Showing posts with label Tax Reform. Show all posts
Showing posts with label Tax Reform. Show all posts

Tuesday, December 19, 2017

Stealin’

     Certain pathways in logic are irresistibly seductive. One of them, which forms the core of today’s screed, is the following:

“If it’s okay for him, it’s okay for me.”

     Now, as logic, there’s very little wrong with it. The crux of the matter lies in that insidious little word if.

     Part of the social binder usually called respect for the law arises from whether the law is applied uniformly. A law that some persons are allowed to violate with impunity will elicit little or no respect, at least in a society that doesn’t recognize a privileged class. Shortly after the people realize that some law is being enforced against some but not others, there will arise a personal ethic that treats that law as something to be broken when it’s advantageous, as long as the penalty can be eluded.

     A society in which a great many laws are known to be selectively enforced will lack respect for the law in general: i.e., the lack of respect will not be confined to a particular set of laws. Over time the privileged ones will become bold: they will openly use their privileges for personal enrichment and aggrandizement at the expense of others. The ambitious man will strive to enter their ranks, or to emulate them from without. The “little guy” will sense that he’s become prey for the mighty; he will bend his efforts away from production and toward evasion and concealment. It’s then that Hari Seldon’s assessment looms large for that society:

"The fall of Trantor," said Seldon, "cannot be stopped by any conceivable effort. It can be hastened easily, however. The tale of my interrupted trial will spread through the Galaxy. Frustration of my plans to lighten the disaster will convince people that the future holds no promise to them. Already they recall the lives of their grandfathers with envy. They will see that political revolutions and trade stagnations will increase. The feeling will pervade the Galaxy that only what a man can grasp for himself at that moment will be of any account. Ambitious men will not wait and unscrupulous men will not hang back. By their every action they will hasten the decay of the worlds." [Isaac Asimov, Foundation, emphasis added.]

     Isaac Asimov was writing about the extremely far future...or so he thought.


     I have two articles in mind today, one of which is a month old:

     The father of the UCLA basketball player who was arrested in China for shoplifting sunglasses appears on CNN to explain why he feels President Trump did nothing to help his son get released from Chinese authorities.

     I can’t blame anyone who disdains to watch the video above. It’s long and irritating, and most of it is disposable. But the fuel for the furor it evoked lies in LaVar Ball’s assertion that Stealin’ be okay, no big deal:

     “As long as my boy’s back here, I’m fine,” LaVar Ball told ESPN. “I’m happy with how things were handled. A lot of people like to say a lot of things that they thought happened over there. Like I told him, ‘They try to make a big deal out of nothing sometimes.’ I’m from L.A. I’ve seen a lot worse things happen than a guy taking some glasses.”

     Where do you suppose LiAngelo Ball got that attitude? Where do you suppose LaVar Ball got it?


     I’ve written before about the role of privilege in creating a class structure. Indeed, privilege, whether de jure or de facto, is at the heart of social class. The representations of the SJWs, the redistributionists, and miscellaneous bleeding hearts notwithstanding, it has nothing to do with one’s income level:

     A class is defined by its legal and social privileges. The aristocrats of medieval times were not distinguished by their lineages or their deeds, but by the things they were allowed to do, without penalty, that commoners were not. There is reason to believe that the majority of medieval aristocrats were fairly responsible stewards of their lands and of public order within them. That does not justify the creation of a class of men who could wield high, middle, and low justice over others, but who would normally escape all consequences for deeds for which a commoner would be severely punished.

     The American response to the failings of traditional aristocracies was the Rule of Law: the fundamental principle that the law must treat all men impartially, regardless of their identities or station in life. The old shorthand for this principle was "blind justice," meaning that the law must not see one's person, only one's deeds. In a society that respects the Rule of Law, a king would stand in the same dock as a trash-hauler, were the two accused of the same offense. All that would matter would be the evidence for their guilt or innocence.

     In the absence of a scrupulously observed Rule of Law, classes with differing degrees of privilege will emerge. The flourishing of the members of each class will be influenced, often heavily, by the class's privileges and how effectively they can be exploited. Men being what we are, we will be moved to use those privileges in our own interest, both against competitors within our class and against other classes.

     I cite that passage with a distressing frequency. I can’t avoid it; it’s a fundamental element in the grand explanation of why American society is disintegrating.


     But wait: there’s more! The GOP’s tax reform package has elicited a lot of talk about that perennial shibboleth of the Left, “fairness”...but this time, they’re concerned with “fairness” toward the already well off:

     I turned to the personal financial adviser, who had begun to offer his two cents.

     “It’s a disaster. I mean, it’s what you would expect from Trump and the Republicans. It rewards rich people and hurts poor people.”

     “As I said, I haven’t paid attention to the specifics. What does it do?”

     “Well, I don’t really know yet, but I know it’s going to hurt poor people in California. It takes away the mortgage tax deduction and it no longer allows us to deduct our state income taxes from taxable income for our federal income taxes. It’s so destructive.”

