Category: Government

How would eliminating taxes on tips work in practice?

by philg

Kamala Harris recently floated the entirely original idea of eliminating taxes on tip income. How would this work in practice?

Consider the hypothetical case of Abu Mohammed Alsomiri, a personal trainer in Dearborn, Michigan. Clients currently see Abu twice per week and pay $80 per session via Venmo or Zelle. After Kamala’s no-taxes-on-tips program is implemented, Abu says that he provides training at no cost because he is so passionate about fitness, but tips are gladly accepted and that anyone who doesn’t tip at least $80 per session may need to be dropped from his schedule because he tends to be busy.

Or how about Catherine Débrosse, a Haitian migrant with Temporary Protected Status (extended most recently in July 2024) who attended law school in Maskachusetts and became a divorce litigator in Boston. She was previously charging $1000 per hour and paying taxes on her $1.5 million/year income (not every hour is billable). She tells clients that they have to pay her $300/hr and then she expects a $700/hr tip, which is never expected, but always appreciated. At the same time, she notes, due to her great track record at winning custody, child support, alimony, and property division, she’s too busy to work for clients who don’t tip so the clients who don’t tip can expect to have her withdraw from their case. Now Ms. Débrosse pays taxes on only 30% of her income?

What stops corporations from tipping? John Q. Nerdly volunteers to work at Nvidia as a software engineer keeping the CUDA flame alive. If the company appreciates what Mx. Nerdly does, Nvidia can give him/her/zir/them a $20,000 weekly tip (purely voluntary). Now Mx. Nerdly doesn’t have any taxable income. If the tips arrive weekly, Mx. Nerdly never risks working for more than a week without some financial compensation. In fact, Nvidia could eliminate that risk by providing a “first week tip” that is comparable to a month of regular expected tips.

In Kid perspectives on contracts I chronicled a situation where I paid a contractor more than he said (and the paperwork said) I was required to. He wouldn’t have to pay taxes on the amount that I added voluntarily because that was a tip?

Chevrolet dealers will soon be selling the ZR1 version of the C8 Corvette at a $50,000 markup. What if they say that their supply of these 1,064 horsepower cars is limited and they will be happy to sell them at MSRP, but unfortunately must limit sales to those who are decent tippers (where “decent” is defined as a $50,000 tip)? (This would be a great car for going to Publix except that Chevy eliminated the front trunk to make 1,000+ hp happen. The rear trunk isn’t huge and it gets quite hot due to being next to the engine.)

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Why you’re likely safer on a Panamanian- or Liberian-flagged ship than an American ship

by philg

A maritime safety lecture from Into the Storm: Two Ships, a Deadly Hurricane, and an Epic Battle for Survival by Tristram Korten…

SS El Faro’s hull, a towering wall of blue-painted steel, loomed over the wharf at the Port of Jacksonville’s Blount Island terminal as gantry cranes loaded her decks with cargo containers. She was a steamship (designated by the “SS” before her name), using two large boilers to power a single-propeller shaft. And she was old, built by the Sun Shipbuilding and Dry Dock Company in Chester, Pennsylvania, just south of Philadelphia, which rolled her into the Delaware River for service on January 1, 1975. That put her in the minority of big ships [in 2015]—less than 9 percent of the world’s merchant fleet is over twenty years old.

This doesn’t sound good for structural integrity:

Twenty years later, in the mid-1990s, she was hauled into a shipyard in Alabama, where her mid-body was lengthened to increase cargo capacity.

The 790-foot El Faro didn’t make it past her 40th birthday, sadly, but it turns out that she would almost certainly have been scrapped many years prior to the dramatic events of 2015 if not for U.S. laws to restrain maritime trade.

