Kvetch

Not that I'm complaining

AOC, the 70% Income Tax Proposal and why she’s both right and wrong

Some Notes on a 70% Tax and AOC

Let’s see. Top federal rate, 37%. ObamaCare 3.8%. California’s top rate 13.3% (and no useful deduction for the CA taxes, so those three simply add up): 54.1%. California’s sales taxes are around 9% (statewide 7+, but local taxes bring it up as high as 10.25.)

So a top earner takes home 46 cents on the (marginal) dollar, buys something for 42c and sales taxes eat up the rest. Total net tax rate: 58%.

AOC is right – we could raise the rate on the highest earners to as high as 70%, but that’s NOT the same thing as raising the *Federal* rate that much. Several economists have been cited talking about that overall level (around 70%) as reasonable and/or optimal, but pundits and columnists rarely add in State, Local, or sales taxes when considering that “optimal” level compared to where we are now.

Now the part that AOC is wrong about: (a) since we are talking about only increasing taxes by about 10-12% at the margin on the very highest earners, the revenues it would generate are really nowhere near the size you’ll see her cite. and (b) pretending that people don’t respond to incentives — ie. that the money raised by that tax change would be a simple static analysis — is also silly.

So she’s both not as absurdly wildly out of the field as the right says. But she’s also — and this seems to be a habit for her, as she’s done it in other contexts, too — she’s wildly out of line on how much you could really expect to raise by following her prescription.

And a note about historic top marginal rates of 70% — during those times, there were vastly more write-offs (ie. 100% of interest — including auto, credit card, mortgages, etc — and vastly more loopholes.)

Moreover, state and sales taxes were uniformly much much lower.

Folks love to talk about how Reagan lowered rates. He did. But it was in conjunction with closing out a *lot* of loopholes.

Finally, regarding the alleged problem of undertaxing unearned income (dividends and capital gains) with the current top federal rate of 20%:

That’s misleading, too. Again, ObamaCare 3.8%. And CA has no lower CapGains/QualDiv rate — so 13.3%.

So no, not 20%. 37.1% already (for high earners in CA — home of many of the very highest earners in the country).

Moreover, particularly for the QualDivs — that’s income that has *already* been taxed at the corporate level. The reason it gets that lower rate is specifically because it’s double-taxed. If you want to talk about eliminating the corporate taxes completely (or making div payouts deductible against corporate earnings but keeping the corp tax for retained earnings) and making QualDivs taxed as ordinary income, that’s an interesting conversation to have.   And in fact, may make sense — taxing divs as ordinary income means they are taxed much more *progressively* so rich folks pay higher rates and poor folks pay lower rates.

There may well be an argument for raising some of these rates — but bear in mind that it’s rarely as simple as anyone likes to make sound bites out of.

Raising the QualDiv rate but ignoring the double-taxation doesn’t make sense.

And raising the CapGains rate has very clear and obvious consequences since those are generally under the control of the taxpayer — if the rate is too high, they simply don’t sell assets. There are step-up basis if they hold until death, the ability to borrow against assets rather then sell them, etc.

Advertisements

Why the UK Election Race Is Closer Than Expected (and a riff on means-tests)

From the Department of Predictions Are Hard, Especially About the Future, and Elections
 
Of note, the linked videos in there are interesting.  In a radio interview, an interviewer just wouldn’t let Corbyn off the hook for not knowing how much one of his centerpiece proposals is going to cost.
It’s actually probably a very good proposal — child-care for everyone without a means-test.  As any economist will tell you, means-tests almost always have unfortunate side effects — their effect is that of a high marginal tax rate starting at the phaseout — meaning it’s effectively a tax increase on exactly the wrong folks
The problem is that without means-tests, programs cost more — but the folks who are wealthy enough to not need these programs — the argument for the means-tests being that rich people don’t need government benefits — those rich folks who don’t need these benefits are already the ones paying for them anyway.  Because, due to progressive taxation, we already tax the rich.  Why shouldn’t they get some of the same benefits that they’re paying for?
Unfortunately, folks on the left don’t want the rich to get these benefits (and won’t embrace the high cost of providing benefits to everyone).  And folks on the right don’t want to pay for them for anyone at all.  Which leaves the left and the right to always end up making the worst possible compromise — means-tests.

On Yiddish Words and English Letters

While there appears to be some debate as to the correct spelling of “mishegas” — I noted today that the domain “mishegas.guru” is available.

I’m tempted to get “mishegas.guru” for my half-Indian half-Jewish totally-troublemaking son.

I think my wife would kill me, though. And, besides, I prefer “mishigas” even though autocorrect always tries to replace it with “michigan”. (And while we’re at it, for the records, autocorrect always tries to replace “gorsuch” with “grouch”.)

Apple, Bluetooth, the iPhone 7, etc.

Bluetooth — and management of bluetooth connections — is still half-assed.

