Category Archives: Economics

Tax Day!

Not actually Mrs. Animal.

Tax time is stressful for all of us, but when you run your own business, things become way more complicated. I’m not sure how many times, I just want to throw up my hands and give up, but we all know that’s not really an option.

When I took over all financial record keeping over 20 years ago, we didn’t have the luxury of spending extra on anything, so I began tracking expenses so we could see the big picture. After a few years, our business income became the primary income, prompting me to create a much more detailed record keeping system.  Every penny is accounted for by category and subcategory, which account(s) are affected, and who was paid.

When tax season comes along, I run a detailed report including the categories I need to include for tax purposes. I visually go through the data to check for data entry errors (I’ve gotten pretty quick with that) and summarize all the numbers. It should be easy to just enter the numbers on the forms, and I’m done. Right?

WRONG!

Most people might not realize it, but tax laws change from year to year. And consequently, the software necessary for that changes each year as well. Tax categories seem to be fairly fluid, so for example what I put under auto services one year had to be split into separate oil change and repair categories the next, even though it’s all totaled on the final form. And I wouldn’t be surprised if it changes back at some point in the future.

To make it more complicated, while there are guidelines as to what is deductible (and at what percentage), where you account for that is not cast in stone. Office equipment, for example, includes furniture and long term assets such as printers, computers and copiers. But, if your furniture is used solely for the business, you can instead list it under supplies with paper, ink and the like. I don’t know about you, but my chair isn’t ‘used up’ at the end of the year, so this really makes no sense to me, but I’ll take advantage of the laws that benefit me.

So why do small things like this drive me crazy? Because it changes the bottom line on our personal taxes!

A pass-through partnership doesn’t pay corporate taxes. Instead everything filters to our personal taxes. But, how I choose to categorize expenses changes how much we are required pay. So if I bought an office chair for the business this year, I can put it either in depreciable assets or office supplies.

  • If it’s a supply, the total amount is expensed this year, and I don’t have to worry about it any more.
  • If I depreciate it, depending on when we bought it, there are several options for spreading out the expense, including a one time complete expense in the current year.

On the surface this looks like I can deduct the full amount either way. But it’s listed on a different line for partner expenses, which changes how the final taxes are calculated.

To put another little twist in the fabric, things like home office and auto expenses are not included on our partnership forms. We also have to submit the self-employment schedule on our personal forms to do that. (Don’t even get me started on self-employment taxes!)

Quite a few years ago, I didn’t notice a category that had previously been on the personal form had moved to the business side. Since I had already submitted our business form, it lead to a series of corrections on both sides. So each year, I don’t file any tax forms until I know I have both business and personal for federal and state(s) completed to our best benefit. Sometimes this leads me to a several variations of calculations which can confuse the software a bit, adding a little more headache.

Since I spend most of my time actually running the business, I’m sure there are ways I could legally reduce our tax burden that I’m just not finding. I wonder how our bottom line would look if a fleet of tax lawyers took a gander.

But I’d rather have a more streamlined, unbiased and fair system. Instead of penalizing success by taxing income, wouldn’t it make more sense to look into a consumption tax system?

Animal’s Daily Taxation is Theft News

Make sure to check out the final installment of my History of Lever Guns series over at Glibertarians!

Meanwhile:  Sacramento just never runs out of stuff to tax.  Excerpt:

But in California under Democrats, it’s tax, tax, tax — a drip and a drop, nickel and a dime — all the time. That’s not a political statement. It’s a fact.

Not all taxes are evil. Some are justified. But many are unwarranted. And others are eye-rollers.

One of the more controversial and annoying taxes currently being proposed is a state levy on sugary soft drinks. More on that later.

Here’s an eye-roller: A bill that would authorize San Francisco to turn its crooked Lombard Street — a tourist attraction after so many movie appearances — into a toll road, maybe even requiring reservations. Think they have a traffic jam now on weekends? Wait until cars are lined up behind a tollgate.

There are a whole bunch of taxing ideas in the Capitol: on new tires, firearms, water, prescription painkillers, lawyers, car batteries, corporations based on their CEO pay, estates worth more than $3.5 million, oil and gas extraction. The list goes on.

The oil and gas extraction tax is long overdue. We’re the only major oil-producing state without one. It would raise an estimated $1.5 billion a year.