Sun Shipbuilding has since closed, a casualty of America’s decline in manufacturing, leaving a dwindling number of shipyards able to construct big cargo ships in the United States, which also means a dwindling number of shipyards capable of fulfilling the requirements of the Jones Act, a 1920 law requiring that any cargo transported from one U.S. port to another must travel on ships that are American built, American crewed, and American owned. (Puerto Rico, being a U.S. territory, counts as a U.S. port.) The law was designed to protect America’s supply routes during times of war. Today its primary effect is to protect the jobs of American sailors, preventing companies from hiring much cheaper crews from Third World countries. But there is a cost—and it is steep. To build a Jones Act ship costs $120 million to $140 million. To build the same ship in South Korea, which is a developed nation, would cost about $32 million, according to Court Smith, an industry analyst with Shipping Intelligence and Analytics. It’s even cheaper to build one in India or China. South Korea builds roughly two hundred commercial ships a year, according to Smith. America puts out maybe four. As a result, shipping companies pushed the life spans of their expensive American-made ships to the absolute limit. The average age of the U.S.-flagged cargo fleet is thirty-three years, compared to thirteen years for the global fleet, according to UN statistics, and most shipping experts say the average age a cargo ship is retired worldwide is around twenty years. El Faro was a product of this dynamic. Due to its age, it was allowed to remain outdated in certain areas. For example, a regulation requiring new ships to carry enclosed lifeboats was waived for older ones, for which compliance would require a costly retrofit. Grandfathered in, El Faro continued to carry two old-fashioned open-top lifeboats. Likewise, the ship’s emergency position-indicating radio beacon, or EPIRB, did not have to be encoded with GPS, which would give the ship’s position in a time of distress.

In addition to putting American sailors lives’ at risk, the Jones Act dramatically drives up costs for businesses and individuals in Puerto Rico, Alaska, and Hawaii. In addition to the obvious costs described above, there is the non-obvious cost that the closed market facilitates collusion:

For two decades, Sea Star had been one of several shipping companies that sailed supplies to Puerto Rico on a regular schedule. All that competition meant slender margins and low profits. But companies stayed with the route to Puerto Rico—travel between a U.S. state and a U.S. territory—because they had invested so much to comply with the Jones Act. There were no dodgy flags of convenience for El Faro; she flew the Stars and Stripes. That was a high barrier to entry for would-be competitors—they would need an American-built ship, crewed by U.S. sailors. Then, in 2002, one of those firms, Navieras, went bankrupt. Suddenly the companies still afloat—including Sea Star, Crowley, Trailer Bridge, and Horizon—started seeing increased business and profits for the first time in decades. Rather than risk losing their newfound earnings to any potential newcomers, the companies bought Navieras’s ships, and executives from at least three of the companies, Sea Star, Crowley, and Horizon, conspired to fix their prices. They created secret email accounts to communicate, and set up spreadsheets that kept track of their rates, which increased by as much as 30 percent—so that, as Forbes magazine wrote, “they could assure that nobody was cheating, while they were cheating.” They weren’t clever enough to fool the FBI, however, which got involved after learning of a meeting between executives from the competing firms.

Even a newly built South Korean ship would have had some trouble handling what the American captain and crew did with El Faro, but the new ship might not have sunk and, if it had, the modern lifeboats would have given the crew a chance to survive.

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Accountability in Iran versus in the U.S.

by philg

“Iran Arrests Dozens in Search for Suspects in Killing of Hamas Leader” (NYT):

Iran has arrested more than two dozen people, including senior intelligence officers, military officials and staff workers at a military-run guesthouse in Tehran, in response to a huge and humiliating security breach that enabled the assassination of a top leader of Hamas, according to two Iranians familiar with the investigation.

The high-level arrests came after the killing in an explosion early Wednesday of Ismail Haniyeh, who had led Hamas’s political office in Qatar and was visiting Tehran for the inauguration of Iran’s new president and staying at the guesthouse in northern Tehran, Iran’s capital.

The fervor of the response to the killing of Mr. Haniyeh underscores what a devastating security failure this was for Iran’s leadership, with the assassination occurring at a heavily guarded compound in the country’s capital within hours of the swearing-in ceremony of the country’s new president.

