Warren Buffet must be either a fool or a knave. Or maybe he's just ready for the dog track.
While I was in the Canadian wilderness, Warren Buffet said the rich should pay more taxes. No doubt some rich should pay more, particularly the hedge fund and private equity fund managers ... and Warren Buffet himself.
Buffet gets most of his income and wealth from stock in Berkshire Hathaway, which he has held for many years, thus qualifying for long term capital gains tax treatment on whatever shares he sells. That rate is 15%.
But does he even pay that? Nope.
He donates stock to charities such as the Gates Foundation and pays nothing - the gain is never realized for his tax return. And he even gets a tax deduction on the full value of the stock donated. That deduction offsets whatever other ordinary income which would be taxed at rates as high as 35%. In summary, he pays no gain on the stock donated, yet gets a full value tax deduction for its value: that's free money.
And he says he'll leave all his wealth to the Gates Foundation, thus avoiding any estate taxes. No capital gains taxes will ever be paid.
Warren Buffet is shirking paying his fair share to support the government, including the elderly and the poor and for national defense and for all the other services which benefit him
He's a freeloader.
How can those loopholes be closed?
Make all capital gains be realized and due when any transfer of the stock occurs, whether on donation or on death. Do not permit those taxes (already low) to be offset by charitable donations.
Then billionaire freeloaders would be forced to pay their fair share.
Word of the Day
"Hie" - verb, intransitive and / or reflexive [$10] Shakespeare. Archaic and poetic.
Hie means go quickly
Sentence: Warren, hie to the dog track, you old hypocrite.
Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Tuesday, August 23, 2011
Friday, April 15, 2011
Taxes. IV.
Today I reprise ideas of prior posts regarding how the corporate income tax should be reformed, and expand on those ideas.
Corporate tax reforms
(I) eliminate the deduction for all interest expense (must be phased in over time) except for (a) banks and finance companies (as interest for them is an ordinary cost of business), (b) working capital loans secured by inventory, and (c) other loans secured by equipment or real estate. All unsecured corporate debt (in the past called debentures) is simply capital fungible with equity, hence should not be subsidized by the taxpayer. In olden times, it was called "water" in the capital structure.
This reform will eliminate many abuses: overleveraged, private equity scams, etc.
(II) tax US corporations on worldwide income - no more free ride on income in foreign lands;
(III) eliminate deductions for ANY compensation above a fixed number such as the salary of the US President;
(IV) permit expensing of all costs for machinery and equipment as paid;
(V) lower the corporate rate to equal the income tax rate for individuals (as reformed by Bunkerman);
(VI) include a big, one time small business exemption of something like $1 million that can be carried forward until used;
(VII) move all other deductions for business expenses to a cash basis - this will simplify everything and eliminate most of the games that corporations play now to reduce taxes;
(VIII) eliminate all tax preferences and tax credits for everything except foreign taxes actually paid.
That's about it. Simple and fair.
Word of the Day
"Despite" - noun usage [$10] T. S. Eliot. Archaic or literary.
Despite means (preposition) in spite of; (noun - archaic or literary) 1. outrage, injury; 2. malice, hatred (died of mere despite).
Sentence: [T. S. Eliot, Selected Prose, "Tennyson", p. 247] "... he has been rewarded with the despite of an age that succeeds his own in shallowness."
Corporate tax reforms
(I) eliminate the deduction for all interest expense (must be phased in over time) except for (a) banks and finance companies (as interest for them is an ordinary cost of business), (b) working capital loans secured by inventory, and (c) other loans secured by equipment or real estate. All unsecured corporate debt (in the past called debentures) is simply capital fungible with equity, hence should not be subsidized by the taxpayer. In olden times, it was called "water" in the capital structure.
This reform will eliminate many abuses: overleveraged, private equity scams, etc.
(II) tax US corporations on worldwide income - no more free ride on income in foreign lands;
(III) eliminate deductions for ANY compensation above a fixed number such as the salary of the US President;
(IV) permit expensing of all costs for machinery and equipment as paid;
(V) lower the corporate rate to equal the income tax rate for individuals (as reformed by Bunkerman);
(VI) include a big, one time small business exemption of something like $1 million that can be carried forward until used;
(VII) move all other deductions for business expenses to a cash basis - this will simplify everything and eliminate most of the games that corporations play now to reduce taxes;
(VIII) eliminate all tax preferences and tax credits for everything except foreign taxes actually paid.
That's about it. Simple and fair.
Word of the Day
"Despite" - noun usage [$10] T. S. Eliot. Archaic or literary.
Despite means (preposition) in spite of; (noun - archaic or literary) 1. outrage, injury; 2. malice, hatred (died of mere despite).
Sentence: [T. S. Eliot, Selected Prose, "Tennyson", p. 247] "... he has been rewarded with the despite of an age that succeeds his own in shallowness."
Thursday, April 14, 2011
Taxes. III
Today the estate tax, tomorrow the corporate tax.
The proper tax on estates is easy: ALL assets are marked to fair market value and ALL capital gains are realized on death and transfer in the estate to heirs. There shall be NO deduction for anything. The rate shall be the same rate as for the income tax. Asset transfers to spouses shall defer the tax until the spouse passes. That's it.
The gift tax is integrated into the estate tax: ANY gifts of appreciated property shall cause capital gains to be realized and the tax paid by the donee or donor, as specified in the gift. No other gift tax shall exist.
Simple. Easy. Fair. The Bunkerman approach to government
Word of the Day
"Adumbrate" - verb [$10]
Adumbrate means to give a sketchy outline; to foreshadow.
Sentence: In his blog this week, Bunkerman adumbrates a K. I. S. S. approach to true tax reform. Hello Barry, are you reading?
The proper tax on estates is easy: ALL assets are marked to fair market value and ALL capital gains are realized on death and transfer in the estate to heirs. There shall be NO deduction for anything. The rate shall be the same rate as for the income tax. Asset transfers to spouses shall defer the tax until the spouse passes. That's it.
The gift tax is integrated into the estate tax: ANY gifts of appreciated property shall cause capital gains to be realized and the tax paid by the donee or donor, as specified in the gift. No other gift tax shall exist.
Simple. Easy. Fair. The Bunkerman approach to government
Word of the Day
"Adumbrate" - verb [$10]
Adumbrate means to give a sketchy outline; to foreshadow.
Sentence: In his blog this week, Bunkerman adumbrates a K. I. S. S. approach to true tax reform. Hello Barry, are you reading?
Wednesday, April 13, 2011
Taxes. II.
Today I shall adumbrate how the income tax system can - should - be reformed.
Objective: a simple, fair system understandable by all sentient human beings.
There are two rules:
1. ALL income (profit) is taxed at the same rate. No deductions.
2. Adults receive a large personal exemption, children/dependents a smaller one; both are computed to reflect reasonable costs of a simple and frugal household lifestyle.
Thus in Bunkerman's K. I. S. S. income tax system, that tax emulates a simple tax on household profits, the amounts a household has after that costs of a simple, frugal life style.
My guess: the adult exemption would be about $20,000, the child/dependent exemption would be about $5,000. Thus the prototypical "family of four" would receive the first $50,000 without any income tax. [Don't forget, they will be paying the Bunkerman VAT, hence paying something to support the government].
No deductions means no deductions. No deductions for mortgage interest, charity donations, medical expenses, state/local incomes taxes, property taxes ... nothing.
ALL income would be taxed EQUALLY. That means municipal bonds, rents, capital gains, wages, business profits, pensions ... everything.
This would be the ONLY tax on anything related to incomes: no added taxes for Social Security, Medicare, etc. Those benefits are paid out of general revenues, which includes the VAT and estate taxes.
That's it. Simple, understandable, doable.
Tomorrow: the estate tax.
Future Posts: the corporate tax and the VAT.
Word of the Day
"Disport" - verb & noun [10]
Disport means (verb, intransitive and reflexive) frolic, gambol, enjoy oneself (disported on the sand, disported themselves at sth); (noun, archaic) 1. relaxation; 2. a pastime.
Sentence: His taxes completed, this afternoon Bunkerman intends to disport himself with a local friend at the MG range, capping off a few hundred rounds of 9mm. That metal target is going to sound like Lionel Hampton.
Objective: a simple, fair system understandable by all sentient human beings.
There are two rules:
1. ALL income (profit) is taxed at the same rate. No deductions.
2. Adults receive a large personal exemption, children/dependents a smaller one; both are computed to reflect reasonable costs of a simple and frugal household lifestyle.
Thus in Bunkerman's K. I. S. S. income tax system, that tax emulates a simple tax on household profits, the amounts a household has after that costs of a simple, frugal life style.
My guess: the adult exemption would be about $20,000, the child/dependent exemption would be about $5,000. Thus the prototypical "family of four" would receive the first $50,000 without any income tax. [Don't forget, they will be paying the Bunkerman VAT, hence paying something to support the government].
No deductions means no deductions. No deductions for mortgage interest, charity donations, medical expenses, state/local incomes taxes, property taxes ... nothing.
ALL income would be taxed EQUALLY. That means municipal bonds, rents, capital gains, wages, business profits, pensions ... everything.
This would be the ONLY tax on anything related to incomes: no added taxes for Social Security, Medicare, etc. Those benefits are paid out of general revenues, which includes the VAT and estate taxes.
That's it. Simple, understandable, doable.
Tomorrow: the estate tax.
Future Posts: the corporate tax and the VAT.
Word of the Day
"Disport" - verb & noun [10]
Disport means (verb, intransitive and reflexive) frolic, gambol, enjoy oneself (disported on the sand, disported themselves at sth); (noun, archaic) 1. relaxation; 2. a pastime.
Sentence: His taxes completed, this afternoon Bunkerman intends to disport himself with a local friend at the MG range, capping off a few hundred rounds of 9mm. That metal target is going to sound like Lionel Hampton.
Tuesday, April 12, 2011
Taxes
I finished doing my taxes yesterday: Federal and state income taxes and estimated taxes for 2011, a very long and ultimately painful process as I saw how much I pay to support the governments.
All rational persons who believe in freedom and happiness must agree that the US system is an utter disgrace and a violation of the principles upon which the US was built. There is no doubt the Founding Fathers would revolt against the current system.
The simple problem is that system attempts to raise too much money from one source, viz. incomes.
The systems taxes wage income, investment incomes, income from property, and corporate incomes with a panoply of complex taxes and rules far too complex.
Let's think about happiness. All should contribute something to the support of the government in a manner that burdens happiness the least. There are two material (in both senses of the word) supports to securing happiness: income and use of goods/services.
Thus obviously the current system neglects taxing a huge resource for happiness: use of goods/services. That resource is simply not paying its fair share.
What is a fair tax system? All resources to happiness pay equal taxes to support the government.
True tax reform will subject all income to an single tax and all use of goods/services to an single tax. True tax reform will have the following elements:
1. a uniform VAT on all goods & services (whether imported or made/done in the US).
2. a uniform income tax on ALL incomes (and I mean ALL).
The tax system will not be used for social engineering; it simply shall be a system to collect money with the least disturbance to the path of any person's happiness.
Social support systems would be direct and NOT be created via tax benefits or deductions or credits.
I will write about the details later this week, perhaps in several blogs.
Word of the Day
"Consentient" - adjective [$10]
Consentient means 1. agreeing, united in opinion; 2. concurrent; 3. (often followed by 'to') consenting.
Sentence: All sentient beings must be consentient in thinking that the US tax revenue system is a disgrace to the Declaration of Independence.
All rational persons who believe in freedom and happiness must agree that the US system is an utter disgrace and a violation of the principles upon which the US was built. There is no doubt the Founding Fathers would revolt against the current system.
The simple problem is that system attempts to raise too much money from one source, viz. incomes.
The systems taxes wage income, investment incomes, income from property, and corporate incomes with a panoply of complex taxes and rules far too complex.
