After Summer Session ’66 ended, another law student, Randy Berry from Amarillo, and I, put a Judson supercharger on Randy’s VW and headed off for Monterrey to find John Steinbeck.

Crossing the  Bonneville Salt Flats, we started pushing oil through the rings of the overstressed air cooled engine.  We got to SF and took a $2 room at they YMCA.  We met a chauffer who lived in the Y at the cafeteria and from him we got a reference to a Serbian VW mechanic in Santa Cruz.  We spent a second night in SF camping on Mt. Tam and froze, but we were down to about $30 between us and had to conserve.

We drove to Santa Cruz, slowly.  On the boardwalk, Randy, a crack shot, pulled a deal with the shooting gallery operator on the boardwalk to bring in the rubes by hitting all the targets.  He paid Randy $130. for four hours of shooting.  I stood out front, talking loudly about how easy it was to win at the gallery and would shepherd folks over to watch Randy.

Having no place to sleep, we went to a coffee house near the fledgling UCSC campus.  We played chess with Navy guys who were stationed nearby – frogmen trainees in their early to mid twenties.  Good guys.  We napped on the sofas.

In the morning we found the Serb.  He fixed the VW by nightfall.  One more night in the coffee house and we drove to our destination, Monterrey.  Pacific Biol was still standing on stilts (“Cannery Row” readers will recall it as Western Marine Biol, where Doc hung out).  One cannery was still open.  It was a dying town.  We went to the Dew Drop Inn and asked for Steinbeck.  Turned out he lived in NYC!   But his sister came in, and we bought her drinks for two hours and pumped her for details about our favorite novelist, and about Monterrey in the forties.

Next day we drove down to Morro Bay and then turned left across the desert to Las Vegas.  Got to the Sands at about 6 PM, got a room, showered, shaved, and changed into clean khakis and shirts.  When we boarded the elevator to head down to the restaurant for steaks [they were so cheap then in LV!] we joined Joey Bishop and two pretty young women in cowgirl outfits trying to pitch him on watching their routine which involved singing and lariat tricks.

He looked over to me and said “Glad you finally got here”.  Looked at the girls and said “This is an agent of mine, and he and his associate will buy you dinner while you pitch your deal.”  He smiled at me and got off the elevator.

Randy and I took the women to dinner and bought them steaks.  After the meal,  and decidedly before they had an opportunity to invite us to their room to show us their routine, I told them the entire truth.  Wounded for a minute, both of them, who were sisters from Montana, laughed, and shared dessert with us.

Drove out across Hoover Dam in the morning and then through AZ, NM, and home.  Had another adventure in Santa Fe, but Mt. Tam, the shooting gallery in Santa Cruz, Steinbeck’s sister, and Joey Bishop in the elevator stood out.
 
Years later, late in the S&L crisis, I was close to bankrupt and needed $25K fast.  Randy and his brother wired me the cash from Amarillo where their cattle operation was flush, that year.  It took me almost 5 years to pay it all back [it was not my only debt from that time].  Then Randy got caught up at 55 with no health insurance and a heart condition after having spent his liquidity on a slowly dying wife uninsured with diabetes.  I wired him $5K for med bills, but he died soon after.  We were friends for life and we always laughed about Joey Bishop in the elevator.

Filed under: Uncategorized | 7 Comments »

Rick Perry’s tax returns

He did well on real estate deals. On one, a sweetheart purchase from Mike Dell, he tried to get his property tax appraisal lowered because he bought the property for far less than it was appraised for on the Travis County rolls. He and I sat next to each other in the waiting room of the central appraisal district before our first protest appearances. I suggested to him that he needed an independent appraisal. He told me that made no sense because it was obviously worth what he paid for it. I said that was some evidence, but would not likely be enough to sway the County unless there were some other comparable sales nearby on the lake. I won my appeal. He lost his.

by ashotinthedark

Since we are talking about personal interactions with politicians, I figured I would share one I had yesterday. Yesterday I attended a legal conference through the State Bar of Michigan and the keynote speaker was Michigan’s recently elected Attorney General, Bill Schuette. He was quite charismatic and introduced himself to everyone in the room by going around to each table with a caraffe of coffee and pouring coffee to those who wanted some. He said it is a trick he has used since he first ran for political office 20 pluse years ago. His speech seemed an awful lot like a political stump speech and was not particularly informative. Just about the only memorable thing he said was his consistent use of the term Obamacare….repeatedly. In fact, he was unable to recall the actual title of the bill when he attempted to refer to it as somethign other than Obamacare. I found it unprofessional and off putting, as did the obviously liberal leaning former circuit court judge who was sitting next to me. I can see using the term Obamacare at a fundraising or partisan political event, but it seems like a bad idea at a meeting of health care lawyers in Michigan.