Can anyone recall a similar failure to achieve security here in the U.S.? If so, how many arrests were made of people who failed to achieve what they were paid to achieve?

Separately, the article says that Israel was responsible, but what is the evidence for this?

The deadly blast, which also killed Mr. Haniyeh’s Palestinian bodyguard, wasn’t only an earth-shattering collapse of intelligence and security; nor only a failure to protect a key ally; nor evidence of the inability to curb the infiltration of Mossad; nor a humiliating reputational blow. It was all of those, and more.

Perhaps most important, it delivered a jarring realization that if Israel could target such an important guest, on a day when the capital was under heightened security, and carry out the attack at a highly secure compound equipped with bulletproof windows, air defense and radar, then no one was really safe.

If being a senior Hamas leader can yield personal wealth, e.g., via skimming US and EU taxpayer dollars off the UNRWA budget, wouldn’t the most likely suspect in hastening the martyrdom of a senior leader be a junior leader?

Finally, we are informed by corporate media that Palestinians do not support Hamas. Aj Jazeera, on the other hand, shows us “Palestinians in the occupied West Bank protest against Haniyeh’s killing”:

If these folks viewed Hamas rule as oppressive or illegitimate why would they be out in the street upset that a senior Hamas leader is gone?

The Deplorable New York Post covers similar events here… “Hamas flag-wielding anti-Israel protesters show off portrait of killed terrorist leader Ismail Haniyeh in shocking Times Square rally”.

What about the 0.6 percent of (88+ million) Iranians who don’t identify as Muslim? It would be interesting to know if they are upset about their Hamas-affiliated guest ascending to Islamic Heaven.

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Online passport renewal takes longer than mail-in

by philg

My U.S. passport expires in September so I’ve been looking at renewal options.

The State Department has an online renewal system that they’re offering to a limited number of lucky taxpayers every day. I was excited about this because it doesn’t require mailing in the old passport. I would thus be able to keep using my old passport while waiting for the new one. That assumption turned out to be incorrect:

Only slightly discouraged, I thought “well, at least it will be quicker because the mailing time will be cut out.” That was also wrong, wrong, wrong:

An online application will result in one’s current passport being immediately invalidated and the new one not being sent out for up to 8 weeks. A mail-in application, on the other hand, can result in a new passport after about 3 weeks (if one pays for “expedited” service).

Given that our borders are effectively open to anyone without documents who wants to collect four generations of welfare, I can’t figure out why the Feds persist in pretending that the border is tightly controlled and, therefore, that taxpayers must jump through hoops to keep their documents current. A friend’s U.S.-born wife couldn’t get on a plane to Ireland, for example, because her passport was a few months out of date. When we returned from Portugal to the Newark Airport, they CBP has 2-3 officers processing passports from multiple jumbo jets, thus resulting in an epic line. It would have been faster to fly into Mexico and walk across the border. During the hour-ish wait (my Global Entry status wasn’t useful due to the fact that we had the kids with us and they’re not set up on the program), I wondered why the U.S. checks commercial airline passengers with U.S. passports. The passports were checked three times prior to departure by different groups of qualified personnel in Portugal working in three different parts of the airport (front counter check-in; immigration border; gate). Why couldn’t we just be waved in? Why is it a problem to admit a U.S. passport holder whose passport was just checked and stamped by a Portuguese immigration officer? If there is some additional information they want they could ask the airline to collect it or ask the Portuguese to collect it (at a tiny fraction of the cost of paying a U.S. government worker).

I’m also wondering about the simpler question of why, if the process is entirely online and they don’t want the old passport mailed in, there must be a gap in passport availability. Why would it complicate matters for the government to allow the use of the old passport through about 90 days after the issuance of the new one? (this would account for a taxpayer leaving on an extended trip just before the new passport arrives)

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What would the Secret Service have done differently if they’d wanted a random kid to shoot and kill Donald Trump?

by philg

We’ve been getting some details about the face-off between the arch criminal below and the $3 billion/year Secret Service.

