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License Plates on a New Car

I Love Michigan !
I just bought my 1986 Jaguar “Vanden Plas” (2-tons of “old geezer” car – leather seats and walnut dashboard) – and I could drive it home WITH NO LICENSE PLATES !!!
Yup – that’s legal and it’s even covered by my other cars insurance.
Can you get more cool than that!

Some legal/technical details:
a) RMV has a 3-day “new car” rule – basically so you can get the car home then drive to the registry.
b) You need the signed (and dated?) title with you to pull this trick.
c) With compulsory “no fault” insurance – it seems the insurance companies have to support this feature too.  No registration, no insurance binder, no plates, nuttin – just you driving with the title in your hot little hands…

Mix that with “right to carry” and dollar-pint nights – oooooh baby


Recall Elections (and Wisconsin 2012)

The recall election yesterday in Wisconsin brought to mind my feelings about recall elections in general.

I have always felt that regular elections bring an individual and party into power, and this is the “will of the people”.  The individual/party then has their term (2 or 4 years) to carry out their plans, then they are re-evaluated and possibly re-elected.

However, a recall election is when a sub-group of the voters are not happy with the results of the general election.  They may couch it in terms of a policy decision that will “harm the children”, but I have always viewed this as simply a bunch of sore losers.

In my mind, the only legitimate use of a recall election is when there is clear gross maleficence or other “high crimes”.  Not because of a disagreement on policy.

Wisconsin is especially transparent, as a point – the state senate Democrats went into hiding in hotels in Illinois to prevent a quorum to prevent a vote.  That is especially small-minded.  Those Democrats were acting like children rather than facing the problem and actually performing their elected duties (are those people facing a recall for dereliction of duty?).

In short – I am glad that the recall failed.  This makes recall proponents a bit more hesitant the next time they feel slighted and demand a recall.

I just read (in the NYT no less) that this recall election cost local governments $18Million – a good use of public monies??

Republican / Democrat Thief Joke

I usually try to keep it serious, but this fell across my screen.  Courtesy of Christopher Kimball at Cooks Illustrated (and America’s Test Kitchen and Cook’s Country).  Chris has an occasional “Letter from Vermont” to subscribers which is more personal than the cooking newsletter.

New Year’s brings with it the beginning of the political season, hence this story from the world of Vermont politics. An old-time northeast kingdom farmer, also a stout Republican, went to see the Democratic sheriff to report a theft.

“Yes, sir,” the farmer said, “yesterday I butchered a hog and left it hanging by the barn. During the night someone came along and stole half of that hog and I am sorry to say that it was a Republican.”

“And why,” asked the sheriff, “do you think that it was a Republican?”

“Because,” said the farmer, “if it had been a damned Democrat, he’d have taken the whole hog!”

Corporate Money in Politics

At church lately, a lot of people have been echoing the grousing of the 99% that “corporations are people”.  This is usually in relation to political speech roiled by the recent Supreme Court ruling in “Citizens United v. Federal Election Commission“, its affect on McCain-Feingold, and the general feeling that “politics is all about money”.

As an aside – the concept that “corporations are people” is a bedrock principle and is well understood and supported both by the courts and common law.  I will ignore the fact that “the 99%” don’t understand how capitalism works and just address what they are really complaining about.

Originally, I felt that McCain-Feingold was an imperfect, but reasonable, compromise in its attempt to prevent corporations and unions to finance political advertisement near an election.  Of course, the devil is in the details, and the “Citizens United” ruling dealing with a movie (a very political movie, but a movie nonetheless) exposed one such detail.

The movies in question?  The ‘left-wing flame-bait’ Farenheit 9/11 (by Michael Moore) and the ‘right-wing flame-bait’ Hillary: The Movie (by Citizens United).  The case was about the advertisement and broadcast of the latter movie around the time of an election.

In other words – this was a first-amendment case.

