A economics post: kill the corporate tax

I was reading Greg Mankiw’s excellent blog today, and came across a bit of discussion about corporate tax rates. Now I’m pretty liberal (and Dr. Mankiw isn’t by any measure: he was the chief of the CEA under G.W. Bush), and I believe in progressive taxation, and the rich, who generally reap more benefit from large infrastructure investments and a healthy workforce for their factories, should pay more than the poor, who have to use government benefits.  But one thing, after thinking about we can agree on is corporate taxes.

They need to go.

Now you may think I am crazy – but here’s why.  Your 401(k) is probably pretty darn full of stocks right? Mine is: about 95%+ stocks, given my young age.  Corporations that are profitable pay a pretty high tax rate (albeit full of loopholes) – actually one of the highest in the world, the top marginal rate is 39%, albeit it isn’t fully progressive & there are loopholes big enough you could drive a couple dozers through side-by-side.  If you lose money, you pay nothing (with some exceptions – some items can not be deducted from taxes (like fines), so in theory you can lose money in the eyes of your shareholders in a given year but pay taxes, and there are differences from how the IRS does things and the SEC wants them done – again these are not common enough to make a significant impact).  More or less, we tax those who profit.  By allowing firms to retain more of their earnings, we increase value in retirement plans, personal investing, and give firms extra money to spend on projects and employees (albeit I could argue that the market will demand all of this back).

My one big problem with this is how we treat dividends as special, and tax them (at least long term) at lower rates than short term earnings.  We should do away with this, and treat all income the same on a personal level. Firms can be expected to pay higher dividends by their shareholders to make up for this change in tax policy (10-15% higher, given the current cap of 25% and top marginal tax rate of 36%, scheduled to return to 38.9% in a few years), however if P/E remains constant, the value created here will overtop any personal taxation policy changes, as enough stock holdings are tax advantaged to not cause a direct 1:1 correlation.

What’s so great about being in Arkansas

You’re always going to be the oddball.

That in life no matter what we do we’ll always be looked down upon by the New York elite who believe you must be bred to be President, or anything but their bellboy and the folks in California who forgot that three or four generations ago their ancestors were here, or some other off the wall place.  That I can look back at life and be proud of what I’ve done. 

I’m not going to say much about Owen Thomas’ off-hand comments about “Little Rock oddballs”, because well, those oddballs are still popular.  How did that bred president George W. Bush work out for us?  I’ll take that kid from Hope who had bad taste in twenty-something interns over him anytime, anyplace, anywhere.

What I’m looking forward to in 2009

Since I talked a bunch about what went wrong in 2008, let’s talk about what is going to go right in 2009

• I’ll have a MBA. First person in my family with a grad degree.
• Megan and I. I had to put this near the top
• Life. I’m going to start treating myself better. Buying less, saving more. Working out. Eating less fatty fried goodness.
• Work. It’s going to go good I hope.
• The Big Cats will issue a new record and I hope it kicks ass as much as On Tomorrow.
• Hope. Sure things look ugly now, but we will survive and have a new tomorrow
• I’ll eventually get a haircut. I promise.

News & Notes – Jan. 2, 2009

Today’s been an interesting day.  I woke up to a call that someone had found the paperwork to my car in the street, which was weird. Until I noticed my passenger window was laying in the apartment parking lot.  Then it made sense: my satellite radio, which was my gift from the parents, was gone.  Oops.  So a crook steals something that has a grand total of zero value – a stolen satellite radio that has been turned in as stolen isn’t going to serve much good.  That said, I get to live with a $250 window bill (and probably some other work because some of the window trim is dented up, but not bad enough to require immediate replacement) and the cost of a new radio.  Life sucks.  After this, I decide I’m taking the day off.  No reason to go in at this point – my day is wasted.  One interesting thing: the cop said CSI is the worst thing to happen to small crime investigation – people know just enough to keep the standard cops from investigating, and the Crime Scene guys are not going to come out over a smash and grab, even if there is blood on the car (which there was, which in itself may be a sign of an inexperienced crook).

The big event of the day is this: I finally bought a new printer.  I’ve been on the same Samsung ML-1210 since June 2002 – seven and a half years of printing. 4,469 pages later, it still prints.  But it prints crooked, and isn’t officially Mac OS X 10.5 compatible (you have to hack a PPD from Linux Printing in after installing GhostScript & some other stuff).  Weird because it worked with 10.4 great. You think Apple would have left the official support in, but oh well.  I plan on keeping it around for draft printing and such, and when it dies, I’ll probably get another laser printer (one that works better with the Mac).  So what did I buy? An inkjet. I never thought I’d ever buy another inkjet, but I figured it was time to get something that prints color for less than 300 bucks (plus on occasion, I might shoot a few photos out, albeit most of my photo printing is handled at a lab, because for ~30 cents each, they will print it on a very expensive machine, vs. my 99 dollar Canon).  The nice thing about this printer is that it connects to my network.  No need to worry about getting the sharing to work, or other random things – I just install the drivers and tell the computer to find it.  Even has a small web management interface.  Makes my life much easier.

Oh the troublesome life of a nerd in fly-over, USA.