A posting every day; an interesting idea every three months…
Here are some photos from a 2016 visit to the Notre-Dame de Paris, a time when it seemed like the worst threat to the cathedral was a plague of tourists.
Sad, obviously, but Moscow rebuilt a huge cathedral in modern times. So let’s hope that it can be done.
Related:
As we send in your checks today to keep the wise planners in D.C. funded, let’s consider why D.C. is where it is.
In our government-funded K-12 system, I learned that the location between Maryland and Virginia was a political compromise and that the interests competing were those of multiple states.
From America’s Founding Fathers, a lecture series by Allen Guelzo, a professor at Gettysburg College, I have learned that actually the interests competing were those of individuals.
The original idea was a capital near Philadelphia on the Susquehanna River. Why relocate to a swamp along the Potomac River? Professor Guelzo says that this was a much better location for shareholders of the Potomac Company, which was building canals to facilitate shipping up and down the river.
Who were the shareholders and principals of the company? George Washington was one of the biggest! And his Mt. Vernon estate happened to be quite close to the eventual site of the national capital. Many additional “founding cronies” helped themselves to what they expected to be massive personal profits by moving the site of the capital to the river whose navigation they were improving.
Maybe the next Mueller investigation can look at whether Donald Trump has been scheming to move the capital to Palm Beach?
Full post, including commentsI think that 2018 will be remembered as the breaking point at which the federal tax code become too complex for anyone other than a full-time accountant to understand.
One of the brand new areas is the 20-percent discount for pass-through income from LLCs and S Corp. I think the goal of this is to prevent everyone from forming a C corporation and paying tax at the new corporate tax rate, then eventually taking money out via a dividend and paying tax at the qualified dividend rate (21 percent federal for the corporate tax, 20 percent for dividends, plus another 3.8 percent for Obamacare, plus whatever a state might charge (e.g., 13 percent for California)).
The 20 percent discount, however, is limited to something like the first $157,500 of income. So it is progressive! The mason or plumber gets the full discount while the business consultant probably won’t.
How can you tell how much tax you’re going to pay? You need to calculate the wages paid by the business and also “the unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business” and then plug those into a formula (IRS explanation):
A qualified trade or business is any trade or business, with two exceptions:
1.Specified service trade or business (SSTB), which includes a trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing and investment management, trading, dealing in certain assets or any trade or business where the principal asset is the reputation or skill of one or more of its employees. This exception only applies if a taxpayer’s taxable income exceeds $315,000 for a married couple filing a joint return, or $157,500 for all other taxpayers
2. Performing services as an employee
Q6. The SSTB limitation discussed in Q&A 5 does not apply if a taxpayer’s taxable income is below $315,000 for a married couple filing a joint return and $157,500 for all other taxpayers; the deduction is the lesser of:
A) 20 percent of the taxpayer’s QBI, plus 20 percent of the taxpayer’s qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income B) 20 percent of the taxpayer’s taxable income minus net capital gains.
If the taxpayer’s taxable income is above the $315,000/$157,500 thresholds, the deduction may be limited based on whether the business is an SSTB, the W-2 wages paid by the business and the unadjusted basis of certain property used by the business. These limitations are phased in for joint filers with taxable income between $315,000 and $415,000, and all other taxpayers with taxable income between $157,500 and $207,500. The threshold amounts and phase-in range are for tax-year 2018 and will be adjusted for inflation in subsequent years.
Got it? If so, please explain this to the rest of us!
(“Section 199A: unadjusted basis of qualified property” by an Arizona CPA is helpful. It says that you go back 10 years in calculating the value of property used, unless there is a longer applicable recovery period “under Sec. 168.”)
If your brain doesn’t explode from all of the paperwork, an accountant friend says that, due to the 20 percent discount, it always now makes sense to have an LLC or S Corp. (as opposed to a Schedule C sole proprietorship) if you’re going to be doing any kind of profitable business.
Separately, I have noticed a trend of Massachusetts friends and neighbors spending more time in Florida (or outright moving to Texas). Some of them will spend 1 day every four years voting virtuously for a Democrat, but 183 days every year living in Florida so as to skip out on the no-longer-deductible Massachusetts income tax.
Full post, including comments“Trump claimed Oakland’s mayor doesn’t want released immigrants. Her response: We welcome all.” (Washington Post):
President Trump threw more fuel on the flames of the immigration debate Saturday night in a series of tweets that singled out Democrats and news outlets that had reported on his administration’s plan to relocate migrants to so-called “sanctuary cities.”
Trump specifically singled out the mayor of Oakland, Libby Schaaf (D), who had criticized a proposed policy to relocate detained immigrants to sanctuary cities as an “abuse of power and public resources.”
Then the president claimed that the mayor does not actually want the detained immigrants to be released into her city. In fact, Schaaf’s administration strengthened Oakland’s sanctuary policy in 2018 and had warned residents last year of an upcoming raid by U.S. Immigration and Customs Enforcement.
