The Everyday Cheapskate by Mary Hunt
Keeping Important Papers
Every year about this time, my mailbox tells me it's time to review the general guidelines on how long to keep statements, paid bills and other important paperwork.
Here are the general rules for how long to keep important household papers:
ONE YEAR. Keep pay stubs for at least one year, so you can reconcile them against your W-2 (this is the form from your employer that shows how your annual earnings were allocated, which you attach to your tax return) and your Social Security Earnings Statement (which you receive once a year in the mail, though you can request a copy any time on the Social Security website). You'll be happy to have your pay stubs to prove your earnings and withholdings if your records do not match the entries on these forms.
ACTIVE/INDEFINITE. As for receipts and records of bills paid, keep them only as long as the situation is active. For example, a paid water bill is no longer active, but the receipt for your new water heater is active. Attach it to the owner's manual and warranty. You can confidently destroy statements for closed accounts, expired warranties, cancelled checks for minor items that are not related to a proof of purchase or income tax, and instructions for appliances or equipment that you have sold or discarded. Every home needs a paper shredder.
THREE YEARS MINIMUM. The IRS requires that you keep your tax returns and substantiating documentation as long as is necessary to prove the validity of those returns. There are some experts who say that means forever. Others say seven years is sufficient. You decide for your own particular situation.
SEVEN YEARS. Seven years from the last date of activity is sufficient for moving expenses, business or employee expense records, appraisals, charitable contributions and medical expenses.
FOREVER. Some of your important papers should be kept forever, such as birth records, military records, marriage records, divorce records, death records, education records, employment records, medical records, lawsuit records and family history documentation.
You don't need to spend a lot of money to get organized. Four boxes with lids and a highlighter pen make a dandy system. Label the boxes "Active/Indefinite," "Three Years," "Seven Years" and "Forever." Next, get all your paperwork out and into one place. As you go through the stacks, assess how much time has passed from the last date of activity. Once you find the date on the document, highlight it so you won't have to search for the date the next time you go through these items. Then, assign each item to its proper box.
Mary invites questions, comments and tips at email@example.com, or c/o Everyday Cheapskate, 12340 Seal Beach Blvd., Suite B-416, Seal Beach, CA 90740.
This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website and the author of "Debt-Proof Living," released in 2014.
International Trade Thuggery by Walter E. Williams
President Donald Trump's threats against American companies looking to relocate in foreign countries have won favorable review from many quarters. Support comes from those alarmed about trade deficits, those who want a "level playing field" and those who call for "free trade but fair trade," whatever that means.
Some American companies relocate in foreign lands because costs are lower and hence their profits are higher. Lower labor costs are not the only reason companies move to other countries.
Life Savers, a candy manufacturing company, was based in Holland, Michigan, for decades. In 2002, it moved to Montreal. It didn't move because Canada had lower wages. Canadian wages are similar to ours. The mayor of Holland offered Kraft, the parent company of Life Savers, a 15-year tax break worth $25 million to stay. But Kraft's CEO said it would save $90 million over the same period because sugar was less expensive in Canada. Congress can play favorites with U.S. sugar producers by keeping foreign sugar out, enabling them to charge higher sugar prices, earn higher profits and pay their employees higher wages. Our Congress has no power to force the Canadian Parliament to impose similar sugar import restrictions.
One of the unappreciated benefits of international trade is that it helps reveal the cost of domestic policy. For example, the Occupational Safety and Health Administration can impose high costs on American companies, but it has no jurisdiction elsewhere. Our Environmental Protection Agency can impose costly regulations on American companies, but it has no power to impose costly regulations on companies in other countries. Congress can impose costly tax burdens on American companies, but it has no power to do so abroad. Restrictions on international trade conceal these costs. My argument here is not against the costly regulations that we impose on ourselves. I am merely suggesting that we should appreciate the cost of those regulations. The fact that a good or service can be produced more cheaply elsewhere helps.
Trump's threats to impose high tariffs on the products of companies that leave ought to be a worry for us -- namely, whether we are going to have another president who flouts the U.S. Constitution. Here's how Article 1, Section 7 of our Constitution reads: "All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills." President Barack Obama has circumvented the Constitution and Congress through executive orders. His success in doing so has put too much power in the hands of the executive branch. One wonders whether Trump plans to broaden that power by implementing trade tariffs through executive order.
In early December, Masayoshi Son, CEO of SoftBank, a Japanese telecommunications company, pledged, after meeting with Trump, to invest $50 billion in the United States, a move that would create 50,000 jobs. I wonder whether Trump would support Japanese domestic interests that might want to prevent so many jobs from moving away from Japan. A few weeks ago, when it was announced that Peter Navarro was appointed to lead the new White House National Trade Council, Trump said Navarro will work to "shrink our trade deficit." Yet more foreign investment would put upward pressure on America's trade deficit.
