Windfall Profits Tax on Bitcoin?

Whenever other people are smarter and more successful than I am, I like to propose a massive tax applicable only to them. Since I neglected to buy Bitcoin…. it is time for a Jimmy Carter style Windfall Profits Tax on cryptoprofiteers! (spoiler: the Tax Foundation says that this is a bad idea)

One challenge with this is that it might be hard to hunt down folks who have a seed phrase and a passphrase written down on a Post-It note. Some Bitcoin success stories invested in ETFs and public equities that are somehow tied to Bitcoin and they’ll be easy to hit with Philip’s 95 percent windfall profits tax. But the richest/biggest fish may get away (renounce U.S. citizenship, pay the exit tax, move to a tax-free country, and then start cashing in the Bitcoin).

Is Bitcoin a bubble? Physicist and general smart guy Brian Keating points out that the “bubble” has lasted for ten years, much longer than tulip mania (six months) and other historical bubbles. Peter Schiff, smart enough to move to Puerto Rico in 2015 and skip on Federal taxes, points out that the Feds began inflating the stock market and housing market in the mid-1990s and the collapse didn’t come until 2008. Schiff: “If people are dumb enough to pay $50,000 for Bitcoin, maybe they’ll be dumb enough to pay $100,000.” Isn’t it a good hedge against governments printing money and inflation? “Maybe Bitcoin is a hedge against stupidity because if people are still stupid they will still buy it. If you’re worried about the dollar going down, don’t hedge it with something riskier than the dollar. Buy Swiss francs.” (watch Keating and Schiff talk)

A bad guy lair (for a Bitcoin early adopter?) under construction in Sarasota:

Related:

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Shutdown favors bigger enterprises: car registration example

Here in Maskachusetts, our year-old state of emergency means that the Registry of Motor Vehicles (RMV) will see people in person only by appointment. Appointments are seldom available, however, and typically a Boston-area resident who needs to do business with the RMV will have to drive to Pittsfield, Massachusetts, more than 5 hours round trip.

While swapping our 2018 Honda Odyssey for a 2021 Honda Odyssey, the salesman told us about his recent trip to Pittsfield. He had purchased a car privately and there was no way to register it without an in-person trip. “Why don’t we have to go to Pittsfield to register this new Odyssey?” we asked. “Dealers are able to do everything online,” he explained.

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We will solve our affordable housing crisis with vastly expanded immigration

From the New York Times, a tireless cheerleader for more low-skill immigration into the U.S…. “Pandemic’s Toll on Housing: Falling Behind, Doubling Up”:

Even before last year, about 11 million households — one in four U.S. renters — were spending more than half their pretax income on housing, and overcrowding was on the rise. By one estimate, for every 100 very low-income households, only 36 affordable rentals are available.

When your hospitals are 110 percent full, the solution is more immigration. When there are 3X as many people who need affordable housing compared to the supply, the solution is more immigration.

One block back from the sand in Atlantic Beach, Florida:

(in other words, migrants are welcome, but not the big concrete condo and apartment buildings that could actually house an expanded population; note that signs of virtue/justice were extremely rare in Florida (January 2021 trip) compared to here in Maskachusetts; I took this photo because it was an unusual scene)

Related:

  • “Hunter Biden and wife Melissa upsize into $25k-a-month canal-front home in Venice, California” (Daily Mail): “Interestingly the homeless people who were living up along the street he now lives on are gone. … His two-year-old daughter with stripper Lunden Roberts, 29, was not present. … The stylish 3,700 square feet home boasts 25-foot acoustic ceilings hanging over contemporary limestone white floors in the living room.” (a fairly spacious house; will Hunter Biden be willing to dedicate a spare bedroom to housing one of the migrant families that his father tells Americans it is their responsibility to shelter?)
  • “Turned Back by Italy, Migrants Face Perilous Winter in Balkans” (NYT, today): “To escape persecution in his homeland, a 27-year-old Pakistani man walked over mountains and through woods on an arduous 18-month journey across Bosnia, Croatia and Slovenia until he finally reached the Italian border.” (the remaining 216 million people in Pakistan must suffer continued persecution? Italians don’t want to solve their own hospital and housing overcrowding situation by taking in more migrants?)
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How are FBI agents almost always able to avoid being killed?

