Twitter says it plans for its future patents to be subject to an “Innovator’s Patent Agreement,” which will prevent them from being used “to impede the innovation of others.” Seems like a good thing, but it’s still very much a proposal, with the latest draft apparently here. Like Google’s “don’t be evil,” I suspect there will end up being some flexibility as to what is “defensive” and what actually “impedes innovation.”
(via Barry Rithotlz)
image credit:Jinx via Flickr (cc)
I have written before about the “economic development” tool which allows employers to keep the taxes paid by their employees. Now I find that Good Jobs First has compiled a report showing that over 2700 companies in 16 states have got this kind of deal. The report includes a spreadsheet detailing the 3750 cases. Turns out that Illinois is far from the worst offender, gifting just $35 million of employees’ tax money, compared to $89 million in Indiana.
Thanks to David Cay Johnston via Reuters. Johnston says that these direct subsidies are considered necessary because states are already exempting such corporations from most real estate, income, and other taxes. Altho he doesn’t mention it, states are also typically paying for worker training and infrastructure improvements.
image credit: freedigitalphotos.net
Longtime HGS supporter Joseph Bast, head of the Heartland Institute, has a new policy brief (pdf), with a podcast overview, recommending that fans of professional “sports” own the teams thru nonprofit corporations. The only actual example of this is the Green Bay Packers, which originated as a for-profit organization but was bought out of bankruptcy by a fan-organized nonprofit. They would never leave Green Bay since the owners cannot profit by moving them. Thus the main lever used by for-profit teams to extort new stadiums and other favors would be broken.
Pointing out that teams currently extract monopoly rents from the community, Bast mentions Henry George but rejects George’s idea that natural monopolies should be municipally-owned. Of course, George never applied this concept to professional “sports,” which existed in his day but was nothing like what we see now. The closest I can think of is that George considered the idea of a publicly-subsidized theater to be so absurd, that he compared it to subsidy of various other industries to illustrate the absurdity of the latter.
So why don’t fans establish nonprofit teams? My personal theory is that most fans of professional “sports” are masochists and like to be abused. But perhaps I’m wrong. Bast suggests routes around other barriers including opposition of major leagues, high cost of setting up a team, and existing taxpayer-subsidized facilities which are controlled by existing monopolies.
Just in case there was any doubt, Pam Martens in Counterpunch gives us a report on the Lower Manhattan Security Coordination Center, where feeds from sophisticated spy cameras are integrated to essentially track anyone and everyone on the streets who might interest our supervisors. What’s news here, tho I suppose I already suspected it, is that partners in this operation are not just the NYPD, but also “the same firms under investigation in 50 states for mortgage and foreclosure fraud and widely credited with causing the Nation’s economic collapse.” Presumably they have added some of the proceeds of their crimes to the $150 million public money that’s been used for this project.
image credit: Kake Pugh via flickr (cc)
The basic function of money is as a medium of exchange. Inevitably, a secondary function arises as a measure of value. Money can be paper, precious metals, shells, whatever people in a particular time and place use as a medium of exchange. There’s no reason that it would need to have “intrinsic” value. If people use U S currency to buy and sell, then it is “real money.”
So is gold “real money?” I don’t think so. Just about nobody uses it as a medium of exchange. Historically, gold coins have sometimes been used but for ordinary people silver, copper, or base metal fiat-type money would be much more common.
Certainly fiat money can depreciate, usually does, and for us in the U S that has been and will almost certainly continue to be the trend. And gold might be a good investment, in the sense that it will be exhangeable in the future for more real wealth than it is now, or at least more in comparison to other kinds of investments available to ordinary people. Of course, gold can depreciate too, if large new deposits are discovered or folks decide they really don’t want gold after all. Which isn’t to say that either of these things will happen any time soon.
Anyone who wishes to resurrect the “gold standard” might want to read the late Peter Bernstein’s “Power of Gold,” or some other history books. Somehow we end up electing people who don’t put a high priority on keeping the dollar strong (or at least, not too much weaker). If that’s a problem, then maybe we should be electing other people, or finding ways to reduce the power of those who purchase elections. Making the U S dollar convertible into a fixed amount of gold is not going to bring prosperity, or even prevent further disruption. There are plenty of examples of economic collapse under a gold standard.
It might, however, benefit those who own gold, or gold mining stocks.
Somebody please disagree with me, or I will assume all of the above to be true.
credit: Berkeley T. Compton via Flickr (cc)
Lots of folks seem upset that corporations are being treated like people. True, America prospered for centuries with tight limits on corporate powers (fine history here), and it might be a good idea to again restrict the privilege of forming and maintaining corporations. Or maybe to do away with them altogether.
But if, instead, corporations are going to have the same powers as natural persons, let’s go about this systematically.
