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The GOP seems to be in the middle of an identity crisis.  They’re looking to re-brand and re-package their message to motivate the base back to the tent.

The biggest problem, in my mind, is that they haven’t simply had a few bad years – they’ve totally lost their way and no amount of re-packaging and re-branding is going to do much until they get back to basics.

The number one basic they’ve totally lost sight of – LIMITED GOVERNMENT.

Not only have they abandon the very principle, they’ve reached a point where they’re really no better than Democrats when it comes to spending, expanding government and imposing more regulations on individuals lives.  These days the Democrats and Republicans really are no more than two-sides of the same coin, with very little difference at the end of the day in how they actually operate.

Actions speak louder than words.

If you say you’re conservative and want limited government, but then spend like there is no tomorrow, increase the size of government and such – well, your actions betray you – you’re no better than the tax and spend Democrat you’re attempting to win against!  In fact, you’re just a tax-and-spend politician calling yourself a Republican.

The Republicans can try to re-brand – but until they start to frame things based on conservative principles, they won’t get much traction with the populace since they’ve allowed themselves to be sucked in by the idea that the government should be regulating social issues, medical procedures and ideas.  They’ve allowed themselves to come to the belief that the Federal Government should be calling the shots, when the reality is that so much of what’s been going on in Washington should have been left to the states to decide.

Until the Republicans start to frame things in terms of how a particular issue involves government, little is going to change and I won’t be voting Republican.  (I won’t be voting Democrat either)

A good example of what I’m talking about – the stimulus package.  Both Democrats and Republicans started from the point of the stimulus package as being a done deal, the quibble was in the details of just how much money they’d spend and on what it would be spent. 

The Republicans failed to step up and clearly articulate that stimulating the economy was not the job of the Federal government; that if anything, the Federal government should be looking for ways to encourage the private sector to work things out so that the economy could get moving again.  They didn’t do this, instead they simply argued over how much money to spend and where.  They joined the chorus of doomsday, that without the stimulus package, the US would collapse.  They joined the Democrats and worked together to achieve the goal to spend more and expand the government rather than step-up and do their duty to work to limit government.

If the Republicans want to get back on track and get back the base of voters whom are truly conservative – their question for each issue MUST be: 

WHY IS THIS SOMETHING THE FEDERAL GOVERNMENT SHOULD DO? 

And then:

WHERE IS THE FEDERAL GOVERNMENT TASKED WITH DOING THIS?

If they can answer the “why” but can’t answer where they’re justified, they need to step back and hold the position that for whatever the issue is, it’s not the business of the Federal government. 

Period.

End of Story.

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Most small business owners in the United States structure themselves as a business entity in the simplest way possible – sole proprietor or simple partnership if they have a low liability risk, LLC or subchapter-S Corporation for greater liability protection.

These four main business structures all feature something few are talking about today – the flow-through of all income to the owners personal income and his 1040.

How the proposed budget and other potential changes may affect his budget can and will directly affect those (s)he employs because the bottomline is the owners income.

Let’s set up a hypothetical couple, married, two kids.  The husband is the primary earner since the kids are small and his wife helps with the business, but isn’t an employee.  His business nets him an income of $300,000 a year.  After federal taxes, social security and medicare (which he must pay both sides of, employer and employee) and living in a no state tax state, taking nothing but the standard and personal deductions, takes home $209,181 each year.  Note, he paid out, in various taxes $90,819 of his earnings from his business.

A very respectable take home at the end of a year of hard work – taking home about $17,430 a month.

How will the family situation change, if the proposed changes take effect?

All things remaining the same, except his federal taxes going up, his take home will be reduced to $196,741; stated another way, doing the same exact thing he’s always done, he’ll now have to pay $9,440 more to the government, taking $787 less home each month.

Would your budget be affected if you had to take a $787 hit on your take home money?

Could it get worse for our business owner?

Sure could, especially if the powers that be decide to remove the cap on social security taxes – abolish the limit that currently exists that taxes the first $106,800 of income so that all income is now taxed.

