Tidbits Political Quotations
To Accompany the February 14, 2019 edition of Tidbits
http://faculty.trinity.edu/rjensen/tidbits/2019/Tidbits021419.htm           
Bob Jensen at
Trinity University




USA Debt Clock --- http://www.usdebtclock.org/ ubl

In September 2017 the USA National Debt exceeded $20 trillion for the first time ---
http://www.statedatalab.org/news/detail/national-debt-surpasses-20-trillion-for-the-first-time-in-us-history

Human Population Over Time on Earth ---
https://www.youtube.com/watch?v=PUwmA3Q0_OE 



Wikiquote from Wikipedia --- https://www.wikiquote.org/

 

History will prove former President Donald Trump was correct about Mexico one day funding an impenetrable wall --- to keep out over 2 billion starving green immigrants seeking to enter Mexico from the north.
Bob Jensen

 

The Young Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system — and the Democratic Party ---
https://fivethirtyeight.com/features/the-young-lefts-anti-capitalist-manifesto/

 

"In Praise of Cheap Labor," by Paul Krugman, Slate, March 21, 1997 ---
https://slate.com/business/1997/03/in-praise-of-cheap-labor.html

 

Corruption in general has a deleterious effect on the readiness of economic agents to invest. In the long run, it leads to a paralysis of economic life. But very often it is not that economic agents themselves have had the bad experience of being cheated and ruined, they just know that in this country, or in this part of the economy, or this building scene, there is a high likelihood that you will get cheated and that free riders can get away with it. Here again, reputation is absolutely essential, which is why transparency is so important. Trust can only be engendered by transparency. It's no coincidence that the name of the most influential non-governmental organization dealing with corruption is Transparency International.
A Conversation with Karl Sigmund:  When Rule of Law is Not Working
https://www.edge.org/conversation/karl_sigmund-when-the-rule-of-law-is-not-working

Mortgage Backed Securities are like boxes of chocolates. Criminals on Wall Street and one particular U.S. Congressional Committee stole a few chocolates from the boxes and replaced them with turds. Their criminal buddies at Standard & Poors rated these boxes AAA Investment Grade chocolates. These boxes were then sold all over the world to investors. Eventually somebody bites into a turd and discovers the crime. Suddenly nobody trusts American chocolates anymore worldwide. Hank Paulson now wants the American taxpayers to buy up and hold all these boxes of turd-infested chocolates for $700 billion dollars until the market for turds returns to normal. Meanwhile, Hank's buddies, the Wall Street criminals who stole all the good chocolates are not being investigated, arrested, or indicted. Momma always said: '"Sniff the chocolates first Forrest." Things generally don't pass the smell test if they came from Wall Street or from Washington DC.
Forrest Gump as quoted at http://newsgroups.derkeiler.com/Archive/Rec/rec.sport.tennis/2008-10/msg02206.html

It is not that machines are going to replace chemists. It’s that the chemists who use machines will replace those that don’t ---
Derek Lowe

Gallup: Americans Say No. 1 Problem is 'Government,' No. 2 is 'Immigration' ---
https://www.cnsnews.com/news/article/michael-w-chapman/survey-americas-no-1-problem-government-no-2-problem-immigration

 

12 inspiring quotes from Martin Luther King Jr.---
https://www.businessinsider.com/inspiring-martin-luther-king-jr-quotes-2017-1

 

21 oustanding Warren Buffet quotations ---
https://www.businessinsider.com/warren-buffett-21-best-quotes-2019-2

 

The Atlantic:  The Swiftly Closing Borders of Europe ---
https://www.theatlantic.com/international/archive/2018/12/europe-france-italy-immigration-border/578179/

Italian Minister tells NGO Italy doesn’t want migrants: “Our ports are closed!” ---
https://voiceofeurope.com/2018/12/italian-minister-tells-ngo-italy-doesnt-want-migrants-our-ports-are-closed/#.XB6WCZMs_Xo.twitter

The enemy is fear
We think it's hate
But, it's fear

Gandhi

 

13 of the (alleged) most famous last words in history ---
https://www.businessinsider.com/famous-last-words-in-history-2017-10

21 of Michelle Obama's most inspiring quotes on work, success, and relationships ---
https://www.businessinsider.com/michelle-obama-most-inspiring-quotes-advice-becoming-2019-1

 

19 unforgettable quotes from legendary Marine Gen. Jim 'Mad Dog' Mattis, who quit as Trump's defense secretary ---
https://www.businessinsider.com/general-mattiss-best-quotes-2016-11

 

Here are the Ten Best Pieces of Advice from 2018 Commencement Speakers ---
Click Here

Sometimes the grass is greener on the other side because it's been fertilized with more bullshit.
Anonomous

 

The Lucretius Problem is a mental defect where we assume the worst case event that has happened is the worst case event that can happen ---
https://www.fs.blog/2015/04/lucretius-problem/

 

The worst form of inequality is to try to make unequal things equal.
Aristotle

 

The Economic Ignorance of Bernie Sanders ---
http://reason.com/archives/2018/08/09/the-economic-ignorance-of-bernie-sanders

 

How many times have we heard ‘free tuition,’ ‘free health care,’ and free you-name-it? If a particular good or service is truly free, we can have as much of it as we want without the sacrifice of other goods or services. Take a ‘free’ library; is it really free? The answer is no. Had the library not been built, that $50 million could have purchased something else. That something else sacrificed is the cost of the library. While users of the library might pay a zero price, zero price and free are not one and the same. So when politicians talk about providing something free, ask them to identify the beneficent Santa Claus or tooth fairy.
Walter Williams

 

Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket.
Eric Hoffer.

 

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.
Winston Churchill

 

Shoot for the space in between, because that's where the real mystery lies.
Vera Rubin
https://www.brainpickings.org/2016/12/28/remebering-vera-rubin/?utm_source=Brain+Pickings&utm_campaign=f053a9c4e2-EMAIL_CAMPAIGN_2017_01_07&utm_medium=email&utm_term=0_179ffa2629-f053a9c4e2-234390133

 

Only those who will risk going too far can possibly find out how far one can go.
T.S. Eliot

There is a crack in everything, that’s how the light gets in.
Leonard Cohen

In honor of his centennial, the Top 10 Feynman quotations ---
https://www.sciencenews.org/blog/context/top-10-richard-feynman-quotations

Thomas Sowell (controversial conservative black economist) --- https://en.wikipedia.org/wiki/Thomas_Sowell
The 30 Best Thomas Sowell Quotes ---
https://pjmedia.com/lifestyle/the-30-best-thomas-sowell-quotes/

Be brave enough to start a conversation that matters.
Margaret Wheatley
Even conversations that are not politically correct.

That government is best which governs the least, because its people discipline themselves.
Thomas Jefferson

Why, we grow rusty and you catch us at the very point of decadence --- by this time tomorrow we may have forgotten everything we ever knew. That's a thought isn't it? We'd be back to where we started --- improvising.
Tom Stoppard, Rosencrantz and Guildenstern are Dead (Act I)

It's hard to beat a person who never gives up.

Babe Ruth, Historic Home Run Hitter
What's sad is to witness what Syria has become because nobody gave up earlier.

And "because they're nonstate actors, it's hard for us to get the satisfaction of [Gen.] MacArthur and the [Japanese] Emperor [Hirohito] meeting and the war officially being over," Obama observed, referencing the end of World War II. 
President Barack Obama when asked if the USA of the future will be perpetually engaged in war.
http://www.businessinsider.com/obama-on-americans-being-resigned-to-live-in-a-perpetual-war-2016-7

We must be willing to get rid of the life we've planned, so as to have the life that is waiting for us. 
Joseph Campbell

If everyone is thinking alike, then somebody isn't thinking. 
George S. Patton

And many writers have imagined for themselves republics and principalities that have never been seen or known to exist in reality; for there is such a gap between how one lives and how one ought to live that anyone who abandons what is done for what ought to be done learns his ruin rather than his preservation: for a man who wishes to profess goodness at all times will come to ruin among so many who are not good.
Niccolo Machiavelli

If you don't know where you're going, you might not get there.
Yogi Berra

Happiness is like a butterfly: the more you chase it, the more it will elude you, but if you turn your attention to other things, it will come and sit softly on your shoulder.
Henry David Thoreau

Today, humanity fabricates 1,000 times more transistors annually than the entire world grows grains of wheat and rice combined  ---
https://www.realclearenergy.org/articles/2018/12/11/energy_and_the_information_infrastructure_part_3_the_digital_engines_of_innovation_jevons_delicious_paradox_110368.html

I learned long ago never to wrestle with a pig. ... You get dirty and besides the pig likes it ---
George Bernard Shaw

You can get a lot farther with a smile and a gun than you can with just a smile.
Al Capone

21 quotes from self-made billionaires that will change your outlook on money ---
https://www.businessinsider.com/self-made-billionaire-quotes-that-will-change-your-outlook-on-money-2016-12

 

The Best Advice from 2018's Celebrity Commencement Speakers ---
https://moneyish.com/heart/the-best-advice-from-2018s-celebrity-commencement-speakers/

Tiawan's Foxconn Says Wisconsin Plant Plans Will Proceed After Chairman Spoke With Trump  ---
Click Here
Does China unwittingly deserve credit here?
You can get a lot farther with a smile and a gun than you can with just a smile.
Al Capone

This Is CNN: Network Labeled Democratic VA Governor Embroiled In Racist Yearbook Fiasco Was A Republican
Click Here
Sometimes networks do blatantly lie without apology
Most other networks cherry pick by not mentioning party affiliation

Made in the USA? Well sort of maybe.
Check out the $600 million Alabama factory where Airbus builds jets for American, Delta, and JetBlue ---

https://www.businessinsider.com/airbus-mobile-alabama-factory-tour-a320-american-delta-jetblue-2019-1
Jensen Comment
We cannot ipso facto assume that products of foreign companies are not assembled in the USA. My two Japanese Subaru SUVs were assembled in Indiana. However, when you look deeper into the matter, a lot of the components of those products might have been manufactured outside the USA such that the phrase "Made in the USA" is very loosy goosy. Even the USA airplane and automobile manufacturing companies use foreign-made components. I often wondered why my former Jeep had so many metric system bolts and nuts.

NATO is on Trump's side as Democrats attack him for pulling out of the nuke deal with Russia ---
https://www.businessinsider.com/nato-sides-with-trump-on-inf-as-democrats-attack-his-decison-2019-2
I think Putin beat Trump to actually pulling out of the deal. If so, there's no more deal for Trump to pull out of in the first place.

Why do so many people want a hike in the minimum wage?
Amazon's minimum-wage hike barely made a dent in its operating costs, and it may explain why some workers say they're actually earning less ---
https://www.businessinsider.com/amazon-minimum-wage-hike-barely-made-a-dent-in-its-operating-costs-2019-2
Jensen Comment
Another common ploy not necessarily used by Amazon is to transfer full-time workers to part-time workers and to outsource former jobs like in-factory plumbers, electricians, and trainers. Universities frequently just cut back on the number of student-worker hours.

