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Tuesday, November 04, 2008

Why I'm Voting Against... Me

I'm an unemployed, married, 25-year old father of two beautiful little girls, ages 2-1/2 and 5 months. I'm also a registered Democrat, though that's somewhat misleading - while I've voted for far more Democrats than Republicans, I did cast my vote for George W. Bush in 2004, and tend to lean to the right on numerous issues. At the same time, it seems to be rather clear that my family would be substantially better off if Barack Obama were to become the next President of the United States - which is possibly a perfect example of why we should vote for John McCain.

Thank God, I'm a reasonably talented, able-bodied individual capable of performing most tasks. I'm certainly not a stupid person - as an easy example, I scored an 800 on the Math section of the SATs. However, at this point in my career, it makes more sense for me to stay home and watch my daughter while my wife works about 23 hours a week than to get a job. In fact, I'd have to make approximately $60,000 a year before taxes for it to be worth my while to get a job... and that's before factoring in the fact that I'd much rather sit at home and play with my daughters every day than sit in an office cubicle designing Excel templates (and I'm enough of a nerd that I enjoy that).

Barack Obama, if he wins, will be President of the United States with a strong Democratic majority in both the Senate and the House of Representatives. He will be able to pass nearly any policy he wishes to, and there is no reason to assume that he would not try to implement the change he has been promising to deliver all along. This change, which includes actual tax credits - money that the government gives to people below a certain threshold, formerly known as welfare - would make it so that over half the country would be taking more from the government than they pay into it. Tens of millions of people would be like me: Better off not working or working minimally, even if they could contribute greatly to American society, ingenuity, and overall production.

Currently, 32% of Americans - a far higher rate than ever before - have zero or negative income tax liability. This number would break 50% under a President Obama. That translates into less than half the country supporting the other half plus. For those people who are successful, the effective earnings rate for additional dollars earned would drop to under 40% after taxes (federal, state, local, SocSec, etc.). This means that for every ten dollars a person would earn, they would keep less than $4, while the government would take the other $6+ and give that money to others. In essence, less than half the country - those who are the most productive, who contribute the most to society - will be responsible for the upkeep of not only themselves and their families, but the US government, the majority of the country who will be under that threshold, Social Security payments, and health care for everyone. At what point will these people simply decide that they are better off either living elsewhere to keep some of their money or that it's not worthwhile to work as hard as they do for little extra gain?

Moreover, Senator Obama has suggested that to raise some of the $4.3 trillion [$1.0t deficit, $1.32t tax credits/seniors, $1.63t Medicaid expansion, $1.4t other programs] he needs to pay for his plans, he would close loopholes for corporations to pull in another $924.1 billion. While it is highly doubtful that this is possible (it requires an estimated 25% increase in corporate taxes simply by closing loopholes), the more important issue to note is that corporations are responsible for most of the products and jobs in this country. Corporations simply do not pay taxes - taxes are just another expense they factor in when determining how much they need to charge for products and how many workers it pays to have. Any increase in corporate taxes, dividends (Obama proposes to raise the 15% rate to as high as 28%), or the like will simply result in higher expenses for the rest of the country that consumes those products - people like us.

Today will be one of the most pivotal days in United States history. The outcome of today's election will determine how this country pursues the war on terror, who gets appointed to the Supreme Court in a time when issues such as gay marriage and partial-birth abortion may come before the Court, and what economic policies this country pursues. Will we switch to a more government-run health care system? Will we promote individual choice? Will we encourage people to work more or work less?

My wife and I are heading out to vote in a few minutes, and I'll be voting for John McCain. Should he lose... well, we can make do. Getting paid to play with my daughters isn't a bad deal - unless you're the one working to pay for it.

48 comments:

  1. The most cogent and excellent argument I've heard to explain the urgent need to vote for McCain. Our entire work ethic, moral climate and future depends on it. Thank you, Ezzie.

