The other day, I was stupidly wondering if there was such a thing as a "Bad Samaritan". It doesn't seem to me to be a phrase that is in common usage. I wouldn't say that a Bad Samaritan is necessarily someone who doesn't stop to help another - the help was what made the Good Samaritan good - if he had continued walking down the road, he would have been an Apathetic Samaritan. No, a Bad Samaritan is someone more insidious, someone who actively throws someone else under the bus (think T.O. with the Eagles or Linda Tripp viz a vis Monica Lewinsky).
Come to find out that, of course, the Bad Samaritan already exists in popular culture. Indeed, besides the eponymous DC comic character, we have the book by economist Ha-Joon Chang, decrying capitalism and identifying "rich countries" as bad samaritans (timely!).
Despite these minor cultural references, the phrase is not commonly used. I promise to change this. I hereby am instituting a new "feature" on this here blog, in honor or Marv Albert's "Close Plays of the Month", I will begin the "Bad Samaritan of the Week" award.
Well, next week.
On to the updates.
The Taxes Update
The McCain/Levin Options Bill
Not much new to report since my last post. There are some reactions from the interwebs:
OMB Watch, while noting that the bill is unlikely to reach the Senate floor (not so sure about that), thinks this is a good start to reducing book-tax differences. Well, it may reduce a book-tax difference, but it results in a massive windfall for the IRS, at the expense of corporations who are using stock options to presumably incentivise their employees. It's a stealth tax on corporations (and by extension their shareholders)
The Health Care Tax Update
Lots has happened since my last post on this topic.
Surtax = explicitly limited to millionaries, and probably a nonstarter in the Senate
Repeal of tax exclusion for employer-provided health care = dead, in terms of direct tax, but back-door tax (sorry, "fee") on employers who provide "gold-plated" insurance
Sin taxes on soda, fatty foods, lipo, abortions... = all on the table., although Megan Mcardle hates the idea and the NY Times economix blog questions whether they work.
They probably don't work, at least not at any level that will be politically palatable. Also, they're regressive and I'm not generally a fan of taxes on such personal behavior when it is not precisely clear that the failure to tax is costing society at large.
Some more good links on the tax debate:
Conor Clarke at the Atlantic thinks taxing health care will lower costs in the long run (he's right).
This Washington Post piece is contra.
I linked to it above, but this piece by Len Burman at the Tax Vox Blog is remarkable, going over whether a fee imposed on health insurers, rather than a direct tax on health insurance benefits (with some subsidies for lower income people) is a regressive tax. Really a brilliant post.
Finally, another post from the Tax Vox Blog pointing out, as I have before, that Obama has really painted himself into a corner by promising deficit-neutral reform that also brings costs under control, without imposing taxes on the "middle class".
Unfortunately, this is all a bunch of silliness since there won't be any real vote on any real bill until after the August recess. Still, the level of detail into the tax policy issues is fantastic.
Especially for a tax geek.
The Baseball Update
Yeah, Papi tested positive for steroids. Here is the piece by Michael S. Schmidt (can't believe he is only 25 years old). Here is Papi's statement. Here is some video from NESN.
I don't really care, except that I guess I wish he hadn't been so strident in some of his statements following the A-Rod disclosures. Perhaps he really was blindsided by this as he says.
Anyway, Nomar Garciaparra gave a fascinating (and wide-ranging) interview today after the Sox-A's game. He noted something I had never heard before - that some players essentially told the testers to mark them down as positive for steriods (apparently by refusing the test) so that the overall positive tests came in above 5% (the threshold for mandatory testing starting in 2004). If you listen carefully, it sounds almost as though Nomar is intimating he is one of those guys. Either because it's true, or because he tested positive and is setting up his cover story now.
Oh, and go to hell Dan Shaughnessy. Wonder what the odds are that CHB had this column sitting in his rusty file cabinet for the past 4 years, just waiting, panting, foaming at the mouth, hoping the day would come when he could finally publish it.
The Death Update
Harry Patch, Britain's last living WWI veteran, died this past Saturday, July 25. He was 111. This comes just a bit after WWI's other surviving WWI veteran, Henry Allingham died.
Every once in a while I'll see an article or short piece of the "last" veteran of something, sometimes a war, sometimes, the last person who did a particular job, whatever. If you do the math (WWI ended in 1918, soldiers should have been about 18 minimum to serve), all remaining WWI vets must be at least 109. Actually, god bless Wikipedia, here is the list. Nearly 70 million men served. There are 3 left.
Anyway, the obit is here
Showing posts with label Taxes. Show all posts
Showing posts with label Taxes. Show all posts
Thursday, July 30, 2009
Thursday, July 23, 2009
McCain, Levin Introduce Bill to Alter Tax Treatment of Stock Options
Senators John McCain and Carl Levin yesterday introduced legislation (S. 1491 - see below for link) which would radically change the way corporations deduct compensation paid to their employees in the form of stock options.
I note that we've been down this road before
Under current law, (Section 83 of the Code), a corporation deducts compensation related to a stock option granted to an employee at the time the employee exercises the option (this is correspondingly the time the employee recognizes the income). The amount of compensation expense (and therefore the amount of the deduction) is the "spread" at exercise - i.e., the difference between the fair value of the stock upon exercise and the exercise price the employee must pay.
The accounting treatment is different - and is the reason for the bill. Under accounting rules, corporations are required to book expense related to stock options upon grant and book the "fair value" of the option (determined under Black-Scholes or some other option pricing model) at the time of grant.
The book expense will often (nearly always) be less than the tax expense. From a financial accounting perspective, companies like this - they show a small expense for book purposes, which has a minor impact on earnings and then get to monetize a much larger expense via the greater tax deduction.*
a few years ago, companies were allowed, for GAAP purposes to book zero expense upon grant, on the basis that the options had no "intrisic" value at grant if they were granted out of the money or "at the money" (i.e., the exercise price was at least equal to the value of the underlying stock at grant). This changed a few years ago and now companies are (rightly) required to book comp expense based on the fair value of the options
The Levin/McCain bill would change current law and limit companies' tax deduction to the amount reported as compensation expense for book purposes.
This makes no sense to me. The employer's tax deduction is based on the compensation its employee includes in income - you have yin and yang. It's fundamental in the tax law that corporations are entitled to deduct compensation paid to their employees (so long as it is not "excessive"). This would alter that fundamental law on the basis that the accounting treatment is different; however, there is no dodge here.
Perhaps the Senators want to steer companies away from making large option grants in the first place:
The deductions are not "outsized". They match the income that employees are reporting and paying tax on. If the link between the employee's income and the deduction is broken, the IRS will have a windfall (unless companies begin to report much higher comp expense for accounting purposes, which seems unlikely).
Perhaps I am missing something, but this strikes me as particularly unfair and silly. If the Senators want to limit stock option grants, then they should limit stock option grants - just make the $100,000 limit applicable to incentive stock options applicable to all stock options (or perhaps choose a greater limit).
Update: Man, the Tax Prof is fast
Further Update: Here is the legislation.
I note that we've been down this road before
Under current law, (Section 83 of the Code), a corporation deducts compensation related to a stock option granted to an employee at the time the employee exercises the option (this is correspondingly the time the employee recognizes the income). The amount of compensation expense (and therefore the amount of the deduction) is the "spread" at exercise - i.e., the difference between the fair value of the stock upon exercise and the exercise price the employee must pay.
The accounting treatment is different - and is the reason for the bill. Under accounting rules, corporations are required to book expense related to stock options upon grant and book the "fair value" of the option (determined under Black-Scholes or some other option pricing model) at the time of grant.
The book expense will often (nearly always) be less than the tax expense. From a financial accounting perspective, companies like this - they show a small expense for book purposes, which has a minor impact on earnings and then get to monetize a much larger expense via the greater tax deduction.*
a few years ago, companies were allowed, for GAAP purposes to book zero expense upon grant, on the basis that the options had no "intrisic" value at grant if they were granted out of the money or "at the money" (i.e., the exercise price was at least equal to the value of the underlying stock at grant). This changed a few years ago and now companies are (rightly) required to book comp expense based on the fair value of the options
The Levin/McCain bill would change current law and limit companies' tax deduction to the amount reported as compensation expense for book purposes.
This makes no sense to me. The employer's tax deduction is based on the compensation its employee includes in income - you have yin and yang. It's fundamental in the tax law that corporations are entitled to deduct compensation paid to their employees (so long as it is not "excessive"). This would alter that fundamental law on the basis that the accounting treatment is different; however, there is no dodge here.
Perhaps the Senators want to steer companies away from making large option grants in the first place:
By eliminating what Levin called an “excessive and outdated corporate tax deduction,” the Michigan senator said, “we would not only eliminate a tax incentive that encourages corporate boards to hand out huge executive stock option pay, but also ensure that profitable corporations do not use outsized tax deductions to escape paying their fair share of the tax burden.”Breaking that parity and tying the comp deduction to the accounting treatment
The deductions are not "outsized". They match the income that employees are reporting and paying tax on. If the link between the employee's income and the deduction is broken, the IRS will have a windfall (unless companies begin to report much higher comp expense for accounting purposes, which seems unlikely).
Perhaps I am missing something, but this strikes me as particularly unfair and silly. If the Senators want to limit stock option grants, then they should limit stock option grants - just make the $100,000 limit applicable to incentive stock options applicable to all stock options (or perhaps choose a greater limit).
Update: Man, the Tax Prof is fast
Further Update: Here is the legislation.
Wednesday, July 22, 2009
Big 100th Post Extravaganza
... Not really - I'm pressed for time.
The Baseball Update
Sox picked up Andy LaRoche from Pittsburgh - should slide in to a 3B/PH role and hopefully help out against righties. Sox also picked up Chris Duncan from the Cards for Lugo. Duncan seemingly replaces Mark Kotsay as 5th OF/general 1B utility guy. I hope he does well. Here are some reactions:
Neyer
ShysterBall
Via Leitch on why Sox fans will enjoy Duncan
Jere Smith
Update: More from the Hardball Times on the Duncan deal. And More from Pinto on the same deal.
My take? LaRoche has done much better in the second half than the first half and does reasonably well against righties, and makes a natural platoon w/ Lowell, but this is the definition of a marginal move - how many more runs will Laroche create than Kotsay (who is basically who he is replacing on the roster?) The Duncan move I guess has some upside if he can capture his '07 power, but the Sox did not improve themselves appreciably.
Meanwhile, we have these opposing tweets:
Sports Guy
John Henry
Meanwhile, meanwhile, Sox are down 3-1 as I write this, looking tired. Didn't most of these guys just have a few days off?
The Taxes Update
USA Today got Nancy Pelosi today to say that she could lived with a scaled-back surtax to fund health care. President Obama seemed to be o.k. with that in his presser tonight (while definitively killing the idea of scrapping the tax exclusion for employer-provided health care benefits).
What does this mean? Your taxes will not go up to fund health care unless you make > 500K (for individuals and gay spouses) or 1M (for hetero married couples).
The Death Update
R.I.P. Gidget.
Words fail.
The Baseball Update
Sox picked up Andy LaRoche from Pittsburgh - should slide in to a 3B/PH role and hopefully help out against righties. Sox also picked up Chris Duncan from the Cards for Lugo. Duncan seemingly replaces Mark Kotsay as 5th OF/general 1B utility guy. I hope he does well. Here are some reactions:
Neyer
ShysterBall
Via Leitch on why Sox fans will enjoy Duncan
Jere Smith
Update: More from the Hardball Times on the Duncan deal. And More from Pinto on the same deal.
My take? LaRoche has done much better in the second half than the first half and does reasonably well against righties, and makes a natural platoon w/ Lowell, but this is the definition of a marginal move - how many more runs will Laroche create than Kotsay (who is basically who he is replacing on the roster?) The Duncan move I guess has some upside if he can capture his '07 power, but the Sox did not improve themselves appreciably.
Meanwhile, we have these opposing tweets:
Sports Guy
John Henry
Meanwhile, meanwhile, Sox are down 3-1 as I write this, looking tired. Didn't most of these guys just have a few days off?
The Taxes Update
USA Today got Nancy Pelosi today to say that she could lived with a scaled-back surtax to fund health care. President Obama seemed to be o.k. with that in his presser tonight (while definitively killing the idea of scrapping the tax exclusion for employer-provided health care benefits).
