Thursday, April 19, 2007

Personal Tax Earmarking

Lindsay over at wiseGEEK sent me an article to look at which I found interesting. (As an aside, as this blog has grown, I've been receiving emails directing me to certain articles, and I just wanted to thank you all for taking the time to send them, even if I don't get a chance to write about them)

The article she sent me discusses the idea of personal tax earmarking - basically, having control over where your taxes go. Initially, this sounded like a great idea. I get to choose where the government spends my money? Heck yea! I could earmark my taxes for the maintenance of the trails in national parks instead of the social security which I will never benefit from! I could provide even more money for the Big Dig...... or not. Plus, I believe in the benefits that the article touts - more people would pay taxes because they get to direct where their money goes. I think many people, especially the rich, are averse to paying taxes not necessarily out of greed, but because they think they know a better way to use it. Given the long list of pork barrel spending on each budget, I can't disagree.

My worries, however, are this. What system is going to be able to handle such a complex distribution of money? Each person can earmark their taxes for one of thousands of causes, or they can divide their taxes up however many ways between thousands of causes. Multiply that by the millions of taxpayers in this country? The government is already getting flak for the numerical nightmare known as Medicare Part D - the prescription drug benefit - and that's only 400 or so choices. Imagine thousands of choices and permutations. I have little faith that the government would be able to handle something of such complexity given its track record. And given the government's recent push to simplify taxes, I think idea would be heading in the opposite direction.

Nice idea, but probably not feasible. Is it just me or am I becoming a cynic?

Article: What is Personal Tax Earmarking?



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Saturday, April 14, 2007

AGLOCO revisisted

A few months ago, I wrote about AGLOCO, and several people have asked me about whether it works or is a scam. I'm still undecided, but they're finally releasing the viewbar sometime this month to the first group of people who joined, so I'm sure we'll hear more buzz about it in the next couple of weeks. Will it succumb to it's eventual doom like Sanjaya or take on a meteoric rise like Barack? Only time will tell.....

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Sunday, April 08, 2007

The End of Affirmative Action

I'll preface this post by explaining a little bit about where I'm coming from. I'm neither black nor white, but I grew up in the South, at times experiencing discrimination because I wasn't white, other times immune to discrimination because I wasn't black. I think this has given me a unique perspective into the nature of discrimination and its effects on a person, so that's my story, and I'm sticking to it. How does this relate to personal finance? You shall see.

I had this discussion with a friend about affirmative action as we drove up to D.C. for spring break. Affirmative action is a pretty touchy subject, and rightly so. It lies close to our heart because it touches on a fundamental belief: fairness.

I believe that within our generation (yes, we child of the 80's, see picture), affirmative action will disappear. Does that mean racism or discrimination will disappear? Not necessarily. Everyone encounters some sort of discrimination throughout their life, but affirmative action is in place to address institutional discrimination, not personal discrimination.

Nowadays, even in the most conservative professions, institutional discrimination is waning. Take a look at the elite colleges - minority students are taking top leadership positions left and right. My alma mater, a top 20 university, has had a minority student as the Student Government Association president for the past 3 years, perhaps longer since I don't know who the president was before then. It hasn't even been the same minority - we've had a black male, Asian female, and Indian male. While most of the current leadership in the corporate or political world is overwhelmingly white male, as these people retire and take their prejudices with them, the leaders of our generation will rise to these roles, regardless of race.

Another reason why affirmative action will disappear: discrimination is very unpopular and un-PC. In fact, most people will go out of their way to not seem prejudiced. I currently attend a school in the South, and a good proportion of the students are fairly conservative. But nowadays, conservative does not necessarily mean racist or narrow-minded. We had an election for a class officer at the beginning of the year, and a black student won, even though less than 10% of our class is black. Just look at the current leaders in campaign fundraising. Who would've thought this would ever happen a generation ago?

Ok, so how does this all tie into personal finance? Affirmative action is holding back minorities much like wealthy parents who give their adult children financial outpatient care. Financial outpatient care is when parents provide financial assistance to their adult children. In The Millionaire Next Door, they discuss this situation and prove how financial outpatient care is a roadblock to the financial independence of their children because the children never learn fiscal responsibility. In much the same way, affirmative action only creates a nagging doubt in the back of a person's head about why he or she got a position, which creates a roadblock to realizing unquestionable self-confidence.

The great leaders of the civil rights era must realize that we are in a different era and affirmative action is slowly losing its purpose. No longer are we judged by the color of our skin but by the way we dress, the way we talk, and the way we carry ourselves. As the Bee Gees once said - you can tell by the way I use my walk, I'm a woman's man.

Let the debate begin. Any non-derogatory comments are welcome.

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Saturday, April 07, 2007

Confessions of an Economic Hit Man

Sorry for the lack of updates, just got back from spring break. Over the break, I read an incredible book, Confessions of an Economic Hit Man, which has affected my view on consumerism even further. I've always been pretty anti-consumerism/materialism, but this book further reinforced my view. I think I've stayed pretty true to my anti-consumerism by promoting frugality, but I'll be looking at even more ways to eliminate spending, not reducing the cost of purchases. I'm also in the beginning phase of purchasing a house, so for those of you who are recent graduates or others looking to purchase a home, look for future articles on the topic.
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