It is often been asserted that the only two sure things are death and taxes. The current Democratic caucus is making every effort to combine them to avoid any confusion. There have been various arguments put forth regarding the level at which estates should be taxed but whether the act of dying should trigger a tax is rarely discussed.
Newsday informs us that through industry, intelligence and luck – not to mention sacrifice and good choices – some people amass “fortunes” of various sizes. In their opinion, this means that anyone who accomplishes this is justifiably required to contribute a portion of it to everyone else. Their sole reason is because they should. They even attempt to make this less awful “smart estate planners can avoid much of its sting”. So, passing tax on people who can avoid it actually makes sense to the collective economic wisdom of the editors.
Say a guy builds a business manufacturing widgets. After a while he owns a building, the land it’s on, specialized machinery, support equipment, and employs 100 people paying their salary and benefits. Then he dies. The government says his heirs have the absolute right to continue the business - if they give the government $3,000,000. The value any business is mostly in the plant, equipment, trade name and patents so the heirs don’t have $3,000,000 in cash available. The result is the business closes or is sold to a competitor, jobs are lost and Congress has achieved their aim of insuring that no one gets “richer”. Meanwhile, there is still a demand for widgets. The heirs start another business selling the same widgets but these are imported from China. This time the business has no concrete value and nothing to tax except current income. Unfortunately, there are no US employees either. And people wonder why we lost jobs.
So goes the "logic" of the economic loonies.
Tuesday, December 21, 2010
A Stimulating Idea
There needs to be some level of safety net for the unemployed -- after all the government caused the problem in the first place. But the Democratic House supports never ending and unfunded benefits to the unemployed based on the assumption that this is a great stimulus to the economy - to them almost as good as raising taxes. They assume two things:
One premise is that the wealthy will not spend any money they get to keep in reduced taxes. The theory is that they will not spend on consumption but will only save it. (Which is a stimulating factor too.) Their conclusion is that people who have disposable income will not spend it on electronics, dining out, cars and other symbols of wealth. (?)
A second premise is that people who are getting the small unemployment checks will stimulate the economy by their spending. People in this situation have limited disposable income. They are buying – or should be buying – only what they absolutely need. But the conclusion is that unemployment benefits will stimulate the economy. (?)
So their economic analysis concludes that people with no money can stimulate the economy more than people who have money to spend.
Why are we listening to these idiots?
One premise is that the wealthy will not spend any money they get to keep in reduced taxes. The theory is that they will not spend on consumption but will only save it. (Which is a stimulating factor too.) Their conclusion is that people who have disposable income will not spend it on electronics, dining out, cars and other symbols of wealth. (?)
A second premise is that people who are getting the small unemployment checks will stimulate the economy by their spending. People in this situation have limited disposable income. They are buying – or should be buying – only what they absolutely need. But the conclusion is that unemployment benefits will stimulate the economy. (?)
So their economic analysis concludes that people with no money can stimulate the economy more than people who have money to spend.
Why are we listening to these idiots?
Yell at them
Sent this to John Boehner:
Thanks to the work of many people we achieved the biggest swing in the House in 60 years. The question to be answered now is: so what? The overall result has been is no appreciable difference in how Congressional business is conducted. This is from an AP article:
Obama has his Departmental Secretaries “reaching out” to the Republican incoming committee chairs and at least one of chairman has already been impressed by this effort.
“It’s very smart,” said Rep. John Mica (R-Fla.), the incoming chairman of the Transportation and Infrastructure Committee, of the White House outreach. … Mica met with Transportation Secretary Ray LaHood, a former House Republican colleague. "I know Ray and I have a lot of confidence in dealing with him.”
The day after meeting with Mica, LaHood announced that the Transportation Department will kick in an additional $342 million for SunRail, a commuter rail project for central Florida strongly backed by Mica... Florida is expected to be a key battleground in Obama’s 2012 reelection run.
This is the same type of earmark (bribe) as the one Landrieu got to vote for Obamacare and is exactly the type of thing we were all motivated to end.