Wikipedia says that the building from which Thomas Matthew Crooks shot at Mr. Trump was identified as an ideal location for an assassin, that police snipers were sitting inside the building eating donuts and drinking coffee rather than risk falling off a mostly-flat roof, that law enforcement ignored the crowd’s attempts to warn them of Mr. Crooks’s activities, and that Crooks’s use of a rangefinder wasn’t considered sufficiently suspicious for anyone to take action. The state of knowledge as of July 16, 2024:

According to WPXI, Crooks was photographed twice by security officers prior to the shooting. Prior to 5:45 p.m. EDT, a police officer saw Crooks on the ground and reported him, with a photograph, as a suspicious person. An officer searched for Crooks but did not find him. Multiple local law enforcement officers identified Crooks and believed that he might have been acting suspiciously near the event’s magnetometers; they expressed their suspicions over the radio, and their radio communications were available to the Secret Service.[38] At 5:45 p.m., a member of the Beaver County Emergency Services Unit (ESU) tactical team saw Crooks on a roof, notified other security services, and photographed Crooks.[47] According to Forbes, in one of the two cases of Crooks being photographed, the police officer who photographed Crooks saw him “‘scoping out’ the roof and carrying a range finder”.[43] Reports indicated that several bystanders also witnessed a man carrying a rifle on the rooftop and alerted the police about him nearly a minute and a half before shots were fired at Trump.[48][49] A Butler Township police officer attempted to climb to the roof of the building in search of Crooks, hoisted by another officer. Crooks spotted the officer while the officer’s hands were clinging to the edge of the roof and aimed his rifle at the officer, at which point the officer let go, falling 8 feet (2.4 m) to the ground and severely injuring his ankle. Crooks undertook the assassination attempt immediately following the confrontation with the officer.

My question for today is “Suppose that the Secret Service and local law enforcement actually wanted a random kid to be able to shoot and kill Donald Trump. What would they have done differently?” Short of actually handing out rifles, scopes, and ammo, how would it have been possible for the Secret Service and police to facilitate what young Mr. Crooks was trying to do?

Note that the Secret Service was supposedly at its most vigilant last weekend. “U.S. Detected Iranian Plot to Kill Trump Separate From Last Weekend’s Shooting” (NYT):

U.S. intelligence agencies were tracking what they considered a potential Iranian assassination plot against former President Donald J. Trump in the weeks before a gunman opened fire last weekend, several officials said on Tuesday, but they added that they did not believe the threat was related to the shooting that wounded Mr. Trump.

The intelligence had prompted the Secret Service to enhance security for the former president before his outdoor campaign rally in Butler, Pa., on Saturday, officials said. Yet whatever additional measures were taken did not stop a 20-year-old local man from clambering on top of a nearby warehouse roof to shoot at Mr. Trump, grazing his right ear and coming close to killing him.

American progressives now agree with Iran on both (a) Palestine, and (b) the importance of getting rid of Donald Trump?

Separately, at least according to Joe Biden and/or his minders, here are some of the threats that Mr. Crooks came close to eliminating:

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30 years of Republican cuts to the food stamp (SNAP/EBT) program

by philg

From the member of the U.S. Congress who called for “river to the sea” liberation of Palestine after the October 7 Hamas/UNRWA/Palestinian Islamic Jihad victory:

There have been previous cuts. The program has been gutted. A yet larger cut is forthcoming unless everyone votes for Democrats.

After 30 years of “cuts” to this program that is part of what used to be called “welfare”, how has the number of beneficiaries changed?

USDA publishes data from 1969 through 2023 regarding the number of Americans who are dependent on their brothers, sisters, and binary-resisters who pay taxes. Based on the table below, the number of dependents has grown from 2.9 million in 1969 to 42 million in 2023:

How does it work in practice? Here’s a tutorial video:

Note that this post is not an argument against taxpayers being forced to provide for those who wisely elect to refrain from work. It is about the subtlety of the American progressive mind, in which people can believe and say that a government program has been “cut” or “gutted” while spending on that program grows.

