You can think of corporate taxation as a sort of long chess match: The government makes a move. Corporations move in response — sometimes literally, to another country where the tax burden is less onerous. This upsets the government greatly, and the Barack Obama administration in particular. Treasury Secretary Jack Lew has written a letter to Congress, urging it to make it stop by passing rules that make it harder to execute these “inversions.”
I’ve got a better idea: What if we made our tax system so attractive to corporations that they would have no interest in moving themselves abroad?
The problem with this extended chess game is that every move is very costly. First, it adds to the complexity of the tax code. With every new rule — no matter how earnestly said rule attempts to close a “loophole” — it becomes harder to know whether you are in compliance with the law. This is true on both sides; corporate tax law has now passed well beyond the point where it is possible for a single expert to be familiar with its ins and outs. This makes it harder to plan business expansions, harder to forecast government revenue, and it requires both sides to hire more experts in order to determine whether corporations are compliant. It also means more lawsuits, and longer ones, as both sides wrangle over how this morass of laws should be applied to real-world situations.
You can think of it this way: Every new law has possible intersections with every other tax law in existence. As the number of laws grows, the number of possible intersections grows even faster. And each of those intersections represents both a possible way to avoid taxes and a potential for unintended consequences that inadvertently outlaw something Congress never intended to touch. This growing complexity makes it more and more difficult for either companies or lawmakers to forecast the ultimate effects of new tax laws.
Megan McArdle, “We Don’t Need a Corporate Income Tax”, Bloomberg View, 2014-07-16.
June 27, 2015
QotD: The corporate tax game
June 26, 2015
The Austro-Hungarian Empire Strikes Back I THE GREAT WAR Week 48
Published on 25 Jun 2015
Just a few weeks ago Austria-Hungary’s military laid in shambles. But with German support from August von Mackensen and other German generals, the tide is turning on the Eastern Front. Even Lemberg can be conquered again and the Russians are still on their Big Retreat.
Bob Dylan at 60
Mark Steyn dug up an old column from 2001 (also anthologized in his recent book The [Un]documented Mark Steyn) where he describes the re-appearance of Bob Dylan on the mass media:
I first noticed a sudden uptick in Bob Dylan articles maybe a couple of months ago, when instead of Pamela Anderson’s breasts or J-Lo’s bottom bursting through the National Post masthead there appeared to be a shriveled penis that had spent way too long in the bath. On closer inspection, this turned out to be Bob Dylan’s head. He was, it seems, getting ready to celebrate his birthday. For today he turns 60.
Sixty? I think the last time I saw him on TV was the 80th birthday tribute to Sinatra six years ago, and, to judge from their respective states, if Frank was 80, Bob had to be at least 130. He mumbled his way through “Restless Farewell”, though neither words nor tune were discernible, and then shyly offered, “Happy Birthday, Mister Frank.” Frank sat through the number with a stunned look, no doubt thinking, “Geez, that’s what I could look like in another 20, 25 years if I don’t ease up on the late nights.”
Still, Bob’s made it to 60, and for that we should be grateful. After all, for the grizzled old hippies, folkies and peaceniks who spent the Sixties bellowing along with “How does it feeeeeel?” these have been worrying times. A couple of years ago, Bob’s management were canceling his tours and the only people demanding to know “How does it feeeeeel?” were Dylan’s doctors, treating him in New York for histoplasmosis, a fungal infection that in rare cases can lead to potentially fatal swelling in the pericardial sac. If the first question on your lips is “How is histoplasmosis spread?” well, it’s caused by fungal spores which invade the lungs through airborne bat droppings. In other words, the answer, my friend, is blowin’ in the wind.
He has, of course, looked famously unhealthy for years, even by the impressive standards of Sixties survivors. He was at the Vatican not so long ago and, although we do not know for certain what the Pope said as the leathery, wizened, stooped figure with gnarled hands and worn garb was ushered into the holy presence, it was probably something along the lines of, “Mother Teresa! But they told me you were dead!” “No, no, your Holiness,” an aide would have hastily explained. “This is Bob Dylan, the voice of a disaffected generation.”
