Tax Day Bill Whittle

As always, correct.

There are benefits that Bill doesn’t go into as well, such as much less lobbying, and so forth. Unfortunately they make it unlikely to pass Congress, let alone the executive branch. But it is a very good idea.

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History Rhymes

Rudyard Kipling

Cover of Rudyard Kipling

 

Mark Twain told us that history doesn’t repeat itself, but it does rhyme. As we look at the economic numbers which show the workers and the middle class are losing income every year, and only the connected are succeeding in increasing their income, it struck us that it is literally true in this case.

 

Why? Because it was much the same in Rudyard Kipling’s day, and he wrote about it. So, on Sunday morning, we bring you this

 

The Wage-slaves

OH, glorious are the guarded heights
Where guardian souls abide—
Self-exiled from our gross delights—
Above, beyond, outside:
An ampler arc their spirit swings—
Commands a juster view—
We have their word for all these things,
No doubt their words are true.

Yet we, the bond slaves of our day,
Whom dirt and danger press—
Co-heirs of insolence, delay,
And leagued unfaithfulness—
Such is our need must seek indeed
And, having found, engage
The men who merely do the work
For which they draw the wage.

From forge and farm and mine and bench,
Deck, altar, outpost lone—
Mill, school, battalion, counter, trench,
Rail, senate, sheepfold, throne—
Creation’s cry goes up on high
From age to cheated age:
“Send us the men who do the work
“For which they draw the wage!”

Words cannot help nor wit achieve,
Nor e’en the all-gifted fool,
Too weak to enter, bide, or leave
The lists he cannot rule.
Beneath the sun we count on none
Our evil to assuage,
Except the men that do the work
For which they draw the wage.

When through the Gates of Stress and Strain
Comes forth the vast Event—
The simple, sheer, sufficing, sane
Result of labour spent—
They that have wrought the end unthought
Be neither saint nor sage,
But only men who did the work
For which they drew the wage.

Wherefore to these the Fates shall bend
(And all old idle things)
Werefore on these shall Power attend
Beyond the grip of kings:
Each in his place, by right, not grace,
Shall rule his heritage—
The men who simply do the work
For which they draw the wage.

Not such as scorn the loitering street,
Or waste, to earth its praise,
Their noontide’s unreturning heat
About their morning ways;
But such as dower each mortgaged hour
Alike with clean courage—
Even the men who do the work
For which they draw the wage—
Men, like to Gods, that do the work
For which they draw the wage—
Begin-continue-close that work.
For which they draw the wage!

 

Have a good day.

 

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ABBA and the Story of the Most-Inane-Ever Tax Controversy | International Liberty

I’ve complained about this sort of thing for years.

The tax code is a complicated nightmare, particularly for businesses.

Some people may think this is because of multiple tax rates, which definitely is an issue for all the non-corporate businesses that file “Schedule C” forms using the personal income tax.

A discriminatory rate structure adds to complexity, to be sure, but the main reason for a convoluted business tax system (for large and small companies) is that politicians don’t allow firms to use the simple and logical (and theoretically sound) approach of cash-flow taxation.

Here’s how a sensible business tax would work.

Total Revenue – Total Cost = Profit

And it would be wonderful if our tax system was this simple, and that’s basically how the business portion of the flat tax operates, but that’s not how the current tax code works.

The UK-based Guardian is reporting on the supposed scandal of ABBA’s tax deductions. Here are the relevant passages.

The glittering hotpants, sequined jumpsuits and platform heels that Abba wore at the peak of their fame were designed not just for the four band members to stand out – but also for tax efficiency, according to claims over the weekend. Abba…And the reason for their bold fashion choices lay not just in the pop glamour of the late 70s and early 80s, but also in the Swedish tax code. According to Abba: The Official Photo Book, published to mark 40 years since they won Eurovision with Waterloo, the band’s style was influenced in part by laws that allowed the cost of outfits to be deducted against tax – so long as the costumes were so outrageous they could not possibly be worn on the street.

When I read the story, I kept waiting to get to the scandalous part.

But then I realized that the scandal – according to our statist friends – is that ABBA could have paid even more in tax if they wore regular street clothes for their performances.

In other words, this is not a scandal at all. It’s simply the latest iteration of the left-wing campaign (bolstered by tax-free bureaucrats at the Paris-based OECD) to de-legitimize normal and proper tax deductions.

