Thursday, November 26, 2009

Corporations Pretending to be Green: FAIL

Tomra and Schupan Recycling were so concerned that everyone do the right thing for our planet that they created large vinyl billboards which they put on the back of rented trucks that they drove around Mid-Michigan. The traffic congestion and pollution were a small price to pay to show everyone how to be green. I urge everyone to contact Tomra and Schupan to let them know how proud you are of what they are doing.

Sunday, September 6, 2009

My Response to a Republican's e-mail about Tax Evasion

This is the response that I sent to the e-mail in the previous post. I messed up one of the facts, It was Daschle, not Geithner who failed to report a car - and it was a car with a driver, but I am posting it as written.

I'm right in more than just theory. The IRS got information on 4,450 accounts with $18 Billion in them - that averages just over $4 Million per account. Undoubtedly there are many more "small" accounts than large ones, so the big ones will be in the hundreds of millions. In any case the numbers are huge.

You go on to make a case that " The IRS lost the right to go after tax evaders" You base this on two facts (1) There are politicians that have failed to pay taxes (in what you admit are far smaller amounts than the ones we are talking about here) and (2) there are corrupt, immoral democratic politicians.

Since the second fact is more peripheral I'll deal with it first. Yes, there are corrupt politicians on both sides of the aisle. Sometimes the system works they are caught, tried, and convicted. Sometimes it fails. We'll get back to this point later.

No politician should be above the law. This includes Ollie North in Iran Contra, president Nixon in Watergate and Bush with his warrant-less wiretaps. Once you start exempting politicians from having to follow the law, from checks and balances, you begin the slide from the rule of law to the rule of man and those systems end up serving only the people at the top (think North Korea, Communist China, Nazi Germany, Imperial Japan).

So, you would think I'd be as outraged at Timothy Geithner as I am at the tax evaders with the accounts in Switzerland, but I'm not.

First, there is the question of scale. For Geithner the $43,000 (including penalties and interest) is rounding error -- it was a car provided for personal use and not declared if memory serves.

Second, there is the question of intent. I know those with Swiss accounts were trying to evade taxes. I'm not sure that Geithner was. I've got an MBA, some financial sophistication, and my taxes are surely less complex than his but I'm sure if you went through my returns with a fine toothed comb you would find mistakes.

Third, there is a question of equal treatment under the law. Even for the Swiss account holders, if they voluntarily came forward and paid up the IRS said that they would not be prosecuted -- and that is for a far more egregious offense.

Fourth, there is a question of the standard of evidence. In this country, we require evidence beyond a reasonable doubt for a criminal charge to stick. You can argue that there is a reasonable doubt about forgetting to declare some income -- but not about hiding a million bucks in a tax haven.

Finally, I want to address the most troubling claim, that because you think there has been some unfairness in the system the IRS "gives up the right to collect taxes." As I'm sure you'll agree, this system -- democracy with checks and balances, is the best one tried on the planet to date. Sure it is imperfect and unfair at times -- it is designed and run by humans. If everyone decides that they need not pay their fair share until the system is as fair as they want it to be we'll end up with next to nobody paying. Then the things you value: aid to Israel, a strong defense, the police, etc. won't be possible. The things that I value: education, the FDA, the NIH won't be funded either. This particular paradox - conservatives claim that they don't want anarchy or tyranny but are unwilling to pay the price for democracy - that drives me crazy. They claim to love our country, but fight against our government - trying to starve it of the money it needs to run.

I don't like everything our government does. I hate some of the things our politicians do. There is injustice and waste in our system. I am happy to lobby for a more efficient, less corrupt system - but not at the price off vilifying the great system we have. I think that conservatives should feel the same way.

Friday, August 28, 2009

A Republican Response to the Rich Hiding from Taxes

I posted a link to an article about UBS handing the IRS a list of tax evaders with Swiss bank accounts on Facebook. I suggested that the IRS throw the book at these unpatriotic tax evaders and got this e-mail from a conservative whose anonymity I will preserve here. I'll post my response shortly:


Theoretically you are right, I really agree that those big tax evaders
should be made to pay up. However I have a few issues:

$20 billion divided over 19,000 accounts (from the article cited by you) breaks down for about $1 million per person (not hundreds of millions). It is still true that the avoided tax is a few times larger then the tax “mistakes” Geithner and Daschle made, but consider that they are not “ingenue”s but financial experts in the highest financial positions of the country. They did get away by claiming “honest mistakes” that is totally ridiculous. And not just simply they got away, but were nominated/appointed to high offices). Everyday Jack and Joe are audited for minor mistakes and prosecuted. It is like putting the wolf to guard the sheep. There should be 1 law for everyone (that unfortunately includes those weasels with the USB accounts.) The IRS lost the right to go after tax evaders when they accepted the “honest mistake” claim from leading political figures.