Let's think about happiness. All should contribute something to the support of the government in a manner that burdens happiness the least. There are two material (in both senses of the word) supports to securing happiness: income and use of goods/services.
Thus obviously the current system neglects taxing a huge resource for happiness: use of goods/services. That resource is simply not paying its fair share.
What is a fair tax system? All resources to happiness pay equal taxes to support the government.
True tax reform will subject all income to an single tax and all use of goods/services to an single tax. True tax reform will have the following elements:
1. a uniform VAT on all goods & services (whether imported or made/done in the US).
2. a uniform income tax on ALL incomes (and I mean ALL).
The tax system will not be used for social engineering; it simply shall be a system to collect money with the least disturbance to the path of any person's happiness.
Social support systems would be direct and NOT be created via tax benefits or deductions or credits.
I will write about the details later this week, perhaps in several blogs.
Word of the Day
"Consentient" - adjective [$10]
Consentient means 1. agreeing, united in opinion; 2. concurrent; 3. (often followed by 'to') consenting.
Sentence: All sentient beings must be consentient in thinking that the US tax revenue system is a disgrace to the Declaration of Independence.
Wednesday, February 23, 2011
Public Employee Unions ?
Should they exist ?
The obvious answer is no.
Do taxpayers have a union ? Nope.
Can taxpayers go on strike ? Nope.
Federal labor laws do not apply to States and localities. Why ? Read the 10th amendment and the rest of the Constitution. There is no Federal power to force the States to do anything (except obey the Constitution and have a Republican form of government).
Public employee unions are inherently corrupt. The union gives campaign donations of member in-kind support and money; in turn, the beholden legislator or governor gives them more pay and benefits. Where is the taxpayer ? The taxpayer is entangled in a web of corruption and self-dealing, paying and paying for ... nothing of value.
Civil service laws, service boards and other protections can and should prevent governmental corruption from harming worker groups or individual workers. Cronyism is rampant in government - it's likely an inherent nature of the beast. The balance, however, is not to put taxpayers at the mercy of more crony tactics. Why create another beast of prey to suck the blood of taxpayers ?
Taxpayers have no choice in whether to pay or not. It's pay or go to jail or be killed resisting arrest. In the private sector, a consumer can buy another product or do without. One can buy a car made in Alabama by a non-union plant. A taxpayer in Wisconsin has no choice, but to pay ... and pay ... and pay.
All powers of public employee unions should be eliminated. If public employees want to join an organization to lobby or whatever, fine. But DO NOT give that entity any powers whatsoever.
Public employee unions - no way, no how, no where. They have no place in a fair society.
Actions
None. All is in balance after yesterday's sale of some gold & silver. Budding sell signals for some stocks are now dormant. Krypto is still waiting for QE2 to end to get better prices on taxable bonds and TIPs.
Notice
Tomorrow's blog post will be R rated.
Word of the Day
"Gallous" - adjective [$10 ? or $1,000 ? unclear]; formed from the noun, "gall" [$10] but not listed in dictionaries of any value.
Gall means (usage #1) 1. impudence; 2. asperity, rancor; 3. bitterness, anything bitter.
Gallous means having a bitter, rancorous, or impudent quality.
Sentence: Gallous actions of public employees unions in extracting money from taxpayers and exercising power must be challenged and defeated. Nearly insolvent state and city governments show that their power must be eviscerated.
"Gallous" was used in the famous play by J. M. Synge, Playboy of the Western World (written in 1907 and first performed in Dublin, causing riots). The character, Pegeen Mike, says, "There's a great gap between a gallous story and a dirty deed." I read that line in a chapter in the Cambridge Companion to W. B. Yeats, page 123, as Yeats' influence on Synge was described. The title of the play is now a cliché, but the drift in meanings of words in time and space since 1907 in Ireland has caused its usage to have almost no relation to the play.
The obvious answer is no.
Do taxpayers have a union ? Nope.
Can taxpayers go on strike ? Nope.
Federal labor laws do not apply to States and localities. Why ? Read the 10th amendment and the rest of the Constitution. There is no Federal power to force the States to do anything (except obey the Constitution and have a Republican form of government).
Public employee unions are inherently corrupt. The union gives campaign donations of member in-kind support and money; in turn, the beholden legislator or governor gives them more pay and benefits. Where is the taxpayer ? The taxpayer is entangled in a web of corruption and self-dealing, paying and paying for ... nothing of value.
Civil service laws, service boards and other protections can and should prevent governmental corruption from harming worker groups or individual workers. Cronyism is rampant in government - it's likely an inherent nature of the beast. The balance, however, is not to put taxpayers at the mercy of more crony tactics. Why create another beast of prey to suck the blood of taxpayers ?
Taxpayers have no choice in whether to pay or not. It's pay or go to jail or be killed resisting arrest. In the private sector, a consumer can buy another product or do without. One can buy a car made in Alabama by a non-union plant. A taxpayer in Wisconsin has no choice, but to pay ... and pay ... and pay.
All powers of public employee unions should be eliminated. If public employees want to join an organization to lobby or whatever, fine. But DO NOT give that entity any powers whatsoever.
Public employee unions - no way, no how, no where. They have no place in a fair society.
Actions
None. All is in balance after yesterday's sale of some gold & silver. Budding sell signals for some stocks are now dormant. Krypto is still waiting for QE2 to end to get better prices on taxable bonds and TIPs.
Notice
Tomorrow's blog post will be R rated.
Word of the Day
"Gallous" - adjective [$10 ? or $1,000 ? unclear]; formed from the noun, "gall" [$10] but not listed in dictionaries of any value.
Gall means (usage #1) 1. impudence; 2. asperity, rancor; 3. bitterness, anything bitter.
Gallous means having a bitter, rancorous, or impudent quality.
Sentence: Gallous actions of public employees unions in extracting money from taxpayers and exercising power must be challenged and defeated. Nearly insolvent state and city governments show that their power must be eviscerated.
"Gallous" was used in the famous play by J. M. Synge, Playboy of the Western World (written in 1907 and first performed in Dublin, causing riots). The character, Pegeen Mike, says, "There's a great gap between a gallous story and a dirty deed." I read that line in a chapter in the Cambridge Companion to W. B. Yeats, page 123, as Yeats' influence on Synge was described. The title of the play is now a cliché, but the drift in meanings of words in time and space since 1907 in Ireland has caused its usage to have almost no relation to the play.
Thursday, February 3, 2011
The Job Solution
Unemployment and underemployment in the US is between 15% and 20% of the workforce. I favor the higher number because I suspect many, many people who could be productive and want to work simply believe that no meaningful work exists that can cover the costs of working. This problem took a catastrophic leap upward in the recent Great Recession
The Great Recession was caused by the Panic of 2008 which was in turn caused by the financial vikings on the Street and in the hedge funds; the hedge funds were funded by the wealthy wanting more money without making productive investments. But the causes are not part of the solution; they are mostly irrelevant.
The solution is ... a combination of policies, of course. No silver bullet.
The Job Solution
I. Stop taxing jobs, completely. That means no more taxes paid on employment income for Social Security, Medicare, unemployment benefits or any other direct or indirect tax on jobs. This will make the cost of hiring people much lower.
II. Eliminate the connection between health care and jobs. That bond prevents people from changing jobs to move on to either better jobs or starting their own businesses. It also increases the cost of employment enormously.
III. Social Security, Medicare AND a new National Shared Heath Care Benefit will be funded by a new Value-added or Sales tax on goods (especially imported goods) and many services (especially imported services). Consumers of imported goods and services now get a free ride - they are freeloaders. Make them pay a fair share to support the American System.
IV. Eliminate all tax subsidies for equipment and machinery (accelerated depreciation, etc.). Eliminate the overseas income tax loopholes. Eliminate tax loopholes for hedge fund managers.
V. Eliminate tax deductions for any compensation above the salary of the President. This will lower the costs of employing many people at middle income wages/salaries vs. the executive suite.
VI. Require compensation committees of corporations to have a majority of true outsiders nominated and drawn from the ranks of INDIVIDUAL shareholders. Require all corporate votes to be secret ballots.
VII. Require any incentive executive pay to have clawback provisions and to included the effects of ANY so-called nonrecurring losses. Require mandatory stockholder votes to approve ANY incentive plans offering pay in excess of the President's salary. These votes are binding. For any plan that loses, the compensation committee is fired and a new committee is formed.
VIII. Require any corporation wishing to bring in immigrants for so-called "hard to fill" jobs first offer the job broadly at a 10% pay increase AND offer job training for any special requirements; provide an arbitration board to protect against unfair or excessively tailored job descriptions.
IX. Eliminate all Federal & State regulations that kick in at some number of jobs, like 50. Those hold down the number of jobs and encourage using high paid employees supported by machines, vs. simple jobs for more people.
X. Eliminate the R&D tax credit and replace it with a Job Training credit.
All these policies will lower the cost of hiring people and increase the demand for people vs. machines. that's what we want. And it frees the entrepreneurial energy of millions of people stuck in dead end jobs with "benefits". The Job Solution will permanently lower the unemployment and underemployment rates. Entrepreneurs will be more free to hire people as hiring becomes simple and direct, with no red tape. The cost of replacing people with machines goes up. By equating the W-2 worker with the 1099 worker, employers will want to hire more people to lock in their services; there will be NO benefit to keeping people on 1099 contracts.
Education is part of the job problem. It's also part of the transportation problem. I will address those matters next week.
EXTRA
Any global warming Kool-Aid crowd: check this out ->
http://motls.blogspot.com/2011/02/global-uah-amsu-january-2011-cooler.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+LuboMotlsReferenceFrame+%28Lubos+Motl%27s+reference+frame%29
A data stake into the heart of AlGore's propaganda machine.
Word of the Day
"Mimetic" - adjective [$10]
Mimetic means relating to or habitually practicing imitation or mimicry; 2. (Biol.) of or relating to mimicry.
Sentence: The American "leaders" must stop acting as being mimetic is not patriot; stop the "not-invented-here" syndrome. We have a lot to learn from GERMAN employment and education practices. GERMAN unemployment fell to a record low not seen since reunification in 1990. Let's analyze GERMAN policies to see which can help here.
The Great Recession was caused by the Panic of 2008 which was in turn caused by the financial vikings on the Street and in the hedge funds; the hedge funds were funded by the wealthy wanting more money without making productive investments. But the causes are not part of the solution; they are mostly irrelevant.
The solution is ... a combination of policies, of course. No silver bullet.
The Job Solution
I. Stop taxing jobs, completely. That means no more taxes paid on employment income for Social Security, Medicare, unemployment benefits or any other direct or indirect tax on jobs. This will make the cost of hiring people much lower.
II. Eliminate the connection between health care and jobs. That bond prevents people from changing jobs to move on to either better jobs or starting their own businesses. It also increases the cost of employment enormously.
III. Social Security, Medicare AND a new National Shared Heath Care Benefit will be funded by a new Value-added or Sales tax on goods (especially imported goods) and many services (especially imported services). Consumers of imported goods and services now get a free ride - they are freeloaders. Make them pay a fair share to support the American System.
IV. Eliminate all tax subsidies for equipment and machinery (accelerated depreciation, etc.). Eliminate the overseas income tax loopholes. Eliminate tax loopholes for hedge fund managers.
V. Eliminate tax deductions for any compensation above the salary of the President. This will lower the costs of employing many people at middle income wages/salaries vs. the executive suite.
VI. Require compensation committees of corporations to have a majority of true outsiders nominated and drawn from the ranks of INDIVIDUAL shareholders. Require all corporate votes to be secret ballots.
VII. Require any incentive executive pay to have clawback provisions and to included the effects of ANY so-called nonrecurring losses. Require mandatory stockholder votes to approve ANY incentive plans offering pay in excess of the President's salary. These votes are binding. For any plan that loses, the compensation committee is fired and a new committee is formed.