Continue reading ABBA and the Story of the Most-Inane-Ever Tax Controversy | International Liberty.

Dan continues on to discuss why we should have a flat tax. he’s right of course. Absolutely, positively right. But, short of a miracle, we never will. Why?

  • The IRS controls us (including business) by their ruling on what we can deduct. Many more things can be done with 50 cent dollars, after all. The may or may not (usually not) be the right things for long term growth, like modernizing the plant. Buying the boss a new Mercedes may look better on the (adjusted) bottom line. And so we distort the market from what it really is, and introduce artificial inefficiencies into it.
  • Politicians love to be lobbied for special favors, without deductions, there would be a fair system, and no favors to grant (or refuse).
  • How many lawyers make a living trying to get people a fair deal from the IRS?
  • Same story for the few remaining unions that haven’t self destructed.
  • How many people (sorta) work at the IRS? With a flat tax, we might need one tenth of that.
  • How many people spend their lives working with the tax code,  almost all of them would have to find productive work.
  • The malappropriation of funds causes a reduction in the wealth created, not to mention new products not created and all the rest. When we waste our time doing stupid stuff, we can’t reuse that time for important stuff.

And remember the IRS, is not productive, even for a government body. All they do is collections, and every dime they spend is not spent on what might, arguably be a productive program. I admit that’s unlikely but it’s also true that the money could have been left in the private sector, where it almost certainly been productive.

And as to The Guardian’s, and the rest of the statists, shock that someone would arrange their affairs to minimize the tax due, I would reply with Justice Learned Hand

Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

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The Levelized Cost of Electric Generation | Watts Up With That?

English: United States Power Grid

English: United States Power Grid (Photo credit: Wikipedia)

 

OK, we haven’t talked about ‘renewable’ energy for a while. It’s still a crock. There are some possibilities in geothermal, maybe, and hydro works well. The rest are simply political pork, which will cause inordinate increases in your electric bill.

 

The main reason I don’t write more about this, other than time, is that it is a complex field, and one I’m not overly competent in. Lots of costs that aren’t very evident, including what happens if you end up with an incompetent engineer designing the foundation of a wind turbine. I don’t know the answers, and I doubt anybody else has them all either. Yet on we go, on our merry way, threatening our lifestyle on novelties.

 

Anyway, this post is from Watt’s Up With That, one of the best sites out there for this type of thing.

 

In early 2013, the US Energy Information Agency (EIA) released their new figures for the “levelized cost” of new power plants. I just came across them, so I thought I’d pass them on. These are two years more recent than the same EIA cost estimates I discussed in 2011 here. Levelized cost is the average cost of power from a new generating plant over its entire lifetime of service. The use of levelized cost allows us to compare various energy sources on an even basis. Here are the levelized costs of power by fuel source, for plants with construction started now that would enter service in 2018:

us average levelized costs 2018Figure 1. The levelized cost of new power plants that would come on line in 2018. They are divided into dispatchable (blue bars, marked “D:”) and non-dispatchable power sources (gray bars, marked “N:”).

Now, there are two kinds of electric power sources. Power sources that you can call on at any time, day or night, are called “dispatchable”. These are shown in blue above, and include nuclear, geothermal, fossil fuel, and the like. They form the backbone of the generation mix.

On the other hand, intermittent power sources are called “non-dispatchable”. They include wind and solar. Hydro is an odd case, because typically, for part of the year it’s dispatchable, but in the dry season it may not be. Since it’s only seasonally dispatchable, I’ve put it with the non-dispatchable sources.

OK, first rule of the grid. You need to have as much dispatchable generation as is required by your most extreme load, and right then. The power grid is a jealous bitch, there’s not an iota of storage. When the demand rises, you have to meet it immediately, not in a half hour, or the system goes down. You need power sources that you can call on at any time.

You can’t depend on solar or wind for that, because it might not be there when you need it, and you get grid brownout or blackout. Non-dispatchable power doesn’t cut it for that purpose.

This means that if your demand goes up,  even if you’ve added non-dispatchable power sources like wind or solar to your generation mix, you still need to also add dispatchable power equal to the increased demand.

 

 

Continue reading The Levelized Cost of Electric Generation | Watts Up With That?. Do work through the comments as well, there’s a lot of further information there.