If you’re on your earpiece and get into your car which has bluetooth — boom, your conversation jumps from one connection to the other. If you didn’t want it to do that, bummer — now you have to navigate the panels and move it back. Meanwhile, you’re all “oh, sorry, I didn’t get that, bluetooth jumped”.

If wireless is a front-and-center technology — it needs a front-and-center control panel which you can get to immediately, which lets you say “no, unless this device goes offline completely, leave it where it is”, etc.

Apple likes to push things – to go where the technology isn’t quite ready, sometimes – to help really bring it up to a polished and usable place.

Hopefully, the AirPods will be part of that, but they are not the only problem here. Apple likes to act like folks don’t need controls for things, but sometimes you really do. This is one of those instances, and hopefully they’ll come up with a very impressive solution. But we’ve had bluetooth for *years* now and they haven’t yet.

Not that that’s stopped me from making the transition. I use — almost exclusively now — bluetooth devices with my iPad and iPhone 6.

But it’s annoying as shit sometimes.

I really want a panel which lets me lock in audio streams to specific devices (i.e., unless I actively change it, voice conversations should always go to my Voyager Edge. Music — to the car stereo. Navigation directions — if the Voyager Edge is on, to there. etc. etc.) And I should be able to get to that panel instantly from anywhere without having to navigate to the Prefs/Settings app and digging down through there.

Make your bed

You ever see or read one of those motivational/inspirational speeches which says that you should make your bed every morning? They usually say that doing so is an easy way to start your day having “accomplished” something, and that it sets the stage for you to be in a mindset of accomplishing things for the rest of the day.

Let me tell you something. Whoever thinks I need to make the bed to have accomplished something first thing in the morning is someone who’s never gotten the kids out the door.

By the time that guy’s made his bed, I’ve dressed the kids (including several, um, discussions about clothing), I’ve made multiple lunches, coffee/tea for the grown-ups, gotten backpacks in order, found lost library books, packed up all my *own* shit of the day at the office, etc. etc.

If all that crap doesn’t make me feel like I’ve gotten something done before 8a, believe me, making the bed is the last thing I should be worried about. I should be back *in* the bed.

So, yeah, maybe make your bed if you think it’ll make you feel good.  Or you just like having your bed made.

But if you’re making it just to have a feeling of accomplishment, you’ve got some serious other problems in your life.  Or maybe a spouse who works way the hell hard to make your life so easy that you feel that making the bed is a major achievement.

 

Car seats

Somewhere, somehow, the universe is tracking all the time I’ve spent installing and removing and installing and removing car seats.
And I’ll get some of it back somehow.
This, I need to believe.

The Rent is Too Damn High

My office landlord just informed me that my rent is going up a full 50%. From “astronomical already” to “nope, just nope”.

Now I’ve got to start looking for a new office. This stinks.

I really love my little office.  Sigh.

 

Resetting the share menu on MacOS Yosemite or El Capitan

[Yeah, this isn’t really me kvetching so much as me providing a solution for something about which I was going to kvetch.]

If options like ‘Email this page” Airdrop or Facebook are missing from the pop-up share menu (i.e., in Safari) — execute the following command on the command line to reset it.

/System/Library/Frameworks/CoreServices.framework/Versions/A/Frameworks/LaunchServices.framework/Versions/A/Support/lsregister -kill -seed

If stuff still doesn’t show back up, then go to System Preferences->Extensions and check some boxes if necessary.

Because that’s just what the world needs…

 Just the other day I was wondering how much better my life would be with an Internet enabled water pitcher which could magically suck money out automatically…
 

Self-serving nonsense of the day, via the WSJ 3/30/2015

Self-serving nonsense of the day, via the WSJ:

[discussing lowering US corporate tax rates]
“But that approach, some lawmakers contend, faced a basic mathematical problem, particularly on the business side: The US corporate tax rate is the highest in the developed world, and lowering it substantially would require eliminating a large number of tax breaks to avoid adding to budget deficits. That could offset any economic benefit of lower rates.”

Translation: That would cut back on those same lawmaker’s ability to favor one constituency or another, and thereby reduce their power and the utility of lobbying by special interest, which is their actual bread-and-butter. The economic benefit is not just lower rates (and certainly not lower tax revenues) – the economic benefit is efficiency, regularity, predictability, and the reduction in the value of /lobbying/. Yes, self-serving lawmakers – the benefit here is a reduction in the value of special interests paying you guys off.

Unfortunately, the media is likely going to look at any such improvements in our tax system as “ooh — lower rates for evil corporations!” so any such rational improvement in our tax code faces TWO huge obstacles – the lawmakers and the media. The only ones likely to be cheering for it are pretty much every single economist. And businesses too small to have an army of lobbyists.

Note that it’s not the WSJ coming up with the nonsense. It’s the unidentified lawmakers they are quoting. WSJ could, however, help clarify that it’s nonsense by simply publishing, next to the article, the definition of “rent-seeking” from any basic econ textbook.