Month: February 2016

“Stock options can affect child support order” is a Boston Herald article by Gerald Nissenbaum, the lawyer whom we interviewed for the Massachusetts chapter of Real World Divorce. Here’s the question from the reader:

My wife is dragging me back to court. She wants more alimony and child support because I made money by selling stock I got by exercising stock options in my employer’s company.

But in our divorce agreement, I agreed she’d get three-quarters of the proceeds from the sale of our marital home and I got to keep my stock options. Can she get a double dip?

The answer from Nissenbaum turns out to be “yes,” with the explanation: “search for the latest appeals court case on child support — Hoegan v. Hoegan. Then forget about trying to hold onto your wallet.”

The plaintiff here has a great strategy. Give up something that will yield income in the future in exchange for more cash now. Then get between 20 and 50 percent of that future income (11-25 percent of the pre-tax amount, but paid on a tax-free basis) via a child support modification based on the fact that the defendant’s income has changed. (And since judges are reluctant to modify child support awards downward, a plaintiff could easily end up with 200 or 300 percent of a short-term income boost if the child support is set during the period of temporarily higher income.)

[The appeals court case shows why you want to be a divorce litigator in Boston. The kids were born in 2003 and 2004. The mother sued the father in 2010. They’ve been litigating now for six years. The youngest child will yield a cashflow for whoever can hold onto primary custody through the year 2027. The cash yield from the children cannot be determined definitively without lawyers on both sides arguing in front of a judge.]

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I’m spending the week with friends in Beaver Creek, Colorado. Hertz rented me a brand-new Kia Optima mid-size sedan, which would retail for about $21,000, for $40/day including all of the Denver airport fees.

How much does it cost to rent a set of ski gear? Boots, skis, poles, and a helmet from the resort will cost $85/day. From one of the many independent shops clustered in the nearby towns? Between $40 and $55/day. My friends tell me that the stuff being rented retails for about $1,600 total and that it is typically sold at the end of the season for about $800. If the wholesale price was $1200, this means the actual cost of the gear is recovered after 5-10 days of renting.

How to explain the much higher ratio of rental compared to purchase price in ski gear versus cars? I don’t think that it can be damage to the gear because customers are charged for that separately (and offered a damage waiver at an additional cost to the above prices). Perhaps it is more labor-intensive to rent out ski gear? But Hertz has plenty of employees, massive computer systems (if they paid healthcare.gov prices to program and run their servers, it would wipe out 100 years of profits!), shuttle buses, etc. Hertz also has huge admin costs, presumably, to clean up after minor accidents (figuring out which insurance company is responsible, getting the car fixed, hunting down the various parties for reimbursement, etc.); a cracked ski, on the other hand, can be dealt with on the spot.

Readers: Who can explain this “skinomics” question?

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People in Massachusetts are trying to decide whether or not to tax people who earn over $1 million per year at a rate, for however much they are over $1 million, that is 4 percentage points higher than the rate paid by the common rabble. (article) Moving to a California-like system of progressive state income tax rates may require an amendment to the state constitution.

As a member of the common rabble, I of course support the idea of rich people paying my bills. As most other voters probably can’t see the days ahead when (a) politicians define down the “rich” threshold to capture revenue from people formerly not thought of as rich, and (b) $1 million is also the price of a Diet Coke, I think this idea of higher taxes on “the rich” has a good chance of adoption. (Also predicted by Russell Long‘s class poem:

Don’t tax you,
don’t tax me,
tax that fellow behind the tree!

; Long also predicted my personal support for the new tax: “A tax loophole is something that benefits the other guy. If it benefits you, it is tax reform.”)

Readers: What can we expect to change for the Massachusetts economy once this does go through?

(My predictions:

• further decline of the tech startup industry here relative to California; people who work in startups often have years of pretty low cash compensation and then one big year. If they’re going to pay California tax rates during that big year, why not just move to the center of the tech universe to begin with?
• slowdown of the real estate craze; there will be fewer people wanting to live in a $4 million house in Weston (but I think that Boston and Cambridge will continue to be in demand due to the meltdown of the U.S. transportation system and the lack of new walkable pleasant urban environments being built in the U.S.)
• heating up of the private jet business as more people decide that living in tax-free Florida for 183 days per year, but visiting New England frequently (rich people: watch out for “permanent alimony” in Florida compared to the theoretically limited term in Massachusetts!)
• increased values for Portsmouth, New Hampshire real estate (walkable pleasant town; water views everywhere); rich people: watch out for unlimited child support in New Hampshire, albeit not as lucrative as in Massachusetts
• earlier retirements for some successful folks; if you don’t need to keep working, a higher tax rate should provide encouragement to retire and move to a state with good weather and no estate tax (map). This could make Massachusetts a better place to be young and still climbing the ladder in, e.g., a big money management firm?

