Category Archives: law

Why Warren Buffett pays 0% social security tax

Social Security is billed along with Medicare (health care for the poor) as an anti-flat tax called FICA where middle class workers pay 7.65 -15.3%, and rich people pay essentially 0%. The reason that Warren Buffet and other rich people pay 0%, on a percentage basis, far less than their secretaries, is that there is a FICA cap of $127,200 currently, and he earns far more than $127,200. Buffett’s secretaries pays 7.65%, or which 6% approximately is social-security payment, and the rest Medicare. Buffett’s company then matches the 7.65% — a situation that applies to virtually every employee in the US.

A self employed person though, a gardener say, pays both the employee and employer portion or 15.3%. The same $127,200 cap applies, but since few gardeners make more than this amount, they are likely to pay 15.3% on all earnings, with no deductions. FICA really socks the poor and middle class, and barely touches a rich man like Buffett. This is the tax-inequality that most needs addressing, in my opinion, and one I have not heard discussed.

A short history of FICA

A visual history of FICA rates (right), and of the salary cap (left). Medicare contributions were added in 1966.

As I write this, there is a debate about tax reform that mostly involves income tax, but not at all FICA. Income tax could be improved, in my opinion, and should be. We could remove some exemptions that are being abused, and we should lower the general rates, especially for foreign-earnings, but the current income tax isn’t that bad, in my opinion. Buffett likes to brag about the high rate he pays, but it’s not a bad rate compared to the rest of the world. And Buffett benefits from a lot of things we don’t. His income is taxed at a lower rate than a worker’s would be since most of it is unearned. And, like most rich folks, he has exemptions and deductions that do not apply to most. He can deduct cars, private airplanes, and interest; most folks don’t deduct these things since they don’t spend enough to exceed the “standard deduction”. I’m happy to say these issues are being addressed in the current tax re-write.

The current, House version of the GOP tax proposal includes a raise in the standard deduction and a cap on interest and other deductions. There is a general decrease in the tax rate for earnings, and a decrease for earnings made abroad and repatriated. I’d like to see tariffs, too but they do not appear in the versions I’ve seen. And I’ve very much like to see a decrease in the FICA rate coupled with a removal of the salary cap. Pick a rate, 4% say, where we collect the same amount, but spread the burden uniformly. Why should 7.65%-15.3% or the workmanship wages got to the window, the orphan, and healthcare of the poor, while 0% of Buffett’s go for this?

Some other tax ideas: I’d like to see shorter criminal sentences, especially for drugs, and I’d like to see healthcare addressed to reduce the administrative burden.

Robert E. Buxbaum, November 17, 2017. In the news today, the senate version puts back the tax exemption on private jets. The opposite of progress, they say, is congress.

Forced diversity of race is racist

Let me browse through some thoughts on efforts to address endemic racism. I’m not sure I’ll get anywhere, but you might as well enter the laboratory of my mind on the issue.

I’d like to begin with a line of the bible (why not?) “‘Do not pervert justice; do not show partiality to the poor or favoritism to the great, but judge your neighbor fairly.” (Lev. 19:15). This sounds good, but in college admissions, I’ve found we try to do better by showing  favoritism to the descendants of those who’ve been historically left-out. This was called affirmative action, it’s now called “diversity”.  

In 1981, when I began teaching chemical engineering at Michigan State University, our department had race-based quotas to allow easier admission to the descendants of historically-disadvantaged groups. All major universities did this at the time. The claim was that it would be temporary; it continues to this day. In our case, the target was to get 15% or so black, Hispanics and American Indians students (7 in a class of 50). We achieved this target by accepting such students with a 2.0 GPA, and not requiring a math or science background; Caucasians required 3.0 minimum, and we did require math or science. I’m not sure we helped the disadvantaged by this, either personally or professionally, but we made the administration happy. The kids seemed happy too, at least for a while. The ones we got were, by and large, bright. To make up for the lack of background we offered tutoring and adjusted grades. Some diversity students did well, others didn’t. Mostly they went into HR or management after graduation, places they could have gone without our efforts.

After some years, the Supreme court ended our quota based selection, saying it was, itself racist. They said we could still reverse-discriminate for “diversity,” though. That is, if the purpose wasn’t to address previous wrongs, but to improve the class. We changed our literature, but kept our selection methods and kept the same percentage targets as before.

This is a popular meme about racism. It makes sense to me.

This is a popular meme about racism.

The only way we monitored that we met the race-percent target was by a check-box on forms. Students reported race, and we collected this, but we didn’t check that black students look black or Hispanic students spoke Spanish. There was no check on student honesty. Anyone who checked the box got the benefits. This lack of check bread cheating at MSU and elsewhere. Senator Elizabeth Warren got easy entry into Harvard and Penn, in part by claiming to be an Indian on her forms. She has no evidence of Indian blood or culture Here’s Snopes. My sense is that our methods mostly help the crooked.

