So we've been studying taxes and how they work lately. One thing I definitely remember is how simplicity is an essential part of having a successful and effective tax. Its pretty straight forward. After all, no one wants to just blindly give up a portion of their income to the government. You've got to know what you are doing with the money.
I came across this article on the Fox Business that questions if simplifying taxes could hurt small businesses. Honestly I have no idea how this works nor do I fully understand the article but I guess since its at least related to class I'll give it a shot. According to the article, U.S. businesses received 161 billion dollars in tax expenditures in 2013, and small businesses account for 40 billion of that. The issue the article brings up is that by lowering corporate tax rates, the government would be forced to cut many expenditures for small businesses, which would raise their tax bills. Right now, the United States has the highest corporate tax rates in the world.
That concept makes perfect sense to me, however I still don't understand what this has to do with tax simplification. Maybe you can help explain this further? One thing for sure is that small businesses are a huge part of our nations economy and that harming them financially would only wreck our already highly disturbed economy.
Sunday, November 10, 2013
Sunday, October 13, 2013
The Apple and the Worm
This article is about the all familiar Apple corporation and its future as the leader in the smart phone and tablet market. As we all know, Apple has recently released the iPhone 5s and also the 5c, which comes with a friendlier price tag and a variety of color designs. Some of Apple's biggest competitors are Microsoft, with their windows tablets, Google, and Samsung.
The author of this article asserts that China is the world's largest smart phone market, and has many devices that are being made by manufacturers that didn't exist when the iPhone first came out. According to the author, this competition isn't going to stay confined to Asia. Rather, it is going to bloom in the future, and eventually Apple is going to whither down and become nothing but 'just another brand' to choose from at tech stores.
None of this seems to bother Apple's Tim Cook too much though. He explains that in there are splits in all markets in the world of technology. Its inevitable. The main difference in the unavoidable schism of the smart phone market is that most of the competition is about price and that is their only ability to achieve demand for their products. He continues that Apple's intention is to be an "upper end" company and with making a quality product that offers the utilities people need comes the upper end price tag.
Apple has still acknowledged the ever growing market of cheaper competitors with the release of the iPhone 5c, which is less expensive and thus more affordable to a larger market of people. And with Apple's army of stalwarts world wide, the company is probably going to continue to stay on top for a long time.
The author of this article asserts that China is the world's largest smart phone market, and has many devices that are being made by manufacturers that didn't exist when the iPhone first came out. According to the author, this competition isn't going to stay confined to Asia. Rather, it is going to bloom in the future, and eventually Apple is going to whither down and become nothing but 'just another brand' to choose from at tech stores.
None of this seems to bother Apple's Tim Cook too much though. He explains that in there are splits in all markets in the world of technology. Its inevitable. The main difference in the unavoidable schism of the smart phone market is that most of the competition is about price and that is their only ability to achieve demand for their products. He continues that Apple's intention is to be an "upper end" company and with making a quality product that offers the utilities people need comes the upper end price tag.
Apple has still acknowledged the ever growing market of cheaper competitors with the release of the iPhone 5c, which is less expensive and thus more affordable to a larger market of people. And with Apple's army of stalwarts world wide, the company is probably going to continue to stay on top for a long time.
Sunday, October 6, 2013
U.S. Default
This article is about how the possibility of the United States defaulting on its debt sometime soon. As we all know, the United States government has shut down. This is happening for the first time in 17 years, which would have been back in 1996. The government shut down means that a majority of the government offices and agencies have closed and its employees are not working, however critical agencies and services are still operating. This is all coming from congress's inability to make come to decisions over things such as the debt ceiling and the Affordable Healthcare Act.
The deadline to raise the debt ceiling before we default is October 17. Default simply means failure to pay the debt (in this instance). The the ceiling is not raised, we would no longer be able to repay the debts. This sort of situation could be very bad for the U.S. economy, which is already very fragile. Back in 2011 during a similar situation, the U.S. credit ratings were damaged. This has a ripple effect which can result in volatility in the stock prices, and reduce the confidence of small businesses and consumers.
