Wednesday, April 26, 2017

work ethic is a code word for slavery

Universal Basic Income (UBI) has the same rationale as Universal Health Care.  Provide the means to survive without a work requirement.  The recent legislation attempt in the US to replace the flawed ACA (Obamacare) health plan with an even more flawed and (lower quality) health plan that would push 24M Americans out of coverage, and failed to pass only because the so-called freedom caucus (a wing of Republican party) found the bill insufficiently oppressive. They used the language of "work ethic promotion" as code for "insufficiently oppressive".  Some Democrats share the Republican's deep hatred for the American people by not supporting the alternate "Medicare for all" bill.  Nanci Pelosi's voiced concern is that it would mean higher taxes.

Structural oppression to maintain the people's work ethic is fundamentally equivalent to supporting slavery.  Its a transformation of the unacceptable physical chains and abuse of slavery, with less visible, structural chains that force us to seek kind masters to alleviate our food and shelter (and healthcare in US) insecurity.  High abundance dictates that we should make the world/society more welcoming (easier) rather than harsher.

Work is awesome!!!!
It provides fame, fortune, a positive source of self identity, a feeling of helpfulness, pride of creation and responsibility, and the means to form a family, and/or buy boats, hookers and intoxicants.

The benefit of work sells itself.  For necessarily evil reasons, however, leaders and politicians wish to structure a harsh world such that those benefits need to be supplemented with harsh consequences for failing to do or find work.  Conventional thinking is that the labour market must be unfairly coercive towards labour suppliers and create a bias towards employers.

Slavery and oppression are awesome!
Most people support slavery.  Its not a rational support, but it is rooted in philosophical belief in the work ethic.  Still a significant number of powerful people do directly benefit from oppression.   If you want to buy a house, you will get a better price from a seller financially overburdened from owning another  house, or desperate to pay for a medical procedure.  Buy products manufactured in low cost third world areas because they are cheaper.  Forcibly manufacture desperation in your own society so that you can oppress your fellow citizens into conditions competitive with the third world, or to consider the military a sensible career choice.

Its only this last (very small numbered, but powerful) group has a rational interest in opposing UBI.  For the rest, their position in the harsh hierarchical order is probably a zombification they prefer over unknown freedom..

Yet the necessity and desirability of having others to exploit decreases every day as machines grow more capable of following direction without question or relative expense.  Remote control of (military) murder weapons only needs to pay the operator enough to overcome the moral deficit of the actions without needing to convince them that the actions are more important than their fears.

The family farm - origins of the work ethic
Families are communes.  The wealth is shared within it.  But a family is also a hierarchy.  Parents teach their children a work ethic in order for them to help around the house/farm, respect for their creators, and aid them in their old age.  Developed nation birth rates declined in large part because of socialized eldercare.  There's less of a need for children to help.  The birth rate decline started with industrialization.

The freeloader problem exists (only) within communes.  A fixed amount of work is required to sustain the household, farm or commune.  All work that I avoid, you have to do.  Both of us are unpaid to do the communal work.  So work ethic is important to the household/commune to ensure a fair share of duties.

Outside of the commune, freeloaders are an opportunity (not problem) for you
If no one else in the world wanted to grow wheat, I would like to  grow it all because I love bread so much.  If no one else in the world wanted to bake bread, I would do it all because I love boats, hookers and intoxicants so much.    Extremely high wealth potential exists for any activity that other people are too lazy to do.

Outside of your commune/family, your work is paid for.  A small portion of your profits being used to pay for freeloaders (through taxes) enhances your wealth compared to an exterminist policy.  If 50 out of 100 social members are productive, and share the burden of socialized support for the population, then on average each productive person supports the subsistence of 1 other.

It does not take twice as much work for me to produce wheat for 100 vs 50 people.At the cost of just 2% of my production, I get to double my sales, and more than double my profits.  Other productive people and businesses support most of the "hippies".  The hippies can also provide me with hookers and intoxicants and entertainment.

"Teaching" work ethic to the hippies is counterproductive for me
If I am the only one growing wheat for a 100 people market, I sure as hell don't want to force anyone else into competing with me.  Even if I were lucky, and teaching/forcing  a work ethic upon the masses drove the hippies into bread baking or boat building, there is the much more important consideration that UBI supports them in the most (cost) efficient way possible.

Hateful work indoctrination programs such as conditional welfare, police and prisons to deal with hippie non-compliance (including survival motivated theft) means an even more expensive solution involving employing/forcing unproductive people to inflict unnecessary conflict and hate on the hippies. The conflict itself distracts from hippie productive pursuits.

Financial destressing/security helps the productive classes too
The most important obvious benefit of UBI, or anti-poverty programs in general, for the productive is that the poor spend it all, and so tax money flows right back up to taxpayers.  The less obvious, but even more important benefit of UBI specifically for the rich productive is that, UBI is a safety net for everyone.  Not just the poor.  This means that the only reason to have savings is having more wealth than you know how to spend. (An alternative reason to have savings today is an emergency/rainy day fund, or planning an early retirement, or funding children's early adulthood education or support )

Lower income variability, and assured future income subsidies means a lower need for emergency savings, and setting aside for children's adulthood (they will be able to pay for their own education through UBI), among productive people.  This necessarily means, more spending, and so more income for society as a whole as more work is needed to collect all of that spending.  Since income always flows up to those with more wealth than they know how to spend, this is a benefit to people at all income levels.