Also, due to space restriction on facebook I did not even mention Charles Rangel, the Chairman of the Committee on Ways and Means, and a Deputy Whip (look it up on Google: Mr. Rangel, who has a net worth of $566,000 to $1.2 million, according to Congressional disclosure records occupies 4 rent-stabilized apartments in New York city -the very few rent-controlled and rent-stabilized apartments are for small income families.

Rangel has admitted to a no-interest loan along with $75,000 in income from a rental villa in the Dominican Republic and said that he plans on repaying the owed money for his federal tax evasion.

According to the House Ethics Committee Rangel’s use of nearly $80,000 worth of campaign funds to pay his son for a sub-par website is against House Rules

According to the House Ethics Committee Rangel failed to report 28 instances of acquiring, owning, or disposing of assets between $239,026 and $831,000. These assets appeared and disappeared from his disclosures without notice,as House rules, at the time, demanded.)

Thursday, August 20, 2009

Arguing with Republicans over a public health insurance OPTION

I've been arguing with Republicans about including a public option in the current health-care reform proposals. Here's how the argument seems to go:

Republican: We can't have a public option, the government is going to ration health care. They'll decide your life isn't valuable enough, refuse to pay, and you die. I read that if Steven Hawking had lived in England the Government would have pulled the plug on him and let him die.(1)

Me: Your care is rationed now, by an insurance company that profits if you die. Walk in front of a bus and they can decide to cancel your coverage because you forgot to tell them about the doctor you visited for a wart ten years ago. If you don't like the way government rations health care, you can stick with the insurance company that rations your care now. By the way, Hawking is British and has lived there his whole life.

Republican: But it'll be the government running it. They can't do anything right.

Me: They won two world wars, the cold war, put a man on the moon, funded DARPANET (which turned into the Internet), educated a generation with the GI bill, and built the Interstate highways.

Republican: Yeah, but they will be inefficient because the government is running it.

Me: Why is that?

Republican: Because the free market always does things more efficiently.

Me: Leaving aside the recent debacle in the financial sector, the government is better at collecting debt (2) and more cost effective at delivering medical services, look at the (3)Medicare Advantage Program.

Republican: Everyone will love the Government program so much, that private insurance will be destroyed.

Me: You mean the inefficient, bureaucratic, rationing system will be so loved that by everyone the free market system won't be able to compete?

Republican: This plan doesn't address the real root of the problem.

Me: No, it get the 46 million uninsured into the insurance system, stops you from losing healthcare if you lose your job, stops you from being unable to buy insurance if you have a pre-existing condition, and makes an attempt (which I'll admit is weak) to begin to control costs.

Republican: No, the problem is run away malpractice suits make Medicine too expensive.

Me: Malpractice costs are less than 2% of total healthcare spending(4).

Republican: There aren't really 46 million uninsured. That includes illegal immigrants.

Me: Of the 46 million uninsured, only a fifth are immigrants (5). I think that we'd all agree that legal immigrants deserve the right to health insurance, but assuming that we want legal immigrants to be left out of our insurance system, that leave 37 million citizens with no health insurance. A number that is growing. We've got to do something about it.

Republican: Yeah, but whatever we do we can't have a public option, the government is going to ration health care. They'll decide your life isn't valuable enough, refuse to pay, and you die.

(1) "Hawking is British and has lived there his whole life. He’s a professor at Cambridge for crying out loud."

(2) "The study – supported by an independent review -- showed that it is reasonable to conclude that when working similar inventory, IRS collection is more cost effective than the contractors."

(3) "The plans now cost the government about 14% more per person than does regular Medicare, according to a recent analysis by the Medicare Payment Advisory Commission, which recommends reimbursement rates to Congress."

(4) "represents less than 2 percent of overall health care spending."

(5) "Mr. Rove claims that one-fifth of the uninsured are illegal aliens. I can’t find the basis for this claim (which, if the numbers in the latest Census report are correct, implies that all noncitizens are illegal immigrants)."

Monday, July 20, 2009

Tea Parties: Protesting taxation with representation

I was recently approached on the street by someone who urged me to come to a "tea party" at our state capitol to protest high taxes. I told her that I resented her usurping a symbol of our history and using it to represent something that it never represented in history.