Doing that, on top of the above hike in federal taxes now will take another $23,957 out of his household budget because right now he pays $13,243 for his social security contribution and will, if the cap is removed, then have to pay $37,200 instead.

Now this couple isn’t simply taking a $787 monthly hit on their income for their household, they’re now taking $2783 LESS home each month, with their annual take home reduced to $172,784….or a 28% reduction in his take home, taking his taxes and social security from $90,819 for a year to $127,216!

Now yes, there’ll be naysayers who can’t quite fathom why this is potentially a problem in our economy, they’ll say this couple should pay the higher amount, they can afford it. 

How many out there can truly say, with a straight face, they can easily take a 28% reduction in their take home pay?

If the hypothetical business owner doesn’t figure out how to adjust income to pay less taxes, he and his wife are going to sharply cut spending (they no longer have the same disposable income) and likely will begin to look at whom to layoff in their business since the wife can step in and do that work instead of their paying someone else to do it.

Either way the economy loses – be it through spending less on services and convenience, or by someone getting laid off to make up the $36,397 in additional tax burden the couple will have to face and deal with.

Take $36,397 out of this couple’s disposible income equation and you’re likely to be hitting the service sector – they’ll reduce meals out, salon services, cleaning services, etc. because they have $3,033 LESS to spend on services each month – and it will domino through the economy as each service provider makes less, they’ll need to cut back on their own use of services, and so on and so on.

Just food for thought, especially when you consider that in an interview, Obama told Fox News:

“In terms of raising the cap on the payroll tax, right now everybody who’s making $102,000 or less pays 100 percent of payroll tax on 100 percent of their income. There are about 3 percent to 4 percent of Americans who are above $102,000 in income every year. So if you want to talk about who’s middle class, me giving cuts to folks making $60,000 or $70,000, and potentially asking more from friends of mine like Warren Buffett. That’s a debate I’m happy to have…because it’s the people making $75,000, $50,000, $60,000 who are hurting.”

We see and hear a lot of reasons presented why we need to adopt a universal healthcare model in the United States.  The most frequently cited is that if we look at other developed nations, they have universal healthcare and spend less of their GDP on healthcare than we do; that if we adopt a model similar to theirs, our healthcare costs will be lowered and the delivery of healthcare will improve.

The Walker Report makes the case using the newly signed stimulus package as a cost comparison:

If we adopt any one of the health care systems used by the dozens of first world nations with universal health care, we would save the equivalent of one stimulus package a year.

The article above even goes so far as opining that if we could only be as efficient as Luxembourg or Finland, our healthcare system would be great…but that might not be an attainable goal, so maybe doing as well as  Germany, France, or Switzerland might be our best goal for now.

One thing I love about the internet is quick access to numbers and statistics.  While GDP serves as one measure, perhaps a better one is actual dollars spent per capita in US dollars?  That way we’re comparing real dollars to real dollars rather than an abstract percentage of gross-domestic-product.

Nation Master is a neat site that lets you define out statistics by category and includes the category “health” for the nations in its database.  When we do a search for across the board “health” and then  “total expenditure in US$” we are returned statistics that reveal that in 2004 (latest data available for all reporting countries) the following was spent, in US-dollars, by each country in the list, sourced from the World Development Indicators Database:

United States:  $6096 per person annually

Luxumborg:  $5904 per person annually

Finland:  $2664.30 per person annually

France:  $3464 per person annually

Germany:  $3521.4 per person annually

Switzerland:  $5571.90 per person annually

I’m left scratching my head about why Luxembourg is considered more efficient when they only spend $194 less per person each year?  I mean Finland is obviously spending less – with only $2664.30 per person each year, that’s $3,431.70 less spent per person each year.

How do they do it?

Well, another interesting statistic can be had on Nation Master – how often a population visits the doctor, and in the United States we average 8.9 consultations with physicians each year per person; in Finland they consult with a doctor just 4.3 times a year per person. 

So in Finland they use their system about half as often as we do across the population, thus spend about half as much as we do.  Interesting.

Are they really “efficient” as Walker Report thinks they are?