Vowels, consonants … and how we understand the written word
In the New English Review, Colin Wells undertakes to explain why Arabs hate reading:
Though little reliable research has been done on Arabic literacy, the little that has been done is quite clear in one regard. As Johns Hopkins researcher Niloofar Haeri concludes in her contribution to The Cambridge Handbook of Literacy (2009), throughout the Arab world educated people find reading very difficult, don’t like to do it, and do as little of it as possible — even the librarians.
Why this uniformly strong dislike of reading?
Haeri’s answer is that Arabic literature is written in “classical Arabic,” the archaic language of the Quran, which is stilted, difficult, and often unfamiliar to speakers of the many modern dialects of spoken or “street Arabic.”
[…]
If you look up “writing” in the current Encyclopedia Britannica online, you’ll find an article by David Olson, a leading scholar of writing systems at the University of Toronto, where much of the most important research on literacy has been done over the past half century. Among the entry’s many interesting bits of information, one brief observation is easily overlooked: writing that has only consonants must be understood before it can be read, while writing that has both consonants and vowels reverses that process.
With consonants alone, the consonants act as hints, but the reader has to fill in the missing vowel sounds, as in “Ll mn r crtd ql” or “Nc pn tm thr ws lttl prncss.” This seems easy enough, at first glance. With both consonants and vowels, on the other hand, you read it first and then go on to figure out what it means, as in “Look out the window and bring me the nail file.” In Olson’s academese, with consonantal writing “interpretation precedes decipherment,” while with alphabetic writing “decipherment precedes interpretation.”
With a fine-tuned academic alertness to thin ideological ice, Olson deftly skates away from exploring the implications of this well-known fact. Nor is he alone in doing so. Only two kinds of consonantal writing are widely used today, Hebrew and Arabic, and both are considered sacred by their practitioners. So among scholars, there’s an unspoken and perhaps understandable reluctance to look closely at how — and at how well — they work when it comes to reading them, and especially to countenance that alphabetic writing might be easier to read.
Hebrew writing is a special case, a consonantal script for a dead language that was brought back to life by European Zionists for use in Israel, where alphabetic script is also commonly used. But it’s no secret that the Arab world has a huge literacy problem, though most of us in the West are unaware of just how severe it is. Not only are very few books published in Arabic overall, virtually none are translated into Arabic from other languages. This intellectual starvation and isolation contrasts with the many millions of books published in, and the hundreds of thousands translated into, alphabetic languages each year.
The self-driving truck won’t displace many human truck drivers for years to come
I’m far from being a Luddite, but I find Megan McArdle‘s analysis of the low short-to-medium term risk of job losses due to self-driving vehicles to be pretty convincing:
… my objections are actually to the understanding of the trucking industry works and of self-driving vehicles. Fully automated trucks, with no drivers at all, are probably going to arrive later than Santens thinks, take longer to roll out than he projects, and displace fewer workers than he thinks they will. I’m not saying it will never happen. I’m just skeptical that this is going to be a major policy problem in the next two decades.
Why?
Start with what truckers do, and how many of them there are. Santens quotes the American Trucker Association to get 3.5 million. The Bureau of Labor Statistics puts that figure a bit lower, around 2.8 million. More importantly, only 1.6 million of those are long-haul truckers. The rest are “driver/sales” employees or “Light truck or delivery services drivers.” Those are short-haul services that will not quickly be replaced by automated cars, both because chaotic urban roads are harder for autonomous vehicles to handle and because part of the job is loading and unloading the truck (something that long haul drivers may also do).
Also: Why would we assume that the advent of driverless trucks would be bad for trucking support jobs? Those folks are doing stuff like maintenance or loading that still has to be done. Moreover, other jobs will be created, in designing and maintaining the new systems. Someone has to map all those roads.