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Why did NPR hire a white person as its new CEO?

by philg

Katherine Maher, the former head of Wikipedia and recently hired CEO of state-sponsored NPR, has been in the news lately. Christopher Rufo has been highlighting her years of progressive-themed tweets. This one is my favorite:

(It’s actually a prompt of exclusion since the password does not include “Ze”)

What I can’t figure out is why NPR hired this white native-born 40-year-old. Here’s the NPR diversity policy:

If diversity is their core value, as they say, why couldn’t they find a CEO who fits into more corners of the “big tent” that they’ve identified? A Black gay transgender poor religious old disabled conservative undocumented immigrant, for example. And why did she take the job? She says that she wants to help sex workers, Black and brown people, Muslims, “LGBTQ+ folks”, et al. Shouldn’t she have rejected the offer and told NPR to hire someone who fit into one of those categories?

Some more tweets from the head of the taxpayer-funded radio network:

(It’s a “man’s world”, but someone with only a bachelor’s degree was able to get the top jobs at Wikipedia and NPR without identifying as a “man”?)

Don’t have kids, but invite 100 million migrants and their kids into a high-carbon society from their low-carbon societies? Hearing about the possibility that immigrants destroyed the natives (Anglo-Saxons moving into present-day Britain) makes her more confident that open borders are the correct choice for current Americans:

In case the original of my favorite tweet goes into a memory hole:

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WSJ article on the working/chump class

by philg

“The Calls for Help Coming From Above the Poverty Line” (WSJ, April 6):

United Way, the nonprofit that operates about half of the country’s 200-plus 211 centers, and other poverty researchers blame that disconnect partly on the federal poverty line, which they say hasn’t kept up with the real cost of living.

The share of households below the census-designated federal poverty line has barely budged since 2010. Meanwhile, poverty researchers say a large and fast-growing group of people are earning too much to qualify for social services and not enough to afford the basics where they live.

In other words, the working class has been trampled by open borders, just as the Harvard economics eggheads said: “Yes, Immigration Hurts American Workers”.

The trend, which was hugely accelerated starting in 2021, probably isn’t going to be reversed. The question then becomes how should a person of modest means, yet not entitled to “not-welfare”, adapt to a society that has been degraded for the working class?

Humans are social animals and a lot of the misery inflicted on the working class has to do with their standard of living being lower than that of nearby non-working people on what used to be called “welfare” and is now “means-tested”. The working class person will experience pain at the grocery store when seeing a relaxed-from-not-working customer pay for a huge cart of groceries via EBT card, for example.

How about a move to a state where people who work have a higher spending power than people who don’t work? “The Work versus Welfare Trade‐​Off: 2013” (CATO) is filled with pre-Biden dollar figures that are absurdly out of date, but the percentages and rankings are still relevant. Here are the states where a working class American is going to feel the dumbest for not having gone on the welfare career track starting at age 16:

Here are the states where a median worker might enjoy twice the spending power of someone who chooses the relaxed non-working lifestyle:

We then probably want to look at these states to figure out which ones have the best opportunities for free recreation, the best schools for kids so that they can move up, and the best weather. In the report covered by “Surprise: Florida and Texas Excel in Math and Reading Scores” (NYT 2015), Texas, Florida, and Colorado had the best schools among the above states. Florida and Colorado have great weather and free recreation. Florida is ranked #8 for happiness by WalletHub and Colorado is down at #31. So maybe the answer for a working class person feeling like a chump is to move to Florida! (Maybe not to Palm Beach County, though, if envy is an issue!)

The same advice applies to people who are rich, incidentally, if the rich person wants to be in an environment where anyone with a job can thrive and not suffer despair. Inequality isn’t a terrible thing, from a rich person’s point of view, but for those who adhere to the now-obsolete Protestant work ethic, there is value to being in a place where the working people one interacts with are cheerful.

