A Taxing Subject

So we have a tax cut, at long last, I guess. I haven’t read into it deeply, to me, tax language is about the fifth circle of Hell, and that day is coming soon enough, so why volunteer. But from what I’ve read there is some pretty good stuff in it, and some bad, no doubt. Well, that’s how legislating goes, and frankly, what we are trying to undo would have better never been started. Bookworm at Watchers of Weasels has some thoughts about some of the good stuff in it.

I’m not an economist, but I was blessed with a fair amount of common sense. Despite Democrat hysteria, it’s obvious that “the little people” will fare better under the proposed tax bill than they do now — and for a reason the Republicans ought to be speaking about a lot but, because they’re bozos, they are not.

That last sentence may be the most self-evident piece of truth ever written. They are indeed bozos, who wouldn’t know a good policy if it bit them on the ass. But we both digress.

Currently, America ostensibly does not have a “Regressive” tax system. This is a lie. America’s tax code is highly regressive. This is because we have the highest corporate tax rate in the Western world. Yay, say Lefties. Let’s stick it to the corporations. That sentiment proves that Lefties are either stupid or uninformed.

The reality is that corporations don’t pay taxes. This is because the buck doesn’t stop with the corporation, meaning that corporate shareholders will take whatever steps are necessary to ensure that their return on investment is not affected by the tax. After all, once that money goes into their pockets, it will again be subject to a tax.

To avoid double taxation on corporate dollars, corporations do two things: they place a cap on employee wages and — here comes the regressive part — they pass the costs on to the consumers. The higher the tax imposed on corporations, the higher the cost of consumer goods and services.

A widget that would sell for $10 under a lower tax code is priced at $20 to offset taxes while still showing a profit. This kind of price mark-up is bad all around. It makes the product less desirable, which can hurt corporate sales and, potentially, drive the corporation out of business. It also places on poor people a disproportionate burden connected to buying the item. For Jeff Bezos, that extra $10 is as insignificant as a microscopic speck of dust falling on a $100 bill when he opens his wallet to pay. For the guy who mows my lawn, that $10 means that he cannot buy the product, even if he needs it, or that, if he must buy the product, his available money is substantially decreased.

That is why this article is here, she just gave the best description I’ve read of why the corporate income tax is not only counterproductive but downright evil. It disproportionately hurts the poor, by raising the price of literally everything you buy, even if you buy things that allow you to make the things you need yourself. Literally, everything you use or buy from birth to death is subject to this hidden tax, and that doesn’t even mention the (perhaps many) things you simply cannot buy (indeed that you may never have dreamed could exist) because the corporations could not make enough on them to market them.

It’s pretty obvious that it also increases unemployment. Why? Because while to employ somebody, they have to make enough to cover the costs involved in employing them, and that includes the overhead of the tax one pays on their labor. Actually to be accurate the amount of tax that the customer is willing to underwrite for whatever they do, which is a different, higher number.

And yes, the corporate tax rate really should be 0.00%. It is an iniquitous fraud perpetrated by the government on those not paying enough attention to what the government is doing. Sadly, that’s us, almost all of us.

 

Why L.L. Bean’s Boots Keep Selling Out

FILE-In this Dec. 14, 2011 file photo, Eric Rego stitches boots in the facility where LL Bean boots are assembled in Brunswick, Maine. LL Bean CEO Chris McCormick told workers that the Maine-based retailer has been conservative for the past few years and is now ready to "accelerate our growth plans and grab market share." That plan includes pumping an additional $100 million into its website, retail expansion and business systems, he said. (AP Photo/Pat Wellenbach, files)

FILE-In this Dec. 14, 2011 file photo, Eric Rego stitches boots in the facility where LL Bean boots are assembled in Brunswick, Maine. LL Bean CEO Chris McCormick told workers that the Maine-based retailer has been conservative for the past few years and is now ready to “accelerate our growth plans and grab market share.” That plan includes pumping an additional $100 million into its website, retail expansion and business systems, he said. (AP Photo/Pat Wellenbach, files)

This is old, so it may not be as true this year, but then again it may be. I missed the story, but then, I don’t read The Atlantic, almost never see it out this way. Here’s a piece.