But I think it will be a while before we get to a fully autonomous vehicle with no people in it. The “driverless truck” that Santens links is not actually driverless; it’s partially autonomous. If it foresees something it can’t deal with, such as heavy snow, it signals to the driver to take over; if the driver doesn’t respond, it slows to a stop. That’s an improvement in the lives of truck drivers, not a job killer.
QotD: The legacy of the Church of England
As an atheist in good standing, I go to meetings every week, I’m suppose to scoff and keep directing my fire at something more vital to the modern world than the Anglican Church. Which would be pretty much everything at this point.
The Anglican Church, however, isn’t just another Christian sect, it is the official sect of the United Kingdom. Justin Welby, in theory, reports to God and the Queen. That’s a pretty posh set of bosses. Despite it’s compromised beginnings the C of E has been one of those bulwarks of English life that made England what it was. You can mock its theology, you can criticize its history yet, in its own remarkable way, it has basically worked. The manners and mores of the English speaking people have been profoundly influenced by the teachings of this church. Laugh if you want, but you’re laughing at one of the unacknowledged wellsprings of the Anglosphere.
This is deep culture stuff. Beneath the Rule of Law, Free Markets and Parliament stuff is manners and mores. It’s hard to explain really. The cadences of the language, the body language of the people and the basic decency of its public life. It’s impossible to imagine that somewhere, behind all of that, there is not some country vicar going about his business in an earnest fashion. There are thousands of Christian sects. This one helped established the culture of the modern world in a way unlike any other. Attention must be paid.
Richard Anderson, “Put A Hat On It”, The Gods of the Copybook Headings, 2014-07-16.
June 25, 2015
Refuting Piketty on the inevitable “rich get richer” meme
At Reason, Ronald Bailey links to a study that appears to undermine most of Thomas Picketty’s claims:
From the study:
We believe Piketty’s core message is provably flawed on several levels, as a result of fundamental and avoidable errors in his basic assumptions. He begins with the sensible presumption that the return on invested capital, r, exceeds macroeconomic growth, g, as must be true in any healthy economy. But from this near-tautology, he moves on to presume that wealthy families will grow ever richer over future generations, leading to a society dominated by unearned, hereditary wealth. Alas, this logic holds true only if the wealthy never dissipate their wealth through spending, charitable giving, taxation, and splitting bequests among multiple heirs.
As individuals, and as families, the rich generally do not get richer; after a fortune is first built, the rich get relentlessly and inevitably poorer.
The “evidence” Piketty uses in support of his thesis is largely anecdotal, drawn from the novels of Austen and Balzac, and from the current fortunes of Bill Gates and Liliane Bettencourt. If Piketty is right, where are the current hyper-wealthy descendants of past entrepreneurial dynasties — the Astors, Vanderbilts, Carnegies, Rockefellers, Mellons, and Gettys? Almost to a man (or woman) they are absent from the realms of the super-affluent. Our evidence — used to refute Piketty’s argument — is empirical, drawn from the rapid rotation of the hyper-wealthy through the ranks of the Forbes 400, and suggests that, at any given time, roughly half of the collective worth of the hyper-wealthy is first-generation earned wealth, not inherited wealth.
The originators of great wealth are one-in-a-million geniuses; their innovation, invention, and single-minded entrepreneurial focus create myriad jobs and productivity enhancements for society at large. They create wealth for society, from which they draw wealth for themselves. In contrast, the descendants of the hyper-wealthy rarely have that same one-in-a-million genius. Bettencourt, cited by Piketty, is a clear exception. Typically, we find that descendants halve their inherited wealth — relative to the growth of per capita GDP — every 20 years or less, without any additional assistance from Piketty’s redistribution prescription.
Dynastic wealth accumulation is simply a myth. The reality is that each generation spawns its own entrepreneurs who create vast pools of entirely new wealth, and enjoy their share of it, displacing many of the preceding generations’ entrepreneurial wealth creators. Today, the massive fortunes of the 19th century are largely depleted and almost all of the fortunes generated just a half-century ago are also gone. Do we really want to stifle entrepreneurialism, invention, and innovation in an effort to accelerate the already-rapid process of wealth redistribution?
