Truth About Tax Cuts on Rich

Do rich people pay less taxes than poor people?
Financial freedom comes from hard work and persistence. Getting rich is possible here in America because we have free competition and many opportunites. Anyone can make one's dream come true if he or she has the right idea or product unlike other countries.

Recently, being rich has been demonized by many people particularly by democrates. We hear over and over the misconception about tax cuts that are only for riches. Even though, it's far from the truth but it works for democrates in stirring up the class warfare.

Government welfare program doesn't do any good to anyone.
Barack Obama has been running based on his entitlement programs. He advocates a variety of welfare programs which are not realistic and will bring about socialistic society. The United States of America is not found on that philosophy. We have seen most governement controled programs have failed one after another over the years.

His entitlement philosophy will dominate on his policy and income redistribution will hurt small businesses and entraprenuers who work hard to build their wealth and financial freedom by taxing tham arms and legs for his welfare programs.

Truth about tax cuts
Pass the Advil on taxes
by Larry Elder

The Associated Press ran a rare article explaining exactly who pays the federal income taxes. They state that the top 5 percent of income earners pay more than 55 percent of the total federal income taxes. (To be eligible for the top 5 percent, one must have an annual income above $120,846.) For people who believe the "rich" hire fancy accountants and lawyers to avoid paying taxes, this news comes as quite a shock.

Three years ago, Investor's Business Daily ran a similar article about the top 10 percent of taxpayers - those earning above $74,981 - who received 41.6 percent of the nation's income and paid 62.4 percent of the taxes, thus paying a tax share 50 percent greater than their income share.

Do people know the top 10 percent pay more than 62 percent of the federal income taxes? Three years ago, I put this question to my radio listeners.

Here's what they said: "The top wage earners, what they pay in taxes … is only about 3 percent." "I'm gonna say the top 10 percent pay between 2 and 4 percent." "I would say 2 to 3 percent." "I would say 1 percent."

The Associated Press also noted that the top 1 percent of wage earners pay over one-third of the federal income taxes, while taking in 19 percent of the nation's income. To qualify for the 1 percent, one must make a minimum of $293,415. What do people generally think qualifies one for admission into the top 1 percent? Again, three years ago, I posed the question to my radio listeners:

How much must one make in order to qualify for "the rich," the top 1 percent?

Here's what they said: "Probably $1-$2 million." "At a minimum, I would say $800,000." "$100 million, around there." "Let's just give it $25 million." "Somewhere in the neighborhood of $400-500 million a year."

Wrong. Really wrong.

Why the ignorance?

In his book, Bias: A CBS Insider Exposes How the Media Distort the News, Bernard Goldberg explains that mainstream media find certain issues of interest while ignoring others. When, for example, negative studies on day care appeared, Goldberg wrote that these studies made uncomfortable the male and female journalists who placed their kids in day care centers.

"On network TV," wrote Goldberg, "given the prevailing sensibilities that reign there, voices that argue for policies that would make it easier for moms to drop their kids off at day care are considered thoughtful, compassionate and reasonable. But voices that argue for less day care, because day care is bad for kids - frankly, I don't think the media elites even know such voices exist."

Similarly, many members of the mainstream media seem indifferent to or actually approve of the disproportionate percentage of federal income taxes paid by "the rich." Many go into journalism to right the wrongs, believing the rich get richer, the poor get poorer, and that the rich "fail to pay their fair share of taxes."

Perhaps this explains why print and television newspeople rarely refer to taxpayer or taxpayer dollars and instead use terms like "federal expenditures," "federal dollars," "federal outlays," "government aid," "government investments" or "federal grant." It is, of course, our money, but the lexicon used by mainstream media suggests otherwise.

Congressman Brad Sherman, D-Calif., in a recent mailer to his constituents, asks the following question:

I strongly believe that the federal government should spend more money on which of these? (Check those that you feel strongly about):

a. Federal aid to public schools
b. Provide a pharmaceutical benefit under Medicare
c. Environmental protection
d. National defense
e. Tax cuts for middle-class families
f. Homeland security
g. Transportation
h. Consumer protection
i. Don't spend - pay off the national debt

Note e: "Tax cuts for middle-class families"! How does a middle-class tax cut become something "government should spend more money on"? Only on the Potomac does a return of taxpayers' money become a federal spending program.
This brings us to Sen. Hillary Rodham Clinton. The National Taxpayers Union said that Clinton voted for more spending bills than did any of her 99 other colleagues. In fact, according to the NTU, Clinton set a record for the lowest score (voting for more spending measures) than any other freshman senator in the some 25 years they've tracked this. The Los Angeles Times once described House Majority Leader Dick Armey, based on his voting record, as a "hardline conservative." Will the media, based on Clinton's voting record, call her a "hardline liberal," or an "extremist" or "leftist"? Don't hold your breath.

