Thursday, August 28, 2008

California In A Nutshell

According to a headline in the August 22nd San Francisco Chronicle:
Berkeley tree-sitters still refuse to leave
Which might explain why California activist Paul McCauley has proposed a state referendum to raise taxes, including:
  • a one-time tax of 55% on property exceeding $20 million of a California resident or held in California by nonresident


  • a tax of between 36.5% to 54.3% when a resident dies or leaves California


  • an additional 17.5% tax on taxpayers with incomes between $150,000 and $350,000 (if single), $250,000 to $500,000 (if married)


  • a 35% tax on taxpayers whose incomes exceed $350,000 (if single), or $500,000 (if married)
McCauley has "until January 2, 2009 to gather the 694,354 signatures needed to place the initiative before California voters."

Never mind that the proposal "is almost certainly unconstitutional as it restricts interstate commerce." I'm excited because it seems so . . . well . . . Californian, as Roth & Co. quips:
It just goes to show - as bad as things are in California, there's always somebody working to make it worse.
(via TaxProf Blog)

8 comments:

Geoffrey Britain said...

When there's a single thief, it's robbery. When there are a thousand thieves, it's taxation. ~Vanya Cohen

Collecting more taxes than is absolutely necessary is legalized robbery. ~Calvin Coolidge

Be wary of strong drink. It can make you shoot at tax collectors... and miss. ~Robert Heinlein

What at first was plunder assumed the softer name of revenue. ~Thomas Paine

You don't pay taxes - they take taxes. ~Chris Rock

OBloodyHell said...

heh. I'll see your five and raise you...

"Taxes are not levied for the benefit of the taxed."
- Lazarus Long(R. A. Heinlein) -

"There's a big difference between the inevitability of Death and Taxes.
Death doesn't get any worse every time Congress convenes."
- Burt Lancaster -

"Anyone may so arrange his income that his taxes shall be as low as possible; he is not bound to choose the pattern which best pays the Treasury. Taxes are an enforceable extraction and not a voluntary contribution."
- Judge Learned Hand -

Back in 1776, our Founding Fathers were so outraged by the taxes imposed on them by England that they launched the American Revolution, which was, First and Foremost, a tax rebellion. Public Schools today no longer consider it prudent to mention that the 'outrageous' taxes in question were, all together, less than five percent.

"I missed the April 15th deadline for filing taxes because I missed the December 31st deadline for making money."
- 'Frank & Ernest' by Bob Thaves -


"There are twenty-seven specific complaints against the British Crown set forth in the Declaration of Independence. To modern ears they still sound reasonable. They sound reasonable, in large part, because so many of them can be leveled against the present federal government of the United States. Maybe not the 'Death, Desolation, and Tyranny' complaint,... but how about:
--------...has erected a Multitude of new Offices, and sent hither Swarms of Officers to harrass our People, and eat out their Substance.
George III was a piker compared with FDR or LBJ. Or:
--------...has combined with others to subject us to a Jurisdiction foreign to our Constitution, and unacknowleged by our Laws,...
Federal regulatory agencies, for instance.
--------...Depriving us, in many Cases, of the Benefits of Trial by Jury.
If we cross one of those regulatory agencies.
--------...Imposing Taxes on us without our Consent.
Nobody asked me if I wanted a 1040 form."
- P.J. O'Rourke, 'Parliament of Whores' -

"...so when can we quit passing laws and raising taxes? When can we say of our political system, 'Stick a fork in it, it's done.'? ... The mystery of government is not how Washington works, but how to make it stop."
- P.J. O'Rourke, 'Parliament of Whores' -


"People in government work are a cheerful and indefatigably optimistic bunch. At first I was mystified. Government work would seem to be run in a hamster wheel. Government can do nothing, at least nothing right. For instance, the deficit is terrible, but lower spending will hurt the poor and higher taxes will lead to a recession causing more people to become poor and get hurt by the lower spending needed to bring taxes down to end the recession, and so on. But since government rarely succeeds, it hardly ever fails. And government programs aren't necessarily designed to go anywhere. Like the joggers beneath my window, who are the people who run those programs, they just go. The results -- sweat, ruined knees, America as a second-rate world power -- don't matter. It's the effort that makes the action worthy."
- P. J. O'Rourke, 'Parliament of Whores' -

"Taxes are theft, perpetrated by the mob against the individual."
- Alexis A. Gilliland, 'The End of the Empire' -

"One secret to balancing the budget is to remember that all tax revenue is the result of holding a gun to somebody's head. Not paying taxes is against the law. If you don't pay your taxes, you'll be fined. If you don't pay the fine, you'll be jailed. If you try to escape from jail, you''ll be shot. Thus I -- in my role as citizen and voter -- am going to shoot you -- in your role as taxpayer and ripe suck -- if you don;t pay your share of the national tab. Therefore, every time the government spends money on anything, you have to ask yourself, 'Would I kill my kindly, gray-haired mother for this?' In the case of defense spending, the argument is simple: 'Come on, Gramma, everybody's in this together. If those Canadian hordes come down over the border, we'll all be dead meat. Pony Up.' In the case of helping cripples, orphans, and blind people, the argument is almost as persuasive: 'Granny, I know you don't know these people from Adam, but we've got five thousand years of Judeo-Christian-Muslim-Buddhist-Hindu-Confucian-animist-jungle-God morality going here. Fork over the dough.' But Day care doesn't fly: 'You're paying for the next-door neighbor's baby-sitter, or it's curtains for you, Lady."
- P. J. O'Rourke, 'Parliament of Whores' -

"Count that day won, when, turning on its axis, this earth imposes no new taxes."
- Franklin Pierce Adams -

Assistant Village Idiot said...