It is this point that UBI is an improvement to life for people at all income levels, and with all possible attitudes towards work, that leaves as the only rational opposition to UBI as the manufacturing of misery and desperation  for exploitation.

The right may have more evil motives for expolitation:  military service, slums, sweat shops, motivated servitude in pursuit of unethical behaviour, intentional destabilization of regions to promote violence and racial tensions.  But the left can also wish for exploitation to persist as it justifies hierarchical empires to combat it:  Union dues, government charitable services, unnecessary work.

Controlling the work ethic of others is a root of this irrationality
The need and acceptance of controlling others is a root of this root, but the thinking around coercing work ethic is clouded by misunderstanding society as part of the same family farm.  Other people's laziness (outside of our commune) is the source of our profits.  Oppression causes savings and hoarding (and therefore not trading for your profit) in defense against that oppression, and violence, fraud, and other costly antagonism in reaction to that oppression.

Coercing work ethic is necessary in forcing tax cuts for successful companies and people (where success is portrayed as work ethic).  It helps convince the public that the rich deserve to rape society, if other workers share a bit of the traits that are glorified.

Proof that UBI and higher taxes leads to more wealth and income for the rich
An empirical point is that the GINI coeficient (measures wealth inequality) for Denmark is (slightly) higher than that of the US.   Denmark is recognized as having a generous social safety net.  Logically this is explained by most people not needing to save in Denmark, and so savers are typically those with more wealth than they know how to spend.

In a simplified economy designed to approximate the US economy, with $10T consumer spending, 200M non-senior adults can be provided UBI of $16k/year, at an average tax cut of $4000 ($800B in  program cuts).  Couples with household income of $160k could break even taxwise, with those earning less getting a net tax cut, and those earning more a net tax increase. 

$2.4T in redistribution is accomplished (16k * 200M less 800B program cuts)  All of which is taken from savers and given to those with high propensity to spend.  Furthermore, households near the  $160k income threshold would typically save for kids college education and early retirement opportunities.  Both of these needs are significantly alleviated by UBI:  Kids will be able to fund their own education, and UBI income supplements significantly reduce the savings requirements for any sustainable income level.  So existing savings by those earning under $160k will be drawn down, and the increase in consumer spending will likely be greater than $2.4T.

$2.4T in increased consumer spending on a $10T base, is 24% growth.  Since all income flows up to rich savers, this will mean a greater than 24% increase in the incomes of the highest earners, and a much higher benefit than any tax increases they face.

More wealth for the rich should not be understood as negative under UBI.  They get rich by providing more value to lower income groups which have an easier opportunity to acquire that value.  Even though lower income groups will have less reason to save, they may still choose to do so in order to climb up the wealth ladder.  Poverty and lack of opportunity are real problems.  Wealth inequality is not a real problem.

Getting Business leaders advice on the economy is like getting polution and climate advice from coal miners

Business leaders have no goal for employment, research or investment.  All of which are necessary for economic health and growth.  Business leaders want to hire slaves, want to cheat customers without repercussion, pollute freely, have innovation subsidized, and bailed out by government when they fail.  They don't want money in order to do economically productive activities, they do econoomically productive activities because they want money. 

Business tax cuts directly reduce employment and other investment because lower tax rates means less of a tax refund for those activities.  Any filth that tells you differently, is lying, trying to steal from you, and trying to destroy your country.

If destroying the economic health of a society can be done while milking it dry for a greater share of the milk for business leaders, along with the opportunity to acquire the rubble at bargain prices, with a good share of the bailout subsidies meant to redress the destruction, then that path to destroying the country is the advice business leaders will provide media and political leaders, and the latter can often value the friendship of business leaders more than their constituents economic health.

Free and fair labour markets

UBI relies on the market principle that work will get accepted at a sufficiently high offer.  I recognize that slavery, and oppressive conditions approaching slavery, can motivate more work more cost effectively than fair markets can.

But the only change to labour markets that UBI causes is higher wage offers and better work conditions needed to be made to compete with the leisure or entrepreneurial options available to the worker with UBI.  Businesses are not at a competitive disadvantage with each other, and can just raise prices to pay for the higher costs.

There's also the potential for lower wages under UBI.  Labour regulations become less necessary.  If there are 1M applicants per job opening, but the applicant's needs are for beer money (because food and housing is covered by UBI), then some applicants may be happy with a wage offer that is for beer money.

UBI promises a happy society with high wealth inequality
Under UBI, the rich get richer by manufacturing the abundance for a very broad consumer base.  The poor happily trade their UBI money for those goods, secure in knowing more will come next month.  The alternative gets ugly:  culling people to save on taxes, similar to recent republican healthcare bill compromise to deny insurance coverage on the basis of pre-existing conditions, exterminating them, so premiums can be reduced for the healthy.