The main problem with is, I suspect, is the goal. We’ve decided to make every university department match the state’s racial breakdown. It’s a pretty goal, but it doesn’t seem like one that helps students or the state. Would it help the MSU hockey squad to force to team to racially match the state; would it help the volleyball team, or the football team?  So why assume it helps every academic department to make it’s racial makeup match the state’s. Why not let talented black students head to business or management departments before graduation. They might go further without our intervention.

This is not to say there are not racial inequalities, but I suspect that these diversity programs don’t help the students, and may actually hurt. They promote crookedness, and divert student attention from achieving excellence to maintaining victim status. Any group that isn’t loud enough in claiming victim status is robbed of the reverse-discrimination that they’ve been told they need. They’re told they can’t really compete, and many come to believe it. In several universities, we gone so far as to hire “bias referees” to protect minorities from having to defend their intellectual views in open discussion. The referee robs people of the need to think, and serves, I suspect, no one but a group of powerful politicians and administrators — people you are not supposed to criticize. On that topic, here is a video of Malcolm X talking about the danger of white liberals. Clearly he can hold his own in a debate without having a bias referee, and he makes some very good points about white liberals doing more harm than good.

Robert Buxbaum, November 5, 2017. In a related problem, black folks are arrested too often. I suggest rational drug laws. Some financial training could help too.

West’s Batman vs Zen Batmen

“Holy kleenex Batman, it was right under our noses and we blew it.” I came of age with Adam West’s Batman on TV and a relatively sane Batman in the comic books. Batman was a sort of urban cowboy: a loner, but law-abiding, honest, and polite – both to the police and to the ordinary citizen. He was good, and he was “nice.” As with future Batmen, no one died, at least not from the Batman.

bat-buddah

More recent Batmen have been not nice, and arguably not good either. They are above the law, trained in eastern monasteries by dark masters of kung fu, with a morality no one quite understands. One could say, quite literally, “He was a dark and stormy knight.”

Well, a few days ago, I found the item at left for sale on e-Bay, a plastic Batman-Buddha, and I started wondering about the meditations that produced Batman, and that Batman expounds on life and crime. It wasn’t pretty. They are not pretty. A quick check from the movie versions suggest the Zen Batman is pretty messed up, something that psychologists have noted.

Here’s a quote from the goofy, Adam West Batman of the 1960s: “Underneath this garb, we’re perfectly ordinary Americans.” Believing yourself to be normal helps improve sanity, and helps you relate to others. Calling yourself an American implies you keep American laws. Here’s another quote: “A reporter’s lot is not easy, making exciting stories out of plain, average, ordinary people like Robin and me.” It’s nice to see that the Adam West Batman feels for the other peoples’ problems, respects their professions, and does not profess to be better than they. By contrast, when a more recent Batman is asked: “What gives you the right? What’s the difference between you and me?” The Dark Knight responds, “I’m not wearing hockey pads.” This is a might-is-right approach, suggesting he’s above the law. The problem: a self-appointed vigilante is a criminal.

Here are some more quotes of the recent, eastern Batmen:
“Sometimes it’s only madness that makes us what we are.”
“That mask — it’s not to hide who I am, but to create what I am.”
“I won’t kill you, but I don’t have to save you.”

These quote are at least as messed up as the hockey pad quote above. It sometimes seems the Joker is the more sane of the two. For example, when Batman explains why he doesn’t kill: “If you kill a killer, the number of killers remains the same.” To which Joker replies: “Unless you kill more than one… but whatever you say, Batsy.”

Not a classic Batmobile, but I like the concept.

Not a classic Batmobile, but I like the concept; if that’s not Adam West, if could be.

The dark, depressive Batmen tend to leave Gotham City in shambles after every intervention, with piles of dead. West’s Batman left the city clean and whole. Given the damage, you wonder why the police call Batman or let him on the streets. Unlike West, the current Batmen never works with the police, quite. And to the extent that Robin appears at all, his relationship with Batman is more frenemy than friend or ward. Batgirl (mostly absent) has changed too. The original Batgirl, if you don’t recall, was Barbara Gordon, Commissioner Gordon’s daughter. She was a positive, female role model, with a supportive, non-sexist parent in Commissioner Gordon (an early version of Kim Possible’s dad). The current Batgirl appears only once, and is presented as the butler’s daughter. Until her appearance that day, you never see her at Wayne Manor, nor did she know quite what her dad was up to.

Here are some West Batman / Robin interactions showing an interest in Robin’s education and well-being:

“Haven’t you noticed how we always escape the vicious ensnarements of our enemies?” Robin: “Yeah, because we’re smarter than they are!”  “I like to think it’s because our hearts are pure.”

“Better put 5 cents in the meter.” Robin: “No policeman’s going to give the Batmobile a ticket.”
“This money goes to building better roads. We all must do our part.”