Related:

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Sam Bankman-Fried signature license plates?

by philg

A sad day for Joe Biden’s second-largest donor (NYT):

Could the federal government reduce the budget deficit by selling license plates and other collectibles made by Sam Bankman-Fried? If he’s going to be in prison for at least a few years why not start up a line of Effective Altruism plates at $5,000, each one signed by Mr. Bankman-Fried? (partnership with the states, of course, and some of the profits shared with each state that participates)

Separately, when and by which president might Sam Bankman-Fried be pardoned?

Also, with Bitcoin now at $70,000, is it possible that Bankman-Fried, if left alone, could have paid everyone back? FTX melted down in November 2022 when Bitcoin was worth about $20,000. What if Bitcoin had gradually moved from its $65,000 November 2021 price to today’s $70,000? Would FTX have been okay despite the diversions of funds and the girlfriend’s investment decisions?

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Gerald Ford and the Swine flu panic of 1976

by philg

An Ordinary Man: The Surprising Life and Historic Presidency of Gerald R. Ford reminds us of the 1976 panic regarding a respiratory virus: a strain of influenza called “swine flu”. This was the genesis of the modern muscular CDC. Congress appropriated $500 million in pre-Carter/pre-Biden dollars. The CDC said that every American should get vaccinated (Republican Ford publicly accepted the sacrament; Democrat Jimmy Carter refused it). The vaccine was rushed to the market, greatly enriching four pharma companies who also were indemnified from any liability. This indemnification turned out to be useful. The vaccine was at least 10X more likely to cause Guillain-Barré Syndrome (paralysis) than it was to protect the injected person from death due to influenza (contemporary CDC page on the subject).

Abram Saperstein, who changed his name to Albert Sabin, was recruited to sell the idea of universal vaccination. Sabin was famous at the time for having created the oral polio vaccine. After a few months, however, Sabin concluded that the rushed-to-market swine flu vaccine was more likely to harm than help and that a 1918-style epidemic was unlikely.

Speaking of Jimmy Carter, the book notes that his campaign promises were similar to Javier “Chainsaw” Milei’s in Argentina. Candidate Carter promised to reduce the number of federal agencies from 1,900 to 200, for example. What did President Carter deliver? A brand new Cabinet-level Department of Education that kicked off decades of tuition inflation at American colleges and universities via subsidized student loans and grants.

Personal health anecdote: Following the example of Jimmy Carter, the greatest president in our nation’s history, I ignored CVS’s constant reminders of flu vaccine availability. In early January, embedded in Boston with the nation’s smartest and most assiduous mask and vaccine Karens, I got a truly horrible cough/flu. I cursed myself for ignoring CDC advice. After limping home on JetBlue (I actually wore a mask in hopes of protecting fellow passengers!) I went to a German-trained physician here in Palm Beach County and tested negative for both COVID and influenza.

Related:

  • “The Effect of Influenza Vaccination for the Elderly on Hospitalization and Mortality” (Anderson, et al. 2020; Annals of Internal Medicine): “Turning 65 [the age at which people in the UK become eligible for flu vaccines from the NHS] was associated with a statistically and clinically significant increase in rate of seasonal influenza vaccination. However, no evidence indicated that vaccination reduced hospitalizations or mortality among elderly persons” (in other words, the flu shot might help some people avoid a brief illness, but it doesn’t reduce the chance of being killed by the flu)
  • “Carter’s Flu‐Shot Plan For the Ill and Elderly Termed Short of Goal” (NYT, 1979): [the CDC director] also defended the program against criticism by Dr. Albert B. Sabin, who developed the oral vaccine for polio. Dr. Sabin, who is associated with the Medical University of South Carolina, said that he did not believe that the influenza vaccine would help many people because new virus strains kept cropping up. and required changes in immunization formulas. He said that vaccines containing major new strains became available only after the new strains already had their major impact.
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