EppsNet Archive: Taxes

Why Are Black Americans Against School Choice?

10 May 2017 /

Most or all of the people booing Betsy DeVos know little or nothing about her except that they’re expected to dislike her for reasons that they may know are related to her views on public schools and school choice.

But why are black Americans against school choice?

I don’t want to overgeneralize — my son went to public schools and got a good education — but it’s all on the kids and their families to make it happen. Without school choice, public schools don’t have the right incentives.

People running public schools aren’t paid by customers who voluntarily send their kids to those schools and who could choose to send their kids to another school if they wanted to.

Public schools are paid for by taxing citizens who may or may not have kids in the schools and regardless of how well the schools actually perform. The funding is independent of customer choice. Each child is assigned to a particular school.

So where is the incentive to provide good education?


Carmack on Government

22 Aug 2016 /
John Carmack

My core thesis is that the federal government delivers very poor value for the resources it consumes, and that society as a whole would be better off with a government that was less ambitious. This is not to say that it doesn’t provide many valuable and even critical services, but that the cost of having the government provide them is much higher than you would tolerate from a company or individual you chose to do business with. For almost every task, it is a poor tool.

Given the inefficiency, why is the federal government called upon to do so many things? A large part is naked self interest, which is never going to go away — lots of people play the game to their best advantage, and even take pride in their ability to get more than they give.

However, a lot is done in the name of misplaced idealism. It isn’t hard to look around the world and find something that you feel needs fixing. The world gets to be a better place by people taking action to improve things, but it is easy for the thought to occur that if the government can be made to address your issue, it could give results far greater than what you would be able to accomplish with direct action. Even if you knew that it wasn’t going to be managed especially well, it would make up for it in volume. This has an obvious appeal.

Every idealistic cry for the government to “Do Something” means raising revenue, which means taking money from people to spend in the name of the new cause instead of letting it be used for whatever purpose the earner would have preferred.

It is unfortunate that income taxes get deducted automatically from most people’s paychecks, before they ever see the money they earned. A large chunk of the population thinks that tax day is when you get a nice little refund check. Good trick, that. If everyone was required to pay taxes like they pay their utilities, attitudes would probably change. When you get an appallingly high utility bill, you start thinking about turning off some lights and changing the thermostat. When your taxes are higher than all your other bills put together, what do you do? You can make a bit of a difference by living in Texas instead of California, but you don’t have many options regarding the bulk of it.

Helping people directly can be a noble thing. Forcing other people to do it with great inefficiency? Not so much. There isn’t a single thing that I would petition the federal government to add to its task list, and I would ask that it stop doing the majority of the things that it is currently doing. My vote is going to the candidates that at least vector in that direction.

— John Carmack

Tony Robbins’ Wealth-Building Tips Seem Pretty Useless

18 Jan 2016 /
Tony Robbins

Tony Robbins has 6 tips for Building Wealth Now. Let’s look at each of the tips and apply the “would anyone advise the opposite?” filter to assess the value of Robbins’ advice.

  1. Don’t lose money. I’m not kidding, that’s the first tip. Would anyone advise “Lose money”? No. So this “tip” is useless.
  2. Look for investments in which rewards far outweigh risks. Would anyone advise “Look for investments in which risks far outweigh rewards’? No. Robbins recommends using “the 5-to-1 rule,” in which the potential returns on an investment are 5 times greater than the potential losses. Why 5? Why not 10? Or 100? Where do you find these investments? I have no idea.
  3. Don’t overpay taxes. Would anyone advise “Overpay taxes”? No.
  4. Diversify. Would anyone advise “Don’t diversify”? Possibly. There’s a couple of schools of thought on diversification: 1) Don’t put all your eggs in one basket; and 2) Put all your eggs in one basket, then watch that basket. So there’s a tip for you: Diversify.
  5. Watch out for mindless spending. Would anyone advise “Spend mindlessly”? No. Robbins says if you spend $40 a week on restaurant meals, consider inviting friends over for a low-cost dinner at home instead. “In a year, you’ll have saved $2,000. If you invest that $2,000 every year, in 40 years you’ll have half a million dollars.” No, in 40 years you’ll have $80,000. Maybe. Given some assumptions about your rate of return, you might have half a million dollars, but on the other hand, you might make some bad investments and wind up with nothing.
  6. Stop sabotaging yourself. Would anyone advise “Sabotage yourself”? No.