Exterminism is the logical alternative to UBI

Automation in just transportation, retail, and food service will mean massive social disemployment.  Meanwhile, all of those industries need significant numbers of consumers with disposible income to survive and thrive.  The exterminism option is also the choice that ensures economic collapse.

The appeal of exterminism is that once "we" don't need people for military and police (especially), then exterminating anyone that might require social support saves the cost of that social support.  The seeds for this are already firmly planted.  First you come for the muslims and mexicans, and the nazis will cheer for it, for they are neither muslim nor mexican, but are too stupid to understand that genocide does not create jobs.  It creates empty housing and abandoned cars, and excess food capacity, then just scavenging for those goods. The weapons used to exterminate the early waves of undesirables can easily be turned onto expanded groups made desperately criminal by the spiraling collapse.

But before you start the explicit extermination on racial/ethnic grounds, you should destroy the social safety nets such as healthcare access and welfare.   Manufacture crime increases to strenghten police and prison resources, and show society how undeserving the criminally desperate are of social support.  An invisible sheppard's hand can manufacture hate and violence among the sheeple and the goats.  Short sighted cost savings are often mistakenly chosen despite the obvious economic benefits of population sustanence.

Greater than 50% chance that exterminism wins
US Republicans favour exterminism.  Climate destruction and war is one path to exterminism they favour.  But, even if we escape that fate, robocops can be as little as 10 years away.  Corrupt electoral and governance processes may make democratic opposition to exterminism irrelevant.

Even if there is a clear path towards great economic shared prosperity, there may be too many idiots who will follow those who see profit from actions directly leading to collapse.  For example, coal is a dead techology.  There should never be another dirty coal electric plant built even on profitability grounds.  But if someone can make a dollar keeping a coal plant from shutting down for 5 years, regardless of the destruction caused, he'll use that power to make a dollar.

Is a world based on slavery necessary?
There is obvious appeal to business leaders for creating and maintaining a desperate subclass for which work ethic is "whipped" up, and structurally shaping a labour market composed of desperate sellers forced to aggressively outcompete each other, and powerful buyers able to dictate oppressive terms

For UBI not to cause production collapse, the labour market would still need to function when people may refuse to work.  Employers offering better wages and work conditions is not a world collapsing situation.  Fairly power balanced labour markets exist in professional sports, entertainment, and have existed in stem fields and mid 20th century high demand conditions which gave rise to unionized manufacturing labour.  In the case of stem fields and manufacturing, industry was thriving when wages were higher.  Entertainment and sports are still thriving now.

Quite obviously, balanced markets work themselves out just as easily as coercive markets.  So there should not be a panic or opposition over allowing fair labour markets.

Automation makes slavery no longer necessary.
Forcing other people's work ethic only benefits the slavers, and threatens you with culling/extermination, not to mention increases the competition you face for work.

RoboCops, RoboSoldiers, RoboDrivers, RoboMiners, RoboBuilders, RoboFoodservice all promise to eliminate the need for slaves.  Unless immediate consciousness that renounces work ethic politics and the false notion that exterminating/deporting groups of people can ever create more work for the slavers' favourites, then your eventual extermination is threatened too.  When only white republicans remain, poor white republicans will be put up for extermination.

Liberating people from slavery (and letting them survive and thrive) with UBI, lets 9B people contribute to the improving abundance in the world.  Art, design, software, science are more useful and profitable and affordable the more people they benefit.  A robot is very useful in providing food for 1M people.  For 4 people, research into improved automation is not worthwhile.

Even if it should be obvious that more people helps all of us be richer, the stupid believe what they do despite reason.  Power rather than wealth can motivate slavery, and then when slavery is no longer useful, extermination rather than pursuing the market opportunities that UBI fed people would deliver for you.

Laziness, Greed, and Fear
  1.  Everyone is lazy.  Even the poor opt to pay for pipes to deliver water and energy (automation) rather than going out every day to collect it from nature.  (property rights/regulation may prevent that option in some places).  UBI gives everyone the means to pay for their laziness.
  2. Everyone is greedy.  No one would respond to a $5M offer for their house or their labour with an argument with the bidder for it being too high of an offer.  Where greed is destructive, is the use of coercive power to further accumulations.  Greed ensures, under UBI, that people will volunteer to permit other's laziness in exchange for their money.
  3. The overwhelming political majority can be made afraid of false phantoms as a result of the combination of relative stupidity and information imbalance relative to the wizards.  Jealousy, hatred, and envy are also easily manipulated negative emotions.  Where UBI equalizes opportunity, society can be much more harmonious, and individuals can look to themselves to improve their lives as they see best.  The significant difficulty facing the world is that political structure rewards manipulation with an objective of obtaining power to abuse power.  It is greedy to lie and distribute the spoils of victory to favorites, but why engage in difficult struggle if not to abuse the power of victory?  UBI as a social dividend is fundamentally incorruptible, and its appeal is based on avoiding the abuses of traditional political liars.
 The commonality of these 3 attributes is that none of them will ever be changed, but with automation and abundance, individual laziness becomes a positive for the rest of society as it improves "much needed" work opportunities.  Phantom manipulations of fear and hatred must be exposed because tax cuts for the rich and accelerated climate destruction is the straight line path to extermination.

