No tax

It has been in the news recently that Amazon pays no income tax. The reason is that Amazon continues to invest in areas of growth at the expense of profitability. Their stock pays zero dividend so the only way Bezos gets money is through his salary which is a modest $81,000 per year. Other money he needs he gets by selling Amazon stock on which he would pay a 20% capital gain rate. This is why his tax bracket is higher than his secretaries which is what Warren Buffet said about his secretary. By way of contrast: San Diego announced its $300 million, 10-year contract with the All-Star infielder on Thursday, more than two days after the deal was agreed to. Keep in mind that Bezos has created 660,000 jobs while the ball player is paid to entertain.

Billionaires

This is from an article I read about how billionaires live. Billionaires don't have to work but they do They seek experiences that build family memories and fulfill personal interest They enjoy watching their children and grandchildren learn and grow They enjoy giving to charity What they are interested in is their minds -- intellectual pursuits, greater knowledge, and deeper meaning. Billionaires aren't spendthrifts. In fact, most billionaires try to save money. They prefer home cooked meals enjoyed by the whole family Here are some questions they ask themselves: Did I practice gratitude today? Did I improve the quality of my life today? Did I improve someone's life today? Did I invest value into my family today? After I read that I suddenly realized that I am a billionaire.

Class size

In recent teacher strikes the big concern has been wages but a close second is class size. The two big school districts that I work in have a total of 6,500 employees and 3,500 are teachers. Total number of students is 45,000 so the student to teacher ration is 12 students per teacher but this is very misleading because of special ed students. These student require sometimes one to one teaching so the real class size for most teachers is 25 to 30. A teacher would normally be able to handle this except for the small percentage of students who are disruptive. In a typical classroom the teacher will spend 80% of his time on 20% of his students and this is similar to what managers in industry experience.

Single use plastics

With great fanfare the European Union announced a phaseout of single use plastics. These are common plastic materials like utensils, straws, cups and less common items like diapers. They now want the US to follow their lead. The result will be far more wood based products and the environmental cost associated with the paper industry. The impetus for this new concern was the accumulation of plastics in the Pacific Ocean, 90% of which comes from five rivers in Africa and Asia. These countries, as they do with other environmental concerns, will offer lip service but only very long term commitments to take action.

Medicaid for adults

Medicaid was a free or almost free healthcare for low income people but only for those with children. Obamacare changed that to include low income adults without children. This added about 8 million people to the rolls. Another 6 million adults became eligible because income limits were raised. A new law allows states to place work requirements on those receiving Medicaid and Arkansas in one of the first states to implement new rules. In Arkansas the law requires beneficiaries to work, volunteer, search for new jobs or go to school 80 hours a month to be eligible for Medicaid. America is now home to an army of prime working aged men, some seven million of them ages 25 to 54 who are no longer looking for work. According to demographer Nicholas Eberstadt, the labor force participation rate for men ages 25 to 54 is lower now that it was at the end of the Great Depression.

Woke billionaire

It started a number of years ago with the phrase doing well while doing good. It referred to businesses that put the well-being of the country along side of promoting a profitable enterprise. This has now expanded into the "woke" billionaire. These are super wealthy people who have become philanthropist. While giving to charity is always admirable some of these individuals have the talent of starting successful businesses and could likely help more people by using their money in that fashion rather than just giving it away. It is much like using public funds to create infrastructure jobs rather than public assistance. There is always a need for both but the best welfare plan is a good job.

Childcare

Senator Warren has proposed free childcare for people whose income is less than 200% of the poverty level. A family of four would qualify if their income is less than $51,000. The average cost for childcare is $200 per week per child so this family would receive $21,000 per year to pay for their childcare. The hidden unintended consequence would be how fast the cost of childcare would rise. Remember what happened to tuition when the government started sponsoring student loans.

Poor tax

The City of Philadelphia has a tax on soft drinks that brought in $40 million last year. This is a tax on poor people and since there are many the tax works good. The tax was $2.16 on a 12 pack of 12 ounce cans. The Minnesota governor wants a 20 cent per gallon tax on gasoline and once again this is a tax on poor people. On a national scale the payroll tax brings in almost as much as income tax because there are a lot of poor people.

Fence or wall

80 senators including Obama, Hillary Clinton and Schumer and Pelosi in the House voted for the 2006 Fence Act which authorized the building of hundreds of miles of fence. Two years later President Obama said, “But those who enter the country illegally and those who employ them disrespect the rule of law and they are showing disregard for those who are following the law.” “We simply cannot allow people to pour into the United States undetected, undocumented, unchecked, and circumventing the line of people who are waiting patiently, diligently and lawfully to become immigrants into this country.”

