Gerald (Jerry) Zezas

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Monthly Archives: February 2016


Why Bernie Sanders is Such a Risky Bet

If you look up the word Socialism, you get the following definition from Webster’s:

“A way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies”

If you look up Democratic Socialism, Webster’s has nothing. You must go to Wikipedia or some other non-scholarly source to find out what it is. Or, you can do what millions of people do all the time, you can get the definition from Bill O’Reilly:

“You can see that Democratic socialism where citizens still vote but are mostly told what to do by guys like Bernie Sanders is a system of subservience to a big central government. There is little power to the people.

Now the majority of those supporting senator Sanders have no blanking idea what he actually wants. They are hypnotized by the prospect of free stuff, education, healthcare, because, of course, they deserve that, why? Because the system is rigged by billionaires. So why shouldn’t Bernie provide for me and take from the greedy rich folk who have made their money by exploiting the peasants?

That’s right out of the Fidel-Che handbook. But again Talking Points submits many of those voting for the Bernmeister have no idea who Che was or who Karl Marx was or even who Fidel is.”

And that ain’t nothin’ folks.

Webster’s defines Communism as:

A way of organizing a society in which the government owns the things that are used to make and transport products (such as land, oil, factories, ships, etc.) and there is no privately owned property. How different is that from Socialism?

Now, folks, I’m not advocating that Bernie Sanders is a Communist. What I’m saying is that, as hard as it was to get someone named Barack Hussein Obama elected because of the assumption that he is Muslim and not a citizen, both of which were untrue, CAN YOU IMAGINE WHAT THE REPUB ATTACK MACHINE WILL DO TO SOMEONE WHO SELF-DESCRIBES USING THE WORD SOCIALIST IN THE DESCRIPTION? He actually admits it!

Many of you who like Bernie fail to realize that he has not yet been attacked by the Repubs because they are too busy fighting with each other. Once the get themselves a nominee, the anti-Communist rhetoric will come out in spades, with examples of failed Socialist states like Venezuela and Cuba, not to mention the similarities between Socialism and Communism. There will be ads with pictures of bread lines in Moscow, starving farmers in China and soldiers marching in North Korea.

Folks, I like Bernie’s ideas as well as anyone. I’m a lefty through and through, but we live in the real world, not the world of a Repub Congress going along with free college and health care for everyone with taxes going up on the rich. It can’t happen with a Repub Congress, and it can barely happen with a Democratic one. Bernie’s ideas may come to fruition one day, but today is not the day.

The Repubs don’t even want to vote on a replacement for Scalia for fear that Obama will appoint another Liberal! And these same people are going to give Bernie free college and health care?

Hillary may not be your first choice, but she is the best and most logical choice in these times.


Our Complex Tax System is Actually Pretty Good

Much is being bandied about by Repub political candidates on tax rates and the old chestnuts about “flat taxes” and “consumption taxes” are once again entering the conversation. For that reason I decided to explain modern tax schemes to those who may not understand them:

Flat Tax

The so-called flat tax is a simple levy on every dollar earned, deemed flat because everyone pays the same amount. This may seem much simpler, and it is, but mere simplicity is not a reason to change an entire tax code. Under this scheme, a person earning, say $30,000 per year would pay, say, 18% of his income or $5,400.00, considerably more than he pays now. That same person, earning $300,000 per year would pay $54,000, considerably less than he pays now. Most flat-tax schemes have been set at considerably lower rates than our current tax tables, begging the question as to the motivation of those proposing it. Flat taxes remove a large burden from high earners, who can afford to pay more taxes, and shifts it to low earners, who by their very nature, cannot.

Consumption Tax
This tax seems to make more sense to many. Rather than tax what a person earns, it would tax what they spend. On its face, it appears to be a fairer system, in that those who make a lot presumably spend a lot and, therefore, the highest burden would be with them. The problem is that those in lower income brackets tend to spend all or most of their incomes on basic necessities such as food, fuel and rent. These people have little disposable income from which to draw taxes, and so it would place an undue burden on them. They are virtually forced to spend nearly all their money nearly all the time, and have little or none to save, making 100% of their incomes subject to this tax.

Those with higher incomes and more disposable incomes can choose when to spend money and when not to. They can afford to save their money, rather than spending it, and would, therefore, be in a better position to keep their tax burden, on a percentage of income basis, lower than low-income people.

There are some who also suggest that this kind of tax would stifle spending-never a good thing for the economy.

Progressive Tax
The advantage of a progressive tax is that it’s based on the taxpayer’s ability to pay. The more one makes, the higher percentage of income one is able to pay. This premise is based on the fact that there is a baseline for how much it costs to live in modern society, and the further one is from that baseline, the more of one’s income is deemed to be surplus, and, therefore, available for taxation to benefit the greater good. It also allows those who do not make as much to pay less in taxes, thereby leaving more available to pay for everyday expenses like rent and food. It can also assist those in need by adding complexities like earned income credits, allowing low-income workers to receive money from the general tax account in order to help them survive.

It also creates more investment and charitable giving, in that those in the higher tax brackets, wanting to avoid high levels of taxation, will employ “writeoffs” by investing in tax deductible items such as charities or expanding their businesses by paying for factories and risking capital for new innovations. This, by extension, creates jobs and expands businesses. This is why when, during the 1950s when we had a maximum marginal tax rate of 92%, very few people ever actually paid that high rate. They were incentivised by these high rates to use their money for capital improvements in their businesses and expansion of industries, as well as investing in innovation, due to the tax-deductible nature of those types of investments. In this way, the marginal rate of 92%, although not actually paid by many people, may have contributed to the enormous economic expansion he U.S. experienced during the 1950s.

It is the most complex of all tax systems in that many “loopholes” are baked into it for various political reasons, but those loopholes do not mean that the system doesn’t work, only that certain interest groups have been able to get special treatment for themselves. These loopholes are purely political and have nothing to do with the benefits of the system itself. In general, it is the fairest of tax systems across the broad spectrum of incomes.

Some complain about the level of complexity of the current tax system for the average citizen. These issues have been largely resolved by the advent of personal tax software like Turbo Tax and the like. The simplicity of these software packages is such that virtually anyone who has earned their income from simple employment can do their taxes in minutes and avoid the expense of a tax preparer.

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