Robin: “You can’t get away from Batman that easy!” “Easily.” Robin: “Easily.”
“Good grammar is essential, Robin.” Robin: “Thank you.” “You’re welcome.”

Robin/Dick:”What’s so important about Chopin?” “All music is important, Dick. It’s the universal language. One of our best hopes for the eventual realization of the brotherhood of man.” Dick: “Gosh Bruce, yes, you’re right. I’ll practice harder from now on.”

“That’s one trouble with dual identities, Robin. Dual responsibilities.”

“Even crime fighters must eat. And especially you. You’re a growing boy and you need your nutrition.”

“What took you so long, Batgirl?” Batgirl: “Rush hour traffic, plus all the lights were against me. And you wouldn’t want me to speed, would you?” Robin: “Your good driving habits almost cost us our lives!” Batman: “Rules are rules, Robin. But you do have a point.”

And finally: “I think you should acquire a taste for opera, Robin, as one does for poetry and olives.”

Clearly this Batman takes an interest in Robin’s health and education, and in Batgirl’s. Robin is his ward, after all, rather a foster child, and it’s good to seem him treated as a foster child — admittedly with a foster-father whose profession is a odd.

Perhaps the most normal comment from a non-West Batman is this (it appears in many posters): “It’s not who I am underneath, but what I do that defines me.” It’s, more or less, a quote from Karl Jung (famous psychologist) and can serve as a motivator providing pride in one’s art, but job-attachment goes with suicide, e.g. when you lose your job. The far healthier approach is less identification with job; just be proud of doing good and developing virtue. West’s Batman finds Catwoman, a woman with her own moral code, odious, abhorrent, and insegrievious, and says so. The only difference between her and The Joker is the amount of damage done; he should find her insegrievious. Sorry to say, recent, Zen Batmen and Supermen are just as bad. To quote Robin: “Holy strawberries, Batman, we’re in a jam.”

Robert Buxbaum, June 26, 2017. Insegeivious is a made-up word, BTW. If we use it, it could become part of the real vocabulary.

Taxes and accounting jokes

A friend called the other day asking about a financial matter. It seems his wife bought some pictures for  pictures a few days ago for $2000, and after having them apprised, she finds they’re worth $2,000,000.

I started talking about un-realized profits, and mentioned that I never imagined that his wife had such an eye for art. He said, they’re not art pictures, exactly; they’re of you discussing business with the Russians. (It’s a joke — I thought you-all might depreciate it).taxation with representation

—————

When I started my business, I found that you could deduct medical costs. I called the IRS and asked if I could deduct birth control. They told me: “only if it doesn’t work.”

—————

I’m glad I learned about parallelograms in school, instead something mundane, like taxes. It’s really come in handy this parallelogram season.

—————–

I got a robo-call asking me to press “1” to hear about a government program for those who wanted to avoid paying back taxes. I did, and a voice said “Leavenworth.”   It wasn’t much of a program, more of a sentence.

—————-

Robert E. Buxbaum, April 5, 2017.  For jokes on other topics, click the jokes tag, here.

Arrested for decriminalized possession

The arrest rate for marijuana is hardly down despite widespread decriminalization, but use is up. decriminalization, but use is up. A rate that exceeds that for all violent crime.

Despite years of marijuana decriminalization, arrest rates for marijuana are up from 20-25 years ago, and hardly down from last year. Why?

There are a couple of troubling patterns in US drug arrests. For one, though marijuana has been decriminalized in much of the USA, marijuana arrest rates are hardly down from five years ago, and higher than 20-30 years ago — see graph at right. Besides that, it’s still mostly black-people and Latinos arrested. And the crime is, 4/5 the of the time, drug possession, not sale.

At the same time that violent crime rates are falling, marijuana possession arrests are rising (see graph below). Currently, according to FBI statistics,  more people are arrested for marijuana possession than for all violent crime combined. You’d expect it would not be this way, and a question I’d like to explore is why. But first, let’s look at more data. I note that part of an explanation is that marijuana use is up (18% in 2015 vs 12% in 1990). This still doesn’t explain the racial imbalance but it could explain the general rise. Marijuana isn’t quite legal, and if use is up, you’d expect arrests to be up. But even here, something is fishy: use rates are the same as in 1980, 35+ years ago in the midst of the “war on drugs,” but arrest rates have more than doubled since. Why? Take New York City as an example, 17,762 people were arrested for low-level marijuana possession in 2016 (smoking in public or possession of 25 gm to 2 oz). The low-level arrest rate is twice the national average in this Democratic-bastion city, where the drug was decriminalized years ago. Arrest rates in NYC went up an additional 10% in 2016, with black people arrested at 11 times the rate of white people. How could this be?

