Saturday, June 27, 2009

The real effect of income tax cuts.

How will a decrease in income tax affect your financial standing?

Let's say you, like a large majority of Americans, are not self-employed.

For the sake of round numbers, let's assume

-your salary at ABC corp. is a cool $100,000
-the federal tax rate is 50% (again, for the sake of round numbers, we're going to assume Federal tax is the only tax, but really, it could be ANY tax)
-After tax, you take home $50,000/year.

This feels terrible, because you all that money you're earning is going to the government. After all, it's your money!

So you call your state representative, he agrees, and authors a 50% tax cut bill which passes the house, senate, and white house, bringing the tax rate to 25%.

You now take home $75,000/year, a whopping 50% take home increase! The world is good; Rainbows and unicorns are everywhere.


Meanwhile, your employer knew that yesterday, you agreed to work for a salary that brought home $50,000/year.

Now, next week, John Doe is hired with an identical job function to yours at ABC corp. Assuming all things equal, will John be given a $100,000/year salary? Not if your company is in the business of making a profit! His salary will be $66,666.67/year. After the 25% tax, he'll take home $50,000 assuming he's still in the same tax bracket, if he's not, they'll calculate a salary to yield the $50,000 take home. HR and management have just saved the company $33,333.33 for every employee they hire from now on!

Who really benefits here? The business owners, executive management, and "the investor class."


In the modern world, people, not materials & equipment, are considered the greatest monetary burden. Companies would much rather have machines do the work that humans do. They don't show up late, take vacation, use facebook during the workday, they're way easier to maintain(i.e they don't get sick), and they don't ask for raises.

Soon enough, your identical co-worker is providing the same amount & quality of work, yet he's costing the company less. Will your company pressure you to work more? Should they? Why not? You're costing them more. Are you sure you won't be "pressured" to leave? You can save the company $$ if you do. As an example, Target corporation is known for getting employees out of the organization by giving them a workload so large that they will fail. That way, they can say it is "performance related." There are no laws to my knowledge against management changing your job function, or its scope.


Stepping back to the big picture, the grocer, your landlord, and the gas station know that you're making more money. AND YOU CAN AFFORD TO PAY MORE. What business wouldn't charge more if they knew their employees could afford to pay more? (The kind that don't last very long)

The dollar inflates and the cost of goods go up that year.

Obviously, youll argue that 25% tax cut is unworldly, and that governments hike or deflate taxes incrementally over time to prevent the economic shock to the labor market and cost of goods to spike. touche. Lets go back and run the numbers if it was something more realistic like 5%. Is 5% savings something that would really impact your life? Probably, but not a huge effect. Is 5% of your salary important to your company? 5% times the payroll is a BIG number in many instances.

But then I have a question for you. WHAT IS THE POINT OF THE TAX CUT IN THE FIRST PLACE? Is it not to decrease burdon? How much should income tax be cut?


Here's the rub. It doesn't matter what the income tax rate is. Your take home dollars will always reflect your worth to the company and the economy as a whole(whether your compensation is appropriate or not). Not your pre-tax salary. None of this applies if you are the type of person that can get away with naming your own salary. The company will obviously pay what it takes to get your talent. You are also quite rare.

This goes for everything. People see tax breaks as a shortcut to get ahead. But when everyone gets ahead at the same rate....guess what. Its a zero sum for everyone except the government, who won't be able to afford filling potholes and paying police & educators. The less money that is available to the government is essentially the same as less power.

This is essentially an ingredient in a recipe to create an oligarchy and dynastic families. Money is siphoned away from the government (i.e. the people) and given to a few.


In the end, a tax cut is not going to make you more money. If you want to make more money, move around in your career, learn new skills, gain and edge on the competition, and step up the competition with your co-workers. Remember, It's a jungle out there....

Saturday, June 20, 2009

A Tribute to Shane McConkey

Shane McConkey was a big hero to me. Whenever I've dreamed of skiing, whether it be mid-summer, bad or no snow in the Midwest, or on my indoor bike trainer, I'd be watching ski flicks....and Shane was in all of them.

One of the world's top "extreme" skiiers, he was always pushing the limits of skiing, and is considered the inventor of the fat ski, which has made big mountain skiing accessible to a huge slice of people who don't have skills like he did. He also invented Ski-BASE -- where you ski off a monster cliff, and pull a parachute, making just about any slope with snow skiable.

