Wednesday, August 22, 2012

Pissed Off by Political Ad

I just saw an Obama ad on TV that really pissed me off.  And it started out with the old "I am Barack Obama and I approved this ad" so you can't say he didn't know about it.  This ad was focused on Mitt Romney's tax rate.  It should be illegal to make statements like that without explaining that Romney, along with Warren Buffet, Bill Gates, and tons of other wealthy people pay low tax rates because most of their income is from long-term capital gains which is taxed at a lower rate FOR EVERYONE!

All you have to do is google: Why does Mitt Romney pay a lower tax rate than most?  Here's what comes up.

"Romney released his 2010 tax return in January after intense pressure, showing that he paid a 13.9 percent effective rate on $42.5 million in income. His tax rate, lower than that paid by most middle-class filers, was because most of his income came from investments."

Here is a quote from the Tucson Sentinel:
"Robert Farley
A new ad from the Obama campaign claims that Mitt Romney "paid only 14 percent in taxes—probably less than you." That depends. Romney paid a federal income tax rate that is higher than the income tax rate paid by 97 percent of tax filers. But if you include a combination of income taxes and payroll taxes — which make up the bulk of federal taxes for most taxpayers — the ad is accurate.

The ad, called "Stretch," is the first to feature a report from the Tax Policy Center that concluded a plan like Romney's proposal for across-the-board tax cuts, together with the goal of remaining revenue neutral, would ultimately raise taxes on people making less than $200,000 a year. The ad contrasts those findings with data from Romney's 2010 tax return.

The ad begins with a narrator stating, "You work hard, stretch every penny, but chances are you pay a higher tax rate than him: Mitt Romney made $20 million dollars in 2010, but paid only 14 percent in taxes—probably less than you."

I hope that what people come away with after watching this ad is that they need to learn more about investing their money so that one day their entire income can consist of capital gains and they, too, can pay a lower tax rate.  

Monday, August 20, 2012

Why Is Ecuador Poor?

It was clear immediately that Ecuador is a poor country.  What was not clear, and still is not, was why.  I couldn't help but compare China and Ecuador since I visited them both within the space of three months.  China has pulled 400 million people up from poverty and has not sacrificed the culture to do it. Actually, one website says the number is 600 million people.  Wikipedia states that there has been a decline in the poverty rate in China from 85% in 1981 to 16% in 2005.

When we visited China we were astounded by the amount of new construction being done.  In Beijing the government had to designate an area containing the hutongs as "national treasures" and protect them from the bulldozers.  

Otherwise, soon there would be nothing left of the old China except the Forbidden City.  Everyone has heard of the Three Gorges Dam project which has provided power for a great expansion of modernity but has wiped out many towns and villages where families had lived for hundreds of years.  All of those people were relocated, and I doubt that they were ever asked whether they were in favor of the project or not.  When the great Reform and Opening began in 1978, China's economy began to grow.  In the second phase of this program, the country was opened to foreign investment and in a short time China became second only to the US as an economic power.  

In Ecuador, there is some new construction taking place, but it appears to be single-family homes, or condo complexes to sell to Americans wanting to live on their social security income.  There are few, if any, office buildings being built to house foreigners working to bring prosperity to an emerging country.  Nor did we see any factories, plants, major infrastructure projects or even sports facilities being built.  Admitedly, we did not spend much time in Quito or in Cuenca, and I am sure we would have seen more evidence that we were still in the 21st century had we been there.  But we did travel around quite a bit on busses, and everywhere we went was the same.  

Unpainted concrete block structures that looked like the least tremor from one of the many volcanoes would send them tumbling down.  There was very little effort made to make the environment appealing and pleasant.  In Cotacachi, on Leather Street, the shops were very attractive and clean, but, of course, the majority of their customers are foreigners.  The condo complex where we stayed likewise was beautifully landscaped and the painters were working to freshen up the exterior while we were there.  Again, mostly for Americans.  When we got out into the countryside, some of the dwellings were deplorable.  Even in the beach community of Puerto Lopez, the streets were dirt, the chickens roamed at will, and starving stray dogs begged at every restaurant.

We visited the Temple of Heaven garden in Beijing and loved seeing the people playing cards, mahjong, and exercising together in the park.
In Ecuador, people worked every day it seemed, and especially on Sunday when they worked in the marketplace selling produce, fruit, or flowers.

In China there was a feeling of striving, a sense that every person, even the eldest, were working hard to improve their lives and make their country better. I never got that sense in Ecuador.  Perhaps that's why Americans are flocking there to live.  They want to spend their retirement years where there is no pressure to accomplish anything.