IS IT TRUE November 19, 2012

47

The Mole #??

IS IT TRUE November 19, 2012

IS IT TRUE we heard a lot from the presidential and congressional candidates about keeping taxes low for the middle class and helping small businesses create jobs?… they said nothing, though, about an unknown and hidden “tax” on the use of credit cards that hurts every consumer and merchant in America?… this hidden tax is called the swipe fee and is the fee that merchants pay to banks to accept a card and pass on to consumers?…even though swipe fees are invisible to consumers, they result in higher prices, even for those who mostly pay with cash and rarely use a card?…the only difference between swipe fees and taxes is that the $50 billion in revenue that the swipe fee generates every year goes directly to banks rather than to the government?… every American household on average pays about $427 a year in the swipe fee “tax.”?… the swipe fee is the second highest operating expense for merchants, an especially serious burden for small businesses?…swipe fees are the fastest-growing expense these businesses face, rising much faster than, for example, health care costs?…while health care has received a lot of presidential attention, swipe fees did not draw any attention at all?…maybe that is because the politicos on both sides of the aisle line their campaign coffers with donations from the “too big to fail” banks that rake these fees in and have little interest in the backbone of American business that is all too often deemed “too little to matter”?

IS IT TRUE that the EPA gave the City of Evansville 730 days (a full two years) to come up with a plan to implement actions necessary to correct the problems associated with having a Combined Sewer System?…the CSO of Evansville frequently pours raw sewage into the Ohio River, our streets, into basements, and keeps that crappy aroma permeating the air of the South Side?…now with 10 days to go before the November 30th deadline Mayor Winnecke and city officials are asking for a 180 day extension BECAUSE THEY HAVE NOT DONE THEIR JOB by creating even so much as a plan?…this failure of both the Weinzapfel Administration and now the Winnecke Administration could result in fines being levied on the city for not even planning to plan?…the first idea was to see if the EPA would allow the can to be kicked 30 years down the road instead of 20?…City leaders even tried to float a trial balloon stating they had “saved” the people of Evansville $300 Million but that was for doing half the job and hoping the EPA would play ball?…here we are 720 days into a 730 day project with our Mayor and his surrogates begging like dogs for an extension that would not have been necessary if the Weinzapfel Administration would have started this project when they should have?…the excuse being put forth is that “is rained too much in 2011 to take good data”?…given the changing and unpredictable nature of weather this is about as dumb as a box of rocks to make this assertion?…data was taken for years that lead to the EPA successfully suing the City of Evansville (along with 10 other dysfunctional places) and other places have done their fixes?…the actions needed are known and the City of Evansville has once again deliberately FAILED TO PLAN WHICH IS THE SAME AS PLANNING TO FAIL?…THAT PLANNED FAILURE SEEMS TO BE THE ONLY PLANNING EXERCISE THAT LOCAL GOVERNMENT IS CAPABLE OF DOING WELL?

IS IT TRUE that in a recent Ernst & Young Strategic Growth Forum that Bob Nardelli, the GE product that went on to serve as the CEO of both Home Depot and Chrysler made a very profound statement with respect to manufacturing in America?…Mr. Nardelli’s statement was “if America had the lowest cost of electricity manufacturers would flock back to our shores”?…he went on to state that in most heavy industry that labor is only a 10% contributor to the expenses?…our own Gail Riecken without having heard Mr. Nardelli said much the same thing on a local basis in an interview with the Indianapolis Star yesterday when she stated “Vectren’s rates are a deterrent to potential homebuyers and businesses looking to relocate”?…the cost of electricity in America is only exceeded greatly by one thing on business expenses and that is the fact that our corporate income tax rates are the HIGHEST IN THE INDUSTRIALIZED WORLD?…it seems as though one way or another our country seems to be infatuated with ways to impose WARTIME ECONOMIC SANCTIONS ON OURSELVES?…if we just had a population that was aware and capable that would get off the darn couch and raise some hell about these things we may just make a comeback?

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47 COMMENTS

  1. The Democratic Party insists on high income tax rates for businesses to placate their sheeple who expect their leaders to soak the “rich” with higher taxes than they pay. The businesses in this country hire lobbyists, attorneys, and accountants to lobby for exceptions to the tax laws to obtain lower tax bills for their firms than many individuals pay. The result is a system that almost everyone hates and is patently unfair to everyone (every taxpayer either pays too much or not enough).