     Further inquiry revealed that, when he said “poor people in California,” he actually meant that it was going to be a problem for him, personally. For laudatory reasons that I won’t divulge here, he’d extended himself financially to live in our middle-class-by-Marin-standards neighborhood, so he has a large mortgage compared to someone in, say, Bakersfield or Abilene.

     Bookworm lives in California’s Marin County, an exceptionally well off region. I hear a lot of the same crap from my Long Island neighbors.

     The tax laws have been used to privilege debt incurred for home ownership – mortgage debt. That constituted a more or less explicit subvention to the most prosperous Americans. It becomes more explicit when we consider this facet of it: Second “homes,” even if used only as vacation getaways, are included in the deduction. Indeed, a mortgage undertaken to finance a trailer or motorhome would qualify for the deduction.

     So those who have benefited from this provision of the law are squealing like stuck pigs about its curtailment.


     Smart people know when they’re getting away with something that others aren’t. Most such people are, shall we say, other than candid about it. All the same, theft through the action of a third party remains theft – and “If it’s okay for him...”

     The federal government has taught us something about getting away with theft: Let us do it for you. Privileges pertaining to taxation and finance have been piled one atop the next until it becomes impossible to square the aggregate with any conception of either property rights or respect for the law. But the moral effect on the nation cannot be averted merely by transferring the agency of theft to a well armed third party. He who receives the stolen goods is morally complicit in the burglar’s deed.

     I was recently ejected from a local “social network” for daring to say what you’ve just read. Ponder that for a few moments over your coffee.

Wednesday, December 6, 2017

The Tax Bill And The High-Tax States

     I suppose this was to be expected:

     Governors of three high-tax states said Monday they’re considering suing to stop the GOP-backed tax overhaul that limits deductions for state and local taxes.

     “We are looking at the legality now. This is double taxation. They are taxing the taxes,” said Gov. Cuomo during a conference call with California Gov. Jerry Brown and New Jersey Gov.-elect Phil Murphy.

     “This is from the party that is against taxation. This takes from the richest states and has them subsidize a tax cut for the less wealthy states. It may well be illegal and unconstitutional.”

     Any number of other federal policies that created tax-system-enabled transfers to the high-tax states evoked no protest from those states, back when. But it’s a bit like the joke about the laborer who found an extra dollar in his pay envelope one Friday and said nothing to anyone about it. On the subsequent Friday, his pay envelope was short one dollar...so he went to his supervisor and complained.

     The supervisor cocked an eyebrow and said, “Last week you received a dollar too much. Why didn’t you say anything then?”

     The laborer drew himself up to his full offended dignity. “One mistake, I can overlook,” he said. “But not two.”

     Should Cuomo et alii elect to sue the federal government over the bill, I predict vigorous forum-shopping and copious media bloviation.


     Yes, the tax bill will negatively impact two groups of Americans:

  • Earners in high-income-tax states;
  • Homeowners in high-property-tax states.

     I’m one of each. I’ll take a hit, possibly two or three thousand dollars’ worth. But the correction of incentives is necessary. Indeed, it’s long overdue.

     The political dynamic has a lot in common with the behavior of predators of all kinds. As I wrote in Which Art In Hope:

     “Now, we know from historical data that predators of all sorts will concentrate where the prey is fattest. The State, which is merely an organized band of predators with a veneer of legitimacy derived either from tradition or from a manufactured appearance of the consent of its subjects, took a huge fraction of its subjects’ annual production from them in taxes.”

     (The lecturer who said that to his students, Arne Stromberg, holds the Edmond Genet Chair in Sociology at Gallatin University, one of the most prestigious institutions of higher learning on Hope, so you should give his views respectful consideration.)

     New York, California, Illinois, and New Jersey have crushing tax rates because several decades ago, political predators noticed that the residents of those states had higher incomes than the residents of other states. That created an incentive for those predators to flock to those states and worm their way into politics there. Within each of those states, the most voracious predators are usually found in the large cities, where the pickings are geographically concentrated and the conditions of life compel the centralization of important facilities. (It also helps that the media in large cities can easily be bought off, for reasons beyond the scope of this screed.) As the large corporation assumed economic dominance over the family business, the pursuit of one’s chosen trade led to a reduction in mobility, especially among senior and middle-aged workers. That worked to pin the “prey” in place.

     The federal government should never have collaborated with the state governments to subsidize the states’ predations via the federal tax system. The incentive for it grew as income tax rates rose, particularly during the New Deal years. Making state and local taxes deductible on one’s federal return helped Franklin D. Roosevelt to purchase the support of the states with the largest number of electoral votes.

     But what’s of greater import at this time is whether Cuomo and his High-Tax Comrades can find a federal judge willing to allow their suit.


     These days there isn’t much that can’t touch off a lawsuit. State governments don’t often sue Washington, but there are precedents for it. Should the bill reach President Trump’s desk in something close to its current form, I predict that Cuomo, Brown, and Murphy will sue over it.

