The Biggest Unaddressed Problem In America

I was a little saddened by the State of the Union address the other night and the Republican response to it.  Something was missing.  Of course, I wasn’t surprised.  Not really.  It’s been missing in our political conversation for, I don’t know . . . 20 years?

Our tax laws have been twisted to the point that major corporations making billions in profit pay little of no taxes while people struggling to make ends meet every month can pay 20-30% of their income.  Ready to become angered?  Here’s a list of top American Corporations with an Effective Tax Rate of 0% for the 12 months ending in October 2013 (ranked by market value in billions) :

  • Verizon: $146.4
  • MetLife: $53.9
  • Eaton: $32.7
  • Regeneron Pharmaceuticals: $29.6
  • Public Storage: $29.5
  • Ventas: $19.3
  • Avalonbay Communities: $17.4
  • Agilent Technologies: $16.9
  • Vornado Realty Trust: $16.8
  • Boston Properites: $16.7
  • Seagate Technology: $15.9
  • Broadcom: $15.7
  • News Corp.: $9.8
  • Lam Research: $8.8
  • Kimco Realty: $8.6
  • Waters: $8.5
  • Macerich: $8.3
  • Plum Creek Timber: $8.4
  • PulteGroup: $6.4
  • Apartment Investment & Management: $4.3
  • Perkin Elmer: $4.2

(source:  USA TODAY)

Gut wrenching, right?  How do they do it?  How does MetLife manage to have a 0% tax rate while you and I pay, say 28%?  I mean, peak Corporate Tax Rates are about 38%, right?  How did these guys manage to pay . . nothing?

Offshore transfer payments. The corporation sets up a subsidiary in a tax-friendly country to make components for its products. They then buy the components from themselves at well above cost.  The subsidiary makes a big, largely untaxed profit while the US company shows a loss. 

Harvesting losses.  Essentially saving deductions from money losing years to offset earnings in good years.  J.C. Penney, Hewlett-Packard and E-Trade make money today, but they offset those profits with losses from years gone by to arrive at a negative  effective tax rate (which means, of course, that we’re paying them now).

Accounting rules.  I’ve tried to understand them, but really:  corporate tax rules are so bizarre that they are beyond me.  Some companies speed up depreciation when times are good.  Others load up their transient executives with rich severance packages that cut profit.   Sometimes, as in the case of Real Estate Investment Trusts, profits are passed on to shareholders who then pay taxes on them (or find ways not to). Verizon had an effective tax rate of negative 4.8% during the period in question largely through its use of creative (but legal) accounting.

I saw a video the other day from the Bill Moyers group that addressed this kind of inequity.  Though almost a year old, the video is chilling.  Highlights for me included:

  • Microsoft avoiding $4.5 Billion in taxes by shifting money to off-shore accounts.
  • CITI having 20 subsidiaries in off-shore tax havens.
  • Pfizer reporting NO taxable income from US Operations.

I see this stuff and I can’t help but wonder about the credibility of our elected officials.  I’d love to say this is a Republican thing, that the party famous for protecting business is responsible for this,  but I don’t hear President Obama talking about it.  I don’t see Dianne Feinstein rattling her pearls in outrage.  Nancy Pelosi is not championing tax code change. Washington is nearly silent on the redistribution of wealth that is going on every year when we pay our taxes (and they don’t).  What do you think?  Is our Congress bought and paid for?  Should politicians be forced to wear jump suits ala NASCAR drivers so we can tell who their corporate sponsors are?

That’s pretty much it:  my rant for early 2014.  But I do want to touch on one more way in which the big guys avoid paying their fair share.  They become non-profits.  Take the National Football League.  Yep.  It’s a non-profit. Pays no taxes.  Oh, somehow they have enough money to pay their Commissioner $29.5 million a year, but they still are a non-profit and pay no taxes.  That kind of nonsense is all over the place.  Take my own local YMCA – which I love.  It’s a non-profit.  I get calls several times a year about donating more than my already steep monthly dues and they have this whole estate planning arm so that I can leave them all my cash when I die.  Yet, they still manage to pay their CEO – this is the local CEO of my little group of San Diego YMCAs – they pay him more than $560,000 a year (a fact that will be at the forefront of my thinking next time a donation call comes in).