BRUNSWICK, Maine—For over a hundred years, the company Leon Leonwood Bean founded has been making rubber boots and outdoor clothes in this area, about 25 miles north of Portland. But on the particular afternoon I visited their manufacturing plant, loud music was pumping inside the office, beats spilling into the cubicled area where visitors sign in—a Zumba class for employees was in progress.

L.L. Bean’s offerings have traditionally not been synonymous with cool. The company’s signature items are intended for the unglamorous activity of camping: pragmatic sleeping bags, flannel pajamas, fleeces, and down jackets. But then something happened in 2011: The outdoorsy aesthetic that L.L. Bean had been selling for 100 years became trendy. That’s when the duck-boot shortage first began, and “Bean Boot heartbreak” spread as countless consumers found that retailers didn’t have what they wanted. Every autumn since, business reporters have provided updates on whether the duck boot is selling out. This year’s update? It still is. […]

In Brunswick, L.L. Bean operates a 170,000-square-foot factory where the boot is assembled from start to finish. The rubber bottom of the Bean Boot is made by a machine, but after that it’s handmade by 200 people who split their time between three shifts. All in all, making the boot takes about 85 minutes’ worth of labor (not including the breaks in between stations). Royce Haines, the senior manager of manufacturing at L.L. Bean, describes it as “a mix of old and new technology”: While the boots aren’t made exactly as they used to be, the assembly process and sewing are all done by hand.

There are two main reasons, then, the Bean Boot can’t keep up with demand. The first is the company’s decision to keep making the boot in Maine, rather than exporting operations out to, say, China, where the majority of shoes sold to Americans are made. Fifty years ago, 98 percent of shoes for Americans were made in the U.S. Nowadays, one estimate suggests that China makes 12.5 billion pairs of shoes, which is about 90 percent of shoes made worldwide. To preserve its brand, L.L. Bean keeps operations local.

via Why L.L. Bean’s Boots Keep Selling Out – The Atlantic

Over the years, I’ve bought a fair amount from LL Bean, although not Bean boots. Why? Because like some other brands, say, Stetson hats, Lucchese and Wesco Boots, Filson, and to a point Pendleton clothes, and Klein and Wright tools, they have met the competition by remaining what they always were, the top quality. They, all of them, look expensive, and their first cost is higher, but their cost over time is lower than the Chinese junk that WalMart sells.

So I hear you asking, why don’t you have a pair of Bean boots? Well, it’s like this, my underlying skill set is that of a lineman, You know working on power lines, and climbing poles requires quite an arch support. Good as they are, Bean boots don’t have it. I once had a pair of Sorel’s, bought in a blizzard with -80°F wind chills, and they worked fairly well, but I wasn’t climbing. By the way, Columbia bought Sorel a few years ago, and guess what, the quality has, I hear nosed dived.

l13nonail_sWhat I wore back in the day was Hoffman Lineman’s Felt Pacs. They were OK, but not nearly as good as my WESCO Highliners. Well, no surprise really, Highliners are mostly custom made and go usually for about $800 dollars, but take care of them and they should last out your career. Off duty, a lot of us wear Lucchese cowboy boots, most of us have gotten so used to that high arch that anything else is uncomfortable.

But there is a pattern here, fashion aside. Bean is one of those companies, that has offshored some things but the core remains Americans doing it right the first time. They likely had to, to keeps some control over costs, all those companies above, except maybe Wesco have to an extent. Pay now, or pay every two years. Personally, I believe in doing it right the first time.

Saturday Links

Well, I’m more or less recovered, but there is a mass of stuff I read (and archived for use) while I was ill. So how ’bout some links today to help you (and me) catch up?

Hillary Clinton & Double Standards on the Left

The Flint Water Scandal

The Tribal War with Islam

This refers to much the same thing I said yesterday.

Obama’s Middle Eastern policy is a bad replay of Woodrow Wilson’s post-WWI efforts (and we know how that ended)

What we really need to talk about after Cologne

Europe Braces Itself for Terrorism as Germany and Other Countries Experience Sexual Jihad Firsthand from Rapefugees

Are there really two popes?

Affirming Anglicanism

The one thing most people think they know about economics is wrong

Sell everything ahead of stock market crash, say RBS economists

Oil could crash to $10 a barrel, warn investment bank bears

Project Fear: how Cameron plans to scare us into staying in the EU

The Brexit vote: it’s neck and neck

Why farms die and should die

And finally, only marginally suitable for work, but an example of “Improvise, Adapt, and Overcome”.

