Trying To Put My Head Around a Billion Dollars

Posted on 03/02/2012 by Grumpa Joe
Logo of the Internal Revenue Service

The numbers being thrown around on the news these days are mind-boggling. Most of us can’t put a handle on the spending that goes on in the Federal Government. It is absolutely immense.

As an exercise, I decided to estimate my lifetime earnings and compare it to a billion dollars. I began working at age eleven and didn’t stop until I was seventy. That is a cool fifty-nine years of making money.  In the beginning my salary was modest compared to today’s standards. At graduation from college, my starting salary was $6800/year. My jobs were always good paying ones and I never complained about how much I made. Engineering paid well during my career. I estimate that I earned two million dollars over that fifty-nine year period (If only I had that 2 mil in my 401K today). Before you think of me as a hyper millionaire think about that. The 2 million over fifty-nine years averages out as $33,898 per year. I also estimate that I paid taxes of around four hundred and twenty thousand dollars over those same years.

Where am I going with this? I’m trying to put my head around a billion dollars.  It takes five hundred above average people, just like me, fifty-nine years to earn a billion dollars. Yet, we see the Feds throwing billions around like a billion was chump change. Now ramp that number up to a trillion, and it takes 500,000 people fifty-nine years to earn that much.

I still can't get the size of the number into my head

Last week, we learned that 289,000 federal workers collectively owe 3.4 billion dollars in taxes ($11,764 average per person).  That is not trivial. It seems to me the Chief Executive who continues to harp on us to pay more should put some executive pressure on the people who work directly for him. Well, you argue, they have the same rights as the rest of us, and must be treated under the same rules. I’m here to tell you that the IRS challenged one of my returns because I failed to claim  $2000 of income on one return, and they did it within two months after I filed. They also expected me to resolve things within thirty days or be faced with further audit. The difference between me, and federal workers is they know the administration will not go after them. They are the privileged. All it would take is one phone call from the BOSS to the head of the IRS and his wish would become their command. Why isn’t it happening?

It is not happening because the hype about taxing the rich has nothing to do with needing money, it is about exerting power and demonizing the “rich.”

Since the economy took a dump in 2008, I have personally cut my expenses by twenty percent. I feel that is not enough, and I am looking for more ways to economize because my 401K is shrinking fast.

My attitude was that I couldn’t afford not to have something because I am old and may not live to enjoy it. Now, my attitude is keep the nest egg, because if the economy collapses and inflation hits, I will be standing in the soup line with everyone else.

Let the government cut twenty percent before they begin squeezing us for more. If we don’t nag our representatives to cut spending and to do their jobs how in the world will we ever get this monster under control?

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Obama Will Give Me An “A” For This One(Edited)

Posted on 03/04/2009 by Grumpa Joe
My Flag Flies Everyday

My Flag Flies Everyday

One of my good friends called me on this one. She pointed me toward Snopes. It turns out that Nancy Pelosi never proposed taxing 401K plans.  To see her entire proposal check it out on Snopes. In the meantime I’ve editied my post below to correct my mistake.

http://www.snopes.com/politics/pelosi/windfall.asp

 

WOW! Taxes on the rich, the middle class, and the poor. Stimulus money galore, bonuses for the fat cats, Deficits going out of control, what else?  Nancy Pelosi recently said the following “…windfall profits and income created by the Bush  administration need to be taxed at 100% rate and those dollars redistributed to the poor and working class.”

Well my 401K is a part of this category of investments. If they are to be taxed 100% why have a 401K at all?

They were  set up so “we the people” could have a way to raise money for our own retirement. We needed the 401K because Social Security is not going to be here much longer. Worse yet, try living on SSA alone. You will have to learn to like cat food . Don’t be in such a hurry Nancy, we’ll pay taxes on the money, after we begin to use it. She wants to tax it as we go along. Like I said, why even bother to have a private pension fund?

The one thing I haven’t heard anything about is taxing campaign funds. Why not? The weasels are getting millions to spend. They use the money for all kinds of personal purposes other than running a campaign. Why did Blagojevich work so vigorously to build his fund?  If we have to pay, why not them too?  This is another case of our politicians forgetting who they work for.  Once they get a taste of money from outside interests they set themselves apart from the rest of us. They begin to think of themselves as demigods.
I think a Senator or Congressman should be taxed ninety percent on his salary, and campaign fund. In fact, I think that is being too liberal. They should work for one dollar per year, and be required to use campaign funds to pay off the deficit. They create the debt, let them pay for it.

Yep! Tax the campaign funds; it’s the best idea I’ve had today. .

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Capital Gains What?

Posted on 21/10/2008 by Grumpa Joe
My Flag Flies Everyday

My Flag Flies Everyday

The rhetoric in this campaign could only be written by lawyers. We need to listen and understand every word, then read between the lines. I keep hearing that BO wants to limit his taxation to the “very rich.” He openly says there are many companies who are so rich they can afford to give some up for those at the bottom. I got to thinking about his words, and the concepts begin to sink in.

The folks who support BO and who have jobs seem to agree that their employers use them to make their fortunes. These workers have a mentality that somehow, their employer would not be rich if it were not for the sweat of their labor. They revel in the concept of taking it back from the rich. These people resent everything and everyone who has a nickle more than them. What they don’t understand is that the employer pays them a fair market wage for the the fruits of their effort. They also don’t realize that when they go home, the employer is still working to make things happen. Business is a 24/7 operation, and the owners take on a huge responsibility to make it a success.

How does the capital gains tax affect me and you? I fall into the “ninety five percent, or the middle class,” who are supposed to get a tax break in the BO program. I will get that tax break at the expense of a capital gains tax on the wealthiest of companies.  I don’t work anymore, and I live off my 401K, and Social Security. It took my deceased wife and me over forty two years to accumulate the nest egg. We gave up luxuries, spent judiciously, and saved. We invested in the market, and bought into many different companies. Many of my investments are designed for growth so the nest egg keeps up with inflation. When a company does well and expands, or grows, they transfer the growth to the share holders in the form of a capital gain distribution. It is not money, but shares of stock. This is a “capital gain.” At the end of the year, I have to pay a tax on that gain. There have been years, when I had capital gains, and paid a tax, however, the share price of the stock dropped making the value of the gain negative. Uncle Sam took the tax and ran. There was no sympathy toward the stock holder, Even though I was stuck with a stock that was lower in value than before the gain was declared. My 401K depends on capital gains to keep feeding me. I have to sell shares of the funds to get the  money I live on.

All of the people, who have been hypnotised into believing that BO will only tax the rich, are in for a rude awakening.  Any worker who is planning to retire on a 401K plan will be affected by the capital gains tax. Why? because you are investing in the companies that he will tax. All the “boomers” who want to retire and take advantage of their years of labor will be affected too. Companies who pay taxes, pay less dividend and have less money to invest in growth. It is as simple as that; more tax, less growth. More tax, less money in your 401K. More capital gains tax, and the more you pay; the less you have to live on. We are all affected by the capital gains tax, even those of us who are “middle class.” I don’t beleive for a minute that BO doesn’t see that he will burden the retiring baby boomers. He wants it all.

Barack and his liberal cronies love the concept of taking care of the little guy.  He doesn’t believe we are smart enough to care for ourselves.  If BO is really interested in taking care of us, he will abolish his ‘welfare,’ mentality. Karl Marx had a similar idea, and initiated a great ‘experiment” in Europe. Millions were slaughtered to make the idea work. Marxism took everything from the people. The government owned the wealth to take care of the people. The experiment was called “communism.”

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