There Are Four Ways You Can Spend Money

10 Aug 2015 /
English: Portrait of Milton Friedman

There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income.

— Milton Friedman

The Public School Monopoly Provides Little Incentive to Supply Good Education

31 Dec 2014 /

[The public-school monopoly] is yet another scam that inflicts disproportionately great damage on people who are the poorest and least advantaged. How could it not? Those who run K-12 government schools aren’t paid by customers who voluntarily send their children to those schools and who could easily choose to send their children elsewhere. Instead, these teachers and officials are paid by governments that tax citizens regardless of how many children those citizens have in schools and regardless of how well the schools perform. Therefore, with funding that is independent of customer choice — and with each child assigned to a particular public school — public-school officials have little incentive to supply good education.


A Spectacularly Bad Job of Rigging the System

19 May 2014 /

If you nevertheless believe that the capitalists have been busily rigging the system in their own interest, you’ve got to admit they’ve done a spectacularly bad job of it. How else to explain the quintuple taxation of capital income, where you can invest a dollar that was taxed the day you earned it, then pay corporate income taxes, dividend taxes, capital gains taxes and inheritance taxes on the income it throws off? Surely any concern that the rich are calling the policy shots should melt away in the face of actual policy.

— Steven Landsburg

One Percenters

10 May 2014 /

“Progressives” love to complain about the alleged unfairness of the amount of income earned (“Progressives typically use misleading terms such as “claimed by”) the top 1 percent of income earners. Why not complain instead about the unfairness of the amount of tax revenues received by the top 1 percent of net-tax-revenue recipients? Why are the annual tax-receipt incomes of this small group less worthy of condemnation than are the annual pre-tax market-earned incomes of “the 1 percent” who are the regular objects of criticism, envy, and childish populist moralizing?


IRS Refunds $4 Billion to Identity Thieves

1 Dec 2013 /
IRS Seal

The Internal Revenue Service issued $4 billion in fraudulent tax refunds last year to people using stolen identities, with some of the money going to addresses in Bulgaria, Lithuania and Ireland, according to an inspector general’s report released Thursday.

The IRS sent a total of 655 tax refunds to a single address in Lithuania, and 343 refunds went to a lone address in Shanghai.

In the U.S., more fraudulent returns went to Miami than any other city. Other top destinations were Chicago, Detroit, Atlanta and Houston.

Hmmm . . . aren’t there some sort of sanity checks built into the IRS system? Doesn’t a warning bell go off when 655 tax refunds are sent to a single address in Lithuania?

Does this erode your confidence in the federal government’s ability to manage complex systems and gigantic sums of money?

I’m sure they’ll do a much better job managing health insurance, right? Right?


T.J. Rodgers: Targeting the Wealthy Kills Jobs

Posted by on 19 Aug 2013

NY Times: Across U.S. Companies, Tax Rates Vary Greatly – Interactive Feature

Posted by on 27 Jul 2013

Things That Scare Other People’s Dogs Do Not Scare Our Dog

4 Jul 2013 /
Taking a nap

We went out to watch the city of Irvine fireworks show. Best use of our tax dollars since last year’s show!

As we drove back to the house, I said, “I hope the fireworks didn’t scare Lightning.”

He was asleep on his bed. He’s not scared of anything.


Drive Me to the Junkyard in my Cadillac

30 May 2013 /

Well buddy when I die throw my body in the back
And drive me to the junkyard in my Cadillac

— Bruce Springsteen, “Cadillac Ranch”

Say goodbye to that $500 deductible insurance plan and the $20 co-payment for a doctor’s office visit. They are likely to become luxuries of the past. . . .

Then blame — or credit — the so-called Cadillac tax, which penalizes companies that offer high-end health care plans to their employees.

You’re probably thinking: “So what? I don’t have a high-end health care plan. I’m a working stiff. Let the Wall Street fat cats pay their Cadillac tax.”

Actually, because the plan cost that triggers the Cadillac tax is not indexed for inflation, Bradley Herring, a health economist at Johns Hopkins Bloomberg School of Public Health, estimates that as many as 75 percent of plans could be affected by the tax over the next decade.

