All posts by Jack

Economics, Politics

An Income Tax Proposal

I have some numbers (rounded) to put in the pot.

$13.1 Trillion is the total personal income in the US.
116 Million Households in the US.
$53,000 Median household income. (half of the households make $53K or more, half make less.)
$3.8 Trillion 2013 Budget

Pay for the Budget –
Give all households a $53K deduction. – $6.1 Trillion
Total Income after the deduction – $7 Trillion

Tax Rate on post deduction income to cover the budget – 54%

So, put a 54% tax on all income over $53,000 and there is no more deficit. There are no other deductions. Simplified tax code.

And we can use the corporate taxes to pay down the debt.

 

(I hate it when I make stupid math errors in public)

Economics, Politics

Net Neutrality

I am curious as to what the powers that be are thinking in regard to net neutrality.

To use an analogy to the transportation system, the current internet is like a railroad network. Freight trains are loaded with containers destined for delivery to end users. When the train pulls into a railyard, the containers are picked up from one train and moved onto another train heading towards the ultimate destination. Eventually the containers get to the proper destination but they don’t necessarily follow the quickest, most direct path. The tracks are owned by various companies and those companies probably own the railyards their tracks lead to. (But they can’t own the content that is carried by the railroad, which is where the analogy breaks down.)

The railyard protocols determine which containers get handled and in which order they are handled. The new net neutrality rules seem to be allowing the railyards to revise their protocols to let some container shippers to pay for priority handling. They may even establish separate railroads just for the priority traffic and let the existing infrastructure muddle along, just like AT&T did with the telecommunications network in the post-war period.

This is a hard one to address. On one hand, the networks cost money to build, the routers that can handle the traffic cost money to install, the features cost money as well. If a service provider requires lots of bandwidth capacity and router ports, the user should be paying an appropriate cost. The service provider also needs to increase the bandwidth capacity interior to the network to handle the increased usage. So they should be charging the source provider enough to cover the bandwidth and equipment costs generated.

Most of the new internet services seem to be streaming video related. and with streaming video speed and order of the incoming info containers is important. If you could let your computer collect the entire stream of video before displaying it then it wouldn’t be an issue. But a lot of those video providers don’t want to let you have the entire video at one time. Why, you may pirate the video; shame on you. So they need to have your videos delivered piecemeal but in an evenly streamed manner. To get this requires using the prioritization flags in the Internet Protocol. And who should get those flags? The ones that pay for them.

What should not be allowed to happen is getting someone’s container dropped completely, based on either originating address or destination address. The ISPs have already been guilty of this (e.g. the early VOIP services) and will probably bend any new FCC rules to continue being guilty of this in the future.

The internet is a network of networks. The backbone networks connect to edge networks or other backbone networks to facilitate the movement of those information containers.  An intranet may be considered a single network managed and operated by a single entity.  As an example, the Verizon backbone network connects to the European backbone, to the Canadian backbone, to the AT&T backbone, to the Comcast edge network, to the Time Warner edge network, to the Verizon edge network, etc. (I am using edge network to describe the networks that connect to the users, both senders and receivers. Unless you are going right around the corner you will probably traverse a backbone network to connect with someone on the web.)

In my example I used the Verizon backbone network and noted that it is connected to the Verizon edge network. And in reality the two networks may not be distinguishable as far as routers or links are concerned. For Verizon it may all be one intranet. The edge network delivers content to the end users and receives content from content sources. Will Verizon provide better packet handling for its customers than it will for content coming from the internet?

Internet Protocols are developed and managed by the IETF.  It seems to me that government internet regulators should be ensuring that ISPs are following the internet protocols fairly, especially on the backbone portions of the internet. And I think the backbone portion should be regulated as common carriers.  The edge networks I reserve judgement on.

 

 

 

Politics

Personal Income Taxing

Our current generation has been borrowing excessively to provide a better society for Americans and little effort has been made to repay that debt. I suggest that those who have benefited the most from the growth of America should shoulder the brunt of the repayment. To that end I have developed a tax method to review. The percentages and dollar amounts are always subject to change and may well need to be changed in order to generate enough income to begin to pay off our debts. (Paying off the debt is a very long-term project.)

This is a fair and equitable progressive tax on income.

30% tax on income up to $500,000.
40% tax on income from $500,000 up to $1,000,000.
50% tax on income from $1,000,000 up to $2,000,000.
60% tax on income from $2,000,000 up to $4,000,000.
70% tax on income from $4,000,000 up to $8,000,000.
80% tax on income from $8,000,000 up to $16,000,000.
90% tax on income over $16,000,000.

Only 1 deduction per household – the median household income – ~$50,000 in 2014. – No mortgage deductions, no charity deductions, no itemized deductions, etc.

So,

  • If your household has an income of $100,000 you have an effective tax rate of 15% after the $50,000 deduction.
  • If your household has an income of $1,000,000 you have an effective tax rate of 34% after the $50,000 deduction.
  • If your household has an income of $10,000,000 you have an effective tax rate of 64% after the $50,000 deduction. And you are still taking home more money than anyone who makes less than you do.
Economics, Politics

A little tax

I wonder  that would be the effect on quick-time stock sales if there was a transaction tax on each stock sale equal to $1/number of seconds the security has been held. If you hold a stock for 1 second it is a $1 tax. If you hold a stock for 1/100000 of a second it is a $100,000 tax. If you hold a stock for 10 seconds it is a dime tax.

