Government Thanksgiving

Corporate taxes are due on March 15th and partnership tax filings are due April 15th, but both can be extended to September 15^th. As a tax accountant, September 15^th was a big work deadline for me, and I’m glad it’s passed! I even got to have a bit of drama to celebrate the end of “busy season” – I had to hand deliver a tax return to a client in order to meet the filing deadline. Since that meant battling area traffic, I got to jam out on the radio in my car. I lucked out and heard some really good songs – “Lean on Me” and “Here comes the Sun” (which, I’ve decided, is my favorite Beatles song). The point is, all that good music got me thinking and so I sort of composed this post in my head.

I’m grateful for government.

I’m grateful for the tax system (even if it’s complex) and the fact that the vast majority of American citizens and corporations pay taxes, thus contributing to building our society. I’m grateful to live in a relatively corruption free society, where businesses can thrive without having to pay bribes to government officials. I’m grateful for a car that’s safe because government mandates certain safety features. I’m grateful for a government that restricts monopolies from crushing ordinary people. I’m grateful for a government that allows us to protest against it, and even provides police officers to protect such rights. I’m grateful to work in a building that won’t collapse, due to building codes. I’m grateful for workplace safety regulations and government protection from discrimination. I’m grateful for all 12 years of my public school education, paid for by our government. I’m grateful to eat safe food that’s inspected by the government. I’m grateful to be able to vote for my representatives, governor, senators, and president (and grateful for the confidence that the votes will be fairly counted). I’m grateful for a government that stays out of my religion and guarantees my right to worship as I please. In fact, I’m grateful for the whole bill of rights and all constitutional amendments (especially the 19^th!). I’m grateful for a government that provides a social safety net to the poor, the elderly, and the unlucky. I’m grateful for the sacrifice of brave men and women in serving in our armed forces, protecting me from horrors I will probably never fully comprehend. And yes, I’m grateful for the bureaucrats – those who work in public service jobs in government.

There are notable exceptions and limits to government’s abilities. Sometimes government doesn’t work. Government is imperfect, but I believe it reflects our own imperfections. When failures of government come to light, they should be exposed, rooted out, and reformed. After all, in America we believe in government “by the people, for the people, and of the people.”

Ronald Reagan once famously said that “Government is not the solution, government is the problem.” That simplistic statement overlooks the vast good that government can and does do in our society. Sure, it’s annoying to wait in line at the DMV, it’s frustrating to pay taxes, and we may not like our current representative, governor, senator and/or president. But on the whole, government is a good thing, and I’m grateful it protects my rights, provides so many services, and regulates things that should be regulated.

"Socialized" Medicine? Sign me up!

Call me a socialist, but I am so pro-health care reform, it's not even funny (After a my post on likeable things about President Bush, I had to make up for it by getting back to my liberal roots). I'll illustrate my health care views with a simple example from my time in Russia as a missionary.

I served for seven and a half months in a the town of Barnaul, which is in Siberia. As you might imagine, there was a lot of ice. On one cold winter night, my companion slipped and fell on some ice, twisting her ankle. Luckily, we were only three blocks from home and 1 1/2 blocks from a local clinic. We entered, and she was seen immediately by a doctor, given an x-ray within 15 minutes, and it was determined that nothing was broken (though she was in a lot of pain, poor girl). As we were leaving, I asked the nurse/receptionist where we should pay. I'll never forget the look on her face, or on my (Ukrainian) companion's face. They looked at me like I was completely insane. Why would we have to pay for basic medical services? Then it dawned on me that this was all paid for by the government!

Now, I will not pretend that all my interactions with the Russian health care system were that positive (some of them were downright scary), but on that visit at least, my companion was cared for more quickly and effectively than she would have been at the typical U.S. emergency room. I am not suggesting that socialized medicine is perfect (or that we should model our system on Russia's!), but I am saying that every civilized country in the world recognizes that health care is a national responsibility. Every country, that is, except America.