 

Is Ayn Rand important?
Yes historically, but not so much currently

https://marginalrevolution.com/marginalrevolution/2005/02/is_ayn_rand_imp.html

NYT:  All of New Zealand’s major cities were rated as “seriously” or “severely” unaffordable, with a house in the least expensive city, Palmerston North, priced at five times the median income ---
https://www.nytimes.com/2019/01/31/world/asia/new-zealand-housing-prices.html?rref=collection%2Fbyline%2Fcharlotte-graham-mclay&action=click&contentCollection=undefined&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
Only Hong Kong is said to be worse
I had a friend who was paying $5,000 per month for a tiny, albeit nice, apartment in Hong Kong

Because of their natural gifts, accounting professors should be supplementing their income
The growing market of writing for the purpose of putting people to sleep
https://www.cbc.ca/news/health/national-sleep-stories-chris-advansun-1.4929841

When Top Rates Were So High:  Do you really think Bing Crosby and Bob Hope paid 90 percent of their income to the taxman?
https://www.bloomberg.com/opinion/articles/2019-01-29/hollywood-stars-didn-t-pay-90-percent-tax-they-created-loopholes

USA Powerlifting bans all trans women from competing as women ---
https://www.outsports.com/2019/2/1/18204036/usa-powerlifting-trans-athlete-policy-jaycee-cooper?fbclid=IwAR3NKXoDJZ7SJZaeknE3jlUaXpEMzGbKEOCY1ulgkdHLC24nkfkyYBr5Ago

Trump Will Not Get His Wall Until Countless Tunnels are in Place ---
https://finance.townhall.com/columnists/mikeshedlock/2019/02/04/tunnels-under-trumps-wall-already-in-progress-n2540757?utm_source=thdaily&utm_medium=email&utm_campaign=nl&bcid=b16c6f948f297f77432f990d4411617f

Tidbits for Minimizing Taxes (know your recent court decisions where loopholes are created) ---
https://www.accountingweb.com/tax/individuals/talking-taxes-with-clients-part-one?source=tx020419

U.S. appeals court reverses ruling on Puerto Rico bonds ---
https://www.statedatalab.org/news/detail/us-appeals-court-reverses-ruling-on-puerto-rico-bonds

Is California’s pension system already underwater?
https://www.statedatalab.org/news/detail/is-californias-pension-system-already-underwater

State Capture: How Conservative Activists, Big Businesses, and Wealthy Donors Reshaped the American States -- and the Nation  ---
https://www.amazon.com/State-Capture-Conservative-Activists-Businesses/dp/0190870796/ref=sr_1_1?keywords=state+capture&qid=1548020999&sr=8-1/marginalrevol-20


CNN:  "The capitalist socialist populist manifesto of Democrats in 2020" ---
https://www.cnn.com/2019/02/03/politics/democrats-everywhere-economics/index.html
FiveThiryEight Blog:  The Young Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system — and the Democratic Party ---
https://fivethirtyeight.com/features/the-young-lefts-anti-capitalist-manifesto/

Jensen Comment
Leftist billionaires Mike Bloomberg and Howard Schultz are seriously thinking of running. Both are opposed to the wealth tax and might spend their billions fighting it --- thereby losing much more than they would be taxed by Elizabeth and Alexandria.
Republican billionaire Donald Trump also opposes the wealth tax. But he'll leave the USA to protect his billions. He already has a number of places to stay if he leaves the USA.

Gov. Cuomo’s right: The rich are leaving high-tax New York
https://www.statedatalab.org/news/detail/gov-cuomos-right-the-rich-are-leaving-high-tax-new-york
Watch them move out of the USA is President Elizabeth Warren's Wealth Tax is Enacted

This is why blackface is offensive: A brief history ---
http://www.freerepublic.com/focus/f-chat/3725301/posts

Trump Curse? LA Rams Say They Might Skip White House Visit If They Win ---
Their boycott threat was not political. They just wanted something besides a Big Mac with fries
https://www.nytimes.com/2019/01/15/us/politics/trump-burgers-fast-food.html
But after the Super Bowl all the Rams get to eat is crow in humble pie.

Al Sharpton Accuses 'So Called' Super Bowl Fans ( including Labron James and Elijah Cummings) of Racism Because They Did Not Kneel Enmass During the National Anthem ---
Click Here
Sharpton will only stand for the National Anthem if you pay him a bribe.
Tom Brady took a knee near the end of the game.

The government of India is asking the U.S. to release 129 students who were detained by Immigration and Customs Enforcement. The students had enrolled in a fake school called the University of Farmington, which was created by ICE as a sting operation “to lure people trying to remain here (illegally) on student visas ---
https://www.freep.com/story/news/local/michigan/oakland/2019/02/03/india-students-university-farmington/2760906002/

L.A. Rams Are Building the NFL's Most Expensive Stadium, Without Public Money ---
https://reason.com/blog/2019/02/02/super-bowl-bound-la-rams-are-building-th
This is not common in the sports world, although there are some taxpayer dollars finding their way into the deal
 

Left Leaning Slate --- Nancy Pelosi Keeps Quoting Her Favorite Bible Verse. The Mystery: It’s Not Actually in the Bible ---
https://slate.com/human-interest/2019/02/nancy-pelosi-bible-quote-minister-needs.html
“To minister to the needs of God’s creation is an act of worship. To ignore those needs is to dishonor the God who made us.”

“A Fundamentally Illegitimate Choice”: Shoshana Zuboff on the Age of Surveillance Capitalism ---
https://theintercept.com/2019/02/02/shoshana-zuboff-age-of-surveillance-capitalism

Make Honduras Great ---
https://innovativegovernance.org/wp-content/uploads/2019/02/Make-Honduras-Great.docx.pdf

Federal Reserve Bank:  As Fewer Young Adults Wed, Married Couples’ Wealth Surpasses Others’ ---
https://www.stlouisfed.org/publications/in-the-balance/2018/as-fewer-young-adults-wed

Phoenix drowning in pension debt, drastic response proposed ---
https://www.statedatalab.org/news/detail/phoenix-drowning-in-pension-debt-drastic-response-proposed

Elizabeth Warren registered for the Texas State Bar as an American Indian ---
https://legalinsurrection.com/2019/02/uh-oh-elizabeth-warren-registered-with-texas-state-bar-as-american-indian/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+LegalInsurrection+%28Le%C2%B7gal+In%C2%B7sur%C2%B7rec%C2%B7tion%29

Are the slums of San Francisco worse than slums of India, Haiti, Africa? (Possibly because of drug addiction)
https://townhall.com/columnists/johnstossel/2019/02/07/slum-by-the-bay-n2540841?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=02/07/2019&bcid=b16c6f948f297f77432f990d4411617f&recip=17935167

San Francisco Health Department:  There are about 24,500 injection drug users in San Francisco — that’s about 8,500 more people than the nearly 16,000 students enrolled in San Francisco Unified School District’s 15 high schools ---
http://www.sfusd.edu/en/assets/sfusd-staff/about-SFUSD/files/sfusd-facts-at-a-glance.pdf
And most of those injection drug users are among the hordes of homeless defecating in the streets
https://www.theguardian.com/commentisfree/2018/aug/18/san-francisco-poop-problem-inequality-homelessness

San Francisco No Longer Allows Facial Recognition
Microsoft: It would be cruel to stop government agencies using facial recognition software ---
https://www.businessinsider.com/microsoft-cruel-to-stop-government-using-facial-recognition-2019-2
Jensen Comment
Sanctuary cities like San Francisco claim its immoral to deport undocumented immigrants

Jimmy Kimmel, while the host of Comedy Central’s “The Man Show,” dressed up more than once in blackface makeup, a bald cap and a body suit to portray former Utah Jazz basketball star Karl Malone as an inarticulate, dim-witted person who had difficulty pronouncing words correctly ---
https://heavy.com/entertainment/2017/10/jimmy-kimmel-black-face-malone-grope-man-show/
Watch a video clip --- https://www.youtube.com/watch?v=-wse5lgIDxM
This is far more degrading and insulting  than a minstrel show.

Ford is investing $1 billion and hiring 500 new employees at two Chicago factories ---
https://www.businessinsider.com/ford-to-invest-1-billion-hire-500-new-employees-in-chicago-2019-2

NYC Politicians Might Squelch the Deal in an Effort to Cut Off Their Noses to Spite Their Faces
Amazon is reportedly reconsidering its plan to open a second headquarters (HQ 2) in NYC ---
https://www.vox.com/the-goods/2019/2/8/18217338/amazon-hq2-headquarters-new-york-queens
Also see
https://www.businessinsider.com/amazon-hq2-leaving-new-york-city-would-mean-tax-revenue-loss-2019-2
Jensen Comment
By threatening to leave those dissident politicians will probably shut up.
Amazon (read that Jeff Bezos) helped defeat Seattle's proposed excise tax on high income folks and then pledged much more to help Seattle's homeless ---
https://www.bloomberg.com/news/articles/2018-09-13/bezos-homeless-pledge-follows-fight-against-tax-for-housing

 

http://news.cchgroup.com/2017/11/28/washington-court-strikes-seattle-tax-high-income-earners/

Finnish basic income experiment: Basic income on top of safety nets creates happiness, but not employment ---
https://www.apnews.com/f80234e1958e4635ba01c5aa83f09778
Jensen Comment
Castro said something similar happened in Cuba when people lost incentives to work
https://www.theguardian.com/world/2008/jun/12/cuba 

Ocasio-Cortez: Latinos Can’t Be Illegals Because They’re ‘Descendants of Native People’---
https://freebeacon.com/politics/ocasio-cortez-latinos-cant-be-illegals-because-theyre-descendants-of-native-people/
Jensen Comment
She should've added that this is tantamount to allowing all of Latin and most of South America into the USA.

