Archive for April 15th, 2009

High taxes, out-of-control gov’t spending, ballooning national debt … let’s have a tea party.

April 15, 2009

Just in case you haven’t heard (since NBC, NY Times, etc. have been ignoring the story or playing it down) …

According to the WSJ: Today, American taxpayers in more than 300 locations in all 50 states will hold rallies — dubbed “tea parties” — to protest higher taxes and out-of-control government spending. Below is a map of planned rallies and a link to an interactive map with specific locations and times.

Why you should care

If you’re reading this, your tax burden is considerable — probably way more than you think.  Consider a reasonably typical “professional”  couple earning about $125,000 (maybe with both husband and wife working).  Subtracting $10,900 for the standard deduction and  $13,600  in personal exemptions (assume a husband, wife, and 2 kids @ $3,400 each) leaves $100,000 in taxable earnings.  The Federal income taxes would be about about $15,000 … not bad, if that’s all there were.  But they’re not.

Add to that total payroll taxes, which are payroll deducted at a rate of 7.65% based on gross earnings (called FICA earnings) not taxable income … that’s another $9,500.  The couple is up to 24.5%.

Then, there are state income taxes.  On average, state income taxes run about 5.5% of taxable income.  That gets the couple up to 30%.  Note: for specific state rates, see
http://www.taxfoundation.org/taxdata/show/228.html

Then there are sales taxes.  The couple is left with $70,000 after income taxes.  Assume that they spend about 75% of it on taxable goods and services at an average state sales tax rate of a little more than 5%.  That’s another $3,000.  They’re up to 1/3 of their taxable income going to taxes.

Finally, let’s assume that they own a modest house and pay $5,000 in local property taxes.  Now, they’re approaching 40% … and that doesn’t include gas taxes, cell phone taxes, etc.  … which gets the number into the 40s for sure, and maybe up to 1/2 of taxable income … for a couple that probably doesn’t consider themselves to be rich. 

Think about it : half of what you make going to support about $4 trillion in annual government spending … much of it wasted.  For details, see the just released “Pig Book” — the annual summary of government spending published by the Citizens Against Government Waste
http://www.cagw.org/site/DocServer/CAGW-Pig_Book_08.pdf?docID=3001

That’s why there are tea parties today …

 

image

Interactive map:
http://www.freedomworks.org/groups/19186

Related article:
http://online.wsj.com/article/SB123975867505519363.html#mod=djemEditorialPage

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Posted in Obama Administration, Taxes | 4 Comments »

Extreme Entrepreneurship: Products for Bottom of Pyramid

April 15, 2009

Excerpted from Fortune, “Products for the other 3 billion” By Michael V. Copeland, April 1, 2009

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Jim Patell … operates out of Stanford’s design school, where he teaches a class called Entrepreneurial Design for Extreme Affordability … the class mission: to teach a new generation of entrepreneurs to use their business and engineering smarts to design and sell products – profitably – for the developing world.

Some of the students – a mix of would-be MBAs, engineers, and designers – truly are do-gooders, but a fair number think building good, cheap products is a skill any corporation would value.

“We can fill a gap, with an approach that goes beyond a fast profit motive.”

For the smart, ambitious students in his classes  …professional success and saving the planet aren’t mutually exclusive.

Two such budding entrepreneurs … make cheap, solar-powered lights to replace the kerosene and diesel lamps so common in the developing countries of Asia and Africa.

 

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Often the approach involves combining cutting-edge technology with widely available products that are moving down the cost curve.

One application … make cheap, solar-powered lights to replace the kerosene and diesel lamps so common in the developing countries of Asia and Africa.

D.light, for example, marries next-generation light-emitting diodes (LEDs), proprietary power-management tools, and increasingly cheap solar panels. As a result, D.light is able to offer poor communities an affordable alternative to kerosene, which is ubiquitous but hazardous … The D.light lamps sell for about $25, steep for someone earning $1 per day, but … the quality of light was so good that people with the D.light lamps were able to do more work at night and increase their income.

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Empowering would-be customers is one of the mantras of Patell’s class … Patell doesn’t expect every student to start a company, but he does demand that every product in the class offer poor consumers tools for their own microenterprises.