Depending on which poll you cite, about 8 in 10 Americans who have insurance are happy with it. Of course, citing those numbers doesn't include more than 40 million Americans without health insurance (Tangent: WSJ article about estimating the number of uninsured). It also glosses over the fact that 85% of Americans are concerned about rising health care costs. Others are "uninsurable" because of pre-existing conditions. For all too many people the American health care system is a nightmare of inefficiency and insufficiency.

For all the scare tactics about some "government bureaucrat" standing between you and your doctor, right now you have company bureaucrats standing between you and health care - we have a system with some very scary incentives. I am lucky to have a job with health insurance, through a large HMO. Think about that: this company literally makes more money if I don't go to a doctor. They have a profit incentive to deny me health care. On the other hand, doctors in our current system have an incentive, under fee-for-service plans, to push more expensive options. I have an incentive to consume more health care than I need because I'm not (directly) paying for it. These incentives often don't lead to the best treatment. A friend emailed me recently a story (not verified) of a doctor who treated children on Medicaid and was denied access to a badly-needed medication to prevent blindness. Horror stories like this may well occur (if they do, we need to change that), however my private health insurance plan does the same thing - I just received a three page list in very tiny print of all the drugs my health insurance doesn't cover (including such drugs as Prozac).

One of the best articles I've read on the bad incentives currently in place for doctors, patients, and all participants in our health care system was written by a man whose father died of an infection he picked up in a hospital. David Goldhill writes about what he learned in his search for answers in "How American Health Care Killed My Father" in Atlantic Monthly. I don't necessarily agree with his solutions, but he does a really good job of fleshing out the problem of how messed up our current American system is.

Here's a news flash: often the best run parts of the American health care system are (gasp!) the government run parts. People who are on "government plans" actually like it. Medicare recipients rate their health care higher than those on private insurance (see this article). The Veterans Administration is generally better at providing care, according to a study by the RAND corporation.

There are so many people saying "we can't" do health care reform. "We can't" afford it. "We can't" make a system that preserves the positive aspects of choice and competition. "We can't" have a public option because it would hurt those poor big health insurance companies. Congress "can't" possibly understand an issue as complex as health care reform.

I believe in the problem solving abilities of America. I believe that we can find a way to preserve competition and choice while also providing a basic safety net for everyone. My main problem with current proposals is that it doesn't take reform far enough - we need to be doing more to change the way health care is funded (again, see Goldhill's article cited above). We are going to have to make some tough choices, and yes I may have to pay slightly higher taxes because of it. Who says that because something is a difficult and complex issue that "we can't" tackle it with American ingenuity? How about some "can-do" American optimism? Yes we CAN!

Can there any good thing come out of Nazareth? (or Crawford, TX?)

There is a verse in the bible that I've been thinking about as it applies to politics. Phillip, a follower of Christ, goes to his friend Nathanael and tells him about Jesus Christ. Nathanael's response is interesting:

"And Nathanael said unto him, Can there any good thing come out of Nazareth? Philip saith unto him, Come and see."

What I get from this is that Nathanael has some preconceived notions about Nazareth, because it's a po-dunk town. He's thinking to himself: nothing good can come from there, I know it's all bad. Do we have some of the same views of our political opponents?

The reason I've been thinking about this is that I've been, quite frankly, surprised by some of the venomous discourse directed at President Obama. Some of my friends literally cannot find anything about him to like! This seems to show a pre-judging and uncharitable spirit. But then I had a thought: maybe I'm the same way about President George W. Bush. So, I urge you to take a politician that you disagree with, or think is stupid, or cannot find anything about to like, and look at that person with fresh eyes. Take a walk in their shoes, and you might find more to like than you think. Now, it's no fair to say things like "Congressperson A is less dumb than I thought" or other sarcastic things like that. You have to truly find things to value in this person. I didn't say it would be easy (and for me it wasn't), but I am going to say that it's worth it. I think this is so important in politics, because it is much easier to demonize the other side than to try to understand them.

In that spirit, I've come up with five things to like about George W. Bush, and I'm going to share them with you:
5. Immigration policy: President Bush actually made a lot of sense on immigration policy. He supported temporary guest worker programs and a path to citizenship for those already here.

