Tax Day Post: A criticism of the flat-tax

This article isn’t great, but it’s still fairly interesting to read someone criticizing the flat tax idea as something that’s not radical enough. The only reason I felt the article was blogworthy were a number of points/quotations made near the beginning.

The US tax code — with its “nine million word mountain of verbiage” — is so complex and “littered with impenetrable passages” that a fictional tax return given by Money magazine to forty-five tax preparers resulted in forty-five different calculations of the correct amount of tax due. This is not surprising since IRS employees (Forbes says that there are 97,440 of them) don’t even give the same answers to tax questions. Forbes mentions a 2003 Treasury Department study which found that callers to the IRS toll-free help lines “gave the wrong answers to tax-related questions more than 25 percent of the time.”

Regardless of one’s take on an appropriate level of taxation, I’d assume most people agree the current tax system is amazingly screwed up. Stats like that are almost unsurprising.

France opposes iTunes

Something about the iPod-iTunes relationship ruffled the feathers of economic policymakers in France. Most of the music on my iPod wasn’t bought through iTunes, and I’ve certainly used ephPod and other utilities to get songs off/on my iPod. From what I understand, they want people to be able to use iTunes with devices other than the iPod. That, to me, sounds like a slippery slope whereby any company who makes software to support their hardware would have to make sure their software works with other people’s hardware too. I’m not sure where France draws the line.

“I don’t want the crap,” [France Trade Minister Christine] Lagarde said. “It annoys me when France is portrayed as an awkward, backward country. It is not.”

Yes, it is.

While reform is needed in the labor market, French commerce is on firm footing and the economy strong, Lagarde said.

Riiight… I’m sure the labor market problems are totally unrelated to the economy. The anti-corporation attitude and 9% unemployment rate probably have nothing to do with each other and are purely coincidental. Keep up the fine work.

I also think taking iPods away from the country’s youth (who’s unemployment rate is above 20% and are already rioting) would be great for France too. How could anyone think of this behavior as “backwards”?

Low Taxes Do What?

I found this article from Thomas Sowell pretty interesting. It was popular on today, even though it was written in 2004. It talks about one misconception I didn’t even think of (the difference between wage rates and labor costs) and one I was already aware of (tax rates and tax revenues).

One of the apparently invincible fallacies of our times is the belief that President Ronald Reagan’s tax cuts caused the federal budget deficits of the 1980s. In reality, the federal government collected more tax revenue in every year of the Reagan administration than had ever been collected in any year of any previous administration.

At least we're living longer…

Slate has an interesting article about Social Security… not really interesting in that it says anything new, but I like it because it appears to have a bounty of facts, and summarizes a lot of the issues succinctly.

In 1950, more than 45 percent of men 65 or older were still in the labor force. By 2003, that percentage had plunged below 20. Five years ago, a study showed that men and women were retiring five and six years earlier, respectively, than their predecessors did 45 years before. Why? Because they could.

Articles like this make me ill

Verizon Executive Calls for End to Google’s ‘Free Lunch’. There is so much wrong with this argument that taking about it makes me want to hit someone. A few bullet points instead:

  • Hearing a corporation begrudge another for earning money is so hypocritical and anti-capitalist that it makes me ill
  • There’s nothing “free” about the infrastructure. Google pays some backbone for connectivity to the Internet. Verizon’s customers pay Verizon for connectivity from their homes to that backbone.
  • Verizon and Google, near as I can tell, have no legal relationship, no contract, and even from a strictly technical perspective are hardly related.
  • Google is just one website. When is Verizon going to send a bill to (insert sarcastic remark here)
  • If Verizon built a billion dollar infrastructure with no plans on how to profit from it, aside from crying to congress, then they’re idiots.
  • It’s nonsense like this that’s probably causing Google to look into, effectively building their own internet. In general, I hate when companies go to congress. It usually means something bad. In this case, I hope it’s the first step in Verizon’s road to irrelevancy.

Why Bill Gates is better than Steve Jobs

This is an interesting article comparing the two. While I don’t see a person having wealth as an obligation to give charitably, I still admire people who do and look down on people who don’t. I’m fairly disappointed that the 67th Richest American in the world hasn’t given back to charities.

That’s not to say a rich individual doesn’t give back to society (almost whether he likes it or not) via:
– All of the people who work for, and get paid by, Apple Computer
– The people making money from the stock which he helps drive up
– All the companies and companies’ employees who exist and profit by making iPod accessories (the entire iPod sub-economy).
– The amount of taxes he pays individually, and Apple pays on a corporate level, plus sales taxes on their products in the various states.
– The actual products they make, which people find enjoyable and willing to purchase because they benefit their lifestyles (computers, software, iPods, music, videos, etc).

