Prop 39 is the Solution

Close that Sneaky Loophole! 

The election that just passed was not only about the presidential campaigns but also about state measures. An important measure that will help our rapidly changing society is California Proposition 39. Proposition 39 closes a loophole that allows companies to choose how they are taxed. The loophole was "created" in mid-February of 2009 as the result of a last minute, middle of the night decision made by corporate lobbyists in the California budget negotiations of 2009 (latimes.com). The loophole allows corporations to decide how they would like to be taxed. Pre-Prop 39, corporations could choose to be taxed via the “Three-Factor Method” or via the “Single Sales Factor Method”. The single sales factor method looks at and taxes the in-state sales alone to determine a company’s taxes. The three factor method uses a combination of the company’s: sales, employees, and property to calculate their taxes (ballotpedia.org). This choice and these two options give out of state corporations that do not have a physical presence in California a huge savings. So, many out of state companies choose the “Three-Factor Method”. Since companies that have some physical presence in California see the tax break that these out of state companies are getting, more and more companies such as, Chrysler, are moving their operations out of state. If you could still receive the business of Californians while paying less in taxes, then why wouldn’t you move out of state?

           

The solution to this problem is Proposition 39, sponsored by billionaire hedge fund manager Tom Steyer. Prop 39 will not only close the loophole that is costing the state of California $1 billion annually in lost corporate tax revenue, but it will go a step further and use the additional revenue to reduce public energy costs and to help develop California’s clean energy infrastructure. By boosting this alternative energy solution, approximately 20,000 to 30,000 jobs will be created in the process. The long term revenue will help fund California’s schools and reduce the budget deficit. Increased funding will be made available to services such as health and social care, education, and transportation (cleanenergyjobsact.com).

I, myself, am a huge proponent of Proposition 39, because it eliminates a sly, sneaky, injustice that was created intentionally. California workers have experienced more unemployment than necessary due to the immoral actions of these corporate lobbyists. Finally, the corporate tax loophole problem will be solved after the passing of this proposition. What I like about this proposition is that it goes above and beyond just closing the loophole, it improves our state. Energy and education are two areas that our state needs help in. Clean energy is going to come at a premium later on, so it is a positive that we are investing in clean energy now. Everyone knows that California’s education is struggling, so this increased funding is much needed. I would tell you to go out and vote in favor of Prop 39, but thankfully it has already passed!

http://ballotpedia.org/wiki/index.php/California_Proposition_39,_Income_Tax_Increase_for_Multistate_Businesses_%282012%29

http://www.cleanenergyjobsact.com/the-facts/

http://articles.latimes.com/2012/may/02/local/la-me-cap-taxes-20120503

The Federal Reserve and Federal Express

Dollar bills. The Fed. Federal Reserve Notes. These are all words and terms that we have heard of or seen. But what exactly is the Federal Reserve? Is it our nation's bank? Who runs this bank? All of these answers may surprise you and will also probably disappoint you. It is a privately owned bank that lends money to our United States government at interest. The clever title has fooled many Americans. The Federal is privately owned, but has many ties to our government. The Board of Governors is chosen by our own President and Senate (Johnson, 1999). No president has ever had to appoint the board of say, Wells Fargo. What makes this bank so special? Well, first of all, The Federal Reserve Bank works very closely with our government. It is the bank that lends us the dollar bills that are in our very wallets, it sets the interest rates, and it controls our money supply. The Fed can encourage or discourage spending by setting what is called the reserve requirement. The reserve requirement is the amount of cash that a bank must have on hand or claim at the Federal Reserve at any given time. Open market operations controls the amount of money the Fed holds. The Fed controls this by buying and selling U.S. government treasury securities. The most infrequently used mechanism that the Fed can call upon is called the discount rate. The discount rate is a fluctuating rate that is attached to short-term loans that smaller banks get from the Fed.  An increase in this rate discourages institution's borrowing and a decrease would promote borrowing and encourage the institutions lending initiative (Gill, 2008).

