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“Two heterosexual Irish men marry to avoid inheritance tax on property” (Guardian) neatly combines two recent media sensations: same-sex marriage and whether there should be taxes following death.

[Separately, though of course any marriage is a beautiful event it is unclear why this one was necessary. If you inherit a house that you live in, you may be exempt from taxes under Irish law (source). But perhaps one has to be a blood relation?]

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Our 2007 Infiniti M35x is on its last legs with about 85,000 miles on the clock. The latest issue is a disconnection in one of two mufflers that, absent craft welding skills, requires $1,300 in third party parts ($2,500 in official Infiniti parts?) to repair. This follows failures in the radiator, brakes, A/C coolant hoses, etc. Nissan is not up to the challenge of New England winters and roads!

We are considering saving the planet with a Honda Clarity plug-in hybrid.

Let’s assume that lease numbers are the best guide to the actual cost of owning a vehicle since that is the price at which an arm’s length transaction for three years of ownership occurs.

We got a quote from the same dealer at roughly the same time for $0 down 36-month leases.

• stripped Honda Clarity: $556/month (residual value 46 percent)
• stripped Honda Accord LX CVT: $376/month (residual value 60 percent)
• upgraded Honda Accord EX CVT $434/month (residual value 59 percent)

As noted above, the Clarity Hybrid has a much lower predicted resale value than the gas-powered Accords. This, plus the higher list price, leads to $6,480 in extra costs over three years.

What about fuel cost savings that might offset this? Suppose that we drive 25,000 miles at 25 mpg in the Accord. That’s 1,000 gallons of gasoline at $2.75 per gallon = $2,750. The Federales say that the Clarity can go 100 miles on 31kWh of electricity (about $6 at Massachusetts electric rates, delivered, of 20 cents per kWh (nationwide rates)). We assume that we can go 12,000 miles on electric at a cost of $720. The other 13,000 miles in the Clarity will happen at 30 mpg? That’s 433 gallons = $1,192. So the fuel savings are $952.

Readers: Did I make any mistakes above? Or is the cost of lording it over neighbors in the Greener Than Thou department roughly $5,500?

[Note that I updated the electricity-related arithmetic, above, to reflect the real cost of electricity in Massachusetts, including the various delivery charges.]

Related:

• Have we reached Peak Reliability for internal combustion engine cars? (camshaft sensor) describes the Infiniti’s failure on Interstate 90
• How to get a free car: lease an electric car (but sadly, not a Tesla) — middle class taxpayers in California will buy rich residents free cars

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Hosting a New Year’s celebration for a mixed group of deplorable small business owners and righteous W-2 wage slaves? Here is a suggestion for wines to serve:

 

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As 2017 winds down I want to recommend The Russian Revolution: A New History by Sean McMeekin, very likely the only Bard College professor who is not impressed with Socialism.

I had always thought of Bolshevism as a kind of logical next step in the political development of Russia. Professor McMeekin presents the success of Lenin, Trotsky, and Stalin as almost an accident. The Tsar followed bad advice and entered World War I. The Germans, with whom Russia was at war at the time, financed the Bolsheviks with as much as $1 billion in today’s money. The provisional government that took over after the February Revolution got distracted by a fight with a popular general (the Kornilov affair) and failed to do the obvious thing of arresting all of the German-financed traitors. McMeekin’s point of view does not seem to be the consensus among historians, but it is an interesting perspective.

The history is also relevant for our time due to the debate that we’re having about whether we can make the average American better off by having the government grab money from rich Americans. The Soviets were the masters at this, according to McMeekin. They looted out the world’s largest gold reserves. Then they took all of the property from wealthy private citizens, some of whom were among the richest people in the world. Then they took all of the accumulated wealth of the churches in Russia, which yielded literally tons of silver. Then they took a lot of wealth from the rest of the world by defaulting on the country’s debt. Russia had been one of the world’s most successful economies in the years leading up to the revolution so there was a huge pile of loot to draw down. Nonetheless, the loot didn’t go that far and people ended up starving. What the Russian/Soviet experiment teaches McMeekin is that a growing economy is more important than grabbing accumulated wealth from rich bastards.