Do others find the use of Obamacare off putting? Have others had similar experiences with local politicians using the term?

PS. Is anyone else unable to comment using their google account? It only happens when I on my network at work, but when I sign in, it send me to my blogger.com profile but when I return to the blog, I am no longer signed in. Anyway, any suggestions Kevin?

Filed under: Uncategorized | 18 Comments »

Any serious discussion of top tax rates should start with understanding top rates around the world.

http://en.wikipedia.org/wiki/Tax_rates_of_Europe
http://en.wikipedia.org/wiki/Tax_rates_around_the_world

I began this conversation on our first day with the suggestion that corporate tax rates peaked too high [39%] and too early, dropping off above $350K taxable income.  It has continued at times that I could not comment because life, as it were, interfered.  My corporate tax argument was based on both the irrationality of taxing small biz at a higher marginal rate than big biz, and at taxing it at a higher rate than our trade partners would.

The same argument applies to the personal tax.  There is some point where personal wealth would flee to invest in another nation where taxation was not as burdensome.
However, no matter how low taxes are in Albania, it will not go there.  We have experienced capital flight, so we know it does happen and we know what we are up against.  On the tax front, we probably need to worry only about western Europe, Japan, Canada, and Australia right now, but the field will expand, as other nations are viewed as safe, with protective judicial processes and as friendly to investment. Russia and China are out, for now.

So we can set our top personal tax rate at the low middle of our most similar competitors without fear of capital flight.

TMW, that would be the extent of my conservative argument here.  I suggest the following to you:

If the rate is not prohibitive, if it does not force capital flight to another country, then the highest such rate will not affect employment or decision making in a negative way.

Why?

1]  The tax is on net income only and does not affect pricing.  Net income is maximized for a competitive business at the same competitive price with or without the tax, although after tax profit is reduced across the board.

2]  The reduction of profit across the board could lead to less investment in a future year.  Again, as long as the worldwide comparison is favorable to us, we get more than our share of the future investment.  I would revisit this aspect if investment in America was stronger than in our trading partners, but we were all suffering from a shortage of private capital, that is, if an inordinate % of net income was replowed into expansion and R&D rather than sitting relatively idle.

3]  Think of high marginal tax rates [say, 40%] as high contributions from government for deductible expenses.  In other words, each new employee I hire when I am in the forty percent bracket is only 60% paid by me; each new Sec. 179 asset I buy is only paid 60% by me, etc.

TMW, I ask you to think about these points absent the bathtub theory that we can starve big government by removing its revenue stream.  About the Norquist theory: obviously, if the idea is to shrink the federal government across the board, that is one way to do it, in theory.  It has not worked in practice for reasons you and I have agreed upon before.  Both of our political parties are Free Lunchers.  They each want to be known to the voters as having supplied something for nothing.

A better plan for reigning in costs is a renewed Gramm-Rudman-Hollings statute.  At least it is better than arguing for tax cuts and wars at the same time.  It is also better than a constitutional amendment because were we to become fiscally responsible we would be balancing over a business cycle, not in both great years and bad years.  As it stands we only reached balance and surplus recently at the culmination of a boom in the late 90s.  Rather than either tax cuts or spending increases, we could have simply reduced the ND, knowing we might have to increase it in a bust.

Look at the world info and think of tax rates in that competitive light.  I suspect that will be an interesting exercise for each of you, whether you share your conclusions or not.

See y’all again rather late tonight, I fear.

Filed under: Uncategorized | 6 Comments »

Filed under: Uncategorized | 12 Comments »

I assume you reposted since I wrote, QB, because now it is fully visible and open to comment, to me.

Because I have seen the nation more divided than it is now [IMHO] I believe the comparison is not the proper focal point.  I think the proper focal point is in your positing of the current nature of profound disagreement and of mass and personal communication, and how to address them.

In order to have this discussion, I am assuming [by assumption] that EVERYONE AT THIS TABLE is familiar with the English language as spoken in the USA, and that we all are fluent at a post high school level.

Further, I am assuming that we all have access to all the same news sources and that we understand with substantial clarity what we read and what we hear and what we see.