April 15 is just a handful of weeks away.  I’m starting to organize my shoe box of receipts.  I’ll be paying taxes as I have ever year since 1965.  I’m sure you’ll be doing the same.  Isn’t it time we started demanding that GE – who (yes, who, not which:  Corporations have ‘person-hood’ in the US), who had $108 Billion in profits stashed in off-shore subsidiaries in 2012 and who is famous for paying little or no tax – Isn’t it time we started demanding  GE pay its fair share too?



A Little Fitness Success

It’s a new year and all of those resolutions are manifesting themselves all over the place.  As is typical in January, I’m seeing a lot of new faces at the gym . . . and some old familiar ones I haven’t seen in awhile, too.  Usually the population settles back to the same group of hard core regulars by about March.  It’s true that a few newbies will actually continue, but each year it’s just a few.

I’ve been working at getting fit for ten years and each year I make progress:  I get fitter.  I’m far healthier and in much better shape today than I was in 2004.  In recognition of all the good intentions out there, I thought I’d share a few of the lessons I’ve learned about getting fit.

  • Stretching and flexibility are the foundation for everything you want to accomplish at the gym.  If you are stiff and sore, if your range of motion is restricted, jumping into heavy cardio or resistance training will likely result in injury.  I know you want to lose 50 pounds by June, but start by spending a month doing nothing but stretching.  Go to a yoga class 3-4 times a week.  Warm your muscles up and get your joints functioning again.  Then take on other activities one at a time.
  • Once your stretching and flexibility program is established, mix in the other two elements of your exercise program:  cardio and resistance/weight training. To become fit will require work in all three areas, but start and establish them one by one.
  • Don’t go crazy with the diet.  Instead of giving up everything you love, make a couple of small changes, or change just one meal a day.  I changed breakfast.  Most days it is the same thing:  a fresh fruit smoothie (a VitaMix machine is a wonderful investment!) and a bowl of oatmeal.  Six months after I started, my cholesterol was off the scale . . . in the right direction.  Small changes that will bear big results are things like quitting soda (and the diet stuff is at least as bad as the regular; have you ever noticed that most people drinking diet soda are overweight?), increasing your consumption of fresh vegetables, eliminating something white from your diet (potatoes, white rice, white bread, crackers, something like that).
  • Make water your best friend.  There’s a reason why almost every diet and fitness book advocates big increases in water drinking:  it works!  Years ago I did both Jenny Craig and Nutrasystems and I am convinced that the rapid weight loss that occurs at the beginning of those programs is primarily from increased water consumption!  Plan to pee your pounds away.
  • When it’s time for cardio and resistance training, consider NOT going it alone.  It is a rare person who can start a fitness routine all by themselves and find the discipline to make it a habit.  A workout buddy is a great thing but so are classes.  For cardio, try indoor cycling (spinning), zumba, or swimming classes or join a running group.   There are many group options for resistance/strength training:  Boot Camp, TRX, Body Pump and so on.
  • When you find something that works and that you enjoy, stick with it!  Today, I have a yoga/Stretch class twice a week, an hour of spinning (indoor cycling) once a week, a Muscle Pump class twice a week (rapid fire weight lifting to music) coupled with my own mini-cardio and weight training sessions.
  • While I love a good hour long spinning class – and used to do 3 or more of them a week – there is a school of thought that that kind of intense endurance-cardio exercise is counter-productive to weight loss.  The theory is that when faced with frequent long cardio sessions, your body actually goes into fat and calorie preservation mode.  I’ve started experimenting with a kind of ‘burst’ cardio training and it seems to be working – meaning that I’m pinching less flab around my mid-section.  I use a rowing machine, but you could do this on a treadmill, orbital trainer, in a pool, on a bike or any other piece of cardio equipment.  I row as hard as I can for 30 seconds; then I row at a more casual pace for a minute.  I repeat the combination four times – and front load it with 30 seconds of casual rowing just to set up – so it takes 6 1/2 minutes to complete.  I do it just three times a week, usually right after yoga
  • I kept one spinning class in my regimen because I can’t imagine going through my week without it!  Ray Torres puts together the most fun, musically interesting, physically challenging cycling class I’ve ever attended.  At the end of the hour everyone in the class is wet from head to toe and smiling.  If you are in San Diego and can get to the Downtown YMCA by 5:30 on Tuesdays, check it out.  It will do as much for your positive attitude as it will for your fitness program.
  • I’ve talked about 3 components of a fitness exercise program, stretching, cardio and resistance training, but I’m starting to believe there is another:  balance.  Balance is something you can work on, something you can improve over time.  If you get into a yoga class you will likely work on balance a bit with things like Tree Pose.  But I’ve had great results working on it on my own with a Bosu ball.  That’s the half ball with the hard plastic base.  Try turning it upside down (hard side up) near a wall (in case you get into trouble)  and then just standing on it.  Pay attention to how your body feels as it adjusts to keep you from falling over.  Lots of muscles should be firing in your low back – which is a good thing, especially if you have some weakness there.  Then try doing and holding a squat.  You’ll feel much more work in your thighs.  When you are comfortable with those two moves, try standing on one foot, then the other.  Maybe you’ll even be able to do a Tree Pose on the ball.