VIII. Require any corporation wishing to bring in immigrants for so-called "hard to fill" jobs first offer the job broadly at a 10% pay increase AND offer job training for any special requirements; provide an arbitration board to protect against unfair or excessively tailored job descriptions.
IX. Eliminate all Federal & State regulations that kick in at some number of jobs, like 50. Those hold down the number of jobs and encourage using high paid employees supported by machines, vs. simple jobs for more people.
X. Eliminate the R&D tax credit and replace it with a Job Training credit.
All these policies will lower the cost of hiring people and increase the demand for people vs. machines. that's what we want. And it frees the entrepreneurial energy of millions of people stuck in dead end jobs with "benefits". The Job Solution will permanently lower the unemployment and underemployment rates. Entrepreneurs will be more free to hire people as hiring becomes simple and direct, with no red tape. The cost of replacing people with machines goes up. By equating the W-2 worker with the 1099 worker, employers will want to hire more people to lock in their services; there will be NO benefit to keeping people on 1099 contracts.
Education is part of the job problem. It's also part of the transportation problem. I will address those matters next week.
EXTRA
Any global warming Kool-Aid crowd: check this out ->
http://motls.blogspot.com/2011/02/global-uah-amsu-january-2011-cooler.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+LuboMotlsReferenceFrame+%28Lubos+Motl%27s+reference+frame%29
A data stake into the heart of AlGore's propaganda machine.
Word of the Day
"Mimetic" - adjective [$10]
Mimetic means relating to or habitually practicing imitation or mimicry; 2. (Biol.) of or relating to mimicry.
Sentence: The American "leaders" must stop acting as being mimetic is not patriot; stop the "not-invented-here" syndrome. We have a lot to learn from GERMAN employment and education practices. GERMAN unemployment fell to a record low not seen since reunification in 1990. Let's analyze GERMAN policies to see which can help here.
Monday, January 24, 2011
What is to be Done?
That's the famous question. Last week I proved by simple research of widely and easily available data that since around 1970, the common man and woman has been screwed by the hegemonic class and their bureaucratic allies. The screwing occurred under administrations of both parties insidiously and slowly. For 40 years ALL the productivity gains of technology has been slurped down by those hogs. But ... What is to be Done?
(A) The new system must increase the demand for labor ... employees .... in the US economy, and concurrently permit entrepreneurs to prosper. We need reforms to do this WITHOUT increasing governmental power. Increased government is part of the problem; that permits the bureaucratic classes to slurp MORE from the trough; it gives the hegemonic classes a place to buy protection and gain tools to grab more wealth and power.
Increased demand for labor and freedom for entrepreneurs would increase the pay and share of profits for the common man and woman.
(B) The costs of the social safety net must be borne by those who have benefited from the existence of the nation. Notice I wrote that past tense of the verb, benefited. Not the present tense. The current income tax system takes mostly from those trying to become wealthy, not those who are wealthy.
One single change will not do the job; we must identify an entire panoply of changes, each designed to accomplish either A or B or both.
Here are some changes.
1. Eliminate all accelerated depreciation - that subsidizes machines over people. Go back to the old system of the 1960s - straight line depreciation over the useful life.
2. Eliminate the R&D tax credit - a corporate tax subsidy used to replace people.
3. Eliminate the corporate deduction for interest except to the extent of interest income from loans (not securities income) made by banks. Capital is capital - tax it equally: No more subsidies for debt.
4. Eliminate the deduction for charitable contributions in the estate tax. Make the wealthy spend or give away the money while alive.
5. Make the estate tax iron clad - no loopholes for any trusts, etc. The recent changes for exemptions, rates are fair and fine. Encourage the wealthy to spend or give away the money while alive.
6. Implement the other tax reforms the I wrote about a few weeks ago, viz., the low rates & large exemptions for the income tax, the value added tax, the new rules for foundation spending, etc.
7. Seal the borders, but permit immigration from entrepreneurs and the very talented: we need them and they would prosper here. No more use of visas by US corporations to keep US pay down for engineers, etc.
8. Put luxury taxes on many, many goods the wealthy covet (mansions, extravagant travel, old art, etc.). The rate would be equal to the value added tax (i. e., these pay double).
9. Put an excise tax on corporate pay over the President's salary - let's call it the Hog Tax; this is paid at the corporate level and would equal the income tax rate (as modified by my other reforms): high income pays double; NO deferring compensation unless subject to clawbacks. Two moderately paid people suddenly become more economical than one hog.
10. Apply the Hog Tax to any pay over the President's salary for any service (actors, big mouth media, sports hogs, lawyer hogs, etc.), BUT permit them and all entrepreneurs and sole proprietors to income average over 10 years: they should not pay those extra taxes for one time gains.
11. Gut and scrap ALL tax loopholes the hedge funds and money managers: compensation is pay and gets taxed the same as for the common man and woman. Hedge funds pay the Hog Tax on manager pay (see item 9).
12. Invigorate an inspector general to investigate government contracts for overpayment and any indicia of inside dealings.
13. Put a 10% annual excise tax on the licenses of electromagnetic spectrum - all of it - to pay for the safety net. The big mouth media need to pay. The money goes to support and improve the systems nationally.
14. Require truly independent compensation committees for all corporations to be made up from small shareholders (whether by lottery or by some fair system). The Street, hedge funds, mutual funds, etc. are part of the problem.
15. Reform government pensions at all levels to be no better than available to the common man and woman; no one retires before 65 unless they do it on their own savings.
16. Tax ALL income equally - no special buckets - over a sizable exemption (see prior tax reforms).
17. Put an excise tax on sports franchises and on the top 1/2 of player compensation; the money goes to provide access to the common man. The sports owners & player hogs pay for the stadiums and access; no more blackouts. Permit ALL sports betting: the people want it. More freedom for the people.
18. Eliminate taxes on employers for unemployment benefits, but keep worker's compensation taxes (that promotes safely). Unemployment taxes should be paid out of an add-on special Hog Tax: the bosses lay people off to make more money for themselves, let them pay the costs.
19. Use money from the Hog Taxes to keep rates low for the common man and woman. This will make it easier for them to save and lead a happier life. The Hogs pay and aristocracies are prevented. The unlucky and unendowed have a secure, reasonable safety net.
20. Apply the value added tax to all services engaged overseas: outsourcing pays that tax.
Using the principles of Free Fraternalism, finding innumerable small reforms is rather easy. One can see ways to implement these changes almost everywhere. The crucial factor is to embrace the principles of Free Fraternalism and apply them fairly and uniformly.
Combined with the other reforms I wrote about a few weeks ago (which eliminate all taxes on jobs), you can see this new system is consistent with Free Fraternalism. The economics of common people increase; the economics of Hogs decrease; the economics of machines decrease. That's what we want.
Word of the Day
"Latifundium" - noun [$100]; plural latifundia.
Latifundium means 1. a great estate; 2. a great landed estate, especially of the ancient Romans.
Sentence: It's time to break up the latifundia of the hegemonic classes; too much wealth is held unproductively. Put it back to work.
(A) The new system must increase the demand for labor ... employees .... in the US economy, and concurrently permit entrepreneurs to prosper. We need reforms to do this WITHOUT increasing governmental power. Increased government is part of the problem; that permits the bureaucratic classes to slurp MORE from the trough; it gives the hegemonic classes a place to buy protection and gain tools to grab more wealth and power.
Increased demand for labor and freedom for entrepreneurs would increase the pay and share of profits for the common man and woman.
(B) The costs of the social safety net must be borne by those who have benefited from the existence of the nation. Notice I wrote that past tense of the verb, benefited. Not the present tense. The current income tax system takes mostly from those trying to become wealthy, not those who are wealthy.
One single change will not do the job; we must identify an entire panoply of changes, each designed to accomplish either A or B or both.
Here are some changes.
1. Eliminate all accelerated depreciation - that subsidizes machines over people. Go back to the old system of the 1960s - straight line depreciation over the useful life.
2. Eliminate the R&D tax credit - a corporate tax subsidy used to replace people.
3. Eliminate the corporate deduction for interest except to the extent of interest income from loans (not securities income) made by banks. Capital is capital - tax it equally: No more subsidies for debt.
4. Eliminate the deduction for charitable contributions in the estate tax. Make the wealthy spend or give away the money while alive.
5. Make the estate tax iron clad - no loopholes for any trusts, etc. The recent changes for exemptions, rates are fair and fine. Encourage the wealthy to spend or give away the money while alive.
6. Implement the other tax reforms the I wrote about a few weeks ago, viz., the low rates & large exemptions for the income tax, the value added tax, the new rules for foundation spending, etc.
7. Seal the borders, but permit immigration from entrepreneurs and the very talented: we need them and they would prosper here. No more use of visas by US corporations to keep US pay down for engineers, etc.
8. Put luxury taxes on many, many goods the wealthy covet (mansions, extravagant travel, old art, etc.). The rate would be equal to the value added tax (i. e., these pay double).
9. Put an excise tax on corporate pay over the President's salary - let's call it the Hog Tax; this is paid at the corporate level and would equal the income tax rate (as modified by my other reforms): high income pays double; NO deferring compensation unless subject to clawbacks. Two moderately paid people suddenly become more economical than one hog.
10. Apply the Hog Tax to any pay over the President's salary for any service (actors, big mouth media, sports hogs, lawyer hogs, etc.), BUT permit them and all entrepreneurs and sole proprietors to income average over 10 years: they should not pay those extra taxes for one time gains.
11. Gut and scrap ALL tax loopholes the hedge funds and money managers: compensation is pay and gets taxed the same as for the common man and woman. Hedge funds pay the Hog Tax on manager pay (see item 9).
12. Invigorate an inspector general to investigate government contracts for overpayment and any indicia of inside dealings.
13. Put a 10% annual excise tax on the licenses of electromagnetic spectrum - all of it - to pay for the safety net. The big mouth media need to pay. The money goes to support and improve the systems nationally.
14. Require truly independent compensation committees for all corporations to be made up from small shareholders (whether by lottery or by some fair system). The Street, hedge funds, mutual funds, etc. are part of the problem.
15. Reform government pensions at all levels to be no better than available to the common man and woman; no one retires before 65 unless they do it on their own savings.
16. Tax ALL income equally - no special buckets - over a sizable exemption (see prior tax reforms).
17. Put an excise tax on sports franchises and on the top 1/2 of player compensation; the money goes to provide access to the common man. The sports owners & player hogs pay for the stadiums and access; no more blackouts. Permit ALL sports betting: the people want it. More freedom for the people.
18. Eliminate taxes on employers for unemployment benefits, but keep worker's compensation taxes (that promotes safely). Unemployment taxes should be paid out of an add-on special Hog Tax: the bosses lay people off to make more money for themselves, let them pay the costs.
19. Use money from the Hog Taxes to keep rates low for the common man and woman. This will make it easier for them to save and lead a happier life. The Hogs pay and aristocracies are prevented. The unlucky and unendowed have a secure, reasonable safety net.
20. Apply the value added tax to all services engaged overseas: outsourcing pays that tax.
Using the principles of Free Fraternalism, finding innumerable small reforms is rather easy. One can see ways to implement these changes almost everywhere. The crucial factor is to embrace the principles of Free Fraternalism and apply them fairly and uniformly.
Combined with the other reforms I wrote about a few weeks ago (which eliminate all taxes on jobs), you can see this new system is consistent with Free Fraternalism. The economics of common people increase; the economics of Hogs decrease; the economics of machines decrease. That's what we want.
Word of the Day
"Latifundium" - noun [$100]; plural latifundia.
Latifundium means 1. a great estate; 2. a great landed estate, especially of the ancient Romans.
Sentence: It's time to break up the latifundia of the hegemonic classes; too much wealth is held unproductively. Put it back to work.
Tuesday, January 4, 2011
Reforms II. Funding the Government.