"We must make our immigration laws more rational, and more humane...I believe we can do so without jeopardizing the livelihoods of American citizens."
"I ask Congress to reform our immigration laws so they reflect our values and benefit our economy. I propose a new temporary-worker program to match willing foreign workers with willing employers when no Americans can be found to fill the job. This reform will be good for our economy, because employers will find needed workers in an honest and orderly system. A temporary-worker program will help protect our homeland, allowing border patrol and law enforcement to focus on true threats to our national security."

4. Not pardoning Scooter Libby. A recent Time Magazine article reveals that Bush was pressured by Vice President Cheney to do so, but he thought Libby deserved punishment for breaking the law. I like what he said when he commuted Libby's jail sentence (which he thought excessive), while allowing the fine and guilty verdict to remain:

"Our entire system of justice relies on people telling the truth, and if a person does not tell the truth, particularly if he serves in government and holds the public trust, he must be held accountable."

Also, I thought Bush's reason for not granting more pardons was interesting, and I agree that pardons do tend to favor the well-connected and the rich:

"Bush had long approached pardons with suspicion. As Texas governor, he granted them sparingly. His reluctance stemmed not from a lack of mercy but from his sense that pardons were a rigged game, tilted in favor of offenders with political connections. 'He thought the whole pardon system was completely corrupt,' says a top Bush adviser."

3. Creating an awesome National Park that I want to visit someday. And if you can say its name five times fast, I salute you.
2. Going to war in Afghanistan. I don't think it's ever easy to order troops into battle, knowing that some of them will die or be wounded. But, taking out the Taliban was (and still is) essential to our national security. It was a repressive and horrible regime, and while the ongoing fight will be difficult and prolonged, it is the right one, because America should be on the side of freedom, women's rights, and progressive values. I'm glad President Bush choose to fight there.
1. And finally, one policy that is truly compassionate: providing billions in funding for AIDS medication to those in poor countries. Saying that the President's Emergency Plan for AIDS Relief (Pepfar, for short) is a good thing would be understating it! This was something President Bush didn't have to do, and he might not have won any votes on it, but it saved countless lives and was a truly good deed. From a NY Times article, a doctor who worked with the program had a good summation.

"Dr. Coutinho said Ugandans were terrified that when Mr. Bush left office, 'the Bush fund,' as they call it, would go with him. "When I’ve traveled in the U.S., I’m amazed at how little people know about what Pepfar stands for,” he said. “Just because it has been done under Bush, it is not something the country should not be proud of.”"

So, just because Bush/Clinton/Obama/Whoever does it, doesn't make it a bad thing. Finding good things in others makes you a better person yourself :)

Adventures in Baking

I was pondering the other day that we don't do much "hands-on" stuff in our culture anymore. America was built by farmers clearing trees, by cowboys herding cattle, by pioneers building wagons and moving west, people having the vision to build skyscrapers and automobiles, Texans drilling for oil, etc. All these jobs had a certain degree of risk of injury and/or death.

Now, I spend my working day staring at a computer screen, with the greatest physical harm I'm likely to encounter being hurt eyes from staring at my screen too long. Americans generally are less likely to be employed in manufacturing jobs and more likely to be in the service sector. I don't know that I necessarily regret this, because I'm a wimp and I don't think I would do well on the frontier or walking the Oregon trail.

However, one "hands-on" thing that I love to do is bake. It's true that you can buy a cake at the store and it tastes delicious, but there's something about cracking open the eggs and mixing it up that makes it more enjoyable. I love to try baking new things. Sometimes this works well and other times it can be disastrous. This weekend I baked, and wanted to share pictures and a few recipes with you!

Banana bread (for some reason this loaf looked horrible, but I promise it tasted delicious):

My favorite banana bread recipe is on the Diana's Kitchen website (and no, I'm not affiliated with the site, but it does have some good recipes). I like it without the nuts, tho. Some tips for good banana bread: bake at 325 degrees to increase moistness and DON'T put too much flour in!

(I love the way banana bread looks)

Cinnamon rolls for the local pool party/fundraiser:
I'll have to do a separate post sometime on how much I love bread baking.

and, Coconut Cake for a church luau:

This recipe was really good, I may have to add it to my favorites!