What does this mean? Your taxes will not go up to fund health care unless you make > 500K (for individuals and gay spouses) or 1M (for hetero married couples).
The Death Update
R.I.P. Gidget.
Words fail.
Monday, July 20, 2009
John Smoltz and the Big Inning (Plus the Daily Updates)
John Smoltz wasn't exactly mowing them down tonight (although he did get his FB in the low '90s with movement), but he was plenty effective, through 5 IP he had allowed only 4 hits, 3Ks and no walks. Then it all fell apart - 2B, HR, K, 1B, K, HR, HR and he's gone. He ended up throwing 96 pitches in 5 2/3 innings.
This is not a new thing for Smoltz. In his July 6 start against the A's he allowed 4 in the 4th inning (although with less violence - no home runs). And in his first start of the season, against the Nationals (!!!) he allowed 4 in the first.
Scott Baker of the Twins is another guy who's been snakebitten by the curse of the "one big inning". In his 18 starts this season, he's allowed 3 runs or more in a single inning 10 times (including a 5 spot against the Royals). Baker's problem has mostly been the home run ball, with his HR/9IP rate way up over last year.
Now my gut reaction when I see something like that is to say, "well, take away those bad innings and Baker's got a 3 ERA" or "Smoltzy just needs to minimize the damage and he'll be an effective 4th starter".
But that's wrong.
Joe Posnanski makes the point today in a great post that is ostensibly about the Royals injury issues this year, and whether you can lay any of the blame for their horrible year at that door. Joe concludes not.
The One Big Inning is like that. It seems aberrational until it's not. Eventually, the One Big Innings can't be excluded from the calculus. Sometimes a 5.4 ERA is a 5.4 ERA, it's not the product of bad luck. With Baker, yes, his high FB/GB ratio will get him in trouble when the wind is blowing out, and that's a fundamental flaw that will hold him back from his ace status. With Smoltz, it's still too early to tell and the Nats game can be explained away due to first game jitters, but it's not a good sign that the third time through the lineup tonight he wasn't fooling anyone.
The Baseball Update
As I write this, the Sox are down 6-2 and likely heading for the loss. The Yanks won on a walkoff from Matsui tonight. AL East = TIED.
Soxaholix said it best today. I dread the next 3 months if the Yanks pull ahead.
The Taxes Update
Really the Health Care Update, but the National Journal had a great exchange today about the proposed "surtax" on high earners to fund health care. Really good back and forth and enlightening for the views of left of center guys like William Gale:
As they say, read the whole thing.
The Death Update
Of course, Walter Cronkite's passing is the most prominent. Kottke.org has a great tribute up (probably over by the time you read this) to Cronkite, an online viewing of the Apollo 11 moon landing with Cronkite's commentary, at exactly the time it happened 40 years ago.
There are plenty of other appreciations of Cronkite on the web - the Atlantic's writers had some good ones.
In other death news - Gordon Waller of the '60s group Peter and Gordon. I have fond memories of listening to "A World Without Love" on the oldies station my dad listened to for a couple of years in the late '80s (Buffalo peeps - 104.1 or 103.3?) on the way to school in the mornings. It is a McCartney song. But despite the poppy, sing songy melody, the lyrics are kind of dark. Sample lyric:
Anyway, back to poor Gordon. The obit is here.
This is not a new thing for Smoltz. In his July 6 start against the A's he allowed 4 in the 4th inning (although with less violence - no home runs). And in his first start of the season, against the Nationals (!!!) he allowed 4 in the first.
Scott Baker of the Twins is another guy who's been snakebitten by the curse of the "one big inning". In his 18 starts this season, he's allowed 3 runs or more in a single inning 10 times (including a 5 spot against the Royals). Baker's problem has mostly been the home run ball, with his HR/9IP rate way up over last year.
Now my gut reaction when I see something like that is to say, "well, take away those bad innings and Baker's got a 3 ERA" or "Smoltzy just needs to minimize the damage and he'll be an effective 4th starter".
But that's wrong.
Joe Posnanski makes the point today in a great post that is ostensibly about the Royals injury issues this year, and whether you can lay any of the blame for their horrible year at that door. Joe concludes not.
We will have to get better or make some changes, there’s no other way.”
Trouble is: That’s not the vibe I get from the Royals. Here’s the vibe I get: “Injuries killed us.” And, plainly, that just makes me ill. There’s an old saying: “Winners win and losers meet.” Well, I think it’s also true that “Winners win and losers complain about injuries.” Or “Winners win and losers gripe about umpires.” Or “Winners win and losers make excuses.” Or simply, “Winners win and losers lose."
The One Big Inning is like that. It seems aberrational until it's not. Eventually, the One Big Innings can't be excluded from the calculus. Sometimes a 5.4 ERA is a 5.4 ERA, it's not the product of bad luck. With Baker, yes, his high FB/GB ratio will get him in trouble when the wind is blowing out, and that's a fundamental flaw that will hold him back from his ace status. With Smoltz, it's still too early to tell and the Nats game can be explained away due to first game jitters, but it's not a good sign that the third time through the lineup tonight he wasn't fooling anyone.
The Baseball Update
As I write this, the Sox are down 6-2 and likely heading for the loss. The Yanks won on a walkoff from Matsui tonight. AL East = TIED.
Soxaholix said it best today. I dread the next 3 months if the Yanks pull ahead.
The Taxes Update
Really the Health Care Update, but the National Journal had a great exchange today about the proposed "surtax" on high earners to fund health care. Really good back and forth and enlightening for the views of left of center guys like William Gale:
It is poor leadership because it furthers the myth that we can solve our fiscal problems by taxing “other” people or with gimmick taxes. It has been said many times already and will be said many times again: we are going to need broad based tax increases and spending cuts to bring the fiscal house into order and the more politicians continue to act as if we can just foist the financing on a small group (be it rich people or foreign corporations or obese people or people who drink soda, etc.) the worse are our prospects for solving the problems.
As they say, read the whole thing.
The Death Update
Of course, Walter Cronkite's passing is the most prominent. Kottke.org has a great tribute up (probably over by the time you read this) to Cronkite, an online viewing of the Apollo 11 moon landing with Cronkite's commentary, at exactly the time it happened 40 years ago.
There are plenty of other appreciations of Cronkite on the web - the Atlantic's writers had some good ones.
In other death news - Gordon Waller of the '60s group Peter and Gordon. I have fond memories of listening to "A World Without Love" on the oldies station my dad listened to for a couple of years in the late '80s (Buffalo peeps - 104.1 or 103.3?) on the way to school in the mornings. It is a McCartney song. But despite the poppy, sing songy melody, the lyrics are kind of dark. Sample lyric:
Birds sing out of tuneI read something the other day asserting that McCartney's songs were lacking in angst. I challenge anyone who's heard "For no One" or "World Without Love" to defend that statement.
And rain clouds hide the moon
I'm OK, here I stay with my loneliness
I don't care what they say, I won't stay
In a world without love
Anyway, back to poor Gordon. The obit is here.
Friday, July 17, 2009
More Health Care Tax Reax
Matt Yglesias wants to cap deductibility of itemized deductions and double the federal alcohol tax. I think this would be more expensive for me than the surtax.
Ezra Klein, in an otherwise snarky set of "rules" for commenting on the CBO's testimony yesterday thinks health insurance benefits should be subject to tax.
Conor Clarke likes both.
Awesome takedown by The Awl of a ridiculous NY Post story yesterday on the effect on NY taxpayers of the surtax.
And Seton Hall law professor Frank Pasquale arguing that the 5.4% surtax on millionaires is not high enough!!!.
Hysterics aside, what he means is that we should have more tax brackets and not tax someone earning $350,000 the same as someone earning $35,000,000. I.e., there's the "rich" (although reasonable people can disagree whether a family bringing in $350,000 is "rich" or just "well off") and the RICH (think Bill Gates or Warren Buffett). Even the most dedicated redistributionist can see differences between those words (for one, I capitalized the second version of "rich"). (via Tax Prof Blog)
Ezra Klein, in an otherwise snarky set of "rules" for commenting on the CBO's testimony yesterday thinks health insurance benefits should be subject to tax.
Conor Clarke likes both.
Awesome takedown by The Awl of a ridiculous NY Post story yesterday on the effect on NY taxpayers of the surtax.
And Seton Hall law professor Frank Pasquale arguing that the 5.4% surtax on millionaires is not high enough!!!.
Hysterics aside, what he means is that we should have more tax brackets and not tax someone earning $350,000 the same as someone earning $35,000,000. I.e., there's the "rich" (although reasonable people can disagree whether a family bringing in $350,000 is "rich" or just "well off") and the RICH (think Bill Gates or Warren Buffett). Even the most dedicated redistributionist can see differences between those words (for one, I capitalized the second version of "rich"). (via Tax Prof Blog)
Thursday, July 16, 2009
Fill it to the Rim... With Brim..
Some random thoughts while wondering what the hell ever happened to Brim coffee...
The Taxes Update
Head. Spinning.
More fallout from the House's "surtax" proposal. Another great post by Howard Gleckman at the Tax Vox blog. Here is a sample:
A micro example of the macro problem - it's entirely possible that high earners will seek to shift their income into non-taxable income or deferred income arrangements - more expensive health employer-provided health insurance is just the most ironic example.
Which leads me to the other big piece of news - CBO head Douglas Elmendorf testified in front of the Senate Budget Committee today and essentially told them that the plan put forth by the House yesterday not only will not control costs, but will raise health care costs due to the public plan proposed, and as a result, they will not be paid for.
So how did he suggest tax reform be paid for? He dropped the bomb:
Of course the problem is the administration is dead set against such a change (it would be a tax raise on people earning <$250K which Obama foolishly promised not to do when a candidate). Senator Baucus blamed the Obama administration for limiting the Senate's options in taking this option off the table.
Some other reactions to the surtax:
Robert Reich likes it.
Nancy Pelosi says the rate is negotiable.
The Baseball Update
Very strange that so many teams are off after a 3 day break, so no Sox game to report on tonight. So here are some random thoughts on some random happenings today:
Ryan Howard fastest to 200 home runs (in terms of games played). As David Pinto pointed out today, in terms of age, he's nothing special. My prediction on lifetime home runs for Howard? 389.
This piece by Allen Barra came out a few days ago, but I can totally get behind the premise. After all, my twitter icon is a doctored '77 Mike Schmidt baseball card.
Finally, if you aren't already checking out Jon Couture's brilliant blog Better Red than Dead blog, well.. what are you waiting for. Best recaps on the web.
The Death Update
Ron Nicolino, 69, of San Francisco. A very interesting gentleman/artist. Some choice bits from the obit:
"And as an artist, Mr. Nicolino achieved international attention for his work with breasts and brassieres, including most notably the "Big Giant Bra Ball" - like a rubber band ball, but bigger and made of undergarments."
"In the mid-1990s, he got the idea to string bras across the Grand Canyon."
"His efforts also included creating a milelong line of sand breasts along Stinson Beach in 1994, with hundreds of volunteers using Size 34C plastic molds.
"When the tide came in, it washed it all away and the sand was smooth again. It was a very nice day," his mother said."
Now if Jeff Koons would adopt a bit of Mr. Nicolino's vision, I could get behind his "art".
Finally, a classic Brim commercial for your enjoyment:
The Taxes Update
Head. Spinning.
More fallout from the House's "surtax" proposal. Another great post by Howard Gleckman at the Tax Vox blog. Here is a sample:
Why take cash compensation that could face a top rate of more than 45 percent when you could easily get more tax-free health insurance? Forget Cadillac plans. Now we’re talking Lamborghini coverage
A micro example of the macro problem - it's entirely possible that high earners will seek to shift their income into non-taxable income or deferred income arrangements - more expensive health employer-provided health insurance is just the most ironic example.
Which leads me to the other big piece of news - CBO head Douglas Elmendorf testified in front of the Senate Budget Committee today and essentially told them that the plan put forth by the House yesterday not only will not control costs, but will raise health care costs due to the public plan proposed, and as a result, they will not be paid for.
So how did he suggest tax reform be paid for? He dropped the bomb:
Asked what provisions should be added, Elmendorf suggested changing the way Medicare reimburses providers to create incentives for reducing costs. He also suggested ending or limiting the tax-free treatment of employer-provided health benefits, calling it a federal "subsidy" that encourages spending on ever-more-expensive health packages.