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  2. In fact, I'd have to make approximately $60,000 a year before taxes for it to be worth my while to get a job.

    I don't get it -- are you collecting welfare?

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  3. NL - Thank you.

    JA - Unemployment, Medicaid, not paying for childcare*, and a few other things (some state/local). Also remember that my first dollar is taxed at a higher rate since it's on top of what my wife earns, I live in NYS, and that at some point AMT kicks in, too.

    * About $1,200/mo for the baby and whatever it would cost for 1.5 hours after school four days a week for the 2.5 year old... and all post-tax. About $1,500 a month post tax; that's over $3k/mo just for childcare in New York State under Obama, or close to $40,000.

    Add in healthcare: Even if I got through work [likely], I'd still pay about $200/mo in premiums and have a deductible of about $3k + 10% after I hit it. Add in medicines and the like and you're talking about $2500 pre-tax and another $4k post tax, or about $11,000 total pre-tax earnings.

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  4. It sounds like most of your "problem" is that outsourcing day care costs almost as much as you could earn. How is that Obama's fault, or how would he make it worse?

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  5. Wait, I just remember that you're saying Obama would help. So I'm just confused all around. What's the problem?

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  6. ? No problem - with Obama at the helm, the salary I'd need to make work worthwhile grows higher and higher. Which means that I'm not a productive member of society, but rather someone who only takes from it. That's wonderful for me, but horrible for the country.

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  7. Im voting for Obama -- to support American Aliya!

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  8. with Obama at the helm, the salary I'd need to make work worthwhile grows higher and higher.

    How so?

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  9. Unless you're making 250,000+, Obama won't be affecting your federal income tax rates.

    The most significant of the tax credits is the EITC, which pays not a penny to people without earned income.

    Get your facts straight.

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  10. I see, I can assume then that we will never again see or read anything on the blog about this type of thing and how it plays out, say, in the Kollel community?

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  11. other than to endorse it, of course

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  12. LWY - Thanks

    Jameel - LOL. Shocker.

    JA - Do the math.

    Anon - Huh? I'm not disagreeing with that.

    G - ? Which way do you mean? How are the two comparable or not?

    FWIW, I left out my brother as an example of the same problem: It makes more sense for him not to work than to work.

    My problem with the kollel system is the same - it encourages people to not work, which in the end, hurts everyone.

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  13. I recommend reading http://economistmom.com/2008/10/the-economist-endorses-obama/

    (and the rest of her blog--you seem interested in public finance economics, and Dr. Lim-Rogers is worth reading)

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  14. anonymous:

    All economists who support Obama are hopelessly biased. Anybody who supports Obama doesn't understand economics, obviously. Haven't you ever dealt with Ezzie before? ;-)

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  15. Anon - I am interested, thanks!

    JA - I have never said that. I've always said to analyze what they're actually saying and why. I only have said that you don't understand economics. :)

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  16. You are a cleveland fan. That automatically calls your judgment on anything and everything into question.

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  17. Maybe God will lead you to write for a living. Then, you can stay home with the girls, and EARN, money at the same time. Mostly, you can contribute your incredible insights to the rest of us. Your article is inspiring. You are a blessed and gifted man!

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  18. The argument that McCain should be president just because the legislative and judicial branches will lean left seems like the biggest 'handout' of them all. VOTE OBAMA!

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  19. beautifully said. thank you. i will also be better off financially (only) under obama, but the damages he will do to family structure, cultural morals and individual responsibility and incentive is not worth it. praying for our nation.

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  20. Ezzie, this is one of the most fantastic, phenomenal things I've read on your blog. Well-written, well-presented, effectively persuasive, and powerful. You should write real posts like this more often. :)

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  21. What about Aliyah?

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  22. Great article. This should be sent everywhere.

    The problem is that people don't care. And would gladly say that they will just quit and live off the government.

    Sad sad.

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  23. Jack - I expected nothing less. :)

    Anon3 - Thank you so much, I really appreciate it...!