COCONUT CREAM CAKE
(18.25 ounce) package white cake mix

3 eggs

1/3 cup vegetable oil

1 cup water

1/2 teaspoon coconut extract

1 (14 ounce) can coconut cream (I had no idea where to find this in the grocery store - for good reason! Turns out my grocery store keeps it in the wine aisle as it's a popular drink ingredient)

1 (14 ounce) can sweetened condensed milk

1 cup heavy whipping cream

1 tablespoon white sugar

1 cup flaked coconut

DIRECTIONS

1. Preheat oven to 350 degrees F (175 degrees C). Grease and flour a 9x13 inch pan.
2. In a large bowl, mix together cake mix, eggs, oil, water and coconut flavoring. Beat for 2 minutes and pour into 9x13 inch pan. Bake for 30 minutes, or until a toothpick inserted into the cake comes out clean.
3. In a medium bowl, combine coconut cream with sweetened condensed milk and stir until smooth. When cake comes out of the oven, poke holes into it in even rows using a large fork or chopsticks. Pour milk mixture over, allowing it to soak into the cake. Refrigerate for several hours or overnight.
4. In a large bowl, whisk cream until soft peaks form. Add sugar and continue whipping until stiff. Spread over cooled cake. Sprinkle top with flaked coconut.

And speaking of "hands on," I wondered why my cream in #4 did not form soft peaks, but instead was watery. I learned today that I had made a grave tactical error in whipping my cream - I had used a hand whisk, but you need to use an electric mixer to get real homemade whipped cream. My parents laughed at me, because no one knows how to make whipped cream any more! Lesson learned.

The only part of baking I don't love: clean-up.

Torture = Wrong

It's that simple, America.

Reading: More than Just Rainbows

Did you ever watch Reading Rainbow as a kid? I loved that show, because it glorifies one of my favorite activities - reading! Apparently as a child I loved the Mitzi books, and I can remember having my mom read books like Charlotte's Web to us. My mom set up a library shelf in our house, where we could "check out" books and then return them (mostly I think this was a way of preventing messy books everywhere). When I was young I was very into "series" books - I can still remember where all the Boxcar children, Nancy Drew, and Babysitter's club books are in my elementary school library.

One of the first books I remember thinking deeply about was "Wolf by the Ears" - a fictional tale of a slave on Thomas Jefferson's plantation, who may or not be his daughter. It made me ponder (however briefly) the wrongs of slavery, and humanized a problem that might otherwise have been a dry history text.

Reading has been a big part of my life. So, partially because it was National Volunteer Week, but mostly because I didn't have anything better to do, I volunteered last Thursday with a program called First Book. First Book was started by a lady who was tutoring a kid in a tough school. She asked him to bring a book from home that they could read together - and he brought the phone book. She realized that this kid had no books to read at home.

First Book brings volunteers to classrooms in low-income neighboorhoods, and lets schools purchase books for their students at really low prices (like $1-2 per book). Each time I go, I get to spend about 1 1/2 hours reading to kids in an elementary school, and then get to hand each kid a bag with two books of their very own, to take home. It's like being Santa Clause! This is the 3rd time I've done this, and it is so fun to read to the kids and get them excited about the books. I love reading! I lucked out this time and got to read to a really excited group of kindergartners.

I love reading fun and silly books (Harry Potter!), but as I've grown older I've come to appreciate the power of the written word. Reading increases your learning potential, your vocabulary, your knowledge of the world, and can draw you into a world that is created by the author. Great books even have the power to change us for the better.

In reading "The Good Earth" by Pearl S. Buck, I came across this quote, which she uses at the beginning:

"This was what Vinteuil had done for the little phrase. Swann felt that the composer had been content (with the musical instruments at his disposal) to draw aside its veil, to make it visible, following and respecting its outlines with a hand so loving, so prudent, so delicate and so sure, that the sound altered at every moment, blunting itself to indicate a shadow, springing back into life when it must follow the curve of some more bold projection. And one proof that Swann was not mistaken when he believed in the real existence of this phrase, was that anyone with an ear at all delicate for music would at once have detected the imposture had Vinteuil, endowed with less power to see and to render its forms, sought to dissemble (by adding a line, here and there, of his own invention) the dimness of his vision or the feebleness of his hand."

