Tuesday, September 20, 2011

Capital Games: Buffet BS.

The new proposal to "close loopholes" that allow "rich people" like Warren Buffet to pay a lower (capital gains) tax rate than his secretary pays (on current earned income) offers an enlightened Republican response that is not only reasonable, but ought to be supported by a broad base of the electorate.

The problem with comparing long-term capital gains apples to other income oranges is that the former treats purely paper "gains" as if they were real. Let's try a hypothetical example to flesh this out:

Suppose that ten years ago, I bought shares in a European company at €100/share. On the exact same day, a German citizen also bought shares at that same price. (Over the intervening years, we may or may not have gotten dividends from the company, in which case we'd have paid taxes on those dividends. Whether we did or not has no real bearing on the rest of this.) Today, we each sell our shares, at exactly €100/share. We didn't make any long-term capital gain on our shares, but we didn't lose any either.

But wait. In the intervening decade, the US Dollar lost value against the Euro. My broker puts $150 into my account for every share I sold. (A "low" inflation rate of just over 4% is all it takes to erode 50% of the purchasing power of a unit of currency in just ten years.) And now the IRS tells me I have to pay tax on that $50/share "profit". Never mind that $150 today isn't worth any more than $100 ten years ago.

Why should I be taxed for my $50/share "profit" when I have not really profited at all. My German counterpart pays no tax for two reasons: First, the Bundeszentralamt für Steuern (Federal Central Tax Office) would not consider him to have made a profit by selling for precisely what he'd originally paid for the asset. Secondly, Germany taxes capital gains at the rate of ZERO.

Now, my proposal is not to calculate capital gains in Euros or any other currency that gains and loses value. Instead, I propose that real capital gains on assets held over a year be taxed at the same rate as any other income, but that the calculation of what actually constitutes a "gain" in the first place.

A slight increase in complexity of calculating the profit/loss for an asset held over a year is required: The taxpayer should be allowed to refer to a published table of an appropriate inflation index (such as CPI) to calculate what tax codes call a "stepped-up basis" in the asset: The taxpayer would be allowed to subtract the value in current dollars of their original investment.

What would the effect be of this proposal? For assets held just a few years that appreciate very quickly, the effective tax rate could actually go up a bit from what people are currently paying, but for assets held for a longer time, it will go down or even be eliminated in the case of assets that do not gain any real value. I don't know whether it would be revenue-neutral, but it would be a fairer way to tax capital gains, and it would encourage people to make long-term investments, which should be good for the economy.

I do know this: it would deprive the Left of one of their big class-warfare weapons. They could no longer point to "special loopholes for rich people" to gain votes. It would also deprive the government of the perverse incentive to print too much money, debase the currency, and get to collect tax on inflationary "gains".

And because Warren Buffet makes a lot of money on capital gains, he ought to get his wish, and pay a higher rate.
[Click on the title above, or date stamp below, to see the full article.]

Sunday, August 28, 2011


I don't think I can disagree with a word of this:

Particularly the recent trend of using "BOGO" for "Buy one, get one half off," which I call "bogus", is annoying in the extreme.

Oh, and as long as I have my Language Martinet hat on, it's "per se", not "per say". Really, folks, if you're trying to use fancy words to make yourself seem smarter, and you misspell them, your plan fails spectacularly.

Friday, July 22, 2011

The Return of Afterburner!

Bill's PJTV show "Afterburner" is back, and I'm jealous:

Friday, July 1, 2011

Firewall 16: Walking Into Mordor

Bill's back with another Firewall. Here he ventures deep into enemy territory and brings back a recon report:

Saturday, May 28, 2011

Sarah Palin's Mystical Magery Tour

Friday, May 27, 2011

Firewall 15: Turncoat!

Thursday, May 12, 2011

Firewall 14: Memebusters! The Osama bin Laden Edition

Bill's back to chew gum and kick ass. And he's out of gum:

Wednesday, May 11, 2011

Thomas Sowell: In the Right Direction

I stumbled across this old Fox News special about the great Thomas Sowell. Enjoy:

Monday, May 2, 2011

Bin Laden has become an ex-terrorist.

Saturday, April 9, 2011

A way to silence DC, PR statehood proposals

DC non-voting delegate Eleanor Holmes Norton's been running her mouth lately, raising awareness of the peculiar relationship betweeen her constituents and Congress. Periodically, we hear of efforts to bring statehood to the District, or Puerto Rico; less often the US Virgin Islands or Guam. The driving force behind these movements is usually the electoral reality that the proposed states are expected to reliably send Democrats to Congress. I've done some thinking about the "fairness" argument, and I believe I have a solution.