Think how different CA politics would be if their millions of legal abd illegal immigrants came from Eastern Europe instead of Latin America.

Geoffrey Britain said...

Enough with quotes!;-) Are we not men? Can we not think for ourselves?

Rather than complaints, let us discuss solutions.

First, define the circumstance: the government must have revenue, even if but to perform the most basic of protective functions.

Second, the problem: conservative/libertarians (anarchists don't count, nor do idiots, but I repeat myself...) view taxes as too high.

Liberals as too low because they wish to substitute government largess for charity. As 'Charity' is far too variable, they wish to make charity compulsory.

As Einstein pointed out, a problem cannot be solved at its own level.

Second, the solution:
I suggest that the problem revolves around the answer (income tax)to the need for government revenue being insufficient and counterproductive.

Therefore eliminate taxation, after establishing an alternative means of revenue for the government.

What form might that 'alternative' take? Well actually, several methods come to mind:

An ownership 'dividend' for the private use of natural resources.

In selling mineral rights to say, oil companies, the public would retain partial ownership, so that it would receive revenue from the successful extraction of oil from public lands.

That revenue would be used to create a public 'trust' fund, which would be placed into 'escrow' with mandatory growth and investment until such time as it's sustainable dividends could replace income taxes.

Trust funds work for individuals and families, why can't they work for nations?

Yes, it would take perhaps a century but that is not a obstacle on the national scale.

Yes, greed would need to be accounted for, especially as the fund grew to substantial size.

Yes, discipline would be required but only in setting it up so that it resided within the proverbial 'lock-box' (come on, the man had one good idea)but properly safeguarded and 'sold' as the 'heritage' of future generations it could be done.

I'm essentially proposing a national savings account and using ongoing natural resources as a means to fund it.

In time, the 'interest' from that national savings account could replace the income tax!

Obviously the 'devils in the details' and real leadership would be critical but in principle, I see no fundamental obstacle.

OBloodyHell said...

> Enough with quotes!;-) Are we not men? Can we not think for ourselves?

Quotes do not alter my thinking -- they reflect my thinking with words I have found particularly apt or effective.

The thought processes already occurred.

;-P


> Rather than complaints, let us discuss solutions.

So far as I can see, the only one appears to be the Decision of The Ark: "Kill 'em all, let God sort 'em out."

> That revenue would be used to create a public 'trust' fund, which would be placed into 'escrow' with mandatory growth and investment until such time as it's sustainable dividends could replace income taxes.

geoffrey, part of this problem is that you don't necessarily grasp the unique position of government when it comes to money. As the source of money, the government cannot "save" money in the classic sense. They can only pull it out of circulation or put it into circulation. This is where the term "Money Supply" comes in. Ideally, the Money Supply represents the total wealth available to the citizenry through the assets directly controlled by the USA and its citizenry. When the money supply goes up faster than the assets, inflation occurs (a larger amount of money is equating to the exact same assets). When it goes down, several things occur -- either the actual asset valuation has to be going down equal to it (generally does not happen, save perhaps in wartime), or the economy slows down substantially to match, since now there isn't enough money to hand around to drive the economy (this is believed to be one of the root causes of the Great Depression, the shrinking of the money supply)

Side note: this tied into the support for Keynesianism, which is that the economy is driven by the money supply, instead of the tie between wealth creation and the money supply, which isn't quite the same thing. You can't increase wealth creation by increasing the money supply, only decrease it by decreasing the money supply.

Hence, your idea of a "National Savings Account" is defective in that it is not possible for "The Nation" to have "savings", in the manner you think.

"Invest" it, is what you mean?

Government bureaucrats show a remarkably bad talent for investing money. This is generally because they're in the "fourth class" of money handling:

Class 1: *You* spend *your* money on *yourself*.
Your money -- > Your benefit
You made it, so you feel the work it took to earn it. You experience the rewards, so you want good value for your work, too.

Class 2: *You* spend *your* money on *someone else*.
Your money -- > Others' benefit
Like the above, you want good value for your work, so you choose carefully. Not so much so as #1, but still carefully.

Class 3: *You* spend *someone else's* money on *yourself* (i.e., a "gift certificate, for example).
Others' money -- > Your benefit
You didn't earn the money, but you have an interest in the result, so again you choose carefully. Not so much so as #1, but still carefully.

Class 4: You spend someone else's money on someone else.
Others' money -- > Others' benefit
This is you getting nothing in return for your time. You have no particular reason to care about either the value given or the value recieved. The deal could completely, utterly suck and all you care about is getting it over with and getting back to playing with your Wii. (Note, this can shift, of course, if you care about the "someone else" in either or both positions, but, in particular, that does not necessarily apply by any means to expenditures made by government bureaucrats.