Washington Post Fact Checkers Strike Out Big On The SOTU ---
https://townhall.com/columnists/katrinapierson/2019/02/08/wapo-fact-checkers-strike-out-big-on-the-sotu-n2541071?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=02/09/2019&bcid=b16c6f948f297f77432f990d4411617f&recip=17935167

Yeah, There's a Picture:  Cambridge University Economist Uses Her Naked Body to Fight Brexit  ---
https://www.insidehighered.com/news/2019/02/07/cambridge-economist-uses-unusual-approach-oppose-brexit?utm_source=Inside+Higher+Ed&utm_campaign=187cd2c7ea-DNU_2019_COPY_01&utm_medium=email&utm_term=0_1fcbc04421-187cd2c7ea-197603613&mc_cid=187cd2c7ea&mc_eid=495c6bd417
Jensen Comment
At one time what Lady Godiva did to protest taxation was an outrage, but the Countess of Mercia had long hair and a horse's neck for modesty. Prof. Victoria Bateman in 2019 was more shameless with shorter hair and no horse.
https://en.wikipedia.org/wiki/Lady_Godiva

Nearly 400 Southern Baptist church leaders and volunteers have been accused of sexual misconduct over the last two decades ---
https://www.businessinsider.com/report-hundreds-abused-by-southern-baptist-leaders-workers-2019-2

We do NOT have momentum in reducing carbon emissions of agriculture or manufacturing. In agriculture, livestock methane emissions + deforestation to graze livestock are biggest problems. And meat consumption is doubling in next 40 yrs. This should scare you more than coal ---
https://marginalrevolution.com/marginalrevolution/2019/02/the-wisdom-of-ramez-naam-on-climate-change.html

Pelosi's Brother-in-Law Received $737m Taxpayer Money for Failed 'Green' Project ---
https://neonnettle.com/news/6471-pelosi-s-brother-in-law-received-737m-taxpayer-money-for-failed-green-project

The New Yorker:  Are Equality and Freedom Mutually Independent?
https://www.newyorker.com/magazine/2019/01/07/the-philosopher-redefining-equality

California to pull plug on billion-dollar bullet train, cites ballooning costs ---
https://www.foxnews.com/politics/california-to-pull-plug-on-billion-dollar-bullet-train-cites-ballooning-costs

Illinois lawmakers want to go after corporate profits in tax havens
Several states have similar taxing structures
Oregon’s worldwide reporting law was repealed in 2018 after lawmakers found diminishing returns and raised concerns about lawsuits ---

https://www.mdjonline.com/neighbor_newspapers/extra/news/illinois-lawmakers-want-to-go-after-corporate-profits-in-tax/article_6194e8d4-49b4-533b-b08f-fe262b536858.html

Democrats claim the decline in Americans' tax refunds is proof the GOP tax law screwed over the middle class — but the truth is more complex ---
https://www.businessinsider.com/democrats-tax-refund-attack-gop-trump-tax-law-misleading-2019-2




Howard Schultz
One interesting political event of the times is the interview with multibillionaire Howard Schultz on CBS Sixty minutes ---
https://www.cbs.com/shows/60_minutes/video/MD3ISxVkJXgLBsH4lNDrLYsRQWmCJy_X/howard-schultz-small-satellites-big-data-jerry-and-marge-selbee/

Schultz (think Starbucks) was always viewed as a liberal Democrat. But now he's scaring Democrats by threatening to use his billions to run for President as an independent. One of the major reasons he gave for possibly running is the math of Medicare-for-All. He views Medicare-for-All as an economic disaster for the USA along with other wild spending schemes now contemplated by Maxine Waters like trillions for reparations for blacks and native Americans, free college education for all, massive spending on subsidized housing, zero-carbon regulations, open borders, etc. etc.

All these are good causes, but those politicians advocating those causes understand the math the least.

A Federal Shutdown Is an Annoyance (that can be solved) — Interest on $22 Trillion in Debt Is a Problem (that cannot be solved) ---
https://www.cato.org/publications/commentary/federal-shutdown-annoyance-interest-22-trillion-debt-problem

The U.S. Treasury is set to borrow $1 trillion for a second year to finance the government's unprecedented budget deficit ---
https://www.bloomberg.com/news/articles/2019-01-28/another-year-another-1-trillion-in-new-debt-for-u-s-to-raise?cmpid=BBD012819_BIZ&utm_medium=email&utm_source=newsletter&utm_term=190128&utm_campaign=bloombergdaily

FiveThirtyEight Blog:  The Young Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system — and the Democratic Party ---
https://fivethirtyeight.com/features/the-young-lefts-anti-capitalist-manifesto/

In my opinion, Schultz does not want to run for President. He just wants to scare the Democratic Party to come to its senses on the math.

I think he Shultz will threaten to run until the Democratic platform becomes more math sensible.


Hemel: Elizabeth Warren’s Wealth Tax On The Super-Rich Is The Wrong Solution To The Right Problem ---
https://taxprof.typepad.com/taxprof_blog/2019/02/hemel-elizabeth-warrens-wealth-tax-on-the-super-rich-is-the-wrong-solution-to-the-right-problem.html#more

Gov. Cuomo’s right: The rich are leaving high-tax New York
https://www.statedatalab.org/news/detail/gov-cuomos-right-the-rich-are-leaving-high-tax-new-york
Watch them move out of the USA is President Elizabeth Warren's Wealth Tax is Enacted

Jensen Comment
What nobody seems to want to talk about is how a weath tax on the super rich forces them to liquidate investments annually to pay the tax, and that liquidation at that magnitude could be a disaster for the muni (tax exempt) market that funds USA schools and government buildings, the real estate market, and the stock and bond market.

Academic Look at Wealth Taxation ---
Wealth Taxes: A Future Battleground ---
https://www.nytimes.com/2013/07/21/business/wealth-taxes-a-future-battleground.html
The bottom line:  Serious wealth taxes beyond what we already have are mostly for short-term political gain and long-term disaster

Historically, economists — including me — have generally favored taxes on consumption, on the grounds that they would do the least damage to long-term savings, investment and economic growth. Yet in some eyes, rising wealth will become a tempting target for short-term political gain. And note that while most Republicans currently oppose consumption taxes, they may dislike the relevant alternative, namely wealth taxes, even more.

Even if wildly successful Senator Warren's wealth tax would only pay $2.75 trillion of the $30+ trillion cost ten-year cost of Medicare-for-All
Elizabeth Warren's proposed wealth tax would raise $2.75 trillion over a ten-year period from about 75,000 families, or less than 0.1 percent of U.S. households ---
https://www.cnbc.com/2019/01/24/elizabeth-warren-to-propose-new-wealth-tax-economic-advisor.html
Jensen Comment
This could have all sorts of economic consequences. One is that most of those 75,000 wealthy USA families have their wealth tied up in long-term investments like real estate (think of Trump hotels, Ted Turner's ranches in Australia, Amazon's many shares owned by Jeff Bezos), etc.  Warren's Wealth tax could force liquidation of these long-term investments to pay the $2.75 trillion wealth tax. If you want your top millionaires and billionaires to move out of the USA this is a sure-fire way to wave bye bye to them and the $2.75 trillion that becomes uncollectable.
Wealthy taxpayers are probably not worried with a conservative Supreme Court.  Arguably her proposal requires an amendment to the USA Constitution because her wealth tax proposal is extremely disproportional.---
https://en.wikipedia.org/wiki/Wealth_tax#United_States
You can read more about wealth taxes at
https://en.wikipedia.org/wiki/Thomas_Piketty
Why did liberal Sweden axe its wealth tax while at the same time lowering its top income tax rate from 87% (1979) to 65% (1990) to 56% (2002)? ? ---
http://ftp.iza.org/dp11475.pdf
Elizabeth Warren would probably prefer that you do not study experiences of all disastrous Scandinavian wealth taxes and very high marginal income tax rates that were later greatly reduced to stimulate the economy (called supply side (Laffer Curve) economics) ---
http://www.econlib.org/library/Enc/MarginalTaxRates.html

PS
Those 75,000 wealthy taxpayers now invest in hundreds of billions in tax-exempt bonds (called municipal bonds) that underlie the building of most schools and municipal buildings in the USA. The muni bond market would nosedive if most of those 75,000 people sold their tax-exempt bonds and moved these hundreds of billions in investments off shore on their way out of the USA. That's not a cost that the naive Elizabeth Warren factored into her proposed wealth. What's the incentive for a billionaire who moved to Switzerland to continue to invest hundreds of millions of dollars in the USA muni market?

I suspect that Elizabeth Warren knows that her wealth tax would be an economic disaster. I think she's just trying to get votes from financially-ignorant voters. It's all politics and no sense other than she's trying to fend off the radical anti-capitalist "young" left wing of the Democratic Party.

CNN:  "The capitalist socialist populist manifesto of Democrats in 2020" ---
https://www.cnn.com/2019/02/03/politics/democrats-everywhere-economics/index.html
FiveThiryEight Blog:  The Young Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system — and the Democratic Party ---
https://fivethirtyeight.com/features/the-young-lefts-anti-capitalist-manifesto/

Jensen Comment
Leftist billionaires Mike Bloomberg and Howard Schultz are seriously thinking of running. But are opposed to the wealth tax and might spend their billions fighting it --- thereby loosing much more than ever envisioned in the wealth tax itself.
Republican billionaire Donald Trump also opposes the wealth tax. But he'll leave the USA to protect his billions. He already has a number of places to stay if he leaves the USA.


 

Embattled Virginia Gov. Ralph Northam Signs Bill Authorizing $750 Million in Cash Subsidies to Amazon ---
http://reason.com/blog/2019/02/06/embattled-blackface-wearing-virginia-gov


Big box stores (think Home Depot or Walmart) lower their property taxes through a surreal trick called “dark store theory.” States are finally fighting back ---

https://slate.com/business/2019/02/dark-store-theory-big-box-stores-property-taxes.html
Jensen Comment
There are interesting problems with taxing big box stores in this era of online competition Certainly a case can be made for taxing them for services they receive such as police and fire protection, and if you stretch it they even benefit from schools to the extent they hire local graduates. However, think a bit about the debate issue for you college students when the local Walmart competes with a local catalog store (Sears if there are any such stores left) versus Amazon. Perhaps the online stores pay some property taxes where they have warehouses and offices, but they perhaps made tremendous deals for property tax relief before they elected to build a warehouse.

For debate purposes suppose that a Brand X lawn tractor available from a Home Depot in Concord, NH can also be purchased online from Amazon. The tractors are identical. The Home Depot store in Concord pays local property taxes. Assume that due to a deal made in on its Ohio warehouse that Amazon pays no property taxes for storing and selling its lawn tractor. It would seem that Home Depot is eating a loss for the property taxes paid that are not paid by Amazon. If the price is identical under either option with no shipping costs added to John Smith's invoice then it begins to look like Amazon has an unfair tax advantage. We might argue that Amazon does not need Concord police and fire protection and is not hiring any local high school graduates. We might also that Concord is getting more benefits from Home Depot than Amazon due to the extent that employees of Home Depot live in Concord.

I don't have an answer to the above taxing debate issue, but debating this issue may help students understand the complications of tax equity.


