We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Our Recent Essays Behind the Front Page
Tuesday, April 1. 2014
Why Parents Need to Let Their Children Fail
Who's been getting rich in the US? It's not the 1%, it's not even the 0.1% - it's the 0.01%
Do we all really hate and envy those star athletes, pop stars, movie stars, TV stars, inventors, successful entrepreneurs, and captains of industry? I sometimes envy their talents, skills, and money, but I sure don't hate them.
My family is driving me crazy, and I am growing to hate them
4 reasons RadioShack is massively failing
Black culture and the culture of poverty are not the same thing.
I agree with that. (I also believe that not all poverty is via 'culture of poverty.' There are a thousand sorts of poverty, including genteel poverty.) Dr. X summarizes that debate:
Here comes the sun - The price of a product is a function of the demand for it — or should be.
The French Implosion - Tax-and-spend politics has driven Paris to the brink
Congress Should Phase Out the Mortgage Interest Deduction
I agree that it is unfair and market-distorting - just like 1000 other government "favors." My view is that I want the Feds to have less money, less power, and less control.
In Westbury, Long Island, you can't rent out a room
USDA to Grandparents: Read Government Bedtime Stories to Encourage Healthy Eating
The Feds don't want Granny baking cookies and pies anymore
Israel-Palestine — enough already!
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Regarding the price of goods - Schumpeter would agree. Capitalists are their own worst enemy when they hop into bed with politicians. It is easy to dislike, and even hate, people who make a lot of money. But it's harder for the citizenry to recognize the damage politicians do, even when it is clearly evident. So we keep voting for the vilest people around, and blame the capitalists for our economic woes. Yet it's really the politicians who are doing the damage by encouraging, and being complicit with, the businessmen who are just doing what seems to come naturally.
To be fair, the politicians are just doing what comes naturally, too. But they do it in a rigged environment, convincing people "it's for the public good" as they line their own pockets in what can only be called legalized crime.
Capitalists who hop into bed with politicians breed fascists.
Phasing out the mortgage interest deduction is fine - as long as it coincides with something else to increase the money in my pocket.
A flat, and lower income tax? OK, but a small first step.
I have long supported a .01% (1/100th of a percent) tax on EVERY financial transaction (buying or selling - hit both sides equally). FX, Stocks, Bonds, Commodities, etc. Government bonds should not be exempt.
Do this, and eliminate income taxes entirely.
Tax corporations at a flat 1% rate (they are not humans, after all), with no deductions or exemptions.
Become more rigorous in defining and taxing non-profits and charities (how does the NFL get classified as a charity?).
Get rid of the mortgage interest deduction, indeed. But if we did what I suggest, not only would all our taxes be imposed on the top 10% of the economic ladder, but it would generate a substantial amount of income with relatively few (there will always be some) side effects or distortions.
re. Tax corporations at a flat 1% rate. Instead of taxing earnings, how about a lower rate on all revenues in the year they are recognized. Wouldn't that do away with most of the fancy bookkeeping, and promote efficiency?
Possibly, but does it make sense to tax a failing business?
Why tax corporations at all? They don't pay taxes, their customers do.
Not in my format.
No income taxes. Corporations can't pass along 100% of a tax, they have to absorb a portion of it. Corporations are not human and while there are many benefits to the corporate structure and arrangement, there is a functional downside - no single person is liable for mistakes, accidents, or deliberate negligence. As a result, there is a need for some degree of oversight, however minimal (as a Libertarian, any oversight is anathema, but I'm not an anarchist).
While writing the reply, I think I see what you're getting. I was thinking in terms of public corporations and not considering private corporations and my understanding is that you are interested in the "oversight" of a tax return (public companies have a lot of similar oversight when reporting quarterly results). Did I get your drift?
As for the general point, the tax may or may not be passed on depending on many factors but in general, I see it as a cost of doing business just like the Social Security taxes, pencils, desks, and any other equipment or costs.
Yup, you got it.
The reason no tax is fully passed on is because every increase in cost yields another increase in tax.
If I'm selling a product for $10 and tax is 10%, and I raise my price to $11, I now pay $1.10 as opposed to $1.00. I am still collecting 90 cents more than I would at $10, but losing 10 cents.