 

 

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Wal-Mart and American Business

walmart beijing

walmart beijing (Photo credit: galaygobi)

Gawker ran a letter from a Wal-Mart manager lately, well probably, it’s anonymous, but it fits fairly well with what one can see of the corporation. In fact, he sounds like he is a pretty good manager, doing his best to take care of his people and the corporation as well. That’s never easy. The article is here, and recommended, Decades of Greed: Behind the Scenes With An Angry Walmart Manager.

There is one part though that i want to quote and expand on a bit.

This company is being managed by the quarter. We have executives who have no vested interest in Walmart. All they care about is their salary and bonus. So when they make poor decisions, for example this Christmas when they had a One Hour Guarantee for multiple items. This was a complete [financial] disaster but yet the executive praise what a big success it was. [...] You know what direction us managers were given to do in January? Remember Walmart’s fiscal year ends January 31st. You guess it, cut hours. For the poor decision made by executives at Walmart who could care less where the company is at in 10 or 20 years, we had to cut hours. Not only that we had to cut all expenses. Home office put a hold on all our ordering of supplies and try explaining to customers you don’t have toilet paper for the rest rooms. We had to cut all our part-time associates from 32 hours to 25.5 hours. All our full-time associates had their hours cut too. In addition we had to call all the people we had scheduled for orientation and tell them we couldn’t hire them. Imagine you were told to start Walmart on Thursday but then get a call on Wednesday saying nope can’t hire you.

That managing by the quarter thing that he talks about here is endemic in American business, and long-term it is going to kill it. I’ve seen it in every Fortune 1000 business that I’ve dealt with in the last ten years or so. It forces short-term thinking and compromises the long-term health of the company, both physical plant and personnel, to achieve quarterly goals.

It seemed to come about at the time that executive loyalty to their employer went away. I never saw this from the executives that started with a company just out of college and retired from there, they knew that they had to make the company work over the long-term, including repeat customers or it would all go away. That is no longer the case in large companies, it tends to be in smaller, private firms where the entire livelihood of the owner is tied up in the company. It’s one of the reasons that you get pretty good customer service from local companies.

Now do understand, Wal-Mart has problems not of its making. And yes, it changed greatly after Sam Walton died. But Wal-mart add little value to its products, it is essentially a marketing company, and it chosen market is disposable, low-cost items. My guess is that it’s return on investment is quite low. But the thing is, it’s overhead is not all that low. Almost anything I can get from Wal-Mart today, I can have from Amazon tomorrow, usually for less, because they don’t have to maintain the retail store and it’s associates.

The Wal-Mart model goes back through K-Mart to Sears and the other department stores, as well as the higher end stores, the Marshall Fields, and the Strawbridge and Clothiers of the world. Before that, out here we ordered from the wish books of Sears and Roebuck and Montgomery Ward.

Somebody yesterday said that the mall did its best to turn shopping into a spiritual experience, and to an extent I think that is true, but it is at best a very short-term pseudo-spiritual experience. And not really all that fulfilling, because we do not live by material thing alone, and like the Beatles told us, “Money can’t buy you love” and neither can a new wardrobe.

America still knows how to do things better than most, at worst. But we are hurting ourselves very badly by looking only 90 days ahead, I don’t really know how we are going to fix it but, we had better.

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The Wages of Cronyism, Big Government, Lies, and Corruption = Bankruptcy

Cronyism, Part I: Prosperity

Well, I suppose we may as well begin the Economic Confidence Index, it’s only good news if you are one of the leeches living around Washington D.C. Yes, I know that not everybody there is a leech, some are very important and necessary to us remaining a free people. Maybe as many as 10%, the rest need to get a real job.

The Bible says that “the wages of sin is death,” but the same can’t be said of Washington, DC.

The bureaucrats, lobbyists, politicians, contractors, insiders, cronyists, and influence peddlers have rigged the system so that they get rich by diverting money from people in the productive sector of the economy.

How bad is the disconnect between Washington and real America?

Well, according to Gallup’s Economic Confidence Index, people in every state have a negative outlook.

But there is one outpost of giddy prosperity, and that’s the District of Columbia, where residents have a 20-point gap compared to the most optimistic (or, to be more accurate, least pessimistic) state and a whopping 35-point gap with the average American.

Gallup Confidence DC

Continue reading The Wages of Cronyism, Big Government, and Corruption | International Liberty.