Population Growth:  Denmark versus Guatemala ---
https://www.amazon.com/Whiteshift-Populism-Immigration-Future-Majorities/dp/1468316974/ref=sr_1_1?ie=UTF8&qid=1548565309&sr=8-1&keywords=eric+kaufmann/marginalrevol-20

Vegard Skirbekk shows that many of those who were part of Europe’s population explosion died before reaching childbearing age, which is not true in the developing world. This means the European boom had a smaller impact on global population. Take one of Skirbekk’s comparisons, Denmark and Guatemala. In 1775, prior to the onset of its transition, Denmark had a population of 1 million and a population density of about twenty people per square kilometre. In Guatemala in 1900, these numbers were about the same. Because Denmark’s population boomed earlier, just two to three children per woman survived to adulthood during its transition. By the time Denmark’s total fertility rate fell below 2.1 in the 1950s, its population had expanded to 5 million. By contrast, Guatemala’s transition only began in 1900. By the 1990s, the average Guatemalan woman was giving birth to five children who survived to childbearing age. Today there are 15.5 million Guatemalans. When Guatemala’s transition is complete, it is projected to have a population of about 24 million. Its transition will have produced a population expansion five times that of Denmark. Multiplied across many countries, this explains why the West’s share of world population dropped so rapidly after 1950.


Stockton, California --- https://en.wikipedia.org/wiki/Stockton,_California

Stockton ranked among top fiscally healthy cities ---
https://www.statedatalab.org/news/detail/stockton-ranked-among-top-fiscally-healthy-cities

Jensen Comment
This is especially good news since Stockton was a troubled city a few years back sharing the same public pension woes as other California towns and cities.

For a long time Stockton had, and still has, a reputation as being a dangerous place to live in terms of crime. The reputation got worse a few years back when Stockton eliminated a serious number of police officers for budgetary reasons.

It's nice to see that Stockton is on the rebound fiscally. I suspect more police have been hired with the improved finances of the city.

Stockton made history by commencing a basic income experiment, albeit a very limited, experiment to assist selected unemployed people get on their feet with an added $500 per month on top of other safety nets ---
https://money.cnn.com/2018/07/09/technology/stockton-california-basic-income-experiment/index.html


Uranus --- https://en.wikipedia.org/wiki/Uranus

Why Donald Trump is so Adamant About Building a Wall
It has to do with his ingenious theory of why Uranus is the only planet in our solar system that turned to its side (which is true) ---
https://phys.org/news/2019-01-uranus-side-weve.html
Or as astronomers with cautious pronunciation say at cocktail parties:  "Uranus went bottoms up!"

Trump Theory of Planetary Tilt
His theory actually resulted from a nightmare he had just before setting out on the 2016 campaign for the USA presidency.

 

Astronomers are not sure just when Uranus tipped to its side, but Trump's theory is that at some point the entire population (around 2 billion)  of the southern Western Hemisphere of Uranus commenced migrating to the north in search of economic safety nets (free medical, free education, free housing, free transportation, free sex, free drugs, food stamps, etc. etc. etc.)
At some point the shift in weight in the Western Hemisphere forced Uranus to tip on its side.
What might've prevented this disaster is an enormous wall between north and south that would've kept the population weights balanced between the Eastern and Western Hemispheres of Uranus.
It then became Donald Trump's main mission in life to keep the Earth from tipping

So now when the Earth similarly tips to its side, we should blame Nancy Pelosi for making people on earth walk on all fours and clutch to anything that might prevent them from falling into space (known on Uranus as becoming spaced out).

Instead of a wall in the Western Hemisphere on Earth, Europe could have opened its borders to Africa to counterbalance the hemispheres.  Then the Earth would have only sunk a bit lower and changed its orbit. But 2018 Europe closed its borders to illegal immigration which one day will make the dwindling population of earth sorry that a wall was not built across the Western Hemisphere --- separating south from north.

History will prove former President Donald Trump was correct about Mexico one day funding an impenetrable wall --- to keep out over 2 billion starving green immigrants seeking to enter Mexico from the north.

The Atlantic:  The Swiftly Closing Borders of Europe ---
https://www.theatlantic.com/international/archive/2018/12/europe-france-italy-immigration-border/578179/

Italian Minister tells NGO Italy doesn’t want migrants: “Our ports are closed!” ---
https://voiceofeurope.com/2018/12/italian-minister-tells-ngo-italy-doesnt-want-migrants-our-ports-are-closed/#.XB6WCZMs_Xo.twitter

The enemy is fear
We think it's hate
But, it's fear

Gandhi


This Is CNN: Network Labeled Democratic VA Governor Embroiled In Racist Yearbook Fiasco Was A Republican
Click Here
Sometimes networks do blatantly lie without apology
Most other networks cherry pick by not mentioning party affiliation

Cherry Picking --- https://en.wikipedia.org/wiki/Cherry_picking
Cherry Picking is More of a Problem than Lying in Major News Outlets That are Notoriously Biased
It's like the kid that never tells fibs but selectively chooses what truthful news is shared with parents.

Gallup:  These are the most and least biased news outlets in the US, according to Americans ---
https://www.businessinsider.com/most-biased-news-outlets-in-america-cnn-fox-nytimes-2018-8

Most Biased
-51 Fox News
-51 Breitbart News
-37 MSNBC
-32 HuffPost
-27 CNN
-22 Mother Jones
-12 Vox
-11 The New York Times
-07 NBC News
-07 The Washington Post

+04 ABC News
+05 CBS News
+05 USA Today
+10 The Wall Street Journal
+12 NPR
+23 AP
+31 PBS
Least Biased

Jensen Comment
Individual shows within a network may be biased. For example, PBS News in my opinion is as much or more biased than NBC News. However, under it's mission PBS balances liberal shows with conservative shows. NBC balances the exceedingly liberal MSNBC cherry pickers with CNBC conservative cherry pickers.

The New York Times has a reputation for verification of news that's reported, but I view it as being very prone to cherry picking what's reported relative to the news section of the WSJ. However, the Editorial Pages of the WSJ and NYT are both highly biased and prone to excesses in cherry picking.

There's a saying attributed to Bob Bartley that the WSJ is two newspapers folded into one.

The most notorious cherry pickers are the so-called "Fact Checkers" like Snopes and Politico. They only find facts news items that they've cherry picked with heavy bias to fact find.


Time Magazine:  India's Main Opposition Party Is Promising a Basic Income for the Poor. Can It Work? ---
Click Here

. . .

A caveat to his excitement is that Gandhi’s proposal (of which details are scarce) is not likely to be the kind of pure “universal” basic income that Standing advocates, in which money is given to every single person in an economy, no matter how poor or rich. In Gandhi’s speech on Monday, he promised a basic income to “every poor person,” suggesting that some form of means-testing would be included. “Now, our job is to persuade them to make it more universal,” Standing says. “You’re going to spend far more identifying the rich than by just giving it to everybody and taxing it back from the wealthy in some way.”

For Ashwini Deshpande, a leading Indian economist based at Ashoka University, questions remain about where the money will come from to fund such a program. She says current welfare schemes amount to between 5 and 10% of India’s GDP, and that a basic income would cost a similar amount, according to current estimates.

Continued in article

Jensen Comment
There are intentionally few details in this basic income proposal. It may be a little like Medicare-for-All in the USA which has a lot of voter support until people are told how much they will be taxed to fund it.

Kaiser Family Foundation:  People love Medicare-for-All until they're told how much it will raise their taxes to  fund the $30+ trillion cost:  Then support nosedives  ---
https://www.businessinsider.com/ap-poll-support-for-medicare-for-all-fluctuates-with-details-2019-1
Jensen Comment
Virtually all nations with national health plans raise the funds needed with taxation at all levels of income. Most basic income experiments like that in Finland and Canada have failed to tate.



US News and World Report:  How to Fix Chicago ---
https://www.usnews.com/news/cities/articles/2018-12-13/to-understand-chicagos-problems-look-to-the-mayors-office?fbclid=IwAR1GvtAs3KSiFm14MNQnyUMiH1G-x4xXmldqDHaEp6oysDKlUR89ptS1XnI
Jensen Comment
Personally, I think that it might be easier to fix Venezuela.


China's Attitude to the International Legal Order in the Xi Era: The Case of South China Sea Arbitration

Sydney Law School Research Paper No. 19/04

SSRN
22 Pages
Posted: 6 Feb 2019
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3329614

Bing Ling

Sydney Law School

Date Written: February 5, 2019

Abstract

The paper reviews China's attitude to the international legal order under the Xi Jinping administration through the prism of her engagement with the international law and process regarding the maritime disputes in the South China Sea. Whilst accounting for China's widely-maligned position over the South China Sea Arbitration, the paper suggests that whilst China increasingly integrates the use of international law in the implementation of its foreign policy, China’s engagement with international rule of law remains deeply ambivalent and problematic.

Keywords: China; South China Sea, UNCLOS, law of the sea, non-appearance

JEL Classification: K10, K30, K33


How to Mislead With Statistics ---
A simple technology could secure the border for a fraction of the cost of a wall — but no one's talking about it

https://www.businessinsider.com/fiber-optic-sensing-technology-vs-border-wall-2019-2

Jensen Comment
The problem with buried fiber optic cables is that they really don't prevent intruders from getting across the border. There was a recent enmass race amidst tear gas canisters by caravan marchers for the border in San Diego. They knew they would almost certainly get caught, but they were relying on the liberal Ninth Circuit Court to eventually let them stay in the USA while, in the meantime, the USA government by law is required to them shelter, food, medical care, and safety. Or as is sometimes the case the Border Patrol simply turns them loose in the USA. Of course is was still a gamble that both detained intruders and released intruders will eventually be deported. But over 11 million known intruders are living in the USA.

Many of these racing marchers were instead turned back by fencing and tear gas.

Hence all the favorable statistics for catching intruders once they have crossed the border misses the point. Once across the border they get to stay for weeks and months and maybe years and maybe forever. If stopped by a fence or wall they are still in the Mexico ---  which is where they don't want to stay ---
https://www.breitbart.com/border/2019/02/05/video-caravan-migrants-make-a-dash-for-unfenced-texas-border/


How to Mislead With Statistics
Billionaires  (like progressives  Howard Schultz and Mike Bloomberg) who hate Alexandria Ocasio-Cortez's 70% tax on the superrich are adamant it will hurt the USA economy — but history suggests otherwise (Yeah right) ---
https://www.businessinsider.com/alexandria-ocasio-cortez-70-percent-marginal-tax-fix-impact-on-economy-2019-2
 

Jensen Comment
What billionaires ever paid the highest marginal rates when they were 70%-90% back in the 1960s?
When the rates were this high the Income Tax Code was so riddled with loopholes for high income folks that none of them ever paid 70%-90% tax rates.

When Top Rates Were So High:  Do you really think Bing Crosby and Bob Hope paid 90 percent of their income to the taxman?
https://www.bloomberg.com/opinion/articles/2019-01-29/hollywood-stars-didn-t-pay-90-percent-tax-they-created-loopholes

Sweden unlike the USA did not have so many loopholes, but Sweden learned from its mistakes and lowered the marginal rates.

