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In order to accomplish the four primary characteristics of good tax law:
1. A functional tax system adequately funds government services.

2. A functional tax system is comprised of functional law: Understandable and easy to apply, stable and predictable.

3. A functional tax system is fair.

4. A functional tax system is effective at influencing socially productive decisions about money, time, resources.

 

I propose the following revisions in order of importance.

  1. Tax ALL entities and ALL income on the same progressive rate structure.

    Entirely eliminate all preferences for long-term capital gains and income from dividends, including all spinoff forms of that preference, including section 1256 gains on futures trading, and all carried interest preferential taxation for private equity investment bankers.

    Increases tax revenues from current subsidy of income from long-term capital gains and dividends. Simplifies tax computation, reporting and enforcement. More understandable. Equally taxes income from work, rental and other services, and unearned income from ownership.

  2. Eliminate ALL deductions from income with the exception of deductions for any expenses incurred to earn specific income. No above the line deductions for health care expenditures, retirement plans, educational expenses; no itemized deductions for medical, mortgage or sales tax interest, state or municipal taxes, charitable contributions, and for all entities.

    If a subsidy is to be retained at all, retain it in the form a tax credit, in which each taxpayer receives the same % tax benefit.

    Increases tax revenues from current subsidy. Simplifies tax computation, reporting and enforcement. More understandable. No longer higher subsidy, the higher the tax bracket. Eliminates favored beneficiary interests. Reduces inflation in costs of health care, education, homes.

  3. ALL entities with limited liability status (corporation, LLC, limited partnership) would be taxed as distinct entities. All entities in which the shareholders are personally responsible for all entity debts (not limited) would be taxed as a proportional flow through entity (taxed as if they were an individual on their individual return).

    Increases tax revenues by taxing all entities as well as their distribution of profits. Aligns favored legal status (no shareholder exposure to entity’s debts) with tax responsibility.

  4. ALL limited liability entitites would be required to publish audited financial statements, on their global income. All limited liability entities doing business in the US, would be taxed on all of their audited global income, with the reconciliation for total taxes between countries determined by tax treaty between the countries. (There would be then no possibility of offshoring profits.)

    Increases tax revenues by taxing all corporate entity’s income in US. Simplifies enforcement for corporate entities. Eliminates off-shoring of large corporations’ profits.

  5. For all individuals, a once per lifetime net worth tax, based on the same progressive rate schedule as other taxation, applicable at either age 60 or death, depending on the taxpayer’s discretion.

    Retains estate tax revenue. Adds discretionary timing of tax levy.

  6. Elimination of other ad hoc tax features including the exclusion from $250,000 gain on sale of a private residence, the alternative minimum tax. Passive loss limitations would be eliminated.

    Simplifies tax preparation and enforcement.
    Suggested marginal tax rate structure:

    Up to $20,000          $0
    Up to $40,000          $0           +      12.0% over $20,000
    Up to $80,000          $2,400   +      19.0% over $40,000
    Up to $160,000       $10,000  +      26.0% over $80,000
    Up to $320,000       $30,800  +      33.0% over $160,000
    Over $320,000         $83,600  +      40.0% over $320,000

    Applies to all entities.

Simple!

I didn’t think it could happen to me.

I didn’t think that I could be deflected by recurring circumstances (a life entirely constructed around work routine), to lose the perspective of a cool fresh head/heart.

It did.

In my case, I got into the routine.

My day. Wake up at 6:00, don’t meditate like I used to, don’t say “thank you for this moment” like I used to. For a long time, I woke up tired. I still do from internalized stresses, even with my sleep apnia machine.

Nearly immediately, I get on my cell phone by my bed, read my facebook feed, argue about Israel for an hour (initiating my tension addiction), eat (counting calories), check in with my wife (briefly), walk the dog while listening to music that I can barely hear. Quickly take a shower, get dressed.

Then drive 20 miles to work in a car that is bigger than I would ever desire on its own merits. Also, listening to music that I can barely hear. Then climb the stairs in the converted factory building.

Routinely say hello to my two workmates, whom I also can’t hear really, who are also right in the work rat race (busy). Plop down at my computer. Wait while the computer goes through its contorted startup routine. Close the dozen pop-up programs that require me to close them to continue. Open up the three programs that I use daily, wait for them to boot up. (One also requiring two passes to get it to open.)

Read my daily e-mail, 1/2 spam, another 1/3 announcements of who will be late,  Maybe 1/6 requiring me to act on something useful.

OK, that’s everybody’s in box.

Then, at the screen, all day every day. Governed by my very routine to do list.