Why mainstream political ideas are worthless compared to UBI
  •  Minimum wage:  accelerates drive to automation.  Eliminating jobs and leaving many more desperate to compete with others, driving them to unethical service or behaviour.
  • Job guarantees:  Force people to do useless work, based on work ethic retardation.  This leaves people too tired to develop themselves and/or produce something useful.
  • Infrastructure and government expansion:  Like the job guarantee, job-creation is the worst possible justification for programs or projects.  All programs/projects should be proposed solely on inherent value.  No one actually wants a job.  They want the wage.  UBI provides the job creation benefits while freeing up the time to do something useful or interesting.
  • Institutionalized retraining programs:  While there is a role for institutionalized education, large scale bureaucratic determination of your institutional attendance is far less productive than UBI.  UBI should be enough to get a computer, internet, 3d printer (or other tool), and pursue independent study of your choice that may be more relevant and interesting to you and your goals.  UBI should also be enough to enroll in structured education programs, without an institutional hand compelling you into them.  A bureaucratic/institutional bias towards education makes education more expensive and less beneficial to the institutionalized.
  • appeals to inequality:  Raising income taxes is needed and effective.  UBI doesn't reduce income inequality even if it eliminates poverty.  The latter should be the goal.  Shaming people into paying you more won't work.  Violence towards the rich will get you exterminated.
  • Politically established channels for labour empowerment:  Labour needs to have power to take power.  UBI gives them that power in that it is the privilege to refuse work, making it easier for those that want work to compete.  But a fight to help unionization is a fight against more powerful forces, and a fight consumers side against.  UBI is an individual's empowerment to collectivize or not collectivize in a way that does not impose the choice on the losers.
  • Minincome:  The sabotaged Ontario pilot that is designed to fail pays 0 net BI to those making over $34k, and includes clawback/deduction rates as high as 93% on some lower income brackets.  Minincome forces the poor to pay for all of the costs of BI.  High clawback rates force people to either work for nothing, or not work.  Extremely counterproductive.  The Ontario pilot further reduces the BI amount for couples, disempowering people from forming civil partnerships.  Minincome has important "cheating" problems as well.  Only corrupt vermin attempting to promote other failures in this list as an alternative to UBI design such brainlessly destructive policies to vilify the poor for not having the work ethic to take jobs with 0 takehome pay.
  • Higher Daycare subsidies: Meant to push people (women) into work, its not necessary under UBI.  The UBI is the daycare fund, and you only need daycare if you are earning income.  Though it generates tax revenue to force people into work and further daycare workers
  • Social housing and poverty programs:  has historically been a racist policy of ghetoization and poverty traps, that provide race bait resentment, that races other than their own are getting free stuff, despite the ghettoization, impoverishment and criminalization of those races.  UBI empowers people to live where they wish, and racist supremacists should see no objection, since no race gets more, and they are already convinced that their race will naturally thrive more than the others.
  • Higher conditional (need-based) programs: This is the fundamental problem with work ethic.  They are conditional based on the pressure to stop needing aid, but it is simultaneously a poverty trap in that work involves loss of benefits.  We don't need to force a work ethic on people because natural greed will ensure that, under UBI, people will work to take others' money.
  • Labour protections from robots:  automation is awesome when it saves you from doing needless extra work.  That makes it awesome for society and businesses so that they not force you to do useless work, useless by definition, if an automated process does it more efficiently.  Taxing business profits regardless of their level of automation captures the social value of automation, and those profits should be used to fund UBI thereby compensating all of those searching for useful endeavours.  Protection from robots is a dead end policy in that international competitors will not force their population to do useless work, but will be able to sell useful goods at better value than what the wasteful slavery produces domestically.
Every idea other than UBI is terrible
UBI maximizes social prosperity and liberty,  empowers workers, lets everyone set the exact work-life balance they wish, reduces everyone's stress and their impacts on health and crime, and eliminates poverty.  Only petty and evil power strugles to fight for a better outcome for their narrow slice of society would get in the way of this.

The work ethic counterproductive delusion is the widespread complicity to the power struggle agendas that are likely to lead towards mass extermination, unless the delusion is broken.  Telling other people how awesome work is, just makes them compete with you instead of hiring you to do the awesome work.

Wednesday, February 1, 2017

Border adjustment tax and natural (cashflow) taxation

Republican House of Representatives are proposing the key element of a tax policy I've developed on this blog, and also framing it under the same philosophy of cashflow taxation principles.  This proposal should be supported by progressives, humanists, economists, and international trading partners, even if it is flawed for failing to fully adopt natural taxation principles.