Why did liberal Sweden axe its wealth tax while at the same time lowering its top income tax rate from 87% (1979) to 65% (1990) to 56% (2002)?  ---
http://ftp.iza.org/dp11475.pdf
Elizabeth Warren would probably prefer that you do not study experiences of all disastrous Scandinavian wealth taxes and very high marginal income tax rates that were later greatly reduced to stimulate the economy (called supply side (Laffer Curve) economics) ---
http://www.econlib.org/library/Enc/MarginalTaxRates.html


Academic Research Anti-Capitalists Would like to Hide:  Why Developed Nations Abandoned Billionaire Wealth Tax Experiments

The Young Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system — and the Democratic Party ---
https://fivethirtyeight.com/features/the-young-lefts-anti-capitalist-manifesto/

Alexandria Ocasio-Cortez: A system that allows billionaires to exist alongside extreme poverty is immoral ---
https://www.cnbc.com/2019/01/22/alexandria-ocasio-cortez-a-system-that-allows-billionaires-to-exist-is-immoral.html
Jensen Comment
She's all heart with little understanding of economics

Alexandria Ocasio-Cortez, Bernie Sanders, and Elizabeth Warren's 'soak the rich' tax plans are supported by an increasing number of Americans ---
https://www.businessinsider.com/alexandria-ocasio-cortez-bernie-sanders-warren-tax-plans-popular-polls-2019-2

 

The Washington Post:  Billionaires can be good for democracy ---
https://www.washingtonpost.com/opinions/its-open-season-on-the-wealthy-but-billionaires-can-be-good-for-democracy/2019/02/03/fa9bb60e-2643-11e9-ad53-824486280311_story.html?utm_term=.e0597184f6a3

 

The Role and Design of Net Wealth Taxes in the OECD:  Why Countries Have Moved Away From Wealth Taxes ---
http://www.oecd.org/ctp/the-role-and-design-of-net-wealth-taxes-in-the-oecd-9789264290303-en.htm

This report examines and assesses the current and historical use of net wealth taxes, defined as recurrent taxes on individual net assets, in OECD countries. It provides background on the use of wealth taxes over time in OECD countries as well as on trends in income and wealth inequality. It then assesses the case for and against the use of a net wealth tax to raise revenues and reduce inequality, based on efficiency, equity and tax administration considerations. The effects of personal capital income taxes and taxes on wealth transfers are also discussed to understand how these taxes interact with net wealth taxes. Finally, the report looks at practical tax design issues and shows that the way a net wealth tax is designed can have a significant impact on the effectiveness and fairness of the tax. The report concludes with a number of practical tax policy recommendations regarding net wealth taxes.

Continued in article

Also See
Why Have Other Countries Been Dropping Their Wealth Taxes?
http://conversableeconomist.blogspot.com/2019/02/why-have-other-countries-been-dropping.html

. . .

Why do wealth taxes imposed on what seem to be quite low levels of wealth collect so little revenue in various European countries, especially during the last few decades when high-wealth individuals as a group have done pretty well? The answer seems to be that when countries impose a wealth tax, they often typically create a lot of exemptions for certain kind of wealth that aren't covered by the tax. Each of these exemptions has a reasonable-sounding basis.  But every exception also creates a potential loophole.

 


For example, a number of common exemptions are based on "liquidity" problems, which in this context refers to the idea that we don't want people to have to sell their homes to pay the wealth tax, and we don't want family businesses or farms that are maybe hitting a tough patch to have to be sold off because of the wealth tax. Thus, many European countries exempt a primary residence from the wealth tax (and instead apply a property tax).

Countries also often exempt the value of a business in which you are actively working, which of course means a potentially voluminous set of rules for what "actually working" means. As the OECD notes: "For the business asset exemption to apply, rules typically require that real economic activities are being performed (possibly excluding activities such as the management of movable or fixed assets, e.g. Spain), that the taxpayer performs a managing role, that income derived from the activity is the main source of the taxpayer’s revenue and/or that the taxpayer owns a minimum percentage of shares in the company (e.g. 25% in France and Sweden; 5% in Spain)."

Another common exemption is that wealth tax is usually not applied to the value of pensions and retirement savings. One can sympathize with this, but also recognize that it leads to potential issues. As the OECD notes: "Pension assets typically get full relief under net wealth taxes. ... However, this creates inequities between different taxpayers, raises fairness concerns, and creates tax planning opportunities. .... "

 

What other incentives does a wealth tax create? Here are some examples that often are not included int he discussion:

1) While we often think of a wealth tax as being applied to those who have already "made it" and accumulated a fortune, it's worth remembering that when a small- or medium-sized business is trying to get established, or going through hard times, it may lead to a situation where the overall value of the asset is substantial, but profits may be near-zero or even negative for a time. But at least in theory, a wealth tax would still be owed. As the OECD report notes:  

"Under a net wealth tax, however, if income is zero or negative, the tax liability will still be positive if the capital value of the assets remains positive. In practice, new entrepreneurs which tend to generate low, or even negative, profits in their first few years of operation would still face a wealth tax liability. Thus, a heavy net wealth tax which is unlinked to income might discourage entrepreneurship relative to an income tax with (perfect) loss offset."

2) A wealth tax will tend to encourage borrowing. Total wealth is equal to the value of assets minus the value of debts. Thus, one way to avoid a wealth tax is to borrow a lot of money, in ways that may or may not be socially beneficial. The OECD writes: "[D]ebt deductibility provides incentives to borrow and can encourage tax avoidance. If the wealth tax base is narrow, taxpayers will have an incentive to avoid the tax by borrowing and investing in exempt assets or – if debt is only deductible when incurred to acquire taxable assets – taxpayers will have an incentive to invest part of their savings in tax-exempt assets and finance their savings in taxable assets through debt." 

 

3) To get a fair picture of a wealth tax, one needs to look at it in the context of all the other taxes that exist, along with different situations that arise. It's quite possible for there to be situations where when the wealth tax is added, someone who saves more will actually reduce their wealth. The OECD notes: "In France and Spain, METRs [marginal effective tax rates] reached values above 100%, which means that the entire real return is taxed away and that by saving people actually reduce the real value of their wealth." Indeed, France recently decided to apply its wealth tax just to certain kinds of property wealth, not financial wealth, for this reason.  Indeed, many wealth taxes have provisions that if the combined tax burden gets too high, then the wealth tax gets scaled back. Again from the OECD : 

"Ceiling provisions or tax caps are common features of net wealth taxes. These often consist in setting a limit to the combined total of net wealth tax and personal income tax liability as a maximum share of income. They are used to prevent unreasonably high tax burdens and liquidity constraints requiring assets to be sold to pay the net wealth tax. In France, the wealth tax ceiling (often referred to as the “bouclier fiscal”) limits total French and foreign taxes to 75% of taxpayers’ total income. If the percentage is exceeded, the surplus is deducted from the wealth tax. In Spain, the aggregate burden of income tax and net wealth tax due by a resident taxpayer may not exceed 60% of their total taxable income."

4) A wealth tax is typically at a fairly low rate, like 1-2%, in recognition of the fact that it will be imposed every year. But if a wealthy person is investing in a way that has low risk and low returns, this wealth tax could completely swallow up low return,  while having no effect on higher returns. In general, setting up a situation where people receive no gain from saving is not usually regarded as a good set of incentives. The OECD writes:

"[A] tax on the stock of wealth is equivalent to taxing a presumptive return but exempting returns above that presumptive return. Where the presumptive return is set at the level of or at a level close to the normal - or risk-free – return to savings, a wealth tax is economically equivalent to a tax on the normal return to savings, which is considered to be inefficient. Indeed, the taxation of normal returns is likely to distort the timing of consumption and ultimately the decision to save, as the normal return is what compensates for delays in consumption. As discussed below, it is also unfair that the wealth tax liability does not vary with returns, which implies that the effective wealth tax burden decreases when returns increase."

On the other side, it is sometimes argued that a wealth tax will encourage the wealthy to make more productive use of their wealth:

"For instance, if a household owns land which is not being used and therefore does not generate income, no income tax will  be payable on it. However, if a wealth tax is levied, the household will have an incentive to make a more productive use of their land or to sell it to someone who will ... The argument here is that wealth taxes do not discourage investment per se but discourage investments in low-yielding assets and reinforce the incentives to invest in higher-yielding assets because there is an additional cost to holding assets, which is not linked to the return they generate."

5) A wealth tax will encourage the spawning of ownership structures where people control assets, but do not technically "own" them. A common example is when assets are owned in a trust, or some kind of nonprofit. The possibilities for controlling and benefiting from wealth without technically "owning" it are even great for assets that can be held in other countries across the international economy. If there is a heaven for tax lawyers, it's a place where they get to sit around and invent legal arrangements for shielding wealth. 

 

6) The OECD notes: "Human capital is always exempt under net wealth taxes. This results from a number of considerations, including the fact that human capital is very difficult to value, that it is not

directly transferrable or convertible into cash, and that there is uncertainty about the
durability of its value. Therefore, a wealth tax lowers the net return on real and financial assets relative to the returns on investments in human capital. Thus, wealth taxes encourage investment in human capital, which may in turn have positive effects on growth. Human capital is a critical driver of long-run economic growth. This implies that a wealth tax may be less harmful to economic growth than commonly believed as it can encourage a substitution from physical to human capital formation ... "

 

7) A wealth tax may not seem especially fair if applied across people who started in similar circumstances. As one example, imagine two adults who split a large inheritance. One heir spends the money. The other heir tries to invest, with some success, in creating new technology and businesses and jobs. The spender depletes the inheritance and thus avoids the wealth tax. More broadly, consider wealth from a variety of sources: inherited financial wealth, inheriting a family business, inheriting a family-owned piece of property, starting and running a business, investing in businesses run by others, investing in property that increases in value over time, wealth from having a patent on an invention, wealth from producing a book or music or movie with high sales. A wealth tax treats all of these the same. 

 

 

8) The practicalities of imposing a wealth tax can be nontrivial. It means updating the value of assets and debts every year. If the assets are something that is bought and sold in financial markets, like shares of stock, then updating the value is easy. But updating the value of an expensive house or piece of property on an annual basis isn't easy. Updating the value of art or jewelry owned by a wealthy person isn't easy. Updating the value of a privately owned business isn't easy. Updating the current value of assets held in other countries can be hard, too In general, it's a lot easier to track flows of income than it is to measure changes in asset values.  


To me, many of the endorsements of a wealth tax feels more like expressions of righteous exasperation than like serious and considered policy proposals. Many of those who favor a wealth tax tend to favor a more European-style capitalism (and n
o, I don't think of any country in western Europe as "socialist") that places a higher value on economic equality. But when those who favor your goal of greater economic equality have been steadily deciding that the wealth tax isn't worth the trouble, and that other policy tools are more effective in reaching the goal, it's probably useful to pay attention. 