This would be a per stock tax with the proceeds going to the SEC for enforcement.

Economics, General, Politics

ruminating ideas

Some different ideas are kicking around and I need to get them down to develop in more detail.

——————–

Have the individual states issue licenses for firearms. Basically, everyone/anyone can get a license. The states can set some minimal requirements such as training on safe firearm usage from a recognized trainer, such as military, police, scouting, gun club, etc. The licenses can be done in classes, such as shotgun, rifle, handgun, automatic, etc. much as DMV will give motorcycle, standard, chauffeur, and the different weight class truck driving licenses. Licenses may be revoked for felony convictions, judicial orders and similar situations.

In order to buy a firearm, you just have to show a license that supports that class of firearm. The seller can do a quick check to see that the license hasn’t been revoked and away you go.  And you have to show the license to buy the ammunition for that class of firearm.

This all goes back to the well-regulated militia phrase of the Second Amendment. Let the states decree that all firearm license holders are members of the militia and let them regulate as they see fit.

———————

20% across the board tax on all income directed to the Social Security and Medicare.  If you have a job, the 20% is collected as a payroll tax. If you are collecting non-wage income, like dividends, rents, royalties, etc, the 20% can be deducted by the dispenser. No matter what your income level, you pay the 20%. What you get for that is a retirement plan and healthcare. Social Security and Medicare go off-budget at the Federal level. Congress can maintain oversight of the Trust Funds running these systems, but that is about it.

States, private companies and insurance companies can get out of the basic healthcare business.  Every citizen gets access to basic healthcare. Employers can match the payroll tax.

———————-

After the initial 20% tax on all income, there will be a Personal Income deduction per household equal to the median household, currently ~$50K. I am also tempted to adjust this to the Median Household Income for the Metropolitan Statistical Area you reside in.  Need to look at that in more depth. Single member households may use the 4-member household Poverty Level for their MSA .

The main idea here is to give everyone a large deductible. No itemizing. If you want to give to charities, buy houses, pay mortgages, go to school, go for it. There is no tax advantage or incentive either way.

———————-

As far as our debt and deficit is concerned, Congress shall be mandated to collect revenues to cover their budget. In addition, Congress will include paying back 5% of the deficit each year as part of the budget. We can give Congress some wiggle-room such as the 5% doesn’t need to be included under certain economic conditions, such as the ones we are currently under. Also, in the event of a natural disaster that wasn’t originally budgeted, the 5% deficit payback can be diverted to cover those costs.  If Congress and the President declare a national emergency, then all restrictions are off.

In order for Congress to meet their revenue mandate, they must set a tax rate on all incomes above the deductible that will collect the desired revenue for that year.

———————–

1 Representative per 100,000 citizens.

6 Senators per State. Senatorial elections will continue by the classes as they are now, but the three top vote-getters in each election will each  become a Senator.

————————

No one elected to Congress may serve consecutive terms in the same office.

————————

Any compensation paid to individuals in excess of the salary of the President shall be counted as Corporate profit

———————–

Make the corporate tax rate something like 20% which must paid, at a minimum, on the profits reported to shareholders. – No deductions, no incentives, no corporate welfare

———————–

$1 tax on each transaction that hold a share for less than 60 seconds. Taxes raised this way go to an SEC trust fund to prosecute the people gaming the system.

———————–

Bank, or any Corporate, Executives go to jail when their bank, or company, breaks the law or agrees to settlement without admitting guilt.

———————–

 

General

GMO

If they are going to be labeling Genetically Modified food stuffs, and are concerned that the labels are going to scare people, why don’t they add “USDA Approved” to the label. ( I certainly hope the USDA is approving the basic foods in our grocery stores.) That should get rid of the GMO scare for folks that don’t know what GMO is all about and still contain the alert for those that are concerned about GMO.

Politics

WWRD?

How has Romney run his successful businesses in the past?

First he looks around for a company that isn’t producing as well as it should with the assets it has.

He then acquires the company at a reduced rate, since the company isn’t producing as well as it could. He goes to cronies to borrow the money needed to make the purchase, using the assets of the company being acquired to guarantee the loans. The cronies may slice and dice the secured loans and resell them to other investors.

Then he brings in his crack Management Team to revamp the operations to use those precious assets to the best of their potential. Quite often the company employees are not considered part of the assets and will be made redundant while the work they do is outsourced to low-cost contractors. Said contractors may be off-shore so the jobs are no longer in the US.

Facilities, now empty,  may provide some excellent real estate opportunities. Sub-divisions can be sold off, reducing overhead.  Pension funds are other assets that can be better used elsewhere.  All the while, the Management Team is racking up their consulting fees.

And in the end, Romney may have made the company a leaner producer and can sell it to the public, keeping the original loans on the companies books to be repaid over time. What he gets for selling it is the additional profit, over the management fees, that goes to his pockets. If he can’t sell it because the company is too lean and can’t exist with the remaining assets then he and his team can bail out without a loss (all the loans are on the company’s books) and leave the company to resolve its debts through bankruptcy and leaving the secondary loan investors to collect their loan repayments from the courts, if they can.

Then he turns his attention to the United States.  We certainly have a lot of idle or under-performing assets: National Parks, National Forests, Public Lands, Military Reservations, an Air Force, a Navy, an Army, a Coast Guard, lots of Government Buildings, a large Pension Fund. He has something to work with.