You can run this out until you break even, but price elasticity comes into play, too. You may find sales drop 15% with the first 10% increase in price. So overall revenue is lost...and you'd make more just leaving it at $10.
Not everything works that way, but most sales have meaningful net impacts, which is why keeping the % tax rate low is more useful.
Of course corporations pass on 100% of the taxes they pay. They pass on 100% of all their expenses. Perhaps you mean that sometimes corporations have to accept a lower profit as a result of a government or societal action. True but that is blt into the over riding thing we call capitalism. We try to ncrease profits and sometimes things happen to take away some of that profit and we try to increase them again. To look at one instance where some action reduced profits and conclude it is permanent or inevitable or unavoidable is a mistake. Most corporations pass on 100% of all expenses in real time and a few pass them on over time. But all successful businesses must pass them on. The only exceptions would be a business that is exemted from taxes and a business that is subsidized by taxes and these are only exempt from the natural laws of capitalism because someone has used man made law to make them a special case.
The problem with eliminating the home mortgage deduction is that it is already built into the price of houses. Eliminating it would result in an instant real estate crash and long-lasting depression. It never should have been this way, but it's too late now.
True, if nothing else changes. There are ways to do it so almost everyone wins - as I suggested above.
Those are all worthy ideas, but it would take a philosophic visionary and political near-genius of a President to get it to happen, but then again, Ronald Reagan came out of nowhere, so who knows?
I'm curious how difficult it would be.
If I ran for president on a platform of "I will eliminate income tax, and yet still raise more than enough revenue from the top 10% of income earners to cover all our spending needs," how difficult would that be?
Sure, Wall Street would line up against me, but right now I think voters would fall in line and be all for this.
In reality, the impact on Wall Street would be minor. Can anyone tell me that .02% (adding .01% together) would honestly hurt a trading decision? I doubt it. I pay more than that in capital gains, and in this case the tax is shared on both sides of losses/gains and buyers/sellers.
Off the top of my head, opposition would come from the huge industry (tax preparers, attorneys, accountants ,etc) our current situation creates, then there's an amusing amount that could come out in support of those hard handed sons of toil in the construction trades.
However, if it was easy, everyone in DC (and state houses) would be all over it.
I didn't say it was easy.
And sometimes the easiest ideas are the ones ignored or rejected because easy is assumed to be 'too simple'. But simple is what we need.
I agree the problem may come from accountants and the like - but they won't go away. If anything, they become more useful. Just not for hiding income, like they are now.
"..we do those things because they are hard, not because they are easy" seems to have slipped away from our political class.
In general, in agreement though would like to see some numbers.
It would be impossible frankly if only because of one reason.
Lack of Term Limits.
Unless there are limitations on the number of terms a Representative or Senator can serve, then any proposal becomes a political football subject to preserving and protecting the next election campaign.
That's the simple plain truth. No term limits, no meaningful reform from either Party and Libertarians.
I don't see how term limits fixes that problem.
Most areas are 'party centric' rather than 'person centric'.
With term limits, the parties will make sure the most inoffensive person is put up in each available seat. Someone who is highly electable and highly unlikely to rock the boat.
It's very rare to see independents or third party candidates make inroads at this point, not because a lack of term limits benefits incumbents, but because people have "Republican" or "Democrat" imprinted on their brain.
A very good solution I've seen was in Hoboken, which forbids party labels on candidates running for office. As a result, the mayor runs with a 'team' he/she supports in the council (not every seat, but 2-3). They run as "Team Education" or "Better Parking". You get to vote for each individually, but they run together to promote their ideas more effectively.
Some candidates run on their own. My very favorite of all time was Tom Vezetti, a local bar owner/drunk/Socialist who showed up at a party I threw when he saw a crowd in front of my building. Walked in with his bullhorn, poured himself a beer, and started shouting his slogans. We threw him out. He still won, and abandoned 2 city cars in NYC, which got him in boatloads of trouble (hey, I suppose abandoning them was better than getting DUI as mayor).
Point is, I think the problem is party labels rather than term limits.
I'm not opposed to term limits (well, yes I am, but for entirely different reasons than are worth going into), but I don't see it as a real issue. Once you can't be re-elected, you're actually incentivized to sell your vote to the highest bidder.
