Getting rid of tax envy

I write this blog for free.  Gratis.  I get no income from it, and the only value I put on it is that people can read it.

Whenever I hear grumblings and sniffs that the higher earners* should be taxed more, and supporting propaganda such as "X% of higher earners pay Y% of all tax while Z% of low earners pay nothing," "The zillionaires should have their earnings (taxed heavily, confiscated above a certain level)," and "the fair tax/flat tax/Richard Simmons Shake Your Left Leg and Rub Your Tummy tax is regressive to the poor, the blind, and David Letterman", there is one word that sticks out like a sore thumb:  Envy.

Envy is a powerful thing.  Little wonder why the lower classes cast a huge green eye at the upper classes, and wish they were taxed to the stratosphere.

But there's a problem with punishing the high earners with punitive taxes, even though in the past, it was acceptable to have an income tax rate of 90% during WWII and a 70% rate in the 1960s and people were just as prosperous.  The problem is that when there's a disincentive in place to earn money, the ambition to avoid that tax will go up exponentially.  Whether it's plowing it into investments, putting it into an overseas tax shelter, or giving it away to charity, the high earners will find every which way but loose to avoid having that money snared by the IRS.  And, when the high income earner gets fired, laid off or their business heads overseas, that narcotic tax income that the IRS has enjoyed evaporates - usually because the business itself cannot sustain handing over a high corporate tax rate plus salaries, so the jobs are either eliminated to save money or are sent overseas to countries where the tax rates are far lower and the employment rules aren't as strict.

The lower earners lose also, because to paraphrase John Scarne, Old Man Tax Collector will find a way to get their money, and it's as high or higher than the upper tax bracket of 35%.  The lower earners think they pay no income tax, but they pay high taxes on cigarettes (45-70% effective), gasoline (10%), cell phone bills (12-20%), excise taxes, sin taxes, and many others.  So while it's great to get all that money IRS withheld in your paycheck due to tax credits, all it takes is a sick kid or a major car repair (or a missed rent payment) to wipe that refund out in a jiffy.  Meanwhile, even though the high earner is paying 75% to the government in income tax, they have the ability to save good chunks of their income and can live comfortably, whereas the low income earners are forced to live paycheck to paycheck while paying a ton in hidden taxes.

Ironically, when the lower income earners move up and make comfortable salaries, the revenge fantasies go away.  They don't care if the guy across the street has four BMWs and just returned from a 60 day cruise around the world; so long as the mortgage is paid and the credit cards are current, that's all that matters.  Even the former higher earners, when they lose their job and find a new one that pays less, get the ever-vigilant eye of the IRS off their backs because they've gone down two or three brackets.  Sure, you're not earning as much as you did, but so long as the mortgage is paid and the credit cards are current, that's all that matters.

In my next entry, some ideas to reduce tax envy.

* Rather than using "the rich" as a pejorative term, "high earner" is a little more accurate to me because I'm not putting a random dollar amount on how "rich" a person can be.

Watching the Ten Percenters

I'm responding to this excellent Herald article by Hillary Chabot as a long-time lottery player.

I've cashed tickets at the Lottery offices for years.  Until 2004, I got the full amount of my winnings, and since then I've paid my 5% cut to the state.  (Quit laughing back there if you're thinking I'm financing Deval Patrick's junkets.  OK, maybe a nice lunch at a London restaurant.)  If you have nothing to hide and you won a substantial amount of money, you would go and cash in the ticket...

...unless you owed child support, back taxes, parking tickets, and the like.  Not only do you get the 5% haircut from the state (or, if you're over $5,000, an additional 25% to the IRS), whatever you owe to the Department of Revenue gets taken.  For instance, if you owe $100,000 to the state for child support and you win $250,000, all you get left is $87,500, as $75,000 is sent to the DOR and IRS for taxes and the $100,000 is sent to the ex who has been demanding payment.  Even if you win as little as $600, whatever you're in arrears gets reduced by your winnings.  If you owe $100,000 and you win $600 - sorry, no check for you, but you get your bill reduced to $99,400.

Enter the professional ticket casher, or the "ten percenter."  What a ten percenter will do is cash the ticket for you in his own name, take 10% for themselves, and then give the rest to the winner.  The result: the tax/child support cheat still owes money, but keeps his winnings out of the radar of the DOR and the IRS

If you're not in trouble and you still want to remain anonymous (or have relatives or collectors dial you night and day because they discovered your suddenly fattened bank account) a blind trust established by a lawyer would be better than giving it to a ten percenter.  That way, the lawyer can come forward and claim the prize in the interest of the trust; the members of that trust remain anonymous (well, except for those under 18).