The California Tax Foundation has counted more than $6.2 billion worth of tax increase proposals pending in the Legislature. It expects the figure to grow substantially as bills are amended with details.

Now I have serious issues with taxation in principle.  To my thinking, it’s theft.  “But Animal,” some folks have argued with me, “taxation is part of the social contract we all live under.  It’s part of being a member of a society.”

To which my reply is:  “Bullshit.  A contract is a binding agreement, codified in writing, into which all parties enter voluntarily.  I have not entered into this ‘social contract’ voluntarily.  I was dragooned into it by force, and if you doubt that, bear in mind that if I attempt to renege on what government claims is my part of the ‘contract,’ they will send men with guns out to compel my obedience.”

That’s not a contract.  That’s robbery.

And in California, you’re seeing exactly where a system that allows that sort of robbery will inevitably end up.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks as always to Pirate’s Cove and The Other McCain for the Rule Five links!

File this one under “Well, duh”:  Americans are mostly economic illiterates.  Excerpt:

Economic literacy has been in the news a lot lately, with some high-profile politicians demonstrating the need for some basic financial understanding. However, recent Job Creators Network/ScottRasmussen.com polling shows that the general public has a poor understanding of economic and personal finance topics as well, with a majority of Americans flunking five out of ten basic questions.

Questions revealed:

  • 75 percent of people underestimated how long it would take to pay off $5,000 in credit card debt if you only paid the minimum.
  • Only 27 percent of people knew how large the federal debt is expected to be in 2019.
  • 60 percent of people didn’t know that a rise in the minimum wage would reduce the number of minimum wage jobs.
  • Only 22 percent of people knew that the unemployment rate for Hispanic Americans was at an all-time low.

On the bright side, a majority of Americans understood the basics of supply and demand, tax deductions, credit scores, and fixed mortgage rates.

The public can take the quiz online at our InformationStation.org website, here.

It’s not just that Americans in general don’t understand these things; it’s that the generally lackwitted people who manage to get themselves elected to Congress don’t understand these things.

What’s interesting, though, is the polling results a little further down the page, which include these items (color highlighting added):

How would you rate the US economy today? Excellent (12%), Good (39%), Fair (32%), Poor (13%), Not sure (4%).

Is the economy getting better or worse? Better (36%), Worse (26%), About the same (33%), Not sure (5%).

Okay, how would you rate your own personal finances these days? Excellent (12%), Good (39%), Fair (31%), Poor (17%), Not sure (2%).

Are your personal finances getting better or worse? Better (33%), Worse (17%), About the same (48%), Not sure (3%).

Are companies in your area more likely to be hiring new workers or laying off existing workers? Hiring new workers (43%), Laying off existing workers (22%), Not sure (30%).

Add all of that up, and according to (at least) this survey, a plurality of Americans are pretty happy with the way the economy is going.  That’s certainly good news for President Trump, as the historic key metrics for a Presidential election are 1) incumbency and 2) economy.  Trump holds the high ground on both of those – oh, and it doesn’t hurt that the Democrat field is shaping up to be a race to the left, and a race of nitwits at that.

Still – November 2020 is a long damn ways away yet.

Animal’s Hump Day News

Happy Hump Day!

Oh, the horror!  The Imperial Department of Education faces a 10% funding cut in President Trump’s proposed 2020 budget!  Excerpt:

The plan, titled “A Budget for a Better America, ” requests $62 billion for the Department of Education, or $7.1 billion less than the agency’s allowance in 2019.

The budget eliminates subsidized student debt, in which interest doesn’t accrue on the loans while borrowers are in school or in economic hardship. It also reduces the number of repayment plans for borrowers and scratches the popular, if challenged, public service loan forgiveness program.

“We have also reaffirmed our commitment to spending taxpayer dollars wisely and efficiently by consolidating or eliminating duplicative and ineffective federal programs,” said U.S. Secretary of Education Betsy DeVos.

The plan would narrow the numerous income-driven repayment plans, which caps people’s bills at a percentage of their income, to just one. Under that option, students’ monthly payments would be limited to 12.5 percent of their discretionary income, compared with 10 percent now.

