Taxes the poor pay

There is a disconnect in public discourse that the media has done a really bad job of explaining. One of the big debates in politics is whether people pay enough taxes, and whether particular groups, such as the poor or the rich, pay enough taxes.

The GOP line is that nearly HALF the country pays no income taxes. That's true. A family of four making $47,000 pays no income taxes after standard deductions.

Democrats say you have to include all other taxes as well when discussing the taxes the poor pay - payroll taxes, sales taxes and Medicare taxes.

The Democrats are right of course that these matter. And that changes the overall picture incredibly. The poor pay a lot of taxes (unless they are working under the table).

That's just the fair way of looking at it.

On lock boxes

For years there has been debate about whether there are virtual "lock boxes" that our Social Security and Medicare taxes apparently are in. You hear that funds for Social Security will run out sometime in the 2030s and for Medicare in a few years from now.

This independent's view is that both concepts are nonsense. We have one big general fund that takes money in and pays it out. Everything else is accounting maneuvers. And now that we are paying out more than we are taking in for both of these programs, we are in trouble.

We are in trouble now, not in 2039.

Our fantasy that the money is set aside now means we can SAY we are spending our built-up savings in these areas, but in actuality we have to cut elsewhere to afford them.

Debt showdown - how fast to cut

Let's be honest about Republican demands to slash spending immediately rather than accept mostly longterm cuts.

The GOP is trying to sink the economy now so the election goes better in 2012.

There. I said it.

Let's focus instead on restructuring entitlements.

There. I said it again.

Paul Ryan's plan for Medicare

Here is an honest to God independent's thoughts about Paul Ryan's plan to change Medicare:

He's on the right track.

I know the public by and large hates it. Here is my answer to that problem:

It needs sweetening. Perhaps this modification could work:

Add in some cold hard cash annually beginning at 60 years of age into a health savings account. Give people $2,000 and let it start building over time, which it could if they are a bit fortunate and somewhat careful not to overuse medical care.

Then top that off with something akin to Paul Ryan's proposal.

Bachmann "misspeaks"

I suspect Republican presidential candidate Michele Bachmann might be a "lightweight" nominee similar to Palin, although this doesn't mean she's a political lightweight. She has no chance at the election, but she still could be plenty potent politically.

Bachmann acknowledges misspeaking re: her hometown history, comparing herself to John Wayne. Unfortunately the John Wayne from her hometown in Iowa was John Wayne Gacy Jr., a serial killer. Thanks for the laugh, Michele!

As an independent I'm not judging this as anything but a funny moment. It's no big deal.

She should stop that tendency ASAP, though, or we'll all start to conclude there's something wrong with her - kind of like Joe Biden.

Protests in Greece

Greece is voting this morning on austerity. The Greek people are in trouble - they let their nation grow on false hopes and false credit. And now the people are angry. They don't want austerity. And in many respects, although I disrespect how the country got to this point, I agree with the street. Where is Greece headed? Toward default. Toward leaving the euro. This is the only solution for them. They need a weaker currency. Why support a guaranteed recession/depression and further contraction when they should be focused on growing their industries through lower wages and export growth? A reduced standard of living is guaranteed either way.

But we all know where this is headed. Why should the Greek people protect European banks, who made bad loans to them? They should save themselves. Banks will have to deal with their own bad decisions. Bond holders will have to have their hairs cut. There have to be consequences for making bad loans.

I am starting to think, though, that the Greek government is wrangling cuts from the people, knowing it will default soon anyways, so that it will already have these cuts in place when it leaves the euro. And maybe in the end that is an acceptable strategy for it to have.

I am also thankful that this display is playing out right now as the U.S. struggles with its own debt showdown.