    Anon4 - I'm sorry, that didn't really make sense.

    Anon5 - Thank you, and amen.

    Erachet - Maybe... :)

    Anon6 - Not possible at this time...

    AEF - At a certain point, it becomes difficult to say "I'll work anyway" when so many others are not. It's a fault of the system that creates it.

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  24. I'm sure your pragmatism will greatly impress any prospective future employers. Be sure to save this blog and use it in your cover letters.

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  25. and that's before factoring in the fact that I'd much rather sit at home and play with my daughters every day than sit in an office cubicle designing Excel templates (and I'm enough of a nerd that I enjoy that).

    Wow, I know EXACTLY how you feel. Every day at work I look over at my baby's picture and realize that I'm spending my days performing relatively useless tasks instead of watching him grow up.

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  26. I don't know if I agree with your logic, but at least it's thought out!

    Sorry your guy didn't win.

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  27. your piece should have been published in national newspapers.
    too late now.

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  28. My problem with the kollel system is the same - it encourages people to not work, which in the end, hurts everyone.

    Okay, but it DOES work out better for them...the same way THIS works out better for you.
    So if you are going to take advantage then you really should not say anything about others who do the same exact thing.

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  29. Ezzie - not to sound sexist or anything, (I think it is great that you can be at home with your kids) but wouldn't you make more money than your wife?

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  30. Anon7 - I'm not sure if that was serious or sarcastic, but thank you!

    Nephtuli - Yup.

    Neil - Thank you

    TL - What's wrong with the logic cuz? :)

    TOWIK - Thanks

    WBM - She makes about 2/3 as much in less than half the time than I make as a salaried worker. It makes more sense for us to her work 23 hours a week to make what she does than for me to work 45-70 to make what I would. Plus, it's not as if we have a choice at the moment. :)

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  31. G - Okay, but it DOES work out better for them...the same way THIS works out better for you.
    So if you are going to take advantage then you really should not say anything about others who do the same exact thing.


    I think I'm going to write a post on this in the next couple of days to really explain this, because I do think it's an interesting discussion. In short, most of my complaint in both situations is that it's a horrible setup: In both cases, society is essentially encouraging people not to work to the detriment of society itself. The primary complaint is on the system, not the individuals.

    But the most important difference between someone living off the US government and someone picking a Kollel lifestyle and living off the community is the choices involved. In the former situation, it is the government that has set up and controls what policies exist; the individual can only react to those policies in a way that makes the most sense for him. The primary purpose in electing an official is to choose what policies government would pursue that best suit the population. If the government pursues certain policies, that causes people to make decisions based on those policies.

    In the kollel lifestyle, it is the person who is taking that is directing the policies. If a person decides to learn rather than work, they are choosing to put themselves into a situation where others must support them or feel as if they must support them. (Note: I've always felt that if a person offers - not because they feel they are supposed to but because they truly wish to - to support a couple then that is certainly their own decision.)

    Furthermore, should the kollel man decide to go work, not only would he be helping himself, he would be directly impacting those that surround him as well - his family/community that helps to support him would no longer need to do so. In the societal situation, neither are true.

    Finally, there's a clear difference between someone who was placed into a situation and now has to weigh the options facing him and someone who has placed himself into a situation.

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  32. In the kollel lifestyle, it is the person who is taking that is directing the policies. If a person decides to learn rather than work, they are choosing to put themselves into a situation where others must support them or feel as if they must support them.

    Same difference, bottom line is that the society has accepted the situation. If it didn't then the lifestyle would not be possible. Support can only be taken if it has from where to take it.

    --I am not saying that they parallel completely, just that it puts both into slightly different perspectives than they might otherwise be seen.

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  33. The primary complaint is on the system, not the individuals.

    Fair enough, that was really all I was trying to bring up for consideration.

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  34. Same difference, bottom line is that the society has accepted the situation.