So what to do about this loophole that's costing the DOR millions in back taxes and child support?


Appeal to the ten percenters to turn against the ninety percenters.  A back stabbing move?  Sure, but if the ten percenter knows that the cheat won't give them their 10%, nothing lubricates the skids more than a ten percenter entrapping his boss.

Here's how it would go: a tax cheat owes $50,000 in child support and $25,000 in back taxes.  The tax cheat wins $100,000 in Mass Cash.  His $70,000 net will be seized if he turns in the ticket, so he gives it to the ten percenter with a promise of giving him $10,000.  The ten percenter knows the tax cheat has screwed him in the past, so he works with the DOR and cashes in the ticket for the cheat. 

The catch: the $70,000 check the ten percenter receives gets deposited into a traceable DOR account, who is also monitoring the amount of money given to the tax cheat.   When the tax cheat discovers DOR and IRS agents at his door and arrests him for child support and tax evasion, he also will find out all of his assets are seized too, thanks to the help of the ten percenter.  The $60,000 that the tax cheat tried to evade gets applied to his outstanding liens, and the ten percenter still gets his 10% of the original winnings - plus 10% interest on what the cheat originally owed, which is $7,500.  A fairly nice bonus.

The program, which I would call "Operation Dime Time," would help the DOR get lost cash from their evaders through the work of the ten percenters, who would also get rewarded for their assistance.  The ten percenters themselves would shed their image as mules for tax and child support cheats.  Even better - children who have been suffering due to the selfishness of their parents would get the money they deserve.

Somewhere, Juan Williams is chuckling to himself

After months of controversy, Vivian Schiller, the head of NPR, resigned after one of her colleagues got into a foaming anti-Tea Party tirade, thanks in part to conservative activist James O’Keefe, posing as a Muslim group carrying a $5 million donation to NPR and a hidden camera.  Ron Schiller not only offered his opinion, he offered the rope to strangle funding for public broadcasting.  (Not only that, one of the hoo-hahs chuckled that NPR is actually National Palestinian Radio.  She's on adminstrative leave.)

The clincher in all of this?  Upper class white people have maintained their facade of tolerance for many years, but their unadulterated spleen and contempt for others not like them - in other words, their real opinion about minorities, poverty, etc. - comes behind closed doors.  They are every bit as bigoted, ignorant, racist, and intolerant as they proclaim their bete noirs to be.  The upper white class lusts for power even more than the ones who "cling to their guns and religion," only their guns are mobs of professional agitators and their religion is socialism-lite.


NPR will only have itself to blame when federal funding is cut off from public broadcasting, and their only crime was being too candid.

Juan Williams, who was dismissed for exhibiting his opinion at NPR, is somewhere chuckling wryly to himself.

UPDATE: Juan Williams responds in the New York Post.  Compared to his former NPR bosses, Williams at least has his shoes tied while they tripped over themselves.

Instant Monkey Business (or I voted for #1 but we elected #3?!?!)

Instant Runoff Voting is an alternative way of voting for candidates versus the usual method of voting for one person.  In a nutshell, people are ranked in preference.

Sounds great in principle...but in this article by Brendan O'Neill (editor of spiked!) it really isn't that bright and shining pearl of democracy its supporters purport it to be.  I've included some parts here, and as it's written mainly in British English, I've put some words in braces {example} for an American approximation.  Anything bolded is also my emphasis.

AV is a form of super-technical majoritarianism. The way it works is through insisting that a candidate secure more than 50 per cent of votes before he is declared winner. So it asks voters to list their candidate choices in order of preference, marking them as 1, 2, 3 and so on. If after the first count no single candidate has 50 per cent of votes, then the candidate with the least number of votes is kicked out and those who voted for that candidate have their second-preference votes counted instead. This continues until one of the candidates – through a combination of his own first-preference votes and less keen voters’ second-preference votes for him – finally reaches the 50 per cent mark. So someone eventually wins, even if many of ‘his’ votes were cast very half-heartedly for him.Instead of voting for one person, you select people in terms of preference.  When the voting is closed, the person who receives over 50% of the vote wins.  If no one gets to the magic 50%, the person who has the lowest percentage is eliminated and the votes get passed around until someone hits 50%.