- Swann's Way by Marcel Proust

I understood this to mean that a truly great piece of music (or art, or a great book) can create a world so real and so true that there isn't a false note in it. A good book creates its own world (or, in the case of non-fiction, explains the world really well). This world sounds/looks/is complete and whole in and of itself. I recently read "Ender's Game" for the first time, and I thought this was applicable, because Ender's world is so engrossing. I don't think in reading the book I ever came to a moment that was "fake" (if that even makes sense?).

So, what books are your favorites? What are your favorite "book worlds"? What do you love or hate about reading?

Tax Simplification = Tax Reform?

simplification: to make less complex or complicated; make plainer or easier
reform: the improvement or amendment of what is wrong, corrupt, unsatisfactory, etc

It's been awhile since I actually wrote something about politics. And let's face it, taxes are a political issue. Recent TEA parties have argued that taxes are too high, but the truth is that tax rates have stayed relatively constant over the years. In fact, for all the talk about how "progressive" the tax system is (oh, those poor, poor rich people!), recent data show that tax rates are a lot less progressive than you'd think. People talk about tax simplification and tax reform. In reality, any simplification of the internal revenue code is going to be reform.

According to Time magazine, it takes an average of 37 hours to complete a basic 1040 individual tax return. So, many Americans turn to tax professionals, often paying them way too much money to complete what should be a simple task. The tax code has gone from 31 pages in 1913 to more than 3 million words as of 2004.

So, especially at this time of the year, a lot of people are saying we should simplify the tax system. One good example of this is family credits. Say you have kids - you could then be eligible for the dependent care credit, child tax credit, additional child tax credit, and a larger earned income tax credit - in addition to the exemptions you get. Each of these credits is calculated differently. One idea I read about wants to simplify all these into one "family credit" - one amount to streamline things! The problem is this creates winners and losers. If you only have one kid, you would get a bigger credit under this proposal, but if you have lots of kids, you pay less tax under the current "complicated" system.

This leads me to the dirty secret of the Internal Revenue Code: every complication is in there because of us. Someone has either advocated for a tax break, or someone has done something stupid so that the Treasury Department has to issue a regulation or litigate to prevent it. U.S. taxpayers are responsible for every deduction, credit, exemption, and secret rule. Some decisions about taxation are essentially arbitrary - there's no right or wrong (unless one answer benefits you more, apparently). One example of arbitrariness is "depreciation" - how you expense business equipment. Tax laws arbitrarily give items like furniture a "life" over which you expense the cost of a desk, even if the desk sticks around for 50 years.

Our tax code is a reflection of what behaviors we want to encourage or discourage. So, should teachers have a tax break to buy school supplies? Sure! Should we give people tax breaks to improve energy efficiency? Why not! Should corporations be rewarded for hiring people from economically disadvantaged areas? You betcha! Each of these items may be good things, but they add a layer of complexity to the tax code. This benefits people with enough money and political influence to change the tax laws. One recent article described a 2200% return for companies investing in lobbyists because of a sweet tax break they got in 2004.

Some say that we should get rid of all the special tax breaks and lower the rates - that way the tax system would be simpler, and would bring in the same amount of revenue. The problem with that is human nature - politicians are always going to be meddling with deductions (and we'll ask for them). If we lower the rates and abolish special rules, eventually the rules will be added back in and the system will end up bringing in less revenue, further undermining our fiscal health. Essentially, any effort to streamline the tax system is going to be reform, because it's going to have to take away tax breaks and perks for some people - for example, people with kids, homeowners, or those who give a lot to charity. Some proposals take reform to a whole new level, by wanting to abolish the income tax and replace it with a national sales tax. I think this is highly unlikely. However, I am against it mainly because I feel like it hurts the poor the most. If you click here, there's a good description of the pros and cons (obviously, as an accountant, con reason #5 is very important to me).

P.S. I tried to keep this to five paragraphs, but went over. Sorry, I tend to get nerdily excited when I talk about taxes. I think my next political post will be about the other half of my Democratic "tax and spend" mentality.