The Complexity of the US Tax System

Hat tip: Quick Sprout

I'm still trying to figure out how 16.3% evade paying taxes.

Do you do your own taxes?

Tom Sirois
Great Barrington, MA

How about going 50 – 50?

A couple days ago, The Wall Street Journal had this very interesting article in the regular column about student financial literacy in the personal finance section. It's about dealing with the "I wants" that accompany growing up. The idea is simple. If the youngster claims to want a specific item, particularly a pricey one, offer going half-and-half with them. They can use their allowance, birthday money from relatives, or money from their "jobs" for their portion. The lesson for the children is a good one. I have used this strategy a number of times, and it really does help my children prioritize those wants. It's amazing how something they absolutely "must have" can fade when it involves their own funds. And when they do purchase something that way, they frequently take better care of the item than they do with other things they received as gifts.

The article can be found here: You Want It? Then You Pay for Half of It.

Tom Sirois

Great Barrington, MA

How to fix healthcare in the US . . .

Here is a great, and relatively short video on some very logical ways to "fix" healthcare and it's cost:



Tom Sirois
Great Barrington, MA

Happy Thanksgiving to all!

How Private Property Saved the Pilgrims
Ilya Somin • November 26, 2009 2:35 am

Today is Thanksgiving. And there is no better time to remember an underappreciated lesson of the original Thanksgiving: that the Pilgrims nearly starved to death because of collectivism and eventually saved themselves by adopting a system of private property. Economist Benjamin Powell tells the story in here:

Many people believe that after suffering through a severe winter, the Pilgrims’ food shortages were resolved the following spring when the Native Americans taught them to plant corn and a Thanksgiving celebration resulted. In fact, the pilgrims continued to face chronic food shortages for three years until the harvest of 1623. Bad weather or lack of farming knowledge did not cause the pilgrims’ shortages. Bad economic incentives did.

In 1620 Plymouth Plantation was founded with a system of communal property rights. Food and supplies were held in common and then distributed based on equality and need as determined by Plantation officials. People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food. Governor William Bradford, in his 1647 history, Of Plymouth Plantation, wrote that this system was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. The problem was that young men, that were most able and fit for labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. Because of the poor incentives, little food was produced.

Faced with potential starvation in the spring of 1623, the colony decided to implement a new economic system. Every family was assigned a private parcel of land. They could then keep all they grew for themselves, but now they alone were responsible for feeding themselves. While not a complete private property system, the move away from communal ownership had dramatic results.

This change, Bradford wrote, had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. Giving people economic incentives changed their behavior. Once the new system of property rights was in place, the women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability.

Once the Pilgrims in the Plymouth Plantation abandoned their communal economic system and adopted one with greater individual property rights, they never again faced the starvation and food shortages of the first three years. It was only after allowing greater property rights that they could feast without worrying that famine was just around the corner.


Happy Thanksgiving to all!

Tom Sirois
Great Barrington, MA

Thanksgiving Post

The George Washington 1789 Thanksgiving proclamation:

Whereas it is the duty of all Nations to acknowledge the providence of Almighty God, to obey his will, to be grateful for his benefits, and humbly to implore his protection and favor -- and whereas both Houses of Congress have by their joint Committee requested me "to recommend to the People of the United States a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many signal favors of Almighty God especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness." Now therefore I do recommend and assign Thursday the 26th day of November next to be devoted by the People of these States to the service of that great and glorious Being, who is the beneficent Author of all the good that was, that is, or that will be -- That we may then all unite in rendering unto him our sincere and humble thanks -- for his kind care and protection of the People of this Country previous to their becoming a Nation -- for the signal and manifold mercies, and the favorable interpositions of his Providence which we experienced in the tranquility [sic], union, and plenty, which we have since enjoyed -- for the peaceable and rational manner, in which we have been enabled to establish constitutions of government for our safety and happiness, and particularly the national One now lately instituted -- for the civil and religious liberty with which we are blessed; and the means we have of acquiring and diffusing useful knowledge; and in general for all the great and various favors which he hath been pleased to confer upon us.

And also that we may then unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech him to pardon our national and other transgressions -- to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually -- to render our national government a blessing to all the people, by constantly being a Government of wise, just, and constitutional laws, discreetly and faithfully executed and obeyed -- to protect and guide all Sovereigns and Nations (especially such as have shewn [sic] kindness onto us) and to bless them with good government, peace, and concord -- To promote the knowledge and practice of true religion and virtue, and the encrease [sic] of science among them and us -- and generally to grant unto all Mankind such a degree of temporal prosperity as he alone knows to be best. Given under my hand at the City of New York the third day of October in the year of our Lord 1789. George Washington

Tom Sirois
Great Barrington MA

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Is MLM for you?

When I interact with clients and potential clients about their financial health, especially Debt Pay down Strategies I get a fair amount of questions regarding Multi-level Marketing. Whether it is “should I pursue a MLM opportunity”, or “should I stop investing my time and energy into it”. Having been a bank manager at a local community bank, I had limited exposure to folks who sold Cell Tech’s Blue Green Algae, as well as Amway. I cannot comment on the products specifically, or the overall structure of these businesses, but I have seen many more people who are NOT successful in the MLM business than are. That being said, I do not believe that there is not a good upside to investigation this opportunity for passive income, but it will take an awful lot of time, energy and effort to lay the foundation for future success.

There are other names for it – network marketing, social marketing, direct distributing. Legally speaking, most of the legitimate companies that use this form of marketing are not pyramid schemes. At least not legally. However, they do strongly resemble pyramids in their structure.

Please find below three resources I suggest to people who ask my opinion. After they read through these sites we have a very different conversation.

MLM Survivor

The Pink Lighthouse

Pyramid Scheme Alert

Granted, these are all on the negative slant, but if you are getting the “I’d like to discuss a business opportunity with you” pitch from a sales person, sometimes that is just what you need to counter. Both sides, fair and balanced, and then make an informed decision.

Have you been asked to join a MLM business? Tell me your experience.

Tom Sirois Great Barrington, MA

Maybe our public schools should be teaching this!

Living in an area of the country uniquely filled with entrepreneurs, many local farms, a beautiful four season environment and filled with civic minded people who have a local mindset, I consider myself very fortunate. Unfortunately there is little “industry” in our area that has interested and attracted many of our young people when they are in a position to make a decision to leave or stay in this area. Often these kids go off to college, and decide there is little for them in the community they left (often returning later in life, but that is another post for another time).

I have a very high interest in local, sustainable community activities and systems. There is no better long term investment in our communities than our children and their education. Parents should be responsible to insure their children have these skills. Of course reading, writing, science and math are essential, as well as a deep understanding of history is essential to having a productive member of society, but I feel there are other skills that should be taught and not necessarily taught by our teachers, they could be local business people, community activists, parents or local government officials.

They are in no particular order:

• Personal Finance
• Communication
• Social Skills
• Social Entrepreneurship
• Sustainable Economics
• Health

I have a particular interest in personal finance because of the work I do with small business owners and individuals. I also volunteer my time teaching “Kids and Money” enrichment classes in my local elementary school and as a guest speaker for personal finance in our local High School. I will address each of these in future posts. I think it is easy to blame parents for your financial problems, and that will not be my focus.

What do you think? I’d love to hear from you what you think should be taught? And who should be teaching it?

Tom Sirois Great Barrington MA