There are 12 Federal Reserve Banks located across the country. The current head of the bank is Mr. Benjamin Bernanke. He never appeared on any ballots, he was not elected by citizens and yet he is almost in total control of our nation's finances. Mr. Bernanke is quoted to have said, "Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost." (Maier, 2008). Many of our founding fathers including Thomas Jefferson were terrified of the Federal Reserve's concept. They believed that it was the end of America and that only bad things would come from the Fed. Today, many seem to have overlooked this wisdom. Can we blame the Fed for today's economic shortcomings? After all, the Federal Reserve is only as Federal as Federal Express.

http://www.investopedia.com/university/thefed/fed1.asp

http://host.madison.com/news/opinion/unmasking-the-mysterious-federal-reserve/article_5fb65783-dff4-5799-bc2a-88a0581a6902.html

http://www.higherintellect.info/texts/religion.occult.new_age/occult.conspiracy.and.related/Johnson,%20Roger%20J%20-%20Historical%20Beginnings-The%20Federal%20Reserve.pdf

Recession, recession, recession is all that we hear about today. It is all over the news, the Internet, and it is the topic of many people’s conversations. Many will tell you that money isn’t everything, but right now our nation’s lack of money seems to be consuming us. We hear this word so frequently, but what is a “recession”?

Well, a recession is a period of staggering economic activity, where, typically, unemployment, national debt, and inflation rates go up and household income, GDP, and corporate profits fall. The main culprit behind recessions is inflation, or a general increase in the price of goods or services. This makes the money in circulation worth less, thus everything is more expensive. During occurrences like these the government will resort to drastic measures such as collecting and destroying money in an attempt to make it more valuable.

Recently, lay offs have been an issue, due to declining corporate profits. And it is not just dot comers that are losing their jobs; employees are being let go in all sectors. Even public safety officers, like firemen and policemen, are being laid off. Businesses are going out of business regularly and home foreclosures are rampant. This is our nation’s largest problem right now, but what is our nation doing to help?

           

Many are critical of the Federal government and the Federal Reserve when it comes to the recession, after all, isn’t the government supposed to keep us safe? Others will blame presidents that are no longer in office or old Federal Reserve chair men however, these critics do not realize the fact that recessions are supposed to happen. The natural cycle of business has ups and downs. In order to have good times, there must be bad times. Yes, this recession is the largest recession in American history, however, the general public often acts like recessions can be prevented. The government is trying to stop the bleeding.

           

First off, the Federal Reserve has a lot to do with the health of the nation’s economy. While the Federal Reserve, is not ruled by the government, they loan money to the government and control the distribution of physical money. The Fed’s chairman, Ben Bernanke, has been under much scrutiny lately for our economy’s demise. However, he is a man well fit for the job. In a “60 Minutes”, interview, Bernanke explained that his area of expertise was the Great Depression. He has constructed a plan to revive the economy based off his observations of the Great Depression. The first step that the Fed has taken that is promising is lowering interest rates. The Fed has promised to keep rates as close to zero percent as possible until the year 2014. This will promote healthy borrowing and will also reduce debt.

Second, the housing sector has experienced large growth. Thanks to the Fed’s lower interest rates, banks are able to borrow for less, and thus buyers can borrow for less. The housing sector is important because it accounts for approximately 5% of the nations GDP. In addition, everything that goes into a house (furnishings, appliances, services), accounts for an additional 20% of the nation’s GDP. The debt that the housing sector held has been reduced by 1 trillion dollars since 2009.

Also, the energy industry has had a recent boom. The growth of the industry has utilized more forms of energy. This has brought down the price of oil and also gas. Since April 2011, gas prices have gone from $3.94 to $3.41, equivalent to a 50 billion dollar tax cut. In addition to lowering prices, it has also increased jobs. The extensive research and development of the alternative energy sources have created job opportunities for many people that were previously hunting for jobs.