"But, the Boston tea party was about taxes," she replied. "No," I corrected "it was about taxation WITHOUT REPRESENTATION. Last I checked I got to vote."

Her argument immediately shifted. She said she'd called her congressman and he was not responsive to her concerns about the deficit. She was now just exercising her rights to peacefully protest unresponsive leaders and their lack of concern about deficit spending.

I have no problem with people making their voice heard, even though she is still misappropriating a symbol from American history. Now, however, she was protesting neither taxation nor lack of representation and I still disagreed with her. So, I explained that I believed we should have good roads, great schools, a strong military, and well funded security regulators and now was not the time to raise taxes to pay for those things.

Her argument shifted again. Suddenly she was talking about Michigan State Legislators pensions and how lavish they were. That kind of spending, she explained, was why we needed to restrain taxes. I would have pointed out to her that she'd switched to the state which could not run deficits, asked if she wanted to attract the best and brightest to the legislature, etc. but my wife dragged me away and her argument would have just shifted again.

I'm left unsatisfied. So, tea partiers, what exactly are you protesting?

Monday, May 25, 2009

Sex and Violence

I recently attended a showing of Angels and Demons with my kids. The movie, which was rated PG-13 was full of violence. The plot involves a series of murders and attempted murders including burning a man alive, poisoning, drowning, stabbing, shooting, and a car bomb. I wonder why this level of violence is considered OK by the film ratings board when sexually oriented nudity or expletives if "as must even one of those words used in a sexual context" requires an R rating.

I am willing to bet that the parents of everyone reading this have had sex and have used a dirty word. I'm also willing to bet that almost none of them has shot, set fire to, drowned, poisoned, or bombed another person. We're not killers and we have sex, so why is violence in the movies OK for 13 year olds, but sex forbidden? I'd far rather have my kids think that sex occurs frequently and murder doesn't happen often than have them watch movies that imply it's the other way around.

Saturday, May 9, 2009

A Death Tax or a Birth Tax

Republicans often rail against the estate tax, which they refer to as a "death tax". The Republicans, however, fail to point out that it is a tax that applies to those that have millions of dollars left when they die. They claim that the tax causes families to have to sell farms and small businesses, but specific examples and statistics are never provided - just anecdotes.

In fact, the wealthy manage to transfer significant wealth to their offspring tax free, by paying for education, gifts, trusts, and a variety of other tactics. Furthermore, there was a $1,000,000 estate tax exemption before Bush schedule a series of reductions that included a complete repeal in 2010. In 2011, estate taxes revert to what they were before the Bush reductions. Paris Hilton has to worry about being disowned more than being taxed into starvation.

The wealthy have been given immense opportunities, thanks to our society. All the estate tax does is let them give back to the society that made them so successful.

The most pernicious part of the argument against the estate tax, however, is the part that the radical right never addresses. Absent an estate tax we either need to tax the living by increasing taxes today or our children by passing on larger deficits for them to repay.

When my third child was born I calculated his "birth tax". To do so, I took
I then used Microsoft Excel's PMT function to calculate his monthly payment if he started paying the day he was born and if he waited until his 18th birthday. My poor baby was on the hook for payments totaling $99,189.61 the day he was born. In reality it is even worse, since he's not repaying his birth tax now and is unlikely to be able to start any time soon: Assuming a balanced budget from his date of birth until his 18th birthday (an assumption that now that he's almost 4 seems ludicrously optimistic) he'll need to repay $180,611.27 over his lifetime!

Wednesday, May 6, 2009

Handing Wall Street Yet Another Gift

Our government is trying to buy up toxic assets by giving non-recourse loans to private equity groups that will then buy the pools of assets for pennies on the dollar. Seems unfair that these private groups can buy the assets at a deep discount, primarily with money that you and I loan them and we can not. To counter this argument, the government includes in their solicitation for bids a request for how the private equity groups will allow public participation. Not much of a surprise that they want to package them into instruments which they can sell tot he public and upon which they can collect huge sales and management fees. We do not, however, need to hand wall street a new money maker to allow public participation in the deals.

The New York Times in their reporting on the idea of retail investors participating in buying toxic assets says: "For the investment managers, the benefits are potentially large. These big firms can charge healthy fees to investors for taking part."

The treasury department already sells a variety of notes and bonds directly to the public via it's Treasury direct website. Since, the U.S. government will already be an equity investor in the deals, retaining 50% of each one, they can either sell the public some portion of their equity or some portion of the PEGs equity in each deal directly.

