Childhood Lessons Can Save America Now

 

“ONLY IN AMERICA … can you get a tax refund on taxes you didn’t pay.” Anonymous

Everyone Contributes

My wife and I have two children, both girls. They're older and on their own now, but when they were young we gave them both an allowance.

Every parent has a slightly different philosophy when it comes to a child's allowance, but in our case when we handed out that weekly stipend, we went to great pains to remind our girls that they were getting their allowance not for doing chores around the house but simply because we as parents wanted to give them some spending money.

Why separate their allowance from a connection with household chores? Because we always made it very plain to our girls that doing chores was a responsibility of everyone in our family as a way to contribute to the family. We would not “pay” them to do what every member of the family had an obligation to do.

It was and still is our belief that this instilled three distinct values in our children:

First, they are members of our family and every member of the family contributes to the family’s welfare. There are no free rides (either now or later in life).

Second, it helped them to value our family unit. After all, if they were contributing to our family, they then had a vested interest in the success of our family.

Third, it taught them that we’re all in this together. It gave them a sense of belonging because they were contributing and their contribution was important.

America Today

Whether or not you follow this “allowance philosophy” or not, I think you’ll agree that the values we taught were important to both our family’s and our children’s success. While being self-evident, these values are really pretty simple and fall in the realm of common sense. So why can’t our country understand this lesson?

In America today, the bottom 40 percent of income earners pay no federal income tax. In fact, because of refundable income tax credits, these 40 percent as a group actually receive net payments equal to 3.6 percent of total income tax revenues according to the latest Congressional Budget Office data.

Let me digress here for a minute and give you a definition of a refundable income tax credit in the lexicon of our esteemed politicians; it is payment made to an individual even though that person paid no income tax to begin with. How it can be refundable is beyond a normal human being’s comprehension.

Additionally, the bottom 60% of income earners pay less than 1% of income tax revenues.

Recently, Mr. Obama has led enactment of a new refundable tax credit and other refundable credits, which probably leaves the bottom 60 percen paying nothing as a group on net.

America’s Survival

I understand full well how politicians can continue to be elected by promising a large segment of the population that they’ll “tax the other guy”. But how can America continue to survive when 60 percent of the population has no vested interest in its success?

How can 60 percent of American citizens live the lessons my wife and I taught our daughters when they receive benefits without any contribution of their own?

Does that 60 percent feel like they’ve contributed to America’s success or are they just living off of other peoples hard work?

Do they feel like we’re all in this together or do they just have an entitlement mentality?  And what of our political leaders?

What is more important to them, re-election or a vibrant strong America where everyone contributes and is pulling together?

Profound Quote

 The following quote by Dr. Adrian Rogers seems to fit nicely into this topic: “What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation”.

Let’s Be Honest

George Will describes the current state of America today much better than I can. He says, “America cannot pay its bills, poorly educates its young, and its taxation punishes whatever success that its suffocating regulatory regime does not prevent”.

Perhaps its time to get back to basic values and think of America as a family, our national family.
 Everyone needs to contribute and have “skin in the game”.

We need to concentrate on job creation and economic growth, not income redistribution at the point of a gun.

We need a level playing field and not one distorted by bad tax and legislative policies.

And perhaps most of all, we need politicians that are true patriots, that put America and her people first, not re-election campaigns.

Regardless of our political affiliation we’re all Americans. We love our country and love the people who inhabit it. Let’s respect each other’s rights, always strive to do the right thing and remember we’re one nation under God, indivisible.

Only we can change the system and it’s time we do.

Invitation

If you’re not a client yet, and you’d like to explore the option of developing a professionally managed investment portfolio comprised of no-load mutual funds, please give me a call.

I’d be happy to sit down with you and explain how as a fee-only investment advisor I can assist you in meeting your financial goals.

Marshall Sitarik - CFP
Ph. 407-977-3800