The first positive action that could have been taken was the appointment of chairs that actually understand what happened in November. These appointments could have meant something; certainly more than the symbolic, non- binding, voluntary pledge to end earmarks. But we got the symbolism, a liberal dose of seniority, and no real action. Half of the incoming House committee chairmen do not deserve their positions by any rational evaluation of their past actions vs. the November results. The new Majority Leader in the House is allowing business to be conducted in ways that are indistinguishable from his predecessor. But you keep saying, even in the face of actions like Mica's, that everything is changed.
A repeat of the disastrous display by the 2000-2006 Republican Congress will lead to the collapse of Republican Party as a national option. The motivation to volunteer/donate in the political process is not to elect the lesser of two evils.
Thanks to the work of many people we achieved the biggest swing in the House in 60 years. The question to be answered now is: so what? The overall result has been is no appreciable difference in how Congressional business is conducted. This is from an AP article:
Obama has his Departmental Secretaries “reaching out” to the Republican incoming committee chairs and at least one of chairman has already been impressed by this effort.
“It’s very smart,” said Rep. John Mica (R-Fla.), the incoming chairman of the Transportation and Infrastructure Committee, of the White House outreach. … Mica met with Transportation Secretary Ray LaHood, a former House Republican colleague. "I know Ray and I have a lot of confidence in dealing with him.”
The day after meeting with Mica, LaHood announced that the Transportation Department will kick in an additional $342 million for SunRail, a commuter rail project for central Florida strongly backed by Mica... Florida is expected to be a key battleground in Obama’s 2012 reelection run.
This is the same type of earmark (bribe) as the one Landrieu got to vote for Obamacare and is exactly the type of thing we were all motivated to end.
The first positive action that could have been taken was the appointment of chairs that actually understand what happened in November. These appointments could have meant something; certainly more than the symbolic, non- binding, voluntary pledge to end earmarks. But we got the symbolism, a liberal dose of seniority, and no real action. Half of the incoming House committee chairmen do not deserve their positions by any rational evaluation of their past actions vs. the November results. The new Majority Leader in the House is allowing business to be conducted in ways that are indistinguishable from his predecessor. But you keep saying, even in the face of actions like Mica's, that everything is changed.
A repeat of the disastrous display by the 2000-2006 Republican Congress will lead to the collapse of Republican Party as a national option. The motivation to volunteer/donate in the political process is not to elect the lesser of two evils.
Tuesday, December 14, 2010
Democrats can't do arithmetic
The “rich get richer” argument in the Sunday Newsday has been around for as long as there have been demagogues. It is has been repeated enough to become urban legend but it just does not stand up to a little arithmetic.
The comparison between the top and bottom tiers will always be between people who have little or no wealth and people whose wealth continues to grow. You are comparing something that is by definition close to zero with something that continues to grow. By the laws of arithmetic, the gap between the two groups must continue to get larger.
It is simply intellectually dishonest to continue to make this argument.
The lowest category of category of wealth is always going to contain most recent high school/college graduates, immigrants, drop outs, newly-weds, unwed mothers, etc. In short, people with little or no wealth. The question is whether they stay there over time. As people work, earn, and save, history has shown they go up the economic ladder to be replaced in the lowest category by new people who have little or no wealth. On the other hand, people who are “rich” will be earning more, saving more and generally increasing their wealth at a faster rate (or at least in larger absolute terms) than people who are just starting out. This category is further distorted by the people (Steve Jobs) who started a business that raised them into the highest category.
The comparison between the top and bottom tiers will always be between people who have little or no wealth and people whose wealth continues to grow. You are comparing something that is by definition close to zero with something that continues to grow. By the laws of arithmetic, the gap between the two groups must continue to get larger.
It is simply intellectually dishonest to continue to make this argument.
The lowest category of category of wealth is always going to contain most recent high school/college graduates, immigrants, drop outs, newly-weds, unwed mothers, etc. In short, people with little or no wealth. The question is whether they stay there over time. As people work, earn, and save, history has shown they go up the economic ladder to be replaced in the lowest category by new people who have little or no wealth. On the other hand, people who are “rich” will be earning more, saving more and generally increasing their wealth at a faster rate (or at least in larger absolute terms) than people who are just starting out. This category is further distorted by the people (Steve Jobs) who started a business that raised them into the highest category.