That’s it:  my collection of tips for anyone beginning a fitness program.  I would emphasize the one-step-at-a-time theme that runs through this list.  Getting fit is not something you should try to accomplish in six months.   You can look and feel better in six months; in fact, you can look and feel better in one month.  But establishing fitness as an important part of your lifestyle will probably take a little more time.


Google+ and Distance Learning

I have been home from Oaxaca for a month now but I continue to be in Spanish Classes.  Every day, I go online and connect with one of my teachers at the Instituto Cultural Oaxaca in a Google+ Hangout.  She can see and hear me; I can see and hear her.  She can use her whiteboard to illustrate her points and I can use mine to practice and take notes.  She can use photos when I hit vocabulary roadblocks because, of course, English is forbidden!  We are together for an hour five days a week and I spend another hour, more-or-less, in homework and preparation.

I am very enthusiastic about this for several reasons:

  • The classes are very affordable!  I’ve priced online Spanish programs, and these personal, private lessons are a fraction of the cost.
  • I can attend class wherever there is a wi-fi connection.
  • The platform for making this happen – Google+ – is free and since we use its built-in VOIP for audio, there are no long distance charges.
  • When I need to see something spelled out, Gaby can share her whiteboard and demonstrate for me.
  • Anytime I need to share something – a website, a YouTube video, one of my documents – I just click a button and we both can see it.
  • It is a private lesson.  We can go as quickly or as slowly as I want and we can change directions at any time.

I remember being in Educational Technology classes at SDSU  in the 90’s and learning about this kind of technology.  More a dream than reality, it was very expensive, took tons of setup and technical expertise and often produced rotten results because compression capabilities and bandwidth restricted what could be done.  I’ve been to conferences more recently where slick new platforms were presented, always at a steep price.  Now, bandwidth has caught up with technology and Mother Google, in her own snooping way, has made it available to us for free!

I see so many applications for this technology:  online meetings with several people, coaching, collaborating, even simple video calling.  A Florida friend, Tamara Patzer is using it to teach people how to create and self-publish their books.  She’s also using it as a platform for interviewing business leaders.  I joined a group that matches people who speak one language and would like to master another, and have had a couple of meetings with Spanish speakers who want to learn English where we’ve helped each other.

Google+  works on a PC, a Mac, on my Android phone and tablet and on my Chromebook.  If you have a gmail address, you already have Google+.  Next time you sign into gmail. look for the +before your name in the upper right side of your screen.  It will lead you to the app.  And for a quick and easy start-up guide, go HERE.   Once into Google+, you can start Hangouts with any of your contacts or create one around a theme, open to anyone.

While Facebook has fine video chat capabilities, it’s nothing like Google+ where you can see, talk, share things and invite others to the conversation.  With Hangouts, sharing a learning experience at a distance got a whole lot easier!