Shane died in March in a ski accident. Not just any ski accident. He was in Italy, doing a Ski - Wingsuit - BASE jump when a binding failed.

I've really enjoyed watching him over the years, and I'll share a little with you here.

Shane McConkey in Claim from Phil Herbert on Vimeo.

Saturday, June 13, 2009

Skeiðarársandur sunrise

(for whatever reason, blogger is clipping my photo. click on it for full frame)

This is Skeiðarársandur and a small piece of Vatnajökull above.

Skeiðarársandur is a vast sand plain (sandur) in southeast Iceland that has been flattened over the ages by jökulhlaup and high winds. This area is the sight of the most difficult to build roadway in all of Iceland's ring road because of jökulhlaups -- the last bridge over the glacial runoff was smashed in the mid-90's like toothpicks. The wind & sand combination has been known to strip the paint off cars and knock bicyclists flat over.

We spent the evening before in a country hostel, and were up nice and early heading east. This was one of the best views of the trip. To the left of where I was standing was also much more of Vatnajökull. Svínafellsjökull is seen at the very left.

War Stories from a medical device career.

As if seeing people with bad odds on operating tables wasn't enough to encourage a person to stay healthy,

I attended an industry conference a couple months ago, and heard a very distinguished gentleman named Mark Kroll speak. Mark holds the record for patents among Minnesotans and the medical device industry as a whole, with approximately 290 patents to date. Many of his career efforts have been in the Pacemaker realm. His lunchtime lecture was called "War Stories from a Medical Device Career." A fair amount of it was humorous and light hearted, but it was also informational and did take a few very serious turns.

One of those topics was disease diagnosis. He started by mentioning a fact that all Americans should be aware of. "The first symptom of Coronary Artery Disease in about 50% of the death."

Read that again.

That is bad news for us, but good news for health insurance companies. Because if you die, all that money you contributed to health insurance is theirs to keep! So his point was that "Your Death is the Cheapest Therapy" If you die suddenly, you will never live to an old age and have 8 different prescription drugs to take a day, and get cancer. But let's say you get a Calcium CT scan (HIS suggestion for the best preventative diagnosis today) and your heart is full of calcified blockages? Then you can get blood thinner medication, coronary artery bypasses, and drug coated stents! All that stuff is expensive though, and health insurance gets to help pay. Simple.

So according to Mark, the best thing to date that can diagnose deadly heart disease is something that health insurance companies DO NOT WANT TO PAY FOR.

Life insurance companies will....that is, if you have a big enough policy.

Another example Mark gave: Pacemakers used to only have a few years of life because they used Mercury batteries. When Lithium Ion batteries showed up, the battery life jumped up to 7 years, and there was a belief that improvements could yield a battery with a life of 25 years or more. But who didn't want pacemakers that last 30 years? DOCTORS. They make money from implanting pacemakers, and physicians want repeat customers. Expect today's newest pacemaker to last 10 years. Planned obsolescence---it's not only the automotive & electronics industry.

Today in America, 60% of all bankruptcies are not filed by spendthrifts, but by people who get sick or injured, and put themselves into major debt after being dropped by their insurance.

Heath Insurance companies, medical device manufacturers, pharmaceutical & biotech companies, and Hospitals. They're (actually we're) all after your savings. The wealth you're saving over a lifetime in hopes of passing on to your children to live a better standard of life? We want that. Keep eating fatty/excess food, keep smoking, keep heavily drinking, doing what everyone else is doing..... and we'll get it. The people working at those big medical device companies, pharmaceutical companies....are they really committed to your health and your cure? No. the people making the decisions are focused on developing things that will MAKE MONEY. That's how you run and sustain a business. Simple.

In closing, the best cure for not blockbuster drugs or new medical device breakthroughs. It's PREVENTION. A healthy lifestyle. Regular checkups. Simple.

Wednesday, June 10, 2009

Macbook Serial # W8845DR1B0 is STOLEN!

And there is a $600 reward for its safe return

Ethernet ID: 002332DC3A3A
Airport ID: 00236C8808ED

The police report is filed with the Everett, WA police department, case DD09-6191. It was stolen from outside Sporty's

It is an Aluminum Case, 2.0mhz, 2GB ram, 160GB hdd. The thief only got the charger and a red BuiltNY case to go with it. (and my Nikon D40 camera and my backpack)

This is just a last ditch effort to get it back.

If you've purchased it, I'm sure you hate it because you don't have the firmware password. contact me and we can make a deal.