Quite simply, we are overtaxed Americans. According to the Tax Foundation, Tax Freedom Day is now April 27, 2002. But don't expect much relief soon. The American Enterprise Institute's Kevin Hassett chastises both parties for their spending addictions. "It is really obvious," said Hassett, "that when there is money around, they will spend it, even if they are Republicans."

JWR contributor Larry Elder is the author of the newly released, The Ten Things You Can't Say in America. (Proceeds from sales help fund JWR) Let him know what you think of his column by clicking here.

How to Get Rich with Day Trading?

We often hear that rich gets richer and poor gets poorer. It's very true particularly now. Warren Buffett, the richest man in the world said that the financial crisis were "far from over." We hear more pessimistic outlook for the future from media and financial advisors. However, Warren Buffett doesn't need any more money no matter what happens with our economy, he still stays rich and enjoys being rich.

How to get rich with day trading?
The question is, how an average joe with a little bit of money can invest profitably when uncertainty continues to overwhelm the market? According to Forbes, the Dow, the Nasdaq and the S&P are all down more than 14% so far. Even foreign market doesn't look great. The EAFE stock market index is down 16%, the SPDR S&P World Index is down 13% and even Japanese market is down over the U.S. credit crisis.

However, there is a better way to approach the market.

Exchange Traded Funds or ETFs
According to Carl Delfeld, the managing director of the global asset management firm, ETFs are cheaper, more liquid and more tax efficient than mutual funds. There are hundreds of them and trading them is a snap with any discount broker.

Carl believes in taking a global perspective and using ETFs as a core investment tool. He has recently been investing in beaten down overseas markets that he says are just beginning to turn around. Markets such as Hong Kong, Brazil, Japan and even Ireland, which is currently one of the most inexpensive markets in the world.

There are many opportunities in other countries of the world. Carl likes France (EWQ) which is starting to go through its own "Reagan Revolution" under President Sarkozy. In addition, he says the Netherlands (EWN) is dirt cheap and is trading at just six times earnings due to its heavy exposure to the financial sector. Here in the U.S., there are sectors where Carl says ETFs have huge opportunities, such as in Healthcare and Financials.

7 ways you can profit from ETFs
1. ETFs are a tax-advantaged investment: you are not tagged with the big capital gains distributions when your fellow investors sell shares, because the underlying stocks in the ETF are traded, not sold. You don’t pay taxes until you sell your shares.

2. Annual management fees and expenses are extremely modest compared to most mutual funds. There are no 12-b-1 fees, sales loads, or exit charges. And no minimum investment required.

3. You can trade ETFs with stop-loss orders, sharply limiting your downside risk. To make sure you don’t pay more than you want for shares, you can use limit orders, just as you would for a stock.

4. You can purchase ETFs on margin, enabling you to leverage your investment for huge gains.

5. There are almost 800 ETFs trading on U.S. exchanges and 1,200 globally, enabling you to trade virtually any index in the world, from the NASDAQ and the Malaysian stock market, to microcap and Chinese stocks.

6. ETFs can be sold short, even during a market rout, to profit from falling stocks. Unlike individual stocks, ETFs are exempt from the uptick rule.

7. Unlike mutual funds, which trade at end-of-day prices, ETFs can be bought and sold instantaneously on major stock exchanges all day long, giving you tighter control of your entry and exit prices.

Here is S&P/Citigroup Data, 7/1/2008.

• Brazil: Price/cash flow 6.2%, Price/earnings 16.3%, ROE 14.4%
• India: Price/cash flow 11.94%, Price/earnings 16.2%, ROE 21.1%
• China: Price/cash flow 10.4%, Price/earnings 17.0%, ROE 16.1%
• Russia: Price/cash flow 13.0%, Price/earnings 14.0%, ROE 17.3%
• World: Price/cash flow 8.1%, Price/earnings 13.6%, ROE 14.7%

Among Carl's 2007 winning picks:
iShares MSCI Brazil (EWZ), up 75%
Indonesia Fund (IF), up 51%
iShares MSCI Hong Kong (EWH), up 37%
iShares MSCI Germany (EWG), up 33%

Here is Carl's advice.

It's to be careful! You can't just invest blinldly-even in thriving markets. You have to do a rigorous valuation of these countries, know ehich are best positioned, understand where the momentum is and make sure you buy at the best entry point.

It's also important to know the politics of the countries you invest in and where the big global fund managers are placingtheir bets. What will be the catalyst to drive an ETF and what are the prospects for a country's currency?

Don't make the mistake of turning to actively managed mutual funds either. They charge high fees because they spend an enormous amount of money on stock research.

By comparison, ETFs, like index mutual funds, can keep costs low because they typically track market benchmarks.

Here are his books on global ETF investing:

From Homeless Drug User to Millionaire

As a teen, Bob Williamson 'got all hung up in drugs and all that nonsense.' Decades of hard work later, his company has 173 employees and sales of $26 million a year.

When Bob Williamson left home at 17, he lived on the streets and did time for heroin possession. But he pulled himself together, got a job and eventually began his own business as a manufacturer of art supplies.