What you get is entrenched politicians who can't see beyond the next election, protecting their own positions, making enough money to campaign and making sure they live in a safe district.
Otherwise you get what we got - term limits eliminates that entrenched perspective as the pressure of campaigns is removed from the process.
Remember when Congress changed the tax laws on real estate in the mid-80s? It was a mess for a while, then it worked itself out. It's never too late to get rid of stupid tax structures.
“Congress Should Phase Out the Mortgage Interest Deduction”.
In this story they make the statement: “The mortgage interest deduction is one of the most expensive federal tax preferences.” First of all I’m not sure it is, but more importantly what it does is allow taxpayers to pay less tax on their earnings. Let’s compare that with EITC. A typical 18 year old with two children who pays no taxes, gets the equivalent of $35,000 in federal and state welfare will also get about $8,000 as a tax free gift each year from the IRS. The tax policy center wants to end a tax deduction for mortgage interest and presumably wants to end most tax deductions for individuals and yet has nothing to say about the many programs that literally loot the treasury! How can that be? Ignorance? Apathy? Social justice (Marxism)? What exactly is it that makes someone think it is OK to continue to raise taxes on hard working people and with the other hand give money away to an ever growing number of people who are scamming the system.
I am in favor of an overhaul of our tax system. Something that would bring more equity into the system. I would be OK with eliminating all deductions and exemptions but requiring that everyone pay taxes. There are simply too many people with no skin in the game. Too many people who vote for higher taxes to fund their benefits but pay nothing towards those benefits. Tax welfare, tax free health care, tax any and all income. I would suggest a two tier tax system where the first dollar is taxed at 10% up to $30,000 then everything past $30k is taxed at 20%. No exceptions, no exemptions if you get money, goods or services from any source it is income and you pay taxes on it.
Remember, Income Taxes were originally deemed unconstitutional until a stupid political ploy - designed to kill the income tax - led to an amendment which made it Constitutional.
Basically, it's still unconstitutional, except that a moment of stupidity means it isn't.
An overhaul is necessary and it should be made unconstitutional again.
BTW, it's considered expensive not just because of the revenue lost to government (which is only one way to measure it), but because of the market distortions it creates in housing and household goods which are typically purchased to fill and maintain a home.
As a side note - when I bought my first house, the owner was selling a car. He wanted me to buy it, and I was interested. $18,000 and I could fund it with the mortgage. I did the math, bad idea. But I guarantee you that kind of thing takes place over and over again. One example is a friend of mine who agreed to pay $2,000 more for a host of household appliances the owner left behind. All covered by his mortgage. Seriously? You're paying off a washer/dryer/refrigerator/mixer/lawnmower/etc. with a mortgage?
It would have made more sense is for him to purchase all that stuff new for slightly more. With interest he paid $4,000 for all that, and it didn't last 15 or 30 years.
That's just one more example of skewed markets and lost potential.
Negotiate first. The guy who built our house in '77 put in the kitchen appliances at his cost, which IIRC was about 50-60% of what I would have had to pay a retailer for them installed (retail was different back then). They went on the mortgage, which we planned to, and did pay off in under 10 years. When my wife remodeled our kitchen in 2001 for cash, it was cheaper to buy the top of the line appliances she wanted and have the retailer install them than than it was for the remodeler to buy and install them.
The mortgage interest deduction was intended to assist the middle class, and those who aspire to be middle class, to better afford home ownership. OK, let's just cap the mortgage interest deduction five years from now at $25k annually, higher cap now and reduce it to $25k in five years, and restrict it to primary residence only.
Even at mortgage rates of 6% that limit allows full deduction on a loan balance of around $415k, which is plenty of debt for a middle class home in almost any zip code. You want a pricier house and bigger loan, no tax benefit for the excess.
The current rules have inflated property values in most locations, especially the overpriced regions, and give a big break to high earners on their overpriced first homes and even more overpriced vacation homes, which is crazy economic and tax policy.
I would prefer a flat tax or something close to it, with an individual exemption, but Congress likes the corruption opportunities inherent in the present tax code.
I paid off my mortgage a few years ago.
