Robot Cops Threaten Liberty & Safety

Our good friend Patrick Bedard of Car & Driver has a excellent piece on the governmental sneaky tax: Robo-Cop.

This just in: A red-light camera on Broadway Street in Knoxville, Tennessee, has suffered fatal gunshot wounds. Three bullets struck the device, destroying the lens and rendering it inop. Clifford E. Clark III, 47, holed up in a nearby minivan, was arrested and charged with felony vandalism.

Not to put words in Clark’s mouth, but what I think he was trying to say with his .30-06 Ruger was that he had withdrawn his consent to be governed by robots. You may remember that our founding fathers had a very clear idea of the source of government legitimacy. The Declaration of Independence says that “Governments are instituted among Men, deriving their just powers from the consent of the governed.” The political theory here is that there is no moral authority to use state power unless the people say there is.

One guy expressing disapproval of a red-light camera won’t curb government zeal for robot surveillance, but it’s a start…

Let’s be clear about the tyranny here. This is not about running red lights. Camera enforcement is a revenuing scheme that depends on an end run around the fundamental American principle of innocent until proven guilty. The glassy-eyed accuser is a robot, and it’s not subject to cross examination. Moreover, it’s a robot employed by a for-profit business that makes its profits from guilty verdicts. It makes nothing on innocent verdicts. Such an obvious conflict of interest should bring out all the rifles…

But there is growing frustration. Consider the case of Tim Alstrom of Aberdeen, Washington, as reported in He opened an envelope last summer to find a demand for payment of $101. Nearby Seattle had convicted him of running a red light at 3:21 a.m. on June 29, citing camera evidence as proof. He was at home asleep at the time, and the car in the photo wasn’t his, but never mind. It gets worse. Seattle, like most camera jurisdictions, will dismiss a camera ticket under one condition only: The car owner has to rat out the actual driver, who must pay the $101.

Students: Test your knowledge. Red-light cameras are about (a) the money, (b) the money, (c) THE MONEY…

As good as it might be for safety, lengthening the yellow is bad for (a), (b), and (c) above. San Diego saw a $2 million increase in revenues in the first year after trimming its “grace period” to 0.1 second versus 0.3 to 0.5 before. In Dallas, 7 of the 10 highest revenue-raising cameras have yellows shorter than the minimum recommendation of the Texas Department of Transportation.

When the choice comes down to safety versus the money, safety doesn’t stand a chance.

Democrats, Party of the Rich

The demographic reality is that, in America, the Democratic party is the new “party of the rich”. More and more Democrats represent areas with a high concentration of wealthy households. Using Internal Revenue Service data, the Heritage Foundation identified two categories of taxpayers- single filers with incomes of more than $100,000 and married filers with incomes of more than $200,000 – and combined them to discern where the wealthiest Americans live and who represents them.

Democrats now control the majority of the nation’s wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the 18 states where Democrats control both Senate seats.

This new political demography holds true in the House of Representatives, where the leadership of each party hails from different worlds. Nancy Pelosi, Democratic leader of the House of Representatives, represents one of America’s wealthiest regions. Her San Francisco district has more than 43,700 high-end households. Fewer than 7,000 households in the western Ohio district of House Republican leader John Boehner enjoy this level of affluence…

It should be noted that income and wealth are often confused.  Due to the fact that IRS income data is much easier to come by, but not a reflection of “wealth” or net worth. For instance, you could make $120,000 in southern California and be financially unable to purchase a home.  You could also have a net worth north $100 MILLION dollars, but show an IRS income of less than $100k. (Which is actually how we got saddled with the AMT).

Just a quick Fair Tax side note: focusing on and taxing income mainly hurts people trying to become rich; not the actual rich.

Democrats To Raise Income Tax Max To 44%

Disguised as a “fix” for the Alternative Minimum Tax, the Dems have proposed a 4% surcharge on anyone making over $150k ($200k for couples). This coupled with the decision to let the tax cuts that spurred our economy to new records expire (an easy way to raise taxes) means the top bracket for individuals will become 44% in the US. For comparison, the average for developed countries is 35.7%.

Now some of you may say that such wealthy people can afford to give us all their money. Unfortunately, small businesses owners and farmers, often pay taxes as individuals not as businesses (like corporations do). So if you’re out to screw the rich – remember that when the family loses their farm, or the small business down the street has slow customer service because they had to lay off some help to pay the new 9% of taxes.

And it’s actually even worse: the 4% increase is a surcharge not a rate hike. The difference? Surcharges are applied before tax deductions. Got a kid in college? Paying all that mortgage interest? Gave a large donation to Katrina relief? Doesn’t matter… 4% on it ALL.