Monday, May 4, 2009

You Know You are a Liberal

You believe that a man should be judged by the content of his character, not by the color of his skinYou support affirmative action
Believe that war is not the answerbut won't tell us how many rounds of Kumbaya it will take to get Al Quada recruits to become peace loving humanists
Believe that education and economic opportunities in the third world is all that is needed to defeat Islamic fundamentalismIgnore the fact that the 9/11 hijackers were well off, exposed to Western ideas, and college educated.
You love to talk about America's support for authoritarian in countries like Chile and Guatemalabut have no problem with third world despots from the left like Fidel Castro
Hate factory farms, buy organic, protest against genetically modified organisms, and don't like milk from cows that got rBGHClaim to want to feed the world and ignore the fact that without the technologies you protest we'd have mass starvation.
Enjoy criticizing America for all its failingsNever compare it to North Korea, Cuba, Iran, Russia, or any of the countries that don't measure up
You object to big corporations sending jobs to overseas sweatshops because it costs our jobs and depresses wagesWant to ease immigration laws as if that won't depress wages
Object to capitalism because it's not equitableIgnore the fact that it is far and away the most productive system ever used by man
Hate when conservatives ignore science and back abstinence only education, creationism, and oppose stem cell researchTreat your diseases with herbs because they are natural instead of scientifically tested pharmaceuticals. Supplements are untested and unregulated.

Friday, April 24, 2009

You Know You are a Conservative When

You defend huge pay packages for executives because you need to pay to attract talentOppose increasing school funding because there is no proof that throwing money at the problem will make it better
During good economic times you want tax cuts because "it's our money and should be returned to us".
During bad economic times you want tax cuts because we need to stimulate economic growth
Are shocked at the size of the deficit
You are pro-life, demonstrating for every fetus and brain dead comatose person on life supportYou oppose taxes and regulation on pollution and cigarettes
You oppose paying for universal health care
You say "Government is the problem, not the solution"Still want paved roads, functioning schools, fire fighters, police, a military, diplomats, courts, a coast guard and safe food.
You gleefully celebrate the free market's successes and point to urban housing from the 60s and 70s and other government failuresIgnore WorldCom, Enron, AIG, B of A, and government successes like the GI bill, TVA, DARPAnet, and the interstate highway system.
You have no problem running huge deficits for 8 years under Bush to finance tax cuts that widen the gap between rich and poor to levels not seen since the 1920sTake to the streets throwing "tea parties" when Obama chooses huge deficits to finance a stimulus package to ameliorate the greatest economic crisis of our generation
Remember that tea parties are to protest taxationconveniently forget that it is to protest taxation without representation
You refuse to believe the overwhelming science behind evolution and global warmingTrust the science that makes your refrigerator, car, and Viagra work
Oppose gay marriage because the Bible and tradition say marriage is between one man and one woman and we shouldn't change traditionConveniently forget the traditions of polygamy in the old testament and bans on inter-racial marriage
Oppose gay marriage because every child deserves two parents of opposite sexNever protest divorce, allowing marriage between infertile individuals, and have no problem with the fact that opposing gay marriage leaves kids in foster care
Oppose government intrusion into our private livesbut oppose legalizing assisted suicide
Oppose government intrusion into our private livesbut oppose gay marriage
Oppose government intrusion into our private livesbut support strong marijuana laws
View government regulations and regulators with hostility, claiming that eventually the market will punish bad actors so nobody will misbehaveWonder where the regulators were when you invested with Madoff and Enron and bought those lead toys for your kids
Believe in private markets because the private sector will always do it better and cheaperbut ignore the overwhelming evidence that Meidcare is more efficient than private insurers, military contractors overcharge us, subsidized student loans are more expensive than direct....
Oppose immigration because immigrants take our jobs and depress wagesFavor free trade because off-shoring reduces a company's costs and results in lower priced goods and a higher standard of living for all
Don't want to talk to Cuba or Iran because they are run by tyrantsWant to engage China and Saudi Arabia because cultural exchange and mutual understanding can lead to positive change
Believe government power must be constrainedSupport warrant-less wiretapping, detention without trial of "enemy combatants" and anything else the President decides makes us safer

Introduction To My Blog

This is my answer to the conservative (and sometimes liberal) orthodoxies that we live with and which make no sense. I'll start by skewering conservatives, who have completely lost touch with reality in my first post "You Know You are a Conservative When..." and then I'll poke holes in a few liberal positions. I hope to inspire serious debate about ideas. Name calling will not be tolerated (in fact I will just moderate you out).