US Federal government funding is completely out of balance. Nearly all its revenues come from taxes on incomes of one kind or another: personal income taxes, corporate income taxes, and taxes on employment earnings. Europe does not do this; its funding mechanisms include big value added taxes to spread the cost of government much more broadly. Value added taxes even make consumers of imports pay for the cost of government, while in the US, consumers of imports get a free ride.
Historically, the US government was funded by tariffs and excise taxes on specific good and services. Perhaps coincidentally, the US had enormous economic growth then. All that changed when taxes on incomes were made constitutional.
The funding imbalance causes huge losses to the US economy and people. Taxes on jobs reduces the number of jobs; letting import consumption get a free ride hurts US based production and ... costs more good jobs.
The US needs to re-balance its funding sources. How?
1. Eliminate ALL taxes on jobs: no Social Security taxes, no Medicare taxes, no other taxes on employment earnings.
2. Put on a big, European style value added tax - or excise tax - on everything, including imports: something in the range of 10-15% could work. The rich would pay a lot as they spend their money; even old art would be taxed.
3. Reform the personal income tax to (A) eliminate ALL deductions and ALL adjustments to income, (B) put in a BIG personal exemption, perhaps $20,000 for each adult and $5,000 per child, and (C) lower the rate to something like 15%. Tax ALL personal income equally, including municipal bonds.
4. Corporate tax reforms: (I) eliminate the deduction for interest expense (must be phased in over time) except for (a) banks and finance companies (as interest for them is an ordinary cost of business) and (b) working capital loans; (II) tax US corporations on worldwide income - no more free ride on income in foreign lands; (III) eliminate deductions for ANY compensation above a fixed number such as the salary of the US President; (IV) permit expensing of all machinery and equipment as paid; (V) lower the corporate rate to something like 15%; (VI) include a big small business exemption of something like $1 million; (VII) move all other deductions for business expenses to a cash basis (this will simplify everything).
5. Estate Taxes: (I) eliminate this entirely, but (II) require all capital gains be realized on death and the taxes paid. Eliminate gift taxes.
6. Foundations: require all foundations to expend ALL monies within 21 years of creation - no perpetual tax free institutions. This eliminates the creation of modern day monasteries owning everything, and fairly quickly recycles all the wealth of the Ruling Class.
This system of funding the government is simple, containing only a few rates and variables such as the exemption levels. It has LOW rates and is fair to the common man and woman. It removes tax subsidies for the Ruling Classes and big corporations. It removes taxes on jobs and even has a simple incentive to hire more people below the executive suite.
TOMORROW: The safety net for the common man and woman.
Word of the Day
"Piacular" - adjective [$10] formal.
Piacular means expiatory; 2. needing expiation.
Sentence: Tossing salt over one's left shoulder after spilling salt is a simple, piacular sacrifice: a bit more salt is lost, but the demons are appeased. [Salt was a very valuable commodity in ancient times.]
Historically, the US government was funded by tariffs and excise taxes on specific good and services. Perhaps coincidentally, the US had enormous economic growth then. All that changed when taxes on incomes were made constitutional.
The funding imbalance causes huge losses to the US economy and people. Taxes on jobs reduces the number of jobs; letting import consumption get a free ride hurts US based production and ... costs more good jobs.
The US needs to re-balance its funding sources. How?
1. Eliminate ALL taxes on jobs: no Social Security taxes, no Medicare taxes, no other taxes on employment earnings.
2. Put on a big, European style value added tax - or excise tax - on everything, including imports: something in the range of 10-15% could work. The rich would pay a lot as they spend their money; even old art would be taxed.
3. Reform the personal income tax to (A) eliminate ALL deductions and ALL adjustments to income, (B) put in a BIG personal exemption, perhaps $20,000 for each adult and $5,000 per child, and (C) lower the rate to something like 15%. Tax ALL personal income equally, including municipal bonds.
4. Corporate tax reforms: (I) eliminate the deduction for interest expense (must be phased in over time) except for (a) banks and finance companies (as interest for them is an ordinary cost of business) and (b) working capital loans; (II) tax US corporations on worldwide income - no more free ride on income in foreign lands; (III) eliminate deductions for ANY compensation above a fixed number such as the salary of the US President; (IV) permit expensing of all machinery and equipment as paid; (V) lower the corporate rate to something like 15%; (VI) include a big small business exemption of something like $1 million; (VII) move all other deductions for business expenses to a cash basis (this will simplify everything).
5. Estate Taxes: (I) eliminate this entirely, but (II) require all capital gains be realized on death and the taxes paid. Eliminate gift taxes.
6. Foundations: require all foundations to expend ALL monies within 21 years of creation - no perpetual tax free institutions. This eliminates the creation of modern day monasteries owning everything, and fairly quickly recycles all the wealth of the Ruling Class.
This system of funding the government is simple, containing only a few rates and variables such as the exemption levels. It has LOW rates and is fair to the common man and woman. It removes tax subsidies for the Ruling Classes and big corporations. It removes taxes on jobs and even has a simple incentive to hire more people below the executive suite.
TOMORROW: The safety net for the common man and woman.
Word of the Day
"Piacular" - adjective [$10] formal.
Piacular means expiatory; 2. needing expiation.
Sentence: Tossing salt over one's left shoulder after spilling salt is a simple, piacular sacrifice: a bit more salt is lost, but the demons are appeased. [Salt was a very valuable commodity in ancient times.]
Thursday, October 21, 2010
Make Them Pay
The most ridiculous idea I've seen recently is the one floating around to give the corporations a tax holiday on their accumulated overseas earnings. Here's the main facts: A company creates an overseas subsidiary to do business in other countries. It makes money and pays taxes wherever it operates, such as in Europe or Asia. The company also takes an accounting charge to US earnings for the taxes due to the US, but the actual payment is deferred until the cash is brought back to the US. The company receives a credit on its US taxes for the foreign taxes paid on that income - thus NO double taxation.
Now they want to get out of this tax liability - one already booked and owed. The overseas countries got their taxes, but the US - the home country which provides them existence - would not. That is utterly ridiculous.
Example: Cisco Systems with its CEO, John ("JohnBoy") Chambers. He co-authored an op-ed in the WSJ yesterday asking for this tax break. His co-author was president of Oracle. Both of them make millions of $ a year, but want more.
"One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations—and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more.
"But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here."
This article and the entire argument is first class sophistry. The companies have ALREADY booked the taxes they OWE to the US. There is no "penalty" - the tax is owed.
In the first place, the only money the company cannot reinvest is the money they OWE to the US government. The rest of the money - up to 65% - can be reinvested. Second, they already OWE that money and have reported that liability to their shareholders. Third, nothing makes them actually invest that money - they can use it for executive salaries or dividends or whatever. Claiming this is a job issue is a total LIE. US interest rates are extremely low. The companies can easily finance new investment for jobs with long term bonds. They are simply lying when they say this tax break is needed.
All JohnBoy and his clique want is another free ride to get more executive pay via stock options and other massive pay packages.
Here's a better idea: tax the entire worldwide earnings NOW. Let's collect this long overdue debt. Close this overseas earnings loophole forever.
Use the money to pay down US debt.
Word of the Day
"Coxcomb" - noun [$10]
Coxcomb means an ostentatiously conceited man, a dandy.
Sentence: Corporate coxcombs seem to think the world revolves around them, that they are Dukes or Princes. It's time to bring them down to learn about the common man & woman. Make them pay.
Now they want to get out of this tax liability - one already booked and owed. The overseas countries got their taxes, but the US - the home country which provides them existence - would not. That is utterly ridiculous.
Example: Cisco Systems with its CEO, John ("JohnBoy") Chambers. He co-authored an op-ed in the WSJ yesterday asking for this tax break. His co-author was president of Oracle. Both of them make millions of $ a year, but want more.
"One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations—and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more.
"But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here."
This article and the entire argument is first class sophistry. The companies have ALREADY booked the taxes they OWE to the US. There is no "penalty" - the tax is owed.
In the first place, the only money the company cannot reinvest is the money they OWE to the US government. The rest of the money - up to 65% - can be reinvested. Second, they already OWE that money and have reported that liability to their shareholders. Third, nothing makes them actually invest that money - they can use it for executive salaries or dividends or whatever. Claiming this is a job issue is a total LIE. US interest rates are extremely low. The companies can easily finance new investment for jobs with long term bonds. They are simply lying when they say this tax break is needed.
All JohnBoy and his clique want is another free ride to get more executive pay via stock options and other massive pay packages.
Here's a better idea: tax the entire worldwide earnings NOW. Let's collect this long overdue debt. Close this overseas earnings loophole forever.
Use the money to pay down US debt.
Word of the Day
"Coxcomb" - noun [$10]
Coxcomb means an ostentatiously conceited man, a dandy.
Sentence: Corporate coxcombs seem to think the world revolves around them, that they are Dukes or Princes. It's time to bring them down to learn about the common man & woman. Make them pay.
Tuesday, September 7, 2010
More Blather from the Bloviator
La Grande Bouche ... The Bloviator in Chief ...
speaks again ... and again ... and again.
Does he think ? Nope.
On Labor Day he comes out with some more ... talk. He want to give business $200 billion in tax savings on investments in plant & equipment. Uh ... is not the problem a lack of jobs for HUMANS ? So why is he subsidizing replacing humans with machines ?
He want to spend $50 billion on "road, railways, and runways". Uh ... wasn't the P-O-R stimulus plan supposed to do that ? It had $700 billion. I guess he is tacitly admitting that money was squandered on unproductive spending. And the people are supposed to suppose that crowd of knaves for MORE spending ?
Meanwhile, the massive taxes on jobs continue. As do the onerous new IRS reporting requirements for small business expenditures. As does the favored tax rates for the billionaire hedge fund managers (the capital gains treatment for "carried interest").
The working poor pay higher tax rates than the billionaire hedge fund and private equity managers. A single person making $15,000 per year in a small business pays 15.3% tax for Social Security and Medicare [ no deductions here ! ] AND a 15% marginal tax rate on taxable income (after the standard deduction and personal exemptions). There is almost no "Earned Income Credit" for single people OR married people with no children. Thus those people are paying 15.3% on the gross plus 15% more on their net household "profit", for a total a 30.3% tax rate.
The billionaire hedge fund or private equity manager pays 15% capital gains rate on his "carried interest". This is not a capital investment. He invested NOTHING - he gets the carried interest for free as a management fee. And the multimillionaire who inherited their wealth and has invested in municipal bands pays NOTHING, TOO.
So Obama still wants to tax jobs, give companies tax breaks for replacing people with machines and give billionaires and multimillionaires free ride.
Is that the "Audacity of Hope" ?
No. That's just lazy sleaze and bloviation to get and keep power. No thought is happening in the White House, but a simple calculation of how to change the subject ... from his failures to anything else.
The P-O-R [Pelosi-Obama-Reid] knaves need to be ejected from power. I hope the public gives them the boot this fall.
PS: The Tea Party activists who are listening to libertarian billionaires like the Koch brothers are being fooled. All they want is free rein to turn themselves into a new aristocracy and gain more wealth and power. Notice how they love to adulated at those social events. They want the public to kowtow to them like they were Dukes or Princes in old Europe. Pericles would scorn them. And the public should, too. Ugh.
PPPS: The health care debate is rather false, too. Those opposed to some kind of national benefit keep screeching that the poor get health care via Medicaid. BUT anyone checking would find out that is given almost exclusively to people with children. The common man without a job gets almost nothing. Thus if he gets sick and a big health care bill, he can lose his home, too. And his life savings. Some fairness. The US system is a disgrace.
Word of the Day
"Zetetic" - adjective [$10]
Zetetic means proceeding by inquiry, investigating.