"Black culture and the culture of poverty are not the same thing." True, but there's a lot of overlap. Part of the problem is that black poverty is more concentrated (inner city and all that). White poverty seems (because I keep seeing it presented this way) more rural and thereby less concentrated.
Letting kids fail: Failure teaches lessons, though the failer doesn't always learn from it. What I also noticed was the link to the Sheriff Arpaio story; I'm pretty sure Mr. Coyote at http://www.coyoteblog.com/ would agree.
"Do we all really hate and envy those star athletes, pop stars, movie stars, TV stars, inventors, successful entrepreneurs, and captains of industry? I sometimes envy their talents, skills, and money, but I sure don't hate them."
No, I'm glad some people have success and wealth and are able to buy and create beautiful things and properties. But I was just looking at the current issue of Architectural Digest and reading the stories of some exceptionally privileged people, their extravagances, and big league smug sense of entitlement, and have to confess that our elites and celebrity types can really get on my nerves.
In theory, it is good that such prosperity is possible. In reality, many of the prosperous come across as selfish and hedonistic and lacking in a spirit of gratitude for their riches. Very worldly, and not wholly admirable. But life is not fair, and we will all be subject to a final judgment.
Wonder whats the sudden urge to control who lives with whom in Westbury? Either a desire to keep college kids from creating animal house blocks or the presence of illegals and Hispanics sharing houses and driving down property values?
Israel Palestine, one day we will realize peace requires critters of good will on all sides.
Radio Shack, still use the local one for batteries and small hand tools, do miss the sales guy that would have resistor chart pocket protector, don't miss their high prices on printer paper, ink, etc.
And now for something completely different...
4 reasons RadioShack is massively failing
There are lot more than four reasons Radio Shack is circling the bowl. While the author had four of the more legitimate ones, the main reason RS is failing is that it has forsaken what used to be its core customer for pre-fab outdated manufactured goods.
What am I talking about you might ask? Well I'll tell you.
Experimenters and technology enthusiasts. Used to be if you wanted to bread board a small electronics project, you'd zip down to the local RS and grab a couple of copper surfaced circuit boards or a jumper based bread board. Need a LM335 precision temperature sensor? Yep, it would be hanging on the wall along with all the other LM series ICs. Need 1/4, 1/2, etc. watt resistors? Yep. Capacitors - yep. Switches, rheostats, variable resistors/capacitors, tuning capacitors, etc., etc., etc.? Yep - all there for the taking.
I built my very first amateur radio set up using parts from Radio Shack located on Commonwealth Ave in Boston (right across from BU stadium). Built a rock bound (crystal controlled) receiver, transmitter and power supply for 40 meter Novice band CW. Mind you, this was in the mid-60's when technology was exploding and people were actually interested in DIY, but the point stands - that customer is still out there.
That didn't change with the advent of the computer either. Lots of people cut their experimental teeth on Tandy/RS computers. Tandy was the first manufacturer to build a 486 based computer that sold like crazy to all kinds of people because it was so versatile - you could write your own software easy peasy and feel good about the results.
They got away from that in the late 80's, early 90's. The markets they used to cater to, amateur radio, computer geeks, repair parts, etc., went to pre-made Chinese equipment that at first was successful, but eventually became outdated and dull.
Plus, and this is one of the big reasons which was totally missed by the author, most RS employees are ill prepared to answer any question of a technical nature. Ever. About anything.
What RS doesn't understand, and is completely missing the boat (as it were) is that there still is a strong experimental streak in American as evidenced by the various Maker Fairs around the country. Only now, folks who are building electronics and electronic devices are ordering their parts from China rather than picking them up at the local RS.
It won't be long - RS is in its death spiral and won't recover - they will be long gone in a couple more years which is a shame.
Worked in telecom, paging, background music and CCTV; in my time I've been to RS a million times for caps, resistors, electrical tape, solder, wire nuts, relays... I could go on and on.
Then the day came that a RS clerk told me I HAD to give them my telephone number and address to purchase a part. FU Homer.
Every homeowners association charter I've ever examined outlawed renting out a room. The usual language requires strictly "single-family residential use." HOAs generally are OK with renting out the whole house to a single family. They also turn a blind eye to official marital status, as long as a couple appear to be a couple. Same for gays.
Dat's What I Like About the (deep) South. No HOAs. At least around here.