If my assumptions are correct, we [here] come to our disagreements early.  We choose our reading/viewing material by predisposition or prejudice, if you will. This may be by reason of parental influence, or college experiences, or psychology, which last is beyond my ken.
============================
My father was an Eisenhower R.  He was an anti-communist with a sense of humor.  He despised Joe McCarthy as a fake and a fear monger.  But he correctly believed, as history has now revealed, that Hiss spied for Stalin.  I wrote my senior in high school honors history paper on “Communism in Latin America”.  I predicted Castro and urged that we co-opt him before he took power.

I went to Rice in 1960 on a full ride and turned down a partial scholarship at Yale. At Rice I came face to face with the reality of segregation and I was caught up in the Civil Rights movement, as were all the northern boys on one wing of one dorm in Houston.

In law school at UT, while the rest of the campus seethed with anti-war protest, we went about our business knowing we would sign up for OCS and hoping for JAG slots.

By 1967, I was a Texas D hawk.  When the D Party abandoned the military [I was there for McGovern’s capitulation] I was not amused.  I voted for Ford in ’76.

So I think my predispositions have focused my news reading and my perceptions.  I rely fairly heavily on the “Economist” for facts.  I do not watch any 24/7 cable except when forced to on the treadmill at the gym.

From where I began my “political journey” the Eisenhower Rs are gone.  The far left, when it argues for unilateral disarmament or someting like it, still drives me nuts.

My experiences as an attorney active in local politics and working the last twenty five years on the side of management in labor and employment law have  made me believe much can be achieved by local government when folks are aroused, and my civic mindedness does not immediately turn to “federal” solutions.  Indeed, I have seen what spirited private public local partnerships can do and how much more efficient they are.

My last roommate in Law School was John Carter, still a friend but now the R Congressman from our neighboring CD.  I have been friends with Lloyd Doggett ever since 1971, a D Rep from our neighboring CD.  KBH  is a classmate and I have always voted for her. I recall how tough it was for each of my four female classmates and how gracefully Kay handled it.

Our schoolboard races here are between sane Rs and creationists.  I vote for the sane Rs.  Yes, I think this refusal to acknowledge evolution is nuts.

Ross Perot almost singlehandedly brought Texas public schools into the top 20 in America for a time in the late 80s.  He spent millions of his own money lobbying school reform and going around the state with his persistent flip charts.  I voted for the man twice for Prez without regret.

I worked for a while around 1970 in David Richards’ law office.  He was [still is]a brilliant labor lawyer.  His wife Ann became governor.  I used to go to swim parties at their house.  I worked for Ann’s election.

I did pro bono ACLU work in the early 70s.  Mainly defending court martials at Ft. Hood, of men who were being tried for wearing obscene or political tee shirts, worn off duty.

This began for me with my first federal case in late 68 after I was HD’d from the Navy.  I repped a Defense Atomic Substation worker, an E-7 corporal, who had had his security clearance pulled because my client’s daughter had called the Colonel’s daughter a pothead, which she was.

I sought a due process hearing on the security clearance issue.  The Army lawyers walked in and announced they were offering to reinstate my client’s security clearance.  The Judge asked me to respond, and so stunned was I that I began my opening statement.  Judge Roberts, who knew me already, growled and interrupted.  “MARK, YOU WON.  SIT DOWN.”

I have worked both sides of the labor law aisle, defense/employer since 1980.

So my experiences and background probably have more to do with my current perceptions than failures of communication.  And mine are unique to me as yours are to you.

Where we have common experiences [I busted a big Ponzi scheme in 1989 – headlines in Austin, recovered all of 13% of the “investments”] we still have differences of opinions as to what defines Ponzi and what defines insurance, or finance, or gambling, or tax supported welfare.  I think you focus on the rising number of retirees and think the base can no longer support the top, or as Scott says, will no longer support the top without a change.  I focus on the mens rea and the demographics that actually will ease in another twenty years.

But in an instance like that, I do think we can agree to disagree knowing what each of us are emphasizing.

And that is probably the best as we can do.

Filed under: Uncategorized | 11 Comments »

The “Plum Line” itself seems useless to me this morning – its morning discussion points just brought out Obama love/hate.  So now for something completely different to chew on:

The euro crisis

Time is running out

Filed under: Uncategorized | 12 Comments »

I pose that corporate tax rates should be made rational and competitive, and I think the 28-29% area is both, provided we close most yawning gaps. 