Sentence: Good solutions to national problem of lack of jobs must come from true zetetic analysis of the actual factors forming the situation, not from political calculations for gaining or retaining power. From my own zetetic thinking, it seems obvious that the US has too few jobs because it taxes jobs too heavily.
speaks again ... and again ... and again.
Does he think ? Nope.
On Labor Day he comes out with some more ... talk. He want to give business $200 billion in tax savings on investments in plant & equipment. Uh ... is not the problem a lack of jobs for HUMANS ? So why is he subsidizing replacing humans with machines ?
He want to spend $50 billion on "road, railways, and runways". Uh ... wasn't the P-O-R stimulus plan supposed to do that ? It had $700 billion. I guess he is tacitly admitting that money was squandered on unproductive spending. And the people are supposed to suppose that crowd of knaves for MORE spending ?
Meanwhile, the massive taxes on jobs continue. As do the onerous new IRS reporting requirements for small business expenditures. As does the favored tax rates for the billionaire hedge fund managers (the capital gains treatment for "carried interest").
The working poor pay higher tax rates than the billionaire hedge fund and private equity managers. A single person making $15,000 per year in a small business pays 15.3% tax for Social Security and Medicare [ no deductions here ! ] AND a 15% marginal tax rate on taxable income (after the standard deduction and personal exemptions). There is almost no "Earned Income Credit" for single people OR married people with no children. Thus those people are paying 15.3% on the gross plus 15% more on their net household "profit", for a total a 30.3% tax rate.
The billionaire hedge fund or private equity manager pays 15% capital gains rate on his "carried interest". This is not a capital investment. He invested NOTHING - he gets the carried interest for free as a management fee. And the multimillionaire who inherited their wealth and has invested in municipal bands pays NOTHING, TOO.
So Obama still wants to tax jobs, give companies tax breaks for replacing people with machines and give billionaires and multimillionaires free ride.
Is that the "Audacity of Hope" ?
No. That's just lazy sleaze and bloviation to get and keep power. No thought is happening in the White House, but a simple calculation of how to change the subject ... from his failures to anything else.
The P-O-R [Pelosi-Obama-Reid] knaves need to be ejected from power. I hope the public gives them the boot this fall.
PS: The Tea Party activists who are listening to libertarian billionaires like the Koch brothers are being fooled. All they want is free rein to turn themselves into a new aristocracy and gain more wealth and power. Notice how they love to adulated at those social events. They want the public to kowtow to them like they were Dukes or Princes in old Europe. Pericles would scorn them. And the public should, too. Ugh.
PPS: One of the biggest lies being shouted is that the working poor pay little or no tax. I guess they've never even looked at a tax return and are making it up. Economists and people in think tanks are like that. They have little or no practical experience in the world.
PPPS: The health care debate is rather false, too. Those opposed to some kind of national benefit keep screeching that the poor get health care via Medicaid. BUT anyone checking would find out that is given almost exclusively to people with children. The common man without a job gets almost nothing. Thus if he gets sick and a big health care bill, he can lose his home, too. And his life savings. Some fairness. The US system is a disgrace.
Word of the Day
"Zetetic" - adjective [$10]
Zetetic means proceeding by inquiry, investigating.
Sentence: Good solutions to national problem of lack of jobs must come from true zetetic analysis of the actual factors forming the situation, not from political calculations for gaining or retaining power. From my own zetetic thinking, it seems obvious that the US has too few jobs because it taxes jobs too heavily.
Wednesday, August 25, 2010
Thinking Outside the Box
For all the big talk about doing this, no major figure in the public debate in the US seems to do it, ever. Even the so-called "Think Tanks" don't.
Last year the US was embroiled in a long "debate" on health care. But there was no debate, no presentation of well-argued positions, no evidence for positions was provided. The "debate" had the intellectual content of a football sports bar dialogue over a few beers. The P-O-R crowd hid behind closed doors and wrote a "plan" with the help of the lobbyists. The Rs bloviated against "socialized medicine". Did anyone look around the world for plans or systems that work ... better than what we have ? Nope. France and Germany have workable systems with very, very high public support. Who bothered to assess if all or parts could be applied here ? No one.
Take tax "reform". Does anyone with experience actually doing tax returns provide input ? Nope. All the players are economists and lobbyists who have agendas. Do you realize the US has multiple systems taxing "income" ? [regular income, minimum income, 'earned' income, capital income .. and then the corporate income] Why ? The complexity and unfairness is huge. Potential for favors and corruption are enormous. Dislocations and unfairness abound. Who among the blatherers knows that a retired person making around $35,000 a year can face marginal tax rates in the mid 40% range ? That's more than any billionaire.
Rs say the poor pay little or no tax. They are either stupid of liars. The working poor pay plenty in the form of social security taxes and medicare taxes. Those taxes come off the top, before ANY deductions. The Rs love to talk about the 'employer' payments when they talk about costs: they say it is really paid by the worker. YET they somehow forget that when it comes to assessing how much tax the working poor.
How much tax does a billionaire pay who owns municipal bonds ? Zero. He pays NOTHING for support of old people, for medical care of old people, nothing for national defense, etc. He's a total freeloader. YET who in the DC chattering classes talks about "fairness" in taxing that freeloader ? No one.
Any tax "reform" that does not unify and simply the systems is fraud. A simple, unified income tax at a low rate with a high exemption for the poor PLUS a value added tax would be fair. All would pay something. The value added tax would pay for Social Security AND a unified Shared Health Care Benefit. Taxes would be fair and collect plenty of money. Double taxation and loopholes would cease.
That is thinking outside the box.
Hey DC, read this blog !!!
Actions
I sold a bushel of TIPs [Treasury Inflation Protected securities] yesterday at a good price. The proceeds were put into a money fund. Krypto now have lots of cash to buy stocks on this dip. On a further rally in TIPs prices, I will sell more. The TIPs allocation in Krypto Fund is now 7.5%, down from a high of 12.5%. I have done the reduction in two steps, and will cut the allocation to 5% on a further significant move up in the price of TIPs.
My buying of US stocks will begin when the S&P gets closer to 1000. As always, I will buy in stages. Time diversification rules.
Word of the Day
"Obstreperous" - adjective [$10]
Obstreperous means 1. uncontrollably noisy, clamorous; 2. stubbornly defiant, unruly.
Sentence: The Tea Parties need more intellectual content to focus their obstreperous natures in order to expand support to the political center and win major elections - not just primary elections.
Last year the US was embroiled in a long "debate" on health care. But there was no debate, no presentation of well-argued positions, no evidence for positions was provided. The "debate" had the intellectual content of a football sports bar dialogue over a few beers. The P-O-R crowd hid behind closed doors and wrote a "plan" with the help of the lobbyists. The Rs bloviated against "socialized medicine". Did anyone look around the world for plans or systems that work ... better than what we have ? Nope. France and Germany have workable systems with very, very high public support. Who bothered to assess if all or parts could be applied here ? No one.
Take tax "reform". Does anyone with experience actually doing tax returns provide input ? Nope. All the players are economists and lobbyists who have agendas. Do you realize the US has multiple systems taxing "income" ? [regular income, minimum income, 'earned' income, capital income .. and then the corporate income] Why ? The complexity and unfairness is huge. Potential for favors and corruption are enormous. Dislocations and unfairness abound. Who among the blatherers knows that a retired person making around $35,000 a year can face marginal tax rates in the mid 40% range ? That's more than any billionaire.
Rs say the poor pay little or no tax. They are either stupid of liars. The working poor pay plenty in the form of social security taxes and medicare taxes. Those taxes come off the top, before ANY deductions. The Rs love to talk about the 'employer' payments when they talk about costs: they say it is really paid by the worker. YET they somehow forget that when it comes to assessing how much tax the working poor.
How much tax does a billionaire pay who owns municipal bonds ? Zero. He pays NOTHING for support of old people, for medical care of old people, nothing for national defense, etc. He's a total freeloader. YET who in the DC chattering classes talks about "fairness" in taxing that freeloader ? No one.
Any tax "reform" that does not unify and simply the systems is fraud. A simple, unified income tax at a low rate with a high exemption for the poor PLUS a value added tax would be fair. All would pay something. The value added tax would pay for Social Security AND a unified Shared Health Care Benefit. Taxes would be fair and collect plenty of money. Double taxation and loopholes would cease.
That is thinking outside the box.
Hey DC, read this blog !!!
Actions
I sold a bushel of TIPs [Treasury Inflation Protected securities] yesterday at a good price. The proceeds were put into a money fund. Krypto now have lots of cash to buy stocks on this dip. On a further rally in TIPs prices, I will sell more. The TIPs allocation in Krypto Fund is now 7.5%, down from a high of 12.5%. I have done the reduction in two steps, and will cut the allocation to 5% on a further significant move up in the price of TIPs.
My buying of US stocks will begin when the S&P gets closer to 1000. As always, I will buy in stages. Time diversification rules.
Word of the Day
"Obstreperous" - adjective [$10]
Obstreperous means 1. uncontrollably noisy, clamorous; 2. stubbornly defiant, unruly.
Sentence: The Tea Parties need more intellectual content to focus their obstreperous natures in order to expand support to the political center and win major elections - not just primary elections.
Monday, March 29, 2010
Gross Unfairness
That's the current US system for taxation of income. The capricious and vindictive nature of the technical details of the system are grossly unfair to the people. How ? This post concentrates on one type of pure unfairness: inequality before the law. The example: payments for health insurance.
Persons working for big companies or governments who provide that benefit don't notice it. That's because the company or government pays. The employee pays nothing and it never shows up on his taxes. The company deducts the premium expense as an ordinary business expense. Even IF the employee pays part of the expense in a share of the premium OR the co-pays under the policy, often that is structured to use pre-tax money: A portion of pay is diverted pre-tax into an account to be used for that purpose. So these people get health care from pre-tax money.
That's a good deal IF you can get it, since including Social Security and Medicare taxes, marginal rates are really very high even at low incomes. Adding the 15.3% Social Security and Medicare tax to the 25% bracket [which kicks in at $67,900 for joint filers, $34,000 for the single] and adding 5% state income taxes, too, one gets a very, very high marginal tax rate of just over 45% for the bulk of the middle class. Using pre-tax dollars means buying at a 45% discounts - quite a "sale".
What about persons working for small companies or even larger companies who do NOT provide to all employees ? They have to buy their own insurance. That is very expensive. I pay for our health insurance now. The plan is that of Mrs. B's former employer, as she was able to retain it as a retiree, having worked there over 30 years and being over 55. BUT we must pay the FULL costs for coverage of ourselves. That is about $14,000 per year. Not chicken feed. [By the way, I priced other plans and for a married couple in MA, the cost is about the same for the same "Preferred Provider" plan.]
A person in the 45% marginal tax regime must earn $25,450 to be able to pay that cost. You can easily see why many, many persons don't buy health insurance if their employer does not provide it. It is very, very unfair that those with GOOD JOBS from stronger employers get health insurance cheaper than those working for weaker, less financially able companies, often for less pay.
[NOTE: one might be able to deduct part of that cost in the itemized deductions, BUT that is limited to the amount over 7.5% of one's income. If one is a middle class family of two earners making $200,000 per year, that limit is $15,000 - hence NO deduction. see how capricious the system is ?]
What about the self-employed ? Can they use pre-tax dollars ? Yes, they can, IF the plan is "established under your business". For a sole proprietor, that means in the name of the sole proprietor. IF that condition is met, then the self-employed can take take an adjustment to income (that's good - it's before the adjusted gross income line and before all the limits on itemized deductions).
BUT if the policy is in the name of the sole proprietor's spouse, then NOPE, no adjustment. that person gets screwed and must use very costly after tax money to pay for the premium.
AND you might now guess that we are in that situation. The coverage we could retain from Mrs. B's former employer is in her name. I pay the same cost, but we get no income adjustment.