    Meanwhile the Golfer-in-Chief plays another round of golf and laughs behind the backs of all of his sheeple who were too dumb to realize that he fooled them again, just as “The Who” said so in 1975.

    • I’d be interested in seeing YOUR PLAN. Let’s set the Obama deficit aside just for one moment, and YOU TELL ME what YOU would do to pay off just the Bush deficit from the two unpaid Bush wars, Bush’s Iraqi and Afgani nation building, Bush’s unpaid Medicare drug benefits, and Bush’s bailouts … those inacted up to January 20, 2009, BEFORE Obama took office.

      I’d like to see how YOU propose to pay for the Republican-created deficit before we discuss how “the Golfer-in-chief” and Democrats propose to pay for the deficit created AFTER January 20, 2009.

      • We have a large cash only economy that is not being taxed. One solution to the deficts, either Bush’s or Obama’s, would be to initiate a federal sales/use tax. To minimize the impact on the poor and middle class certain items, such as food, could be exempted from the tax. Administration and collection of the proceeds could be through the State’s as most already have in place a mechanism to collect a similar tax.

        • Really?….your solution is yet more taxes? how about the government at all levels do the same thing that responsible adults do and that is not spend money you don’t have, set a budget and don’t go over, cut out worthless “feel good” spending and in the case of the federal government stop giving money to foreign countries especially the ones who hate us for our meddling.

          JMHO

          • Yes, a sales/use tax would generate significant monies. I guess I should have also said that any funds generated should be used to reduce the debt and not just become new fodder for DC spending. We agree that too much is wasted. An alternative would be to reduce existing rates somewhat and use a portion of the revenues generated from the s/u tax to offset that reduction. The basic premise that I propose is to generate revenue from those who currently are outside of the existing taxing system. Thus drug dealers, etc., would pay into the treasury when the purchase items.

            • The Census Bureau estimates that the total retail sales for Q3 2012 is 1.1 Trillion. Let’s for the sake of making an estimate scale that to a year and add some to Q4 for holiday spending and assume an annual figure of $5 Trillion. Oddly enough that is close to what the government spends in any given year. That aside a 10% VAT on the $5 Trillion in sales would bring in $500 Billion per year or 3.1% of the national debt of $16 Trillion. That is barely enough to pay the interest on the debt. To be effective the rate would have to be high enough to pay down the principle. So lets adjust that up to 20% VAT and in 32 years our debt will be paid off.

              The bottom line here is that the USA has one huge debt problem that is not being addressed. It will take raising prices on every retail transaction by 20% over a 32 year period to pay this off. This assumes no further deficit spending during that 32 year period. If we continue on the current spending trajectory in 2016 it will take 40 years to pay off the debt. I seriously doubt that the people of this country have the means or the will to solve this problem.

            • Under a 20% VAT with the income tax rates proposed for the demon rich a $100,000 consulting gig accepted after earning $250,000 already would shake out like this in high tax states. Gross pay: $100,000; net pay $40,000. Now when you go to spend that money you will be paying 28% combined sales and VAT so your $100,000 will actually yield closer to $30,000 in purchasing power. That is a 70% effective tax rate on your marginal earnings if you choose to spend them. If you hoard your $40,000 and your children inherit it after the new 55% tax they will actually get $18,000 that leaves them with $14,062 in purchasing power. Anyone that thinks this is fair needs to move to France right now. That said a consumption tax is the fairest tax possible and you are right, the black market economy will pay too. Any idea how large that might be?

          • Lol!….sorry.

            Drug dealers? how’s that going to work? The federal government has tried for many many years to stop under the table cash transactions it can never work unless all cash is eliminated, keeping track of transactions is the main reason our society has moved to debit cards over using cash, yeah it is convenient method of payment but it also produces a traceable audit trail.

            While I’m all for a national sales tax in lieu of the income taxes we pay now getting under the table transactions into the system just isn’t a possibility…..but I’ll give you one, how about all of the drug monies and forfeitures related to crime go directly into the US Treasury instead of the local police agencies, since we as taxpayers are financing the war on drugs it would be nice to see a return on our investment instead of trophy cars decked out in the DARE logo paraded around by local LEOs.