Any remaining debt would be cancelled after 15 years for undergraduate students, and 30 years for graduate students.

I’ve got a better idea:  Reduce their budget to zero.

Here is the Constitution of the United States; you know, the highest law in the land?  That Constitution?  Well, have a read through that, and tell me where it says that the Imperial government is allowed to meddle in education at any level.

Now, here is the Tenth Amendment to the Constitution:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

In other words, if the Constitution doesn’t specifically allow the Imperial government to do a thing, then they are actually prohibited from doing that thing.  Not that that hasn’t stopped the Imperial Congress from wiping their asses with the Constitution since about 1860.

To President Trump, were he to listen to me, I would have the following advice:  Grow a pair, Mr. President!  Defund the lot, and a bunch more extra-Constitutional agencies into the bargain.  Swing that axe!  You’ve talked a lot about Imperial debt; do something about it it!  Cut spending!

Animal’s Daily Nutcase News

Thanks as always to The Other McCain for the Rule Five links – and check out Part 2 of my History of Lever Guns series over at Glibertarians!

Moving along:  Our favorite pinkie Congresscritter Alexandria Occasional Cortex strikes again.  Excerpt:

Rep. Alexandria Ocasio-Cortez (D-NY) made an appearance at SWSX. During a talk at the conference, the Congresswoman was asked about the threat of automation and technology eliminating jobs. Her response was strange and not very well thought out.

“We should not be haunted by the specter of being automated out of work,” she said, The Verge reported. “We should be excited by that. But the reason we’re not excited by it is because we live in a society where if you don’t have a job, you are left to die. And that is, at its core, our problem.”

Wait. 

People work to pay bills, to put a roof over their head, food on their table and heat their homes and they should be excited to be put out of a job? 

AOC is clearly delusional. 

Now, hang on just one damn minute.  Townhall author Beth Baumann is correct to note that “People work to pay bills, to put a roof over their head, food on their table and heat their homes and they should be excited to be put out of a job? ”  Yes, that’s true, and it’s something Occasional Cortex seems to have trouble with.  But here’s the quote from the ex-bartender that is the real jaw-dropper:

But the reason we’re not excited by it is because we live in a society where if you don’t have a job, you are left to die. And that is, at its core, our problem.”

What.

The.

Fuck.

Left to die?  Seriously?  This stupid, stupid, stupid, stupid, stupid girl really believes this?

Honestly, Occasional Cortex is the best argument I can think of for requiring an intelligence test before being sworn in as a Congressman – fail to pass, your election is voided – and frankly, it probably wouldn’t be the worst idea to have a head-candler check out the folks that voted for this nitwit.  Bear in mind she’s up against some pretty stiff competition for the Stupidest Person in Congress; there’s just an embarrassment of riches in Washington if it’s dimwits you’re seeking.

What’s amazing is this:  During the interview excerpted above, there is not an iota of evidence that anyone asked her “wait, wait – can you name one, even one, person in the United States in, oh, the last century, who was ‘left to die’ because they didn’t have a job?  Even one?  Since the First World War?”

Because, of course, she couldn’t.  That’s what makes this statement so staggeringly stupid.

If her fellow Congressional Democrats aren’t wearing a lot of red faces every time Occasional Cortex opens her yap, I’d be damned surprised.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks as always to Pirate’s Cove and The Other McCain for the Rule Five links!

Down south in Venezuela, things continue to head south.  Excerpt:

International pressure mounted against Venezuela’s leader Nicolas Maduro on Sunday, with Washington vowing to “take action” after opposition efforts to bring humanitarian aid into the country descended into bloody chaos.

Self-declared interim president Juan Guaido called on the international community to consider “all measures to free” Venezuela after clashes at the border crossing left at least two people dead.

Guaido announced he would participate in Monday’s Lima Group meeting of mostly Latin American countries in Bogota, and called on the international community to be prepared for “all possibilities” regarding Maduro. US Vice President Mike Pence will represent Washington at the meeting.

Secretary of State Mike Pompeo said the United States “will take action” as he condemned violence perpetrated by Maduro’s “thugs.” President Donald Trump has said that Washington is not ruling out armed action.

Humanitarian aid, much of it from the United States, has become the centerpiece of the standoff between Maduro and Guaido, the 35-year-old leader of Venezuela’s National Assembly who declared himself interim president one month ago.