Of course the problem is the administration is dead set against such a change (it would be a tax raise on people earning <$250K which Obama foolishly promised not to do when a candidate). Senator Baucus blamed the Obama administration for limiting the Senate's options in taking this option off the table.
Some other reactions to the surtax:
Robert Reich likes it.
Nancy Pelosi says the rate is negotiable.
The Baseball Update
Very strange that so many teams are off after a 3 day break, so no Sox game to report on tonight. So here are some random thoughts on some random happenings today:
Ryan Howard fastest to 200 home runs (in terms of games played). As David Pinto pointed out today, in terms of age, he's nothing special. My prediction on lifetime home runs for Howard? 389.
This piece by Allen Barra came out a few days ago, but I can totally get behind the premise. After all, my twitter icon is a doctored '77 Mike Schmidt baseball card.
Finally, if you aren't already checking out Jon Couture's brilliant blog Better Red than Dead blog, well.. what are you waiting for. Best recaps on the web.
The Death Update
Ron Nicolino, 69, of San Francisco. A very interesting gentleman/artist. Some choice bits from the obit:
"And as an artist, Mr. Nicolino achieved international attention for his work with breasts and brassieres, including most notably the "Big Giant Bra Ball" - like a rubber band ball, but bigger and made of undergarments."
"In the mid-1990s, he got the idea to string bras across the Grand Canyon."
"His efforts also included creating a milelong line of sand breasts along Stinson Beach in 1994, with hundreds of volunteers using Size 34C plastic molds.
"When the tide came in, it washed it all away and the sand was smooth again. It was a very nice day," his mother said."
Now if Jeff Koons would adopt a bit of Mr. Nicolino's vision, I could get behind his "art".
Finally, a classic Brim commercial for your enjoyment:
Wednesday, July 15, 2009
Seeding the Tip Cup (and the daily updates)
The other day, I was buying some groceries in my neighborhood C Town (149th and B'way!). All grocery stores in Manhattan are local, but C Town is local-er than most. All of the checkout girls (and they are all girls) live in the neighborhood and on Sunday there was at least 1 teenage boy bagging at each checkout aisle.
Now I remember reading a story in the Times a while back exposing a "scandal" prevalent in neighborhood grocery stores - baggers working purely for tips and not getting paid minimum wage. It's not clear if the kids at C Town are volunteering, looking for some spare coin to buy soda and comics*, or whether they are getting paid under the table, or what. What is clear, however, is that each station has a little plastic dish for tips.
*Do kids still buy comics? I bought pretty lame comics when I was a kid - mostly the conventional superhero type - Superman, Green Lantern, Spiderman, with lots of ads in the back for direct sale programs. I never got into the X-Men or Fantastic 4 or certainly not any of the alternative comics. If not comics these days, what are kids spending their hard earned grocery bagging tip money on?
There is a psychology to tipping that I learned as an oyster shucker in Faneuil Hall in Boston - this is called "seeding the tipjar". Lounge piano players, subway performers, panhandlers, all know that people are more likely to give someone money when they either see someone else giving, or see (via the seeded tip cup) that someone else has already. Now I am not the first to notice this, but it is not a staple solely of your local Starbucks.
The nudge blog asks what is the optimal amount seeding the tip jar to get the ball rolling. In my experience, it's not any particular amount - its more important to have a reasonable volume (but not too much, lest people think you've been tipped enough!) of small bills. A few crinkled ones in a 16 oz plastic cup usually was the routine when I worked at the Walrus and Carpenter 15 years ago.
Unfortunately the C Town kids didn't get the memo. Their tip bowl was empty when I arrived and empty when I left.
Of course, I didn't have any cash on me at the time.
The Baseball Update
President Obama did not bounce the first pitch. I don't care where Pujols was standing. President Obama's candor in the announcer booth was much more interesting ("we're out of money").
Hey, some Red Sox Blog links:
Red Sox Chick (blogging at Weei!!) on the relative lack of Red Sox participation in the ASG.
Red Sox Dad on the Sox all stars meeting the Prez.
Jere from Red Sox Fan From Pinstripe Territory with a nice remembrance of watching the '83 ASG with his dad.
The Taxes Update
Seems like there may be some sort of tax hike proposed to fund health care reform? Anyone else know anything about this?
Recent coverage on other blogs:
Citizens for Tax Justice release (warning - pdf file). Editorially, the idea that it is tax justice for certain (but not all) taxpayers to be forced to "give back" some of the tax cuts they have received over the past decade is not "justice". That's a retroactive tax.
Don't Mess With Taxes also pointing out the multiple states in which a 50% marginal rate will be the new high.
Tax.com predicting that the surtax will never be enacted (I agree - and so does the taxgirl, I believe.
Finally, Megan McArdle with her thoughts.
The Death Update
After not blogging about my dad for a long long time, I had a weird dream last night - one of the increasingly rare dreams where he is an active present, walking, talking, like nothing ever happened - and I am always grateful that somehow he is among the living again. But this time, in my dream, I was reasoning with my brother, my mother, trying to get at whether he was really alive or not (again, in my dream). In my dream, we all saw him and thought he was there, but it turned out that we were each, separately, having Sixth Sense moments, when one of us saw him, it didn't mean the others did. We each were dreaming within my dream.
I feel like my subconcious had some sort of resolution.
Either that or I've got to cut down on the gin at night.
Your obit of the day belongs to Reggie Fleming, a hard-nosed hockey player from the 60s. He easily could have been the inspiration for Reggie Dunlop in Slap Shot, but apparently the first name was just a coincidence. He played professionally for 20 seasons (12 in the NHL) and led the league in penalty minutes his last season. Now that is dedication.
The obit is here
The Economist on the Surtax
From the Economist's Free Exchange blog today:
For me, the biggest concern is that Congress seems to have followed the path of least resistence here and it may do so again in the future. Recall that America has a fairly significant structural deficit, which will only grow as the population ages. American also has fairly significant need for large-scale investment in things like infrastructure and education. Revenues are going to have to rise to avoid a budget crisis somewhere down the road. And that means that taxes will have to rise.
Exactly. Some very good comments to this piece as well, including this:
if I were in the upper 1.2% (I'm not), with the fungibility of money, I'd be left with the feeling that my surtax might just as well be apportioned to subsidizing ethanol producers, or some other tremendous waste of resources.
Tuesday, July 14, 2009
Prince Fielder, PETA and the Truism about Publicity (and the daily updates)
Darren Rovell twittered last night that PETA would be happy with noted vegetarian Prince Fielder's win in the Home Run Derby.
They were.
Is it just me, or doesn't it seem like 80% of PETA's news releases are what people would call "puff pieces". Perusing the last 20 or so news releases on PETA's media center, I see the following hard hitting stories: Prince Fielder's home run derby win, Carol Liefer coming out as a Vegan, Woody Harrelson doing god knows what, Playboy playmate hosting veggie dog lunch, bikinis, sexy lettuce, and something called "bloody syrup" (apparently an objection to seal killing in Canada - yeah I don't get it either).
Are these actually successful press releases for PETA? Do they actually get attention? Do they raise money? At some point the cuteness factor must wear off, no? Yes, we liked the first 20 or 30 spots of a supermodel promising to go naked before she would wear fur (with Pics!!!), but eventually, the tongue-in-cheek too-cute-by-half copywriting and ultimately silly messaging (hey, maybe you should stop eating meat to be stronger!!!) would seem to be counter-productive. They undermine the seriousness of PETA's mission and raise questions about its credibility.
PETA has to walk a fine line. Its mission is basically to improve animal welfare and reduce animal cruelty. Most animal cruelty takes place on the factory farms and in the testing labs. People don't want to hear about that though - I imagine PETA has decided they get more traction with puff pieces than with exposes, or even worse, guerrilla operations against farms. The pieces though distract from PETA's message and in some cases seem to make light of it (nobody really thinks that Fielder's vegetairianism helped him win the Derby - so what's the point besides a cheap laugh?)
It seems like the ASPCA walks the line better - affecting spots with Sarah McLachlin, tugging on people's heartstrings with the shots of the poor abused puppies. Yeah, that's not exactly PETA's mission - I think PETA's plank technically would not allow for domesticated animals either - but it is a credible approach, not snarky and was a proven money maker.
This is a long way of saying I wonder if the old truism of all PR being good PR is still true? For an arguably "fringe" group like PETA, is it more important to make sure people know you're still around than to provide a credible argument/release (whereas ASPCA is surely more well regarded than PETA so does not care as much about exposure)? Or are today's consumers so well informed and looped in that they will tune out obviously hacky BS like the Prince Fielder PR linked above?
The Baseball Update
Short one tonight - just a classic case of Tim McCarver idiocy.
President Obama asked McCarver and Buck why they thought the AL had won the last 12 all star games. Now the answer was probably simply a combination of luck and the talent in the AL being somewhat better than the NL the past decade. McCarver said that he thought the NL was catching up, but that the AL had a head start due to the DH. Just let that sink in for a second.
This was idiotic on so many levels. First, the DH has been around since '73. Second, the DH is used by both leagues in AS games played in AL parks. Third, the NL went 13-1 from '72 to '85, during which time the AL had the DH. I really can't imagine what McCarver was thinking. Actually, I'd rather not try.
The Taxes Update
I've already blogged on taxes today. I note though that Taxgirl noticed something I didn't - the surtaxes suggested by the House today apply to investment income as well as wages - basically, once again, resulting in a 45% max marginal rate on wages and a 25% max rate on cap gains and dividends (if Obama's proposals on cap gains and dividend tax rates come to fruition).
Greg Mankiw adds sales and state/local taxes to arrive at a top marginal rate above 50%. I think we're already there in California by that math, actually.
Update: Howard Gleckman at the Tax Vox blog has a very good post on the topic.
The Death Update
Samuel Genensky, a near blind inventor and mathematician for the Rand corporation who invented a precursor technology to the magnification devices currently in use by the partially sighted.
I thought this quote from him was interesting:
I find it is true in all walks of life that the benefits we provide people are at the margins - the high achievers and the low achievers. I guess the idea is that the rest will muddle through - not a perfect analogy because here we are talking about the somewhat disabled (partially sighted) vs. the obviously disabled (the blind), but I do think as a society we provide more accommodation for the obvious cases than the harder, less obvious cases.
Oh, and as a parent who hated the mandatory ointment requirement for newborns, this is haunting:
Yeah. Um, sorry? The obit is here.
They were.
Is it just me, or doesn't it seem like 80% of PETA's news releases are what people would call "puff pieces". Perusing the last 20 or so news releases on PETA's media center, I see the following hard hitting stories: Prince Fielder's home run derby win, Carol Liefer coming out as a Vegan, Woody Harrelson doing god knows what, Playboy playmate hosting veggie dog lunch, bikinis, sexy lettuce, and something called "bloody syrup" (apparently an objection to seal killing in Canada - yeah I don't get it either).
Are these actually successful press releases for PETA? Do they actually get attention? Do they raise money? At some point the cuteness factor must wear off, no? Yes, we liked the first 20 or 30 spots of a supermodel promising to go naked before she would wear fur (with Pics!!!), but eventually, the tongue-in-cheek too-cute-by-half copywriting and ultimately silly messaging (hey, maybe you should stop eating meat to be stronger!!!) would seem to be counter-productive. They undermine the seriousness of PETA's mission and raise questions about its credibility.
PETA has to walk a fine line. Its mission is basically to improve animal welfare and reduce animal cruelty. Most animal cruelty takes place on the factory farms and in the testing labs. People don't want to hear about that though - I imagine PETA has decided they get more traction with puff pieces than with exposes, or even worse, guerrilla operations against farms. The pieces though distract from PETA's message and in some cases seem to make light of it (nobody really thinks that Fielder's vegetairianism helped him win the Derby - so what's the point besides a cheap laugh?)
It seems like the ASPCA walks the line better - affecting spots with Sarah McLachlin, tugging on people's heartstrings with the shots of the poor abused puppies. Yeah, that's not exactly PETA's mission - I think PETA's plank technically would not allow for domesticated animals either - but it is a credible approach, not snarky and was a proven money maker.