            In reality giving the federal government another revenue stream will accomplish nothing but added spending, just look at the history of taxes, how many instituted taxes have ever been repealed? The government is IMHO at all levels just a machine that consumes money (taxes) and in return produces nothing tangible but more and more bureaucracy….but it is just my opinion.

            JMHO

          • Joe is right. People don’t have the means to pay off this debt. It will never happen.

            The only way to eliminate our debt is to eliminate the mechanism of our debt generation – The Federal Reserve and fraction reserve banking. The other way is through another World War. Debts tend to get erased or restructured after such events.

            Having the world’s reserve currency – the dollar – means the United States is in a doomed position. We cannot eliminate the mechanism of our debt creation without stepping down from the position of having the reserve currency. Our position of supremacy in the world is dependent upon other nations’ willingness to accept our printed dollars as payment of debt. The backing for this is no longer gold or silver as Constitutionally mandated, it is in fact our military muscle. Countries accept our dollars under unspoken duress.

            The hidden VAT is already in effect with all the inflation in the system. The people are already paying a hidden tax that is straining the system. In fact, the hidden tax has grown large enough to actually cause people to cut back back on their personal consumer spending, which has a stagflation effect which deepens the problem further.

            There is only so much junk food you can shove down a glutton’s throat before he finally chokes.

      • The deficit is not from unpaid wars. It’s time to stop blaming Bush and find real solutions. Creating another entitlement is not a real solution. We need a balanced budget amendment linked to a percentage of GDP first. Only then should we consider increasing revenue. Then we can do things like private accounts for SS.

        • You and your ilk is going to have to own up to Bush’s depletion of the Clinton surplus and the onset of the mega-deficit caused by Bush wars and economic policy.

          And how would private accounts for Social Security have worked out for folks in the Bush recession of 2008/2009?

          • You are kidding yourself dude. Bush was a money wasting spendthrift but Obama is twice as bad. Clinton was a typical politician making claims that were not true.

            Clinton ran deficits through all 8 years of his term, and one can go to the US Treasury Department and looking through the history of the total outstanding debt through Clinton’s term.

            Every year Clinton was in office, the total national debt continued to climb.

            How Clinton managed to claim a surplus was that while the general operating budgets ran deficits but Clinton borrowed from numerous off budget funds to make the on budget fund a surplus.

            For example, in 2000, Clinton claimed a $230B surplus, but Clinton borrowed
            $152.3B from Social Security
            $30.9B from Civil Service Retirement Fund
            $18.5B from Federal Supplementary Medical insurance Trust Fund
            $15.0B from Federal Hospital Insurance Trust Fund
            $9.0B from the Federal Unemployment Trust Fund
            $8.2B from Military Retirement Fund
            $3.8B from Transportation Trust Funds
            $1.8B from Employee Life Insurance & Retirement fund
            $7.0B from others

            Total borrowed from off budget funds $246.5B, meaning that his $230B surplus is actually a $16.5B deficit.
            ($246.5B borrowed – $230B claimed surplus = $16.5B actual deficit).

            If there is ever a true surplus, then the national debt will go down.

            Now please ask our President to do the right thing and get this trainwreck of an economy on the right track and stop blaming everyone from the pilgrims to GWB for his own failures.

            • Dude, anyone who could reduce the annual deficit to $16.5 Billion today would be crowned king for life. The current administration burns through more than that in a day.

          • To be absolutely fair here, it took more than just Bill Clinton to produce the surpluses of the 1990s. It took a Republican controlled congress with a lame duck President in a time when people were demanding results and the threat of a third party candidate on the Presidential ticket had shaken things up considerably. Giving Clinton the credit is intentionally misleading.

            As for Bush… Someone done f$%#ed up and got me started… This guy was a jackass if ever there was a jackass. Got us into two wars trading on the “anti-terror” frenzy of 9/11 and lies about yellow cake uranium and portable WMD. This man was one of our WORST Presidents ever, hands down. He was one of our most fiscally liberal as well. The Bush tax cuts are a ruse to make you forget the actual results of his disastrous administration – the massive debt he generated with his overseas crusades and the eventual implosion of the US economy and the first of this most recent string of bailouts, signed by his own hand, in 2008.