And, all in a background of tension, every minute of every day there. I appreciate many things about all the people there, but I can’t get my boss and our current less than perfect work relationship out of my mind. It haunts me. And, I know that aspect of the problem adds an edge to my response to everything, and that that is my problem, my responsibility to manage.

The objective reasons for work tension remain, but the emotional ones are in the front of my mind.

6 hours (a short day). 10 minute lunch, then back to it.

Then guilt that I’m leaving work while my workmates continue (they work 8 hours).

Then a tense drive home, like all other commuters.

Then eat a snack as I’ve usually not eaten enough during the day and I’m ravenous (dieting too). Then, back to my home computer to write about Israel again (continuing my stress/”I’m needed” addiction). Then a bit of philosophical musing of the pointlessness of human existence, anybody’s, mine. Then, some more self-pity, running over my day, my angers, my reasons why I’m right.

Then I cook dinner, and spend a few minutes with my wife. (Maybe 25 minutes of total attention or time together compared to six hours at work plus many more preparing and getting to work, and the many more hours that my boss is in my mind).

Then eat, usually watch a movie after work (in spite of my resolve earlier to move forward on some of the other projects that I’ve committed to.) Then crash, sleep for an hour.

Then rarely, exercise. (I’m afraid to bicycle now with two falls in the last two sessions resulting from loss of balance due to my loss of functioning of hearing and balance nerves).

More often get back on the web and argue with far left and far right about Israel.

Then, get ready for bed, play some mind-exhausting games so I can fall asleep, some more posting about Israel, then put on my sleep apnia mask, then crash for six hours.

Repeated 5 days.

Then Saturday I visit my mother, who needs my visit, but it is also always stressful. We have fun too, laugh when we can hear each other. But, mostly just get her out of the facility that she’s in for some diversion. Long drive. 45 miles each way, with some of the most dangerous highway design in New England on the way.

Sunday is mine. (Lots of time writing about Israel, and playing video games. Eating yeah. Sleep.)

I don’t take vacations for myself. I can’t be away from my mother, missing more than one weekend in a row, and I can’t be away from work more than once in any two week period, for the unnecessarily complex payroll preparation exercise that no one else is remotely able to do.

Rat race.

Head down. No looking up to see what’s going on. Me and everyone.

Collectively. No looking up to see that we drive and drive and drive.

I can’t hear, so social interaction is difficult and always includes the tension of the struggle to hear, and all clouded by my permanent and persistent low level depression. No hope.

Just like my father.

(Then some breaking through, my wife making me laugh about something,)

No possible social change. No possible room to think, to see.

Guilty for seeking to enjoy my own life (by looking away from my problem-solving addiction), while others have to struggle.

Guilty for spending money on diversion at all.

Just guilty and trapped.

Too sensitive and not sensitive enough at the same time. A wound.

Which is the beginning of this circle? Anyone have any ideas? Social/political, emotional, simple failure to interrupt the cycling to take a minute to pursue wellness?

Why do others seem to focus just on their own lives, their own life-scale only (and not think about social problems, or anybody others’).

Why do I lack that skill?

Or, am I just seeing clearly, and commonly unable to make change in my own life, and socially. Doomed to watch slow decline, continual.

This is not a suicide note. But, I am in the middle of this. This is not an after-the-fact Oprah Winfrey interview of an epiphany.

Trying figure out, so that I can live decently.

All My Relations

This is the theme of the blog, always, forever, bone to whimsy.

In looking at “all my relations”, some identify codes of conduct/interaction, and methodically assess their behavior relation by relation. Others emphasize spontaneity, realizing good by loving.

I do both, structured and spontaneous.

My structured inquiry is by social scale, starting from the most within, “God” if you will.

1. My relationships with the most intimate. God is usually thought of as a remote authority, a judge, a king.

Others speak of God as that which knows you entirely and compassionately, utterly without judgment, more than one knows oneself, the most intimate. “Search my heart”. My most trusted friend.

It doesn’t require belief in any manner, nor any credo, nor any association, nor any magic incantation. The most that one can do is to relax, to allow to “search my heart.

Ultimately, the only power that accrues is the personal power of self-knowledge and self-control, adopted by repeated days and days of exercising one’s capacity to let one’s reality be seen, reviewed, accepted.

Religion in contrast is an application, but religion becomes twisted if only the application is remembered and not the original humility.

2. My relationship with my self. I personally am very self-critical, with an underlying consciousness of guilt, wondering what I did wrong, when?

I forgive myself for all actions, for all shortcomings. I acknowledge my kindness, my intelligence, my physical strengths. I observe the healing of pains, the natural restoration of vitality. I acknowledge my inevitably physical mortality. I acknowledge that I can only know what one person can know.