Some Americans support trade restrictions because they think there is a problem with having a trade deficit, i.e., buying more from foreigners than they buy from us. But when foreigners sell us goods and take home U.S. dollars, what do they do with those dollars? The answer to that question lies in the fact that ultimately, dollars are only good in the U.S. They can go from country to country, but they sooner or later wind up in the U.S. as claims on what we produce.
By the way, all trade is fair in the eyes of the parties trading, or else they would not trade. It's third parties who seek to interfere.
Walter E. Williams is a professor of economics at George Mason University.
Capital Versus Countryside by Michael Barone
Capital vs. countryside -- that's the new political divide, visible in multiple surprise election results over the past 11 months. It cuts across old partisan lines and replaces traditional divisions -- labor vs. management, north vs. south, Catholic vs. Protestant -- among voters.
This was apparent last June in Britain's referendum on whether to leave the European Union. London voted 60 percent to remain, while the rest of England, whether Labour or Conservative, voted 57 percent to leave. It was plain in Colombia's October referendum on a peace settlement with the FARC guerrillas. Bogota voted 56 percent "si," the heartland cordillera provinces 58 percent "no."
In both countries, the ethnic and geographic fringe -- Scotland and Northern Ireland, the Caribbean provinces -- voted with the capital. But in each case, the historic heartland, with the majority of voters, produced a surprise defeat for the capital establishment.
It was a similar story here in November. Coastal America -- the Northeast minus Pennsylvania, the Pacific states minus Alaska -- favored Hillary Clinton over Donald Trump by a 58-35 percent margin. But the geographic heartland, casting 69 percent of the nation's votes, favored Trump by a 51-43 percent margin.
The contrast is even starker if you separate out the establishment metro areas -- New York, Washington, Los Angeles, San Francisco -- that produce most Democratic big-dollar funding. They voted 65-29 percent for Clinton; the rest of the country they feel entitled to rule voted 49-45 percent for Trump.
And on April 23, France voted in a presidential race that scrambled the usual party divisions. Marine Le Pen, shunned by the Paris establishment as a neofascist, finished fourth, with 11 percent of the vote, in metro Paris and third, with 15 percent, in 13 other prosperous cities. But she ran first in la France profonde, with 24 percent. She'll almost certainly lose the May 7 runoff, but she has already topped her National Front's previous high of 17 percent.
Is there any precedent for this? The Economist's Bagehot columnist, Adrian Wooldridge, spots one in the 17th century. He quotes historian Hugh Trevor-Roper's description of the "general crisis" of 1620-60 -- a "revolt of the provinces not only against the growing, parasitic Stuart Court, but also against the growing 'dropsical' City of London; against the centralised Church ... and against the expensive monopoly of higher education by the two great universities."
The capital vs. the countryside, in other words, much like today. The countryside party, Trevor-Roper writes, vied to "pare down the parasitic fringe" of central government and sought to "protect industry," "rationalize finance" and "reduce the hatcheries which turned out the superfluous bureaucrats."
Similar impulses are apparent in Britain, France and America today. In different ways, Brexit, Le Pen and Trump seek to counter the university-trained bureaucratic, financial and cultural elites in London, Paris and NY/DC/LA/SF. They resent overlarge and undercompetent bureaucracies and public employee unions, the paymasters of the Labour and Democratic parties. With blunt, often ill-advised rhetoric, they challenge the pieties of the universities as 17th-century countryside parliamentarians challenged the established church and universities.
Consider the debate over what has become, for many, the religion of global warming. Those with doubts that predicted harm will occur are labeled "deniers," heretics who must be punished. The science is settled, the elites insist. That's exactly what the church told Galileo.
Or consider the "speech codes" promulgated by most colleges and universities. We see violent disruption of speakers on campus go unpunished, excused and even praised. We see The New York Times publish an article by a New York University dean arguing for restricting free speech.
We see the deadweight cost of public employee union pensions and unpoliced murders destroying one of the great creations of civilization, Chicago. No wonder the countryside resists; this is how these arrogant bullies govern the precincts of society they control.
In this struggle, the capital has certain advantages -- huge supermajorities in its strongholds, inhabited largely by elites and ethnic, racial and religious minorities. It monopolizes most established media. Its claims that opponents are bigots are taken as gospel.
The countryside has serious grievances and majority numbers but doesn't always find steady leadership. Le Pen's insalubrious pedigree meant she would lose in the end, and Theresa May's icy steeliness had British Conservatives sent to a shocking loss. Donald Trump instinctively (calculatedly?) reckoned that the countryside was the key to victory; now he has to deliver. The battles of capital vs. countryside will go on.
Michael Barone is a senior political analyst for the Washington Examiner.