Treating the same expenditures differently for technical reason is simply unfair - no, it's grossly unfair. All payments for health insurance should at least be given an adjustment to income. That's still not a good as those working for big companies and governments get, as those get the coverage before those big Social Security and Medicare taxes. But it would be a start.
With all the focus on health insurance reform by Obama, you would have thought his supposedly "historic" "reform" would at least be roughly fair. BUT noooooooooooooooo, his "reform" did nothing to repair this gross unfairness.
Reality is the very, very few persons under the Obama mandate to buy health insurance will be able to afford it even with the subsidies, due to its cost and the unfair tax treatment.
What would be fair ? Payment for health insurance should be, at a minimum, an adjustment to income for everyone making the payments.
To be truly fair and equal and not destructive of jobs, the Federal government should provide this as a Shared Benefit to all, funded from a national value added tax.
Does ObamaCare move towards a truly fair program ? Nope. He retains the superstructure of the old, corrupt, unfair system. It's going to be a cruel joke on all when (IF) it goes into full effect in a few years.
Word of the Day
"Plangent" - adjective [$10]
Plangent means loud, reverberating.
Sentence: The sound of the season should a plangent roar for tax reform, but it's not. The public is numbed or unaware of how grossly unfair the income tax system is. IF they knew many of them faced a 45% marginal tax rate on extra earnings from work, they would revolt.
Persons working for big companies or governments who provide that benefit don't notice it. That's because the company or government pays. The employee pays nothing and it never shows up on his taxes. The company deducts the premium expense as an ordinary business expense. Even IF the employee pays part of the expense in a share of the premium OR the co-pays under the policy, often that is structured to use pre-tax money: A portion of pay is diverted pre-tax into an account to be used for that purpose. So these people get health care from pre-tax money.
That's a good deal IF you can get it, since including Social Security and Medicare taxes, marginal rates are really very high even at low incomes. Adding the 15.3% Social Security and Medicare tax to the 25% bracket [which kicks in at $67,900 for joint filers, $34,000 for the single] and adding 5% state income taxes, too, one gets a very, very high marginal tax rate of just over 45% for the bulk of the middle class. Using pre-tax dollars means buying at a 45% discounts - quite a "sale".
What about persons working for small companies or even larger companies who do NOT provide to all employees ? They have to buy their own insurance. That is very expensive. I pay for our health insurance now. The plan is that of Mrs. B's former employer, as she was able to retain it as a retiree, having worked there over 30 years and being over 55. BUT we must pay the FULL costs for coverage of ourselves. That is about $14,000 per year. Not chicken feed. [By the way, I priced other plans and for a married couple in MA, the cost is about the same for the same "Preferred Provider" plan.]
A person in the 45% marginal tax regime must earn $25,450 to be able to pay that cost. You can easily see why many, many persons don't buy health insurance if their employer does not provide it. It is very, very unfair that those with GOOD JOBS from stronger employers get health insurance cheaper than those working for weaker, less financially able companies, often for less pay.
[NOTE: one might be able to deduct part of that cost in the itemized deductions, BUT that is limited to the amount over 7.5% of one's income. If one is a middle class family of two earners making $200,000 per year, that limit is $15,000 - hence NO deduction. see how capricious the system is ?]
What about the self-employed ? Can they use pre-tax dollars ? Yes, they can, IF the plan is "established under your business". For a sole proprietor, that means in the name of the sole proprietor. IF that condition is met, then the self-employed can take take an adjustment to income (that's good - it's before the adjusted gross income line and before all the limits on itemized deductions).
BUT if the policy is in the name of the sole proprietor's spouse, then NOPE, no adjustment. that person gets screwed and must use very costly after tax money to pay for the premium.
AND you might now guess that we are in that situation. The coverage we could retain from Mrs. B's former employer is in her name. I pay the same cost, but we get no income adjustment.
Treating the same expenditures differently for technical reason is simply unfair - no, it's grossly unfair. All payments for health insurance should at least be given an adjustment to income. That's still not a good as those working for big companies and governments get, as those get the coverage before those big Social Security and Medicare taxes. But it would be a start.
With all the focus on health insurance reform by Obama, you would have thought his supposedly "historic" "reform" would at least be roughly fair. BUT noooooooooooooooo, his "reform" did nothing to repair this gross unfairness.
Reality is the very, very few persons under the Obama mandate to buy health insurance will be able to afford it even with the subsidies, due to its cost and the unfair tax treatment.
What would be fair ? Payment for health insurance should be, at a minimum, an adjustment to income for everyone making the payments.
To be truly fair and equal and not destructive of jobs, the Federal government should provide this as a Shared Benefit to all, funded from a national value added tax.
Does ObamaCare move towards a truly fair program ? Nope. He retains the superstructure of the old, corrupt, unfair system. It's going to be a cruel joke on all when (IF) it goes into full effect in a few years.
Word of the Day
"Plangent" - adjective [$10]
Plangent means loud, reverberating.
Sentence: The sound of the season should a plangent roar for tax reform, but it's not. The public is numbed or unaware of how grossly unfair the income tax system is. IF they knew many of them faced a 45% marginal tax rate on extra earnings from work, they would revolt.
Tuesday, January 26, 2010
Entrepreneurial Tax Purgatory
If you are an entrepreneur, then you know what I mean. Now is the time you have to ramp up your preparation of material for the annual tax return tortures the State performs on you. You have to prepare 1099s and start filing the innumerable state forms and the Federal beast. Even with no employees, just contract service providers, the burden is large. And worse, the 1099s have to be typed on special forms. You can't just print them out. That's a burden the State puts on you to save them money.
Them. You know I gripe about what they do. Each state has its own tortures. Florida, for example, requires a corporation to file just one return, but Alabama requires two. Then one must file Delaware annual reports.
Every LLC, partnership or corporation you use to structure your business properly requires more forms and returns in every state and the Federal government. I have operations in many states. I file at least 50 returns this season every year. Most are done by a skilled accountant, but I must check them and provide him the raw material. I've done all these in the past by hand, so know that's involved. I still do a few state corporate returns myself by hand. Thus I DO know what I'm talking about, unlike many pundits and journalists.
For my personal return, I do it myself by hand and have done so for many, many years. The spreadsheet does the arithmetic, but I have to alter it to reflect tax law changes.
To call this system a disgrace and unholy burden is no understatement. And it's getting worse every year. The States are as bad or worse than the Federal government. How many jobs are lost due to these burdens on the entrepreneur ?
Congress and the ruling classes of course don't care. It's part of the method for them to control us.
This economic crisis needs to precipitate a new 21st century tax revolt !
Markets
Yesterday's bounce was wimpy, so I chose not to play. I'm standing aside for now.
Word of the Day
"Snarky" - adjective [$100]
Snarky means 1. testy or irritiable; 2. (Urban Dictionary) tendency to make snide remarks.
Sentence: Bunkerman spends this season every year in a snarky mood, due to the tax preparation and filing burdens on him from the State.
Them. You know I gripe about what they do. Each state has its own tortures. Florida, for example, requires a corporation to file just one return, but Alabama requires two. Then one must file Delaware annual reports.
Every LLC, partnership or corporation you use to structure your business properly requires more forms and returns in every state and the Federal government. I have operations in many states. I file at least 50 returns this season every year. Most are done by a skilled accountant, but I must check them and provide him the raw material. I've done all these in the past by hand, so know that's involved. I still do a few state corporate returns myself by hand. Thus I DO know what I'm talking about, unlike many pundits and journalists.
For my personal return, I do it myself by hand and have done so for many, many years. The spreadsheet does the arithmetic, but I have to alter it to reflect tax law changes.
To call this system a disgrace and unholy burden is no understatement. And it's getting worse every year. The States are as bad or worse than the Federal government. How many jobs are lost due to these burdens on the entrepreneur ?
Congress and the ruling classes of course don't care. It's part of the method for them to control us.
This economic crisis needs to precipitate a new 21st century tax revolt !
Markets
Yesterday's bounce was wimpy, so I chose not to play. I'm standing aside for now.
Word of the Day
"Snarky" - adjective [$100]
Snarky means 1. testy or irritiable; 2. (Urban Dictionary) tendency to make snide remarks.
Sentence: Bunkerman spends this season every year in a snarky mood, due to the tax preparation and filing burdens on him from the State.
Tuesday, November 24, 2009
To Solve the Twin Deficits
That problem is how to simultaneously reduce the trade deficit and to reduce the US Federal budget deficit. Those problems are connected by the flow of funds to and from overseas: the dollars sent overseas to buy goods (or services) flow back to invest in US $ denominated debt. Some call them "imbalances". Maintaining stability when both flows are large is a problem, as small changes in big numbers are ... big, and cause serious disturbances.
What is Do ?
First, recognize some causes. IF the US economy had full employment, the Federal budget deficit would shrink hugely. Second, US tax policy both taxes employment heavily AND subsidises imports, so we get less employment and more imports than otherwise would be equilibrium.
How is this done ? Social security, Medicare and various unemployment taxes are a very, very high cost to labor, over 15% of gross wages. Add to that the cost of health care benefits. The gross cost probably is over 25%. Under ObamaCare, this cost for using people will grow. Obviously, less US source employment is used for production and US firms place production overseas where possible.
All that labor tax money flows to provide benefits to US workers/people, and is added to the cost of US source goods. So Americans buying US source goods pay a huge added cost, while buying foreign source goods lets them pay NONE. What do we get ? People can buy imports and not pay for those benefits to the people. So the nation's tax policy effectively subsidizes imports, at the expense of US-based production, AND even taxes exports, too, via US source labor taxes.
All these create a huge dis-equilibrium in favor of less jobs, more imports, and less exports. This poor US tax policy supports the twin deficits.
How to Solve the Problem ?
Replace ALL labor taxes - Social Security, Medicare, unemployment and any health care mandates with a single National Sales Tax ("NST"), or call it a value added tax ("VAT") if you wish, on all goods. Employers will see their labor bill reduced hugely, and can hire more. Firms using foreign source labor will have to pay the NST/VST on sales in the US, so will lose that prior advantage (of not paying for US social benefits). US firms will see better profit margins on exports, as they will not have to pay that tax on exports.
American consumers will pay the tax equally on US source goods and imports, but that total amount will go to US benefits to its people. The opposite is true now, as no benefit to the American people flows from use of imports.
This fair tax policy will hugely reduce unemployment and the trade deficit - helping hugely to solve the twin deficits.
By the way, one has to replace ALL labor taxes at once with the NST/VAT, or no one will believe that the change is real and permanent, and that the public will not end up with both taxes. Also, the tax is on goods only: services are labor. The income tax picks those up directly or in the NST/VAT on price of the goods they help produce.
Additional Benefits
The municipal bond freeloaders and cash income persons will have to pay that NST/VAT, too when they spend their money. This improves fairness.
Word of the Day
"Controvert" - verb, transitive [$10]
Controvert means 1. to dispute, deny; 2. argue about, discuss.
Sentence: To controvert that US labor taxes seriously hurt US employment levels is a pretty difficult position to argue.
What is Do ?
First, recognize some causes. IF the US economy had full employment, the Federal budget deficit would shrink hugely. Second, US tax policy both taxes employment heavily AND subsidises imports, so we get less employment and more imports than otherwise would be equilibrium.
How is this done ? Social security, Medicare and various unemployment taxes are a very, very high cost to labor, over 15% of gross wages. Add to that the cost of health care benefits. The gross cost probably is over 25%. Under ObamaCare, this cost for using people will grow. Obviously, less US source employment is used for production and US firms place production overseas where possible.
All that labor tax money flows to provide benefits to US workers/people, and is added to the cost of US source goods. So Americans buying US source goods pay a huge added cost, while buying foreign source goods lets them pay NONE. What do we get ? People can buy imports and not pay for those benefits to the people. So the nation's tax policy effectively subsidizes imports, at the expense of US-based production, AND even taxes exports, too, via US source labor taxes.