3. My relationship with my wife, trusted and trusting good friends, my children, my mother. Close, never abandoning one another. Cared for. Clearing up when I hurt or offend in some way. Speaking up when I’ve been hurt in some way. Seeking ways to be of help. Seeking help. Checking in often. Laughing and playing often.

4. My relationship with my community. Volunteer. Friendly acquaintance. My neighbors. Conscientrious professional relationships. Helpful, and productively critical. Problem solving.

5. My relationship with my nation, with my people. Loyal and productively critical.

6. My relationship with the planet. Lightly walking. Leaving room for others.

By caring, by loving as a verb in all our relations, we create a pleasant world, rather than an unpleasant one.

Structured and spontaneous.

This is my map of a good life.

Simple, with MANY complexities in the application.

You should.

If you are an investor they are a uniquely tax-sheltered form of investing/speculating.

If you are interested in public policy, they are a uniquely abusive tax shelter for those that undertake short-term speculation.

What is IRS code section 1256? I don’t have chapter and verse in front of me, but it is a provision in the IRS code that allows those that trade in futures contracts, or those that invest in funds that trade in futures contracts, to pay taxes as if the trades were partially long-term, even though most trading is closed out within a day or other short period.

Long-term capital gains are taxed at a maximum tax rate of 15%, and 0% if you are in the 10 or 15% marginal tax bracket. For a married family with two kids, the 25% tax bracket comes into effect at around $70,000 in income.

Section 1256 construes gains as taxed at 60% long-term capital gains (at the reduced capital gains rates above), and 40% at short-term capital gains rates (one’s marginal tax rate).

If you bought stocks, and not future’s contracts, and traded them on the same pattern, all of them would be short-term and taxed at one’s marginal tax rate (up to 35%, compared to a maximum of 15% for long-term capital gains).

Anyone (with $5,000 at risk capital) can open a future’s contract. Further, futures contracts allow for much much more leveraging of one’s initial investments.Most futures brokerages will allow you to invest up to 10 times (or more) the amount that you put at risk initially, so long as you quickly cover short-term deficiencies in your account (margin calls).

One can make a LOT of money in futures (and lose a lot of money), and although strictly speculation, it is taxed mostly as if it were a capital gain at reduced tax rates.

Its grossly inconsistent with logic (to reward speculation rather than encouraging value-adding enterprise). Its grossly unfair. And, it has horrid social consequences, even horrid marketplace consequences.

And, most importantly, it distorts human psychology, replacing the decision trees of a greed addict, instead of the moral decision trees of a mindful and honorable mensch.

I want to go on record. I don’t like the mandatory nature of the Obama Health Care Act. People have different priorities regarding health care. As feminists have asserted strongly that their/our own bodies are our own business, the same should apply to decisions about every aspect of health decisions. We should not be forced into even the insurance model of health care.

There is an irony (I love ironies) about the more “left wing” proposal of medicare for all. That is that, it, more than the mandatory commercial insurance model, preserves individual health care independence, as well as has elements of cost accountability, that are missing in the universal commercial insurance model.

That is that medicare pays for 80% of most medical care, and the individual is responsible for the other 20%.

That 20% is enough to effect my health care decisions. There are some tests and some procedures that I will not get. There is some accountability.

With only a fixed $20 copay, I won’t forego any procedure. The doctors want to be risk averse with other people’s money, fine.

Medicare for all is better for providing health care, period. Accountability for cost, universal coverage for preventitive and public health related care, very reduced overhead costs (due to not requiring profits, separate administrative offices, marketing, and management). The difference in costs is staggering, close to 18% of all health costs is unnecessary overhead, created by the insurance model.

On the law itself. The republicans are gleeful that the Supreme Court declared the mandate illegal if only considered via the logic of the interstate commerce clause, but not illegal is considered by the logic of the federal taxing authority.

And, by that reasoning, the republicans, including many people that are attorneys and should know much better, declared that the penalty for not getting insurance is a “tax”, and they will go to town on it.

But, the Supreme Court did not declare that the penalty was a tax perse, but that the constitutional validation was in the taxing authority.

“Section 8. Clause 1. The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”

A “duty” is not a “tax”, though it is authorized under the taxing authority clause of the Constitution. A penalty is not a tax.

Mitt Romney calling it a tax. I want more integrity in a president. I also want more integrity in the press, that just went along with it.

Aging/Learning

I am the primary support person for my mother, who lives at the Arbors assisted living facility in Amherst. She had lived in Boynton Beach, Florida until she had a small stroke, then a serious fall, then the death of her brother (a neighbor).

