What They Really Want is Lower Taxes

When conservatives and liberals debate taxes, many liberals often take pride in paying taxes, extolling the virtues of all the services that we receive from government paid for by our taxes. But the quiet reality they’d rather not admit is often that they would rather not have to shell out quite so much to the government.1

To whit, Lifehacker, a reliably liberal lifestyle blog aimed at millennials of the liberal bent, recently had an article titled “You Could Save on Your Student Loan by Moving to a Different State—Here’s How Much.” That’s a bit of a misnomer really. In reality, what they’re highlighting is that different states have different income tax rates and if you move from a high income tax state to a zero income tax state, you can use that extra money in your pocket to pay down debt, any debt, including student loan debt. And suddenly they love the idea of lower taxes!

Except when they don’t. The same writer penned an article yesterday on President Trump’s proposed tax cut that makes it out to be a sop to the rich (who pay the vast majority of income taxes and thus would logically reap the most benefit), but also have negligible economic value while depriving government programs of their funding.2

But where was the concern for people paying lower taxes when Lifehacker and their writer were suggesting readers move to places where they could pay no taxes? Of course, the argument is always that someone else should be paying more, usually those dastardly rich people who don’t deserve it.

  1. At the same time, the dirty secret many conservatives don’t want to admit is that while they want lower taxes, they’re reluctant to give up all those government services they like.
  2. Although, to be honest, I wouldn’t mind the tax cut as I’d end up with a $1,700 per year tax cut.

How Affordable is Your State?

WalletHub offers an annual survey of the property tax burden on homeowners in the 50 states and ranks them accordingly. But which data you look at determines whether you’re getting a good deal or not.

The survey’s basic ranking says the top 5 states for property taxes are Hawaii, Alabama, Louisiana, Delaware, and the District of Columbia.1 Now, Alabama and Louisiana make sense and maybe Delaware, but Hawaii and DC are notorious for high-cost of living and real estate. How could they be top-ranked for property tax? Because the survey ranks based on tax rate, not the average dollar amount of taxes paid.

When you rank the states by total annual taxes priced at state median home value, the best states are Alabama, West Virginia, Arkansas, Louisiana, and South Carolina, which are all top 10 states for tax rate as well. Combined with low median home value, you’re getting a good deal. The worst states are, in order from the top, are New Jersey, Connecticut, New Hampshire2, New York, Illinois, and Massachusetts at #6.

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Why Is There So Much Hatred of the Wealthy?

On my commute to work on Boston’s Southeast Expressway, there is a carpenter’s union building right next to the highway with a billboard. In addition to the usual pro-union messages, they occasionally have other sorts of political messages. One in particular caught my eye that claimed that a handful of billionaires held more wealth than 50% of the world’s population.

My immediate reaction was that this was another instance where we should talk about raising up those who live in poverty instead of railing against the few who have wealth.

Jeff Jacoby tackles the same subject in today’s Boston Globe when he calls out Oxfam’s executive director got up at the ultra-exclusive World Economic Forum in Davos, Switzerland, to proclaim that the eight richest men in the world hold as much wealth as half the world’s population and that 1 in 10 people live on less than $2 per day.

Of course, as Jacoby points out, that doesn’t tell the whole story. Yes, it’s a tragedy that so many suffer on so little, but the glass is also half full: Three decades ago, the number was twice as large. Yes, we cut extreme poverty in the world by 50%.

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Ford’s Creepy Post-Sale Come-On

Talk about skeevy marketing attempts. We bought a used van from a Ford dealer back last May and it came with a limited 36 month/36,000 mile warranty that started from the day it was new in 2015, not when I bought it. The sales manager had tried to get me to bite on an extended warranty, but I know enough not fall for paying thousands of dollars in case I need a several hundred dollar repair.

This week, I got a letter from Ford, marked “Warranty Expiration Notice”. That’s odd, I thought, the warranty shouldn’t expire for another 1-1/2 years. Ah, but when I read it I saw it said: “Our records indicate that you drive more miles than the average driver” and then estimated my mileage at 26,000 miles. Now, keep in mind I have not returned my van to the dealership for any service since we bought it.