[AV] would make things less democratic, in two important ways: firstly through its impact on the act of voting, which would turn from being an impassioned statement into a watered-down listing of candidates you like, kind of like and dislike; and secondly through its impact on the act of deciding, which would more and more become a post-election, closed-off process of sifting through people’s preferences to try to decipher which candidate sort of represents the electorate’s desires.

AV would weaken the vote by implicitly inviting people, not to stamp their ballot paper with a heartfelt X for their party, but to scribble numbers next to various candidates, regardless of whether they feel very much for them. Voting would become less a declaration of belief and more a hedging of political bets.

The pro-AV lobby often points out that you will still be able to vote for only one candidate (or just two, or three, or four… it’s up to you). However, the knowledge that your first-preference vote might swiftly be discounted, and that second- or third-preference votes could become key in deciding the outcome of the election, will put moral pressure on voters to play the AV game, effectively to list their feelings about all the candidates rather than attach their flag to one of them. In keeping with our era of ideology-lite, where strong political convictions are seen as weird, voters will be tempted away from their so-called ‘tribal allegiances’ towards the expression of a more relativistic sentiment.

This could impact on what kinds of candidates are put forward for elections in the first place. Which political party will risk {campaigning} a hardcore individual[...]when it knows that if its candidate fails to secure 50 per cent of the vote in the first count then the views of other parties’ voters may become key? Today’s {weaker} parties rarely {campaign} risky candidates these days anyway; but with the introduction of AV we would likely see the party leaders exerting even more influence over which individuals are permitted to {campaign}, with the elbowing aside of those with possibly controversial beliefs in favour of more acceptable, politer and blander candidates who might not only pick up lots of [#]1's from said party’s traditional voters, but also some [#]2's and [#]3's from the other parties’ voters, too. AV would implicitly encourage the homogeni[z]ation of political life.

The new way of voting would also create enormous scope for {mischief}. The knowledge that second- and third-preference votes could become key will invite opportunistic lobbying between the various candidates and their minions. Under AV, the emphasis will inevitably shift from politicians appealing directly to the public for their outright political support and towards candidates cosying up to each other, striking deals, saying ‘get your people to give me their second-preference votes, and I’ll get mine to give them yours…" AV has a built-in tendency towards oligarchical relationship-building over direct, passionate, people-oriented electioneering.

Finally, AV would transform the traditional act of counting votes into a political form of tea-leaf-reading. Elections will be decided through the laborious process of sorting out preferences, expelling failing candidates one-by-one and subsequently spreading their supporters’ votes to other candidates. The people’s will would become something that is not so much clearly expressed in the election itself, in the act of voting, but rather something that is worked out after the election by officials and experts. Politics would become less open, less forged in the public realm, and more an act of elite deciphering of what ‘the people’ seemingly prefer rather than want.  We could easily end up with representatives that no one truly, passionately, wants.

In short, AV will both weaken The Vote and strengthen electoral bureaucracy. It will encourage even more candidates not to stand on a platform of ideas or policies that they are prepared to live and die by, but rather to take fewer political risks and always to keep one eye on the lowest common denominator of appealing to as many people as possible. And AV will strengthen the hand of that expert caste of middle-class negotiators and well-connected, well-educated political players who already dominate much of the modern political sphere. It will be a travesty for democracy.

Which may be the reason why some people, who despise the current, yet imperfect electoral system, would love to have IRV up and running.  Or maybe not...if IRV were active during the 2010 Mass Gubernatorial elections, and Tim Cahill and Jill Stein were eliminated, the 9% of the votes would have gone to Charlie Baker rather than Deval Patrick, and Baker would have been governor.  And, for the reasons listed above, vote pandering and dealing would dilute the very idea of voting in the first place - and dilute the votes themselves.

Success should NEVER be punished

Amy Alkon leads a discussion on why the rich are penalized at high tax rates when the poor skate away without paying a single dime in income taxes, once their credits and withholding are factored in.

The poor, despite paying little to no income tax, actually pay much higher and very well hidden taxes on other things - well hidden by cowardly politicians who would face an enraged populace if they discovered that all the EITCs and withholding they got back from the IRS went back to the government via consumption.  For instance - that $6 of generic smokes they got at the convenience store slams them with an effective tax rate of 58.5%.  Or that their cellphone bill has taxes that have been collected since the Spanish-American war and tack on 10-20% in taxes.  Gasoline taxes are 18.4 cents per gallon in Massachusetts - if you work 40 hours a week at minimum wage of $8 an hour and fill your 20 gallon tank at $60, you've just paid half an hour of your wages in tax.  (When you factor in the federal tax of 24.4 cents per gallon, each hour you work you will pay that much money in gas taxes.)

