Wednesday, March 11, 2009

Sometimes a shrug is just a shrug

I've been reading a lot about "going Galt" lately. I was catching up on some reading while waiting through a couple of dentist and orthodontist appointments on Monday, and hit three pieces in one sitting. Plus comments. Lots of discussion board topics popping up out there, too.
  • An editorial by Stephen Moore, on WSJ online, Atlas Shrugged - from fiction to fact in 52 years.
  • Over at Angry Bear, a historical look at "going Galt", with a comparison of GDP growth under the last dozen or so presidents.
  • Articles about conservatives making plans to drop out, to cut the amount of taxes they'll pay, as a way of battling the policies being passed by the democrat run congress and signed by President Obama.
”Do you ever wonder,” wrote Dr. Helen Smith, “after dealing with all that is going on with the economy and the upcoming election, if it’s getting to be time to ‘go John Galt?’”

The themes had stuck with her readers, too. Within days, Smith had collected nearly 200 comments and a steady stream of e-mails from readers who were responding to the possibility of a Democratic victory by brainstorming ways to pull out of the economy. Four months later, Smith — a host of “Ask Dr. Helen” on the right-leaning web site PajamasTV — is collecting stories and suggestions from readers scattered across the country, all of them using the “Atlas Shrugged” analogy as a rallying cry against President Barack Obama’s economic policies.

Smith was a little ahead of the curve of what has become an incredibly popular meme. Across the broad conservative movement, from members of Congress to activists to economists, Rand’s final, allegorical novel is being looked at with fresh eyes. According to the Atlas Society, a think tank that promotes and analyzes Rand’s work, sales of “Atlas Shrugged” have tripled since the presidential election. One congressman says that Rand wrote a “rulebook” that can guide conservatives through the age of Obama; another calls Obama’s policies something right out of the mind of Rand. One economist says that Rand’s fantasies have become reality. Smith is one of many activists citing Rand to explain their decisions to sell their stocks, or to explain why the president’s “demonization” of run-amok CEOs is aggravating the economic slowdown. The popular meme is giving critics of the president’s policies a way to explain why, they believe, it’s doomed to fail — because Rand predicted all of this.

“Just this weekend,” said Rep. John Campbell (R-Calif.) on Wednesday in an interview with TWI, “I had a guy come up to me in my district and tell me that he was losing his interest in the business he’d run for years because the president wanted to punish him for his success. I think people are reading ‘Atlas Shrugged’ again because they’re trying to understand what happens to people of accomplishment, and people of talent and energy, when a government turns against them. That’s what appears to be happening right now.”

The plot of Rand’s novel is simple, despite its length — 1,088 pages in the current paperback edition. The United States is governed by bureaucrats, “looters” and “moochers,” who penalize and demonize creative people. The country is in decline because creative people are disappearing — they have followed the innovative John Galt to a mountain enclave, “Galt’s Gulch,” where they watch society crumble. Creativity has gone on strike (the working title of the novel was “The Strike”), and the engine of capitalism cannot run without it.


For Dr. Smith’s readers, like their counterparts writing in to libertarian blogs and protesting Obama at “tea parties, ” the novel is most useful for the concept of “going Galt.” “I do some consulting on the side and the taxation on that income is unbelievable,”wrote one reader to Michelle Malkin. “So, to heck with this. I’m ‘going Galt’ on my consulting.” “I’m considering moving to a small family farm in a foreign country,” wrote a reader to Smith, “and looking into the practical side of the issue right now. It will take a year or two of preparation, but might be feasible and even comfortable.”

Smith, who’s still mulling over ways that she can “go Galt,” sees a possibility for a moral stand. During the Iraq War, she read about a painter who’d painted less, reducing his income, in order to dodge taxes and thereby make sure he didn’t fund the war. “I’d go John Galt just to not pay for programs I don’t believe in,” said Smith. “If we’re opposed to socialistic concepts — if we know they don’t work — why should we pay to support them?”

That's just what I read in one morning, but there's a whole lot more. I know it isn't something new. Radio talk show hosts have been talking about it for years. It's not always about quitting and walking away, either. Back in December, Neal Boortz proposed the top income earners cut spending to the level of the middle class, to show the impact of their money in our system. (I remember this, because I thought this made more sense than the threat to sit at home & do nothing - which was too much like the far left democrats who annouce plans to leave the country if republicans are elected.)

Why does shrugging have to be a battle strategy? I'm thinking about it, and not as part of lodging a protest.

It's tax season, and I'm looking at the numbers for my work as a freelancer. My total invoices have gone up, but the money we get to keep has dropped. I figured it was a good time to sit down with all the tools available online to help answer "Should I keep working?" for the modern working mom. They weren't that helpful for my situation, so I ended up using the tax calculators from the IRS and TurboTax websites.

Just for fun, I put myself in the mindset of being stuck in a conversation between my ultra right mother and far left brother-in-law or uncle. (Okay, so it wasn't just for fun. I know I'll have to tell my mom this has nothing to do with any protest/movement, as well as being on the spot for my "real" reasons.)

Whether or not I bill another hour this year, our tax rate does not change. As long as that is the case, a liberal does not see it as an increase in taxes. It does not matter that the additional income wipes out eligibility for deductions and tax credits, the underlying tax bracket remains unchanged.

Our federal income tax bill for 2009 goes up by a little over $5,000 with my income. Less than $3,000 of that is the income tax. The remainder of the increase comes from the phase out of the tax credits for dependents, along with a reduction in the allowable deductions for a few other items. But, to the folks in charge, that's not a tax increase. Technically, they're correct.

The folks "fighting for the middle class" are doing exactly what they've said. They're keeping us in the same tax bracket. They may raise the cap on social security, meaning there's more deducted from the paycheck over the year. But, social security is not income tax. The income phase out for child credits, or the amount eligible for the IRA, childcare and mortgage deductions may be lowered, but it's not a tax increase, it's closing a deduction / loop hole.

Add to the $5,000 in increased federal taxes:
Self employment taxes - $2,000 (Which I wouldn't have if not working.)
State taxes - $1,200 (Over the amount due without me)

There are extra expenses which go into me working, beyond the deductible business expenses. There's afterschool childcare, at about $4,000 per year. Summer/Day camp, $3,600 per year. And the weekly maid, another $4,000 per year. If I wasn't working, there'd still be summer enrichment activities; but it would be a few weeks of half day tennis, swimming or art, at about half the cost. And, I might still keep maid service, but it would be every other week. (Note that I'd be cutting my housekeeper's income by $2-4,000, and reducing payments to afterschool programs and camps by at least as much. That's a different rant though)

There's also the extra time and effort. I juggle schedules and care for five people - work, school, meals, laundry, music lessons, sports/activities, doctors, dentists, etc.... it would be much simpler if not bound to print deadlines.

I work part time. I do it because I enjoy it. Finishing a project gives me a sense of satisfaction. That is the second part of the argument made by those who poo-poo the idea of middle class workers giving extra effort the shrug. Yes, there is more than just the monetary reward for working. But the money does make a difference. When me having a job nets a profit, even after all those things mentioned above, it adds to my incentive to work.

For me, the decision whether or not to "go Galt" is not part of a battle plan. I'm just looking for the answer to a simple question. As the "not-an-income-tax-increase" reduces the amount of money I get to keep at the end of the day, the number of times I ask myself the question goes up.

"Is it worth it?"

It's only a matter of time before the answer becomes no.

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