    I don't think that that's quite true in either case, and in both cases, the idea is to change society. It's why if all else is equal in four years I'd vote the same, and why I'd speak out about the kollel lifestyle which can be changed (in theory) at any time.

    Support can only be taken if it has from where to take it.

    Agreed. Except in both cases, there will soon no longer be a "from where" to take it.

    --I am not saying that they parallel completely, just that it puts both into slightly different perspectives than they might otherwise be seen.

    Understood. I'm saying that there's certainly a difference, but even so, the approach to both is the same: Bad systems that must be changed because of their overall effect. In the kollel case, that can start from either end: Parents/communities saying "No" or kids saying "No thanks".

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  35. Fair enough, that was really all I was trying to bring up for consideration.

    Got it.

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  36. ...but just for the sake of argument...and someone who is in Kollel and NOT taking support other than what his Kollel check is and what he can get out of the government?

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  37. ...that's why I said above about it being different to place yourself into a situation and to be placed into a situation.

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  38. re your comment to WBM at 9:47.
    The parity in salary between your wife and you will not last, at some point you will make more than her. When I was first marries my wife's salary (she's a pharmacist) was almost double mine on a per hour basis (assuming 37.5 hours a week for me) through in tax season it was much worse. After a few years and promotions I make more (calculated based on 2,500 hours a year). You have a greater potential which will only manifest itself by you working. Do you want me to hand in your resume by me?

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  39. Rescue - I know, and that's true; at some point, should I be offered a job that is worthwhile, we'd switch (or we'd both work despite the lack of added gain, and hope that in the future it will be worthwhile anyway).

    Can you e-mail me?

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  40. you lost me on that last part, but I'll wait for the full version.

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  41. DAMN YOU. YOU ARE REALLY STUPID.

    YOU SHOULD HAVE YOUR BRAIN TAKEN OUT. MAYBE YOU'LL FUNCTION BETTER.

    YOU MISSED THE ENTIRE BASIS ON EVERYTHING.

    STUPID. STUPID

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  42. There are a lot of flaws in this reasoning.

    - There are many people who have to earn a significant salary ($40k+) just to cover healthcare. As pointed out by others, this is irrelevant to the whole taxation issue.

    - The 32% of the people who are not paying federal income taxes make so little or are supporting so many, I find it hard to begrudge them this benefit. You paint them as freeloaders when they also include students, part-time workers, etc.

    - Your 60% number of high end income is dependent on where you live. Different areas have different taxation rates; people do make choices on where to live based on cost of living and taxation is an issue in that. The two big hitters are federal income tax and social security. The high end federal rate is 35%; under Clinton it was 39.6%. Obama is moving the line to 38%. I find it hard to believe droves of people are going to be disincentivized to work based on a 3% hike who earn above $250k. The point you really miss is that the Obama line is still in the range of recent history and much less than what people paid in the 70's and 80's.

    However, I would agree about the social security hike, but social security is a critical issue that has to be dealt with. The 6.2% hike to employers will encourage employers to suppress high wage earners. I support Obama, but I am not blind to all his initiatives.

    - You kind of leave out the part where Obama talks about tax breaks for corporations that keep their jobs here and invest in the country. Warren Buffet and a host of others are advising him on corporate tax policy and I trust them to figure out where the pain line is.

    - Is John McCain's economic plan superior? He wants to cut taxes which will reduce government revenue. However, he will cut spending. The last leaders to try this were Reagan and W. The problem with both of them is that they did not cut military spending - they raised it. Considering it makes up 30-40% of the budget, the 3% shaving of the budget is insignificant. This leads to deficits. The Reagan deficit led to the formation of the Euro and the undercutting of American currency. The Bush deficits have allowed us to become indebted to China and Europe to the tune of $1T+. If they dumped the currency, they could make the country go under.

    I'd rather avoid round 3.

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  43. Anon8 - Thanks.

    Anon9 - Thanks for your reasonable comments.