McMeekin closes out the book by noting that modern politicians who promise the same stuff that Lenin promised and use the same tactics are likely to rise to power in roughly the same way.

Related:

• Hugo Chavez: Great politician; poor administrator
• Book review: Piketty’s Capital

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My Facebook friends who live in California are thinking hard about how to minimize their federal tax liability. This month they are prepaying their property taxes as far out into the future as possible. For next year, however, they want to turn the state into a “charity” so that they can make voluntary charitable contributions in exchange for a 100 percent state tax credit (Bloomberg discusses this idea; the LA Times talks about it specifically for California).

If you support higher taxes and a bigger government, why not simply pay with a smile? (maybe even send an extra voluntary check to the U.S. Treasury!) It seems that they would do so, but for the hated Donald Trump having been elected by the racist, sexist, and stupid voters in other states. They don’t want to give Donald Trump more money to spend on policies with which they disagree (though if Congress appropriates $X, won’t taxpayers in other states have to pony up $X eventually, even if Californians come up with ways to avoid contributing? The Trump Administration will still spend the budgeted amount, but maybe borrow more to replace what Californians would have paid in taxes)

Here are some more explanations from the virtuous:

People- myself included- generally don’t mind paying more when you get something in return from a societal perspective.
This tax plan hurts our local system and just goes to subsidize people who voted to lower their own state taxes and gut their own state services and are now complaining about the impact. [i.e., he wants middle class people in lean-government Texas to subsidize rich people in fat-government California and New York]

this tax reform accomplished nothing productive or beneficial for the state or most individuals- it is pure partisan politics.
That is, of course, unless you are in real estate development. [from a woman who never started or managed a company; her spending power came from (a) parents, (b) a W-2 job at a non-profit, then (c) the labor of her husband. I find it interesting that she characterizes the changes to the tax code as “tax reform“, demonstrating how deeply embedded doublespeak is in our society]

What about the fact that the same people attacked Donald Trump for purportedly taking all of the deductions provided for in the tax code at the time (one rather insane feature of which, apparently, was that a real estate developer could deduct at least some of the money put up (and then lost) by investors!)? It turns out that was reprehensible while tax-avoidance via prepayment of 2019 or 2020 property tax was virtuous. Trump wrote off a “fake loss.”

A libertarian friend got into an argument with some of these rich tax-avoiding passionate Democrats. The response?

Logic and rational argument DOES seem boring to an increasing number of Americans, which is how we ended up with our current administration.

(i.e., the smart and logical people all voted for Hillary)

Related:

• The tax-avoidance strategies of folks who support higher taxes (mostly about Massachusetts)

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Thanks to Trump and climate change it has been below freezing for the whole week here in Boston and sometimes below 0F. January 8, 2018 is supposed to be our next day with an above-freezing high temp (39) and February 3, 2018 our first day when it might get warm enough (46F) to melt some of the snow. Accuweather’s forecast of the next day when the low temp will also be above freezing? March 24, 2018!

Our flight school has blocked off aircraft on the coldest mornings. If the plane is on a Tanis or Reiff heater, why is this necessary? “We have found that we do more damage than we collect in revenue below 10F. It is not just the engine. Instruments, gyros, and anything else that has to move gets unhappy. Autopilot servos, trim servos, glass screens, electric fuel pump motors: all of it is unhappy.”

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“No matter what Jackie said, we should generally believe rape claims” (Washington Post):

We should believe, as a matter of default, what an accuser says. Ultimately, the costs of wrongly disbelieving a survivor far outweigh the costs of calling someone a rapist.

is sometimes shortened to “believe all women.”