She found herself not able to drive in an area that it is very limiting to not be able to drive, with shrinking primary support and friend community, distant from me (only child), no contact with my two boys.

Really isolated.

Over the past few months, I’ve been running a small sub-business providing financial management services (day to day, not investments, etc.) for elders that want to remain independent but their kids largely don’t trust their judgment anymore, or at least sense the need for help.

Its a lot of contact with the elderly, after none at all for most of my life, and none with any sense of “that could/will be me”, direct source of empathy.

I’ve learned a few things.

The most important insight is that being old is NOT a period of time when one just settles in, runs on habit only, set in ways.

In contrast, like early childhood, it is the time of most frequent and most radical changes in one’s whole world, requiring learning entirely new skills to navigate the new set of capacities and workarounds.

When one loses the ability to drive, one has to reinvent one’s whole world, whole social support systems. When one loses hearing, or eyesight, similarly, AGAIN. Then, ability to walk, new whole world, way of getting through, AGAIN. Then, when one begins to lose ones memory, not only having to learn to navigate a new setting, but without the tools to do so. Like an infant has to learn what legs are for, that severe a change, requiring that radical a learning capacity.

And, finally, the action of preparing for dying and the process of dying is entirely new world, requiring learning.

Its the periods of 10 – 20 years without significant change, that people get stodgy. The elderly have to be and mostly are learners more than stodgy.

All when tired, more and more and more work-arounds, and not thought of highly.

“Where will I find my resting place?”

From the long-term perspective of living in place over generations, most Americans are homeless.

I’ve never had a home, in all relevant respects that comprehensively was a safe haven.

My parents were certainly kind. Growing up, I had wonderful childhood and young adult  friends and neighbors, but we lived in a new suburban neighborhood, in which all of the families were rising economically (or not) and moving frequently. There were noone’s grandparents, or brothers and sisters, in the same neighborhood.

My neighborhood was a largely upper middle class Jewish ghetto, outside of New York City. There were very few traditionally practicing Jews, almost all were associated with the liberal diaspora originated modern Jewish denominations, if that. Very very few kept kosher. Very very few kept shabbos.

My grandparents on my mother’s side did. We spent a lot of time at there home. My mother’s brother lived in the same community, so my cousins and I were close. Their cousins on the other side were also close, and that family was home (when young).

The place (suburban New York) though was not home in the deep sense. Not enough trust, not enough permanence, roots, future.

Kids went to college, and almost 100% formed other lives away, most driven by where they worked, or some project that they got involved with, or some relationship that they cared about. Coming home was always an irony, internally arguing over whether to use the word “home” or not. Is this my home, or their’s (my parents). And, is it even their home (as in permanence)?

My parents sold their home in 1992. They had lived there 36 years, a long time, and not a long time at all. My father’s business suffered a downturn, and he found the property tax obligation on their highly appreciated valued house a burden, and not sufficient appeal (community) to stay.

They moved to Florida. My mother’s brother also moved to the same area, and that then served as a surrogate faux-home as well. Since then, my father died, my mother’s brother died, my mother had an illness, and we’ve moved her close to my family.

In traditional in place communities, where one’s family is buried is home. My grandparents on my father’s side are buried in Queens in a mass cemetery. My grandparents on my mother’s side are buried in Worcester, in what would be community if multiple generations stayed there. My father is buried in South Florida, where only my aunt lives currently. My mother will be buried in South Florida next to my father, but after the funeral, I probably won’t ever see the grave. I doubt highly that I will move to South Florida.

Is my home in small-town Western Massachusetts home? Its mine. I choose to be here. But, if I had to move (and I don’t mean a pogrom), I would quickly. I have friends here that I definitely care about a great deal, but they are not permanent as a family of families for generations is.

I wonder if I may perhaps be the first generation of the establishment of a new homeplace for my children and their families, but I doubt it.

My homelessness is American common homelessness. We are a nation of immigrants and of migrants (ourselves), and also a nation of alienated families. Maybe its all of the modern world, in which indigenous life is not readily possible, sufficient to cover the fixed costs of living.

We live in primarily a commercial world, not a community world. We go to where our career takes us. The economies in most locales outside of big cities, aren’t sufficiently diverse to allow for children with different interests to all make a living. They move.

We don’t form home. We don’t dig in the earth. Our families don’t stay in a locale very long.

Definitely some do. And among them, some are committed to place and continue to craft, farm, mentor. And some are just eager to cash out, selling their parents’ farms for tract house plots.