“2 F.B.I. Agents Killed in Shooting in Florida” (NYT):

The sun had not come up yet on Tuesday when a group of F.B.I. agents assigned to investigate criminals who prey on children online approached the Water Terrace apartments in Sunrise, Fla., to execute a search warrant, a routine part of the job that is always fraught with risk.

What exactly happened in the ensuing minutes is unknown, but a gun battle broke out, rousting neighbors out of bed in the quiet residential community. Law enforcement officials called emergency dispatchers. Multiple shots fired, they reported. Send air rescue.

Two F.B.I. agents died and three more were injured in one of the deadliest shootings in the bureau’s history. No agent had been shot and killed on duty since 2008. A similarly bloody shootout took place in a Miami suburb 35 years ago, killing two F.B.I. agents and injuring five others.

A sad outcome, obviously, but the history is much more cheerful than what we see in Hollywood portrayals of the FBI, in which the pursued quite often manage to kill at least some of their pursuers.

The FBI has 35,000 employees, of whom more than 13,400 are “special agents” (Wikipedia). How did they manage to go 13 years without a Hollywood-style event in which an agent was killed?

From a recent flight up the U.S. coast, KFLL and the condo forest of Ft. Lauderdale:

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Department of Homeland Security is reading academic papers

A medical school professor friend was denied Global Entry at Logan Airport when returning to Boston from a Christmas holiday in his native European homeland (remember to listen to public health advice from the MD/PhDs regarding the covid-spreading potential of travel; don’t follow their examples!). His luggage was taken apart piece by piece, scrutinized, and repeatedly X-rayed. He presumed that the unprecedented (for him) examination was due to all of the European food that he’d packed. The agents explained, however, that he and another passenger on the same flight had been flagged due to having published journal papers on the subject of COVID-19. Someone at DHS had read these and flagged the two academics as potential carriers of forbidden “human biological samples” (Customs and Border Protection page).

My literary foray into the area of what the government might be monitoring (a few commenters seemed to think that I was serious):

We still have some of the brisket in the freezer…

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Should we hire Guatemalans to guard the U.S. Capitol?

My friends on Facebook are delirious with joy that Washington, D.C. is being closed off to ordinary people and that more 26,000 U.S. military troops are guarding the Capitol against potential domestic enemies. I’m not sure why the 3,800 D.C. police officers, 2,300 Capitol police officers. U.S. Secret Service agents, FBI agents, U.S. Park Police, et al. cannot protect the U.S. government from its subjects. But I wonder if it could be done at a lower cost.

“Migrant Caravan, Now in Guatemala, Tests Regional Resolve to Control Migration” (New York Times):

As many as 7,000 migrants from Central America are hoping to reach the United States to escape poverty intensified by hurricanes and the pandemic. President-elect Joseph R. Biden Jr. has pledged to ease asylum rules.

Wielding truncheons and firing tear gas, Guatemalan security forces on Sunday stepped up their efforts to stop a caravan of thousands of Central American migrants who have surged in from Honduras in recent days in hopes of reaching the United States.

Shortly after dawn on Sunday, migrants tried to force their way through the phalanx but were beaten back by security forces with truncheons, shields and clouds of tear gas, according to the local news media and a video circulated by the Guatemalan government.

“Fortunately, our security forces managed to contain this pitched battle,” said Guillermo Díaz, director general of the Guatemalan Migration Institute. “We managed to calm everything in a very complicated situation.” He added, “We are talking about national security here.”

Instead of mobilizing costly U.S. military forces, why not pay the Guatemalans to keep us safe from ourselves?

Separately, I had always wondered why we needed to spend nearly $1 trillion per year on a military that served no apparent purpose. The Soviet Union was mostly an enemy in our own minds. Canada and Mexico still haven’t invaded. Our military didn’t do anything to stop up to 29 million undocumented migrants from crossing the border and settling down in recent years. Maybe the real purpose of the U.S. military is simply domestic policing?

Tikal, Guatemala, from 2000 (captured with the Mamiya 7 medium format camera):

And the flower market in Chichicastenango

Before coronapanic, friends regularly traveled to the UNESCO World Heritage site of Antigua, Guatemala for Spanish lessons and relaxation. Why not travel there to find folks with a proven track at controlling a determined crowd without lethal violence?

