Six Word Stories-brief, interpretative, reflective

Blogging thoughtfully--Ideas rule, words communicate.

Six Word Stories

Taxing Facts - Stressful thoughts?

Think about the current state of banking. If I went to a bank and started borrowing money on a deal where I offered to pay interest only, how many banks would run my way? Take this story deeper. Assume I already had a ton of debt out there, but I wanted more. In this age where credit card companies are raising rates and cutting credit limits -- I want more credit and a lower rate. While I am doing all of this, I also lend out massive amounts of cash to businesses that have crappy financial health themselves.

Some might think this scenario is either crazy, a scam, or comes from the psycholgically unstable.

Actually, it comes from the US Government. Check out how much the government owes. 

Lot's of details in the links if you are curious about who the Government owes. Maybe we'll get into that another day.

For now, I'd like to link this big debt deal back to your taxes.

We hear a lot of comments about taxes. The rich should pay more. The rich pay too much. Too many don't really pay at all. The poor make money off the progressive tax system; they don't pay their fair share...and so on.

Here are some tax facts.

If we look at the term, middle class, to represent the middle 20% of taxpayers, we can generally describe the middle class as those making $37,771 - $60,000 in 2006 tax year. If you want to break that out with more details or you prefere a braoder range for middle class, check the source link.

Source: The Tax Foundation

Average household income for these levels in (parentheses)

Source: Congressional Budget Office

In 2006, the top 20% of individual income tax payers ($248,400) were responsible for 86.3% of the individual income taxes paid. In 1986, that top 20% ($167,800) was responsible for 68.9% of the individual income taxes paid.

The middle 20% of individual income tax payers ($60,700) were responsible for 4.4% of the individual income taxes paid. In 1986, that middle 20% ($52,500) was responsible for 9.2% of the individual income taxes paid.

The bottom 20% of individual income tax payers ($17,200) were responsible for -2.8% of the individual income taxes paid. In 1986, that bottom 20% ($14,800) was responsible for 0.2% of the individual income taxes paid. This means there was a very small tax liability in 1986 which became a rebate in 2006.

Let's loop that back to the whole deficit thing. As a country, we do not collect enough taxes and fees to cover our expenses on a national federal government level. As the deficits continue to grow this is an issue for all of us regardless of political affiliation. The US has had deficits for most of the last 50 years, but they usually just grow.

Good thing that Riley's beef is with Santa instead of the people that back the savings bond in his drawer. (Clip has foul language.) Is this a future step for those modern day tea parties? I hope not.

CSI - Deal or No Deal

This blog is not about a television obsession. It is about a CSI - customer service investigation.

A friend of mine had a blog recently about companies failing us. While not every business situation is an honest transaction, most are legitimate. It made me think about many of the inside parts of customer service. Lately you will see all sorts of special deals--buy a car, get one free; lose your job and we make the payments; fill out a bunch of surveys and get something free; kids eat free.

You have to check the fine print. Companies want to make money and keep people coming to the business. Usually there are all sorts of rules that limit their exposure on these deals. Don't get mad at them because they cannot afford to give you entirely free stuff. Make sure that you understand the rules and can live with them.

The other day, I was in a fast food place that listed a discount on a kids meal. The fine print was that you had to buy a non breakfast value meal. That works fine for me and the kid. However, the employee rang up the kid's meal at regular price. I objected and referred him to the sign in the window. The claim was that the deal had not started yet. (Not so--I read the fine print first.) We called in a manager and the discount was applied.

Unfortunately, the employee was not current on how to ring up the discount with these modern/advanced cash registers. Long ago, they punched in prices--nowdays, the employee has to put in the correctly coded sequence to make the right price appear. I don't blame the guy for not knowing how to key the discount, but I do hold him responsible for trying to fake his way through the error instead of asking the manager for help.

Caveat emptor - buyer beware. Make sure you know the fine print to the deal. If you do, it is easy to determine if you want the deal. Maybe you don't like the deal, but a better one might be available if you ask for it. We'' save that for another CSI blogisode.

More CSI to come.

Uncle's Money - UncCars version

Taking the money has allowed the government to not only peek into the privacy of many budgetary houses, but it has also given the government the authority to start making suggestions and to initiate actions on the business expenditures.

How would you feel if you borrowed money from your Uncle and he started telling you to buy canned tomatoes from the bulk ware house instead of getting the more expensive fresh tomatoes?

Better yet, you run a business, that Unc has no real expertise in running, but your new silent partner has found the unmute button. Why do you pay that VP so much? I don't think he's any better than the manager that makes 1/3 of the money.

Recently, Unc told GM, you have 2 months to get your act together...and do that without your leader. He needs to go now. Not that I disagree, but it's interesting that Unc has to do what the GM board would not do...even in desparate times.

By the way, Unc will now guarantee the warranty on some vehicles...because the companies took his $$$. I wonder how that deal tastes to Ford and the other auto companies? Maybe Unc will fix cars too. After all, those government mechanics will need something to do when they are not making warranty repairs for UncCars divisions TCCFKAGM (the company formerly known as General Motors) and TCCFKAC (the company formerly known as Chrysler). You know how the government loves those jacked up acronyms.

If you had written employment contracts with some of your employees, do you abandon them based on advice from Uncle or do you take the heat and gain a little credibility internally?

There are no easy answers, but I am confident of a few things.

If Uncle w/o industry experience knows more about your business than you do, find another line of work.

If you made commitments to your employees prior to taking Uncle's money, make sure you know how this will impact your reputation inside your organization and industry when you decide to change the game. He who holds the cash may make the rules. That doesn't mean that the rules are good ones. If I am your competitor that did not take Uncle's money--this is a part of the game plan to take your best employees.

If Uncles smacks you around for spending money on things that may not fit the core business, make sure he treats you the same way when the questionable spending goes to Uncle's business associates. From taxpayers to TARP to Congress.

It is not easy to be responsible with large quantities of other people's money, but it is clear that many folks are tempted to chastise business people when they spend money in ways that they don't like while looking the other way when the funds are spent on themselves.

When my neighbor is out of work, its a recession.

When I am out of work, it is a depression.

When politicians get TARP funds it's hypocrites in session.

Whos is watching Uncle's employees?...hmmmm

The elected ones have 2-6 years between formal evaluations/elections.

Can we even afford to fund Uncle's wallet? That's a future discussion.