     They’ll need a Clinton or Obama appointee to allow the suit to move forward. Nothing in the Constitution requires that Washington make any provision whatsoever for state and local taxes in its own tax systems. Thus, a judge who aced “Straining at Gnats and Swallowing Elephants” in law school and is politically aligned with the leftmost of the Left must be found. Unfortunately, there are plenty of them. However, should the suit survive to reach a federal appeals court, I’m confident that it would be dismissed with prejudice.

     Yes, the tax bill will hit me in the wallet. Still, it’s high time the high-tax states had some clamps put on their jaws. A great part of the reason those states have had trouble retaining young people lies in their tax systems, which make it very difficult to pursue the first years of one’s career there...unless you’re a lawyer or a politician, at least. Without young people a locale tends to ossify, both socially and economically. It doesn’t take long for extortionate taxes to reduce an economically vital region, as Long Island once was, to a retirement community.

     Therefore, it’s time to “take one for the team.” I hope other conservatives in situations such as mine will see it the same way.

Monday, December 4, 2017

Tax Bill - It's a START

Neither the House version nor the Senate version is even close to perfect. Too many loopholes, too gentle a treatment of the housing deduction, too many tax brackets, too skewed towards taxing the top.

However, it is a start.

What will be even more important is to eliminate that inequity that occurs when ONE segment of the population - recipients of government benefits - are insulated from the realities of government overspending.

What happens when you spend too much in government, is that you add to the federal debt. Like a household that overspends the wage-earner's paycheck, a debt is a clear indication that your budget is out of whack.

If you start loading up a credit card, eventually, the accumulating interest takes a greater and greater slice out of your available money. You end up paying up mostly (or all) interest, and the debt never goes away.

That's the situation we're in with the federal debt. It CANNOT be solved by "raising taxes on the rich". We don't have that many rich. Those that we do have will find some way to avoid that tax, usually done by <s> bribing</s> donating to politicians.

There are only two real choices:

  • Pay it back, or,
  • Default - yes, that's like a bankruptcy
Neither is palatable to professional politicians. But, default is something that should cause terror among the voters. Default would mean a worldwide collapse of the economy. We're that big, and we owe that much to other nations.

Can we pay it back? Yes, if we refuse to raise the limit on the debt. That's what all that posturing is about a few times a year. That's what Trump forced the Congress to authorize recently. He said, if you want it raised, YOU have to vote for it.

Of course they did. They know their constituents would have horse-whipped them if they didn't.

So, that leaves paying it back.

Such a solution seems insurmountable. But, it's not entirely impossible. We just have to use an all-out approach.
  • No more authorizing programs that are not paid SOLELY from fees exacted on the people who benefit.
  • Immediately - stop ALL raises, inflationary adjustments, and increases on EVERY person getting a government check. Let them begin to feel the pinch that taxpayers feel, whose paycheck is NOT indexed to inflation.
  • Start a bounty program on fraud in government. If you can track down evidence of fraud (NOT accidental overpayment) by a recipient of government money - whether in armed services purchases, welfare fraud, Medicare/Medicaid billing, or manipulating regulations to award money to a specific person/company, you get a percentage of that money. NO plea deals that don't include a FULL payback of the stolen money - non-dischargeable in bankruptcy, loss of government pension and all benefits, and a public admission of a felony - which, by agreement, will NOT qualify for a pardon or clemency.
  • The first year, take 2% of all Social Security checks, and apply the money to the federal debt. The bottom 10% will be exempt.
  • If SS recipients have an income more than twice that of their SS check, they will lose 1/2 of that check - permanently. This will stop the idiocy of paying out to rich retirees, who have income to spare.
  • NO more gender surgery, unless the person has an actual MEDICAL condition. NOT "I FEEL like a woman". Born with ambiguous genitalia, lost a part through accident or cancer surgery, or other honest-to-God medical anomalies qualify. Self-inflicted harm (dick-ectomy, for example) allows you to regain the mutilated part - AFTER counseling. No amounts of threats to DIY or suicide threats will change this policy.
  • End the current student loan program. Reinstate it with limitations:
    • No grant or loan can exceed the AVERAGE of state colleges' yearly tuition.
    • The actual amount is predicated by the students' major - STEM careers can qualify for the max amount. Liberal Arts and Humanities - perhaps 1/2. Students are free to choose, but - it's gonna cost 'ya if you choose poorly.
    • For students not otherwise qualifying for admission into a 4-year school, they may use their loans at a community college or technical school.
    • ALL students must make adequate progress. Regular schedules, with math and english and other requirements each semester. If they don't qualify for college-level courses, they can give up a summer for a prep program - yeah, we'll pay for it with a LOAN. That loan can be converted into a grant, IF they can pass a standardized test at the end.
      • BTW, withdrawals count against the next semester's loan. If you drop, the money you might receive is reduced by an amount equal to that dropped class's cost.
  • Re-vamp the military academies. They are letting in too many marginal soldiers - academically, physically, and morally. Better to have smaller classes than to risk putting unqualified officers in charge.
    • Consider requiring all potential officers to have served in an actual military unit before admitting them.
    • Or, use their summers as a way of getting them into the field for some actual experience each year.
    • Get rid of those Leftist instructors. There are too many qualified teachers to put up with that crap!
That's just a start.