Meanwhile, in a staggering lack of self-awareness, the daffy old Socialist and Presidential candidate from Vermont tweeted the following:

Venezuela is, of course, the inevitable end-stage of every policy Sanders has championed in his entire non-productive life, beginning with his failed carpentry gigs, continuing with his honeymoon in the Soviet Union and culminating with his championing of Soviet policies in the U.S. Senate.

But back to Venezuela; I’m guessing that there are maybe, oh, 70-30 odds that Maduro and his inner circle end up hanging from lampposts.  That is, of course, unless he manages to flee to someplace like Cuba with the billions in Venezuela’s sovereign wealth he has no doubt squirreled away someplace.  But unless he takes bullion – and that’s certainly not out of the realm of possibility – the international banking system will catch up with him sooner or later.  The key to Maduro’s downfall, though, will be the military, and there are already signs that the rank-and-file soldiery along with a few senior officers are starting to defect.

Venezuela today serves to prove many things about socialism, but aside from all the economic examples, there’s one more think about socialism that has again been proven true:  You can vote your way into socialism, but you’ll have to shoot your way out.

Animal’s Daily Autophagia News

I swear, Alexandria Occasional Cortex is the gift that keeps on giving – to Republicans.  Now Democrat Carolyn Maloney has piled on to the list of Democrats denouncing Occasional Cortex’s aggressive economic illiteracy.  Excerpt:

Rep. Carolyn Maloney (D., N.Y.) on Friday night slammed Rep. Alexandria Ocasio-Cortez (D., N.Y) for her opposition to Amazon headquarters coming to New York City, saying that she was “disappointed” at people protesting jobs in her district.

Maloney, who has been representing the 12th Congressional District since 2013, appeared on CNN’s “OutFront” to discuss Amazon’s decision to cancel its plan to build a headquarters in Long Island City, Queens, which is part of her district. Host Erin Burnett read Ocasio-Cortez’s tweet celebrating the decision and asked if she shared her sentiment.

“My constituents want jobs,” Maloney said.

“This was 25,000 jobs,” said Burnett, prompting Maloney to say this was a “minimum” amount of jobs.

“It would have been many, many more; 25,00 jobs at $150,000 minimum for the job,” Maloney said. “There were promises for a new school, and as a former teacher, I was intrigued with their plans to have a curriculum in 30 different schools supported by Amazon on high tech. We should be really diversifying our base of taxes, our base of businesses. We are too dependent on financial services.”

“It used to be that we would protest wars. Now we are protesting jobs? People are complaining about jobs coming to your [city] … If this had gone through, it would have made overnight New York City the high-tech capital of the east coast, the most important job center for tech jobs.”

Now the Democrats are nothing if not disciplined; it’s rare to see this kind of autophagia among the ranks of their elected officials, at least.  Non-elected activists all over the political spectrum slash and snap at “their own” all the time, but elected Democrats are normally pretty disciplined.

Not Occasional Cortex.  The girl just doesn’t seem to have any filter between mouth and brain, much less any actual knowledge of economics or the ins and outs of job creation.  And every time she releases another verbal outburst, she has to have elected Republicans chortling gleefully even as he horrifies her own side.

Watch in 2020:  I’m guessing she’ll face a primary challenge by some older, better prepared and more disciplined Democrat.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks as always to Pirate’s Cove and The Other McCain for the Rule Five links!

No one thing in particular jumps out this Monday morning, so let’s have a links compendium with some comments.

In France, yellow-vest protestors continue to protest… well, just about everything.  The gist of their argument seems to be “we want more Free Shit, and we want other people to pay for it.”

Princess Spreading Bull has launched her 2020 Presidential bid.  This is a Quixotic quest if there ever was one; even her fellow Democrats are getting to be embarrassed by her serial dissembling over her background.

Portland, Oregon averages a 911 call every fifteen minutes – about homeless people.  Most of these aren’t really emergencies and should be called in to the regular non-emergency dispatch line, granted.  But Portland has in the past had policies like “no-turnaway” shelters, which has drawn itinerants to that city – and this is the predictable result.

Single-family zoning is now racist.  Who knew?  This is so facepalm-worthy it’s not even funny.  When everything is racist, nothing is racist, but that little truism is lost on these people.

