Half-full or half-empty

Aerial photo: Santa Barbara, California

Aerial photo: Santa Barbara, California (Photo credit: Wikipedia)

Fill a glass with your favorite beverage; drink half of it, and then put it down and look at it carefully. What do you see? Is the glass half-full or is it half-empty? It is all a matter of perception.

For six years in the 1990s, I worked two part-time jobs at a hospital in Santa Barbara, California. One job paid around $9.00/hour while the other, easier job required more training and paid $20.50/hour. Both jobs lacked full-time benefits. I loved my schedule because every week of the year had a different work schedule. I worked a variety of shifts around the clock and floated from department to department. And although I loved the variety, the payroll department made frequent errors in computing my salary.

We received our paychecks every other Friday around 11:00 am. I enrolled in direct deposit so my check was only for my information. During one particular period, I had worked 58 hours and I was expecting a check in the amount of $900+. When I opened the envelope, I was shocked to see that my take-home pay was $3,900+. The gross amount of the check was $8,100+. That meant that slightly more than half had been deducted for Federal income tax, state income tax, Social Security, Medicare, State Disability Insurance, charitable deductions and other. I was incensed that so much was deducted, and I was elated at the amount of take-home pay, $3,000 more than I was expecting. I brought the error to the attention of payroll, but since it had been directly deposited, there was nothing they could do that day. On Monday, I wrote a check to the hospital to correct the error.

I calculated that if I worked full-time at the $205.00/hour rate that they had used to miscalculate my salary instead of the correct rate of $20.50, in a year I would earn $400,000+. Even if deductions exceeded 50%, my annual take-home pay would be $175,000+. At that time working part-time, my net pay was around $25,000/annually. Would I have been happy with $175,000/year instead of $25,000? You’d better believe it.

So it’s all a matter of perception. Of course, I would like take-home pay to be more and deductions less. Still it is much easier to make ends meet with $175,000 than it is with $25,000 and this occurred about 15 years ago. Economic times have only gotten more difficult.

Proposition 13 and tax reform

English: Mission Santa Barbara, Santa Barbara,...

English: Mission Santa Barbara, Santa Barbara, California, USA Français : Mission Santa Barbara, Santa Barbara, Californie, États-Unis (Photo credit: Wikipedia)

Proposition 13

Howard Jarvis led the effort to pass California’s Proposition 13 in 1978 to slow the rapid rise in property taxes that was forcing people from their homes. When I moved to Santa Barbara in 1965, many of my co-workers purchased homes in the $20-25,000 price range. As property values increased and assessments rose at the same time that tax rates also increased, my co-workers were hit with a double whammy, often seeing their property taxes exceed mortgage payments. Finally in 1978, Proposition 13 was passed to force a halt to rapidly increasing property taxes. And what was the reaction of our elected officials? Some of them closed libraries and shortened hours at the Department of Motor Vehicles (DMV) causing longer lines to punish the voters for their action. The elected officials had forgotten who they were working for, just as some in Congress have now.

At the time, I thought that Proposition 13 was a temporary measure that would lead to a more sensible,  permanent reform. Although somewhat modified over the years, Prop. 13 lives on after 34 years in effect. This has led to some glaring unfairness that the courts should have addressed by now. The properties that sold for between $20-25,000 in 1965 now sell for between $600,000-800,000. For purposes of this example, let us consider a property now valued at $650,000. If purchased in 1965, that house’s property tax is about $900/annually. An identical house next door on the same street if purchased today has an annual property tax of $8,100. That is a 9:1 ratio for the same government services and blatantly unfair.

Tax reform

I favor progressive taxes in place of regressive ones, and that is why I favor the progressive, graduated income tax as the fairest tax of them all. Property taxes are somewhat regressive and sales taxes are the most regressive of them all. That is why I favor abolishing all regressive taxes and replacing them with progressive taxes based on income and net wealth. And while we are at it,  let us tax corporations as people, as Mitt Romney and the US Supreme Court advocate. Corporations should pay at the same rate as individuals do, and dividends and capital gains should be taxed at ordinary income rates.

The progressive, graduated income tax is the fairest tax of them all, but I think that relying only on an income tax alone is probably not a good idea. Therefore, I advocate an annual wealth tax on a person’s or corporation’s net worth of 1/2 of 1% to 1% as some countries in Europe do. A 1% tax on a net worth of $1,000,000 would be $10,000. Let the Federal government take the lead in setting the rules for the progressive income tax and the wealth tax. Then each state could determine independently whether it wanted to adopt the progressive income and the wealth tax within its borders. For example, Illinois could decide to tax its citizens 35% of the Federal income tax and 20% of the federal wealth tax. Some states might adopt one tax or the other, but not both. Some states like Alaska and Nevada might decide to adopt neither. It would be easy for taxpayers to compute what they owe to states since state rates would be a percentage of what they owed on form 1040. Complicated state forms would be a thing of the past.