The hospital where Abbey Bruce, a nursing assistant in Olympia, Wash., worked, for example, stopped offering the traditional plan that she and her husband, Casey, who has cystic fibrosis, had chosen. . . .

She has had to drop out of school and take on additional jobs to pay for her husband’s medicine.

“My husband didn’t choose to be born this way,” Ms. Bruce said. The union representing her, a chapter of the Service Employees International Union, has objected to the changes. Her employer, Providence Health & Services, says it designed the plans to avoid having employees shoulder too much in medical bills and has reduced how much workers pay in premiums.

Abbey Bruce

Abbey Bruce, a nursing assistant who works a second job cleaning, will pay a sharply higher deductible.

ObamaCare proponents say the Cadillac tax is bringing down employer (not patient) costs as planned.

Cynthia Weidner, an executive at the benefits consultant HighRoads, [said] that the tax appeared to be having the intended effect. “The premise it’s built upon is happening,” she said, adding, “the consumer should continue to expect that their plan is going to be more expensive, and they will have less benefits.”

Key takeaway: Pay more. Get less.

I hate to say I told you so, so instead I’ll say say an insincere thank you to Obama and all the delusional fuckers who voted for this goddamn law.


eEconomics – Tax Inequality in America

9 Mar 2013 /

Tax Rate Hike and Increased Unemployment Payments on the Same Day

2 Jan 2013 /

According to this White House press release, the federal government is ringing in the new year by simultaneously raising tax rates (i.e., penalizing people for working) and extending payments to two million people who do not work (i.e., rewarding people for playing Xbox). Has this ever happened before at any time in the history of the U.S. (or anywhere else in the world for that matter)?


eEconomics – Top Tax Rates

4 Dec 2012 /

eEconomics – Gas Taxes

2 Dec 2012 /

I Don’t Understand What Warren Buffett is Talking About

27 Nov 2012 /
Warren Buffett speaking to a group of students...

Warren Buffett

In an op-ed for the New York Times, Warren Buffett argues that higher taxes won’t keep the super-rich from trying to make money:

Suppose that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”

Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.

Really, Warren? It’s an investment, right? It’s not a sure thing. It’s not a giveaway. I’m being asked to put money at risk. That’s the difference between an investment and a savings account.

So the number one thing that I want to understand before making the investment is what kind of a net return can I expect — worst case, best case, most likely case. Then I can decide if I’m being adequately compensated for the risk that I’m taking on.

And by net return, I mean after taxes, after commissions, after everything. How much money will I actually get to keep? And if I don’t think I’m being adequately compensated for the risk, then yeah, I’ll leave the money in my savings account.

Assuming a tax rate of, say, 35 percent, why does it not make sense to say, “I would take that risk for an expected return of $X, but not for an expected return of 35 percent less than $X?”

Related Links


No Surprises in Berkeley

23 Nov 2012 /
Third-party! Stein, Johnson, Anderson and Good...

(Photo credit: ironypoisoning)

Final election counts are in for Berkeley, CA, the most liberal city in America. Let’s start with the presidential election, where Mitt Romney was able to edge out Jill Stein for second place:

  • Barack Obama, Democrat – 90.3%
  • Mitt Romney, Republican – 4.6%
  • Jill Stein, Green Party – 3.2%

California ballot proposition results included:

  • Proposition 30, a measure to increase state income tax rates for the wealthy – 90.7% Yes (passed statewide at 54.6%)
  • Proposition 34, to abolish the death penalty in California – 86% Yes (lost statewide 52% to 48%)
  • Proposition 37, requiring labeling of genetically engineered food – 92.4% Yes (lost statewide 52% to 48%)

More People I’m Sick Unto Death Of: Paul Krugman

19 Nov 2012 /

America in the 1950s made the rich pay their fair share; it gave workers the power to bargain for decent wages and benefits; yet contrary to right-wing propaganda then and now, it prospered. And we can do that again.

I hardly know where to begin with this . . .

First of all, what is the relevance of the 1950s as opposed to any other period of American history? America prior to 1913 had no permanent income tax and contrary to left-wing propaganda, it prospered. Why can’t we do that again?

Workers of the World, Unite!