Update from Facebook:

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How does HIPAA interact with state governors’ demands for COVID-19 test results?

Today is National Pearl Harbor Remembrance Day, marking 79 years since we entered World War II in order to fight Totalitarianism.

Here in Massachusetts, as part of our governor’s more-than-50 orders, we are required to tell the government, via a web form, about any travels that we might have undertaken. And “Quarantine for 14 days or produce a negative COVID-19 test result that has been administered up to 72-hours prior to your arrival in Massachusetts.”

From mass.gov:

72-hour Testing Rule: The individual can produce, upon request, proof of a negative test result for COVID-19 from a test administered on a sample taken no longer than 72 hours before your arrival in Massachusetts.

So we’ve spent hundreds of $billions (software, time spent with forms) for our medical records to be protected by HIPAA (federal law), but the state can demand a portion of our record via a “request” (fine of $7,000 if one fails to comply with the “request”; see the governor’s 45th order).

Plainly the Shutdown Karens can say that this is quite reasonable. The governor has declared an emergency so the state government should have access to whatever is necessary to deal more effectively with that emergency (never mind that test and trace immediately fell apart, so this information is useless, or that the typical person is not contagious by the time a test has been scheduled and result received (NYT)). But, on the other hand, a governor can declare additional “emergencies” any time that he/she/ze/they wants to. Obesity kills far more Americans than COVID-19. Couldn’t a governor declare an obesity crisis and demand that people submit medical records related to obesity and diabetes? We’re already in an opioid crisis, right? Why shouldn’t the state have the right to “request” your prescription records to make sure that you haven’t been getting too many OxyContin pills? (and fine you $7,000 if you fail to comply with the request)

Very loosely related, a conversation with a 5-year-old after putting a e-collar on our golden retriever to prevent her from scratching at a scab:

  • Me: Mindy doesn’t like wearing this collar.
  • Child: Why not?
  • Me: Even a dog can tell when her liberty is taken away.
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Will millionaires pay up to live in New Jersey?

“Deal Reached in N.J. for ‘Millionaires Tax’ to Address Fiscal Crisis” (NYT):

Gov. Philip D. Murphy, a Democrat, announced a deal with legislative leaders to increase state taxes on income over $1 million by nearly 2 percentage points, giving New Jersey one of the highest state tax rates on wealthy people in the country. The agreement also includes an annual rebate of as much as $500 for families making less than $150,000.

The good news is that Governor Murphy will be a hero in literature and movies 800 years from now, just like Robin Hood. Murphy is taking from the rich (assuming that they can’t figure out how to escape to Florida, Wyoming, Nevada, Tennessee, Texas, Alaska, et al) and giving to the poor (where “poverty” starts at $150k/year, not a great argument for attracting new residents hoping to enjoy a comfortable lifestyle!). New Jersey is already the third highest tax state (percentage of residents’ income harvested for state and local government).

On the one hand, people are fleeing Manhattan to get extra space, which favors suburban New Jersey. On the other hand, New Jersey is not blessed with a California-style climate that might induce people to pay huge $$. year after year.

(You might reasonably ask “If tax rates are relevant, why didn’t rich people move away some years ago?” It is true that New Jersey has been a high-tax state for a long time. However, until 2018, roughly half of those high taxes were paid by the generous folks in Kansas, Indiana, Texas, Florida, etc. A wealthy New Jersey resident might pay a lot to New Jersey, but could turn around and deduct this payment from his/her/zi/their federal taxable income. So we would expect people today to be a lot more sensitive to state tax rates than they were back in 2017, for example. And the fact that work and social life are now Internet-based should also reduce barriers to moving.)