On the other hand, the rich are paid very well because their value and success to their business warrants it. Sure, there are sports players that earn hundreds of millions of dollars in salary for each season, which is a few months a year.  Sure, there are greedy bankster and baron robbers out there that have million-dollar bonuses.  But others who are inventors, innovators, researchers - people who do a genuine service - deserve to be compensated handsomely.  Some are so rich now that they take a nominal dollar salary per year, but they do so as a symbol to their employees that money doesn't matter.

The reason why there are calls for the rich to be taxed higher and higher doesn't involve money.  There are people so insanely jealous and envious of others are guilty of not being successful themselves, so they demand the money be seized via taxes and inflation and given to others as a warped method of "justice."  In East Germany, those who dared work privately and not for the state found their wages taxed at 90% - all because Karl Marx - himself a wealthy aristocrat with disdain for the lower classes - saw those same visions of serfs and feudal lords.

We don't live in the times of feudal lords, aristocracy, royalty, serfs, commoners, and peasants anymore, but there are folks who dream that a pecking order returns and people are put in their place.  The other fantasy is that all are equal and none are exceptional - no one learns how to work hard to get ahead and all is provided by a invisible hand.   (Love this quote about so-called "social justice" in the blog, though - "[Bec]ause if it were real justice it wouldnt (sic) require a qualifing word.")

Hence, not only should the rich not be an ATM for social engineering wonks, the rich should never, ever be punished for their success.  Not all of them are going to drive six-figure cars and spend the entire summer in Martha's Vineyard burning hundreds and engaging in all-day insider trading deals.  Most of them are humble; most of them donate freely to places and charities (the IRS is a government agency, not a charity).  To sneer that the rich are "not paying their fair share" is a sign that the inquirer is either an ignorant moron, a control freak of the highest order, or is clueless of how things and people work.  Of course, if you feel you're not paying enough to the government, by all means, write a check to the IRS to reduce the national debt (or, if you live in Massachusetts, check off the 5.85% "optional" income tax).

Otherwise, you're a jealous fucking control freak asshole.

The Pleasure Killers

I read the piece about the Bush Tax Cuts in the New York Times (link: and you're saying to yourself, 'hmm, he usually quotes the New York Post or Fox News' - there's not everything in the New York Times I disagree with, and this one's pretty good) and how Obama's deal with the Republicans on keeping the current tax brackets and plus an added bonus of cutting the payroll tax by 200 basis points, or 2%.  President Obama could well have left everything as it is, or even hiked taxes to the levels he feels people should pay (not what people are willing to or afford to pay).  I'm not sure what the result would have been, but if there were no extra revenue (or a sharp decline in revenue), then the government would have hiked them even further, engaging in a vicious cycle of tax hikes and revenue drops.

I'm not going to pretend that I don't like what happened.  I'm middle class and I'm not going to complain.  The Republicans tried every way to Sunday to get something moving, and it took the near shutdown of the government (well, that and Election 2010) to get Obama to at least concede that raising taxes is not the way to return to prosperity.

The comments, on the other hand?  Save for one or two good comments, either Obama is the second coming of Bush, Obama should have had more cojones, the Republicans are the Party of No, the rich get away scot free with this, and so on.  Oh, and a smattering of how he's a one term president.  Childish, insecure, ignorant, arrogant, get-the-venom out stuff.

My thought is that there are still a ton of people who hate George W Bush and what he stood for.  I'm also not going to pretend I didn't like him.  Unlike Obama, who I feel surrounds himself with czars, bureaucrats, nanny-staters and the-bus-doesn't-stop-there radicals, Dubya was a steadfast and principled man.  Often he was wrong as he was right.  He too let himself be led by the nose by his advisors, but when he was correct, damn, you had to respect his tenacity, even though you were marching through the streets demanding he be dragged to the Hague in front of the World Court.

It leads me to a good question: some people can't stand others being happy, prosperous, and self-sufficient AND self-reliant.  There's a streak of Puritanism that permeates through certain social circles that happiness and wealth is a sin, one that must be atoned for with brutal acts of contrition.  But within that streak is a rank hypocrisy: it's OK for you to be happy, but not for someone else, and even if you die trying, you're going to prevent someone from their dreams.