The race discrepancy of arrests persists across the US. Though black citizens use drugs only 15% or so more often than whites, and make up only 13% of the US population, they are arrested for drugs about three times as often and incarcerated about 4 times as often. It’s mostly for marijuana possession too, and the discrepancy varies very strongly by location In Louisiana, Illinois, and New York City arrests are particularly weighted to people of color. When New York City police precinct captains were asked about this, they explained that their instructions come from above. It’s a curious answer, I’d say, reflecting perhaps their dislike of the mayor.

Drug arrests are mostly for possession, not sale, and the spread is rising.

Drug arrests are mostly for possession, not sale and the spread is rising. More than half the time, it’s marijuana.

One of the race-affecting instructions is that the police are instructed to patrol black neighborhoods, but not the student unions of majority-white colleges like NYU. They’re mandated to stop and search junky cars but not nice ones, and to search people who have outstanding parking tickets, but not generally. They even get raises that depend on the number of tickets given, a practice that does not lead to a pattern of looking the other way — one many New Yorkers would prefer. Another issue: in many states, including New York, the police can keep money or cars, if they can claim that the asset was purchased with drug money or used in the drug trade. This leads to a practice where the city budget benefits when the police arrest persons they don’t expect will be convicted. It’s a practice called civil asset forfeiture, one lampooned, on Last Week Tonight, but jealously guarded. Since it is near impossible to prove that the money or car was not used in any way illegally, once they arrest someone, the police can expect to keep his or her money or cars indefinitely. The annoyance of lawyers perhaps encourages the arrest of people who do not seem to have them — people of color. New York mayor deBlassio justifies his arrests as a way to protect the neighborhoods, as his version of former mayor, Guilliani’s broken window approach. Maybe. But I think the profit motive is at least as relevant.

drug arrests hit black folks a lot more than white

Drug arrests hit black folks a lot more than white.

I note that strict justice tends to land hardest on the poor and defenseless. I also note that many important people have used marijuana without it damaging their lives in any obvious way. Both Jeb! Bush and Bill Clinton claimed to have smoked it; as did Barak Obama, Al Gore, and the Beatles. My bottom line: while marijuana decriminalization is worthwhile, it must go along with the repeal of civil asset forfeiture laws, and other means that make arrests into profit centers – or so it appears to me. Otherwise we’ll keep on flushing lives down the drain for no good reason.

Robert Buxbaum, March 6, 2017. I’ve previously blogged about the structure of criminal sentencing, coming to conclude that the least strict sentence that does the job is to be preferred. I also ran for water commissioner in 2016.

bicycle helmets kill

There is rarely a silver lining that does not come with a cloud, and often the cloud is bigger than the lining. A fine example is bicycle helmets. They provide such an obvious good that, at first glance, you’d think everyone would wear one, even without a law mandating it. Why would anyone risk their skull in a bicycle accident if injury were prevented by merely wearing a particular hat? Yet half the people ride without, even when there are laws and fines. There are some down-side to helmets, but they are so small that even mentioning them seems small. Helmets are inconvenient, and this causes people to ride a little less, so what?

hospital admissions for bicycle related head injuries, red, left; and bicycle related, non-head injuries, blue, right. Victoria Australia.

Hospital admissions for bicycle-related, head injuries, red, left scale, and bicycle-related, non-head injuries, blue, right scale. The ratio is 1:2 before and after the helmet law suggesting that helmet law did nothing but reduce ridership.

As to turns out, helmets hardly stop accidental injury, yet cause people to ride a lot less, and this lack of exercise causes all sorts of problems — far more than the benefits. In virtually every city where it was studied, bicycle ridership dropped by 30-40% when helmets were required, and as often as not, those who still rode, rode unhelmeted. There was a 30-40% decrease in head-trauma injuries, but it appears that this was just the result of 30-40% less ridership. You’d expect a larger decrease if the helmet helped, as such.

Take the experience of Victoria, Australia; head and non-head bicycle injury data plotted above. Victoria required bicycle helmets in January 1990. Before then, in the peak summer months, hospital records show some 50 bicycle-related head injuries per month, and 100 bicycle-related, non-head injuries — a 1:2 proportion. Later, after the law went into effect, each summer month saw about 35 bicycle-related, head injuries, and 70 bicycle-related, non head injuries. This proportion, 1:2, remained the same suggesting the only effect of the helmet law was to reduce ridership, with no increase in safety. The same 30% decrease was seen by direct count of riders on major streets, though now a greater proportion of those still riding were flaunting the law, and not wearing helmets.

One reason that helmets don’t help much is that the skull is already a very good helmet. As things stand, the main injury in a bicycle flip does not come from your skull cracking, it comes from your brain hitting the inside of your skull, and a second helmet doesn’t help stop that. There’s no increase in safety, and perhaps a decrease as the helmet appears to decrease vision. In a study of bicycle-injury-related highway deaths, Piet de Jong found that countries with the highest helmet use had the highest highway death rates. The country with the highest helmet use (the USA, 38% helmeted) had the highest cyclist death rate, 44 deaths per 1,000,000,000 km. By comparison, the nation with the least helmet use (Holland, 1% helmeted) had among the lowest death rates, only 10.7 deaths per 1,000,000,000 km. There are many explanations for this finding, one sense is that the helmets hurt vision making all types of injury and death more likely.

