Thoreau’s “Civil disobedience” was assigned reading back in high school, circa 1966 or 1967. The essay inspired Gandhi and Martin Luther King, among others, to resist injustice. Thoreau preached a duty to resist moral wrong rather than merely vote in disapproval of it.
The most often quoted passage from the essay is “Any man more right than his neighbors is a majority of one, already.” Thoughtfully exercised by individuals like Gandhi and King, it was a powerful tool for good. But, there is a difference between “more right than his neighbors” and any man who thinks he is more right than his neighbors. If you combine that thought with some unchecked executive authority or overwhelming control of both houses of Congress, the results are potentially less positive.
This flawed thinking might embolden a leader to take his country to war or impose wage and price controls. It might also provoke a leader to nationalize banks or to take controlling common stock (voting) positions in large companies. Is it sufficient justification for displacing secured creditors in favor of union members? Would he consider oppressive cap and trade policies, given the differing scientific and economic evidence, if he were not feeling some moral imperative to act decisively? Would the leader’s congressional colleagues call for a vote on a bill, portions of which were yet to be written?
There were two less-remembered passages from “Civil disobedience.” Thoreau noted that progress from absolute to limited monarchy to democracy was progress toward true respect for the individual. “Is democracy such as we know it, the last possible improvement in government? Is it not possible to take a step further?” Yes, it is possible, but the next step can just as easily be a step back. Democracy is not perfect. People mess it up. When we find democracy inadequate, leaders can and do co-opt it for their own, less democratic inclinations.
Republicans should note the second, less-remembered statement: “A minority is powerless while it conforms to the majority; it is not even a minority then.” The next time they are called to vote on an 1100-page, $800-billion appropriation bill with less than 70 hours notice, they should decline to vote yea or nay. A bit of civil disobedience (“Sorry, still reading”) could serve to highlight the arrogance.
Wednesday, July 15, 2009
Saturday, July 4, 2009
The enemy of incentive
It is clear that taxes are going up for those who succeed in making $250,000 in the upcoming tax years. The proposed top rate will be 39.6 percent.
The are a number of ways to produce $250,000. Bill Clinton, for example has made some speeches that commanded fees of over $200,000. Some former cabinet members garner impressive consulting fees and book advances. For some accomplished people, skill, celebrity and charisma conspire to produce substantial rewards . Some of these same individuals currently have a hand in the bank rescue, the auto industry intervention and formulation of upcoming tax reform.
There is another more typical way of producing $250,000. The $250,000 was the result of a year's effort, not a day or a week or a month. The wealthy individual had to produce revenue 0f perhaps $600,000 or 3 million or 7 million dollars in that tax year. He or she almost certainly had employees. The entrepreneur paid wages, social security, state unemployment tax and worker's compensation on their behalf. The business was subject to personal property tax. There was probably state mandated coverages for general liability and commercial automobiles. and sales tax if applicable.
Revenue is not guaranteed from year to year and has no value in and of itself. General Motors has billions of dollars in revenue but no earnings. The taxpayer has no guarantee of earnings in future years. He could very well lose money.
If he does succeed in generating profit, it will be taxed at 39.6 percent, subject to state tax (Oregon is considering an increase to 11 percent) and perhaps municipal taxes. The owner, if he is drawing wages, is paying both the employee and employer contribution to Social Security amounting to $15.30 for every $100.00 in compensation. In some states, he may be subject to state unemployment tax even though he is virtually precluded from drawing a benefit. He may also be paying in to Worker's Compensation although owners are often allowed to opt out.
Unless the owner is a genius or a cheat, those earnings are reduced by more than 50 and maybe as much as 65 cents on the dollar before he gets to spend it.
The adminstration should understand that you can mandate anything on an ongoing enterprise but you cannot mandate anyone into business. You can require me to pay an employee a designated wage but you can't require me to hire said employee.
Simply put, all businesses do the same thing. They collect money and they pay it out. What distinguishes one from another is how much you keep. When the reward doesn't justify the risk
the tent folds. When that happens, the employer is the one least likely to be out of work going forward. Like it or not, Mr Obama, the only policy that rescues this economy is one that encourages investment and risk-taking. You can't do that by limiting the potential reward.
The same person who make $300,000 probably pays an equal amount in wages and takes on an open-ended financial risk. It is an admirable trait. Don't discourage them.