Why did liberal Sweden axe its wealth tax while at the same time lowering its top income tax rate from 87% (1979) to 65% (1990) to 56% (2002)?  ---
http://ftp.iza.org/dp11475.pdf
Elizabeth Warren would probably prefer that you do not study experiences of all disastrous Scandinavian wealth taxes and very high marginal income tax rates that were later greatly reduced to stimulate the economy (called supply side (Laffer Curve) economics) ---
http://www.econlib.org/library/Enc/MarginalTaxRates.html

Taxing Top Earners: A Human Capital Perspective ---
http://faculty.georgetown.edu/mh5/research/top-earners.pdf

Abstract
An established view is that the revenue maximizing top tax rate for the US is approximately 73 percent.
The revenue maximizing top tax rate is approximately 49 percent in a quantitative human capital model. The key reason for the lower top tax rate is the presence of two new forces not captured by the model underlying the established view. These new forces are strengthened by the endogenous response of top earners’ human capital to a change in the top tax rate.

 

The Young Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system — and the Democratic Party ---
https://fivethirtyeight.com/features/the-young-lefts-anti-capitalist-manifesto/


Alexandria the Economist:  She Wants to Pay for Her New Green Deal by Printing Money ---
https://www.npr.org/2019/02/07/692259103/ocasio-cortez-to-unveil-ambitious-plan-to-combat-climate-change
Sorry Alexandria, Germany after World War I thought of that first, followed by Zambia and Venezuela

Former Starbucks exec Howard Schultz rebukes Rep. Alexandria Ocasio-Cortez's 2 signature policies ---
https://www.businessinsider.com/alexandria-ocasio-cortez-policies-howard-schultz-starbucks-reacts-2019-2

The environmental parts of the plan would be costly, but manageable. The same can’t be said of its social programs ---
https://www.bloomberg.com/opinion/articles/2019-02-08/alexandria-ocasio-cortez-s-green-new-deal-is-unaffordable
This article is vague about what is an "environmental part." Does this include or exclude replacement of all vehicles (think tanks) and aircraft (think bombers and helicopters) in the entire USA military? Does this include elimination of all carbon-based chemicals in agriculture?

How to Mislead With Statistics
How Much Will the Green New Deal Cost? ---
http://reason.com/blog/2019/02/07/green-new-deal-democratic-socialism-by-o
Jensen Comment
This mostly what it will cost (without factoring Alexandria's super inflation) to generate electric power without carbon. What it fails to factor in are such bigger cost items as replacing all airline travel (unless airliners can fly with batteries), eliminating all gasoline-powered vehicles, finding ways to farm without chemicals used in agribusiness (including possible great loss in crop yields), replacement of all plastics, replacing all heating and cooling equipment that depends upon oil and gas (think gas furnaces), replacement of many synthetic fabrics, and on and on.

Just think of the cost of retrofitting all the USA military with new aircraft, tanks, trucks, ships, etc.

All told these secondary costs will be much more costly than building of windmills and solar panels.

Of course new technologies could change a lot of the costs over ensuing decades.

History will prove former President Donald Trump was correct about Mexico one day funding an impenetrable wall --- to keep out over 2 billion starving green immigrants from the north.

 


How to Mislead With Statistics
Where Did Your Alma Mater Rank In This List of the Top 50 Accounting Schools in 2019?
https://goingconcern.com/top-50-accounting-school-rankings-2019/

Jensen Comment
Don't admission standards and faculty research count for anything?
Were these the dream schools among the 200+ accounting Ph.D. graduates in 2018?
Were these the dream schools among CPA firms seeking to hire accounting masters students in 2018?
What about CPA Exam passage rates?

This ranking is so absurd I will forego further comments.
This must be an early April Fools joke.




Bob Jensen's threads on health care ---
http://faculty.trinity.edu/rjensen/Health.htm

NYT:  Choosing the Right Health Savings Account ---
https://www.nytimes.com/2018/12/07/your-money/health-savings-account-hsa.html

NYT:  Fixing Medicare
https://www.nytimes.com/2011/11/21/opinion/fixing-medicare.html


Top Pelosi Aide Tells Insurance Industry Medicare for All Would Be Costly, Politically Perilous, and Difficult To Implement ---
http://reason.com/blog/2019/02/06/pelosi-medicare-for-all-single-payer


Rand Study of Medicare-for-All --- A Look at the Fine Print  ---
https://www.rand.org/blog/2018/10/misconceptions-about-medicare-for-all.html

Misconception 1:  Health care would be free

Care would not be free in a single-payer system—it would be paid for differently. Instead of paying insurance premiums, people would pay taxes, which would be collected by a government agency and used to pay for health care on behalf of the population. Some in higher tax brackets might pay more under a single-payer system than under the current system, while others might pay less.

Many single-payer proposals, including Sen. Bernie Sanders' “Medicare for All” proposal, cover a comprehensive range of services with no or very low co-pays and deductibles. While common in many proposals (PDF), a single-payer system would not necessarily eliminate all out-of-pocket expenses. In fact, the current Medicare program, which some consider a form of single payer, has deductibles and co-pays.

Misconception 2:  Health care spending would dramatically increase (or decrease).

A single-payer system could push health spending up or down, or not have much effect. Spending could increase if a national single-payer system expanded coverage to more people, leading to higher use of health services. If the single-payer plan cuts deductibles and co-pays, currently insured people would also use more services. But a single-payer system might also reduce or eliminate administrative expenses, such as insurer marketing, billing and claims processing, which would push spending down. A single-payer plan could also cut spending by negotiating lower prices with providers and drug companies.

Two recent studies estimated that in a single-payer system, total spending could decline by a few percentage points.

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Two recent studies, a national-level analysis by the Mercatus Center and RAND's analysis of a single-payer proposal for New York state, estimated that total spending could decline by a few percentage points. Regardless of whether total spending goes up or down, federal spending would almost surely increase, because the government would be responsible for paying the bills.

Misconception 3:  People with employer insurance would have fewer benefits covered.

If the United States adopted a single-payer plan, employer-sponsored insurance would become less relevant because people would have an alternative source of coverage. As a result, many employers would drop health insurance coverage (PDF).

However, workers would not lose access to insurance—they would have coverage through the single-payer plan. Many single-payer plans, including Sanders' “Medicare for All” proposal, cover more than most current employer insurance plans, which have an average deductible of $1,573 for single coverage.

Some single-payer proposals explicitly prohibit employers and private insurers from offering health insurance coverage, to avoid a two-tiered system in which wealthier people have access to more services and providers. Other proposals would allow private insurance to offer coverage for services not included in the single-payer plan (such as elective surgeries), or to provide faster or improved services for those who wish to supplement their benefits.

For example, in Australia (and Germany), all residents are eligible for basic health services provided through a single payer, but those with higher income are encouraged to buy additional, private coverage that provides access to private providers and hospitals.

Misconception 4:  Doctors would become government employees.

None of the leading Medicare for All proposals require that doctors and other health care professionals become government employees, as is the case in the United Kingdom's National Health Service. Under Sanders' Medicare for All proposal, private practices and hospitals would continue to operate independently. Other single-payer proposals require hospitals to convert to nonprofit status (PDF), but could remain privately run.

Misconception 4:  People would lose access to their doctors.

Enrollees generally would be able to choose among providers participating in the program, and—if all providers participated—there would be no need to worry about out-of-network charges. However, changes in payment rates under a single-payer system could affect doctors' willingness to supply services, and could make it more difficult to get appointments.

We see this effect in our current system—in 2015, only 45 percent of primary care physicians accepted Medicaid patients, due in part to Medicaid's relatively low payment rates. In contrast, 72 percent of primary care physicians accepted new Medicare patients and 80 percent accepted new commercial patients.

Even if overall provider payment levels were reduced, payments to each individual provider would depend on their existing mix of patients. Payment might go up for some providers, such as those who see Medicaid patients, and could be about the same for those who see Medicare patients.


Jodi L. Liu is an associate policy researcher at the nonprofit, nonpartisan RAND Corporation. Christine Eibner is the Paul O'Neill-Alcoa chair in policy analysis at RAND and a professor at the Pardee RAND Graduate School.

This commentary originally appeared on USA Today on October 26, 2018. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.

 

Jensen Comment
Many (most?) people in the USA are not aware that current Medicare and Medicaid government insurance claims are processed in the private sector rather than by government agencies. This is important, since there will be an enormous cost for a new government bureaucracy in the USA to be formed to process medical insurance claims if the government does not outsource Medicare-for-All claims processing. I don't think researchers to date have confronted the issue of the huge startup cost of having the government process Medicare-for-All claims.

There also is the issue of the many places in the USA where medical care is substandard due to lack of physicians and hospitals and other providers. Everybody keeps saying the government will not have to build hospitals in these places and provide a sufficient number of providers to run these hospitals. Don't count on that when the lawyers start suing over unequal quality of medical care across the USA. Eventually the Federal government will have to finance new hospitals and provide health care providers in those hospitals.

Many (most?) people in the USA are not aware that they might lose their employer-provided medical insurance under Medicare-for-All insurance. Medical insurance would no longer be a fringe benefit provided by employers.

Medicare patients currently must pay 20% of their medical bills or pay for supplemental private insurance to pay part of this 20%. Costs of such supplemental insurance vary with the degree of coverage desired. For Erika and me the supplemental insurance is over $1,200 per month for our premium supplemental plans plus we have to pay over $200 per month for our Medicare Insurance itself. Even though we were taxed for Medicare since 1965 until we retired at 65 years of age, Medicare is not free in our retirement years. Most people in the USA think that Medicare coverage is free after retirement. That is a serious misconception.

 Of course there are variations of the Medicare-for-All plan. 2020 Presidential Candidate Kamela Harris proposed eliminating all private medical insurance contracts and then quickly reversed herself when learning how many of the 177 million insured people in the USA were happy with their private sector insurance companies. She then proposed that public sector insurance contracts only be made available as an option in competition with private sector plans that often give more choices in choosing doctors and hospitals.

Physicians and hospitals do not have to accept Medicare Patients, Medicaid patients, Obamacare patients, or any patients wanting to pay with insurance. Medicaid and Obamacare patients are likely to have a tougher time finding physicians and hospitals than Medicare patients due primarily to severe fee restrictions on for Medicaid and Obamacare patients. Many hospitals complain that they lose money for every Medicaid patient and Obamacare patient.

Major Chicago Hospitals Not In 2017 Obamacare Marketplace Plans ---
https://www.wbez.org/shows/wbez-news/major-chicago-hospitals-not-in-2017-obamacare-marketplace-plans/f55d6c23-d9b1-452f-8c75-73635bd83d07

Some of Chicago’s largest hospitals said they will not be part of any Cook County Affordable Care Act marketplace plans in 2017.

 

University of Chicago Medical Center and Rush University Medical Center both said they don’t plan to be in network for any Obamacare marketplace plans next year. 

 

 

The change means patients with doctors at those hospitals will either need to find a plan off the marketplace, and lose Obamacare subsides, or find a new doctor.

 

Northwestern Memorial Hospital said it will also be out of the marketplace, but will have exceptions for some of its partner hospitals.