All that said, an individual worth $3.3 billion should be giving to charities in my opinion, so I think it’s good that people are writing articles like this to, hopefully, shame him into doing so or reveal to consumers that maybe this guy isn’t worth supporting.

read more | digg story

Google being sued – what's going on?

The lawsuit against Google is all over the news today. I don’t feel like I really understand what’s going on. First, I was trying to figure out exactly what information the government wants. Most of the news articles are vague on this except this Reuters one which says:

a subpoena issued last year for one million random Web addresses from Google’s databases as well as records of all searches entered on Google during any one-week period.

Even still, that’s not very specific. All search terms? All search results? IP Addresses? I have no idea. I understand the whole purpose of this is supposedly pornography-related as part of the Child Online Protection Act but it is totally unclear what good this information is. There’s a lot of free data about where people surf at and Google has some public information with their Zeitgeist summaries. I imagine that’s not good enough for what the government is looking to do, but then again I have no idea what the government is looking to do. I don’t understand why anything about this would be top secret unless it actually has something to do with some terrorist/national security hunt, but that’s not what they’re saying.

Let’s say Google sends the government a list of all of the search terms in a given week. Three years ago it was reported that there were 250 million Google searches per day and there haven’t been any updated statistics since. Let’s conservatively estimate that number has increased to 300 million a day (it’s probably much higher). So, Google turns over a week’s worth of search terms – 2.1 billion phrases (assuming they don’t aggregate duplicates). What does the government expect to do with those? Probably fumble around with how to manage all that data and sit back and wonder how to get anything meaningful out of it. I assume they plan on some number-crunching. Let’s say 40% of the search terms involve pornography, and 5% of those the illegal kind. So what? Where does that leave us? Are they writing a research paper or investigating a crime? The fact that this is so mysterious is what bothers me, and why I’m glad Google didn’t roll over and cough up the information.

Interesting article about taxes

I have no idea who this guy is, for all I know he’s a crackpot, but the article itself is interesting. It was mentioned on digg and is called “The Coming Collapse of Income Tax“.

The first chart on the page made me skeptical, because it’s dumb and unnecessary. However I saw this “possible trigger” and it hit home because it’s something I’ve felt for years:

A wealthy individual files a well-publicized lawsuit against the IRS citing that the individual, who is far above average intelligence with above average resources at their disposal, is simply unable to comply with the tax code. The lawsuit places the IRS and politicians overseeing the system in the untenable position of having to explain to the country how easy it is for people to comply with the tax code. Wide spread political embarrassment forces change to begin.

His second and fifth points about the dealings of non-traditional/ virtual currency is also interesting and have raised some questions recently.

read more | digg story

Question about healthcare.

Here’s a question I’d be interested in responses about. Liberals/Democrats often complain that we don’t have “Universal Healthcare” in the US. I think the accepted definition of this is “free healthcare for everyone provided by the government” and of course the government is funded by taxpayers (us). Smoking accounts for a significant percentage of this country’s health care costs each year (8% of an individual’s health care costs – tens of billions of dollars according to

So, my question is this. If we the taxpayers were to start paying for one another’s health care, do we have the right to demand that the people we’re paying for not smoke? I don’t smoke, is it fair that I pay for the health care of someone who does? Or, assuming we do have the right to demand people not smoke (presumably by making it illegal, since healthcare becomes a federal government program) what else can we make illegal? Eating at McDonald’s? Football? Skydiving?

Obviously when we start making things illegal, we start to trample on civil liberties, which is something liberals typically stand up for (as do I). So, I guess the answer is, under universal health care it is expected that people who go to the gym and eat right must pay the health care costs of people who don’t take care of themselves. Is that right?

Why do we trust the federal government to do anything?

Another fine example of our federal government at work.

Two days after Katrina hit, Marty Bahamonde, one of the only FEMA employees in New Orleans, wrote to Brown that “the situation is past critical” and listed problems including many people near death and food and water running out at the Superdome.

Brown’s entire response was: “Thanks for the update. Anything specific I need to do or tweak?”

But wait, it gets better…

Melancon said that on August 26, just days before Katrina made landfall, Brown e-mailed his press secretary, Sharon Worthy, about his attire, asking: “Tie or not for tonight? Button-down blue shirt?”

A few days later, Worthy advised Brown: “Please roll up the sleeves of your shirt, all shirts. Even the president rolled his sleeves to just below the elbow. In this [crisis] and on TV you just need to look more hard-working.”

On August 29, the day of the storm, Brown exchanged e-mails about his attire with Taylor, Melancon said. She told him, “You look fabulous,” and Brown replied, “I got it at Nordstroms. … Are you proud of me?”

I’m so happy that a substantial part of my paycheck every two weeks goes to these clowns.