Reasons to support
  • Border adjustments or cashflow taxation allows any jurisdiction in the world to unilaterally set their tax rates treating domestic and foreign production equally.
  • Higher tax rates subsidize production/investment and exports more than lower tax rates, thereby funding Universal basic income or refundable tax credits, and increasing jurisdictional competitiveness.
  • The alternative to cashflow taxation or border adjustments, to meet pissface's policy promises, would be tariffs.  These are supplementary taxes paid by consumers instead of tax reform.
  • Reciprocal policies by global jurisdictions will mean minimal disruption, if it is through tax reform rather than supplementary tarriffs.
  • It permits greater jurisdictional autonomy within economic and state unions.
  • It eliminates the roots of all tax avoidance strategies.
  • Retailer/importer/consumer punishment scaremongering is false.  Because other countries will copy the system in some fashion, importers /consumers will face similar pricing as foreign tax system subsidizes their exports.  US Retailer lobbying is entirely related to keeping their advantage for cross border shoppers who face a VAT/GST at home.
Border adjustment taxation is the gateway to the most progressive human development since the magna carta.  It would be a greater progressive achievement than the abolition of slavery or the advent of  representative democracy because it empowers regions to unilaterally determine the balance they wish to establish between production output, consumer favouritism, and social programs, by the simple adjustment of a single business income tax rate.  It will forever shut down the lie that lower business income taxes can ever motivate investment and production.

The regional control this empowers, directly empowers its human population to influence local policy to suit its economic interests in a way that democratic systems have never been able to achieve, and similarly, how the abolition of slavery was simply a minor shift away from oppressive hierarchical structures.  Corrupt states and regions will feel forced to match policies of humanist policy regions.
Natural/cashflow taxation
The best paper on the subject is I think easy to read and thorough, but still summarized as:

  • Business tax rate based on jurisdictional cashflow.  All spending and receipts is taxable to the receiver and refundable to the payer in the jurisdiction it (where the payer is) occurs.  Investment inflows (such as loans or share purchases) are taxable to the business receiving funds, and investment repayments such as dividends are tax deductible to the business paying them.
  • A flat personal rate equal to 0% to 10% higher than the Business tax  rate applies to personal income.  Progressive taxation is achieved through a flat universal refundable tax credit (UBI) which creates negative taxes payable for low and middle income individuals.
  • A personal investment surtax 0% to 10% above the personal income tax rate applies to investment profits.  This includes interest and dividends received, and may apply to rental profits.
Border adjustment tax differences
A decent overview of the republican proposal though with the usual media negativity slant on it. The proposal:
  • immediate tax deductibility of capital investments is a partial though principal move towards cashflow taxation.  The partiality causes incoherent elements in the plan such as not allowing interest payment deductibility.
  • Retaining payroll taxes is an unhealthy and unfair penalty on employment vs. other income.  It unnecessarily discourages employment from both the employer and employee sides. 
  • Its wrong to seek additional social revenue by forbidding interest deductibility as this uselessly depresses demand for capital.  The investment profits surtax is an appropriate means of enhancing social revenue because capital can always voluntarily choose to be kept under a mattress to both avoid investment profits and their tax consequences.
  • The export "tax freeness" and  import "non-deductibility" is not as disruptive as feared.  Reciprocity of some sort by other nations, preferably through pure natural/cashflow taxation is going to mean that US exports are taxed overseas, and there is likely to be some reciprocal subsidy of exports that limits significant change in consumer prices.
  • Violation of WTO rules is unimportant.  The WTO system sanctions the corrupt transfer pricing model, offshore sheltering, and tax inversion system.  The US violating the WTO, gives the remedy of everyone else abandoning it for a fair system.  Natural taxation does not violate the main WTO principle that domestic and foreign companies be treated equally.

The rest of this paper is going to detail why full cashflow taxation is better than border adjustments or tariffs.

BPI: 3 tax rates
(B)usiness, (P)ersonal, and (I)nvestment flat tax rates are used.   Each is greater or equal than the last.

Business tax policy has always been that of near 0 collections
Since businesses all end in eventual bankrupty, lifetime tax credits equal lifetime taxes paid less dividends paid which are often undertaxed at the individual level.  The tax code is complex only to allow difficulty in converting tax credits into cash refunds for businesses, but the complexity generates minimal social revenue.

Under natural taxation, business income tax revenue is 0 regardless of the tax rate
Since all business outlays are a tax refund to the spender, and an equal tax obligation to the receiver, net social revenue from business income taxes are 0.  Social revenue comes from:

  1. Private sector Salaries and wages generate P-B
  2. Government salaries and wages generate P
  3. Government and consumer purchases from  business generate B
  4. Personal Investment profits generate I
A 0% or low business tax rate is a bad idea
Even if it were to provide extreme reporting simplicity, and the same social revenue (assuming end user purchases taxed with a sales tax to cover point 3 above) as a higher business income, having both sides of a business transaction  account for tax effects has important motivational factors:

  1.  Higher tax rates encourage spending and investment (to avoid paying taxes) and significantly reduces the risk of business spending and investment (because of the certain tax rebate no matter the investment outcome) compared to lower tax rates.
  2. An incentive to repay shareholders since that provides a tax reduction.  It would not at 0 tax rates.  The incentive generates social revenue at rate I.
  3. A 0% business tax would raise 0 revenue from consumer purchases
  4.  Less disruption to price levels,  Somewhat minor, but a 0 rate would be slightly deflationary rewarding the wealthy/prior savers on purchases.  Though the business tax on consumer purchases may appear similar to a sales tax, the net price is the same as would be under current income taxes.  The cost base of goods can be modeled as being after input cost tax rebates, and so the after tax break even prices are the same under all models and tax rates.
  5. Having input credits and sales taxes allows for timing adjustments.  For instance the tax bill and deduction for investments could be applied over 2 years under the assumption that not all of it will be spent right away.  Limits on the percentage of personal (non investment return) income that is available to be deducted in any one year might apply.