See

 http://www.smbiz.com/sbrl001.html#ci

 and note that the rate table is irrational: the top rate, 39%, falls on entities making between $100K and $335K and then drops off! I pick the 28-29% level for a top corporate tax for competitiveness. 

See:http://en.wikipedia.org/wiki/Tax_rates_around_the_world

 You will point out that competitor nations have other taxes, and I will respond that due to our federal system we do too.

I would abolish CG preferential treatment if we had a flat tax rate with a high standard deduction, but if we retain a progressive structure then sales of appreciated assets place a punishing high tax on income, which spread over the life of the asset, would have been taxed at a conceivably much lower lower rate.  Take your sale of non-homestead real property, owned for 30 years. It has appreciated five times over. If you are normally in a 15% bracket this appreciation would put you in the 35% bracket for the current year, thus punishing you for having kept the property, because if you could have sold it off piecemeal over the years you would have been taxed at the lower rate. However, I favor a method that would allow us to abolish CG preference because I favor a flatter structure.

I would toy with a very high standard deduction and no itemization as a starting place.  That allows for much flatter rates and simpler personal returns. For example:The last time I ran the numbers, a standard deduction of $20K for a single person, $40K for a couple, plus $10K for the first dependent, coupled with a 33 1/3% flat tax above that, and a 40% rate on incomes over $250K for an individual, $500K for a married couple, plus $10K for the first dependent produces more revenue, but hits higher on the income scale than our current system. CG rates could be the lower of the only two brackets, 33 1/3%. I would consider stretching the CG holding period to three years.

Without itemization, personal tax issues are simplified. I would treat dividends and interest the same as earned income and I would ignore the ruckus about double taxation of corporations. I would call double taxation a cost of obtaining the liability shield for the investors.

However, I would gradually move away from reliance upon the personal income tax toward a small transaction tax on the widest base of transactions, like the automated payment transaction tax for which great claims have been made. 

See:

 http://www.apttax.com/execsummary.php

Less radical, but working along the same principal of lower tax on a broader base, we see Simon Johnson’s proposals. Jonson is both a brilliant economist and an expert in banking and finance. 

http://economix.blogs.nytimes.com/2011/07/21/could-tax-reform-make-the-financial-system-safer/ 

and download from this link:http://www.iie.com/publications/interviews/pp20110727johnson.pdf

I would add in high “sin” taxes, like those on tobacco and alcohol, but also upon carbon based fuels and decriminalized MJ. I would rank order the carbon tax based on the dirtiness of the fuel – coal would be much more heavily taxed than NG. In fact, I might not tax NG at all if it would hasten the end of coal.

As to the expenditure side: For me, the goal is broadly Keynesian but narrowly Friedmanesque, and decidedly Smithian. We should aim to balance the budget over the business cycle in a way that we are in surplus during most times and deficit only during bad times, automatically – rather than in deficit all the time, which is the unfortunate political reality. Monetarily we should not be flooding the world with created funds and low interest when there is an excess of accumulated capital, but only when there is a shortage of accumulated capital. Our Fed does have the unique dual legal and formal obligation to fight both inflation and unemployment, so my desired outcome cannot be, in this respect.

 As to production and trade:I would also like to see an industrial policy that fostered innovation and rewarded it.  For example, that Silicon Valley outfit that invented the most recent advance in led bulbs should be getting encouraged to keep the new jobs to be created in the USA.  If Austin can lure a Samsung factory, someone can lure a light bulb factory.  I am not suggesting a federal policy on the front end, but I would listen to suggestions along that line. This would also lead to tariff protections for fledgling industries, the exceptional circumstance in which Adam Smith supported restrictions on free trade.

Beyond Smith, however, I would attempt to make the UN’s International Labor Organization rules applicable to the World Trade Organization. As it stands, only the “no slavery” rule applies at WTO.ILO insists that nations have minimum wage and maximum hours laws enforced, child labor laws enforced, and freedom of association for the purpose of collective bargaining. WTO ignores these rules and thus can sanction all western nations for placing tariffs against nations like China where there is no collective bargaining. There is reason to believe that all the western nations plus some others, like Japan, could force this upon WTO, or failing that, dissolve WTO. There is no way we can talk about fair trade without this kind of change, because WTO does not recognize these basic principles.

I have posted piecemeal some of these ideas at PL, but I thought doing it here with some links would be a nice kickoff to conversation.

Filed under: Uncategorized | 8 Comments »