            Republicans would do well to study and learn from the failures of George W. Bush. Democrats would do well to admit and learn from the failures of Barack Obama.

            When Obama was elected, the anti-war left was effectively silence, the wars continued and even expanded with much less opposition, and the debt further ballooned upward from Bush’s already stratospheric highs.

            The two above comments represent an illustrative slice of the partisan nonsense we always hear from politicians and defenders of their respective faiths. It is part of the reason we are in this mess.

  2. No CSO plan? So what is the Renew Evansville program all about then?!? Something is not right here. James Gerrard with ESWU has been campaigning with their new plan this year. What gives?

    • The City of Evansville recently asked for a 6 month extension after realizing they would not be meeting the deadline for a plan that will be due on November 30th. Looks like they may have been banging the drum before the good citizens about a plan that is not ready for EPA approval. It is apparent they knew it too.

  3. Your last sentence sums up your city’s and nation’s problems more courteously than what was published in the Czech Republic the day after the election. Read it and weap.

    “The danger to America is not Barack Obama, but a citizenry capable of entrusting a man like him with the Presidency. It will be far easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to a depraved electorate willing to have such a man for their president. The problem is much deeper and far more serious than Mr. Obama, who is a mere symptom of what ails America. Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince. The Republic can survive a Barack Obama, who is, after all, merely a fool. It is less likely to survive a multitude of fools, such as those who made him their president.”

  4. Concerning the swipe fee, why don’t businesses offer a small discount to pay by check or cash?

    • Pappa….

      Not sure if it still is but at one time it was illegal to charge more for a CC transaction than cash, that may have changed, but by offering a cash discount you are in essence charging a surcharge for CC payments. Having said that most retailers have the CC fees built in the price you pay, some smaller businesses do indeed offer a “cash discount” for a lot of obvious reasons.

      http://www.dailyfinance.com/2012/07/12/merchants-may-win-the-right-to-charge-credit-card-users-more/

      JMHO

      • It’s not illegal… It’s against the merchant terms the merchant accepts to have the ability to swipe credit cards. To offer a cash discount violates terms of service, but it’s not policed. As long as it’s not in advertisements or mailers, the merchant would probably be ok.

        Actually, if the merchant simply encouraged debit transactions rather than credit by offering some small incentive, or a cash discount, they could combat this trend. Another option for a small business is to refuse to accept cards and take only cash. They could install an ATM in their store for those without cash. The ATM vendor would accrue their fees directly from the customer. The problem with that would be if the customer wanted to make a purchase larger than the daily limit placed on the card.

        As it is, the consumer is enticed to use the credit option because of the points rewards, where for all your hard swiping you get some free plastic trinket, airline miles, or other rewards.

        • Some stores only take credit cards above a certain limit. I have seen lots of places that only take credit cards for $10 and up but there is nothing to stop them from making that $100. Isn’t it amazing how urban myths are widely believed. I believed my whole life that discounts for cash were illegal until I started accepting credit cards and read the fine print on the merchant agreement. I was just over 40 at that time. Of course side deals for cash are nearly always available as long as it is not a chain store.

          • I believe you are wrong about that. It currently violates the terms of agreement for retailers to set a minimum limit for a Visa or Master Card transaction.

            __

            • I am not wrong on companies setting minimums. That does not mean they are living within the terms of their agreements though.

          • It does violate the terms, but again, the CC companies will NOT police it.

            They have every incentive to ensure you keep that machine in your store. I know of not a single instance of a CC company taking a machine from a retailer who violated those terms.

            I say make whatever policies you want inside your own store. In all likelihood it will never become an issue with the CC company who relies on misinformation and the herd mentality of convenience to keep their cash cow growing fat.

          • The Marathon on N. Green River Rd. gives a discount if you pay with their credit card, and the Swifty a few hundred feet south of Marathon gives a discount if you pay cash.

        • Brad…

          Not taking credit cards in a retail establishment is really no longer possible IMHO, I have been in retail for well over 35 years and watched the trend, people no longer carry cash and only older people still use checks, everyone else is a debit/credit card sale now a days.