Job creation policies require high business taxes
Lower taxes can motivate you to invest more of your time, but higher taxes motivate the investment of your capital/money for the simple reason that the investment provides a certain tax reduction.  This exists under existing income tax system for the most part, but exists perfectly, and is clearly obvious, under natural taxation.

In the case of time investment, the only rational consideration is the after tax expected income of a venture.  Lower tax rates reduce the incentive to hire you at all, and so there can be downward pressure on the wage offered you.  Higher tax rates reduce the importance of the wage, and the time/labour supplier can adjust their demands upwards to meet their after tax needs.

Why are pervasive lies in favour of  lower taxes perpetuated to be an economic/social benefit ?
Large successful businesses operate a profitable formula where nearly all investments are sure things that will lead to higher profits.  Tax rates don't affect whether McDonalds will open a new store.  The science of demographics and past experience, lets them confidently pursue new locations.

Large successful companies have a profit momentum from investment made 2 to 50 years ago.  Lower tax rates provide them with the opportunity to harvest profits instead of innovating and growing.  Lower tax rates also discourage upstart competitors from the risky investments that might challenge their dominance.

Companies have zero concern for general economic growth and sustainability, but politicians and demons whore themselves out to advocate for their selfishness.

Another important benefit of natural taxation is that companies obtain the natural tax avoidance process of repaying investors for a tax reduction instead of tieing up money offshore or through other avoidance schemes.  Business profits are taxed in investor hands.

Higher tax rates on a border tax system or natural taxation encourage domestic production
If it costs $100 (pretax) to make a phone in California and Alabama, and California has a 50% business tax rate, while Alabama's is 20% then:

  • After tax cost to make in California is $50.  In Alabama it is $80.
  • If the company wants to make $10 after tax on each phone, then it sells it for $60+tax from California, or $90+tax from Alabama.  
  • The California phone would sell for $120 in California or $75 in Alabama.
  • The Alabama phone would sell for $180 in California or $112.50 in Alabama.
Every company's production is advantaged by being located in the higher tax state.  There is no basis for trade disputes as each nation or state can just raise their tax rates to be more competitive.

Reasons to lower tax rates
To invite retail tourism (or discourage foreign state tourism) is a main one.  In above example people would visit Alabama to purchase their phone.  If no one would hire your population no matter how high the tax rates/incentives, then lower tax rates would lower cost of living.

The other reason to favour low taxes is to create misery and desperation so that it can be exploited for competitiveness.  Often with an export context, but also to subsidize conflict: police, prisons, and military career choice.  If Alabamans can be oppressed sufficiently to drive down the production cost (pretax) of the phone to $62.50, then it can be sold for the same price and profit in the Alabama and California markets as the California phone.

What to do with all of the tax revenue
The only valid criticism of income taxes is what they are used for.  An authoritarian deciding what's good for you.  Basic income and social dividends is the best governance organization because it allows market solutions for everything, without poverty, and including a fair labour market where participants are not coerced by starvation or healthcare into submitting to the first offer made.

Crude border tax system is close enough
It is better to replace the entire tax system than the limited border tax system which still maintains avoidance opportunities.  But border tax adjustments achieve the main benefits.  The white house's warming to this idea has focused on accusing Germany of leveraging its VAT system.  This is better than VAT as it is not separate from the income tax system.  Both have the advantage of unilateral settings, and total self reliance and responsibility for the economic results.

Payment processors as tax collectors
International/online retailing is already prominent and rapidly growing.  International adoption of this tax system will let online retailers price tax free, and payment processors including bitcoin options will simply add the tax based on the shipping address.

Natural tax allows tax rates customized to postal code
A 1 person UN department can maintain the system of tax rate updates.  Postal code individualization may be too narrow, but there is no technical or even political reason not to allow it.  Where narrowly customized tax policy makes sense is as part of a tributary tax system where sub regions contribute to larger associations

California Secession alternatives
Pissface is threatening the withholding of federal funds to California unless they form immigrant lynch mobs, and to prevent its rights to create regulation in addition to federal ones, specifically targeting its vehicle emission standards which would force Californians to burn more Oklahoma oil and cover the state in smog.

Secession is a human right.  It must be an option to participate in a democratic union, because if it is not, then there is a complete absence of democratic voice by the enslaved possessed colony.  Marriage without the option of divorce is slavery.  The United States, when formed, created the appearance of a voluntary union.

