TAXMAGEDDON, PART 1

I think it's fair to say that most people are a bit overwhelmed, and certainly skeptical of the PATIENT PROTECTION AND AFFORDABILTY ACT OF 2010, also known as OBAMACARE. It's a whopping 2700 pages and includes much legalese. One main goal I had for myself over the last few years was to ACTUALLY read the act. I don't know why, really; most in Congress haven't read it. There's Nancy Pelosi's famous words "we need to pass the bill to see what's in it" comment that I believe summed up why I have such faith in government. The idea of giving a blank check to the government to manage my health literally makes me cringe. Don't get me wrong- people should do what the can to be stewards of their own health by methods like exercise, eating right, etc. I don't however, believe we need the food police to monitor how large our soft drinks should be, ban certain snacks, and the list goes on. This is NOT the government's job- its mine. I will raise my own children and teach them to make good choices. Or if i want to make myself obese by eating twinkies all day and night, it's again my decision. As far as I'm concerned, the government has failed miserably at nearly everything they manage. May I list successes such as the US Postal Service, Fannie Mae, Freddie Mac, Social Security,and so forth. I use the word success very tongue-in-cheek. Now we want to make them in charge of life and death decisions??!! I digress, I really just wanted to give an overview of WHY OBAMACARE is a bad idea from a purely financial perspective. I looked up, read through (zzzzzzzz zzzzzz) the bill as best as I could. I was able to stop taking Ambien when I started getting into the bill since it is so utterly boring and sleep was only a nod away most of the time. Seriously, the bill is a real game-changer when it comes to YOUR financial contribution. 1. Personal income taxes will rise from 35 to 39.6% for top wage earners (and this includes MOST small businesses) and the lowest rate will rise from 10 to 15%. 2. Itemized deductions will go away, and personal exemptions will be phased out. 3. Marriage penalty will kick in as there will be a narrower tax bracket for couples. 4. Child care tax credit will drop from $1000 per child to $500. 5. The middle class death tax returns Jan 1, 2013. The rare is currently 35% up to a 5 million dollar estate. This will go up to 55% on estates over 1 million. 6. You will be penalized if you save/invest. Capital gains goes from 15 to 23.8%. The top dividend tax will rise from 15 to 43.4%. ( a double whammy because scheduled rates hikes coupled with the OBAMACARE investment surtax.) Just a little food for thought. I will share next time the alarming higher taxes that have ALREADY kicked in that you may or may not be aware of, then I will look at Wave 2 of the taxes that will start January 1, 2013. While I'm not a rocket scientist or economist, I am smart enough to figure out this isn't good for a country with a struggling economy and high unemployment. My two favorite Obamaisms about this mandate: "I absolutely reject the mandate is a tax." "Nobody who makes under $200k a year will see their taxes go up as long as I am president!" Remember, your voice DOES matter! Leslie

Good new on UNEMPLOYMENT?? HARDLY!

I have to admit, when I first heard this morning that the unemployment rate had plummeted to the lowest rate in 4 years, I had a momentary rush of elation. While all of the signs don't really point to this sort of recovery, I was heartened to think just maybe, things were looking up, even if it was derived from only one week of data. Then, like I do on everything, I did some investigating. I have many news sources I follow and check. From both sides. Left and right. God gave me the intelligence to decipher facts, exaggerations, and out-and-out lies and misinformation.

Going through data, I was struck by the Associated Press story. I've attached the story for you to decide. Quite frankly, I find the AP very left leaning, but I also subscribe to the belief that you can usually get to the truth if you pull out the actual data. Facts. Indisputable numbers. Then, use your own common sense and powers of reasoning.

Here they are:

The Labor Department based numbers this week on seasonal adjustments, directly based from the auto industry. This past Spring, both Ford and Chrysler announced they would not be laying off workers for 2 weeks this Summer,as they have done in previous years. Taking this into account, the Labor Department INCLUDED this in the figures for determining the unemployment rate. In other words, people that have a job, continue to work and didn't file unemployment based on PREVIOUS years were counted as workers who did not actively seek out unemployment benefits this week! Crazy, right?