          The only people in our establishment who still pay cash….are older men, and blacks (I mean no racial slur), the younger the customer is the less likely they will pay with cash, there are exceptions I see but they get fewer and fewer every day.

          30 years ago cash was our biggest deposit item daily, 15 years ago it was checks, today I make a deposit weekly simply because the bulk of transactions are done via CC and deposited at the end of the day through sending a batch.

          It’s funny how older folks will ask….”You Still Take Cash?” which is signifying to me that that is how they want to pay, honestly I’ve never went into a brick and mortar store that wouldn’t accept cash but apparently there are some around.

          JMHO

          • I managed a music store, so I’m aware of the trend. I’m sure it would depend highly on what kind of retail you’re in, but in my experience, simply asking people for their PIN numbers by DEFAULT on every CC transaction solves 80%-90% of your CC fee issues.

            Most retail stores now follow this model on the swipe terminals. It asks for your PIN for debit and hides the option for CC.

            Then, because you have the assumed CC markup built into your prices, you actually make wider margins on anything purchased with debit, cash, or check.

            There is only so much you can do to combat the trend, but I see no reason to offer a “cash discount” on transactions of a couple percent to give an incentive. You could even build that discount permanently into your POS software and put signs on the counter indicating the discount.

            You could also do something like a “Cash is King” sale where the customer gets 15%-20% off for a limited time if they pay with cash. Then you’re actually offsetting your lost revenue slightly while simultaneously having a sale AND training your customer to use cash more often.

          • By the way, if I ever walked into a store that didn’t accept cash, I’d walk right back out empty handed. That is definitely something I would not encourage. A cashless society would be even less free than what we have now, which is already tyrannical.

            That said, I’m a big fan of the trend of local currencies and currency co-ops. Some are based in silver, others are based in “hours” or similar cooperative coupons to encourage local business.

          • Put me in the “old man” category, as a person who firmly believes cash is king. I only use a credit card to buy gasoline at the Marina Point fueling station, to save cash by buying closer to the Henderson retail price, and because the fueling station is not manned. And yes, I pay my gasoline charges off every two weeks, so the CC company doesn’t get much interest from me.

            If I were still in retail, I’d find a way around credit and debit purchases somehow. Because selling via CC and debit is a real PITA in more ways than just the service charge.

  5. We need to hire some TALENT to put a Business Model into place. The days of selecting a City Head Executive (aka Mayor)by running a popularity contest must be set aside. It’s more evident everyday that The unqualified have been in charge. We need a merger that would have the County taking over the City and a Qualified City Manager hired to shape up the “business of Evansville’s management”. Pay good money for this Position and the Citizens can expect a system of accountability to lead to Goals and good planning to realize those goals for Our Community. The current Mayor position would just be a “ceremonial” office”. I repeat, a 21st Century Future demands that we hire some TALENT! Time for some BOLD moves!

  6. If corporations are to be considered people when it comes to political donations, they should pay income tax at the same rate as people. A simpler system needs to be devised to eliminate the need for accountants just to figure a “persons” tax. This needs to eliminate all exemptions, figure a budget, establish a % rate , and let’er fly. If corporations don’t want to pay the same rate, they can’t make donations, or have lobbyist.

  7. They are always wanting extensions because they can’t make a deadline if their lives depended on it. I heard all summer that they kept on asking the State Board for two more weeks even though their annual report was due on February 29th!

    Rumplebeancounter is here today and he looks like he slept in the same suit all weekend long. Must be cooking the books again!

    • I’m going to really step out here and wager (you name the $bet) that Russ Lloyd, Jr. spends at least 30% more time in the Civic Center than you do, and actually performs work at least 2 times more hours per week than you. But thanks for all your comic relief, and from all your various incarnations.

  8. More businesses should offer a cash discount equal to the swipe fee, or encourage payment with debit rather than credit, which generates no fee to the credit card company.

    • That’s what I’m saying. If it doesn’t cost me any extra to process my transaction as a credit card I’m going to use my debit card as a Visa rather than as a debit.

      #1 (at least according to Dave Ramsey) you have more fraud protection if you process your transaction as a credit rather than a debit
      #2. My credit union offers rewards only on credit (which I’ve built up a butt-load, but never used) on credit purchases.

      I see now why they want me to use the card as a credit. They get the swipe fee that way.