An hour or three of exercise per week adds years to your life -- especially among the middle aged.

From the national cancer institute. An hour or three of exercise per week adds years to your life — especially among the middle aged. Note these are healthy weight individuals. 

Worse than the effect on visibility, may be the effect on exercise. Exercise is tremendously beneficial, especially for middle-aged people in a sedentary population like the US. The lack of exercise is a lot more deadly, it turns out, than any likelihood of flying over the handlebars. How do I know? From studies like the National Cancer institute, shown at right. To calculate the cost/benefit of a little riding, less say you ride 3 hours per week at 10 mph (slow roll). The chart at right suggests a middle-aged person will add 3.4 years to your life, or about 10% life extension. Now consider the risks. This person will ride 30 miles per week, or 2400 km per year. Over 35 years the chance of death is only 0.36%. In order to get a 10% chance of death, you’d have to ride, over 2.3 million km, or 1000 years. Clearly the life extension benefit far outweighs the risk from fatal accident.

But life extension isn’t the total benefit of exercise. Exercise is shown to improve metal health, reducing depression and ADD in children, and likely in adults. Exercise also helps with weight loss, and that is another big health benefit (the chart above was for healthy body weight riders). So my first suggestion is get rid of bicycle helmet laws. I would not go so far as to ban helmets, but see clear disadvantages to the current laws.

The other suggestion: invent a better helmet. While most helmets are vented, and reasonably cool while you ride. They become uncomfortably hot when you stop. And they look funny in a store or restaurant. You can’t easily take them off, either: Restaurants no longer have hat racks, and stores never had them. What’s needed is a lighter, cooler helmet. Without that, and with helmet laws in place, people in the US tend to drive rather than ride a bicycle — and the lack of exercise is killing them.

Robert Buxbaum, January 19, 2017. One of my favorite writing subjects is the counter-intuitiveness of health science. See, eg. on radiation, or e-cigarettes, or sunshine, or health food. Here is a general overview of how to do science; I picked all the quotes from Sherlock Holmes.

The straight flush

I’m not the wildest libertarian, but I’d like to see states rights extended to Michigan’s toilets and showers. Some twenty years ago, the federal government mandated that the maximum toilet flush volume could be only 1.6 gallons, the same as Canada. They also mandated a maximum shower-flow law, memorialized in this Seinfeld episode. Like the characters in those shows, I think this is government over-reach of states rights covered by the 10th amendment. As I understand it, the only powers of the federal government over states are in areas specifically in the constitution, in areas of civil rights (the 13th Amendment), or in areas of restraint of trade (the 14th Amendment). None of that applies here, IMHO. It seems to me that the states should be able to determine their own flush and shower volumes.

If this happen to you often, you might want to use more water for each flush, or  at least a different brand of toilet paper.

If your toilet clogs often, you might want to use more flush water, or at least a different brand of toilet paper.

There is a good reason for allowing larger flushes, too in a state with lots of water. People whose toilets have long, older pipe runs find that there is insufficient flow to carry their stuff to the city mains. Their older pipes were designed to work with 3.5 gallon flushes. When you flush with only 1.6 gallons, the waste only goes part way down and eventually you get a clog. It’s an issue known to every plumber – one that goes away with more flush volume.

Given my choice, I’d like to change the flush law through the legislature, perhaps following a test case in the Supreme court. Similar legislation is in progress with marijuana decriminalization, but perhaps it’s too much to ask folks to risk imprisonment for a better shower or flush. Unless one of my readers feels like violating the federal law to become the test case, I can suggest some things you can do immediately. When it comes to your shower, you’ll find you can modify the flow by buying a model with a flow restrictor and “ahem” accidentally losing the restrictor. When it comes to your toilet, I don’t recommend buying an older, larger tank. Those old tanks look old. A simpler method is to find a new flush cistern with a larger drain hole and flapper. The drain hole and flapper in most toilet tanks is only 2″ in diameter, but some have a full 3″ hole and valve. Bigger hole, more flush power. Perfectly legal. And then there’s the poor-man solution: keep a bucket or washing cup nearby. If the flush looks problematic, pour the extra water in to help the stuff go down. It works.

A washing cup.

A washing cup. An extra liter for those difficult flushes.

Aside from these suggestions, if you have clog trouble, you should make sure to use only toilet paper, and not facial tissues or flushable wipes. If you do use these alternatives, only use one sheet at a flush, and the rest TP, and make sure your brand of wipe is really flushable. Given my choice, I would like see folks in Michigan have freedom of the flush. Let them install a larger tank if they like: 2 gallons, or 2.5; and I’d like to see them able to use Newman’s Serbian shower heads too, if it suits them. What do you folks think?