This is a long way of saying I wonder if the old truism of all PR being good PR is still true? For an arguably "fringe" group like PETA, is it more important to make sure people know you're still around than to provide a credible argument/release (whereas ASPCA is surely more well regarded than PETA so does not care as much about exposure)? Or are today's consumers so well informed and looped in that they will tune out obviously hacky BS like the Prince Fielder PR linked above?
The Baseball Update
Short one tonight - just a classic case of Tim McCarver idiocy.
President Obama asked McCarver and Buck why they thought the AL had won the last 12 all star games. Now the answer was probably simply a combination of luck and the talent in the AL being somewhat better than the NL the past decade. McCarver said that he thought the NL was catching up, but that the AL had a head start due to the DH. Just let that sink in for a second.
This was idiotic on so many levels. First, the DH has been around since '73. Second, the DH is used by both leagues in AS games played in AL parks. Third, the NL went 13-1 from '72 to '85, during which time the AL had the DH. I really can't imagine what McCarver was thinking. Actually, I'd rather not try.
The Taxes Update
I've already blogged on taxes today. I note though that Taxgirl noticed something I didn't - the surtaxes suggested by the House today apply to investment income as well as wages - basically, once again, resulting in a 45% max marginal rate on wages and a 25% max rate on cap gains and dividends (if Obama's proposals on cap gains and dividend tax rates come to fruition).
Greg Mankiw adds sales and state/local taxes to arrive at a top marginal rate above 50%. I think we're already there in California by that math, actually.
Update: Howard Gleckman at the Tax Vox blog has a very good post on the topic.
The Death Update
Samuel Genensky, a near blind inventor and mathematician for the Rand corporation who invented a precursor technology to the magnification devices currently in use by the partially sighted.
I thought this quote from him was interesting:
“When the partially blind went out in the world, they found that they either got no services at all or services that were appropriate for people who were totally blind,’’ Mr. Genensky told an interviewer this year. “Neither of these alternatives made much sense to me.’’
I find it is true in all walks of life that the benefits we provide people are at the margins - the high achievers and the low achievers. I guess the idea is that the rest will muddle through - not a perfect analogy because here we are talking about the somewhat disabled (partially sighted) vs. the obviously disabled (the blind), but I do think as a society we provide more accommodation for the obvious cases than the harder, less obvious cases.
Oh, and as a parent who hated the mandatory ointment requirement for newborns, this is haunting:
His eyes were burned shortly after birth when a delivery room nurse accidentally administered the wrong eyedrops to guard against infection.
Yeah. Um, sorry? The obit is here.
Health Care Reform to be Funded with Evergreen Proposals
According to a briefing service I get at work, the $1 trillion health care overhaul bill just released in the House would be paid for mostly by the surtaxes on the "rich", but also with a few other offsets that keep finding their way into various legislation from time to time.
The offsets are as follows:
--$540 billion from a surtax on households earning more than $350,000 (starting at 1% for couples earning >350K, 1.5% for couples earning b/w 500K and 1M and 5.4%!!!! for couples earning more than 1M. This would bring the top marginal rate post-expiration of Bush's tax cuts to 45%;
--$8.1 billion from the codification of the economic substance doctrine;
--$22.3 billion from a delay of the implementation date of the worldwide interest allocation provision put into law in 2004; and
-- unclear amounts from provisions relating to sale-in, lease-out transactions.
Now, I'm no mathematician, but those numbers aren't going to add up to $1 trillion, which makes me think that included in the offsets must be the limitation on itemized deductions for high-earners. We'll see once the bill comes out. That 45% top marginal rate will be the headline in tomorrow's news though.
Update: More here at the taxprof blog.
The offsets are as follows:
--$540 billion from a surtax on households earning more than $350,000 (starting at 1% for couples earning >350K, 1.5% for couples earning b/w 500K and 1M and 5.4%!!!! for couples earning more than 1M. This would bring the top marginal rate post-expiration of Bush's tax cuts to 45%;
--$8.1 billion from the codification of the economic substance doctrine;
--$22.3 billion from a delay of the implementation date of the worldwide interest allocation provision put into law in 2004; and
-- unclear amounts from provisions relating to sale-in, lease-out transactions.
Now, I'm no mathematician, but those numbers aren't going to add up to $1 trillion, which makes me think that included in the offsets must be the limitation on itemized deductions for high-earners. We'll see once the bill comes out. That 45% top marginal rate will be the headline in tomorrow's news though.
Update: More here at the taxprof blog.
Monday, July 13, 2009
Death, Taxes and Such
Well it's been too long since I've updated, and it may be months again since I do another update, but I have a few minutes, so here goes..
The Baseball Update
David Pinto is doing a quick series over on Baseball Musings, reviewing each major league team at the all star break. So far, he's tackled just the AL West, but eventually he'll get to the Sox. He presents how a team ranks in several stats, OBP, SLG, etc. I remember as a kid noticing the Sox always seemed to be at the top of the league in AVG and 2Bs, but at the bottom of the pack in SBs. This is not news.
The interesting thing (to me) is how much the team has changed since those days (and even since '04 or so). Now, Sox are middle of the pack in AVG, but toward the top in SBs (the perennial success in 2Bs must be a function of the park).
Again, this is not news. Everyone knows that Theo Epstein has made a point of emphasizing OBP and, apparently, has embraced the speed game more than his predecessors (of course, it helps that he has Ellsbury who has by himself more than 1/2 of the team's stolen bases). This is to his credit, but I don't think he gets enough credit. It's one thing to espouse a philosophy, it's another to successfully implement it. And Epstein's been able to do that in spades.
The Taxes Update
For me, it's all health care, all the time. Taxgirl, the Tax Vox Blog, Kausfiles and Robert Ross at HuffPo all had interesting posts in the past few days regarding the various tax initiatives being put forth to fund health care reform
David Brooks had a great op-ed last week noting that the combination of the various tax increases leave Obama with precious little dry powder for future domestic spending initiatives.
I agree with this. To review the bidding, Obama has already proposed/assumed that the Bush tax cuts on individuals earning over $250K will expire in 2011. Added to that since he ran are: (i) a cap on the deductibility of itemized deductions for high earners, (ii) a "surtax" from 1% to 3% on income over $350,000 (ramping up based on income) which Rangel introduced last week (iii) a potential cap on the tax exclusion of employer-provided health insurance (for plans that cost > $25K/year in premiums) and (iv) rumblings about imposing payroll taxes on capital gains and dividends (i.e., nonwage income).
Neither Obama nor Congress has seriously considered any tax increases on the middle class (such as the total repeal of the tax exclusion for employer-provided health insurance).
The price tag for the increased coverage Congress is discussing (which would *not* be universal) is ~$1 trillion (CBO estimate from July 3 reported $600M, but the $1T number is still the one that is most widely reported). Apparently gone is the argument that reform will actually save money (probably for good reasons politically, there was already too much discussion of which end of life interventions would not be covered by government provided health insurance due to lack of "efficiencies" - see below).
I am not morally against a tax hike to fund comprehensive health care coverage, but so far, the plans put forth would not accomplish that goal. It seems to me that if you are willing to wager the rest of your domestic policy agenda (because that is what Obama would be doing if all of the above tax hikes are necessary for a credible plan to be passed, which would leave room for no further hikes, probably including the expiration of the Bush tax cuts), then the payoff had better be more impressive than even the most recent CBO estimates of the increase in the number of people covered in this country. It had better be damned close to universal coverage (Medicare for all, as Mickey Kaus calls it).
I don't think that's what we will see.
The Death Update
Michael. Farrah. Ed. Oxy-Clean. Karl. Robert. Steve. And Waldo.
That would be Waldo McBurney, America's oldest worker. He was 106. He worked from age 13 to age 104. He took up distance running when he was 65.
I was listening to an Adam Carolla podcast on the way home from work tonight and in it he said he had asked his friend Dr. Drew, what was with the health care reform debate - what all the controversy was about, why costs were rising so much. Dr. Drew's answer was simple(istic). Everyone is living longer than expected. This *can* partially explain shortfalls in corporate and public pensions and of course the coming disasters in Medicare and Social Security. The cost issue though is extremely loaded when you start to bring patient age into the equation - issues of rationing and treatment decisions made by reference to the efficiency (or necessity) of a given treatment. Who knows how much "extra" costs we all bore to help Mr. McBurney live to 106. Surely he wasn't getting there solely on "juices and berries".
It's a difficult question. When dad finally accepted his likely fate (late stage small cell lung cancer), he decided he didn't want to pursue more chemo or crap that would just make him feel sicker than he was. That was his decision though. I can't imagine (and we're a LONG way in the discussion from this) someone else making that decision for him. Obama alluded to this in a discussion of his grandmother - even when it was clear she would not make it, she had a hip replacement. He admitted that he would pay for the procedure himself, but what if someone can't pay. As a lawyer, I hate slippery slope arguments and believe that we as rational humans don't need bright lines because we should be able reason between different cases based on their own facts, but that's much easier to do in the dry world of tax where it's just money, ultimately, and not someone's cancer-infected dad.
Addendum
This conversation on Slate.com is a good primer on where the Obama Administration (and Stephen Colbert, er, Peter Orszag in particular) thinks the cost savings will come from.
In addition, this blog post by Orszag lays out the ground rules for health reform being "deficit neutral". This is the corner they've painted themselves into.
The Baseball Update
David Pinto is doing a quick series over on Baseball Musings, reviewing each major league team at the all star break. So far, he's tackled just the AL West, but eventually he'll get to the Sox. He presents how a team ranks in several stats, OBP, SLG, etc. I remember as a kid noticing the Sox always seemed to be at the top of the league in AVG and 2Bs, but at the bottom of the pack in SBs. This is not news.
The interesting thing (to me) is how much the team has changed since those days (and even since '04 or so). Now, Sox are middle of the pack in AVG, but toward the top in SBs (the perennial success in 2Bs must be a function of the park).
Again, this is not news. Everyone knows that Theo Epstein has made a point of emphasizing OBP and, apparently, has embraced the speed game more than his predecessors (of course, it helps that he has Ellsbury who has by himself more than 1/2 of the team's stolen bases). This is to his credit, but I don't think he gets enough credit. It's one thing to espouse a philosophy, it's another to successfully implement it. And Epstein's been able to do that in spades.
The Taxes Update
For me, it's all health care, all the time. Taxgirl, the Tax Vox Blog, Kausfiles and Robert Ross at HuffPo all had interesting posts in the past few days regarding the various tax initiatives being put forth to fund health care reform
David Brooks had a great op-ed last week noting that the combination of the various tax increases leave Obama with precious little dry powder for future domestic spending initiatives.
I agree with this. To review the bidding, Obama has already proposed/assumed that the Bush tax cuts on individuals earning over $250K will expire in 2011. Added to that since he ran are: (i) a cap on the deductibility of itemized deductions for high earners, (ii) a "surtax" from 1% to 3% on income over $350,000 (ramping up based on income) which Rangel introduced last week (iii) a potential cap on the tax exclusion of employer-provided health insurance (for plans that cost > $25K/year in premiums) and (iv) rumblings about imposing payroll taxes on capital gains and dividends (i.e., nonwage income).
Neither Obama nor Congress has seriously considered any tax increases on the middle class (such as the total repeal of the tax exclusion for employer-provided health insurance).
The price tag for the increased coverage Congress is discussing (which would *not* be universal) is ~$1 trillion (CBO estimate from July 3 reported $600M, but the $1T number is still the one that is most widely reported). Apparently gone is the argument that reform will actually save money (probably for good reasons politically, there was already too much discussion of which end of life interventions would not be covered by government provided health insurance due to lack of "efficiencies" - see below).
I am not morally against a tax hike to fund comprehensive health care coverage, but so far, the plans put forth would not accomplish that goal. It seems to me that if you are willing to wager the rest of your domestic policy agenda (because that is what Obama would be doing if all of the above tax hikes are necessary for a credible plan to be passed, which would leave room for no further hikes, probably including the expiration of the Bush tax cuts), then the payoff had better be more impressive than even the most recent CBO estimates of the increase in the number of people covered in this country. It had better be damned close to universal coverage (Medicare for all, as Mickey Kaus calls it).
I don't think that's what we will see.
The Death Update
Michael. Farrah. Ed. Oxy-Clean. Karl. Robert. Steve. And Waldo.
That would be Waldo McBurney, America's oldest worker. He was 106. He worked from age 13 to age 104. He took up distance running when he was 65.