During arguments before the Supreme court, the government (the FEC side) did admit that McCain-Feingold (and a related decision ‘Austin v. Michigan Chamber of Congress’) would allow the government to ban the sale of a book before an election. Originally reading this DID raise my eyebrows about McCain-Feingold.  After all, the advertising for the book, and probably even the conveyance could be construed as a political contribution financed by the corporation (consider the free shipping of your Amazon book, does that subsidy count as a political contribution?).

Now, all this has me in a tizzy.  On one hand, I believe that since corporations are taxed and otherwise affected by the government, they should have a say.  I figure we should consider giving them a single vote like any other citizen, and the $2500 direct campaign limit, like any other citizen (a topic for another day).

However, the unlimited amounts a corporation can spend in politics has me (and just about everybody else) concerned.  This is not the typical “Joe’s Plumbing” or “Google” donating $50,000 to some party or candidate.  This has evolved into single-purpose corporations, so-called “political action committees” (PACs and Super-PACs), which aggregate and channel vast sums of money.  So we don’t have a board of directors to complain to (like Joe the plumber or Larry Page).

But the difficulty is back in the details, what exactly separates a corporation from creating or broadcasting blatant political advertisement from ‘normal’ business acts like advertising a book or movie.  Consider the quandary, NetFlix will have to pull  Mr. Smith Goes to Washington from the play-list because we are within 60 days of a general election?

Hopefully the laws can come up with some reasonable compromise that both does not squash free-speech nor make it impossible for business to happen.

Of course – we all have to remember that We The People are the ones VOTING, not the corporations.  If the voting public attempt to honestly and clearly understand and evaluate the candidates, the impact of all the advertising money will be minimized.

In short – the solution to the current Super-PACs is an eternally vigilant electorate.

Rich People’s Taxes…

Both Warren Buffet and Mitt Romney have famously stated their “tax rate” is about 15%, then the politicians became apoplectic and demanded to further tax the rich.

Well – do the math – 15% is about the correct rate…

Before you call me an aristocratic stooge, you must remember that I am a math-guy – I live with numbers.  If you want the Mitt to pay about the same taxes as those of us getting W2’s – you need to understand where the money comes from – and the fact it has already been hit with a sizable tax.

First – for Joe programmer, let’s keep it simple and assume that we are talking about the 28% tax bracket (which is for a family income of $142 – 217K).  We will also bypass all the details about how tax ‘brackets’ work, and just assume the simplest math (laddering the brackets typically just confuse normal people…).
In short, Joe will think that his money is taxed at 28%.
(Realistically – Joe programmer’s total tax burden will be about 10% because of the way brackets work and his accountant is not a total dope.)
Now – for Jane rich-person with her millions coming from dividends.

And, to keep it simple, let’s say all her “income” comes from dividends.  No need to confuse the issue with her W2 and mix of LT and ST capital gains…

Since Jane’s money is from dividends, it actually comes from a corporate profit – the money left over after all expenses.  Assuming this company employs Joe above, his wage (and its W2 taxes) are unrecoverable expenses to the company.  What this company does and its capital efficiency are unimportant for this calculation, let’s just assume that this company has a total profit of $15Million.  This is the money left over after all the expenses like Joe and the cost-of-goods-sold.
This $15Million profit, is then the income of the corporation, which is then taxed at  38% (unless you have a cadre of lawyers like General Electric who magically weave a story to set this to 0%).
Regardless about GE, let’s assume this profit (typically called ‘corporate income’) is now taxed at 38%, leaving $9.3Million left to distribute amongst the shareholders (or re-invest in the company).

Finally – Jane gets her millions in dividend money, and then pays another 15% on that money.
In short – that money has been taxed  at 53% (38 + 15).

Welcome to the real world baby – the rich DO pay a lot in taxes.

Now – a separate discussion – should the corporate tax rate be 38% or zero or ?
After all, that is the money used to re-invest into the company and create more wealth….

Update (3-Feb-2012)…
We are now hearing that much of Mitt Romney’s ‘income’ was through “carried interest” – OY !
I never liked the tax rules for “carried interest” – that always seemed like a scam to me.
Soooo – my thoughts are still valid for income from dividends, but I will have to figure out what to write about income from “carried interest”.