All these create a huge dis-equilibrium in favor of less jobs, more imports, and less exports. This poor US tax policy supports the twin deficits.
How to Solve the Problem ?
Replace ALL labor taxes - Social Security, Medicare, unemployment and any health care mandates with a single National Sales Tax ("NST"), or call it a value added tax ("VAT") if you wish, on all goods. Employers will see their labor bill reduced hugely, and can hire more. Firms using foreign source labor will have to pay the NST/VST on sales in the US, so will lose that prior advantage (of not paying for US social benefits). US firms will see better profit margins on exports, as they will not have to pay that tax on exports.
American consumers will pay the tax equally on US source goods and imports, but that total amount will go to US benefits to its people. The opposite is true now, as no benefit to the American people flows from use of imports.
This fair tax policy will hugely reduce unemployment and the trade deficit - helping hugely to solve the twin deficits.
By the way, one has to replace ALL labor taxes at once with the NST/VAT, or no one will believe that the change is real and permanent, and that the public will not end up with both taxes. Also, the tax is on goods only: services are labor. The income tax picks those up directly or in the NST/VAT on price of the goods they help produce.
Additional Benefits
The municipal bond freeloaders and cash income persons will have to pay that NST/VAT, too when they spend their money. This improves fairness.
Word of the Day
"Controvert" - verb, transitive [$10]
Controvert means 1. to dispute, deny; 2. argue about, discuss.
Sentence: To controvert that US labor taxes seriously hurt US employment levels is a pretty difficult position to argue.
Friday, March 27, 2009
TGIF and taxes
Ugh ... it's time to do my taxes. I do my own with a spreadsheet that I wrote long ago and have slowly embellished. The spreadsheet simply mimics the actual tax forms and worksheets that I need, so when I'm done, I can just copy the entries onto the actual forms with perfect arithmetic. But I still have to compile all the data, which is a lot of work. I think I'll start today with the brokerage statements, that have to be combined for aggregate numbers for things like interest and dividends, etc.
More ...
The Brazilian president made some stupid statements about "white people" with "blue eyes" causing the crisis. I suppose he's speaking to the folks back home. And he seems to have never taken a look at Stan O'Neal of Merrill Lynch debacle fame.
Markets
Another up day. The few living bulls are very wary and the more numerous bears are complacent, either lurking in the woods (in cash) for victims to maul or suffering as their existing shorts are bleeding while they wait for (certain) redemption. It makes me wonder about this market. I've written before about the 1974 analogy. Today Blabberg described it rather well from the charts - that is, if you were up at 3:30 AM ET to watch it. The guy did a pretty good job. He was British, by the way. That figures. Few American faces can articulate a complex thought.
The 1974 analogy implies a fast rally back to around S&P 1500 in 18 months. That would completely kill the bears with losses or permanent underperformance. Aw shucks, can it really happen ? Of course, analogies are just ... analogies.
Word of the Day
"Invious" - adjective [$1000] and "inviousness" - noun [$1000]; obsolete
Invious means impassible; inaccessible; without paths or roads; trackless.
Inviousness means the state or condition of being invious.
Example from geography (original usage): some places in the Rockies, or the Scottish highlands, or Siberia.
Sentence: The bears (and Krondrativans) claim that Tolstoyan historiography applies: that the economic crisis is invious and man cannot find a short cut out of lengthy purgatory. The bulls deny this, thinking that massive monetary expansion to replace vanished credit, plus plenty of stimulus to generate demand, is the short cut to economic paradise, viz., moderate growth. Time will tell.
Le Mot du Jour
"Internaute" - noun, MF.
Internaute means net surfer, Internet user.
La Phrase: Augmenter les nombres des internautes tue lentement des journals.
Sentence: Increasing the numbers of internet users is slowly killing newspapers.
More ...
The Brazilian president made some stupid statements about "white people" with "blue eyes" causing the crisis. I suppose he's speaking to the folks back home. And he seems to have never taken a look at Stan O'Neal of Merrill Lynch debacle fame.
Markets
Another up day. The few living bulls are very wary and the more numerous bears are complacent, either lurking in the woods (in cash) for victims to maul or suffering as their existing shorts are bleeding while they wait for (certain) redemption. It makes me wonder about this market. I've written before about the 1974 analogy. Today Blabberg described it rather well from the charts - that is, if you were up at 3:30 AM ET to watch it. The guy did a pretty good job. He was British, by the way. That figures. Few American faces can articulate a complex thought.
The 1974 analogy implies a fast rally back to around S&P 1500 in 18 months. That would completely kill the bears with losses or permanent underperformance. Aw shucks, can it really happen ? Of course, analogies are just ... analogies.
Word of the Day
"Invious" - adjective [$1000] and "inviousness" - noun [$1000]; obsolete
Invious means impassible; inaccessible; without paths or roads; trackless.
Inviousness means the state or condition of being invious.
Example from geography (original usage): some places in the Rockies, or the Scottish highlands, or Siberia.
Sentence: The bears (and Krondrativans) claim that Tolstoyan historiography applies: that the economic crisis is invious and man cannot find a short cut out of lengthy purgatory. The bulls deny this, thinking that massive monetary expansion to replace vanished credit, plus plenty of stimulus to generate demand, is the short cut to economic paradise, viz., moderate growth. Time will tell.
Le Mot du Jour
"Internaute" - noun, MF.
Internaute means net surfer, Internet user.
La Phrase: Augmenter les nombres des internautes tue lentement des journals.
Sentence: Increasing the numbers of internet users is slowly killing newspapers.
Tuesday, November 18, 2008
Tax Loss Selling
The markets are likely to be very heavy until the end of the year as tax loss selling will be substantial. I did some of that yesterday and have more to do. Why pay taxes on realized profits if one has unrealized losses to offset them, at least partially ? That is real money that can be saved. For me, I can see my January 15 estimated tax payment cut substantially, as based on current results, I've overpaid my taxes so far this year.
One can switch mutual funds to take losses, or sell one stock & buy a similar one, or just sell and regroup. I expect people all over the world are thinking about this.
I still have a lot of gains that I booked early this year to offset as much as possible.
Markets
Les Bourses mondiales sont plombées. In English, that is "The world markets are leaden."
Hmmm ... I wonder how to say, "doing nothing" in French ? That verb for "do" has a lot of idioms in French. Hehe, it has interesting idioms in American English, too.
Word of the Day
"Mere" - noun (in this usage) [$10] archaic, poetic [I am not using the common adjective, mere, here]
Mere (in this usage) means a lake or pond.
Sentence: Reminiscent of that famous headline as New York City sought Federal help in the major 1973-1975 US recession, which read "Ford to NY - Drop Dead", we have, or can at least infer, "Bush to Detroit - Go Jump in the Mere".
One can switch mutual funds to take losses, or sell one stock & buy a similar one, or just sell and regroup. I expect people all over the world are thinking about this.
I still have a lot of gains that I booked early this year to offset as much as possible.
Markets
Les Bourses mondiales sont plombées. In English, that is "The world markets are leaden."
Hmmm ... I wonder how to say, "doing nothing" in French ? That verb for "do" has a lot of idioms in French. Hehe, it has interesting idioms in American English, too.
Word of the Day
"Mere" - noun (in this usage) [$10] archaic, poetic [I am not using the common adjective, mere, here]
Mere (in this usage) means a lake or pond.
Sentence: Reminiscent of that famous headline as New York City sought Federal help in the major 1973-1975 US recession, which read "Ford to NY - Drop Dead", we have, or can at least infer, "Bush to Detroit - Go Jump in the Mere".
Monday, April 14, 2008
Monday Blues
I finished my taxes yesterday. I had done the numbers a week ago, but filling out the forms is really tedious. I suppose I'm not being original in saying that all Congressmen should be horsewhipped every April 15 for creating this monstrosity. There really is no reason why the tax code is not a simple, cash-basis, revenue collection system. The complexity comes from all the accrual accounting and obscure asset and revenue classes, each with their own forms nd worksheets. Arghhhhhh !
Then the States just have to be different, and can't just collect a percentage of the Federal amount. Arghhhhhhhh^2 !
The result: a 30 page federal return plus more for stock trades on Sch D-1, and a 21 page Massachusetts return, including attachments.
Then I had to adjust my spreadsheet to compute the estimated taxes for 2008. Ugh !
At least it's all over but the mailing (of course via certifed, return receipt requested mail).
Market
I'll be watching and reading the Wachovia news this morning. I have quite a bit of that stock & early reports say they moved up their earnings announcement to this morning and are raising capital via a stock sale. I'll comment more on it later after the actual facts come out.
The GE drop Friday on that crappy earnings report seems overdone, but I'll be patient in adding to my position in September 30 call options. This option play is a trade.
Barron's Intermediate grade bond index fell more last week - another 13 bps. It's still too high at 8.21%, but the trend is good.
The monetary base dropped a bit - it's now up only 1.4% year over year. These new Fed policies might be affecting this, so I'll withhold bashing the Fed. I really do want to see the monetary base and M1 increase a lot more. Both have too little growth, despite the uninformed statements of the inflation-mongers on "printing money".
Politics
I guess I'm not surprised Obama knows nothing of the common man, but this quote from him in Iowa sure is telling [from today's online WSJ]: "Sen. Obama has encountered other problems in trying to connect with rural whites. At a campaign stop in Adel, Iowa, he drew cringes when he asked a crowd of farmers: 'Anybody gone into a Whole Foods lately and seen what they charge for arugula?' The upscale, organics supermarket chain doesn't have a single store in Iowa."
Sheesh. What the bleep is arugula, anyway ? The press sure is protecting this guy. If a Republican had said that, it would be front page news and talk for a few weeks. I now think he can't stand up for an entire campaign. Big John McCain is looking better & better.
Words of the Day
Today's are a couple of "moi" words. The French word, "moi" means "me" but today's words are just English words beginning with "moi" and aren't related to the French word "moi".
"Moiety" - noun [$10]
Moiety means 1. a portion or prt or share; 2. a half; 3. either of two basic units of cultural anthropology that make up a tribe of unilateral descent.
Sentence: [from Gen. Sherman's Memoirs, pg 530 re his tactics in the advance to Atlanta] "... that with the one moiety of our army [entrenched] we could hold in check the corresponding wing of the enemy and with the other sweep in flank ..."
"Moil" - noun and verb [$10] archaic
Moil means (verb, intransitive) 1. to toil, slave; drudge; 2. to churn about; (noun) 1. drudgery; toil; 2. turmoil, confusino.
Sentence: (from Goethe, Faust Part I, Great Book vol. 45, pg. 37 said by Margareta/Gretchen)
"Then there were chores or marketing to do,
And the same old thing the whole year through.
With such a moil,
One's spirits are not always of the best;
And yet with our toil
Makes food taste sweeter, so that we are blessed
And grateful for our rest."
Then the States just have to be different, and can't just collect a percentage of the Federal amount. Arghhhhhhhh^2 !
The result: a 30 page federal return plus more for stock trades on Sch D-1, and a 21 page Massachusetts return, including attachments.
Then I had to adjust my spreadsheet to compute the estimated taxes for 2008. Ugh !
At least it's all over but the mailing (of course via certifed, return receipt requested mail).
Market
I'll be watching and reading the Wachovia news this morning. I have quite a bit of that stock & early reports say they moved up their earnings announcement to this morning and are raising capital via a stock sale. I'll comment more on it later after the actual facts come out.
The GE drop Friday on that crappy earnings report seems overdone, but I'll be patient in adding to my position in September 30 call options. This option play is a trade.
Barron's Intermediate grade bond index fell more last week - another 13 bps. It's still too high at 8.21%, but the trend is good.
The monetary base dropped a bit - it's now up only 1.4% year over year. These new Fed policies might be affecting this, so I'll withhold bashing the Fed. I really do want to see the monetary base and M1 increase a lot more. Both have too little growth, despite the uninformed statements of the inflation-mongers on "printing money".