On Saturday night, she responded to Trump’s attack with a clear message: “Oakland welcomes all.”
In a federally funded welfare state such as the U.S., aren’t poor people an asset for a lot of the politically influential folks within a city? Migrants should be entitled to Medicaid, right? That helps the local health care industry. Migrants should be entitled to food stamps. That is a boost to local supermarket owners. Migrants should be entitled to housing subsidies and/or will have to do some work to pay rent. That’s a boon to anyone who owns an apartment building.
California funds schools centrally. Every migrant child who shows up for a day in an Oakland school, for example, will result in a transfer of funds from Sacramento to Oakland. There should also be federal funds for every new student from a low-income or no-income family.
Might it be an economically rational strategy for political and economic elites in Oakland to pursue a leadership position in the hosting of migrants?
Related:
A friend is an MIT graduate. His son scored 750 math/730 verbal on the SATs, has a perfect high school record, and is a super-nice kid who is passionate about building software. When filling out the application forms, he checked “white male”.
MIT rejected him.
Related:
Back in 2014, I wrote about Oberlin College setting up special dorms for students with darker skin and/or less family money.
Much funnier is this recent video (not de-platformed by YouTube/Google yet!) of white Columbia students singing the praises of separate but equal.
[Video source: a deeply closeted Harvard professor (thus far he has managed to conceal his sinful thoughts from colleagues and administrators).]
Full post, including comments“Congress Is About to Ban the Government From Offering Free Online Tax Filing. Thank TurboTax.” (ProPublica) is about a bipartisan effort to prevent the IRS from making it easy to file taxes. The IRS is in a unique position because it alone has records on what Americans have earned via W-2, 1099, and K-1. Even if TurboTax has better software, for example, it can never start with the authoritative data. (Consider the taxpayer who runs a small Schedule C business and simply loses a 1099 form or the taxpayer who is involved in a bunch of partnerships and loses a K-1; even if these folks are diligent and accurate about rekeying the information from pieces of paper they receive in the mail, they will get flagged for a correction or an audit.)
Given the mournful history of computer (in)security, though, and the lack of Estonian-style electronic authentication for citizens and other residents, I wonder if the hypothetical IRS systems that people are conceiving would ever be practical. What would stop a clever hacker from getting in and downloading information on what every American has earned for the preceding year?
Would the IRS in fact have to rely on mailing printouts to taxpayers’ previously filed addresses? Maybe the hardcopy would contain a generated random key for logging into a web site to enter corrections and tweaks. But what other secure way does the U.S. Government have of reaching residents?
Full post, including commentsFrom one of our most intelligent citizens, a salute to the scientific genius working alone:
Brian Keating’s Losing the Nobel Prize, published just last year, said that the age of a Katherine Clerk Maxwell discovering Maxwell’s Equations mostly on her own was over. The book describes a paper regarding Higgs boson discovery with 6,225 co-authors.
Readers: What is the significance of this “photo” (it is all false or pseudo color since the emissions were not in the visible portion of the E-M spectrum)? What is the actual “advancement of science”? (Rare break from Trump hatred from the NY Times: article on how the experiment worked. The core article on the announcement doesn’t suggest that any in-question hypotheses were confirmed or rejected. I asked a physicist friend: “it’s not exactly the event horizon. It’s the photosphere seen on edge. With limb darkening, it appears as a torus. … eventually you might use images like this to see how general relativity plays out over time. In other words, make a movie called Event Horizon (after they see the actual horizon that is). … It confirmed part of a theoretical prediction. One that was made by a scientist other than Einstein.”)
(Separately, my Facebook friends who were energized by this example of female nerddom (a postdoc identifying as a “woman” writing software! And earning 1/8th the income of a same-age dermatologist (postdoc salary provides less after-tax spending power than obtainable by having sex with a primary care doctor in Massachusetts)) decided that they needed to add a photo of another successful female-identifying programmer. They had to reach back only half a century to find one:
In 1969 Margaret Hamilton wrote the onboard software code for Apollo 11 and coined the term “software engineering.” Now 50 years later, Dr. Katie Bouman’s algorithm enabled the connecting of telescopes around the world to take the first photo ever of a black hole. Here is a photo of Margaret Hamilton with the reams of code, and one of Dr. Bouman with the hard drives containing the 5 petabytes of data generated. Cheers to #WomeninSTEM – now imagine what we could do if they let women run the world! (Photo credit @floragraham). #blackhole #bigdata #IoT
The folks who were excited to see someone identify as female sitting at a desk typing code took their last science class in high school, would consider attending a computer science course to be a physical assault, and would flee if offered the opportunity to spend 45 minutes learning about how their smartphones work.