    There are many people who have to earn a significant salary ($40k+) just to cover healthcare. As pointed out by others, this is irrelevant to the whole taxation issue.

    Wouldn't this point to McCain's plan being an excellent one just for this reason alone, forgetting all other advantages his plan has? (I actually put together a short, basic analysis comparing their respective health care plans if you're interested - feel free to email me.) It's not relevant to the tax issue, but it's relevant as a reason I would or would not wish to work.

    The 32% of the people who are not paying federal income taxes make so little or are supporting so many, I find it hard to begrudge them this benefit. You paint them as freeloaders when they also include students, part-time workers, etc.

    While I agree many are there with good reason, this 32% rate is far higher than ever in the past. I'm not painting them as freeloaders at all: Certainly, tax code changes have had an effect, and as I'm saying in the post, too many people simply have a disincentive to work. That's not freeloading, it's smart economic decision-making based on current policies. The problem is the policies.

    Your 60% number of high end income is dependent on where you live. Different areas have different taxation rates; people do make choices on where to live based on cost of living and taxation is an issue in that. The two big hitters are federal income tax and social security. The high end federal rate is 35%; under Clinton it was 39.6%. Obama is moving the line to 38%. I find it hard to believe droves of people are going to be disincentivized to work based on a 3% hike who earn above $250k. The point you really miss is that the Obama line is still in the range of recent history and much less than what people paid in the 70's and 80's.

    I'm not disagreeing - I used 60% because I'm in NYC, and the first chart I found was CA. In some places it's lower, but then again, the jobs they can find pay less as well. It's also not just the tax hikes, which are mostly affecting those on the high end (and again, in turn, businesses and cost of products), but other policies. And the other problem is that by raising on those rich, at some point they're going to make the same calculation and either stop working or move.

    However, I would agree about the social security hike, but social security is a critical issue that has to be dealt with. The 6.2% hike to employers will encourage employers to suppress high wage earners. I support Obama, but I am not blind to all his initiatives.

    Good!

    You kind of leave out the part where Obama talks about tax breaks for corporations that keep their jobs here and invest in the country. Warren Buffet and a host of others are advising him on corporate tax policy and I trust them to figure out where the pain line is.

    Nevertheless, a company that is getting a small tax break for staying but a large tax burden for being based here is still going to leave if they can.

    Is John McCain's economic plan superior? He wants to cut taxes which will reduce government revenue.

    In the long-term, cutting taxes raises revenues. See the Chamber of Commerce charts, IIRC.

    However, he will cut spending. The last leaders to try this were Reagan and W. The problem with both of them is that they did not cut military spending - they raised it. Considering it makes up 30-40% of the budget, the 3% shaving of the budget is insignificant. This leads to deficits. The Reagan deficit led to the formation of the Euro and the undercutting of American currency. The Bush deficits have allowed us to become indebted to China and Europe to the tune of $1T+. If they dumped the currency, they could make the country go under.

    Keynes shows well how deficits are often necessary in the short term for long-term growth - just look at any well-run company, or ask Warren Buffett. On top of that, McCain talked specifically about cutting wasteful defense spending. I do think his economic plan - while not amazing - was superior to Obama's by a sizable margin.

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  44. A long time ago, a friend and I would speak frequently in the evenings by telephone. I tended to go to bed early, but would sometimes find myself unable to sleep. My friend, meanwhile, regularly stayed up much, much later. A system of semi-unspoken rules for calling each other evolved between us over time.

    I reflected upon this one night to my friend. "You can only call me until about 9:00," I observed, "but if I happen to be up past then, I can call you even until midnight. It's really not fair to you."

    "No," my friend replied, "it is perfectly fair. We each have have a boundary, a time after which we do not wish to be called, and neither of us calls the other past that time."

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  45. Not that you need it:)), but could not let it go by without congratulating you on an amazing post. And I am old(55) and know you are right!

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