Secession does not need to be isolationist.  If in fact it is used in order to re-form a new voluntary union, then an alternative is to reform the existing union.  Polarized politics in a powerful empire with slave possessions creates a risk of fascism, but always unnecessary unhappiness.  Certainly, distinct red and blue Americas should be an alternative to forcing tolerance of opposing views.

A constitutional convention could explore a wide variety of issues that many states are open to:
  • State rights:  gun rights and abortion laws are polarising national political issues.  It is a small price to pay to let Kansas make the wrong choices in exercising their freedom if you are also allowed to exercise your own.
  • Interstate commerce and federal highway program:  is a source of unnecessary leverage over state rights (state funding is often threatened over it).  The highway system is already built.  Transferring ownership of the highways to the states, and letting them fund them.  New interstate infrastructure can be sponsored/negotiated by the affected states.
  • Tributary and border/natural tax system: A concession to poorer red states is to codify that richer states will contribute more taxes to the common union.  Ideally union contributions are spent almost entirely as a social dividend, but no matter how the federal/union surplus is spent, richer states would be contributing to union harmony where others success contributes to one's own success, though the only way for the stupid to grasp the obviousness, is through cash dividend entitlements.  Using tributary funds as a social dividend also puts upward pressure on oppressed state's wages, which simultaneously maintains rich state competitiveness and popular support/harmony for the union.
  • dissolution of the union:  The main appeal to most states would be to eliminate federal debt. obligations.  But this doesn't have to be the objective of the convention.  Rather, it can focus all stakeholders on the concerns states may have with the union.
 Even if the goal is secession or dissolution of the union, a constitutional convention where discontent states offer nazi republican states permanent freedom and subsidized support as part of decentralization initiatives is the right opening move, is constructive, and may produce tangilbe solutions that pacify secessionists, but also address the discontent that sympathises with secessionist motivation, but fears unknown change.

A constructive and concessional constitutional convention process pacifies any strong reaction against secession or federal tax non compliance, and is a path to compromise.

All immigration is economically constructive, and unless ALL of the immigrants admitted directly compete for your job, increase your employment prospects.   More people means more construction, teachers, medical, retail, and food production.  More of those jobs leads to auto and yacht production, as wealth trickles up the capitalist hierarchy.  Not all of these new jobs will go to immigrants.

That some states or societies wish to restrict immigration enriches the states and societies that won't.  There is no need to argue economics against hate if the enlightened and hateful can both get the outcomes they want.  The EU's surprising economic growth for 2015 and 2016 can be attributed to its large refugee influx.

European Union
Right wing stupidity threatens the union somewhat.  Natural taxation's international competitiveness focused based on higher taxation rather than current available manipulations to send capital/profits to lower taxes jurisidictions allows a system based on race to the top rather than race to the bottom.

Still, within the union, allowing poorer members to have a tax advantage (higher) in order to mitigate trade imbalances, and supporting union wide basic income is helpful harmonious policy.  The main reason for the EU to lead on natural taxation though is that the US is threatening trade wars.  Be proactive not reactive, EU first.... and any other slogans they use are all appropriate rhethoric.  A natural taxation approach offers a better, though similar enough, alternative to border taxation.  Since there is some necessary policy response to US action, the EU should both embrace and lead on natural taxation.

Basic income can be implemented with nationalist citizen-advantages/privileges.

Natural taxation and tribute-funded union wide basic income/dividend is  an ultra powerful and flexible policy tool that strongly promotes union membership and cohesion.  There's no longer any complaints about Brussels controlling everything, if Brussels just pays all EU citizens for being part of the union.  EU members with trade surpluses can let other members have higher taxes to help with both their fiscal problems, and trade/employment disgruntlements.

Climate change and pollution
The only possible successful action on climate change and carbon emmissions is a carbon tax.  To ensure popularity of the measure, proceeds from the tax should be distributed as dividend, and it empowers citizens to use the dividend proceeds to make better energy decisions that let them avoid the carbon tax.   A carbon dividend further mitigates other funding sources towards a basic income.

The Paris climate agreement is insufficient in that it relies on future carbon sequestration technology.  No matter how awesome that technology turns out to be, it will involve a cost (without monetizable benefit) per ton of co2 to remove, and so eventually a carbon tax will need to be diverted to equal the sequestration cost.  A dividend is useful to prime basic income, mitigate emmissions, and so buy time for technology magic to be developed.

Without a carbon tax, nationalist impulse to destroy the planet for immediate profit doesn't go away.  Denial is a human response of aligning beliefs with pocketbook interests.  A carbon tarriff has been brought up as a response to the US withdrawing form its Paris agreement commitments, and it is an appropriate response to willful subsidy for planet destruction.  Still, seriousness towards the Paris agreement goals requires carbon taxes.

Inter state harmony and happiness is not a universal goal.  Gun manufacturers thrive on misery, but more generally, destabilizing neighbour states through crime or armed government opposition, can be seen as competitive strengthening of neighbours.  This is easily done through subsidizing gun access in the target jurisdiction.