If that is true, then let's take out those people and figure based on ACTUAL CLAIMS versus what we anticipated. So, take out seasonal adjustments, and we had more than 70,000 NEW claims. ACTUAL CLAIMS. RAW DATA. FACTS. Hardly a reason to do the happy dance. Reality is 42 months and counting of over 8% unemployment, and much, much higher in many minorities including the youth and African American segment of our population. Totally unacceptable.

But, don't take my word for it. Do your own investigation. Come to your own conclusions. It's your duty as an American.

Leslie Millwee

Seasonal adjustments to economic data can mislead

By CHRISTOPHER S. RUGABER, AP Economics Writer – 2 hours ago

WASHINGTON (AP) — At first, it seemed like cause to cheer: The number of people who sought unemployment benefits last week tumbled to a four-year low, the Labor Department said Thursday.

Did that mean the job market is surging back to health? Is the unemployment rate about to sink?

Not necessarily. Turns out, last week's drop in unemployment applications reflected mainly a strengthening auto industry — and the Labor Department's imperfect means of calculating unemployment applications. Economists who analyze the job market cautioned against reading too much into Thursday's data.

The problem involves the department's effort to account for seasonal factors in its calculations. It adjusts the data to factor in such annual trends as holiday hiring by retailers and summer layoffs by automakers. Without such adjustments, these seasonal events would distort the health of the job market.

Early in the year, the department makes its seasonal adjustments for each month. To do so, it crunches historical data to estimate how temporary trends will likely affect the coming year's data.

It doesn't always work as planned.

Often, an unexpected event will throw off the seasonal adjustments. And economists and investors who try to interpret what the data signify are left scratching their heads.

This spring, for example, auto companies decided to close fewer factories than they normally do in summer. They kept those plants open to keep up with rising demand for cars. Normally, a summer lull in production prompts many temporary plant closings and layoffs.

Ford Motor Co. said in May that it would reduce its usual two-week closing to only one week. And Chrysler announced in spring that it was canceling its normal two-week shutdowns at three factories.

The Labor Department's seasonal adjustments had anticipated more temporary auto layoffs than occurred. As a result, the department reported Thursday that applications for unemployment benefits plunged 26,000 last week to a seasonally adjusted 350,000. (Excluding the seasonal adjustment, applications rose 70,000.)

The distortion of the seasonal adjustments is likely to ease by early next month. But it means that one of the most closely watched barometers of the job market may not provide an accurate reading for perhaps three more weeks.

Some economists complain that the Labor Department's seasonal adjustments are always outdated by the time the summer auto-plant shutdowns are announced.

"I find this frustrating every July when we get to the auto shutdowns," said Carl Riccadonna, an economist at Deutsche Bank. "In a soft patch, the most important thing to watch is the job market, and the best labor market indicator is jobless claims, and every July we basically have to throw them out."

The Labor Department did not respond to requests for comment.

The department's Employment and Training Administration is in charge of the seasonal adjustments to the data on unemployment applications. It decides in January or February how to adjust each week's figures. And in March, it publishes its seasonal calculations for the year ahead.

Other Labor Department agencies calculate their seasonal adjustments each month, rather than far in advance. An example is the department's Bureau of Labor Statistics, which issues the monthly employment report. But none of the agencies try to predict future actions, such as the likelihood that auto companies will close fewer factors in summer.

To do so, the department would have to estimate how many workers would be affected at the auto companies, their suppliers — "down to the company that's making sandwiches in the cafeteria," Riccadonna said. "Logistically, it's just too complicated."

Most economists say the unemployment benefits applications report won't provide an accurate picture of the job market until at least early August.

"The drop in claims would be nice if it were true," Michael Feroli, an economist at JPMorgan Chase, wrote in a note to clients.

Copyright © 2012 The Associated Press. All rights reserved.

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