The are a number of ways to produce $250,000. Bill Clinton, for example has made some speeches that commanded fees of over $200,000. Some former cabinet members garner impressive consulting fees and book advances. For some accomplished people, skill, celebrity and charisma conspire to produce substantial rewards . Some of these same individuals currently have a hand in the bank rescue, the auto industry intervention and formulation of upcoming tax reform.
There is another more typical way of producing $250,000. The $250,000 was the result of a year's effort, not a day or a week or a month. The wealthy individual had to produce revenue 0f perhaps $600,000 or 3 million or 7 million dollars in that tax year. He or she almost certainly had employees. The entrepreneur paid wages, social security, state unemployment tax and worker's compensation on their behalf. The business was subject to personal property tax. There was probably state mandated coverages for general liability and commercial automobiles. and sales tax if applicable.
Revenue is not guaranteed from year to year and has no value in and of itself. General Motors has billions of dollars in revenue but no earnings. The taxpayer has no guarantee of earnings in future years. He could very well lose money.
If he does succeed in generating profit, it will be taxed at 39.6 percent, subject to state tax (Oregon is considering an increase to 11 percent) and perhaps municipal taxes. The owner, if he is drawing wages, is paying both the employee and employer contribution to Social Security amounting to $15.30 for every $100.00 in compensation. In some states, he may be subject to state unemployment tax even though he is virtually precluded from drawing a benefit. He may also be paying in to Worker's Compensation although owners are often allowed to opt out.
Unless the owner is a genius or a cheat, those earnings are reduced by more than 50 and maybe as much as 65 cents on the dollar before he gets to spend it.
The adminstration should understand that you can mandate anything on an ongoing enterprise but you cannot mandate anyone into business. You can require me to pay an employee a designated wage but you can't require me to hire said employee.
Simply put, all businesses do the same thing. They collect money and they pay it out. What distinguishes one from another is how much you keep. When the reward doesn't justify the risk
the tent folds. When that happens, the employer is the one least likely to be out of work going forward. Like it or not, Mr Obama, the only policy that rescues this economy is one that encourages investment and risk-taking. You can't do that by limiting the potential reward.
The same person who make $300,000 probably pays an equal amount in wages and takes on an open-ended financial risk. It is an admirable trait. Don't discourage them.
Wednesday, July 1, 2009
Speaking in absolutes
President Obama made some remarks from the Rose garden on June 25, 2009 supporting the proposed Cap and trade legislation. In part, he said “There is no longer a debate whether dangerous carbon pollution is placing our planet in jeopardy. It’s happening.” The tendency to speak in absolutes is very pronounced in some demographic groups. It occurs disproportionately among politicians and married men.
The implication to be drawn from “There is no longer….” suggests that a debate has occurred and evidence has determined an outcome. Contrary to the President’s assertion, even a casual trip around the Internet can find serious credentialed people debating his basic assumption. There are others who accept the warming scenario but propose that it is both cyclical and predictable or that changes in the sun are responsible and have far greater effect than carbon emissions. There is serious disagreement about what effect, if any, the proposed legislation would have in mitigating the problem.
“There is no longer….” is decidedly different than there is no debate necessary or there is a debate but we choose not to participate. When politicians start speaking in absolutes, ask yourself “What do they really know? Why should we believe them?”
The appeal of absolute certainty is so intoxicating that politicians rarely express doubt, even on the record. Barney Frank and Maxine Waters were sure about the financial stability of Freddie Mac and Fannie Mae. It’s instructive to look back. Politicians are often wrong in their certainty but they never get over speaking in absolutes. Watch Inconvenient truth and then view The great global warming swindle. Is the debate over? Did it ever happen?
The implication to be drawn from “There is no longer….” suggests that a debate has occurred and evidence has determined an outcome. Contrary to the President’s assertion, even a casual trip around the Internet can find serious credentialed people debating his basic assumption. There are others who accept the warming scenario but propose that it is both cyclical and predictable or that changes in the sun are responsible and have far greater effect than carbon emissions. There is serious disagreement about what effect, if any, the proposed legislation would have in mitigating the problem.
“There is no longer….” is decidedly different than there is no debate necessary or there is a debate but we choose not to participate. When politicians start speaking in absolutes, ask yourself “What do they really know? Why should we believe them?”
The appeal of absolute certainty is so intoxicating that politicians rarely express doubt, even on the record. Barney Frank and Maxine Waters were sure about the financial stability of Freddie Mac and Fannie Mae. It’s instructive to look back. Politicians are often wrong in their certainty but they never get over speaking in absolutes. Watch Inconvenient truth and then view The great global warming swindle. Is the debate over? Did it ever happen?
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