A different kind of crowd-funding
Christopher Taylor starts off by praising to the skies a movie I’ve never seen … but he goes on to discuss a variant of crowdfunding that might be a significant change to how movies are made:
… the big studios are corporations that answer to a board of stockholders. And the stockholders aren’t interested in great film making, they are interested in making money off their stocks.
So the Broken Lizards guys went to crowdfunding to raise money for their film, and have done quite well. They did so well that they don’t need a big bunch of studio dollars and interference to make the movie.
But here’s where it gets really interesting. See, crowdfunding sites raise money by offering goodies and the joy of helping a product succeed. They are not investment sites so much as a chance to be a patron of something you want to see on the market as well as a chance to get something from the company. Free copies, a mention in the book, a token in the game named after you, and so on.
Well that’s all about to change in a big way.Jay Chandrasekhar writes:
At our meeting, I vented to Slava about my perception of crowdfunding. I told him I wished people could invest in the movie and then own an equity piece of the backend. He said, “I totally agree.” That’s when we hit it off. He said that there is legislation in Washington, as we speak, that if signed, will make equity-based crowdfunding a reality. Think about that.
I’m with Jay here. Think about that. Its very likely that soon you will be able to donate to a crowdfunded project and get money back from its sales. In other words, it will actually be an investment, not just patronizing.
This is a huge key in changing the way that media gets made. All those projects the studios and TV channels pass on because it isn’t hot or doesn’t make sense to them? If this happens, they can have a chance.
Delivering a new streetcar to the TTC
On Facebook, James Bow linked to this photoset from Toronto Life, showing the stages a new streetcar goes through when the railway delivers it to the TTC:
Click to see full-sized image at Toronto Life
Building A WW2 Tank: A Defense Report On Film – 1941 Educational Documentary
Published on 20 Jun 2015
Activities at the Chrysler Tank Arsenal in Detroit. Wheel suspension units are milled, wheels ground, gun mount gears cut, armor plate put through a punch press and drill, sprocket gears cut by an arc torch, gears heat treated and immersed in oil baths, armor plate hydraulically riveted, the tanks assembled, armament installed, and the tanks lifted from the assembly line by cranes. The tanks are tested at Fort Knox, Kentucky.
QotD: Religion as a user interface for reality
I was raised as a Methodist and I was a believer until the age of eleven. Then I lost faith and became an annoying atheist for decades. In recent years I’ve come to see religion as a valid user interface to reality. The so-called “truth” of the universe is irrelevant because our tiny brains aren’t equipped to understand it anyway.
Our human understanding of reality is like describing an elephant to a space alien by saying an elephant is grey. That is not nearly enough detail. And you have no way to know if the alien perceives color the same way you do. After enduring your inadequate explanation of the elephant, the alien would understand as much about elephants as humans understand about reality.
In the software world, user interfaces keep human perceptions comfortably away from the underlying reality of zeroes and ones that would be incomprehensible to most of us. And the zeroes and ones keep us away from the underlying reality of the chip architecture. And that begs a further question: What the heck is an electron and why does it do what it does? And so on. We use software, but we don’t truly understand it at any deep level. We only know what the software is doing for us at the moment.
Religion is similar to software, and it doesn’t matter which religion you pick. What matters is that the user interface of religious practice “works” in some sense. The same is true if you are a non-believer and your filter on life is science alone. What matters to you is that your worldview works in some consistent fashion.
Scott Adams, “The User Interface to Reality”, The Scott Adams Blog, 2014-07-15.
June 24, 2015
Ceremonial Guard 2015 Season
Published on 22 Jun 2015
The Ceremonial Guard is one of Canada’s most recognizable military units. For over 50 years, the Changing of the Guard has been a top Ottawa attraction, having thrilled thousands of visitors on Parliament Hill, at Rideau Hall and at the National War Memorial. The Changing the Guard Ceremony will take place daily at 10 a.m. on Parliament Hill from June 28 to August 22, 2015.
