Outrageous assessments

3710 N. Kenmore
Image of 3710 N. Kenmore from Cook County Assessor

Gary Lucido writes of a small parcel at 3710 N. Kenmore, offered at $9.9 million ($4950/sq ft) after failing to sell when offered at lower prices. While the price seems outrageous, the property is very close to Wrigley Field and could be used for a billboard or rooftop viewing platform. We know that the former use has commanded $350,000/year on a nearby building, which seems to justify a multi-million-dollar asking price.

So we have a parcel worth, let us say, five million dollars.  What are the taxes? Continue reading Outrageous assessments

Karl Marx at the Tea Party

K Marx
photo credit: jtriefn via flickr (cc)

As the national debt finds its support in the public revenue, which must cover the yearly payments for interest, etc., the modern system of taxation was the necessary complement of the system of national loans. The loans enable the government to meet extraordinary expenses, without the tax-payers feeling it immediately, but they necessitate, as a consequence, increased taxes. On the other hand, the raising of taxation caused by the accumulation of debts contracted one after another, compels the government always to have recourse to new loans for new extraordinary expenses. Modern fiscality, whose pivot is formed by taxes on the most necessary means of subsistence (thereby increasing their price), thus contains within itself the germ of automatic progression. Over-taxation is not an incident, but rather a principle. In Holland, therefore, where this system was first inaugurated, the great patriot, De Witt, has in his “Maxims” extolled it as the best system for making the wage-labourer submissive, frugal, industrious, and overburdened with labour. The destructive influence that it exercises on the condition of the wage-labourer concerns us less however, here, than the forcible expropriation, resulting from it, of peasants, artisans, and in a word, all elements of the lower middle-class.

— K Marx, Capital, Part VIII Chapter XXXI (source)

So Karl objects to public debts, sees them requiring high taxes as a way to keep the workers docile and the lower middle-class poor. What part of this do the Tea-Partiers disagree with?

Discouraging inventors and tax dodgers

Major patent “reform” has passed both houses of Congress, presumably the President will sign shortly.  This is called the “America Invents Act,” apparently has as much relevance to invention as the Patriot Act has to patriotism. But dictionary.com tells me that “invent” has two meanings:

1.     to create or devise (new ideas, machines, etc)
2.     to make up (falsehoods); fabricate

Perhaps the second is what’s intended here.

From what I read, the big news is a switch of priority from “first to invent” to “first to file,” which seems to indicate that skill at patent lawyering now is officially recognized as more important than skill at inventing.

Better news, according to Vaughn Henry, is that tax strategies will no longer be patentable.  150 existing patents are grandmothered in, however. (Information from  Henry’s blog here, you need to join, free, to see it, or perhaps it is somewhere on his site. )

Government helping private “enterprise”

This is just a note I write to myself, observing a curiosity about  solar panel maker Solyndra, who filed bankruptcy yesterday and were raided by your FBI today.  The biggest equity investor in the firm is George Kaiser, with “about $337 million”.  Solyndra received a government loan for $527,808,544. OK, so bankruptcy is supposed to mean that loans are repaid to the extent possible, and if there’s anything left it goes to the equity investors.

Not in this case.  Somehow, after the loan was made, documents were revised so that $69 million of Kaiser’s money is first in line for repayment, followed by the government loan. Also, Kaiser was a fundraiser for the current President’s campaign, and visited the White House 16 times since the inauguration.

Lately I kind of figured this is how business is done, it is to be expected that major campaign donors will receive substantial favors from those they helped elect. But at least in this case Reuters has demonstrated some interest, and investigations are giving the appearance of commencing.

Maybe somebody didn’t get their share.

Land Economics and Ownership– cancelled

I am back to the blog, after a series of computer difficulties and travel distractions. I could have resumed earlier, but had (still have) too many things to write about, so I waited for something simple and outrageous. And here it is.

What two products, planned for the 2007 U S Census of Agriculture, have been cancelled?  One is a report on acquaculture.  The other? Land Economics and Ownership.  One inclined to conspiracy theory might say TPTB are trying to prevent folks from learning the truth.  I would tend more to think it’s a product of ignorance, no need for conspiracy. I wonder what the report would have said.

 

 

Does Accurate Forecasting Get Attention?

No, not particularly.  CXO Advisory Group did a little study, comparing the accuracy of forecasts made by a number of investment  “gurus” who they monitor, to the magnitude of google searches.  Based on a couple of different formulations, there was basically no relationship. Of course google searches would be only one measure of fame, and CXO’s way of measuring accuracy isn’t the only reasonable one, but still it is not a surprise.  If I made accurate forecasts, I could prosper with only a few subscribers, who I might charge a high price and ask not to talk about me much.  But if my forecasting record is mediocre, I would want to get as much publicity as possible, because I would need to constantly attract new subscribers.

Tho no surprise, this is not good news for geoists.  At least investment advice can be measured in a more-or-less objective way.  But geoist reforms are in an arena where there are always extraneous factors.  You might get your local tax policy exactly right, for instance, but this could be overwhelmed by an unwise investment in, say, an incinerator.

The limits of Econned

Over the years, Naked Capitalism has provided a fine, if discouraging, play-by-play of the worsening corruption of our financial and governmental powers.  Dense daily posts, plus links to relevant news stories, supported by thoughtful and knowledgable commenters, makes it one of the few sites I really ought to read daily. (Cute animal pictures are a bonus.)

When chief blogger Yves Smith published Econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism, I was anxious to read it. Which I finally did over the last couple of weeks. Continue reading The limits of Econned

Excess returns to Congress

Some may say excess never left Congress, but I am referring to something a bit different.  “Excess returns” is the phrase used to describe an investment result which is above average for the kind of investment made.  And according to a report from Barron’s Randall W. Forsyth, a new study shows that U. S. Senators achieve an excess return of 10.7% per year in their personal investments.  For members of the House of Representatives, the excess is 6.8%.  Forsyth points out that any professional investment manager who achived this result on a consistent basis would be quite phenomenal.  He concludes that

Members of Congress used inside information gleaned from their positions of power to enrich themselves in the stock market.

He is probably right, and I would be the last to accuse Congress of honesty, but there is another possible explanation.  Maybe Congressmen are just cleverer than the rest of us, and in particular are more difficult to deceive.  Congress itself is evidence that the broad public is easily fooled.

In this regard, I recall stumbling a few months ago on a link to the personal investment statements that Congressmen and some other federal officials file. (Curious that I did not bookmark it and can’t seem to locate it right now.) I picked a Congressman who I thought might be honest, Ron Paul, and looked up his statement.  Dr. Paul seemed to have most of his money in precious metals, I don’t recall the extent to which it might have  been bullion, mining stocks, or related investments.  Of course this strategy would have done very well over the past couple of years. Paul is associated with the idea that U. S. dollars should be backed with gold.  I don’t think he considers this realistic in the near term, but of course if it ever happened the effect would be to push the price of gold higher as bullion would be accumulated to “back” the money.  But does Paul endorse gold-backed money in order to increase the value of his investments?  Or does he invest in gold  because he expects its value to increase?  I’m pretty sure it is the latter.  Of course this kind of logic would apply only to honest Congressmen, so I suppose we could consider Ron Paul to be an outlier.

According to Forsyth, the source study, by Alan J. Ziobrowski of Georgia State University, James W. Boyd of Lindenwood University, Ping Cheng of Florida Atlantic University and Brigitte J. Ziobrowski of August[a] State University appeared May 25 in the Journal “Business and Politics” and covers the years 1985-2001.