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Capitalists in Silicon Valley are starting to take notice of the projects coming out of the Stanford course. In November, D.light secured $6 million in funding from … venture capital firms, to ramp up production and get its lamps into markets, initially in India and Africa … the financiers think D.light can model itself after another successful enterprise in the developing world: the cellphone industry.

Device manufacturers … are selling millions of handsets in rural parts of India, China, and Africa, places that in many cases don’t have centralized electricity. But even some of the poorest of the poor will pony up several months’ salary for the benefits of connectivity …

Edit by SAC

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Full Article:
http://money.cnn.com/2009/04/01/technology/copeland_developing.fortune/index.htm

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Treasury Directs GM to Prepare for Bankruptcy Filing … surprise, surprise, surprise

April 15, 2009

Source: CNBC.com 

The NY Times reports that The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite public contention that it could still reorganize outside court, people with knowledge of the plans said during the weekend.

The goal is to prepare for a fast “surgical” bankruptcy … creating a new company that would buy the “good” assets of GM almost immediately after the carmaker files for bankruptcy … Less desirable assets, including unwanted brands, factories and health care obligations, would be left in the old company, which could be liquidated over several years.

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But what about the UAW?  Not to worry … 

President Obama, who was elected with strong backing from labor, remained concerned about potential risk to GM’s pension plan and wants to avoid harming workers, these people said.

So, GM may require as much as $70 billion in government financing, and possibly more to resolve the health care obligations and the liquidation of the factories, according to legal experts and federal officials.

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Preserving GM’s stellar reputation.  Huh ?  …  

a quick restructuring is necessary so its image and sales are not damaged permanently.

The government has said it will guarantee GM’s vehicle warranties.

GM has started an aggressive advertising campaign stressing that car buyers should have confidence in the company, and offering to make nine months of payments, up to $500 each, for owners who lose their jobs.

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Promise: a transparent administration.  Yeah, right … 

None of these people agreed to be identified because they were not authorized to discuss the process. GM declined to comment and the Treasury Department did not comment.

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Full article:
http://www.cnbc.com/id/30184869

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Outlook is Optimistic for Marketers’ Job Security

April 15, 2009

Excerpted from Brandweek, “Marketers Expect to Keep Jobs, Budgets” By Kenneth Hein, March 14, 2009

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While many reports suggest the sky is falling for marketers, a large number of top-level executives feel that their jobs and much of their staff’s jobs are safe. What’s more, the majority do not anticipate cutting their marketing budgets.

The CMO Council interviewed 659 global senior marketers online between mid-January and March 2. Overall, it found that marketers are not planning major restructuring, head-count reductions or wholesale agency terminations this year.

More than half do not feel their jobs are at risk and 20.6% simply are not sure. More than a third plan to keep their teams intact and 26% expect to add staff.

“There was not as much panic about job security that we thought there would be,” said Liz Miller, vp, programs and operations at the CMO Council. “The big story for the marketing community is it is not about budget slashing; it’s about budget reallocation. Marketers are looking to better support the sales team, drive business growth and engage the individual customer” …

“It’s not about window dressing this year … Marketers need to stop looking at how to refresh our brand, change our logo or what we mean to consumers. This year they don’t have the millions to do that. It’s how do you do it faster, better and more efficiently with less cash to waste on things that don’t work. You need to better support your sales team because they need leads, that’s the bottom line” …

Marketers top marching orders from their bosses are: Growing and retaining market share (48%), lowering costs and improving efficiencies (44%) and improving customer insight and retention (33%).

The top factors affecting marketers are customer anxiety and cutbacks (49%) and slower, more complex selling cycles (38%). The top frustrations were: Insufficient budget (43%), the organizational culture (37%) and senior management mindset (33%).

Overall, “We’re coming out of a long phase where the wind was in our favor … When they are in your favor you don’t need to be particularly smart to be somewhat successful. In these conditions, you need to be a lot smarter than before.”

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Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/direct/e3idd9d6803dbe30862f19d9fb07e5dfbca

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