where it’s supposed to be.

Of course, the whole thing is stupid in the first place. They gave you a two year reduction in taxes for a program that’s already going bankrupt.

The whole thing was really the extension of what’s generally known as the Bush-era tax cuts. That extension is why the rates stayed the same for the people under $450,000 married, and under $400,000 single. But just by extending those tax cuts, the country’s deficit will increase by over four trillion dollars.

So you already have 16 trillion dollars of debt today. Then you add this four trillion to it. And we’re operating at a 1.5 million dollar deficit every year. So over the next ten years, you add another fifteen trillion dollars in debt.

When you do the math, you can see that at the current rate, we’ll increase our national debt from 16 trillion dollars to 35 trillion dollars in ten years.

So while tax rates technically didn’t go up, how do you think the government is going to pay for that four trillion dollar deficit?

We’re in trouble. Do you think maybe tax rates will go up in the coming future? You think they’re going up for everybody this time?

Get ready. It’s coming.