Of course, in an economy like ours, the confidence of our businesses and consumers means everything. In our free market system the consumer influences much of the direction our economy takes, and the government serves as protector, regulator, and as the treasury. Obviously these days the government has pretty much dropped the ball. And if congress (and the rest of them) can't get themselves figured out soon, then the government is dropping the ball on its own foot.
The deadline to raise the debt ceiling before we default is October 17. Default simply means failure to pay the debt (in this instance). The the ceiling is not raised, we would no longer be able to repay the debts. This sort of situation could be very bad for the U.S. economy, which is already very fragile. Back in 2011 during a similar situation, the U.S. credit ratings were damaged. This has a ripple effect which can result in volatility in the stock prices, and reduce the confidence of small businesses and consumers.
Of course, in an economy like ours, the confidence of our businesses and consumers means everything. In our free market system the consumer influences much of the direction our economy takes, and the government serves as protector, regulator, and as the treasury. Obviously these days the government has pretty much dropped the ball. And if congress (and the rest of them) can't get themselves figured out soon, then the government is dropping the ball on its own foot.
Sunday, September 22, 2013
The Fall of Detroit
http://www.nytimes.com/2013/09/23/business/detroit-is-now-a-charity-case-for-carmakers.html?ref=business&_r=0
This article is mainly about the fall of the city of Detroit. Detroit, Michigan used to be considered the Motor City, the capital of automobile production in America, but now it is nothing more than the largest municipal bankruptcy in American history. Its central high rises no longer offer the jobs but instead offer a bird's eye view of the desolation for miles, and suburbs blemished by abandoned houses and empty factories.
Detroit recently received a check for ten million from Ford as aid to help bring back a community center. It seems awfully ironic to me that car markers who once defined the job market for the city are now making charitable efforts for the place. 10 million dollars is hardly anything to call life support for a city where the budget deficit is one million dollars a day, and is merely a 'Band-aid' according to the author of the article.
The problem with Detroit is that for years it has been plagued by corruption in its city government. Fraud, racketeering, extortion, excessive taxes, high crime rates, poor management and poor infrastructure create an unfavorable environment for everyone, especially corporations. According to Thomas J. Sugrue, “Detroit’s fate is the result of decades of job flight.” It is much easier for corporations to either expand or move different aspects of their business elsewhere. In Detroit's case, auto makers have been moving production out of the city and even out of the country for years, because it is easier and cheaper for them elsewhere.
This article is mainly about the fall of the city of Detroit. Detroit, Michigan used to be considered the Motor City, the capital of automobile production in America, but now it is nothing more than the largest municipal bankruptcy in American history. Its central high rises no longer offer the jobs but instead offer a bird's eye view of the desolation for miles, and suburbs blemished by abandoned houses and empty factories.
Detroit recently received a check for ten million from Ford as aid to help bring back a community center. It seems awfully ironic to me that car markers who once defined the job market for the city are now making charitable efforts for the place. 10 million dollars is hardly anything to call life support for a city where the budget deficit is one million dollars a day, and is merely a 'Band-aid' according to the author of the article.
The problem with Detroit is that for years it has been plagued by corruption in its city government. Fraud, racketeering, extortion, excessive taxes, high crime rates, poor management and poor infrastructure create an unfavorable environment for everyone, especially corporations. According to Thomas J. Sugrue, “Detroit’s fate is the result of decades of job flight.” It is much easier for corporations to either expand or move different aspects of their business elsewhere. In Detroit's case, auto makers have been moving production out of the city and even out of the country for years, because it is easier and cheaper for them elsewhere.