If we spend $6096 on average, for each person each year, and they see the doctor 8.9 times on average in a year, then we’re spending an average $684.94 per doctor visit (or whatever encounter you have – ER visit, hospitalization, etc.)….compare this to Finland, spending $2664.30 per year, per person for 4.3 doctor visits each year – or $619.60 per doctor visit…..now it’s only a difference of $65.33 per doctor visit – not significantly different or more efficient than the United States, huh?

Yet we won’t see these numbers in the media, nor will we hear them on the radio – but the numbers and statistics are out there if you want to find them!

No doubt our healthcare system can be improved – but let’s not rely on myths to reform the system. 

We need facts and data to be able to make good decisions, not myths!

From the Heritage Foundation, Two Americas: One Rich, One Poor? Understanding Income Inequality in the United States

Class warfare has always been a mainstay of liberal politics. Politicians frequently depict the United States as a nation starkly divided between the rich and poor. For example, vice presidential candidate John Edwards decries “two Americas…one privileged, the other burdened…one America that does the work, another that reaps the reward. One America that pays the taxes, another America that gets the tax breaks.”

Obama is no exception – his rhetoric is rich with intent to foster continuation of the  class warfare (envy) in the United States to promote entitlement mentality and dependence on the government; aka socialism.

The “rich” are defined by Obama as those households earning $250,000 or more each year.

We’re told the “rich” don’t pay enough in taxes, they exploit others for their personal gain, and they benefit off the sweat of the lower income earners.

We hear a lot about how Obama will address the needs to “hard working Americans” and provide tax relief to “hard working Americans”; that “hard working Americans” deserve a dignified retirement, incentives to save more money, tax breaks and, the big one, redistribution of the wealth in the country – take from the “rich” to give to the “hard working Americans” who deserve more.

As if the “rich” doesn’t include ANY hard working Americans.

So, I’m going to say it – the rich not only work as hard, or harder for their wealth…but they also work smarter – they work the money they have.

That’s the real rub between those who have and those who don’t.

Simple fact of life:  it isn’t what you earn, it’s what you spend that matters at the end of the day.  If you spend your money on things that are not necessary you will be poor even if you have a high income.

What irks me lately is the government seems intent on destroying the very people who drive our economy – yes, I’m talking small business owners. 

I’m one of them. 

My husband and I own our business and employ 14 people, all whom have families, all whom we feel a great responsibility toward, pay well and provide top-notch benefits to.  Like many other small business employers, we’re being taxed to death!

Last year, I kid you not, even with our deductions, we still paid 50% of our income in taxes – to the federal government, the state, social security, medicare, AMT penalty; I’m not even including sales tax or property tax. 

Now Obama wants more?  Are you kidding me?

How much more can the government take?  How much more can they regulate us?  How long until they drive small business owners completely out of business?

The government seems to think it’s fair to take our hard earned money and re-distribute it to others less fortunate?  Good grief, I can do that by choosing my charities, I don’t need to government to do that for me!

Tax credits – checks of $500-$1000 – going out to people who PAY NO TAXES?  How the hell is that fair?

Another increase in the minimum wage coming this year – to $7.25 an hour, with Obama promoting an increase to $9.50 an hour by 2011….who the hell is going to pay for that 26% pay raise (from the $7.25 an hour) and the social security and medicare match employers have to make?  I don’t get a 26% raise unless I WORK HARDER AND DO MORE TO EARN MORE!

Oh and the one I just love (note sarcasm), the 50% of matching contribution from the government into savings accounts by “hard working Americans” for the first $1000 placed in their accounts through payroll deductions!  We’re “rich” so we wouldn’t qualify, of course.  But tell me – why the hell the government is getting into the business of matching contributions now, anyway?  They’re going to use the taxes they take from me to again, give it to someone else – money I could have used toward my retirement. But they’re not just content with taking my money – they’re only happy when they totally exclude me from even participating in these programs simply because my balance sheet deems me “rich”!

Small business will be crippled by the programs and plans being outlined by the new administration. When this happens, who will be the employers of the future?  Cause it sure as hell isn’t going to be motivated young people – by then, they’ll be fully entrenched in the entitlement mentality and totally dependent on government handouts.