Going the wrong way
Drunks keep driving the wrong way on the LIE and the Parkways. There is a campaign to resolve the situation by making it harder for drunks to get on the highway going the wrong way. The spend-more-money solution is for unspecified (but probably costly road modifications and undefined engineering solutions. But in what may be a first a DOT spokesman didn’t go for the tax increase and said, “…roads are perfectly safe if you are alert, sober and follow the rules of the road.” True enough, but we are all at risk from people who are not alert, sober and follow the rules. So what to do?
A common thread of all these incidents is that the drunks are really whacked - at least twice the legal (.08) limit – and some have been on drugs on top of that.. Many of these people also have prior DWIs and suspended licenses. The problem is that when these people do get before a judge, jail time has been an exception. (Killing someone has recently be getting more time but 3-4 years for killing someone has not historically unusual.).
How about:
DWI gets jail time for the first offense and you have to pay to have a breathalyzer installed on your car.
Getting caught subverting the breathalyzer (driving a different car, etc) gets a more jail time.
Multiple offenses gets more jail time, impounded car, more fines,etc.
Killing someone while driving drunk is murder and is punished accordingly.
and
Raise the limit for DWI. (.08 is two beers with dinner)
A common thread of all these incidents is that the drunks are really whacked - at least twice the legal (.08) limit – and some have been on drugs on top of that.. Many of these people also have prior DWIs and suspended licenses. The problem is that when these people do get before a judge, jail time has been an exception. (Killing someone has recently be getting more time but 3-4 years for killing someone has not historically unusual.).
How about:
DWI gets jail time for the first offense and you have to pay to have a breathalyzer installed on your car.
Getting caught subverting the breathalyzer (driving a different car, etc) gets a more jail time.
Multiple offenses gets more jail time, impounded car, more fines,etc.
Killing someone while driving drunk is murder and is punished accordingly.
and
Raise the limit for DWI. (.08 is two beers with dinner)
Teaching Sacrifice
The current economic has everyone sacrificing. Many companies have cut staff, reduced or eliminated salary increases, are not hiring, dropping benefits and doing what they can to weather the storm.
Yesterday, Deer Park teachers announced their part of the sacrifice. They were contractually due for a 3% raise for the next school year. The Deer Park Superintendent proudly announced that they will not be getting that raise. Due to her superior negotiating skills these teachers will instead be getting a 4.85% raise next school year. Step increases are not mentioned as part of the sacrifice.
This is what passes for “sacrifice” to the Teachers Union and for great negotiating by those responsible. The idiot Superintendent even called this a “savings”. Compared to what?
Fairness requires that it be noted that this type of sacrifice is not confined to Deer Park. Similar sacrifices have been made by teachers all over Long Island
Yesterday, Deer Park teachers announced their part of the sacrifice. They were contractually due for a 3% raise for the next school year. The Deer Park Superintendent proudly announced that they will not be getting that raise. Due to her superior negotiating skills these teachers will instead be getting a 4.85% raise next school year. Step increases are not mentioned as part of the sacrifice.
This is what passes for “sacrifice” to the Teachers Union and for great negotiating by those responsible. The idiot Superintendent even called this a “savings”. Compared to what?
Fairness requires that it be noted that this type of sacrifice is not confined to Deer Park. Similar sacrifices have been made by teachers all over Long Island
Pension returns
Public pensions are guaranteed a rate of return in excess of the historic return on prudent pension investments. When such unreasonable returns are not achieved, the municipality in question is required to make up the difference. Not being able to just print more dollars (the Federal answer), states, towns and villages get to raise taxes. This benefit is made even more unsound since these guys get to pad their pension pay out in the final working years with unused vacation and sick time and extra overtime. So the unrealistic funding assumption that is supposed to pay for their retirement benefits are made completely impossible since their actual retirement benefits are calculated on an inflated salaries that were never part of the funding process in the first place. This is not a sustainable system.
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