I was listening to an Adam Carolla podcast on the way home from work tonight and in it he said he had asked his friend Dr. Drew, what was with the health care reform debate - what all the controversy was about, why costs were rising so much. Dr. Drew's answer was simple(istic). Everyone is living longer than expected. This *can* partially explain shortfalls in corporate and public pensions and of course the coming disasters in Medicare and Social Security. The cost issue though is extremely loaded when you start to bring patient age into the equation - issues of rationing and treatment decisions made by reference to the efficiency (or necessity) of a given treatment. Who knows how much "extra" costs we all bore to help Mr. McBurney live to 106. Surely he wasn't getting there solely on "juices and berries".
It's a difficult question. When dad finally accepted his likely fate (late stage small cell lung cancer), he decided he didn't want to pursue more chemo or crap that would just make him feel sicker than he was. That was his decision though. I can't imagine (and we're a LONG way in the discussion from this) someone else making that decision for him. Obama alluded to this in a discussion of his grandmother - even when it was clear she would not make it, she had a hip replacement. He admitted that he would pay for the procedure himself, but what if someone can't pay. As a lawyer, I hate slippery slope arguments and believe that we as rational humans don't need bright lines because we should be able reason between different cases based on their own facts, but that's much easier to do in the dry world of tax where it's just money, ultimately, and not someone's cancer-infected dad.
Addendum
This conversation on Slate.com is a good primer on where the Obama Administration (and Stephen Colbert, er, Peter Orszag in particular) thinks the cost savings will come from.
In addition, this blog post by Orszag lays out the ground rules for health reform being "deficit neutral". This is the corner they've painted themselves into.
Wednesday, February 20, 2008
Quick Wednesday Update
Quick links while I marvel at the continued idiocy (and mad IT skillz)of Yankees fans...
Goose's Roost has a preview of tonight's Sabres-Lightning slobberknocker. Serves me right to go and blog about how great the Sabres are playing and then watch them get pegged by the Pens and Rangers.
A couple of the Deadspin guys have a new baseball blog - Walk off walk. Looks good so far.
What the hell is it with movie stars who cheat on their taxes? First it was Wesley Snipes. Now good ol' locust-eating, molar-extracting-with-no-novacaine Nic[k] Cage?
Hey, if the Wicker Man can't get away with cheating on his taxes, what hope is there for the rest of us?
Goose's Roost has a preview of tonight's Sabres-Lightning slobberknocker. Serves me right to go and blog about how great the Sabres are playing and then watch them get pegged by the Pens and Rangers.
A couple of the Deadspin guys have a new baseball blog - Walk off walk. Looks good so far.
What the hell is it with movie stars who cheat on their taxes? First it was Wesley Snipes. Now good ol' locust-eating, molar-extracting-with-no-novacaine Nic[k] Cage?
Hey, if the Wicker Man can't get away with cheating on his taxes, what hope is there for the rest of us?
Wednesday, February 6, 2008
Odd's 'n' Ends
Getting back into this "blogging" thing -- thought I'd fill out a few odds and ends I noticed the past few days...
Thoughts and prayers go out to Joe Ferguson and his family (Joe is battling complications from Leukemia). Joe was the first QB I remember for the Bills, and I distinctly remember that while he was generally mediocre, he had some great hook-ups with Frank Lewis and Jerry Butler (and, IIRC, set a record for most attempts without an interception). Best wishes Joe.
Derek Jeter apparently has settled his tax dispute with New York state on undisclosed terms. He clearly agreed to pay something - wonder if we will notice that Derek will be less of a presence in NYC (see this post for some background on the case)
Shhh - the Buffalo Sabres are coming. Look out NHL. I've been saying all season that they have had a positive goal differential and just a matter of time before they would creep back into the playoff hunt. Haven't lost since the AS break.
Tax news -- Sen. Grassley said in an interview with Reuters that the Blackstone Bill is essentially dead, but that he thought the deferred comp bill introduced by Rahm EMmanuel last year has some legs.
That's all for now - the Beatles' yogi passed away - I guess that's the big obit for the day. Still having dreams about dad, although not that often.
Thoughts and prayers go out to Joe Ferguson and his family (Joe is battling complications from Leukemia). Joe was the first QB I remember for the Bills, and I distinctly remember that while he was generally mediocre, he had some great hook-ups with Frank Lewis and Jerry Butler (and, IIRC, set a record for most attempts without an interception). Best wishes Joe.
Derek Jeter apparently has settled his tax dispute with New York state on undisclosed terms. He clearly agreed to pay something - wonder if we will notice that Derek will be less of a presence in NYC (see this post for some background on the case)
Shhh - the Buffalo Sabres are coming. Look out NHL. I've been saying all season that they have had a positive goal differential and just a matter of time before they would creep back into the playoff hunt. Haven't lost since the AS break.
Tax news -- Sen. Grassley said in an interview with Reuters that the Blackstone Bill is essentially dead, but that he thought the deferred comp bill introduced by Rahm EMmanuel last year has some legs.
That's all for now - the Beatles' yogi passed away - I guess that's the big obit for the day. Still having dreams about dad, although not that often.
Tuesday, February 5, 2008
Always Bet on Black!
Yes, that's my main man Wesley Snipes' line from Passenger 57. Apropos given the recent news of his exoneration of some nasty felony tax fraud charges (his bankroll will still take a dent - he's not off the hook for paying taxes).
Essentially Wesley had been filing returns and paying with bogus checks (so not paying at all), basing his argument that he is not subject to tax on what is called the "861 position", named after a provision of the Code that deals with sourcing of income. The argument is that Section 861 and its regulations define "taxable income" in such a way as to exclude most income from being subject to tax. See the Wikipedia entry.
This is an extraordinarily oft-promoted position that has been repeatedly shot down in the courts. So why did Snipes win?
For a typically arcane reason. In order for Snipes to be convicted for criminal tax fraud, it had to be proven that he did not believe that he was acting in good faith in avoiding paying taxes. Essentially, the jury believed that he was a victim of "bad advice".
Lots of commentary on this at the TaxProf Blog.
Still, it's not all roses for Wesley - he still owes 8 figures in back taxes and penalties and interest stands to serve some jail time for the misdemeanors that he was convicted of - failure to file returns (up to 3 years).
And Always Bet on Black? Seems to be true given that Richard Hatch was not as successful.
Essentially Wesley had been filing returns and paying with bogus checks (so not paying at all), basing his argument that he is not subject to tax on what is called the "861 position", named after a provision of the Code that deals with sourcing of income. The argument is that Section 861 and its regulations define "taxable income" in such a way as to exclude most income from being subject to tax. See the Wikipedia entry.
This is an extraordinarily oft-promoted position that has been repeatedly shot down in the courts. So why did Snipes win?
For a typically arcane reason. In order for Snipes to be convicted for criminal tax fraud, it had to be proven that he did not believe that he was acting in good faith in avoiding paying taxes. Essentially, the jury believed that he was a victim of "bad advice".
Lots of commentary on this at the TaxProf Blog.
Still, it's not all roses for Wesley - he still owes 8 figures in back taxes and penalties and interest stands to serve some jail time for the misdemeanors that he was convicted of - failure to file returns (up to 3 years).
And Always Bet on Black? Seems to be true given that Richard Hatch was not as successful.
Sunday, November 18, 2007
All Apologies
Not just a great Nirvana song, but what I am offering to anyone who came here from the Goose's Roost or Bflo Blog (or anywhere else) and got stuck reading the last few lame posts. What can I say? My dedication has been lacking. Also, the TaxWife has had me on this crazy diet the last week that has sapped my energy. Now that I've discovered cocaine, it's all good and I'm back to bloggin'...
The Taxes Update
Of course this week's big athlete tax news was Derek Jeter's tax woes. The taxman is coming after Mr. Clutch for his position that he is a nonresident of New York State and City, despite the fact that he maintains an apartment in the city and lives here half the year. The rest of the year he apparently lives in Florida.
The law on this is not actually all that clear. The first test is whether someone spends 183 days in the state. Assuming Mr. Worst Defensive SS in the AL actually spends the offseason in Florida and given the number of days he is on the road during the season, he probably is not physically present in New York State for the required 183 days.
The state is asserting that even though he does not meet this test that New York is still his primary residence based on his affinity for the city (e.g., his business ties in New York, holidays spent in New York, and, particularly, keeping items he holds "near and dear" to him in his New York apartment). This filing from the Admin. law judge in the case is illuminating. In taxgeek parlance, New York is his "tax home".
The idea is that while he may physically spend fewer than 180 days in New York, his home in New York is a home while a house in Florida is just a house - more like an offseason rental to which he has no connection. It's an interesting theory and to be honest, I haven't dug into the black letter law in New York to know if it would be enough, but we'll follow it.
The Tax Foundation notes that this is differernt than the "Jock Tax" that taxes a portion of every athlete's income in the state in which the game is played. New York is going after endorsement income, income earned in other states, etc.
Don't Mess With Taxes has a good piece on New York revenue officials' clutch performance in past cases.
The other big tax news was the continuing saga in DC of AMT relief. After some conflicting stories (it appeared for a day that the Senate would at least vote on a bill to provide a 1 year AMT patch with limited offsets solely for popular tax extenders), this do-nothing Congress continued to do nothing. So, it's at least December before any AMT relief is passed.
NFL Picks
No commentary needed (or necessary). You should be reading the Jamboroo for a funny NFL preview column.
Chargers (+3) over JAGUARS. Yes, I know people are jumping off the Philip Rivers bandwagon and that San Diego barely held on against Indy last week despite 6 picks (like Dallas against the Bills), but that defense is still solid and I think Garrard will have some rust in his first game back in a month.
Browns (-2.5) over RAVENS. Yeah, the Ravens really really suck.
Steelers (-9.5) over JETS. I almost took the Jets, but I cannot stand them. I mean, look at this guy:
Washington (+10.5) over COWBOYS.
DOLPHINS (+10) over Eagles. The Dolphins have played almost everyone close this year. They're the best 0-9 team I have ever seen.
Raiders (+5) over VIKINGS
Cardinals (+3) over BENGALS
Chiefs (+14.5) over COLTS. I don't care what Dr. Z says, Peyton is not the same without all of his toys. Just like the TaxBoy. If he's surrounded by the rattle, the horse on a string, the plastic balls that make noise, he's happy. If he has just the stupid fake phone? He throws six INTs.
LIONS (+2.5) over Giants. I'm a little surprised that the Lions are getting points at home, but then again, last time I went to Vegas, I came back looking like this:
Saints (-1) over TEXANS. This is where I call BS on one of the SportsGuy's theories - that early in the season nobody knows anything about the teams and that Vegas struggles just as much as the regular gambler. O.k. First, I don't believe Vegas struggles at all, ever, as compared to the regular degenerate gambler. Second, we're in week 11 and I still can't tell if the Saints, Chargers, Panthers, Washington, Seahawks, Cardinals and about 3 other teams are going to play halfway decent football or stink it up worse than Northrax.
Packers (-9.5) over Panthers. Case in point, although with Vinny starting and Steve Smith maybe not, this should be an easy one for the Favrers.
(Which reminds me of something else annoying - some moron talking head was talking about how Favre was doing this "all himself". I'm sure that Donald Driver, Greg Jennings, Kabeer Gbaja-Biamila, Nick Barnett and Charles Woodson were all happy to hear that. This team does have the second best rushing defense and fifth best defense overall in the NFC).
Rams (-3) over NINERS
Bears (+5.5) over SEAHAWKS
Titans (+2) over BRONCOS
BILLS (+16) over Patriots. Hell Yeah! This game being on Sunday night is great for a whole bunch of reasons. 1. I get to do work during the day and not feel guilty about watching the game (which I will be doing totally sober due to the aforementioned f*cked up diet). 2. I get to hear John Madden talk about Turducken and Buffalo Wings at the same time. 3. Now I can watch the MLS finals without missing any important NFL game action (score update: 0-0).
Bonus: I get to bust out my Marshawn Lynch "Money" t-shirt, recently purchased from 289 design, even though he won't be playing.
Score Prediction: Patriots 31, Bills 20. (Hoping for the upset though).
That's it, all. Enjoy the games.