Unequal equality

In Orwells book Animal Farm he said that in a socialist country all people are equal but some are more equal. In China today there are 88 million people in the Communist Party which represents 7% of the population. These people are awarded special privileges from small things like local administrators to business advantages. For example 90% of the 1,000 richest people in China are members of the Communist Party. The daughters of former Venezuela's President Hugo Chavez are worth billions and live the life of luxury around the world. Forbes estimates the wealth of Fidel Castro at 900 million dollars. In Vietnam with a population of 100 million only 1.5 million are members of the Communist Party and they represent the rich.

Control the money

If the idea is to help low income people the easiest and most effective way is to remove the payroll tax on the first $50,000 of income. This gives each of these people a $4,000 raise. This is not popular with politicians since it does not send the money to Washington so they can redistribute it in the manner they feel is best. They feel they can make better use of these funds. Of course it is also a way to curry favor with voters by offering benefits for votes. If the idea is to improve the environment the easiest and most effective way is to move to natural gas for transportation. Once again this means a direct benefit to the cause of climate change without a transfer of money to Washington so it is not something politicians want to discuss. As long as these problems remain in the realm of politics they can avoid these obvious solutions and keep control of the money.

Intersectionality

In case you missed it, the new word for the 2020 elections is intersectionality. It is so new spell check does not recognize it. It is the antithesis of Martin Luther King's concept of judging a person based on their character. It is why Bernie Sanders is considered a loser. He is an old white guy and I personally object to this characterization. It means you have the best chance of getting the democratic nomination if you are a minority woman. It helps if your platform emphasizes discrimination in income, opportunity, gender, race, religion and even zip code. Your campaign will point out all of the inequalities that exist in America and how you will correct these problems using income redistribution. Here's the well known quote from Benjamin Franklin: "When the people find that they can vote themselves money that will herald the end of the republic.” It may not work out this way at all but we will find out.

Amazon share price

Last October Amazon stock was priced at $1,900 and then they announced that they would start paying $15 per hour minimum wage and last Friday the stock closed at $1,600. Since there are 271 million outstanding shares this represents an $80 billion dollar loss to shareholders. Jeff Bezos the largest shareholder lost $24 billion. This is not proof that the wage situation caused the drop in stock price but it does pose the question. Since Amazon does not pay a dividend the owners of stock buy it on the premise that the stock will go up in value. Those who have owned the stock for some time are still way ahead since the stock was selling at $350 per share five years ago.

College

Living in a free country has many advantages, one of which is access to a good education. For students who live in or near a urban area, there are colleges within driving distance and they can live at home and work weekends and summers to pay tuition and fees. Any student in good health can spend three years in the military and not only serve their county they can get a college education. While in the service they can pick up the first year of general subjects and when their three years are up, they get 36 months of paid tuition, fees and supplies plus $100 per month for tutoring. In addition they receive $1,250 per month for living expenses. Finally a student can take the route of those my age and work full time and attend school part time. It only takes 8 or 9 years to get a BA but you end up with a job, 8 years work experience and money in the bank. Of course for those who want to go away to school and enjoy the social life they can always pay the 30 grand per year but then what are parents for. In the future college will be more available as online courses become more popular. For any student who truly wants a college education, it is there to be had.

Plastic

There is an ad on TV asking for people to donate to cleaning up the plastic in the Pacific Ocean. The ad does not mention that 90% of the plastic comes from Asia and Africa. People in the US have good intentions just as they do with lowering CO2 levels but the real problem is in Asia.

Multiplier effect

One of the candidates running for president is Andrew Yang and he wants to give $1,000 per month to each citizen between the ages of 18 and 64 and he says it will spur economic growth. Recall that Nancy Pelosi said that increasing unemployment benefits would do the same thing so this is not a new idea. Economist have something called the multiplier effect and it states that if a person has $100 of extra disposable income they spend $90 it will result in $900 in total spending. This hand out will cost the government $2 trillion dollars but will result in $20 trillion in spending which will double the GDP overnight. If the government collects ten percent in taxes it will recoup it's investment. Yang also says his plan will eliminate all federal, state and local welfare which will save another $1.2 trillion.