(There seems to be some question regarding whether Margaret Hamilton was the sole author of the big stack of assembly language code next to which she stands. In 2014, for example, the Boston Globe ran an obituary on Richard H. Battin:
Dr. Battin, who developed and led the design of the guidance, navigation, and control systems for the Apollo flights … As astronauts Neil Armstrong and Aldrin were approaching the Sea of Tranquility on that historic July 20, 1969, flight, Dr. Battin was at Mission Control in Houston with MIT Instrumentation Lab founder Charles Stark “Doc” Draper.
See also a 2016 discussion on Hacker News on the question of whether this Battin guy contributed anything significant.))
Is it safe to say that the 19th century lone genius of science is back?
Full post, including commentsI’ve been listening to America’s Founding Fathers, a lecture series by Allen Guelzo, a professor at Gettysburg College.
It turns out that all of the things that Americans fight and fret about today were issues around the time of the country’s creation (i.e., the traitorous and illegal secession from Great Britain).
People questioned whether a republican form of government made sense. From the notes:
… there had been only a few examples of successful republics in human history—particularly, Rome and Athens—and they offered only a handful of useful rules for guidance:
First, a republic must be harmonious. It cannot be divided in purpose; it must be guided by a common vision of the public good.
Second, it must be homogeneous—composed of citizens who are ethnically, economically, and socially more or less equal in wealth and status.
Third, a republic must be small, if only because harmony and homogeneity break down whenever the boundaries of a republic are drawn to include too many different kinds of people or so much territory that people cannot keep vigil over their fellow citizens.
Fourth, every citizen of a republic must be independent and self-sufficient enough to be able to occupy a public office.
Our Founding Fathers, including George Washington, questioned whether Americans were sufficiently virtuous to govern themselves. With the average person being primarily concerned with making money and quite a few folks “corrupt, selfish, and indolent,” how could the resulting conglomeration of these folks ever be sustainable? Washington, 1783:
the want of energy in the Federal government, the pulling of one state and party of states against another and the commotion amongst the Eastern people have sunk our national character much below par [and] brought our politics and credit to the brink of a precipice.
(i.e., we’ve been on the brink of a precipice for more than 230 years!)
During the Confederation period, Americans attacked political opponents, e.g., Robert Morris, the rebellious colonies’ first “superintendent of finance,” by alleging that people with high-level executive jobs were enriching themselves via corruption.
Politicians were not necessarily examples of traditional virtue in private matters:
[President of Congress Thomas] Mifflin retired from his congressional presidency and spent most of the remaining 16 years of his life in Pennsylvania politics and in what one critic described as “a state of adultery with many women.” Several towns and structures were named for him, but he also burned through most of his family’s fortune and ended up hiding from bill collectors.
The course is replete with examples of “How is it that we hear the loudest yelps for liberty among the drivers of negroes?” (Samuel Johnson). Patrick Henry:
In 1774, when he called on the House to begin arming Virginians for resistance to the Crown, Henry spoke his most famous words: “Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me … give me liberty, or give me death!”
Paying 1-2 percent of income in total tax (see this article Foreign Policy on what American colonists paid) was an intolerable state of “slavery” and equivalent to being in “chains,” for Henry, “a slaveholder throughout his adult life” (Wikipedia).
Early Americans complained about concentrations of wealth and considered themselves fortunate that the disparities were not as large as in Europe.
States maintained a degree of independence and sovereignty to a degree that would be unimaginable today. They would use this to issue their own paper currency, help their citizens escape paying debts to Britons or citizens of other states, and weasel out of their own financial commitments to the Continental Congress.
The bad news is that we’re not making any progress, but maybe the good news is that the disputes that described as “crises” every day in the New York Times were with us in the 1780s.
Full post, including comments“Surprise: Most NYers did well by Trump’s tax cuts but very rich at risk” (NY Post) says that, despite New York having the nation’s highest state and local tax burden and the limit on deductions for these taxes, the typical New Yorker actually paid less in 2018.
(Exception: “the big losers from the SALT cap are concentrated among the Empire State’s highest-earning residents, the 1-percenters who generate more than 40 percent of the state’s personal-income tax as well as an outsized share of New York City taxes.”)
This is counterintuitive. We should expect the new tax system to cut back on people in low-tax states subsidizing those in high-tax states (e.g., taxpayers in Nevada, New Hampshire, and Florida would no longer have to pay part of the cost of services provided in Manhattan). Maybe the answer is that almost everyone nationwide is getting a tax cut and folks who live in the highest tax states are getting a smaller one? Or New York is a special case because its taxes fall so heavily on a small percentage of its population?
I hope everyone is enjoying finalizing their tax returns. Should we have a contest in the comments to see who is grappling with the largest number of pages of forms? (Include forms for any LLCs or S Corps if you’re responsible for reviewing them, also for children if you need to file for them, and include 1099 and W-2 forms that you receive and review.) I think that I should clock in at roughly 500 pages this year.
Full post, including comments