Dr. Robert E. Buxbaum, November 3, 2016. I’m running for Oakland county MI water resources commissioner. I’m for protecting our water supply, for better sewage treatment, and small wetlands for flood control. Among my less-normative views, I’ve also suggested changing the state bird to the turkey, and ending daylight savings time.

Skilled labor isn’t cheap; cheap labor isn’t skilled

Popular emblem for hard hats in the USA. The original quote is attributed to Sailor Jack, a famous tattoo artist.

Popular emblem for hard hats in the USA. The original quote is attributed to Sailor Jack, a famous tattoo artist.

The title for this post is a popular emblem on US hard-hats and was the motto of a famous, WWII era tattoo artist. It’s also at the heart of a divide between the skilled trade unions and the labor movement. Skilled laborers expect to be paid more than unskilled, while the labor movement tends to push for uniform pay, with distinctions based only on seniority or courses taken. Managers and customers prefer skilled work to not, and usually don’t mind paying the skilled worker more. It’s understand that, if the skilled workers are not rewarded, they’ll go elsewhere or quit. Management too tends to understand that the skilled laborer is effectively a manager, often more responsible for success than the manager himself/herself. In this environment, a skilled trade union is an advantage as they tend to keep out the incompetent, the addict, and the gold-brick, if only to raise the stature of the rest. They can also help by taking some burden of complaints. In the late 1800s, it was not uncommon for an owner to push for a trade union, like the Knights of Labor, or the AFL, but usually just for skilled trades for the reasons above.

An unskilled labor union, like the CIO is a different animal. The unskilled laborer would like the salary and respect of the skilled laborer without having to develop the hard-to-replace skills. Management objects to this, as do the skilled workers. A major problem with unions, as best I can tell, is a socialist bent that combines the skilled and unskilled worker to the disadvantage of the skilled trades.

Not all unionists harbor fondness for welfare or socialism.

Also popular. Few workers harbor a fondness for welfare or socialism. Mostly they want to keep their earnings.

Labor union management generally prefer a high minimum wage — and often favor high taxes too as a way of curing societal ills. This causes friction, both in wage-negotiation and in political party support. Skilled workers tend to want to be paid more than unskilled, and generally want to keep the majority of their earnings. As a result, skilled laborers tend to vote Republican. Unskilled workers tend to vote for Democrats. Generally, there are more unskilled workers than skilled, and the union management tends to favor Democrats. Many union leaders have gone further — to international socialism. They push for high welfare payments with no work requirement, and for aid the foreign socialist poor. The hard-hats themselves tend to be less than pleased with these socialist pushes.

During the hippie-60’s and 70’s the union split turned violent. It was not uncommon for unionized police and construction workers to hurl insults and bricks on the anti-war leftists and non-working students and welfare farmers. Teamster boss Jimmy Hoffa, supported Nixon, Vietnam, and the idea that his truckers should keep their high wages at the expense of unskilled. Rival teamster boss, Frank Fitzsimmons pushed for socialist unity with the non-working of the world, a split that broke the union and cost Hoffa his life in 1975. Eventually the split became moot. The war ended, US factories closed and jobs moved overseas, and even the unskilled labor and poor lost.

Skilled workers are, essentially managers, and like to be treated that way.

Skilled workers are, essentially managers, and like to be treated that way.

The Americans with Disability Act is another part of the union split. The act was designed to protect the sick, pregnant and older worker, but has come to protect the lazy, nasty, and slipshod, as well as the drug addict and thief. Any worker who’s censored for these unfortunate behaviors can claim a disability. If the claim is upheld the law requires that the company provide for them. The legal status of the union demands that the union support the worker in his or her claim of disability. In this, the union becomes obligated to the worker, and not to the employer, customer, or craft — something else that skilled workers tend to object to. Skilled workers do not like having their neighbors show them high-priced, badly made products from their assembly line. Citing the ADA doesn’t help, nor does it help to know that their union dues support Democrats, welfare, and legislation that takes money from the pocket of any one who takes pride in good work. We’ll have to hope this split in the union pans out better than in 1860.

Robert Buxbaum, June 5, 2016. I’m running for water commissioner. I’d like to see my skilled sewer workers rewarded for their work and skill. Currently experienced workers get only $18/hour and that’s too little for their expertise. If they took off, they’d be irreplaceable, and the city would likely fall to typhus or the plague.

Flat tax countries: Russia, Mongolia, Hungary

For no obvious reason, many Republicans and some (few) Democrats are fans of the flat tax. That is a fixed percentage tax on every dollar earned with no deductions, or very few. They see the flat tax as better, or more fair, than the progressive, graduated tax found in the US and most industrial countries. While most Republicans don’t like high taxes, as in Sweden, France, or in the UK, the flat-taxers want a single tax rate: a constant percentage for all. A common version is what Ben Carson described earlier this month, “if you earn ten million dollars your tax will be one million; if you earn ten dollars, your tax will be one dollar.” Herman Caine (R) proposed something similar eight years ago, and (surprisingly) so did Jerry Brown (D).