Nathan Rothschild did as much to defeat Napoleon as Wellington
Matt Ridley decries his own taste in reading (too many cavalry charges and panzer tanks) and declares that we should honour the man who propped up the Duke of Wellington financially for making Wellington’s battlefield and diplomatic efforts meaningful:
Galloping bravely against an enemy, in however good a cause, is not the chief way the world is improved and enriched. The worship of courage as a pre-eminent virtue, which Hollywood shares with Homer, is oddly inappropriate today — a distant echo of a time when revenge and power, not justice and commerce, were the best guarantee of your security. Achilles, Lancelot and Bonaparte were thugs.
We admire achievements in war, a negative-sum game in which people get hurt on both sides, more than we do those in commerce, where both sides win.
The Rothschild skill in trade did at least as much to bring down Napoleon as the Wellesley skill in tactics. Throughout the war Nathan Rothschild shipped bullion to Wellington wherever he was, financing not just Britain’s war effort but also that of its allies, almost single-handedly. He won’t get much mention this week.
So I ought to prefer books about business, not bravery, because boring, bourgeois prudence gave us peace, plenty and prosperity. It was people who bought low and sold high, who risked capital, set up shop, saved for investment, did deals, improved gadgets and created jobs — it was they who raised living standards by ten or twentyfold in two centuries, and got rid of most child mortality and hunger. Though they do not risk their lives, they are also heroes, yet we have always looked down our noses at them. When did you last see an admirable businessman portrayed in a movie?
Dealing is always better than stealing, even from your enemies. It’s better than praying and preaching, the clerical virtues, which do little to fill bellies. It’s better than self-reliance, the peasant virtue, which is another word for poverty. As the economic historian Deirdre McCloskey put it in her book The Bourgeois Virtues: “The aristocratic virtues elevate an I. The Christian/peasant virtues elevate a Thou. The priestly virtues elevate an It. The bourgeois virtues speak instead of We”.
The precarious economics of recycling today
The recycling industry is having economic problems, which means many municipalities are being forced to share those problems:
Once a profitable business for cities and private employers alike, recycling in recent years has become a money-sucking enterprise. The District, Baltimore and many counties in between are contributing millions annually to prop up one of the nation’s busiest facilities here in Elkridge, Md. — but it is still losing money. In fact, almost every facility like it in the country is running in the red. And Waste Management and other recyclers say that more than 2,000 municipalities are paying to dispose of their recyclables instead of the other way around.
In short, the business of American recycling has stalled. And industry leaders warn that the situation is worse than it appears.
“If people feel that recycling is important — and I think they do, increasingly — then we are talking about a nationwide crisis,” said David Steiner, chief executive of Waste Management, the nation’s largest recycler that owns the Elkridge plant and 50 others.
[…]
The problems of recycling in America are both global and local. A storm of falling oil prices, a strong dollar and a weakened economy in China have sent prices for American recyclables plummeting worldwide.
Environmentalists and other die-hard conservation advocates question if the industry is overstating a cyclical slump.
“If you look at the long-term trends, there is no doubt that the markets for most recyclables have matured and that the economics of recycling, although it varies, has generally been moving in the right direction,” said Eric A. Goldstein, a lawyer with the Natural Resources Defense Council who tracks solid waste and recycling in New York.
Terry McKenna plays the lute at Fluxible 2013
Published on 3 Nov 2013
Terry McKenna is a gifted musician who plays many members of the plucked string family, both old and new. His performance at Fluxible 2013 is music from around the year 1500, played on his six-course Renaissance lute
Terry can be found on the web at:
Terry performed at Fluxible 2013, the UX party disguised as a conference. Attendees enjoyed dual admission to the Festival of Interstitial Music, which took place concurrently in space and time with Fluxible.
H/T to Brendan McKenna for the link.