Regressive taxes like sales tax and property tax would be a thing of the past also. How would cities and schools and sanitary districts be financed in the future? It would be the responsibility of each state to allocate tax revenues within the state to those government entities losing tax revenues under my proposal. This would greatly change how revenues are raised and spent in the US in the future. I cannot predict all the effects of my proposal at this time. However, I will predict that my proposal will have a profound and beneficial effect on schools. Each state would be required to fund all schools within its borders equally. Under the present system, schools are financed mainly from local property taxes which leads some schools to be much better financed than others. This would end under my proposal.


English: Mission Santa Barbara, Santa Barbara,...

English: Mission Santa Barbara, Santa Barbara, California, USA Français : Mission Santa Barbara, Santa Barbara, Californie, États-Unis (Photo credit: Wikipedia)

I am right-hand dominant and my body is wearing out on the right side. My hearing, eyesight and memory are slipping. I am going to die as all of us will some day. I don’t believe in spending time and money to delay the day by a few months or years. Some people are wealthy enough to purchase a longer lives through medical attention and the services of servants. If you use your body less, it won’t wear out as soon. In the wealthy community of Santa Barbara, I cared for patients of advanced age who were in poor health. I wondered then why live a long life without health. I often thought that The Picture of Dorian Grey by Wilde was the ideal way to live, but we humans do not have that option.

Now I live in southern Utah in a community that does not have Santa Barbara’s wealth. The elderly patients I care for seem in better health than the ones I saw in California. It could be a healthier life style or it could be that the less healthy individuals have already deceased. Certainly, here the general population does not have the wealth to afford the best care that America has to offer. Few people do. America has the world’s best health care, but our statistics are not supportive of that claim. Infant mortality here is too high and seniors live years longer in other countries.

Tomorrow, the US Supreme Court will rule on Obamacare. Yea or nay, I hope that the decision will lead to Medicare for all.

Santa Barbara, California

Oprah's Montecito estate, from the window of a...

Oprah’s Montecito estate, from the window of a small plane; view from SSW; January 6, 2009; own work (Photo credit: Wikipedia)

Santa Barbara, California has long been home to the rich and famous. When I moved there in 1965, there was a place for those of us with average incomes. When a water shortage caused a building moratorium in the early 1970s, housing prices started a relentless climb. Then Ronald Reagan’s election in 1980 and his western White House in the mountains west of town cemented the upward climb in housing prices as more people were introduced to Santa Barbara’s year round spring like climate. I lived there and enjoyed 38 years of my life. Upon retirement, my wife and I decided on Saint George, Utah, where the cost of living is much less.

To those who have visited Santa Barbara and would like to know more, I suggest these four authors. Sue Grafton whose “A,” “B,” “C” and other letters of the alphabet detective novels chronicle the fictional detective Kinsey Millhone is a good starting place. T. C. Boyle, who lives in the Santa Barbara suburb of Montecito along with Oprah Winfrey, has written several Southern California novels that are worth reading: The Tortilla Curtain, Riven Rock set in Montecito, A Friend of the Earth set in the Santa Ynez valley and When the Killing’s Done, set in Santa Barbara and the Channel Island of Santa Cruz.

For very early Santa Barbara history, I recommend Richard Henry Dana, Jr. and Two Years Before the Mast. Dana spent several months in Santa Barbara. For a fictional early history of the area, I recommend Kage Baker’s company series, specifically volume 2, Sky Coyote, set around 1700 and about the Chumash Indians who now run a casino just north of Santa Barbara.

Chicken and egg

An Egg McMuffin breakfast sandwich from McDona...

An Egg McMuffin breakfast sandwich from McDonald's, as bought in North America. (Photo credit: Wikipedia)

Which came first, the Chicken McNugget or the Egg McMuffin? Actually the Egg McMuffin came first. It was invented by Herb Peterson, the Santa Barbara franchise owner, in the late 1960s and introduced nationally at McDonald’s in 1972. If you visit any of the three Santa Barbara area McDonald’s locations, you will see a plaque proclaiming that location as the birthplace of the Egg McMuffin. The Chicken McNugget came much later in 1983.