Robert Stacy McCain chronicles the continuing downward slide of our Ivy League schools.  Why are these people so angry?

Our good friend Jillian Becker presents “Prophetess: A Cautionary Tale.”  Well worth the read.  Granted predictions are very difficult, especially when they’re about the future.

On that note, we return you to your Monday, already in progress.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks as always to Pirate’s Cove and The Other McCain for the Rule Five links.  Also, you should read the last of my History of The Six-gun posts over at Glibertarians.com, and in fact you should read all of my articles there by using the link to the right.

Meanwhile:  We’re all too aware of the dumpster fire that socialist Venezuela has become.  The libertarian Von Mises Institute has some ideas on reforms that could once again make Venezuela one of the most prosperous countries in South America:

  1. Open the road to monetary freedom, eliminating all legal tender laws and the nation’s central-bank supported system of fractional-reserve banks. Allow Venezuelans to adopt whatever medium of exchange they wish. Even dollarization ought to be on the table.
  2. Open the country to International Trade: eliminate all tariffs, taxes, and trade barriers. All of them.
  3. Privatize Everything! All state-owned companies and assets, following Econintech’s proposal.
  4. Decentralize the Government: Grant total administrative and budgetary autonomy to Venezuela’s twenty-three states . Decentralization is a key to minimizing the damage an abuse central government can do.
  5. Lower taxes drastically, and decentralize tax collection and administration to the state level. All new taxes must be approved byreferendum.
  6. Allow private Venezuelans to access and accept both humanitarian and security assistance from foreign organizations.
  7. Guarantee the right to self-defense: demobilize all the armed groups, purge the prisons, implement widespread private gun ownership, and auction to the public all weapons confiscated by the state.

Good ideas all, but I have just one question:

Forget Venezuela, why can’t we have these reforms here?

An actual photo of Venezuela’s economy.

Venezuela provides us with a vivid illustration of how socialist economics end, in practice, every time they’re tried.  (And, no, Sweden and the other Scandinavian nations are more statist than the U.S. in many ways, but they aren’t socialist.)

But it’s illustrative to look at that list and see how many items, from one to seven, that we currently do not enjoy in the U.S. – supposedly a free nation; supposedly a nation where we value liberty and individual rights.

Could there be a dumpster fire in our future?

Animal’s Hump Day News

Happy Hump Day!

China, like their neighbor to the north, may be a dying giant.  Excerpt:

Ignore the laughable claim of the National Bureau of Statistics (NBS) that China’s economy is still growing at 6.5 percent year over year. No one believes this, least of all that country’s increasingly embattled business owners.

They know from firsthand experience that China’s economy is not only in recession, but that it is contracting across all sectors, from manufacturing, to retail, to autos, to real estate. And they know the Communist Party, and not Donald Trump, is responsible.

Accurate data is hard to come by, of course, since the party blocks economic data that contradicts the officially rosy economic picture, which is to say almost all of it. But occasionally there is a crack in the Great Firewall and a sliver of truth escapes.

One such sliver was the remarkably courageous presentation of Professor Xiang Songzuo at the Renmin University School of Finance on Dec. 15. Not mincing words, he kicked off his talk with the question: “Just how bad are things?”

He answered his own question by citing an “internal report completed yesterday” — which I strongly suspect was his own — that produced two estimates of China’s real GDP growth using the NBS’s own data. The first set of assumptions produced an estimated annual growth rate of 1.67 percent. This figure, though positive, is low enough to suggest that China has fallen into recession over the past two quarters.

As far as the second estimate of year-over-year growth was concerned, Xiang would only say it was “negative.”

Here’s a shocker:  Communists lie.

To be fair, trying to find something positive to spin about communism is being handed a shit sandwich of the first order.  And one would think that Beijing could learn something from Hong Kong, the former British protectorate that they took in and which (due to being exempted from much of the enterprise-killing policies of the rest of China) is one of the few bright spots in their economy.

To the extent that China prospers today is precisely the extent to which they have embraced some aspects of a market economy.  If they want to turn things around, they should fully embrace a free-market system.

But communists aren’t known for admitting their system is a total shitshow.  That kind of change rarely comes peacefully.