Fairness

Yesterday a talking head said that the congress should reflect the people meaning it should be half female, 12% Black, 13% Hispanic, 5% Asian and so on. That sounds fair but what about qualifications. When less than one percent of the population are lawyers and 40% of congress are lawyers, does that represent the country. When 30% of people are college graduates and 95% of congress are grads does that represent the people. When a person delves into the quagmire of fairness all sorts of unexpected surprises arise. While fairness of opportunity is an honorable goal, fairness of results is a pitfall that often traps people with good intentions.

Economic types

It is difficult for some to understand the good and bad parts of capitalism and socialism. First off, most people know that pure capitalism like pure socialism does not exist in most governments today. The governments of the west including the United States are a mixture of these two extremes and political parties battle to push the country to one end or the other. In the US the less government side follows the philosophies of Friedrich Hayek and the more government group follows John Maynard Keynes. Over the past 75 years the country has moved back and forth between these two ideas without straying too far in either direction. The less government approach allows for individuals to follow their dreams and some achieve great success and others fall into bankruptcy. The more government approach tends to equalized people more toward the middle of the pack. We are now seeing this struggle once again played out in the current politics. Because some have succeeded beyond what is considered fair there is pressure to share their success with those who have not done as well. Since the majority will benefit from this sharing it is a popular idea. Most people who want higher taxes do not want higher taxes on themselves. Most people who want more regulation to not want regulations that adversely effect their lives.

Tuition

Some candidates for president are proposing tuition free college but beware of strangers bearing gifts. About 50 years ago student loans were made available amid cheers from all sides. Experience has shown that as the loans became available and colleges began to increase tuition and both have increased side by side over the years and the net result is $1.5 trillion dollars in student debt. Once free tuition is instituted the colleges will realize that student now have to pay less so they will raise the cost of other items. Dorm room and meals will go up. Fees and services and books and supplies will all cost more. Private rooms will cost more as will food in local restaurants and transportation. In short, there is no free lunch.

Coal plants

While the US is closing coal plants, Asia is building new ones. In total, more than 23,400 megawatts (MW) of coal-fired generation were shut in2017-2018 versus 14,900 MW in 2009-2012, according to data from Reuters and the U.S. Energy Information Administration (EIA). China is building hundreds of new coal-fired power plants capable of generating a total of 259 gigawatts (GW) of electricity—that’s equal to the entire existing U.S. coal fleet of around 266 GW, findings by advocacy and research group CoalSwarm show. China is not alone in constructing coal-fired power plants. According to Urgewald, about 1,600 coal plants are planned or under construction in 62 countries; this data comes from the Global Coal Plant Tracker portal. If constructed, these new plants would increase global coal-fired capacity by 43 percent. According to Urgewald, 11 of the world’s 20 biggest coal plant developers are Chinese.

Green Dream

The foundation of the Green Dream is to move from fossil fuels to solar and wind since nuclear is out. Both of these forms of energy require the use of rare earth metals. These can no longer be mined in the US because they are considered environmental hazards so 90% of these metals come from China. They are already creating havoc with the land and water in China and each year the problem worsens. In addition, as the US moves away from coal fired power plants, to keep our air clean we are shipping excess coal to Asia and Africa where they are continuing to build new coal power plants. News people do not bring this up because of several reasons one of which is their lack of understanding science. Often time these people remark that they are no good at math and since mathematics is the language of science they are not good at science. We are helping to poison the land, the water and the air in China so we can have a clean environment here in the US. The runs counter to President Obama's statement that, "this is not who we are". This could all be avoided if the US and the rest of the western world would move to natural gas for all power plants and for all transportation but that move has no political advantage so once again, I repeat my constant refrain, that nothing ruins science like politics.

Pot test

During an interview shown on the news yesterday Kamala Harris, one of the women running for president, suggested that Pot be legalized and then be studied to see if there are any harmful health effects from smoking Pot. A quick Google reveals thousands of articles indicating the dangers of smoking Pot. Here is one example: Some of the known carcinogens or toxins present in marijuana smoke include: acetaldehyde, ammonia arsenic, benzene, cadmium, chromium, formaldehyde, hydrogen cyanide, isoprene, lead, mercury, nickel, and quinoline.Oct 11, 2018 It took many years before the people were convinced that cigarettes were bad for your health and now they want to go through the same procedure with Pot.