  9. I know of at least three local companies that do not accept CC. Two are small car repair shops the other is a bar. These are owner owned an operated. You have no fraud protection with a debit transaction. With a CC you are only responsible for the first $50. If someone uses your card as a debit you are responsible for the whole transaction.

  10. So… Raise your hand if you don’t think that businesses have every right to charge whatever the hell they want to charge for you to use their product (credit cards)?

    ‘Cause many of the posters on this site are fairly rabid free-marketeers. Seems like this is just ‘the market’ doing it’s thing. I believe the common refrain from the Ayn Rand crowd is “If you don’t like it, start your own multinational banking conglomerate and operate it the way YOU want to…”

    • I cannot speak for anyone else, but this Ayn Rand free marketer agrees that companies should be free to enter into contracts together and set the terms amongst themselves. Consumers do receive a service benefit from using a CC, without question. Those benefits include convenience, protection from fraud, from robbery, point rewards, etc. So the CC companies are providing a valued service to their customers and merchants freely enter into contracts to accept these cards. There is no force or coercion involved in any stage of the process.

      Nonetheless, there exists an incentive for the merchant to steer his customers away from using a CC. This is also a free market force at work. He should use every lawful means to sway his clientele away from using their CC for purchases.

      I disagree with the initial “Is It True” post today, which seems to advocate some kind of government intervention or takeover of the CC industry to reap the rewards for government. That is antithetical to a free market viewpoint. Credit card companies were not recipients of bailouts, to my knowledge, so the assertion that their business should be stolen from them because their customers don’t like paying for a service they receive is absolutely ludicrous.

    • If only a handful of big banks are in the CC business and all charge the same fee would that qualify as a free market in your mind? We seem to be at a point in history where the “too big to fail” financial institutions and the utilities in most places are in a quasi monopoly position. We are also as consumers insulated from the charges in the medical field by insurance companies. For instance an emergency room visit at a particular hospital can vary from free for the indigent, to a nominal co-pay for the insured with the insurance company paying a substantially reduced amount, to several thousand dollars if you happen to be a self insured person of means. These kinds of markets are neither free nor fair. I think that is why so many of the free market readers of the CCO were upset today.

      The IndyStar article describing how Vectren entered into a contract with a subsidiary that it would according to the experts never have entered into with a 3rd party supplier of coal surely sounds like consumers got hosed by a state granted monopoly. If you have another explanation please feel free to post it. Neither we nor IndyStar made any accusations of criminal activity. It does make one feel sort of used though to know that the costs were passed directly to consumers at prices that were quite favorable to Vectren in the long run. The IndyStar article did indeed make this particular transaction sound slimy or SNEGAL as we call it here at the CCO.

      • “If only a handful of big banks are in the CC business and all charge the same fee would that qualify as a free market in your mind?”

        I don’t think you were addressing me, but I’d like to answer that anyway… Let’s for a moment leave the medical field out of this, because that’s a whole ‘nuther can o’ worms. Let’s focus on CC companies.

        Sure, CC companies are in quasi-monopoly positions in their sector, but love them or hate them, they got to that position through decades of marketing strategies costing untold millions or even billions. Their lucrative deals with banking institutions to issue their cards are debit cards was a stroke of genius. They offer a service consumers want. It’s that simple. I am as much against a fractional reserve banking system and a moral hazard bearing system of bailouts and a “too big to fail” mentality as much as the next guy, but I just don’t see where the CC companies quite fit into that.

        The truth is, if some startup wanted to get into that sector, they could do it. Jut like a hypothetical eBay competitor, they would have to spend billions on marketing up front to break the deadlock, but it could be done. I don’t see where the CC companies are getting special government favors. Correct me if I’m wrong.

      • There is a reason why the sage of Omaha’s Berkshire Hathaway was so heavily invested in credit card companies. The man does his homework.

        Apparently two things are indispensable in today’s world: cell phones and credit cards. Both are fairly recent inventions.

        ___

  11. Cash is King period! If ANYTHING disrupts the Electricity,—say goodbye to any access to your 1’s and 0’s in a computer somewhere,—til it’s restored (whenever). I know I am a Dinosaur, but I’m not ashamed of it! Show me the Money!

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