Ben Carson proposes a 10% flat tax. I'm guessing his source is the Bible.

Ben Carson proposes a 10% flat tax.

As it happens, of the 230 nations on the planet, several already have a flat income tax, and none of them are industrial juggernauts. I will list the larger of these countries in order their tax rate: Mongolia and Kazakhstan, 10% flat tax and hardly any services; Russia and Bolivia, 13% flat tax: moribund, raw-material-based, police-states; Romania and Hungary 16%; Lithuania and Georgia 20%; Zambia 22%; Switzerland, 35% when you include the Cantonal and municipal flat rates, and (topping the list) Greenland at 45%. Not one of these is a productive, industrial powerhouse, like the US, and there is no indication that this will change any time soon.

I suspect that the flat tax enters the minds of conservatives from the Bible, from the 10% of grain that was given to the Levites (Numb. 18:24), and the second 10% eaten of pilgrimage festivals or given to the poor (Deut. 14:22-24). If that’s the source, let me suggest a better modern version is to give out cans of food, or to support ones church. But as a model for government finance, I’d suggest it’s best to leave more in the pockets of the poor, and tax more from the rich. Even in Biblical times, the government (king) levied a substantial tax above the 10%s described above.

A measure of tax rate is the percentage of the total GDP that goes to taxes. As things go, our tax rate isn't particularly high.

A measure of tax rate is the percentage of the total GDP that goes to taxes. As things go, our tax rate isn’t particularly high.

A flat tax does not necessarily imply a low tax, either. Greenland’s flat 45% rate is among the highest in the world, and Israel had a 50% flat tax until fairly recently. It’s also worth noting that personal income isn’t the only thing one can tax. Several countries combine moderate personal income rates with high corporate rates (Venezuela, Zambia, Argentina), or add on a high sales tax, or a transaction tax. Herman Caine’s 9-9-9 tax plan included a 9% transaction tax and a 9% federal sales tax that would have gone on top of whatever the state tax would have been. The revenue collected by the 9-9-9 plan would have been no less than we had, but would be, he claimed, simpler. Cain’s flat tax wasn’t even really flat either, as there was an exclusion, an income level below which you were taxed 0%. That is, he was really proposing a two tier system, with a 0% rate at the first tier. Rand Paul seems to favor something similar today.

The two advantages of a flat tax are simplicity, and that it reins in the tendency to tax the rich too much, a tendency found with many liberal alternatives. The maximum tax rate was 95% in England under Attlee. Their 95% tax-rate appears in the Beetles’s song, Mr Taxman: “…There’s one for you, nineteen for me; ‘Cause I’m the Taxman.” High rates like this caused the destruction of many UK businesses, and caused The Beetles’s to leave and reincorporate in the Cayman Islands. Bernie Sanders recently proposed a top rate that was nearly as high, 90%, and praised Denmark (60% maximum rate) for its high social services. Sorry to say, Denmark seems to have concluded that their 60% maximum was excessive, and earlier this year reduced their maximum to 47.794%. This is below the maximum US rate if you include New York state and city income taxes. History suggests that if you tax the rich at rates like this, they leave or do other socially unacceptable things, like go black-market. On the other hand, if you tax too little, there is no money for education or basic social services, e.g. for the desperately poor. At one point, I proposed the following version of graduated to negative scheme that manages to provide a floor, a non-excessive top rate, and manages to encourage work at every income level (I’m rather proud of it). And there are other key issues necessary for success, like respect for law, and not having excessive minimum wages or other excess regulations.

Bernie Sanders: tax the rich at 90% of income.

Bernie Sanders: tax the rich at 90%; I doubt this is a good idea.

Whatever the tax structure is, there is probably an optimal average rate and an optimal size for the government sector. I suspect ours is near optimal, but have no real reason to think so (probably just nativism). I’ve found that comparing the US tax rates to other countries’ is very difficult, too. Most countries have a substantial Value Added Tax (VAT), that is a tax applied to all purchases including labor, but we do not. Some countries have import taxes (Tariffs, I’m in favor of them), while we have hardly any. And many countries tax corporate profits (and sales) at rates above 60% (France taxes them at 66.6%). To make any sort-of comparison, I’ve divided the total tax income of several countries by the country’s GDP (I got my data here). This percent is shown in the chart above. The US looks pretty average, though a little on the low side for an industrial nation: just where I like to see it.

Robert E. Buxbaum, November 29, 2015. I imagine myself to be a centrist, since all of my opinions make sense to me. When I change my mind on something, I stay at the center, but the center moves. If this subject interests you,  seems to have dedicated his life to following the flat tax.