So on top of punishing the successful, we’re now going to take away their incentive to give money to charity? Though, I guess if we just take even more of their money away it won’t matter if they give to charity ’cause the government can fill that void as well. Well at least until they rich take their money & income to another country to avoid the taxes. 50%, 70%, even 100% of nothing is way less that 35% of something.

Your Cash Is No Good Here

Apple is no longer accepting cash for iPhone purchases, as a way to try and prevent people from unlocking them for non-AT&T networks. Apparently Steve missed the place where it says “Legal tender for all debts, public and private” right there on your money.

Well, I’m sure someone else will notice this and sue Apple appropriately.

UPDATE: Apple is also not accepting gift cards for iphones as that could have been purchased with cash.  Yeah its getting a little crazy in here.

Bonds, Baseball & The Tax Code

So the tax implications of Barry Bonds’ 756th home run ball has been discussed by several “experts” and all have failed to see the obvious: this is utterly ridiculous. I can’t think of something more American than eating a hot dog, drinking a beer and catching a home run ball while enjoying America’s past time: baseball.

And I can’t think of a better example of how deranged our tax code has become that we have made it economically infeasible to keep said memento. Seriously, you go to a game, you catch a ball, you suddenly owe the government $250,000+!!! Why is no one else objecting to the seer lunacy of this? “I feel like I’m taking crazy pills!” (Mugatu)

If poor Matt Murphy had decided not to sell his souvenir he would still owe 35% of whatever the IRS guess-ti mated it’s worth. The fair market value of a one of a kind ball (until the record is again broken) mixed with the taint of an asterisk? We’re talking a range of hundreds of thousands of dollars here. So who picks the worth?

Now I’ve heard several people argue that the ball’s value IS that so high because a few people would be willing to pay an exorbitant amount for it. But lets take that logic and apply it else where – like Real Estate. The South, lately, has been getting an influx of people retiring from the North East. These people are paying 2 to 3 times the normal rate per sq ft for homes marketed to them because they’re idiots their cost of living comparison is such that those homes still seem cheap to them. Does the fact that some people are paying 3 as much for a house down the street from mine triple the value of my house? Did clever distance marketing just triple my property taxes?

Or take the plot from Indecent Proposal, a rich man offers $10 million for your wife… you refuse. Does the IRS come calling for the capital gains? Can you use the fact that she’s worth $10M in the divorce settlement when you’re splitting up the assets? I know, I can already here the well trained husbands now “but my wife is priceless”. Ok, can you claim a tax deduction then since she fell in value from “priceless” to $10M?

These examples may seem extreme, but no more so than the original $200k tax liability falling from the sky. Now let’s look at a better tax system: The Fair Tax. Since the Fair Tax is a retail (new) sales tax system, sanity would prevail and guesswork would disappear.

When Matt Murphy catches the ball under the fair tax nothing happens. If he keeps the ball – no tax liability. If he sells the ball – no tax liability. (This is a used ball therefore the tax already was paid by the Giants when they purchased the new ball) “But wait!” you say, “That’s unfair! We need to tax the rich/lucky/people other than me.” If and when Matt Murphy sells the ball (or when his grand kids sell the family heirloom) they would receive money ($700k or whatever). That money would then be used (or why sell the ball?) in one of two ways: 1) Stuff is purchased and the fair sales tax is paid (no guess-timating here). 2) The money is saved/invested. No tax is paid here again, but the money is put back into the economy through investing (saved money is invested by banks) which means the businesses spend the money (which is often taxed) and eventually all business money finds its way to individuals bank accounts (be them employees, executives, or stock holders). That money is then spent and taxed but only AFTER it has helped the economy get a little stronger. So with the Fair Tax you get less hassle and guess work, and either A) the same tax revenue (if the money is spent) or B) a stronger economy and more tax revenue (if invested).

While this is all well and good, what should Matt Murphy do in the here and now. First of all he needs to fire his tax lawyer and get a good one. A creative tax attorney would see that the value of the ball increased dramatically only once it was a home run (not when it was hit). We have seen several instances where a fan can create a home run or stop an crucial out. The opposite is also true, a fan could bobble the ball back onto the field negating a home run and possibly causing an out. Because of this, the fan’s action on the ball effects the out come of the home run – ergo, the ball does not become a home run ball until AFTER it is in his possession. Which means when Matt obtained the ball it was only worth the same as any other Bond’s hit ball ($10? $50?), therefore his income would be $50 and from this basis he’ll have to pay capital gains taxes when he sells it.

So with good advice he could keep the ball essentially tax free. And when he sells it pay the lower capital tax rate (assuming he holds it for two years). The Long term capital gains rate is typically 15% but I believe collectibles are an exception that can be somewhat higher – but even the highest exception rate of 28% is lower than 35%. Worst case this advice would save him $52k of the $263,713 he is paying now; best case would save him $150k. Would you pay a better tax attorney ten grand to save $52k+? I would.