A corporation can deduct all its expenses before calculating its taxable income. A natural person should be allowed to do the same, deducting the cost of food, housing, medical treatments, transportation, and everything else. If the result is a net loss, carry it over to the next year.
A person doesn’t get full legal rights until the age of 18 (or for some rights, 21). Until then, the parents are responsible for most kinds of damage which the person might do. So if a corporation is formed today, the stockholders should for 18 or 21 years be liable for the corporation’s debts and damages. The stockholders would also be responsible for making sure that the corporation is properly cared for and educated. In serious cases of irresponsible stockholders, the State Department of Children, Family, And Infant Corporation Services would come in and take the corporation away.
How about voting? Should a corporation, having reached the age of majority, be permitted to cast a vote? I’m not sure about this. Under “one corporation one vote” the megacorporations really wouldn’t be very influential. But wealthy people might choose to form many small corporations in order to influence elections. And of course if they can vote, wouldn’t corporations have to be permitted to hold office? Voting is definitely a concern, but since the rich and their corporations control major elections now, I doubt any choice in this matter would make things appreciably worse.
image credit: Ged Carroll via Flickr (cc)
I used to be in the forecasting business; still am in a way. So here’s a forecast: Look for financial difficulties in the next few years at Sandisk, Yankees Entertainment and Sports (YES) Network, Louisville Arena Authority, and Harmony Oaks housing development in New Orleans. What kind of difficulties and when?
I don’t exactly know. Sandisk has apparently survived sixteen years of Goldman Sachs help, and the smart parasite does not kill its host too quickly. Maybe not all four; in fact maybe these four have been selected for survival.
Apparently the time has come for CNN to decide that Occupy Wall Street really doesn’t have broad support. So, based on the claim that 47% of Americans don’t pay federal income tax (tho most do pay payroll tax, state and local taxes), CNN found four people who (claim to) pay federal income tax and do not support the Occupants.
I’m sure there are more than four, probably more than four hundred thousand, who oppose the Occupants, but speaking as a guy who does pay federal income tax, lots of it, plus more to the folks who help me prepare the forms, I thank the Occupants for representing me. I would be with them if I didn’t have other obligations.
I suspect that most of the Occupants would be happy to take decent jobs if any were on offer. In fact, what will probably happen– you read it here first– is that the Overlords will find a way to use our tax money to offer a few thousand jobs, Occupants will take them, and the movement will fade.
Wonderful phrase; wish I had thought of it. It’s Jeffrey Winters’ term for the pile of lawyers and others who contrive technically-legal ways for wealthy people to avoid paying most of the tax for which they would otherwise be liable. His recent book, Oligarchy, seems to have a lot of other details we haven’t seen elsewhere.
All I actually know about Winters and his work comes from this interview, broadcast this afternoon on WBEZ. I did note one error: The U S federal income tax imposed in 1894 was the second, not the first, which was in 1861. He seems to have compiled a lot of data that we don’t usually see (some of it presented in this pdf article). Naturally, altho his work is descriptive, he is asked about the potential for the Occupants or other movements to alleviate the oligarchs’ control. One wishes that he had mentioned the importance of taxing privilege, instead of production. Perhaps he is unfamiliar with the concept.
Does anyone pay any attention to the “retirement” investment advice that financial institutions provide? I do, once in a great while. Of necessity, these comparisons assume stable tax laws and regulations, and ignore state income taxes. That’s two unrealistic assumptions right there. So why should we worry if the rest of the example is wrong, too?
What brings this to mind is an article in the Fall, 2011 issue of a publication from a major stockbroker. The story centers on Jane, the daughter of William Smith, who died in 2010. William left her a $900,000 IRA. What should she do? Three options are presented:
But, if Jane took options (1) or (2), what would she have done with the money? We have assumed she is in the 35% tax bracket, so plausibly she doesn’t need the money right away, but would prefer to pile up more. So she would invest it. And we can assume she’ll get the same 6% annual return that we assumed for everything else. Further, we will assume that she pays 35% tax on this income (whereas in reality she will probably pay a lower rate on at least some dividends and capital gains, and might be able to hide some). So, netting 3.9% what is her pile worth in 2036? For option (1), I calculate $1,613,803. And she had complete control of this money, she could invest it in things prohibited to IRA’s, she could use it to flee the country, anything she wanted not effectively criminalized. That’s over twice as much as our friendly discount brokerage firm asserted.
So did the broker make a mistake here? No, because at the bottom of the chart it says:
Source: Ed Slott & Co, LLC. [the broker] is not responsible for information, opinions or services provided by third parties.
Just remember this if you are tempted to spend time reading, or worse yet taking, “investment” advice provided without charge by financial firms. It’s worth every penny, almost.
I really shouldn’t be spending time on this, I have serious responsibilities in the world, but one does what one is compelled to do.