A portion of a friend’s recent Facebook post:

All women deserve respect, all of the time, regardless of where they are.

I couldn’t resist responding “What do you respect the most about Ann Coulter? And do you respect Jayda Fransen all the time?

This got me thinking… what if Ann Coulter were to say that Barack Obama had touched her inappropriately? Would she be believed by those who are currently passionate about helping survivors?

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Potentially interesting item from Karl Denninger: An unequivocal summary of Bitcoin as Ponzi scheme:

All existing cryptocurrencies are designed around a math problem that gets exponentially harder to solve as time goes on. However, the number of “coins” you achieve for solving it is fixed irrespective of where on the curve you solve it. This is a Ponzi scheme by definition since the first people obtain a given reward for little effort yet later people must expend exponentially greater effort for the same reward

Related:

• Investing in Bitcoin vs. Medical School

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Here’s a Christmas posting from a Facebook friend:

The referenced story speaks with certainty about what goes on inside another person’s head: “President Donald Trump wants Americans to think he re-invented Christmas.”

Immigration from all sources should be celebrated:

“Wishing people “merry Christmas” instead of “happy holidays,” is thus in line with Trump’s decision to ban citizens of Muslim-majority countries from entering the United States”

Donald Trump will need to start scribbling:

Likewise, Nazi Germany’s propagandists rooted their idea of Christmas in visions of ethno-nationalism. They rewrote the lyrics of Christmas carols, promoted Nazified holiday traditions and launched numerous Christmas charity events for poor Germans.

Maybe there are some slight differences?

Trump’s rhetoric differs from that of Nazi Germany’s, most notably because he has never advocated for genocide.

I found it interesting that anti-Trump hatred cannot take a rest on Christmas!

Separately, it seems that Air Traffic Control is full of white nationalists because on our epic December 24th journey from Bedford to New Bedford, Massachusetts, every controller and every pilot wished those on the frequency a “Merry Christmas.”

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Our Happy Valley town mailing list has been humming with loyal Hillary supporters trying to figure out how to minimize their personal tax bills by deducting in 2017 expenses related to 2018 through 2022 (and beyond?):

For anyone planning to prepay their taxes today, town office closes at noon.

what are the hours next week???

While a covey of us were writing checks at the Town Hall’s Tax Collection counter in the basement, a young man hurried towards us and asked if he could pay five year’s worth.

As of mid-morning today, they were happy to accept 2nd half FY18 payment AND BOTH 1st+2nd half FY19 (using FY18 as the estimate). They specifically would not accept more than that. Of course, policy may have changed during the course of the day.

I went back this morning for clarification. I spoke with the very, very helpful and friendly tax collector. She explained that, yes, the town would accept THREE payments: the April 2018 payment for the 2nd half of FY 2018 property tax; the November 2018 payment for 1st half of 2019 taxes, *AND* the April 2019 payment for 2nd half of FY 2019 taxes.

Interest in this procedure was not dulled by a resident quoting his accountant:

Most towns do not assess in arears (some do) which means that
if you were to prepay on your fiscal 2018 taxes, I am not sure it would be
deductible under the technical letter of the law. So, we are telling
clients that would receive a benefit to pay the January and March tax
amounts as these are already assessed, but we are cautioning them that any
payments for the latter half of the year may not qualify for a deduction
regardless of the amounts being paid in 2017.

It turns out that the passion for having Americans who live in other states fund the Federal government is a Massachusetts-wide phenomenon. “New rules set off rush to prepay taxes” (Boston Globe):

City and town officials across Massachusetts are being deluged with calls and questions — and even requests for financial advice — from homeowners who want to know whether they should pay next year’s property taxes now, before new rules that cap state and local tax deductions at $10,000 take effect in 2018.

To the bewilderment of municipal workers, taxpayers are dropping off checks — in at least one case for as much as $30,000 — to beat changes contained in the sweeping federal tax bill passed this week by Congress.

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