===================

Once you realize that all government spending (and, essentially, investing) is of Class 4, you start to grasp why putting ANY monies into the direct hands of (i.e., control of) government is usually a bad deal. Sometimes it's the only way for it to work, but it's still a good idea to look for alternatives.

Hence libertarianism and "small government" philosophies of conservatives (which latter I ack often is not followed by the GOP in general and some conservatives in particular)

=======================

But this is why, I think, your notion won't work -- it depends on either(or both) the ability of the government to save money, which it literally cannot do, or to invest it wisely, which it's got an amazingly bad history of doing well.

Name one government program in history which has, overall, brought in more value than it expended, with the exception of the Apollo program and the Lewis and Clarke Expedition. It won't be easy.

And "Once Per Century" doesn't sound like good odds.

;oP

.

Geoffrey Britain said...

this is why, I think, your notion won't work -- it depends on either(or both) the ability of the government to save money, which it literally cannot do, or to invest it wisely, which it's got an amazingly bad history of doing well."

I'm not an economist, have never taken econ 101 (no interest) and aside from a no doubt partial understanding of the bare basics, confess to ignorance.

BUT I do understand people, greed, inefficiency and compound interest.

Forgive my lack of clarity. I do not propose that we allow the government to handle investment. Nor do i underestimate their greed and general incompetence.

I realize that government "can only pull it out of circulation or put it into circulation"

As taxes will continue, I merely propose that we place part of them into a 'trust fund'. AND that we make access to that trust fund, (other than as planned) difficult in the extreme.

Then that all funds in the trust fund be automatically invested through the stock market in mutual funds that 'reflect' the US economy as a whole.

Over time, if congress can't get their 'grubby little hands' into the fund it will grow to an astronomical amount.

That would be essentially, the equivalent of a national 'savings' account or perhaps better put; a public trust fund account.

Once interest from the fund becomes sufficient it can be used to start to replace income taxes.

I'd also stipulate that congress MUST reduce taxes dollar for dollar as funds were withdrawn, so that it was actually a replacement.

Yes, the fund would HAVE to really be a 'lock box' because the only way to make this work is to create a fiscal sanctuary that Congress AND The American people simply COULDN”T get into.

AND as time passed, the temptation to ‘raid’ the lock box would become irresistible.

To make this work a Constitutional amendment would be needed, making this a constitutionally created program, it would have to be literally woven into the constitution.

Congress would have to cooperate and the only way they’d actually do that is if the public and media embraced this idea and demanded that Congress implement the idea.

Full transparency and a special, ‘unanimous vote condition’ would be written into the legislation creating the tax fund and its eventual distribution.

This means that in order to change anything, Congress would have to get a special, unanimous approval from BOTH houses AND then it would have to put the proposed change through the state amendment process, which requires 3/4 th’s of the state legislatures approval.

But just the unanimous voting requirement would keep Congress from raiding the fund because as we all know you can’t get 100% of the people to agree to anything…

There’s always at least one cantankerous cuss who’s NOT going along with the group, either out of spite or principle.

I realize how difficult getting this accomplished would be, that's the human element.

First though the fiscal idea must have worth and that worth agreed to. THAT is my question, economically CAN this work? I think so because its based in accepted economic principles.

THEN we can talk about how no one would ever go for this...THAT'S where vision, leadership and leverage are essential.

All truth passes through three stages: First, it is ridiculed; Then, it is violently opposed; and
Finally, it is accepted as self-evident. -- Arthur Schopenhauer

When you're one step ahead of the crowd, you're a genius.
When you're two steps ahead, you're a crackpot." -- Rabbi Shlomo Riskin, (Feb. 1998)

Carl said...

To the extent paying for a trust fund would require taxation greater than necessary to pay for government operations, I'd oppose it: give government a further source of dollars to spend on stupidity--such as a funded account--and they'd use it.

Geoffrey Britain said...

Carl, that's why I originally suggested that the revenue to pay into the fund would come out of 'dividend' payments due the nation from oil companies' successful drilling of natural resources.

I realize that the licensing fee the oil companies pay would have to be adjusted.

I'm not in favor of increasing taxes either. I think it can be done without raising taxes.

Your caveat appears to indicate that you're extending at least tacit acceptance that economically the idea could work.

I also realize that even if that's true, it's the political realm in which the real difficulties lie. I don't mean to unduly discount those very real obstacles.

I'm merely suggesting that there in fact is another way to raise government revenue and, in a way that hasn't been considered before.

It is my belief that at some point in the not so very distant future the integration of robotics, artificial intelligence, nanotechnology, life extension and other pending technological breakthroughs will result in a logarithmic increase in national productivity.

This will inevitably lead to a paradigm shift in the economics of how society operates.

What DO you do when there is no need for service workers? No need for most white collar jobs? And yet there is heretofore undreamed of national wealth and productivity?

Thinking about THAT led me to the concept of a 'public trust fund'.