)

 

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Thirteen years ago (ouch!), I posted a thesis idea for someone studying computer science:

To a master’s student looking to do something with speech, I’d say “build a system that will occupy telephone solicitors.” The challenge for the computer is to keep the phone solicitor under the impression that he or she has reached a human being for as long as possible. The beauty of this system is that if installed in a wealthy area there would be a near-endless stream of calls on which to test the quality of the result and that, if a high quality system were widely installed on PCs nationwide, it would put the phone solicitors out of business (because they’d be spending so much time and money talking to computers programmed to keep them on the line indefinitely).

Companion: National multi-school contest for the best system.

It seems that the glorious day has come to pass! Gizmodo has published “Today’s Hero Made an AI That Annoys Telemarketers For As Long As Possible” about jollyrogertelephone.com. Not a bad effort, but a lot more could be done by someone researching speech recognition.

A pretty example for direct listening: on YouTube.

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A friend sends his children to the much-vaunted Lexington, Massachusetts public schools. He denies being a tiger parent but has a PhD, is Asian-American, and the kids seem to be doing a lot of extracurricular activities. Are the schools as great as Boston-area parents think? “Most of the teachers are bad; my daughter had a terrible math teacher last year,” he responded. “There are a few good ones, especially in the AP classes. Lexington probably has more good teachers than other school systems.”

A few hours after this conversation I ran into a non-teacher employee of the Newton, Massachusetts public school system, another supposedly top choice. She said “Most schools with a great reputation are riding on something that they were doing 10 years earlier. That’s certainly true of Newton.”

What about Lexington school system insiders? I recently met a teacher in the school system who characterized the evaluation process for already-hired teachers as demanding and said that there was no job security for bad teachers. In his opinion it was easy (too easy!) for a teacher, even one with tenure, to be fired for poor performance. (See also this posting about teacher hiring and firing in a neighboring school system.)

Related:

• Smartest Kids in the World Review

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A sad sight in the Dillon, Colorado supermarket today:

(Readers who happen upon this some years from now: this photo was taken a day after the Denver Broncos won Super Bowl 50.)

 

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Old guys who play squash will appreciate “Holding the T,” a January 18, 2016 New Yorker article about a guy who decided to get super serious about the game starting at age 50.

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Chatting with a pilot in Orlando, Florida… he found a woman who had profited financially from a brief marriage and was continuing to profit by collecting child support for a young son over whom she had obtained primary custody. After a brief courtship, they were married. Seven years and about a day later (seven years is the minimum length marriage that may entitle a plaintiff to “permanent alimony” (Nolo Press)), he found himself in divorce litigation…

[Note that child support in Florida is potentially unlimited, but not nearly as lucrative as in many states in the Northeast. Where Florida shines, from a plaintiff’s point of view, is in the alimony potential.]

Question: Why do humans imagine that they are special and that the future won’t resemble the past?

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Forbes calculates that players in the Super Bowl will, on average, be worse off financially for having shown up to play (spending 7 days in California subjects them to state income tax on a portion of their 2016 earnings). Rather than force players to take a cut in spending power, why not always have the Super Bowl in tax-free Florida, Nevada, or Texas? It would be sold-out regardless of location, right?

Separately, if you want to fly on a mostly empty plane, buy a ticket during the Super Bowl. JetBlue BOS to DEN at 7:45 pm was not a popular choice for others!

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From a reader:

My 16 yr old daughter is about to start pilot lessons in Princeton, NJ. My primary concern is safety. We have the choice of of having her learn in a circa 2000 Cessna 172 or a 2008 DA-40 with a G1000.

I have read this post, suggesting that traditional instrumentation is better for teaching.

My response:

The DA40 is noisier so you’ll have to buy her a high-end noise-cancelling headset.

Everything is G1000 or similar these days. So if she wants to really fly she might as well start with a glass cockpit. It might take her an extra 5 hours due to the complex user interface but if you count the number of hours to being a competent IFR pilot in a real aircraft that you’d actually want to take IFR (like the DA40/G1000), the hours will be the same.

The DA-40 is also a lot more fun to fly.

I wouldn’t say that there will be a significant safety difference. It is more about the instructor and whether or not the instructor stresses checklist discipline, for example. But I guess if they were to crash the DA-40 was certified to much more stringent standards.

If you can get her to sit down with a G1000 simulator for 20 hours total through her Private training, and also read the Garmin PDFs thoroughly, the G1000 shouldn’t add to her required flight time.

Regarding the article you referenced promoting the 1950s six-pack for a primary student…

Students will naturally over-focus on the instruments when they should be looking outside. It is the CFI’s job to keep reminding them to look outside, that he/she will read the student what is on the gauges, and to cover up the instruments when appropriate so that the student has no choice but to look outside to keep the attitude constant.

Looking inside at a G1000 is unhelpful to getting a Private, but so is looking inside at a six-pack. If your daughter becomes a G1000 master by using a simulator, reading the Garmin PDFs carefully, practicing in a plane that is hooked up to external power and/or some other kind of sim, she won’t be any more distracted by the G1000 than she would be by the traditional six-pack.

The real answer is that for about 95% of what she has to learn to get a Private there is no difference. She should be looking outside and should find an instructor who can keep her attention outside.

Readers: Thoughts on what, at least ten years ago, was a live debate?

 

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