Of course we’re all in favor of fairness — right? — but why is it only important that “the rich” pay their “fair share”? I don’t remember ever hearing anyone, certainly not Krugman, use the phrase “pay their fair share” in reference to any group except “the rich.”

If you’re concerned about fairness, isn’t it also important that the middle class “pay their fair share”? Isn’t it important that the poor “pay their fair share”? Shouldn’t we all have some skin in the game?

Why not say that everyone should “pay their fair share” instead of making a class warfare issue out of it?

 

As George Harrison used to say:

Should five percent appear too small
Be thankful I don’t take it all

America in the 1950s had a top tax bracket of 91 percent for incomes greater than $200,000. For every dollar you made in excess of $200,000, the federal government took 91 cents as its “fair share.” You got to keep nine cents as your “fair share.”

Out of those nine cents, you also had to pay Social Security taxes, state taxes, local taxes, sales taxes, property taxes and excise taxes. Am I forgetting anything? It doesn’t seem unlikely to me that nine cents on the dollar wouldn’t be enough to cover all those taxes, in which case you’d actually lose money on every dollar.

If I’d been a business owner in the 1950s, with the knowledge that once I made 200 grand, I’d be operating at a loss, I would have just shut the place down at that point and sent everyone home till the next year. I don’t care if it was November or August or January.

Finally, when Krugman talks about workers having “the power to bargain,” he’s talking about unions, as though the two things are inseparable. I’ve never been in a union but I’ve bargained for wages and benefits at every job I’ve ever had. Anyone with marketable skills can bargain for wages and benefits.

P.S. Maybe I’m reading too much into it, but “workers” is a telling choice of words, isn’t it? Why not “employees” or just “people”? “Workers” calls to mind communist rallying cries and the Wobblies.


The Lives of Julia and Paul

21 Sep 2012 /

David Henderson says — accurately, I think — that Mitt Romney’s “47 percent” remarks can be paraphrased as “People who are dependent on government will vote for the candidate who credibly (to them, at least) promises to keep the programs that have created that dependence.”

Do you think President Obama disagrees with that? He doesn’t.

If you think he does, please see The Life of Julia on the president’s web site. It lays out a “typical” woman’s cradle-to-grave dependence on government assistance and describes how Obama will keep those programs going while Mitt Romney won’t.

The most insulting thing about it is that as you read about Obama funding this and Obama funding that, it sounds like he’s doing it all out of his own goddamn pocket. What a prince!

There’s no acknowledgement that Obama is taking from some and giving to others, and that all of Julia’s “free” stuff is paid for by me and people like me out of money earned by our own labor.

And we are struggling. We’re putting a kid through college, my wife has had an expensive medical condition, our home equity has plummeted, the roof leaks, my car is long overdue for new tires . . . there are unplanned expenses . . . next month, something else will break. That’s life.

As part of our middle-class existence, we pay a five-figure annual federal income tax bill. We pay for Julia’s babysitters, education, health care, etc., and Obama takes the credit. Not even a “thank you.” If we could keep even a fraction of that money, maybe we could afford to pay our own education and health care costs.

How about acknowledging that for every Life of Julia there’s a Life of Paul and presenting their stories in juxtaposition to show how, as with any policy, some people are better off and some people worse.

Life of Julia Life of Paul
As she prepares for her first semester of college, Julia and her family qualify for President Obama’s American Opportunity Tax Credit—worth up to $10,000 over four years. Julia is also one of millions of students who receive a Pell Grant to help put a college education within reach. As they go into debt to pay for their own child’s college education, Paul and his wife are required to pay for Julia’s college tuition as well.

You see the idea? Let’s try another one . . .

Life of Julia Life of Paul
Julia decides to have a child. Throughout her pregnancy, she benefits from maternal checkups, prenatal care, and free screenings under health care reform. Paul’s wife is diagnosed with a life-threatening medical condition. Although they have health insurance, which they pay for themselves, there are deductibles, co-pays and out-of-pocket expenses, as well as the financial implications of his wife’s inability to work. They receive no government assistance, which is fine, but their financial woes are compounded by the fact that they are also required to pay for Julia’s “free” medical care.

The money being used to buy the votes of millions of Julias out there is not coming exclusively or even primarily from unnamed “millionaires” on “Wall Street” . . . it’s coming from “middle class” “hard-working Americans” on “Main Street” who are struggling.


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