(I notice that I missed calling the TB game. Let's just say that I did not have Atlanta. That one is going in the win column)
The Taxes Update
Of course this week's big athlete tax news was Derek Jeter's tax woes. The taxman is coming after Mr. Clutch for his position that he is a nonresident of New York State and City, despite the fact that he maintains an apartment in the city and lives here half the year. The rest of the year he apparently lives in Florida.
The law on this is not actually all that clear. The first test is whether someone spends 183 days in the state. Assuming Mr. Worst Defensive SS in the AL actually spends the offseason in Florida and given the number of days he is on the road during the season, he probably is not physically present in New York State for the required 183 days.
The state is asserting that even though he does not meet this test that New York is still his primary residence based on his affinity for the city (e.g., his business ties in New York, holidays spent in New York, and, particularly, keeping items he holds "near and dear" to him in his New York apartment). This filing from the Admin. law judge in the case is illuminating. In taxgeek parlance, New York is his "tax home".
The idea is that while he may physically spend fewer than 180 days in New York, his home in New York is a home while a house in Florida is just a house - more like an offseason rental to which he has no connection. It's an interesting theory and to be honest, I haven't dug into the black letter law in New York to know if it would be enough, but we'll follow it.
The Tax Foundation notes that this is differernt than the "Jock Tax" that taxes a portion of every athlete's income in the state in which the game is played. New York is going after endorsement income, income earned in other states, etc.
Don't Mess With Taxes has a good piece on New York revenue officials' clutch performance in past cases.
The other big tax news was the continuing saga in DC of AMT relief. After some conflicting stories (it appeared for a day that the Senate would at least vote on a bill to provide a 1 year AMT patch with limited offsets solely for popular tax extenders), this do-nothing Congress continued to do nothing. So, it's at least December before any AMT relief is passed.
NFL Picks
No commentary needed (or necessary). You should be reading the Jamboroo for a funny NFL preview column.
Chargers (+3) over JAGUARS. Yes, I know people are jumping off the Philip Rivers bandwagon and that San Diego barely held on against Indy last week despite 6 picks (like Dallas against the Bills), but that defense is still solid and I think Garrard will have some rust in his first game back in a month.
Browns (-2.5) over RAVENS. Yeah, the Ravens really really suck.
Steelers (-9.5) over JETS. I almost took the Jets, but I cannot stand them. I mean, look at this guy:
Washington (+10.5) over COWBOYS.
DOLPHINS (+10) over Eagles. The Dolphins have played almost everyone close this year. They're the best 0-9 team I have ever seen.
Raiders (+5) over VIKINGS
Cardinals (+3) over BENGALS
Chiefs (+14.5) over COLTS. I don't care what Dr. Z says, Peyton is not the same without all of his toys. Just like the TaxBoy. If he's surrounded by the rattle, the horse on a string, the plastic balls that make noise, he's happy. If he has just the stupid fake phone? He throws six INTs.
LIONS (+2.5) over Giants. I'm a little surprised that the Lions are getting points at home, but then again, last time I went to Vegas, I came back looking like this:
Saints (-1) over TEXANS. This is where I call BS on one of the SportsGuy's theories - that early in the season nobody knows anything about the teams and that Vegas struggles just as much as the regular gambler. O.k. First, I don't believe Vegas struggles at all, ever, as compared to the regular degenerate gambler. Second, we're in week 11 and I still can't tell if the Saints, Chargers, Panthers, Washington, Seahawks, Cardinals and about 3 other teams are going to play halfway decent football or stink it up worse than Northrax.
Packers (-9.5) over Panthers. Case in point, although with Vinny starting and Steve Smith maybe not, this should be an easy one for the Favrers.
(Which reminds me of something else annoying - some moron talking head was talking about how Favre was doing this "all himself". I'm sure that Donald Driver, Greg Jennings, Kabeer Gbaja-Biamila, Nick Barnett and Charles Woodson were all happy to hear that. This team does have the second best rushing defense and fifth best defense overall in the NFC).
Rams (-3) over NINERS
Bears (+5.5) over SEAHAWKS
Titans (+2) over BRONCOS
BILLS (+16) over Patriots. Hell Yeah! This game being on Sunday night is great for a whole bunch of reasons. 1. I get to do work during the day and not feel guilty about watching the game (which I will be doing totally sober due to the aforementioned f*cked up diet). 2. I get to hear John Madden talk about Turducken and Buffalo Wings at the same time. 3. Now I can watch the MLS finals without missing any important NFL game action (score update: 0-0).
Bonus: I get to bust out my Marshawn Lynch "Money" t-shirt, recently purchased from 289 design, even though he won't be playing.
Score Prediction: Patriots 31, Bills 20. (Hoping for the upset though).
That's it, all. Enjoy the games.
(I notice that I missed calling the TB game. Let's just say that I did not have Atlanta. That one is going in the win column)
Friday, November 9, 2007
Friday Afternoon Update
Relatively quiet afternoon at work.. so on to the updates.
The Bills Update
YES. This guy is doing the Bills-Dolphins game this weekend:
Since Eagle/Wilcots are off this week, I guess that makes them officially the Z-team of CBS broadcasters. And if I had an HDTV, I could watch the game in hi-def.
Seeing that Gus is doing the game made me wonder if I would remember differently some of the famous and infamous moments in Bills history if he had been calling the games.
Wide Right: Norwood lines up for the kick. This is at the EDGE of Norwood's distance. Marv Levy is putting his faith in the young kicker out of JAMES MADISON. It's all on the line for the Bills. The snap, the hold is down. The Kick is UP... And... It's NO GOOD!! NO GOOD!! WIDE RIGHT! And TIME HAS EXPIRED! The GIANTS WIN! Somehow the Giants are able to carry Parcells OFF THE FIELD. OH MY, Scott Norwood will carry this moment TO HIS GRAVE. SLEEP TIGHT SCOTTY! HA HAAAAAA"
Frank Reich comeback against Houston in '93: "Forget about the Nazis, here in Buffalo it's the RISE OF THE FOURTH REICH as the Bills unleash the stormtroopers aganist the Oilers. Ha haaaaaaa." "Christie lines up for the winning kick. And it's GOOOOOOOD!!!!! Christie drives a STAKE through the hearts of the Oilers as the Bills win in DRAMATIC FASHION!! DIE NOSFERATU!!!
(sidenote: this game was NOT televised locally in Buffalo because the Bills actually did not sell out the game. A playoff game. I had to listen to freaking Van Miller on the radio).
Music City Miracle: The kick is short to Neal. Neal hands off to Wycheck.. and Oh, Wycheck HEAVES it to Andre Dyson, and Dyson is RUNNING. OH NO, IT's A CLEAR PATH TO PAYDIRT. OH NO. NOBODY's GOING TO CATCH HIM. And Dyson is IN. And it's PANDEMONIUM in Tennessee. Rob Johnson can't bear to look. Wade Phillips is STUNNNED as the Titans RIP THE BEATING HEARTS out of the Bills's chests. KALI MA, they'll SEE YOU IN HELL!!!!!"
No, that still would have sucked.
Last Second Jason Elam Field Goal: Oh wait, he actually did call this game:
I'm surprised he didn't refer to it as a "CHINESE FIRE DRILL!!!!"
Anyway, it's always a "SPECIAL GAME" when Gus is announcing.
-- As for actual analysis? Happy that Losman is starting. He's like Brett Favre, except without the joy. Or much of the talent.
For actual analysis, go to Bflo Blog for the Tailgate.
Goose's Roost has an interesting post on Jim Kelly and Jack Kemp being potential white knights in a future sale of the Bills.
That's it. My prediction? (not that it matters): Bills 21, Miami 17
The Taxes Update
-- The House today passed a bill providing for a one-year AMT patch and extending a bunch of popular tax deductions, the cost of which is offset by changing the tax treatment of carried interest in private equity funds and eliminating offshore deferrals of compensation (where the payor is tax-indifferent). The Senate has not introduced a bill addressing AMT relief and apparently won't until December.
Which really is an abdication of Congresional responsibility. You see, even if a bill is introduced in December, debated, passed, harmonized with the House and signed by Bush, it won't be in time for the IRS to make changes to tax forms necessary to allow taxpayers to file returns correctly. This means that millions of taxpayers will end up overpaying their taxes and seeking refunds later (because they will be forced to file based on the law that is in effect now which sucks millions of taxpayers into the AMT. I think the House is probably more to blame for waiting so long to introduce a bill when EVERYONE KNEW ABOUT THE ISSUE.
-- One other interesting story from last week that is semi-sports related: The IRS has announced an initiative targeting foreign golfers, tennis players and entertainers who work in the U.S. That's right - Roger Federer is a tax cheat* The concern is that foreign entertainers are not paying their "fair share" of withholding taxes on income earned in the U.S. (there is a 30% withholding tax applicable to nonresident aliens performing services within the United States). The focus apparently is on the structures through which entertainers earn money within the United States and making sure that withholding takes place somewhere along the chain. This is all part of closing the tax gap.
*May not actually be a tax cheat, but this commercial is ridiculous:
And what the hell is Henry saying? "I nevuh fthk about ystdy".... Thanks Thierry, er Terry. Go back to playing with your ball.
No Death Update right now. Maybe later.
The Bills Update
YES. This guy is doing the Bills-Dolphins game this weekend:
Since Eagle/Wilcots are off this week, I guess that makes them officially the Z-team of CBS broadcasters. And if I had an HDTV, I could watch the game in hi-def.
Seeing that Gus is doing the game made me wonder if I would remember differently some of the famous and infamous moments in Bills history if he had been calling the games.
Wide Right: Norwood lines up for the kick. This is at the EDGE of Norwood's distance. Marv Levy is putting his faith in the young kicker out of JAMES MADISON. It's all on the line for the Bills. The snap, the hold is down. The Kick is UP... And... It's NO GOOD!! NO GOOD!! WIDE RIGHT! And TIME HAS EXPIRED! The GIANTS WIN! Somehow the Giants are able to carry Parcells OFF THE FIELD. OH MY, Scott Norwood will carry this moment TO HIS GRAVE. SLEEP TIGHT SCOTTY! HA HAAAAAA"
Frank Reich comeback against Houston in '93: "Forget about the Nazis, here in Buffalo it's the RISE OF THE FOURTH REICH as the Bills unleash the stormtroopers aganist the Oilers. Ha haaaaaaa." "Christie lines up for the winning kick. And it's GOOOOOOOD!!!!! Christie drives a STAKE through the hearts of the Oilers as the Bills win in DRAMATIC FASHION!! DIE NOSFERATU!!!
(sidenote: this game was NOT televised locally in Buffalo because the Bills actually did not sell out the game. A playoff game. I had to listen to freaking Van Miller on the radio).
Music City Miracle: The kick is short to Neal. Neal hands off to Wycheck.. and Oh, Wycheck HEAVES it to Andre Dyson, and Dyson is RUNNING. OH NO, IT's A CLEAR PATH TO PAYDIRT. OH NO. NOBODY's GOING TO CATCH HIM. And Dyson is IN. And it's PANDEMONIUM in Tennessee. Rob Johnson can't bear to look. Wade Phillips is STUNNNED as the Titans RIP THE BEATING HEARTS out of the Bills's chests. KALI MA, they'll SEE YOU IN HELL!!!!!"
No, that still would have sucked.
Last Second Jason Elam Field Goal: Oh wait, he actually did call this game:
I'm surprised he didn't refer to it as a "CHINESE FIRE DRILL!!!!"
Anyway, it's always a "SPECIAL GAME" when Gus is announcing.
-- As for actual analysis? Happy that Losman is starting. He's like Brett Favre, except without the joy. Or much of the talent.
For actual analysis, go to Bflo Blog for the Tailgate.
Goose's Roost has an interesting post on Jim Kelly and Jack Kemp being potential white knights in a future sale of the Bills.
That's it. My prediction? (not that it matters): Bills 21, Miami 17
The Taxes Update
-- The House today passed a bill providing for a one-year AMT patch and extending a bunch of popular tax deductions, the cost of which is offset by changing the tax treatment of carried interest in private equity funds and eliminating offshore deferrals of compensation (where the payor is tax-indifferent). The Senate has not introduced a bill addressing AMT relief and apparently won't until December.