Continued in article

Personally, I think Medicare-for-All will significantly increase what is paid for medical services in the USA. Primarily this is because there is a $2+ trillion underground economy where workers are paid unreported cash for services that are not subjected to payroll taxes or income taxes. Much of this is for part-time work (think house cleaners and unregistered day care providers) although there are many full-time workers whose services are not reported to the government. I lived in San Antonio for 24 years where there are various street corners  where employers meet with workers taken to jobs day-after-day such as roofing jobs, construction jobs, landscaping jobs, etc. Such workers save (illegally) on paying income and payroll taxes but also receive no benefits such as medical insurance, unemployment insurance, and Social Security contributions. This begs the question of why law enforcement does not move in to end this enormous illegal practice. The suspected reason is that closing it down those street corner opportunities will hurt millions of families with children across the USA who are vitally dependent upon such cash-payment jobs. Many of those workers, certainly not all, are undocumented immigrants who find it harder to find traditional jobs with benefits or expose themselves to ICE deportations.

Presumably millions of workers in the $2+ trillion underground economy who do not presently have health insurance would be covered under Medicare-for-All. Unreliable stimates of the undocumented immigrants in the USA are reported to be around 11 million, but realistic estimates run much higher than that. Certainly many undocumented workers do not depend upon the underground economy for jobs, but a huge proportion rely upon that underground economy.

What is not clear is whether physicians and hospitals could refuse Medicare-for-All patients. Health care providers are allowed pick and choose what insurance they will accept at the moment, and many refuse Medicaid and Obamacare patients. When we lived in San Antonio we had an outstanding dermatologist that did not accept any insurance plans. Patients paid their own bills and then were on their own when appealing for reimbursements from their insurance plans.

What nobody, including the Rand study above, seems to want to discuss is the wide range of cost possibilities for Medicare-for-All coverage. For example, the 800-lb gorilla lurking in the shadows is the cost of long-term-nursing care. Currently Medicare does not cover long-term nursing care claims. Medicaid does cover long-term nursing care but severely limits what will be paid for each day of care. As a result many Medicaid patients must accept pretty lousy nursing homes or pretty lousy home-care providers. Medicare-for-All costs will explode exponentially if long-term care is provided in quality nursing homes. Presently long-term nursing care insurance plans are very expensive luxuries.

One of the big worries is the magnetic attraction Medicare-for-All will have on very expensive long-term treatment patients. For example, one can imagine the many dialysis patients around the world who will seek to cross the USA borders just for free free kidney dialysis treatments for the rest of their lives. One can imagine all the people in the world who cannot get organ transplants or brain surgeries without crossing into the USA.

Howard Schultz
One interesting political event of the times is the interview with multibillionaire Howard Schultz on CBS Sixty minutes ---
https://www.cbs.com/shows/60_minutes/video/MD3ISxVkJXgLBsH4lNDrLYsRQWmCJy_X/howard-schultz-small-satellites-big-data-jerry-and-marge-selbee/

Schultz (think Starbucks) was always viewed as a liberal Democrat. But now he's scaring Democrats by threatening to use his billions to run for President as an independent. One of the major reasons he gave for possibly running is the math of Medicare-for-All. He views Medicare-for-All as an economic disaster for the USA along with other wild spending schemes now contemplated by Maxine Waters like trillions for reparations for blacks and native Americans, free college education for all, massive spending on subsidized housing, zero-carbon regulations, open borders, etc. etc.

All these are good causes, but those politicians advocating those causes understand the math the least.

A Federal Shutdown Is an Annoyance (that can be solved) — Interest on $22 Trillion in Debt Is a Problem (that cannot be solved) ---
https://www.cato.org/publications/commentary/federal-shutdown-annoyance-interest-22-trillion-debt-problem

The U.S. Treasury is set to borrow $1 trillion for a second year to finance the government's unprecedented budget deficit ---
https://www.bloomberg.com/news/articles/2019-01-28/another-year-another-1-trillion-in-new-debt-for-u-s-to-raise?cmpid=BBD012819_BIZ&utm_medium=email&utm_source=newsletter&utm_term=190128&utm_campaign=bloombergdaily

FiveThirtyEight Blog:  The Young Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system — and the Democratic Party ---
https://fivethirtyeight.com/features/the-young-lefts-anti-capitalist-manifesto/

In my opinion, Schultz does not want to run for President. He just wants to scare the Democratic Party to come to its senses on the math.

I think he Shultz will threaten to run until the Democratic platform becomes more math sensible.

The bottom line is that the USA needs some taxpayer funded medical coverage across the USA. The worry is that, like climate change proposals, that we will become committed to programs that end up being self-defeating. It's like the family that keeps borrowing and borrowing for the big house, expensive cars, luxury cruises, etc. etc. until the day comes when they find themselves in bankruptcy court.

 


Democrats’ 8 plans for universal health care. Here’s how they work ---
https://www.vox.com/2018/12/13/18103087/democrats-universal-health-care-sanders-jayapal

Obamacare funneled a significant amount of money to hospitals and insurers, while a single-payer system like the one proposed by Sen. Bernie Sanders (I-V.T.) would cut provider payments and largely put private health insurers out of business ---
http://reason.com/blog/2018/12/12/even-democrats-are-divided-over-medicare


 

Kaiser Family Foundation:  People love Medicare-for-All until they're told it'll raise their taxes to  the $30+ trillion cost:  Then support nosedives  ---
https://www.businessinsider.com/ap-poll-support-for-medicare-for-all-fluctuates-with-details-2019-1
Jensen Comment
Virtually all nations with national health plans raise the funds needed with taxation at all levels of income. Estimates of USA's cost run $30+ trillion over ten years, but a lot depends upon who is covered (severely ill or disabled immigrants crossing the border illegally for dialysis or other expensive health care), what is covered (think long-term nursing care). and capital costs (will government build hospitals and medical centers?).

Wealth Tax --- https://en.wikipedia.org/wiki/Wealth_tax

Even if wildly successful Senator Warren's wealth tax would only pay $2.75 trillion of the $30+ trillion cost ten-year cost of Medicare-for-All
Elizabeth Warren's proposed wealth tax would raise $2.75 trillion over a ten-year period from about 75,000 families, or less than 0.1 percent of U.S. households ---
https://www.cnbc.com/2019/01/24/elizabeth-warren-to-propose-new-wealth-tax-economic-advisor.html
Jensen Comment
This could have all sorts of economic consequences. One is that most of those 75,000 wealthy USA families have their wealth tied up in long-term investments like real estate (think of Trump hotels, Ted Turner's ranches in Australia, Amazon's many shares owned by Jeff Bezos), etc.  Warren's Wealth tax could force liquidation of these long-term investments to pay the $2.75 trillion wealth tax. If you want your top millionaires and billionaires to move out of the USA this is a sure-fire way to wave bye bye to them and the $2.75 trillion that becomes uncollectable.
Wealthy taxpayers are probably not worried with a conservative Supreme Court.  Arguably her proposal requires an amendment to the USA Constitution because her wealth tax proposal is extremely disproportional.---
https://en.wikipedia.org/wiki/Wealth_tax#United_States
You can read more about wealth taxes at
https://en.wikipedia.org/wiki/Thomas_Piketty
 

PS
Those 75,000 wealthy taxpayers now invest in hundreds of billions in tax-exempt bonds (called municipal bonds) that underlie the building of most schools and municipal buildings in the USA. The muni bond market would nosedive if most of those 75,000 people sold their tax-exempt bonds and moved these hundreds of billions in investments off shore on their way out of the USA. That's not a cost that the naive Elizabeth Warren factored into her proposed wealth. What's the incentive for a billionaire who moved to Switzerland to continue to invest hundreds of millions of dollars in the USA muni market?

I suspect that Elizabeth Warren knows that her wealth tax would be an economic disaster. I think she's just trying to get votes from financially-ignorant voters. It's all politics and no sense other than she's trying to fend off the radical anti-capitalist "young" left wing of the Democratic Party.

 

Taxing Top Earners: A Human Capital Perspective ---
http://faculty.georgetown.edu/mh5/research/top-earners.pdf

Abstract
An established view is that the revenue maximizing top tax rate for the US is approximately 73 percent.
The revenue maximizing top tax rate is approximately 49 percent in a quantitative human capital model. The key reason for the lower top tax rate is the presence of two new forces not captured by the model underlying the established view. These new forces are strengthened by the endogenous response of top earners’ human capital to a change in the top tax rate.



Why did liberal Sweden axe its wealth tax while at the same time lowering its top income tax rate from 87% (1979) to 65% (1990) to 56% (2002)? ? ---
http://ftp.iza.org/dp11475.pdf
Elizabeth Warren would probably prefer that you do not study experiences of all disastrous Scandinavian wealth taxes and very high marginal income tax rates that were later greatly reduced to stimulate the economy (called supply side (Laffer Curve) economics) ---
http://www.econlib.org/library/Enc/MarginalTaxRates.html

 

Alexandria Ocasio-Cortez: A system that allows billionaires to exist alongside extreme poverty is immoral ---
https://www.cnbc.com/2019/01/22/alexandria-ocasio-cortez-a-system-that-allows-billionaires-to-exist-is-immoral.html
Jensen Comment
She's all heart with little understanding of economics

The Washington Post:  Billionaires can be good for democracy ---
https://www.washingtonpost.com/opinions/its-open-season-on-the-wealthy-but-billionaires-can-be-good-for-democracy/2019/02/03/fa9bb60e-2643-11e9-ad53-824486280311_story.html?utm_term=.e0597184f6a3

The Role and Design of Net Wealth Taxes in the OECD:  Why Countries Have Moved Away From Wealth Taxes ---
http://www.oecd.org/ctp/the-role-and-design-of-net-wealth-taxes-in-the-oecd-9789264290303-en.htm

This report examines and assesses the current and historical use of net wealth taxes, defined as recurrent taxes on individual net assets, in OECD countries. It provides background on the use of wealth taxes over time in OECD countries as well as on trends in income and wealth inequality. It then assesses the case for and against the use of a net wealth tax to raise revenues and reduce inequality, based on efficiency, equity and tax administration considerations. The effects of personal capital income taxes and taxes on wealth transfers are also discussed to understand how these taxes interact with net wealth taxes. Finally, the report looks at practical tax design issues and shows that the way a net wealth tax is designed can have a significant impact on the effectiveness and fairness of the tax. The report concludes with a number of practical tax policy recommendations regarding net wealth taxes.

Continued in article

Also See
Why Have Other Countries Been Dropping Their Wealth Taxes?
http://conversableeconomist.blogspot.com/2019/02/why-have-other-countries-been-dropping.html

. . .

Why do wealth taxes imposed on what seem to be quite low levels of wealth collect so little revenue in various European countries, especially during the last few decades when high-wealth individuals as a group have done pretty well? The answer seems to be that when countries impose a wealth tax, they often typically create a lot of exemptions for certain kind of wealth that aren't covered by the tax. Each of these exemptions has a reasonable-sounding basis.  But every exception also creates a potential loophole.