Sunday, September 15, 2013
Socialism In Other Countries
http://www.nytimes.com/1992/03/19/opinion/l-socialism-makes-everybody-equally-poor-301292.html
The issue this article discusses is Socialism, which is relevant to our current study of the different types of economic systems and their characteristics in economics class. Socialism is an extremely complicated type of economic system that includes many variations and doesn't necessarily fall under a single category of economic systems. The basic definition is that socialism is "an economic theory or system in which the means of production, distribution, and exchange are owned by the community collectively, usually through the state. It is characterized by production for use rather than profit, by equality of individual wealth, by the absence of competitive economic activity, and, usually, by government determination of investment, prices, and production levels." (Collins English Dictionary – Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003 http://www.thefreedictionary.com/socialism)
There's no question that these days socialism is a huge topic of often heated debate. The main assertion made in the article I posted is that socialism is bad and would hurt our system of capitalism that has defined this country since its genesis over two hundred years ago. The author is responding to another article, claiming that the other author "does not know what real poverty is." His supporting evidence is a personal account of his life in Russia for 35 years, and the adverse conditions his neighbors lived in. He tells us about a widowed mother of six who lived without a bathroom or running water, couldn't afford shoes for her children or even enough food, and on top of that shared the space with four other tenants. The family did not receive any welfare. Part of Karl Marx's philosophy was that "If you do not work, you do not eat." The author concludes that we have too much socialism in the world and that it makes everyone equally poor, rather than wealthy.
This is a powerful statement to make. The problem with socialism is that by trying to redistribute wealth, it can impair a wealthy person's ability to operate a business in a market economy, and a possible consequence is a loss of jobs that we can't always rely on a central government to produce. In a world where it seems as if more and more people demonize the wealthy, I want to remind people of the incredible contributions and developments for society that have come from private money. For example, Thomas Edison's inventions were developed and backed through the support of the Vanderbilt family and financier J.P. Morgan. This is hardly feasible through a socialistic economy that can't even provide welfare for an extremely impoverished like the one mentioned in the article?
If all of this is true, there is no question in my opinion that socialism would severely hurt everything we stand for regardless of political opinions.
The issue this article discusses is Socialism, which is relevant to our current study of the different types of economic systems and their characteristics in economics class. Socialism is an extremely complicated type of economic system that includes many variations and doesn't necessarily fall under a single category of economic systems. The basic definition is that socialism is "an economic theory or system in which the means of production, distribution, and exchange are owned by the community collectively, usually through the state. It is characterized by production for use rather than profit, by equality of individual wealth, by the absence of competitive economic activity, and, usually, by government determination of investment, prices, and production levels." (Collins English Dictionary – Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003 http://www.thefreedictionary.com/socialism)
There's no question that these days socialism is a huge topic of often heated debate. The main assertion made in the article I posted is that socialism is bad and would hurt our system of capitalism that has defined this country since its genesis over two hundred years ago. The author is responding to another article, claiming that the other author "does not know what real poverty is." His supporting evidence is a personal account of his life in Russia for 35 years, and the adverse conditions his neighbors lived in. He tells us about a widowed mother of six who lived without a bathroom or running water, couldn't afford shoes for her children or even enough food, and on top of that shared the space with four other tenants. The family did not receive any welfare. Part of Karl Marx's philosophy was that "If you do not work, you do not eat." The author concludes that we have too much socialism in the world and that it makes everyone equally poor, rather than wealthy.
This is a powerful statement to make. The problem with socialism is that by trying to redistribute wealth, it can impair a wealthy person's ability to operate a business in a market economy, and a possible consequence is a loss of jobs that we can't always rely on a central government to produce. In a world where it seems as if more and more people demonize the wealthy, I want to remind people of the incredible contributions and developments for society that have come from private money. For example, Thomas Edison's inventions were developed and backed through the support of the Vanderbilt family and financier J.P. Morgan. This is hardly feasible through a socialistic economy that can't even provide welfare for an extremely impoverished like the one mentioned in the article?
If all of this is true, there is no question in my opinion that socialism would severely hurt everything we stand for regardless of political opinions.
Subscribe to:
Posts (Atom)