Which really is an abdication of Congresional responsibility. You see, even if a bill is introduced in December, debated, passed, harmonized with the House and signed by Bush, it won't be in time for the IRS to make changes to tax forms necessary to allow taxpayers to file returns correctly. This means that millions of taxpayers will end up overpaying their taxes and seeking refunds later (because they will be forced to file based on the law that is in effect now which sucks millions of taxpayers into the AMT. I think the House is probably more to blame for waiting so long to introduce a bill when EVERYONE KNEW ABOUT THE ISSUE.
-- One other interesting story from last week that is semi-sports related: The IRS has announced an initiative targeting foreign golfers, tennis players and entertainers who work in the U.S. That's right - Roger Federer is a tax cheat* The concern is that foreign entertainers are not paying their "fair share" of withholding taxes on income earned in the U.S. (there is a 30% withholding tax applicable to nonresident aliens performing services within the United States). The focus apparently is on the structures through which entertainers earn money within the United States and making sure that withholding takes place somewhere along the chain. This is all part of closing the tax gap.
*May not actually be a tax cheat, but this commercial is ridiculous:
And what the hell is Henry saying? "I nevuh fthk about ystdy".... Thanks Thierry, er Terry. Go back to playing with your ball.
No Death Update right now. Maybe later.
Friday, October 19, 2007
The Taxes Update
The bill I mentioned yesterday was introduced today by Senator Kerry - S. 2199, the "Offshore Deferred Compensation Reform Act of 2007". Rep. Emanuel's bill apparently will be introduced in the House later with identical language.
(note - haven't found the bill yet online, but here is a press release from Kerry's office)
In substance, it is as I described - it would prevent nonqualified deferred comp arrangements by companies located in low tax jurisdictions. The definition of low tax jurisdiction for this purpose, however, is not quite clear. The bill requires that:
It is not clear whether this means that a corporate income tax must be on the books of such country, or whether the corporate income tax must actually apply to the actual income of the company. In either case, however, it does not say that the rate needs to be high - so the idea I mentioned yesterday - domicile in a country with a legit corporate income tax, but negotiate for a low rate (Zug, Switzerland comes to mind) could still work. Treasury regulations (which are authorized) would be necessary to refine details like this.
I know that someone did a client alert on this yesterday, but I have not found it. I do not expect to do another one. There's nothing new here that I didn't already mention in my prior alert.
(note - haven't found the bill yet online, but here is a press release from Kerry's office)
In substance, it is as I described - it would prevent nonqualified deferred comp arrangements by companies located in low tax jurisdictions. The definition of low tax jurisdiction for this purpose, however, is not quite clear. The bill requires that:
substantially all of the income of [the offshore] corporation is subject to an income tax imposed by [the offshore country]
It is not clear whether this means that a corporate income tax must be on the books of such country, or whether the corporate income tax must actually apply to the actual income of the company. In either case, however, it does not say that the rate needs to be high - so the idea I mentioned yesterday - domicile in a country with a legit corporate income tax, but negotiate for a low rate (Zug, Switzerland comes to mind) could still work. Treasury regulations (which are authorized) would be necessary to refine details like this.
I know that someone did a client alert on this yesterday, but I have not found it. I do not expect to do another one. There's nothing new here that I didn't already mention in my prior alert.
Wednesday, October 17, 2007
The Taxes Update
I referred to this a month ago when it first came out, but Rep. Rahm Emanuel (D-IL), along with Sen. John Kerry (D-MA) tomorrow will introduce legislation in the House and Senate that would limit deferral by hedge fund managers (among others) of compensation paid offshore. The bill would impose a limit equal to the amount people are allowed to defer into 401(k) and Roth IRA accounts (approximately $20,000).
Some background - Hedge fund managers receive management fees for operating their hedge funds equal to 2% of the NAV of the funds. In addition, they receive a performance based fee equal to 20% of the net appreciation of the funds (called, "2 and 20" in industry parlance).
It is common practice for fund managers to defer receipt of the 2 and 20 fees, avoid current tax on these amounts, invest them back into the funds they manage, and then receive them later, having compounded tax free in the interim (kind of like what happens to your 401(k) - you defer tax on the amounts you contribute into a 401(k) account, it earns a return tax-free while it is in there and then you pay tax at ordinary rates when you pull it out).
The perceived abuse is that this deferral opportunity is not available to regular taxpayers - only managers of offshore hedge funds. From a tax policy standpoint, so long as the deferred amounts are at risk and may be lost (which they are - the amounts are usually reinvested back into the hedge funds the managers run), I do not see how this is any different than any other deferred compensation plan. It's simply a matter of quantum.
Here is the press release from September when he first announced his intentions.
And here is my client alert on the same topic.
Update: I should have mentioned in the above that one of the reasons given for the "fairness" aspect of the bill is that deferrals of comp made by employees of US-based companies result in a economic detriment to the employer, as the employer loses the deduction until the employee is ultimately paid. By contrast, the deferrals that Kerry's and Emanuel's bill will apparently target, are made by employees of hedge fund management companies domiciled in tax havens (Cayman, Bermuda, etc). Thus, there is no lost deduction and no economic detrminent to the employer of allowing the deferral.
However, this grossly misunderstands why hedge funds are set up offshore in the first place - they are set up offshore to allow tax-exempt and non-US investors invest in hedge funds without becoming directly subject to US tax. Tax-exempt and non-US investors, of course, would also have no use for the tax deduction associtaed with payments of compensation to hedge fund managers, because they do not ordinarily pay US federal income tax. Thus, even if the hedge fund managers engaged directly with investors in these deferral arrangements, there would be no lost deduction.
It's a function of the nature of the taxpayer, not the domicile of the management company that creates the mismatch.
My personal view on the topic (which I should have included above) is that this is a small issue in the larger scheme of taxation of private equity funds and their managers and is a distraction from the larger debate. This bill (along with Rep. Sander Levin's bill on UDFI) would probably at least encourage hedge funds to come back onshore.
It's all moot, however, because no tax raises will be signed by President Bush, in my opinion.
Further update: The bill apparently has an easy workaround - organize the fund and management company in a country that can be low tax, but not a tax haven (e.g., Switzerland). The summary of the bill (no actual text yet) says that the cap on deferrals does not apply where the corporation is domiciled in a jurisdiction that imposes an income tax on corporate income, has deductibility rules that work similarly to the US rules and has a tax treaty with the US. Thus, an offshore fund manager could be set up in Switzerland, obtain a ruling to negotiate a low local rate of tax, and continue deferring as usual. There would be some tax slippage, but presumably the tax benefit would outweigh the slippage if the return on the deferred amounts was high enough.
Some background - Hedge fund managers receive management fees for operating their hedge funds equal to 2% of the NAV of the funds. In addition, they receive a performance based fee equal to 20% of the net appreciation of the funds (called, "2 and 20" in industry parlance).
It is common practice for fund managers to defer receipt of the 2 and 20 fees, avoid current tax on these amounts, invest them back into the funds they manage, and then receive them later, having compounded tax free in the interim (kind of like what happens to your 401(k) - you defer tax on the amounts you contribute into a 401(k) account, it earns a return tax-free while it is in there and then you pay tax at ordinary rates when you pull it out).
The perceived abuse is that this deferral opportunity is not available to regular taxpayers - only managers of offshore hedge funds. From a tax policy standpoint, so long as the deferred amounts are at risk and may be lost (which they are - the amounts are usually reinvested back into the hedge funds the managers run), I do not see how this is any different than any other deferred compensation plan. It's simply a matter of quantum.
Here is the press release from September when he first announced his intentions.
And here is my client alert on the same topic.
Update: I should have mentioned in the above that one of the reasons given for the "fairness" aspect of the bill is that deferrals of comp made by employees of US-based companies result in a economic detriment to the employer, as the employer loses the deduction until the employee is ultimately paid. By contrast, the deferrals that Kerry's and Emanuel's bill will apparently target, are made by employees of hedge fund management companies domiciled in tax havens (Cayman, Bermuda, etc). Thus, there is no lost deduction and no economic detrminent to the employer of allowing the deferral.
However, this grossly misunderstands why hedge funds are set up offshore in the first place - they are set up offshore to allow tax-exempt and non-US investors invest in hedge funds without becoming directly subject to US tax. Tax-exempt and non-US investors, of course, would also have no use for the tax deduction associtaed with payments of compensation to hedge fund managers, because they do not ordinarily pay US federal income tax. Thus, even if the hedge fund managers engaged directly with investors in these deferral arrangements, there would be no lost deduction.
It's a function of the nature of the taxpayer, not the domicile of the management company that creates the mismatch.
My personal view on the topic (which I should have included above) is that this is a small issue in the larger scheme of taxation of private equity funds and their managers and is a distraction from the larger debate. This bill (along with Rep. Sander Levin's bill on UDFI) would probably at least encourage hedge funds to come back onshore.
It's all moot, however, because no tax raises will be signed by President Bush, in my opinion.
Further update: The bill apparently has an easy workaround - organize the fund and management company in a country that can be low tax, but not a tax haven (e.g., Switzerland). The summary of the bill (no actual text yet) says that the cap on deferrals does not apply where the corporation is domiciled in a jurisdiction that imposes an income tax on corporate income, has deductibility rules that work similarly to the US rules and has a tax treaty with the US. Thus, an offshore fund manager could be set up in Switzerland, obtain a ruling to negotiate a low local rate of tax, and continue deferring as usual. There would be some tax slippage, but presumably the tax benefit would outweigh the slippage if the return on the deferred amounts was high enough.
Tuesday, October 9, 2007
Rainy Tuesday Night Update
The Bills Letdown
It was quite strange when I turned to the Taxwife not 10 minutes after the Bills lost last night and said "well, they deserved to lose that game - if you can't win getting six turnovers, you deserve to lose". In other words, serenity now.
This morning, before even going on the blogs to check out others' reactions to the games (links below), I thought a little more critically about the game...
-- The Bills gave up an easy 3 at the end of the first half by attempting a 53 yard field goal on a 4th and 3. Not to go all Gregg Easterbrook or anything, but going for it on 4th and 3 has a higher positive outcome than attempting a 53 yarder. Punting may have been the best move there.
-- They sent Roscoe Parrish on an end around (it may have been a reverse) on 3rd and 2 in Dallas territory. It was predictably blown up and the Bills needed to punt. A simple run up the middle or toss over the middle to Lynch or Royal (who was a great weapon in the game (would have obviously been much more productive).
-- Jauron misused times out in the second half, resulting in a bad onside kick defense formation.
-- Defensive playcalling down the stretch was atrocious, giving up easy yards over the middle and then the inexcusable 8 yard sideline route with 7 seconds left. Again, they could have called a time out if they had the wrong personnel on the field, or to make sure the young defense was on the right page.
-- The decision to pass on third and medium deep in Dallas territory in the 4th quarter is inexcusable. That should have been a fireable offense.
I realize that most of the above decisions were not made directly by Jauron, they were made by his coordinators, Brian Fairchild and Perry Fewell (Dr. Z really tears Fewell a new one in particular). Still, Jauron is the HEAD coach and has to ultimately take responsibility for the overall schemes and the decisions to try trick plays on third and short. Most importantly, it is clear that the Bills young players are trying extremely hard and giving it all they have, but they are young. They need a solid gameplan that will not let them down and a coaching staff that knows when to take a breather, settle the troops down and focus that energy. That is sorely lacking this year and it is clear to me that Jauron is not the right man for the job.
Others' more precise takes on last night:
Bflo Blog (special thanks to BfloBlog for linking to the Taxman, by the way)
Buffalo Rumblings
The Goose's Roost
I guess the silver lining I was looking for is that Jauron can't screw up the Bills this Sunday.
In happier news....
The Baseball Update
The ALCS and NLCS are set. Word from Boston is that Schilling will start Game 2 for the Sox, with Dice-K going in game 3. This makes sense insofar as Dice-K has been about 3/4 of a run better on the road than at home this year; however, the way the series lines up, that would have Dice-K going in game 7. I'm not sure how I feel about that, except that the Cubs-D-Backs series showed the fallacy of planning too far ahead in the tournament (although fundamentally, I think Lou was in the right pulling Z).
I'm sticking by my previous prediction of Sox in 6 over the Indians. I only got half of the NLCS teams correct, but I'll stick with the team I did get right - Rockies in 7.
The Taxes Update
Senator Reid announced today that no carried interest legislation would make it through the Senate in 2008. No surprise. Makes for an interesting election year issue. Romney has already pledged no new taxes if he is elected.