Experts

Many are upset that Trump is at odds with his national security people when it comes to foreign policy saying he should listen to the experts. Many of these same people are opposed to the wall even though the experts say it is needed. Here are some examples: "We certainly do need a wall. Talk to any border agent and they will tell you that," Chief Carla Provost said on "Your World."  Walls Work," reads the title of a press release posted on the Department of Homeland Security's website Wednesday Border Patrol agents say they can’t be much clearer: They want more walls along the U.S.-Mexico border. Acting ICE Director Thomas Homan made the case for a wall along the U.S.-Mexico border Wednesday These kinds of contradictions often occur when politics overpowers reason.

Wage controls

Equal opportunity or equal results. Good arguments can be made both ways. In the Minneapolis area a family can live good earning $100,000 per year. A good range for equal results would be between $100 and $200 thousand per year. On the lower end would be factory workers, tradesmen, professional athletes and entertainers and service workers. On the top end would be teachers, nurses, doctors, elder caretakers and police and firefighters. Corporation salaries would vary by responsibility with the CEO making $200,000. The big problem with this outcome based income is who gets to decide who gets what. The obvious answer is the government and this is called wage and price controls.

Walton money

There are about 3 billion outstanding shares of Walmart stock and the Walmart family owns 1.6 billion shares or a little over half. Walmart stock price is $95 per share so the families is worth $150 billion. Like most wealthy people they do not have a lot of their money in cash so if the government decides to take their wealth they will have to divest in what ever they are currently invested. If any company suddenly lost one half of their working capital it would cause severe problems so the government would be wise to take peoples wealth slowly over time to allow businesses to adjust. The Walton family like 43% of billionaires inherited their wealth but 57% of billionaires earned their own money. Should these two groups be taxed differently?When ole Sam Walton died 30 years ago he left $100 billion and the company has grown by 50% since then. Another concern about the Walton money is that they live on dividends. Walmart stock pays an annual dividend of $2 and the Walton family earns $3.2 billion per year and this money is taxed at the capital gain rate of 20%.

Socialism vs capitalism

The rise and fall of socialism and communism during the past 100 years is well documented. Today only five communist countries remain and they are China, North Korea, Laos, Vietnam and Cuba. Of these China and Vietnam have transformed into free market economies while retaining a communist political system. As these ism countries came to power an estimate 100 million people were killed and many more were deprived of their personal freedoms. Many people express surprise at a recent poll showing that 51% of young people have a positive view of socialism but what is their understanding of socialism?

Stay in school

When I first started sub teaching, I was concerned about some students who seemed to have no interest in school. These were mostly males who came from dysfunctional families and normally without any male role models. I finally learned to approach them by saying I can encourage you to learn but I can't make you learn. While this did not cause them to become interested in the work it did take away some of the animosity they had toward me and helped with their classroom deportment. As years past I came to understand that the idea was to keep these students in school until they were 18 years old as statistics indicated that this greatly reduced their odds of ending up in prison. Someone has made the economic calculation that $15,000 per year cost in school is better than $30,000 in prison. More importantly it gives the student a better chance at life.

England

After the war the British people were looking for change and they dumped Churchill in favor of Atlee who was a socialist. He promised the people good times and he started by instituting the national health care system. The cost of this program quickly surpassed all projections but it was so popular that there was no going back and it remains today. Besides the exorbitant cost the biggest complaint is poor service with long waiting times. Atlee followed this up by nationalizing most of the major industries including steel, railroads, coal and electricity. The idea is that any profits generated will then benefit the country, rather than a wealthy few. Many workers were helped, for example coal mining was made much safer and minors received benefits like sick leaven and paid vacations. This was followed by high inflation peeking at 24% in 1975 and this was accompanied with high unemployment. During this period there were many public employee strikes and late 1975 become known as the winter of discontent. In 1979 Thatcher was elected and began the long process of returning England to capitalism and she succeeded in privatizing all industries except health care. At that time 60% of the worlds population was under the control of either socialist or communist governments but things were changing. During her 11 years as Prime Minister the country recovered and returned to normalcy. Today England is much like the US economy except for health care.

Black face

I have always wanted to use the Shakespearean quote, hoist on his own petard, and now I have the chance. It involves Virginia Attorney General Mark Herring who said last week that the Governor should resign since he dressed in black face and this week it comes out that he did the same thing. Oops.

Payroll tax

A family of four with an income of $64,000 will pay no federal or state income tax but they will pay $4,900 in payroll tax (social security and Medicare). If the goal is to help middle and low income families then reduce the payroll tax. As easy to do it is to say that the first $25,000 of earned income is exempt from payroll tax. This will save each family $1,900 per year. It is not like changing tax rates where those who pay the most get the biggest breaks as this would just be cross the board $1,900 to every one. Government officials will not like this since it doesn't send money to Washington for them to redistribute as they see fit meaning the best way to get votes.

