"Don't hurt people and don't take their stuff" - Matt Kibbe


Perfect Should Never be the Enemy of Better

By Grant Davies

The tax debate is back. Well, I guess it never left and it never will. But we can't let that stop us from talking it to death. After all, that's what blogs are for.

I have made three posts in a row about a certain crypto-currency that shall remain nameless because people are tired of me talking it to death. So, DEATH TO TAXES! At least for this post.

Meanwhile, let's make a few points about the recent tax legislation, as long as everyone else is talking it to death.

Obviously those who passed it (Republicans) are saying it's the best thing ever, as usual.

Those who oppose it (Democrats) are claiming the end of the world, as usual. 

Democrats say the stuff they always say. Basically they say that because of it we may be looking at starving babies, starving seniors, no health care, school closings, no fire department, no police, faster global warming, increased alien abductions, more Russian meddling, increased free speech, more student debt, more guns, more deportations, more walls, and general chaos. Did I miss anything?

Okay, I made some of that stuff up. They only hinted at those things this time out. But what they are actually saying again is even more inane. Oh, the old canard of "tax cuts for the rich" is still being used but the most preposterous worry of all is that this will "blow a hole in the deficit." (I've never been sure what the hell that meant since I always thought if you didn't like something and you had a bomb, you should blow a hole in it.)

The complaint might have more credibility if it wasn't being complained about by the very party that advocates more spending in perpetuity with no concern whatsoever for the inevitable consequences.

But let's get to my point/opinion about this new tax law. It sucks. Surprised? Only if you don't know me very well.

It sucks because it is merely toying with the code again and adjusting the numbers. What we really need, and what I have repeatedly asked that fictional old fat man for each Christmas, is a new tax system. Getting rid of the entire tax code, all 73,954 pages. (2014, it's more now) Just like the pony I asked him for as a kid, he never brings it. But, I digress. 

Let's contemplate the worst case scenario. What is better, the same old system, or the same old system with lower tax rates? Yep, the old system with rates not being reduced is the worst case. So should we make the perfect the enemy of the not quite as bad? Not in my mind.

And since I'm an old stock trader, I love graphs. Let's look at this simple one and see if we can figure anything out.

Other than making a good point, there is something wrong with this illustration. It's wrong because perfection would be a new system, and that would be more than barely noticeable. But we all get the idea, I think.

To wrap things up, I would like to make a much bigger point. It has to do with the level of taxation. 

When someone is asked what the level of taxation is, they usually go looking for statistics about how many taxpayers there are and dividing it by the total amount paid. I'm sure there are many more calculations that could be done, but it's something like that.

But as any old economist can tell you, (I'm only one of those things) there is a much simpler way to find the level. However, politicians never bring it up because it lays the whole stinking deception bare.

Simply add up all the government spending and the total amount is the level of taxation. Since the government isn't Santa Claus and there is no Easter bunny either, and since government has no funds of its own, every thing they spend money on must be taxed from the citizens.

Wait, you say....what about what they borrow or print? And what about those pesky subsidies and trade barriers and other gifts to favored businesses or unions?  The answer is, some of the people being taxed haven't even been born yet. And when the FED inflates the money supply by printing dollars, the amount of the decline in your purchasing power is tax as well. Also, any law or regulation that cause you to pay more for a good or service than you otherwise would have is also a tax. A tricky one, but a tax none-the-less.

If you guessed that answer correctly, you get to tell it to a liberal or other pinhead in a smug voice or a snarky meme.

So, the tax cut sucks, but not as much as if they didn't do it. The real answer to lowering taxes is to cut spending.  That would be a perfect way to deal with it. And it would be more than barely noticeable.

So screw this tax cut. It sucks because it's a trick. 


Bitcoin is Safer

Julie nails it.

 But on a more serious note..

As the inevitable and numerous warnings from govt about the dangers of buying bitcoin are becoming a cacophony, try to remember that these are the same people who urge you to buy Powerball lotto tickets from them.

I'm not certain anyone who invested (not traded) in bitcoin has lost money.... yet.

But the odds are a tad better than one in 292 million in the commodity that they ARE urging you to buy.

Taking advice from the government is like,,,,well,,,taking advice from the government.


Skip the Bull

By Grant Davies

I was going to call this post "Skip the Bullshit - Oh Wait, It's All Bullshit" but that was too long and probably a tad over the top. One thing we never do on this site is say stuff that's over the top. Oh wait, that's bullshit too.

So, I had lunch with a good friend recently and he told me about this series on TV called "Adam Ruins Everything" so I decided to look it up on YouTube and I wasn't disappointed.

I mean, maybe this guy is full of bullshit too, but I'm good with that because the more I learn, the more I realize that most of what I always thought was true was bullshit all along. And why should he be any different?