So how do they know how many miles we drive? They don’t! This is pure marketing deception. In fact, we don’t drive nearly as many miles as they think and there’s no way for them to know how many miles we drive.

Is it any wonder people hate the car buying process and dealing with car companies?

Amazon: from manufacturing to delivery?

Awhile ago, I asked a question on Quora.com about how much of an average residential UPS or Fedex truck was Amazon packages, but no one could give an authoritative answer, but I have long suspected that it’s at least half. But as Amazon sucks up more and more of the delivery services’ capacity, it’s beginning to make sense for them to take care of that job too in some places.

In a public interview at this year’s Code Conference put on by Recode, tech journalist Walt Mossberg asked Amazon founder and CEO Jeff Bezos about the growth of white Amazon vans in some metropolitan areas, and specifically about whether Amazon wants to replace existing delivery services.

“We will take all the capacity that the U.S. Postal Service can give us and that UPS can give us and we still need to supplement it,” Bezos explained.

Apparently, the Christmas 2013 disaster when so many Amazon packages were late was the real turning point.

Maybe I need to think about selling my UPS stock.

Chuck Schumer on the Excessive Burden of Taxes

N.Y. Sen. Chuck Schumer thinks federal taxes are an onerous burden on those who work hard and excel and thus should not be levied on them. Has the liberal Democrat taken a sudden conservative turn? Not exactly. Schumer is just pandering to fans of the Olympic Games.

“Our Olympian and Paralympic athletes should be worried about breaking world records, not breaking the bank, when they earn a medal,” said ‎Schumer. “Most countries subsidize their athletes; the very least we can do is make sure our athletes don’t get hit with a tax bill for winning. After a successful and hard fought victory, it’s just not right for the U.S. to welcome these athletes home with a tax on that victory.

Schumer is proposing that Olympians’ cash prizes should not be taxed. While it’s nice to see a liberal acknowledging the drag that excessive taxation causes on those who wish to excel, I wish he would see that the same principle applied to middle-class laborers and white-collar workers, and even to upper-class business owners who create jobs and capital.

DollarShaveClub.com Will End TV As We Know It

Ben Thompson looks at Unilever’s acquisition of DollarShaveClub.com for $1 billion and sees in it the seeds of destruction for massive consumer products companies like Proctor & Gamble. And because companies like Proctor & Gamble are the source of ad revenues that keep most television on the air….

Note that metric: cartridge share. According to the traditional way of measuring marketshare Dollar Shave Club only has 5% of the U.S.; the discrepancy is due to the massive price difference between Dollar Shave Club and Gillette. And yet, the price difference is the entire point: in a world with good enough products (Dollar Shave Club imports their blades from Korean manufacture Dorco) that can be bought on zero marginal cost websites and shipped to your home directly there is no reason to charge more.

The implications of this go far beyond P&G: fewer Gillette razors also mean less TV advertising and no margin to be made for retailers, who themselves are big advertisers; this is why I argued last month that the entire TV edifice is not only threatened by services like Netflix, but also the disruption of its advertisers, of which P&G is chief.

Beware of Counterfeits when shopping on Amazon

CNBC reports on the growing problem of Chinese counterfeiters gaming the system on Amazon. Just because it says “fulfilled by Amazon” doesn’t mean that it’s authentic.

Always a problem, the counterfeiting issue has exploded this year, sellers say, following Amazon’s effort to openly court Chinese manufacturers, weaving them intimately into the company’s expansive logistics operation. Merchants are perpetually unsure of who or what may kill their sales on any given day and how much time they’ll have to spend hunting down fakers.

Some of the signs of fakers include lots of reviews that say “I received this item at discount in exchange for an honest and unbiased review.” And just because an item is cheapest and/or is listed as the bestseller in the category, doesn’t make it the real deal. As always, caveat emptor.

If you want to weed out the sub-standard products, you will want to get familiar with Fakespot.com.

Is Amazon “redlining” minority neighborhoods in Boston?