Republicans vs conservatives

Most of the great divides of the 1800s pitted conservatives against Republicans. This was the Divide in the Mexican civil wars of the 1800s, and there were several; it is the divide in the South American wars of Independence, and in much of the US and European political debate of the 1800s as well.

Ned Flanders, cartoon conservative from "The Simpsons" He's generally well meaning and helpful, but also a bit creepy.

Ned Flanders, cartoon conservative from “The Simpsons” He’s generally well-meaning and helpful, but also a bit creepy.

In general, the difference between conservatives and republicans is that conservative governments favor religion, and religion-based leadership, while republicans favor individual liberty. In 1800s Mexico, conservatives backed two emperors (Maximilian I and Agustin I) and Santa Anna, the ruler who suspended all personal rights an ignited the war of Texan independence. Conservatives generally favor the religion of the majority: Protestantism in England, Catholicism in Central and South America, Judaism in Israel, and Islam in most of the Muslim world. This tends to annoy the irreligious and minority religious populations, who tend to become republicans. Cinco de Mayo celebrates the 1862 victory of Mexican republicans over the French-backed, conservative Maximilian I, at the battle of Puebla. The US Civil War, in essence, pitted the irreligious, industrial, republican north against the conservative, evangelical South; slavery is in the Bible so it must be good.

Conservatives usually favor government actions against sin in all it’s forms: miserliness, drunkenness, drugs, pornography, wild music, money-making, and freedom as such. Conservative-ruled countries have generally had anti-blasphemy laws and enforced “blue laws”, restrictions on business on holidays. Republican governments have few, or none of these. In pre-revolution France, the penalty for blasphemy was death, just as the Bible mandates. This changed when the republicans came into power. In England, private blasphemy was prosecuted as late as 1977. Similar penalties are still in force in Iran and other conservative Islāmic countries. Many US states still restrict the sale of alcohol on Sunday, for similar, conservative reasons. Conservatives usually favor sexual morality laws, putting strong restrictions on homosexuality, abortion, and divorce. In England, amicable divorce wasn’t legalized until 1930, and homosexuality was illegal until 1970. In the US, sexual laws are a fairly bizarre mix, in my humble opinion, the result of republicans, liberals, and conservatives making inelegant compromises.

In republican democracies like modern-day France, Holland, and Germany, sexual immorality laws are more lax than in the US. Republican governments strive to protect the rights of the individual; among these their right to property and to a fairly unbridled pursuit of pleasure. Republican countries tend to suffer from (or benefit from) significant income inequality. People can become rich due to hard work, talent, luck, or birth. And they very often become arrogant and obnoxious after they become rich — and sometimes before — to an extent that bothers conservatives and liberals alike. People can also become very poor: from laziness or bad choices, or just from bad luck or having been born to the wrong parents. Conservative and liberal elements then strive to help the very poorest, providing them with food, money and basic housing — generally achieved by taxing the rich. This is good in moderation, but taken to excess, this can lead to dependency of the poor, and redirection of the rich into less-productive fields like politics and the church. Conservatives very rarely leave a good pathway for the poor out of dependency, nor have they found a way to keep scoundrels out of the government and the church.

Scrooge McDuck. he'd likely be a Republican, if only to protect his wealth.

Scrooge McDuck, banker, railroad tycoon, steel magnate; he’d likely be republican, though not likely conservative. Motivated by money and power, he may do good, but not in any direct way, usually.

At present, the US Republican Party, the GOP, consists of approximately equal halves conservatives and republicans. That is, GOP leadership is currently an approximate balance between kindly folks like Ned Flanders who would rule by the Bible, and an equal number of rougher individuals, more like Scrooge McDuck who would rule by money.  in a sense, this is a wonderful compromise as the excesses of each group reins in the excesses of the other. In another sense though, the balance between conservatives and republicans is an ungovernable mess that leads to regular de Condorcet failures. I’m not sure how this will play out in the 2016 elections.

Fortunately, not all irreconcilable differences are as irreconcilable as one might think. Many de Condorcet problems are solvable by compromise, or by the effects of time. Compromise between charity and commerce can produce the best of all worlds, a major theme point, as I understand it, of Dickens’s Christmas Carol.

Robert E. Buxbaum, October 20, 2015. I use these essays to refine my thinking — here, more than usual. Any help you can provide will be welcome, feedback, corrections, comments. I’m trying to figure out what I, myself think. The divide between Conservatives and Liberals produces some of the most wonderful quote – exchanges, e.g. between Churchill and Attlee in 1950s England. Liberals, and I have not quite made up my understanding here, seem like a sort of like conservatives in that they believe in wealth redistribution, but without the guidance of a church, or church-based morality. At some point in the future, I’ll hope to arrange my thoughts about them, and about the difference between liberals and democrats.