 


For example, a number of common exemptions are based on "liquidity" problems, which in this context refers to the idea that we don't want people to have to sell their homes to pay the wealth tax, and we don't want family businesses or farms that are maybe hitting a tough patch to have to be sold off because of the wealth tax. Thus, many European countries exempt a primary residence from the wealth tax (and instead apply a property tax).

Countries also often exempt the value of a business in which you are actively working, which of course means a potentially voluminous set of rules for what "actually working" means. As the OECD notes: "For the business asset exemption to apply, rules typically require that real economic activities are being performed (possibly excluding activities such as the management of movable or fixed assets, e.g. Spain), that the taxpayer performs a managing role, that income derived from the activity is the main source of the taxpayer’s revenue and/or that the taxpayer owns a minimum percentage of shares in the company (e.g. 25% in France and Sweden; 5% in Spain)."

Another common exemption is that wealth tax is usually not applied to the value of pensions and retirement savings. One can sympathize with this, but also recognize that it leads to potential issues. As the OECD notes: "Pension assets typically get full relief under net wealth taxes. ... However, this creates inequities between different taxpayers, raises fairness concerns, and creates tax planning opportunities. .... "

 

What other incentives does a wealth tax create? Here are some examples that often are not included int he discussion:

1) While we often think of a wealth tax as being applied to those who have already "made it" and accumulated a fortune, it's worth remembering that when a small- or medium-sized business is trying to get established, or going through hard times, it may lead to a situation where the overall value of the asset is substantial, but profits may be near-zero or even negative for a time. But at least in theory, a wealth tax would still be owed. As the OECD report notes:  

"Under a net wealth tax, however, if income is zero or negative, the tax liability will still be positive if the capital value of the assets remains positive. In practice, new entrepreneurs which tend to generate low, or even negative, profits in their first few years of operation would still face a wealth tax liability. Thus, a heavy net wealth tax which is unlinked to income might discourage entrepreneurship relative to an income tax with (perfect) loss offset."

2) A wealth tax will tend to encourage borrowing. Total wealth is equal to the value of assets minus the value of debts. Thus, one way to avoid a wealth tax is to borrow a lot of money, in ways that may or may not be socially beneficial. The OECD writes: "[D]ebt deductibility provides incentives to borrow and can encourage tax avoidance. If the wealth tax base is narrow, taxpayers will have an incentive to avoid the tax by borrowing and investing in exempt assets or – if debt is only deductible when incurred to acquire taxable assets – taxpayers will have an incentive to invest part of their savings in tax-exempt assets and finance their savings in taxable assets through debt." 

 

3) To get a fair picture of a wealth tax, one needs to look at it in the context of all the other taxes that exist, along with different situations that arise. It's quite possible for there to be situations where when the wealth tax is added, someone who saves more will actually reduce their wealth. The OECD notes: "In France and Spain, METRs [marginal effective tax rates] reached values above 100%, which means that the entire real return is taxed away and that by saving people actually reduce the real value of their wealth." Indeed, France recently decided to apply its wealth tax just to certain kinds of property wealth, not financial wealth, for this reason.  Indeed, many wealth taxes have provisions that if the combined tax burden gets too high, then the wealth tax gets scaled back. Again from the OECD : 

"Ceiling provisions or tax caps are common features of net wealth taxes. These often consist in setting a limit to the combined total of net wealth tax and personal income tax liability as a maximum share of income. They are used to prevent unreasonably high tax burdens and liquidity constraints requiring assets to be sold to pay the net wealth tax. In France, the wealth tax ceiling (often referred to as the “bouclier fiscal”) limits total French and foreign taxes to 75% of taxpayers’ total income. If the percentage is exceeded, the surplus is deducted from the wealth tax. In Spain, the aggregate burden of income tax and net wealth tax due by a resident taxpayer may not exceed 60% of their total taxable income."

4) A wealth tax is typically at a fairly low rate, like 1-2%, in recognition of the fact that it will be imposed every year. But if a wealthy person is investing in a way that has low risk and low returns, this wealth tax could completely swallow up low return,  while having no effect on higher returns. In general, setting up a situation where people receive no gain from saving is not usually regarded as a good set of incentives. The OECD writes:

"[A] tax on the stock of wealth is equivalent to taxing a presumptive return but exempting returns above that presumptive return. Where the presumptive return is set at the level of or at a level close to the normal - or risk-free – return to savings, a wealth tax is economically equivalent to a tax on the normal return to savings, which is considered to be inefficient. Indeed, the taxation of normal returns is likely to distort the timing of consumption and ultimately the decision to save, as the normal return is what compensates for delays in consumption. As discussed below, it is also unfair that the wealth tax liability does not vary with returns, which implies that the effective wealth tax burden decreases when returns increase."

On the other side, it is sometimes argued that a wealth tax will encourage the wealthy to make more productive use of their wealth:

"For instance, if a household owns land which is not being used and therefore does not generate income, no income tax will  be payable on it. However, if a wealth tax is levied, the household will have an incentive to make a more productive use of their land or to sell it to someone who will ... The argument here is that wealth taxes do not discourage investment per se but discourage investments in low-yielding assets and reinforce the incentives to invest in higher-yielding assets because there is an additional cost to holding assets, which is not linked to the return they generate."

5) A wealth tax will encourage the spawning of ownership structures where people control assets, but do not technically "own" them. A common example is when assets are owned in a trust, or some kind of nonprofit. The possibilities for controlling and benefiting from wealth without technically "owning" it are even great for assets that can be held in other countries across the international economy. If there is a heaven for tax lawyers, it's a place where they get to sit around and invent legal arrangements for shielding wealth. 

 

6) The OECD notes: "Human capital is always exempt under net wealth taxes. This results from a number of considerations, including the fact that human capital is very difficult to value, that it is not

directly transferrable or convertible into cash, and that there is uncertainty about the
durability of its value. Therefore, a wealth tax lowers the net return on real and financial assets relative to the returns on investments in human capital. Thus, wealth taxes encourage investment in human capital, which may in turn have positive effects on growth. Human capital is a critical driver of long-run economic growth. This implies that a wealth tax may be less harmful to economic growth than commonly believed as it can encourage a substitution from physical to human capital formation ... "

 

7) A wealth tax may not seem especially fair if applied across people who started in similar circumstances. As one example, imagine two adults who split a large inheritance. One heir spends the money. The other heir tries to invest, with some success, in creating new technology and businesses and jobs. The spender depletes the inheritance and thus avoids the wealth tax. More broadly, consider wealth from a variety of sources: inherited financial wealth, inheriting a family business, inheriting a family-owned piece of property, starting and running a business, investing in businesses run by others, investing in property that increases in value over time, wealth from having a patent on an invention, wealth from producing a book or music or movie with high sales. A wealth tax treats all of these the same. 

 

 

8) The practicalities of imposing a wealth tax can be nontrivial. It means updating the value of assets and debts every year. If the assets are something that is bought and sold in financial markets, like shares of stock, then updating the value is easy. But updating the value of an expensive house or piece of property on an annual basis isn't easy. Updating the value of art or jewelry owned by a wealthy person isn't easy. Updating the value of a privately owned business isn't easy. Updating the current value of assets held in other countries can be hard, too In general, it's a lot easier to track flows of income than it is to measure changes in asset values.  


To me, many of the endorsements of a wealth tax feels more like expressions of righteous exasperation than like serious and considered policy proposals. Many of those who favor a wealth tax tend to favor a more European-style capitalism (and n
o, I don't think of any country in western Europe as "socialist") that places a higher value on economic equality. But when those who favor your goal of greater economic equality have been steadily deciding that the wealth tax isn't worth the trouble, and that other policy tools are more effective in reaching the goal, it's probably useful to pay attention. 

 

The Young Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system — and the Democratic Party ---
https://fivethirtyeight.com/features/the-young-lefts-anti-capitalist-manifesto/

 




Bob Jensen's Fraud Updates --- http://faculty.trinity.edu/rjensen/FraudUpdates.htm




Bob Jensen's Tidbits Archives ---
http://faculty.trinity.edu/rjensen/tidbitsdirectory.htm 

Bob Jensen's Pictures and Stories
http://faculty.trinity.edu/rjensen/Pictures.htm

Summary of Major Accounting Scandals --- http://en.wikipedia.org/wiki/Accounting_scandals

Bob Jensen's threads on such scandals:

Bob Jensen's threads on audit firm litigation and negligence ---
http://faculty.trinity.edu/rjensen/Fraud001.htm

Current and past editions of my newsletter called Fraud Updates ---
http://faculty.trinity.edu/rjensen/FraudUpdates.htm

Enron --- http://faculty.trinity.edu/rjensen/FraudEnron.htm

Rotten to the Core --- http://faculty.trinity.edu/rjensen/FraudRotten.htm

American History of Fraud --- http://faculty.trinity.edu/rjensen/FraudAmericanHistory.htm

Bob Jensen's fraud conclusions ---
http://faculty.trinity.edu/rjensen/FraudConclusion.htm

Bob Jensen's threads on auditor professionalism and independence are at
http://faculty.trinity.edu/rjensen/Fraud001c.htm

Bob Jensen's threads on corporate governance are at
http://faculty.trinity.edu/rjensen/Fraud001.htm#Governance 

 

Shielding Against Validity Challenges in Plato's Cave ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm

·     With a Rejoinder from the 2010 Senior Editor of The Accounting Review (TAR), Steven J. Kachelmeier

·     With Replies in Appendix 4 to Professor Kachemeier by Professors Jagdish Gangolly and Paul Williams

·     With Added Conjectures in Appendix 1 as to Why the Profession of Accountancy Ignores TAR

·     With Suggestions in Appendix 2 for Incorporating Accounting Research into Undergraduate Accounting Courses

Shielding Against Validity Challenges in Plato's Cave  --- http://faculty.trinity.edu/rjensen/TheoryTAR.htm
By Bob Jensen

What went wrong in accounting/accountics research?  ---
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong

The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most Accountants ---
http://faculty.trinity.edu/rjensen/theory01.htm#DoctoralPrograms

AN ANALYSIS OF THE EVOLUTION OF RESEARCH CONTRIBUTIONS BY THE ACCOUNTING REVIEW: 1926-2005 ---
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm#_msocom_1

Bob Jensen's threads on accounting theory ---
http://faculty.trinity.edu/rjensen/theory01.htm

Systemic problems of accountancy (especially the vegetable nutrition paradox) that probably will never be solved ---
http://faculty.trinity.edu/rjensen/FraudConclusion.htm#BadNews

Bob Jensen's economic crisis messaging http://faculty.trinity.edu/rjensen/2008Bailout.htm

Bob Jensen's threads --- http://faculty.trinity.edu/rjensen/threads.htm

Bob Jensen's Home Page --- http://faculty.trinity.edu/rjensen/