Readers: What’s a good test to see if this tax hike works as advertised. My theory is that it takes people about three years after a tax law change to get organized and adapt. So we should try to look at New Jersey’s relative fiscal health in 2024. But what do we look at? Unfunded pension and health insurance liabilities for state and local government employees? Right now it is “$151 billion, the worst in the nation”. But if the stock market rises or falls under the able stewardship of President Harris, that might move this number enough to swamp any effect from this tax. How about IRS data? Try to find the percentage of America’s high earners (over $1 million/year in income) who live in New Jersey in 2020 and then in 2024. (example map of money migration produced with these data)

From the glorious days of film… pig racing at the New Jersey State Fair:

And, even before 93 percent peaceful protests…

Related:

  • “One Top Taxpayer Moved, and New Jersey Shuddered” (NYT, April 2016): the hedge-fund billionaire David Tepper … declared himself a resident of Florida after living for over 20 years in New Jersey. He later moved the official headquarters of his hedge fund, Appaloosa Management, to Miami. … Tax experts say his move to Florida could cost New Jersey — which has a top tax rate of 8.97 percent — hundreds of millions of dollars in lost payments.
  • Pennsylvania’s top income tax rate is 3 percent; if you need to go into Manhattan only once per week, why not drive an extra hour and save $100,000/year in tax?
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Maskachusetts limits in-person school to the rich white towns

“Mass. Communities’ COVID Risk Would Guide Schools’ Reopening Plans: Report” (NBC):

Massachusetts’ education department is reportedly issuing guidance on the amount of remote learning schools should use based on the coronavirus risk level in their communities.

As school districts scramble to submit reopening plans to the Department of Elementary and Secondary Education by Friday, superintendents received a memo from Commissioner Jeffrey Riley Tuesday night that would limit the use of online learning, according to The Boston Globe.

Here’s the map….

From a linked page:

Chelsea, Everett, Lynn and Revere are included in the high risk category, meaning they have over eight cases per 100,000 residents. Twenty-nine other communities, including Auburn, Belchertown, Boston, Brockton, Charlton, Chicopee, Fall River, Framingham, Georgetown, Granby, Holyoke, Hull, Lawrence, Longmeadow, Malden, Marlborough, Maynard, Middleton, Northampton, Peabody, Salem, Saugus, Springfield, Quincy, Randolph, Taunton, Winthrop Worcester, Wrentham, are in the moderate risk category, meaning they have between four and eight cases per 100,000.

In other words, if your town is packed with welfare-dependent People of Color and migrants… no school (“remote learning” in your crowded public housing apartment). The rich white kids in Wellesley and Dover can go back to school, though!

Related:

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Government, Hygiene, and Coronaplague

We recently flew a Cirrus SR20 to Martha’s Vineyard, an instrument training flight for an IFR student that, of course, turned into an actual IMC experience (thanks, Maskachusetts weather!).

We brought his 12-year-old daughter along in the back seat. After touring around the island for a bit, it was time to change into bathing suits. We availed ourselves of the government-run public restrooms for this purpose. The 12-year-old complained about their filthy condition. Of course, I responded with “Remember that the country that hasn’t ever been able to provide clean public restrooms will beat the coronaplague via superior hygiene.”

She then shared her idea: “People who are on welfare, instead of just sitting at home to get checks and benefits should have to clean public bathrooms.” (that would be a workforce of at least 70 million!) She had previously been disparaging Dr. Donald J. Trump, M.D. and singing the praises of Democrats, presumably a result of her years of contact with unionized public school teachers here in the Boston suburbs. I told her “you know, there is actually an established political party in the U.S. that is already lined up with your thinking.”

One of the clean public restrooms in every Shanghai Metro station:

(Bonus: While taking these photos, I learned how the locals say “What is that stupid white guy doing?”)

If you go to a private shopping mall, which are spaced at intervals of just a few blocks in many areas, the level of luxury is a lot higher:

Note, in both cases, the provision of low sinks for children. Also note the Chinese conception of (1) possible gender IDs for humans, and (2) most likely family structure.

Houses in Oak Bluffs, failing to social distance:

(This was the site of a 19th century religious summer camp, prior to Americans’ conversion to the Church of Shutdown.)

Separately, we received a notice from our Town Administrator:

Effective Monday August 10, 2020, Notary services will temporarily be unavailable at Lincoln Town Offices due to the inability to maintain safe social distancing. Notary services will resume when deemed safe to do so. In the meantime, you can contact the following local businesses that advertise notary services…

In other words, it isn’t safe for government workers (who could easily walk a few steps to meet a taxpayer outside and the town hall already has a covered-from-the-rain entry), who will be paid at 100 percent regardless of how much or little they do. So let’s make private-sector employees, who need to work in order to get money, take the risk of close encounters with the public.

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