It's a toxic stew of jealousy, resentment, and selfishness that rots the soul.  It's the basis of moral panics that end up hurting people more than they help because the person trying to control the panic ends up overcompensating and snowballing unintended consequences.

Take for example the "obesity crisis."  If a person is slightly overweight, the most simple way of doing so is to eat less and exercise more, not to tax items sky-high because someone (Michelle Obama? Mayor Mike Bloomberg?  Deval Patrick?) is afraid that it might lead to being obesity. If you're exercising and eating right, the occasional donut won't kill you, nor will the daily cruller resign you to the pits of a fat camp.  And, those extra tax revenues because you're slapping a dollar on a soda may be a smokescreen for trying to fatten (pun intended) the state coffers.  True, morbid and gross obesity exists, but trying to eradicate it by controlling food, and in turn trying to control people, is the ultimate fools' errand.

The same thing goes for taxes.  If you're a successful employee and make your company the best it is, why in heaven should you be penalized for it through high taxes?   That's the whole gist about keeping the Bush Tax Cuts - if there are people so resentful and jealous of others success that short of running them over with your car or hiring a hit man to liquidate them your feeling is that the money must be taken away from them "for the greater good" (a healthy, steaming pile of total, absolute, pious, self-serving bullshit), those people should be given something to do that will keep them away from the editorial pages.

How about helping the people who should get a lift up from the depths of trash TV and shady lawyers?  No one's going to be Oprah right away, and there will be weeks of  your bank account being very lean, but it's better than handouts and bailouts.  And happiness and success does come, so long as you work hard and you're patient - and anyone who tries to get in your way should be avoided at all costs.

There are people who still take their anger, guilt, bitterness, and disappointment on others because they cannot control things.  It is a religion all its own, and it makes Puritanism look downright hedonistic.  The ones who try to kill happiness have never been successful anyway - because happiness and success always seem to win, don't they?

UPDATE: Despite the House not deigning to vote on it and Bernie Sanders (S-VT)  deciding it would be a great idea to read from the telephone book as a way to filibuster (maybe he did, maybe he didn't), this tax deal will go through with a lot of noses held, because if it doesn't, the Party of No will have a D next to it.

UPDATE #2: China is in a hefty snit because the Nobel Prize committee awarded Liu Xiabao the Peace Prize in absentia.  The three signs I take out of this are (a) even farthest of the far left are demanding his release from Chinese prison, (b) it takes away the spotlight and attention from a like-minded Canberra Julian of W_______s, and (c) China must be really shit-scared of losing its power to ramp up the manipulation to sub-light speed, all because a dissident had a manifesto that wasn't one endorsed by a German aristocrat with money guilt.

Juan Williams pulls back the PC curtain and freaks out the narrow minds of NPR

Juan Williams deserves a TON of credit for telling the truth about National Public Radio.

Williams committed the simple sin of saying out loud what the rest of the elitist, fully white, upper middle and upper class editorial boards of NPR wouldn't dare say in public, but probably do well behind closed doors. (Even more telling is that Williams was the only black correspondent.)

Who will this brouhaha hurt the most?  At the very least, moderate Muslims who have been yearning to break free from the stereotype of fundamentalist militancy have been pushed back into a corner - the ones who want to prove that the abaya, hijab or burqa, or the four fingers of beard the men must wear, is no way linked to the more malignant strains of Islamic worship - and assure them that while their religion is Islam, their nationality is American.  Thanks to NPR's firing of Williams, that conversation gets drowned out by clueless upper-class twits.

But the real hurt that will come will be on NPR itself.  When free speech is determined by an unelected upper echelon of white elitists, and that money comes from public taxpayers, a new Congress will be loathe to fund an entity whose primary focus is to make sure the right words come out of the right mouths, and any word not in the Approved Vocabulary of NPR will be grounds for immediate termination.  Congress defunding NPR would force it to pledge even more from its listeners, and if you don't have the money, your license to broadcast gets ripped up and tossed out in the trash.

Williams should keep on talking about his now-ex-colleagues, how they love to insult those who aren't like them, and then tell the public to avoid donating a thin rusting penny to their organization because they are malignant narcissisists who only care about their own ideology and not giving a complete story.  Oh, and donations from well-heeled, like-minded people.

Williams did everyone - including Muslims - a favor by pulling back the curtain on the narrow minds of NPR, who proved to the nation that the antidote to curtailing free speech is even more free speech - and that political correctness is worse than any nuclear weapon on the planet.