Amazon.com

The Boston Globe notices that Amazon offers same-day delivery service throughout most of the Greater Boston area, except for the mainly black and Hispanic neighborhoods of Roxbury, and implies that the reason is racism, while saying it’s not racism. Same-day delivery is offered to Amazon Prime customers, who pay $99 per year for the program, on order of $35 or more. If you order early enough in the day and pay a little extra for certain, but not all, items, you can get it the same day.

Predictably, the politicians and community activists are quick to decry the unfairness of it all and to claim that all services should be available to everyone, regardless of where they live. But what the Globe and the activists don’t do is ask the most important question: How many Amazon Prime customers live in Roxbury?

Roxbury is the poorest neighborhood in Boston. What are the odds that there would enough Prime subscribers in that neighborhood to make same-day delivery, which is a very expensive premium service for Amazon, a good use of resources? It’s not Amazon’s duty to make people feel better by using money on them.1

As the CEO of Newbury Comics notes in the article, there are lots of retailers that don’t have stores in Roxbury. Is that unfair too?

Whose fault is it?

The Globe then expands the net to decry all the ways that life is unfair to residents of Roxbury. Trendy foodie delivery companies, with names like Caviar and Drizly, don’t deliver to Dorchester and Mattapan, two other neighborhoods with high populations of poor minority residents. Given the cost of the food they deliver are poor people likely to order from them?

People in these neighborhoods also pay more rent relative to their incomes. Well, yeah, because they’re poor. When you’re poor, then everything is relatively more expensive. They also face longer commutes to work. Again, duh.

I drive an hour in the morning and 1-1/2 hours in the evening on my commute. That’s the price I pay to live in a three-bedroom house in the suburbs that would sell for $250,000, rather than a three-bedroom condo near my office that would cost twice that, at a minimum. We all have to make such compromises.

I’m not saying, Let them eat cake. What I’m saying is that the poor would be better served by politicians and community activists who worked harder at fixing the root causes of poverty—“Why are these people poor”—instead of inculcating a sense of entitlement about services and opportunities they don’t have access to in their current situation.

But it’s a lost easier and personally rewarding for liberal pundits and pols and newspapers to get people angry at faceless corporations and the “rich” than at the failed and inept policies that keep them poor. Class warfare doesn’t serve the rich or the poor, but those who benefit from diverting attention elsewhere.

  1. I should say here in the interest of full disclosure that I am an Amazon Prime customer and also earn money from Amazon affiliate links. I also participate in the Amazon Vine program in which I receive products in exchange for reviews. But those facts have no bearing as this post isn’t so much about defending Amazon as much as it’s pointing out the flaw in the article’s logic. ↩︎

Why My Local Electric Company Won’t Install Solar Panels on My House

Two summers ago, a salesman came by the house to pitch installation of solar panels. It was one of those new companies that instead of selling you the panels, leases them to you. You pay a monthly fee that is supposed to be less than your electric bill. In return, they do all the work of installing and maintaining the panels and replacing them. They also make money selling the surplus electricity back to the electrical grid and by getting the tax rebates from the government.

It’s not a perfect system. For one thing, some companies don’t disclose all the costs. And some homeowners have been put in a difficult spot when they try to sell their homes because the new owner has to agree to take over the lease and has to qualify on credit. And, by law, they can’t install battery backups so when the sun isn’t shining, at night or during storms, you have to draw from the grid, which also removes another big bonus of solar that when the power lines are down you still have electricity.

But overall, it’s a step in the right direction for the “green revolution” and for renewable energy in America. So why aren’t the big electric utilities leasing solar panels and putting them on homes across American themselves? In fact, all of the major players are smallish companies, newcomers to home residential power.

Like many mature industries facing disruption from new upstarts, rather than using their vast resources to innovates, instead they hunker down and use external forces—legislation and lawsuits, for example—to maintain control. They’re using their clout with public utility commissions to create extra fees for solar power producers. They also play both sides against the middle, on the one hand pushing the passage of the aforementioned laws that prevent the use of battery backups and then claiming that by lowering their own rates while still relying on the grid at night, they are raising the costs for the poor and minorities.

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