Cronyism, Part II: Detroit

There’s and amazing story in here. Detroit, not so long ago, had more millionaires than any American city, including New York City. This is the heart of the fabled American industrial miracle. And now? It looks like a third world city and works like one too. Todd Zywicki writing on The Volokh Conspiracy yesterday talked about this, here’s an excerpt:

What comes through in the movie is that the bankruptcy of the automakers and Detroit largely arose from the same forces: horribly inept and unaccountable management and insatiable demands by labor interests that drove both the automakers and the city into the ground.  This manifested itself in rising costs and deterioration in quality (cars in one case and city governance in the other, such as failure to supply basic public services).  One of the more poignant moments in the film is the observation by a longtime Detroit resident of the differing fortunes of Chicago and Detroit over the decades of the second half of the 20th Century—two large, otherwise comparable Midwestern cities that experienced very different fortunes over a multi-decade period.  The parallel between Detroit and Chicago’s fortunes is similar American carmakers and the challenge of Japanese and other foreign carmakers beginning in the 1970s is similar.

Another interesting thesis suggested by the movie is that GM’s welfare mentality was a long time in coming, dating back to the noxious Poletown case where GM used its political clout to enlist the public eminent domain power to destroy a longtime ethnic neighborhood in Detroit so that it could build a new factory.

Do read it all at: Bankrupt: How Cronyism and Corruption Brought Down Detroit

In addition Mr. Zywicki linked the film made by Ben Howe. It’s here

Cronyism, Part III: Obamacare

David Harsanyi writing in The Federalist had considerable to say about Obamacare as well. Much of what he is writing about is how this lawless regime is modifying the law for political purposes, and to benefit the President’s friends. An excerpt from his article

Another Obamacare fiasco? Guess what? We’ll rationalize that disaster into something awesome, tout de suite. You can’t keep your insurance if you like it? Consider yourself lucky. Obamacare disincentivizes work. Be grateful!  The Affordable Healthcare Act will cost three times as much as initial estimates? Spending creates jobs.  The exchanges have been a disaster? Stop rooting for the president to fail, for God’s sake.

The Treasury Department just announced it will delay a coverage mandate for companies with 50 to 99 employees for a year. And liberals who grouse about the anarchic tendencies of grassroots conservatives will be prepared to rationalize why this news is not only unavoidable but great for Americans. It always is.

According to the Congressional Research Service, the Obama administration has probably missed half of the deadlines of the Affordable Care Act. Here’s a list of 13 executive alterations Now, if all this haphazard implementation were only a matter of improving what are onerous and poorly written facets of Obamacare, that would be one thing. A bad thing, yes. But what makes this free-for-all an especially blatant abuse of power is that the delays are enacted almost exclusively for political reasons.

Continue reading: Obamacare is Just Another Word for laws We Ignore Together

Lies, Damned Lies, and Government

Angelo M. Codevilla writing on the LIbrary of Law and Liberty had much to say the other day about our media (specifically in this case Bill O’Reilly) letting Obama get away with lying. It’s an excellent article, which you should read, and  it is linked below. At the end he talked a bit about Alexandr Solzhenitsyn. I chose to excerpt that part.

This is new and incomplete. But only in America. It is the very routine, the very constitution, of totalitarian society. Returning our attention to the indissoluble link between truth and freedom, lies and servitude, was the great Aleksandr Solzhenitsyn’s enduring contribution to our civilization.

Aleksandr-SolzhenitsynSolzhenitsyn showed that totalitarianism works by leading people to take part in the regime’s lies, and that it does so mostly by a host of petty incentives. Then he wrote: “the simplest and most accessible key to our self-neglected liberation lies right here: Personal non-participation in lies. Though lies conceal everything, though lies embrace everything, but not with any help from me.” The lies that hold up corrupt regimes, he noted, like infections, “can exist only in a living organism.” Hence whoever will live in freedom “will immediately walk out of a meeting, session, lecture, performance or film showing if he hears a speaker tell lies, or purvey ideological nonsense or shameless propaganda.”

We should all do that. Even Bill O’Reilly.

The article is here: Live Not by Lies

Yesterday we talked of what is right with America, and that is and will remain true. The huge majority of Americans are honest, hardworking people with a strong sense of honor. But, and it’s a huge but, that is mostly no longer true of the Wall Street-Washington D.C. axis, and until that is rectified America is going to have a lot of trouble.

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