Politics
I guess I'm not surprised Obama knows nothing of the common man, but this quote from him in Iowa sure is telling [from today's online WSJ]: "Sen. Obama has encountered other problems in trying to connect with rural whites. At a campaign stop in Adel, Iowa, he drew cringes when he asked a crowd of farmers: 'Anybody gone into a Whole Foods lately and seen what they charge for arugula?' The upscale, organics supermarket chain doesn't have a single store in Iowa."
Sheesh. What the bleep is arugula, anyway ? The press sure is protecting this guy. If a Republican had said that, it would be front page news and talk for a few weeks. I now think he can't stand up for an entire campaign. Big John McCain is looking better & better.
Words of the Day
Today's are a couple of "moi" words. The French word, "moi" means "me" but today's words are just English words beginning with "moi" and aren't related to the French word "moi".
"Moiety" - noun [$10]
Moiety means 1. a portion or prt or share; 2. a half; 3. either of two basic units of cultural anthropology that make up a tribe of unilateral descent.
Sentence: [from Gen. Sherman's Memoirs, pg 530 re his tactics in the advance to Atlanta] "... that with the one moiety of our army [entrenched] we could hold in check the corresponding wing of the enemy and with the other sweep in flank ..."
"Moil" - noun and verb [$10] archaic
Moil means (verb, intransitive) 1. to toil, slave; drudge; 2. to churn about; (noun) 1. drudgery; toil; 2. turmoil, confusino.
Sentence: (from Goethe, Faust Part I, Great Book vol. 45, pg. 37 said by Margareta/Gretchen)
"Then there were chores or marketing to do,
And the same old thing the whole year through.
With such a moil,
One's spirits are not always of the best;
And yet with our toil
Makes food taste sweeter, so that we are blessed
And grateful for our rest."
Friday, April 4, 2008
TGIF
Another Friday commences after a long week of market swings. Not much has been given up from the big rip up this week, which is interesting as two days of relatively "bad" news brought no intense selling. Since the US jobs number is so often revised substantially, it's hard to conceive that it will be definitive - weakness is expected. As posted in yesterday's comments, the job data is quite erratic as different signs from ADP, Challenger-Grey and the unemployment claims obviates one from educing a defintive trend from the data.
I'm sticking with my "touch & go" economic trajectory ... Battleship Ben is on my side, firing salvos at the bears. About 15 years ago I saw Air Force planes practicing the "touch & go" at the Air Force base in Anchorage, Alaska, in winter. The actual moment of the "touch" is quite exciting. So it is for the economy, too.
Blabberg had that old fool, Soros, on this morning. Ugh ! You can be sure I'll never kiss the butt of some rich, powerful guy just because he once was, or is, rich & successful, no matter what endeavor brought forth his wealth. The words must make sense. So I turned Blabberg off and switched to Babblevision. Perchance I should just hit "mute" ?
I'd be looking hard for a few more good stocks, but my time is taken up with doing my taxes ... ugh ! I do the forms myself using spreadsheets that I've created over the years. Mostly the time is used in making sure that I miss nothing. I use Quicken, so actually getting the annual expenses and income data is rather easy. Still, I file several Schedule C's, am subject to AMT and need many other schedules and worksheets to do the forms correctly and minimize my tax. I slowly plod over the preparation for days :-((
Words of the Day - a trio for comparison
"Converse" - adjective and noun [$ ?]
Converse means (adjective) opposite, contrary, reversed; (noun) 1. a statement formed by another by the transposition of certain words; 2. something that is opposite or contrary.
Sentence: The extreme converse opinion of Bunkerman's "tough & go" economic trajectory is Soros' nouveau Great Depression outlook. Time will tell which, if either, is correct.
"Obverse" - noun and adjective [$10]
Obverse means (noun) 1. the more conspicuous of two possible alternatives, cases or sides: the obverse of this issue; 2. the side of a coin, medal or badge that bears to principal stamp or design: the George Washington silouette is on the obverse of a quarter; (adjective) serving as a counterpoint; 2. facing or turned toward the observer (the obverse side of a statue).
Sentence: (noun) The obverse of the 1 ounce gold American Eagle coin is a classic Lady Liberty holding a torch and olive branch. The reverse contains the two eagles, one flying and the other in the nest.
"Contrapuntal" - adjective (Musical) [$10]
Contrapuntal means of or in counterpoint.
Sentence: Babblevision's standard presentation of an issue with an advocate and then a contrapuntal opponent is so stale and time-wasting; Bunkerman derogates those debates as the "dueling politicians", or "dueling analysts", or "dueling money managers", as approproate.
I'm sticking with my "touch & go" economic trajectory ... Battleship Ben is on my side, firing salvos at the bears. About 15 years ago I saw Air Force planes practicing the "touch & go" at the Air Force base in Anchorage, Alaska, in winter. The actual moment of the "touch" is quite exciting. So it is for the economy, too.
Blabberg had that old fool, Soros, on this morning. Ugh ! You can be sure I'll never kiss the butt of some rich, powerful guy just because he once was, or is, rich & successful, no matter what endeavor brought forth his wealth. The words must make sense. So I turned Blabberg off and switched to Babblevision. Perchance I should just hit "mute" ?
I'd be looking hard for a few more good stocks, but my time is taken up with doing my taxes ... ugh ! I do the forms myself using spreadsheets that I've created over the years. Mostly the time is used in making sure that I miss nothing. I use Quicken, so actually getting the annual expenses and income data is rather easy. Still, I file several Schedule C's, am subject to AMT and need many other schedules and worksheets to do the forms correctly and minimize my tax. I slowly plod over the preparation for days :-((
Words of the Day - a trio for comparison
"Converse" - adjective and noun [$ ?]
Converse means (adjective) opposite, contrary, reversed; (noun) 1. a statement formed by another by the transposition of certain words; 2. something that is opposite or contrary.
Sentence: The extreme converse opinion of Bunkerman's "tough & go" economic trajectory is Soros' nouveau Great Depression outlook. Time will tell which, if either, is correct.
"Obverse" - noun and adjective [$10]
Obverse means (noun) 1. the more conspicuous of two possible alternatives, cases or sides: the obverse of this issue; 2. the side of a coin, medal or badge that bears to principal stamp or design: the George Washington silouette is on the obverse of a quarter; (adjective) serving as a counterpoint; 2. facing or turned toward the observer (the obverse side of a statue).
Sentence: (noun) The obverse of the 1 ounce gold American Eagle coin is a classic Lady Liberty holding a torch and olive branch. The reverse contains the two eagles, one flying and the other in the nest.
"Contrapuntal" - adjective (Musical) [$10]
Contrapuntal means of or in counterpoint.
Sentence: Babblevision's standard presentation of an issue with an advocate and then a contrapuntal opponent is so stale and time-wasting; Bunkerman derogates those debates as the "dueling politicians", or "dueling analysts", or "dueling money managers", as approproate.
Saturday, June 16, 2007
The Sin of Hypocrisy
I was reading my stack of newspapers from the past week this morning while having a fine cup of black coffee. Lo and behold, I see a bit in the WSJ that is one of those glaring examples of hypocrisy that infuriates most of us. And it's coupled with my annoyance with the "rich & powerful" trying to force their ideas on the public. And with unfair taxation. A triple play - hat trick - third strike ;-)
Peter Peterson is a founder of Blackstone and stands to cash in about $2 billion on the Blackstone public offering. He's gotten most of that from "carried interest" aka the incentive fees he received as compensation for doing a good job running the fund. He's also a founder of Concord Coalition, an activist group that wants to raise taxes to eliminate the Federal deficit. I remember him as speaking out to raise taxes for years - maybe almost 20 years or more. He's a plain old country club Republican and served under Nixon as Secretary of Commerce. He also served on Clinton's "tax reform" commission in 1994. Hmm, soon after that taxes were raised on middle income retirees.
So his COMPENSATION at Blackstone has been largely tax sheltered to many years and now he's cashing out and going to pay only the 15% long-term capital gains tax rate. All while Joe Retiree pays a 45% marginal rate on his wages bagging groceries for extra income. And that JERK has been "speaking out" about the need for "all Americans" to pay more in taxes and having his butt kissed by the rich & powerful & the press & the black tie set all the time.
That's a five gold star gold hypocrit !!! Sheesh. Grrrrrrrrrrrrrrrr.
See why I distrust the rich & powerful trying to run the country?
Notes:
1. Being a confirmed anachronist, I still receive PAPER newspapers !
2. I've never considered hypocrisy to be the worst evil or sin that a public figure can do, but the modern press seems to consider it a mortal sin - at least for a Republican.
3. I did a little research on how hypocrisy is classified as a sin in various religions. It does seem to be there in writings of early Christian church fathers and in Islam. Here's an interesting list: "Barnabas 20:3-5 arrogance, hypocrisy, rape, haughtiness, deceit, malice, self-sufficiency, poisoning, magic, having no fear of God, hate truth & love falsehood, don’t take care of the widow and orphan, impatience, abortion, partiality" [ from http://www.biblefacts.org/bible/sin.html ]. Also, from Islam: "Some of the major sins are held to be legally punishable in an Islamic state (for example, murder, theft, adultery, and in some views apostasy; see sharia). Most are left to Allah to punish (for example, backbiting, hypocrisy arrogance, filial disrespect, lying)." [ from http://www.answers.com/topic/sin ]. Interesting how "hypocrisy" is grouped with other sins, eh?
4. "eh", is "Canadian" for the Frenchism, "..., no?" or other usages of "..., yes?" ;-)
Peter Peterson is a founder of Blackstone and stands to cash in about $2 billion on the Blackstone public offering. He's gotten most of that from "carried interest" aka the incentive fees he received as compensation for doing a good job running the fund. He's also a founder of Concord Coalition, an activist group that wants to raise taxes to eliminate the Federal deficit. I remember him as speaking out to raise taxes for years - maybe almost 20 years or more. He's a plain old country club Republican and served under Nixon as Secretary of Commerce. He also served on Clinton's "tax reform" commission in 1994. Hmm, soon after that taxes were raised on middle income retirees.
So his COMPENSATION at Blackstone has been largely tax sheltered to many years and now he's cashing out and going to pay only the 15% long-term capital gains tax rate. All while Joe Retiree pays a 45% marginal rate on his wages bagging groceries for extra income. And that JERK has been "speaking out" about the need for "all Americans" to pay more in taxes and having his butt kissed by the rich & powerful & the press & the black tie set all the time.
That's a five gold star gold hypocrit !!! Sheesh. Grrrrrrrrrrrrrrrr.
See why I distrust the rich & powerful trying to run the country?
Notes:
1. Being a confirmed anachronist, I still receive PAPER newspapers !
2. I've never considered hypocrisy to be the worst evil or sin that a public figure can do, but the modern press seems to consider it a mortal sin - at least for a Republican.
3. I did a little research on how hypocrisy is classified as a sin in various religions. It does seem to be there in writings of early Christian church fathers and in Islam. Here's an interesting list: "Barnabas 20:3-5 arrogance, hypocrisy, rape, haughtiness, deceit, malice, self-sufficiency, poisoning, magic, having no fear of God, hate truth & love falsehood, don’t take care of the widow and orphan, impatience, abortion, partiality" [ from http://www.biblefacts.org/bible/sin.html ]. Also, from Islam: "Some of the major sins are held to be legally punishable in an Islamic state (for example, murder, theft, adultery, and in some views apostasy; see sharia). Most are left to Allah to punish (for example, backbiting, hypocrisy arrogance, filial disrespect, lying)." [ from http://www.answers.com/topic/sin ]. Interesting how "hypocrisy" is grouped with other sins, eh?
4. "eh", is "Canadian" for the Frenchism, "..., no?" or other usages of "..., yes?" ;-)
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