This all arose out of a conversation (ok, that's bullshit, it was more like a bitch session by me about science being mostly bullshit while he listened with a look of dull disinterest on his face, but I digress) concerning bad science that I have been talking about, ad-nauseam, since I started to do research about scientific method.

One big thing I learned in my research is that everything we have been told about what we should eat is bullshit, but that for a future post.

Anyway, you can watch this one and maybe we can bullshit about it next time we have a beer together. I'm buying...and you know what that is.


Bitcoin Revisited - A Simpler Explanation

Just click the picture to see the current price

By Grant Davies

Some of you still seem to be confused about Bitcoin. I'm not sure why because we covered this in an earlier post.

But not to worry, your old trusty blog master has hunted the internet to find this really short and concise explanation. After you see this, the light will go on and you'll probably get on board.

It won't cost many US dollars as you can plainly see by the price above. And the picture is also a handy link to keep track of the price going forward as it has it's small fluctuations. For some reason the short video below can't be embedded so you'll have to watch it by clicking the picture below.

The rude Facebook page that produced the video probably didn't want me stealing their stuff. Stingy bastards.

Click the pic


There Should be a Tax on Disingenuous Analysis

Editors note: This post, by our guest blogger Seth, hits the target. As usual. The title of this post is mine, not his. His title is "Needs More Work". Precisely.
By Seth
This article on QZ.com is disingenuous and not persuasive. It’s headline: The Republican tax bill punishes American families who use public schools.
Under both the GOP Senate’s nearly 500-page bill (pdf) and the House version, the amount that US households pay in state income taxes (which can be as high as 13% in states like California) and local taxes is no longer deductible on federal income tax forms, with the exception of property taxes up to $10,000.
Making state and local taxes no longer deductible from federal income taxes essentially subjects US households to “double taxation,” by taxing them twice on the income they earn, according to a report (pdf) from the Government Finance Officers Association (GFOA), a non-partisan group of state and local finance professionals from the US and Canada.
Why do I think the article is disingenuous? For a few reasons.
First, they don’t tell us how many people will be affected. Only about 30% even claim this deduction.
Second, they don’t mention that what people lose from this deduction, they will gain some, all or more back in the changes in the standard deduction and tax rates.
Third, they don’t mention how many taxpayers will still get to deduct up to $10,000 in property taxes.

When you take the above into account, I suspect that the impact of the change is minimal.
The authors also claim that the removal of this deduction will pressure citizens to lower their taxes, which could be devastating to school district budgets.
That made me LOL.
First, because I highly doubt that would happen. By the time you take the factors I mentioned above into account, it wouldn’t be worth enough people’s time to do that.
Second, if they did pressure local school districts to lower taxes, good for them. They should hold their school districts accountable. This is how the world should work.
Finally, the authors don’t even mention that one of the 2nd or 3rd order consequences of this deduction is already offset in higher home prices, which is a pretty well-known and accepted fact in the economics world.
So, if you do pay more taxes because of losing this deduction you will likely gain it back in home affordability.
Overall, I suspect the individual impact of this change in the tax code will have a minimal financial impact on most folks.

I could be convinced otherwise. But, this article falls well short of making that case. This article is a good example of the type of paper my high school composition teacher would have handed back with “Needs More Work” written on it. Unfortunately, the standard teachers used to hold students to, don’t seem to apply in journalism these days.

Seth has a wonderful blog. You can reach it using the link on the right. I suggest you do.


By Grant Davies

Is Bitcoin fools gold? Is Bitcoin a new paradigm? Is it understandable? Are most people disregarding it because they don't understand it? Are many people disregarding it because they don't like change? Are governments terrified of it? If so, why? So many questions. So few answers. I certainly don't have them.

Recently a guy named Stiglitz proved that Nobel Prizes ain't what they used to be when he weighed in on whether the governments who control all the money should outlaw Bitcoin (of course) to avoid losing power. (That's not exactly his stated reason, but in my opinion, it's the actual reason.) If I ruled over everyone else's money to my own great advantage I'd be contemplating that challenge to my power as well. The poor over-educated, but confounded, old guy doesn't even understand that trying to outlaw it is as futile as abolition was.

That introduction aside, let's take a peek at a YouTube presentation that attempts to explain some things about Bitcoin. It's worth the trouble because if we are still very confused after watching it, we won't be worse off. I'm a bit on an expert in confusion myself. Sadly there is no Nobel Prize for that.

A friend, Bill Ulivieri, who does understand a thing or two about Bitcoin, posted the video on his Facebook page and I thank him for being able to present it here for your contemplation.

No matter what you conclude about Bitcoin, I bet you never imagined a future that looks like the one described in the presentation. Mankind never seems to see the big changes coming.

If you win the bet, I might pay you in block-chain..er..Bitcoin..or something.......