Immigrants by county

The number of legal immigrants coming to the US is at record levels. If Trump wants to use a merit based system the number of immigrants will not change but the educational level of immigrants will change. Merit based means selecting people based on their education and skills which means many more from Asia. Asian have skills like STEM and are badly needed. They also earn more money and are self supporting. And there is a racial quality in that they have brown skins. In 2016, the top country of origin for new immigrants coming into the U.S. was India, with 126,000 people, followed by Mexico (124,000), China (121,000) and Cuba (41,000).

Party changes

Congressional approval has been less than 20% for the past ten years and thus the election of Trump was one of the more significant events of recent history. One of his campaign promises was to change the way Washington operates and he has certainly done that. First off he realigned the Republican party by challenging the establishment by moving away from the old party standbys of reforming entitlement programs and moaning over the deficit. These things were talked about for forty years but nothing was done about them. His changes are mentioned everyday in the press as they refer to him as un-presidential and they are correct. Now as people gear up for 2020 the changes in the Democratic party are coming to light. The movement toward socialism is the most obvious but other changes seen as extreme are also part of the new party, things like late term abortions and cutting defense Many of the new ideas put forth by young democrats are somewhat frightening to the established party members. Talk of impeachment, getting rid of ICE, Medicare for all and wealth tax are seen as too extreme by the old guard. The Democratic party is about to take on a new face.

Fossil fuels

Since people are not interested in nuclear power, to move completely away from fossil fuels means to increase wind and solar, one of which is dependent on wind and the other on sunlight. 80% of current wind production is in 12 states and that is for a reason. It's where the wind blows. It is too costly to store electricity so both of these methods rely on backup sources which today means fossil fuels. Energy should come from all available sources but wind and solar cannot replace fossil fuels. One concern as wind and solar increase is the amount of rare earth metals needed and how mining of these metals harms the environment. Solar is great for homes and businesses or other stationary buildings. To operate semi trucks and locomotives on batteries is too costly and airplanes are out of the question. Operating ocean vessels including military is OK using nuclear fuels. The obvious move to improve air quality and reduce CO2 is to use natural gas for transportation.

Rep. Cortez

It was reported that Trump received $2 billion dollars in free advertising during the campaign. He accomplished this by making controversial statements which often times flew in the face of conventional wisdom and political correctness and while the Washington experts laughed at his naivety many voters saw a breath of fresh air in his contempt for the establishment. Newly elected Representative Cortez is following in Trumps footsteps by making unusual statements that the press jumps on with both feet. She has made such a big splash in the media that others are joining forces with her and many are playing the game of one-upmanship. 70% tax rate soon went to 90% and then added a wealth tax. Getting rid of fossil fuels went from 20 years to 12 years. Free tuition expanded to canceling student debt. $500 per month to poor people became a guaranteed job for everyone. Reducing defense spending grew into cutting defense by half. With almost 2 year left before the election it is hard to imagine what the issues will be at that time. Since no party is concerned about the deficit the sky is the limit.

The poor

I was born in 1937 and for you younger people that was in the midst of the Great Depression. It was a time when being poor was not a big deal because everyone was poor. I was fortunate because my dad was a milkman and kept his job. Many of our neighbors had gardens which later became victory gardens when the war started. They had no jobs so my dad would buy vegetables from them which gave them cash to get things like salt and lard for cooking. Some people lived on farms and they were a little better off since they could raise chickens and pigs and had a cow for milk and cheese. People canned much of their produce to carry them over through the winter. Many of the poor people today are not much better off but they feel worse because there are so many rich people.

School

Students are often times never told the reasons behind school assignments. The first two years of school you learn to read and the rest of your life you read to learn. This same theme will occur at all levels of education and even more so after school is over. They don't study history, geography and other courses so they can remember facts but rather to develop mental discipline. In every setting they learn to read and the write down what they read. It is called reading comprehension and it is the purpose for going to school. Once this discipline is acquired then they are ready to select their career path. If you go to the community college to learn to be a welder, they do not hand you a torch but rather a book and then they say read this and write down what you read. When you go to work at your chosen profession the boss will hand you an project and then you read it and write down what you read. Long after you forgot about the French revolution and the parts of the cell you will still have the mental power to read and write down what you read. When students are told this school makes more sense.