How To Use A Thong

Well that cleans up some of my archives, and there’s something for nearly everyone there! 🙂

 

Margaret Thatcher’s Ghost Stalks The Halls Of the European Union

ThatcherWell, it sounds as if the EU has found some method of stealing more productive people’s money to keep Greece going a bit longer. I didn’t pay all that much attention to the details, honestly. It’s all a sham and show anyway, nearly all of Europe, not even excluding Germany itself soon will be in the same boat.

My friend, Jack Curtis, explained it pretty well yesterday. Here’s part of what he said.

If the E.U. elects to advance funds, Greek debt that cannot be repaid already will be increased by the advance. The E.U. will be throwing good money after bad. Weaning an alcoholic as it were, by buying him drinks. But the facade of business as usual can proceed; the Greek banks can open in the morning.

If the E.U. simply says: Pay what you owe: The Greek banks and government will be forced into what amounts to bankruptcy and collapse. The shock may well collapse the stock markets and thereby the banks elsewhere as the overinflated market values deflate, collapsing still more banks by diminishing the worth of their holdings. And reducing the wealth of everyone else too.

Margaret Thatcher’s Ghost Stalks Halls The Halls Of The Euro … | jcurtisblog.

As he explains it’s a bad omen in a worsening situation. All of Europe, including the UK, will end up in this boat, unless the Tory ‘austerity measures’ are a lot tougher than I think, and besides since they keep stalling on leaving the EU, the rest will drag them along anyway. It won’t necessarily stop there either, we here in the US have decided in the last fifteen (or fifty, perhaps) years that this leaky boat is the way forward.

It amounts to a run on the bank, not the Podunk State Bank but the big ones, the ones billed as too big to fail, which really means that when they fail they will likely take their governments with them leading to who knows what. It’s not hard to see why the politicians want to paper over the mess they’ve made, it could be really catastrophic and when that happens it often turns into a hanging party for all hands.

Sadly, all thinking people have known for basically forever that this is how it ends. What ends? The Greek government at best, the EU and it’s constituent governments, maybe, in the worst case, western civilization. You pays your money and you takes your choice.

Kipling said it over a hundred years ago.

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: “If you don’t work you die.”

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew,
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four—
And the Gods of the Copybook Headings limped up to explain it once more.

As it will be in the future, it was at the birth of Man—
There are only four things certain since Social Progress began —
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool’s bandaged finger goes wabbling back to the Fire—

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins
As surely as Water will wet us, as surely as Fire will burn
The Gods of the Copybook Headings with terror and slaughter return!

But maybe that is too complex for those that think themselves fit to rule us. A few years ago Maggie Thatcher put it more succinctly.

“In the end, more than freedom, they wanted security. They wanted a comfortable life, and they lost it all – security, comfort, and freedom. When the Athenians finally wanted not to give to society but for society to give to them, when the freedom they wished for most was freedom from responsibility, then Athens ceased to be free and was never free again.”
Margaret Thatcher

She also wisely noted, as Jack reminded us:

“The problem with socialism is that you eventually run out of other people’s money.”

 

 

The Theory and Practice of Freedom

Today would have been Milton Friedman’s 102d birthday. He was perhaps the least dismal practitioner of the dismal science. Why? because he believed in freedom, not slavery or dependence on anything but yourself.

Watching him over the years, in his erudite and good-humored presentations has shaped much of my economic world view. And so to celebrate a great man’s birthday, let’s share some of that.

I suspect you will be surprised how germane to today it seems. Enjoy!

On the rights of workers

On Energy

On Money and Inflation

And finally, and maybe most importantly

What is America?

 

 

Video Thursday

I don’t completely agree with the video here. It’s a bit too conspiratorial for me. But it’s not exactly wrong either.

But one thing I want you to remember, while much of this video is true, I think, minus some of the more lurid conspiracy elements, the American Dream isn’t really, entirely, or even mostly about economics is it? It’s about freedom, and while economics plays a part, there are other parts, that need strengthening as well.

Then there is this, which is superficial, but not, I think, false.

Enjoy

 

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