In 1993, Williamson started a company to develop software for cafeterias. Horizon Software International today supplies more than 15,000 schools, colleges and universities, and has annual sales of $26 million. Meal payments are made online, and parents can monitor what their kids eat at school.

Horizon, based in Atlanta, also sells to hospitals, retirement communities, big corporations and, soon, U.S. military bases around the globe -- "wherever," Williamson says, "large numbers of people need to be fed."

Williamson, 61, recently told his story to Inc.com's Andrew Park:

My childhood was tough. My father was in the Air Force. We moved around a lot. When I graduated from high school, I got all hung up in drugs and all that nonsense. I slept on the side of the road; I stayed in missions; I didn't have anything to eat. I fought a lot. I was in jail lots and lots of times.

I had been told all my life that I was worthless and would never amount to anything. I hitchhiked from New Orleans to Atlanta. I had only one change of clothes, and I didn't know anybody. My first job was cleaning mortar off bricks with a hatchet for $15 a day. Not long after that, I had a head-on collision and very nearly was killed. While I was in the hospital I read the Bible and became a Christian. After that I met my wife. We've been married 37 years.

I went to work for a paint company called Glidden. I had the worst job in the company: I was in charge of the label room, a caged-in area in the basement. But I was promoted eight times in two years to the point where I was managing special projects. I knew a lot of the chemists and taught myself about the chemistry of paint. In my spare time, I was a wildlife artist. There wasn't a good airbrush paint on the market. Everybody was using automotive lacquers. I spent about two years developing one for myself. I'd go to an art show and take my entire inventory. People lined up out of the door. Within about six months, I had distributors and customers all over the country.

I started Wildlife Artist Supply in 1977. I went from my basement to my garage to a little building. Then I went to a 50,000-square-foot warehouse. And I didn't just sell paint. We had a thick catalog, 6,000 or 7,000 items for artists, primarily mail order. It was everything you could imagine: brushes, compressors, clay. I started a magazine to teach people how to do wildlife art. We also founded the World Taxidermy Championships.

In 1988, I made a deal to take the company public. We were going to develop my business into a company like L.L. Bean. My customers were hard-core sportsmen. We were selling wildlife art supplies, so we could have just as easily sold them hunting and fishing stuff.

The next day, my controller turned in his notice. And then a whole bunch of other people quit. I discovered that all of our financial records had been destroyed, and we were $1 million in debt and $278,000 overdrawn at the bank, and my inventory was decimated. It was like a nightmare. I spent two years trying to make him pay. To this day, there's never been anybody but a Williamson reconciling our bank accounts.

There are only so many artists in the world. I wanted to get into something that didn't have any limits. My sons were very gifted in computer technology, and they wanted to start a software company. I had a couple of programmers who worked for me. We had written all this software. The best was our warehouse and distribution package. I had been using it for years in my own stuff. We decided to try selling it. I thought it would be like the paint: I'd just go out there and introduce myself, distributors would pick it up, and I'd be home free. Well, I had a rude awakening. When those big boys are in there, they just stomp you. I realized I had to have a niche.

A rep who worked for me also sold systems to school lunchrooms. I went with him on one of his calls and found out that in the schools there wasn't a system like ours, and there was a tremendous need for it. So I modified my warehouse and distribution system so it would work in cafeterias. The market was too small to attract those big guys, but it was big enough for me. There are 14,000 districts, 97,000 schools. It was a really big opportunity. It seemed unlimited. Everybody's got to eat.

I hired salespeople, but they couldn't sell anything. I told my wife, "I might just do it myself." I had always detested sales and salespeople. But I found out that's what I'm really good at. I went in and told food-service directors how they could save money. They were doing everything manually, and I showed them all the things that our software could do. Within two weeks I had my first order. Then I went to another one, and I went to another one, and pretty soon I had all of Georgia. So I became our chief salesperson. You wouldn't believe how I could sell. I could sell firewood in hell.

It wasn't like I was real flush with cash. Pretty much all my career I was undercapitalized. I borrowed on my home equity and loaded up my credit cards. We started with three or four people, in 1993, and each year we would either double or triple in size. Now we have 173 employees and sales of $26 million.

We ended up developing an A-to-Z software system for managing school food services: warehousing and tracking inventory and sales. For a long time I didn't have any competition. I started looking at other markets. We developed software for colleges and universities and then hospitals and senior living communities. Whoever feeds a lot of people, that's who we go to. We have more than 15,000 installations.

In 2005, we got a $10 million deal with the U.S. military. I worked five years on that deal. Our technology will be in every dining facility worldwide for the Army, Navy, Air Force and Marine Corps. Every land base, ship, submarine and remote battlefield.

It's my goal to get junk food out of the schools. Oranges instead of Snickers bars. We've developed technology so kids can buy healthful items from vending machines on their prepaid accounts. And we have software so parents can go online and view what their kids ate that day. I want to help kids make the right nutritional choices. We've got all this technology and all these schools, and we ought to be able to have an impact.

Article By Inc.com