The Death Update
A rather obscure one today. Nolan Herndon passed away Sunday at the age of 88 from pneumonia. He was a member of the famed Doolittle Raiders who engaged in one of the most daring aerial missions of World War II. The mission, a bombing raid over Tokyo in the Spring of '42 was memorialized in the book and film Thirty Seconds Over Tokyo, with a screenplay by blacklisted screenwriter Dalton Trumbo (ironic that a writer of a film known as borderline propaganda was later blacklisted for refusing to name names).
Anyway, back to Mr. Herndon, he retired from the military shortly after the war ended and passed away apparently at his home in South Carolina. The obit is here.
It was quite strange when I turned to the Taxwife not 10 minutes after the Bills lost last night and said "well, they deserved to lose that game - if you can't win getting six turnovers, you deserve to lose". In other words, serenity now.
This morning, before even going on the blogs to check out others' reactions to the games (links below), I thought a little more critically about the game...
-- The Bills gave up an easy 3 at the end of the first half by attempting a 53 yard field goal on a 4th and 3. Not to go all Gregg Easterbrook or anything, but going for it on 4th and 3 has a higher positive outcome than attempting a 53 yarder. Punting may have been the best move there.
-- They sent Roscoe Parrish on an end around (it may have been a reverse) on 3rd and 2 in Dallas territory. It was predictably blown up and the Bills needed to punt. A simple run up the middle or toss over the middle to Lynch or Royal (who was a great weapon in the game (would have obviously been much more productive).
-- Jauron misused times out in the second half, resulting in a bad onside kick defense formation.
-- Defensive playcalling down the stretch was atrocious, giving up easy yards over the middle and then the inexcusable 8 yard sideline route with 7 seconds left. Again, they could have called a time out if they had the wrong personnel on the field, or to make sure the young defense was on the right page.
-- The decision to pass on third and medium deep in Dallas territory in the 4th quarter is inexcusable. That should have been a fireable offense.
I realize that most of the above decisions were not made directly by Jauron, they were made by his coordinators, Brian Fairchild and Perry Fewell (Dr. Z really tears Fewell a new one in particular). Still, Jauron is the HEAD coach and has to ultimately take responsibility for the overall schemes and the decisions to try trick plays on third and short. Most importantly, it is clear that the Bills young players are trying extremely hard and giving it all they have, but they are young. They need a solid gameplan that will not let them down and a coaching staff that knows when to take a breather, settle the troops down and focus that energy. That is sorely lacking this year and it is clear to me that Jauron is not the right man for the job.
Others' more precise takes on last night:
Bflo Blog (special thanks to BfloBlog for linking to the Taxman, by the way)
Buffalo Rumblings
The Goose's Roost
I guess the silver lining I was looking for is that Jauron can't screw up the Bills this Sunday.
In happier news....
The Baseball Update
The ALCS and NLCS are set. Word from Boston is that Schilling will start Game 2 for the Sox, with Dice-K going in game 3. This makes sense insofar as Dice-K has been about 3/4 of a run better on the road than at home this year; however, the way the series lines up, that would have Dice-K going in game 7. I'm not sure how I feel about that, except that the Cubs-D-Backs series showed the fallacy of planning too far ahead in the tournament (although fundamentally, I think Lou was in the right pulling Z).
I'm sticking by my previous prediction of Sox in 6 over the Indians. I only got half of the NLCS teams correct, but I'll stick with the team I did get right - Rockies in 7.
The Taxes Update
Senator Reid announced today that no carried interest legislation would make it through the Senate in 2008. No surprise. Makes for an interesting election year issue. Romney has already pledged no new taxes if he is elected.
The Death Update
A rather obscure one today. Nolan Herndon passed away Sunday at the age of 88 from pneumonia. He was a member of the famed Doolittle Raiders who engaged in one of the most daring aerial missions of World War II. The mission, a bombing raid over Tokyo in the Spring of '42 was memorialized in the book and film Thirty Seconds Over Tokyo, with a screenplay by blacklisted screenwriter Dalton Trumbo (ironic that a writer of a film known as borderline propaganda was later blacklisted for refusing to name names).
Anyway, back to Mr. Herndon, he retired from the military shortly after the war ended and passed away apparently at his home in South Carolina. The obit is here.
Tuesday, October 2, 2007
Late Night Updates
The Tax Update
No major news today (I'm not going to link to the tax cases the Supreme Court is hearing this term), so here are some blog posts from the past week:
Victor Fleischer on Senator Levin's bill to eliminate the book/tax disparity in employer compensation deductions for comp. paid with stock options (as a reminder, for financial reporting purposes, companies generally expense the cost of options upon grant, or sometimes over an exercise period, but can include the deduction for tax purposes only when the employee includes the comp. in its income - generally at exercise when the deduction will be greater than the initial financial reporting expense). I still am missing the "abuse" this is trying to get at there is tax parity on the employee/employer side for comp paid with stock options - not sure why GAAP and tax need to agree in all respects - GAAP is frequently a more realistic measure of economic reality than tax - there is nothing inherently wrong with that.
The Tax Policty Blog notices a bill proposed by Rep. Obey (D-WI) that would impose a "war tax" on the American people - progressively based. Good luck with that Obie.
And from Taxalicious is this clip from the Simpsons of Homer interacting with the IRS.
Check them all out.
The Death Update
Of course, the big name yesterday was Queens' own Al Oerter, who passed away from heart failure at 71. He, like Jim Ryun was frequently referred to as a "schoolboy champ" of his sport, the discus. He famously appeared in, and won golds in, four consecutive Summer Olympiads, a feat that has been matched only by Carl Lewis. The obit is here.
A less-known name belongs to Ralph Sturges. Anyone who has been to Mohegan Sun, however, has him to thank. He helped the Mohegan tribe achieve federal recognition, a precursor, in most cases, to receving a state license to construct and operate a casino on tribal land. I've been to Mohegan once - it was great (even if they stopped serving alcohol too early). Thank you Mr. Sturges. The obit is here.
The Football Update
A roundup of the Buffalo Bills blogs is here:
Bills Locker has the early injury report on Monday night's game against Dallas. Youbuty will be out again. Greer will get the start. He was tremendous against the Jets - we'll see how he fares against the Boys.
Brian Galliford at Buffalo Rumblings has the first quarter report card. Not too much to disagree with here - the Bills are, after all, 1-3 (albeit against 3-1 Pittsburgh, 4-0 NE and 2-2 Denver). I guess I'm not really as impressed with Lynch as Brian is. He's shown flashes, but has lacked consistency which has forced the offense into frequent third and long situations - of course, the QBs for the most part couldn't convert a third and 8 against the Dillon Panthers.
Bills Gab says Losman is worried about his job. He should give Drew Bledsoe a call for some inspiration.
And big props go out to the Goose's Roost for throwing a link to my blog up on their page. Go check them out (they're also over on the left). Right now, the talk is turning more to the Sabres - I need to dive back into hockey already? All I know is that my fellow Terrier Chris Drury is a punk.
and last, but not least:
The Baseball Update
Lots of great stuff from the Sox blogs over the past week celebrating the division. You've already seen my position by position breakdown - I predict Sox in 4 - here are what the other Sox blogs are talking about:
Jere from A Red Sox Fan from Pinstripe Territory had an assload of pictures from Friday night's clincher. Click here and keep scrolling.
El Guapo's Ghost rightly notes that the underreported story so far is the Angels injury issues - Gary Mathews and Bartolo Colon will miss the series and Vlad the impaler is dinged as well - could be limited to DH duty (which would pust Chone "Sean" Figgins to the OF and require Kendrick and Izturis to play in the IF).
Keep Your Sox On (which is an excellent blog) has the breakdown of the series - concluding, obviously, that the Sox are the better team statistically and on paper (although I don't put any stock at all in the season series advantage the Sox have).
Aaaand.. Sawx Blog has the roundup of the rest (conventional media, other blogs, Angels blog - seriously - just one). Go take a look.
That's it for tonight. Quick predictions I guess are in order (for the record, I predicted the Sox, Cubs and Angels as division winners and nailed the Yanks as the wildcard. Unfortunately the rest of my NL picks were a mess - Mets to win the East, Houston to win the WC and LA to win the west).
Cubs over D-Backs in 5
Rockies over Phils in 4
Indians over Yanks in 5
Sox over Angels in 4
No major news today (I'm not going to link to the tax cases the Supreme Court is hearing this term), so here are some blog posts from the past week:
Victor Fleischer on Senator Levin's bill to eliminate the book/tax disparity in employer compensation deductions for comp. paid with stock options (as a reminder, for financial reporting purposes, companies generally expense the cost of options upon grant, or sometimes over an exercise period, but can include the deduction for tax purposes only when the employee includes the comp. in its income - generally at exercise when the deduction will be greater than the initial financial reporting expense). I still am missing the "abuse" this is trying to get at there is tax parity on the employee/employer side for comp paid with stock options - not sure why GAAP and tax need to agree in all respects - GAAP is frequently a more realistic measure of economic reality than tax - there is nothing inherently wrong with that.
The Tax Policty Blog notices a bill proposed by Rep. Obey (D-WI) that would impose a "war tax" on the American people - progressively based. Good luck with that Obie.
And from Taxalicious is this clip from the Simpsons of Homer interacting with the IRS.
Check them all out.
The Death Update
Of course, the big name yesterday was Queens' own Al Oerter, who passed away from heart failure at 71. He, like Jim Ryun was frequently referred to as a "schoolboy champ" of his sport, the discus. He famously appeared in, and won golds in, four consecutive Summer Olympiads, a feat that has been matched only by Carl Lewis. The obit is here.
A less-known name belongs to Ralph Sturges. Anyone who has been to Mohegan Sun, however, has him to thank. He helped the Mohegan tribe achieve federal recognition, a precursor, in most cases, to receving a state license to construct and operate a casino on tribal land. I've been to Mohegan once - it was great (even if they stopped serving alcohol too early). Thank you Mr. Sturges. The obit is here.
The Football Update
A roundup of the Buffalo Bills blogs is here:
Bills Locker has the early injury report on Monday night's game against Dallas. Youbuty will be out again. Greer will get the start. He was tremendous against the Jets - we'll see how he fares against the Boys.
Brian Galliford at Buffalo Rumblings has the first quarter report card. Not too much to disagree with here - the Bills are, after all, 1-3 (albeit against 3-1 Pittsburgh, 4-0 NE and 2-2 Denver). I guess I'm not really as impressed with Lynch as Brian is. He's shown flashes, but has lacked consistency which has forced the offense into frequent third and long situations - of course, the QBs for the most part couldn't convert a third and 8 against the Dillon Panthers.
Bills Gab says Losman is worried about his job. He should give Drew Bledsoe a call for some inspiration.
And big props go out to the Goose's Roost for throwing a link to my blog up on their page. Go check them out (they're also over on the left). Right now, the talk is turning more to the Sabres - I need to dive back into hockey already? All I know is that my fellow Terrier Chris Drury is a punk.
and last, but not least:
The Baseball Update
Lots of great stuff from the Sox blogs over the past week celebrating the division. You've already seen my position by position breakdown - I predict Sox in 4 - here are what the other Sox blogs are talking about:
Jere from A Red Sox Fan from Pinstripe Territory had an assload of pictures from Friday night's clincher. Click here and keep scrolling.
El Guapo's Ghost rightly notes that the underreported story so far is the Angels injury issues - Gary Mathews and Bartolo Colon will miss the series and Vlad the impaler is dinged as well - could be limited to DH duty (which would pust Chone "Sean" Figgins to the OF and require Kendrick and Izturis to play in the IF).
Keep Your Sox On (which is an excellent blog) has the breakdown of the series - concluding, obviously, that the Sox are the better team statistically and on paper (although I don't put any stock at all in the season series advantage the Sox have).
Aaaand.. Sawx Blog has the roundup of the rest (conventional media, other blogs, Angels blog - seriously - just one). Go take a look.
That's it for tonight. Quick predictions I guess are in order (for the record, I predicted the Sox, Cubs and Angels as division winners and nailed the Yanks as the wildcard. Unfortunately the rest of my NL picks were a mess - Mets to win the East, Houston to win the WC and LA to win the west).
Cubs over D-Backs in 5
Rockies over Phils in 4
Indians over Yanks in 5
Sox over Angels in 4
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