Category Archives: manufacturing jobs

Income Taxes

According to a recent article in CNNMoney, ‘a little more than 43% of U.S. households — or 70 Million homes will end up owing no federal income taxes for 2013.”  Of these households, 67% have incomes of below $30,000.  23 millions households pay nothing to the Federal government, when you consider payroll taxes to support Medicare and Social Security.

These statistics highlight a couple of problems that needs to be addressed.  First, approximately 33% of households with incomes over $30,000 pay NO Federal taxes.  This is due to, too many exemptions, exclusions, credits and deductions.  The Federal debt and deficit are too large and the need in America is too urgent for this to continue.  I am not advocating higher rates, just that everyone should pay something, every year, regardless of who they are of what they have.

Our Legislative brand looks at each “special” tax break in a silo, in many cases ignoring the compounding of these breaks.  Households can and do take multiple breaks to minimize their tax liability.  The Legislative branch needs to consider the bigger picture and how these combined breaks impact households.  The Legislative branch needs to take support the view that ‘everyone’ pays someone (with perhaps the exception of the elderly and disabled).

Additionally, there needs to be either a “cap or ceiling” on deductions taken each year.  This cap should be a percentage, thereby making sure that everyone pays something.  So that taxpayers do not feel like they are being shortchanged, I would allow the “excess” tax break to be rolled forward for 3-5 years.  Thereby, bringing in more tax revenue while at the same time, not ‘taking’ away anything from taxpayers.

Another option is to create a minimum tax that everyone pays, a floor.  It can be something modest, to pay for the military, national parks, food inspectors, and etc.  For example, every household in the U.S. must  pay a minimum of $500 in taxes.  You might exempt the elderly and those with a disability.  The idea being that everyone pays something.

There will be those who say that the poor would be paying a higher percentage of their income than those at the higher income brackets.  In an ideal world, you would incorporate both the ideas.  Put a cap on tax breaks, combined with a minimum tax that everyone pays.  This will bring in more revenue and be must fairer to everyone.

The second issue that these statistics highlight is there are far far too many households in the U.S. making below $30000 a year.  Too many families are having to support themselves on an income with no room for savings, emergencies or the extras that make for a good life.  Higher quality, higher paying jobs is the solution for this.  Some might believe that businesses should be ‘forced’ to pay more, I don’t think that is the solution.  A thriving economy and manufacturing jobs would help.  If this were to be improved, the Federal government would also bring in more revenue.

The U.S. can’t ignore these statistics any longer, something needs to be done.  The Congress and the President needs to take action.

 

 

Made in America

This past weekend I was out shopping at a large upscale mall near where I live.  The mall is called Irvine Spectrum and is always packed with shoppers.  There is a Nordstrom and Macys, along with many other upscale retailers.  I was there to shop for a new pair of running shoes and decided to do a bit more shopping.

I went into Lucky Brands, a upscale mens and womens clothing store.  They specialize in selling  high quality jeans and accessories.  While I was looking at a pair of jeans, a clerk came over and asked if I would be interested in buying a pair of pants that were “made in America”.  I was really surprised, I had never been approached by someone offering me clothing with that selling point.

I decided to take a look at the jeans, they didn’t look any different from the other jeans, other than the price, which was about 20% higher than the other jeans I was looking at.  I thought to myself, would I be willing to pay an extra $20 for a pair of jeans to support US manufacturing jobs.  Then I wondered how much of the Jeans were actually “made in America”, or were the components just put together/sewn together.  Was the cotton grown in the US, was the cotton woven into cloth in the US, was the cloth dyed in the US, was the zipper made in the US and etc.

I ended up not buying anything, but did realized that prior to this, I’ve never really thought about where the clothes I wear were made.  The important thing to me has always been about quality, style and price.

I continued my shopping and found myself at American Apparel.  A retailer who uses, Made in the USA as part of its logo.  100% of its clothing are sewn in the US and it is vertically integrated, so the many of the materials it uses are also sourced in the US.  According to their website, they operate the largest sewing facility in the US.

As I am shopping at American Apparel, I notice that the pricing is considerably higher than similar clothing at other retailers.  American Apparel, unlike Lucky Brands, isn’t considered a ‘designer’ brand that you would expect to pay more for.  Basics such as button down shirts were over $50.  After shopping for a few minutes, I leave without buying anything.

I really like the idea of buying American, supporting US based manufacturing jobs and US based workers.  However, I am not sure what it is worth to me to do that.  Am I willing to pay 20% or more for something that is made in the US.  I really don’t know the answer to that.  My initial thinking is probably not, since I tend to be very price sensitive, but if it helps the overall economy, perhaps it makes sense.

There isn’t really a clear answer for me on this.  If the prices were the same or very close, I would buy everything that was made in America, however, with the price difference, this is something that I will have to think about.