Both my eldest brother and Monsterette 1’s husband have served in the US Air Force, maintaining legal residence in KS while living and working in OK, CO, TX, Japan, etc. They filled out KS resident income tax forms, and could vote in our elections. I am thus inspired to propose a Constitutional amendment that will forever negate the “DC statehood” nonsense. As an added bonus, I'm taking out Motor Voter and other sources of fraudulent voting.

Amendment ___

1. The Twenty-Third article of amendment to the Constitution of the United States is hereby repealed.

2. Those persons who are citizens of the United States, but maintain their primary physical residence outside of all of the several States, whether in a territory subject to the jurisdiction of the United States or any foreign State; may declare to the United States their State of citizenship among any of the several states. They are then subject to such taxes as that State may levy upon its citizens, and if otherwise qualified, are entitled to vote in that State’s elections.

3. Congress shall have the power to make uniform regulations regarding such declarations, which shall assure that no person asserts citizenship in two or more States concurrently. The regulations may set a minimum period of citizenship in one State before a new declaration may be made, which may not exceed twenty months.

4. Congress shall have no power to limit such laws as a State may impose to require prior registration and/or positive identification before voting in an election, provided that the statutory deadline for such registration be no more than a hundred days before the first day that votes may be cast in that election.
As a practical matter, if this could be passed, I'd expect most of the residents of DC who exercise this option to declare themselves MD citizens, as the District was formed from MD and it's most convenient for them to travel there to deal with state government issues. I'm less certain about US citizens living in other places; those in PR would probably choose FL, but some might decide to virtually join family in other states, such as NY.

Does anyone see a downside to this idea? I'm trying to imagine ACORN organizing to get everyone in DC to declare residence in a particular state to sway an election there, but I just don't see how they'd actually carry it out.

Thursday, March 3, 2011

Firewall 12: The End of the Beginning

Bill is back with another Firewall. Enjoy:

Threely: http://3.ly/Firewall12

Thursday, February 17, 2011

Firewall 11: Obama's Friends and Enemies

Bill is back with a barn-burner of a Firewall. Enjoy:

Saturday, January 29, 2011

Firewall 10: SOTU Response

Bill is back with another Firewall:

Threely for this post: http://3.ly/Firewall10

Wednesday, January 12, 2011

Vitriol, Hate, Spin

Posted with permission from the author:

I for one am tired of hearing about the "Vitriol" and "Hate" some say are used in todays discussions and speech about politics.

It seems that for some, a difference of OPINION and political views is enough to get one classified as a "HATER" or as someone who uses vitriolic speech.

We should be careful not to fall into this trap or mindset, labels are often thrown around to try and silence those that have an honest sincere disagreement with anothers views.

I would like to ask those that are using these terms and throwing these labels around, just what they want and expect from the MILLIONS of Americans who have concerns about our country and the direction it is going.

If you want to have an HONEST straightforward discussion/debate about the state of politics in this country, you MUST consider the views of both sides.
You must understand that there are MILLIONS of Americans who love their country, are extremely concerned about the welfare of their children, are and have been hard working tax paying citizens..... all they have is their VOICES and VOTES to try and keep the country that they love intact.

Consider WHAT they see and HOW they feel when:

They see the Health Care Bill rammed down their throats... with votes that were bought and paid for. When a Congresswoman is shown on national TV saying that " I didn't come cheap, I got a hospital for MY vote."

The speaker of the house laughs when asked about the constitution and answers "Are you serious??, Are you serious??"

When John Kerry says... "The American voter has historically been disinterested in the politics of our country...." and laments that now, the American voter has opened his eyes..... sad that some of us are awake and paying attention now.

When Cass Sunstein, Obama's regulatory Czar says that he believes children should be able to be aborted up to the age of TWO YEARS OLD because they are not self aware.... and that ANIMALS should have the right to sue humans and should have their day in court.

There are MANY examples of acts and statements that cause honest Americans to be concerned.

I would suggest that those that are so very quick to talk about vitriol and hate are those that would see our country ravaged and changed for the worse.

Maybe, just maybe, if we had an administration that followed our constitution
instead of looking at it as an impediment to their way of governing, we wouldn't have this "VITRIOL."

Maybe if the laws of our country were followed and the government DID it's job instead of being concerned about the things that it was not given the power to do, things would be better.

I don't know what the label throwers want.... maybe we should just shut up, sit down, and pay our taxes.... because apparently if we don't, we are haters.

I'm just tired of the smoke and mirrors, tired of of the labels and lies.

Just venting....... sorry for the RANT!!

Tuesday, January 11, 2011

Firewall 9: Obama at Halftime

Saturday, January 8, 2011

Funny: The Big Gavel