Basic income is a key policy in offering people with better life choices than engaging in gun violence, but anti-harmonious forces may still strive to disrupt your state.  Cash for guns programs are likely great investment for protecting harmony.  If the target is sure that its neighbour states are not doing a sufficient job in reducing the flow of guns in the destabilization attack, it can leverage its newly generated gun stockpile for cooperation under the implied threat of sponsoring a guns for toddlers program in their state.

The main key to interstate harmony is basic income, but alliances and treaties can replace an all powerful overlord guaranteeing safety from state sponsored conflict./aggression.   A large enough alliance is in fact equivalent to a protective dictatorial overlord, but alliance membership

Sunday, November 13, 2016

Opposition to new US Republican control: State secession movements

I believe if the election were rerun 24 or 48 hours after, the democrats would win the presidency and senate.  Low democratic voter enthusiasm caused low turnout.  Media assurances that this was a sure thing for the democrats depressed turnout.  African American turnout was especially low, and in a the close election in many states, moderately higher turnout would have resulted in the media anticipated victory for HRC.

You may skip election judgement ranting, by going to OPPOSITION STRATEGIES

Trump's racism
The real estate industry is the primary conduit for persisting racism.  Racists are attracted to the industry because it gives them control over who is allowed to live where.  Good neighborhoods and good schools need to exist within a reference frame of bad neighborhoods.

The "Birther" attacks on Obama were clearly a violently passionate attack that could only be believed if first a gut instinct that he's an illegitimate President is held, and then latching onto any theory.

The "Central Park 5" (Black accused murder/rapists) opportunity so motivated him that he rushed to take out newspaper ads to address/raise awareness of the "nigger problem".  Even after they were found innocent (someone else found guilty), he insisted on continuing their demonization, certainly because of the "greater problem" that seemed more important to him.

Trump's stupidity
Having a college education not only implies a minimum level of intelligence to gain admission, the process also exercises your thinking and gives you enough background information to absorb and understand the world for the rest of your life.  Its normal for people with little understanding of issues to have very strong opinions about them, because they feel better about themselves after thinking they grasp a single advantage or disadvantage, and relieved that they no longer need to strain themselves to consider other aspects.

I'm surprised to hear that Trump has a degree from Wharton.  Though not surprised that it is asterixed by either no attendance or potential falsehood (no classmate found that has any memory of him).

Being against the Iraq war, but also critical for not confiscating the Iraqi oil is childish stupidity.  Simultaneous criticism of excessive and insufficient evil, and a failure to recognize that the true evil he seeks, requires partnerships on the ground, and the oil is payment for their service.

Torturing children until their parents admit to being terrorists is a mental deficit indicative of racist dementia.  A college education prepares you to consider the possibility that the tortured tell you what you want to hear to make the torture stop.  (Something he would know if familiar with Central Park 5 case).

Fundamentally, "lacking temperament to be president" is the combination of hate, stupidity, violent impulsiveness, and cautiouslessness (bankruptcies) he's demonstrated.   Power doesn't increase reflection.

Trump as an establishment puppet 
His transition team are establishment professionals.  He refined his campaign tax plan to match Paul Ryan's.  During nomination political bargaining, he reportedly offered Kasich the power to administer the whole country to be on his ticket, suggesting he has no desire to govern.

During his first day in Washington's press conferences, his body language was defeated.  Paul Ryan had a genuine (non politician) beeming smile in total control.  Trump, an exceptionally talented liar, instead of having an emotional lift from winning, is showing emotional diminishment from knowing he has to walk back the lies, and is submitting/cowering to the establishment.

Saudi Arabia's Prince Alwaleed beeming enthusiasm for Trump's victory  is indicative of the bipartisan establishment's commitment to Saudi Arabia's middle east destabilization interests, and threatens the Iranian counterbalance and peace progress made by Obama.  Trump's natural love for the military ensures welcoming any invitation for greatness  the world establishment provides him.  The swamp is swampy because greater people than him got drunk in it.

The Republican establishment seeks only to destroy America.  A collapse into a police state that serves the wealthy, and job creation only in the form of desperate people sucking dick for a blanket.

Any Trump benefit of being an outsider independent of the swamp's financial control, such as detente with Russia, or any attack of HRC's progressive agenda due to beholdment to the establishment, is completely lost if he sinks into the swamp on the first day.  Obama, and the democrat agenda, made minimal progress against the Republican's destruction agenda over the last 8 years, but the US did significantly better than its European peers, and the administration should get a passing grade for recovering from Bush's economic destruction.

You can't simultaneously politically attack artificial low interest rates, and the economy.  Dumping of US bonds post election is not a sign of anticipated economic utopia.  The hamster wheel economy depends on maintaining housing prices.  Higher interest rates will depress that market, and the dangerously high car production that has been financed through subprime in the last 4 years (over $1T in outstanding auto loans).

A 3/10 on the Idi Amin scale (corruption/self-enrichment) democrat candidate would have been preferable to a 7/10 on the Hitler scale (hate and megalomania).  Republican establishment control over him may mitigate the overt Hitler factor, but snapping temperament issues, and ultimate authority to act upon them, must remain a concern.


Democratic Establlishment
Midterm elections in 2 years are already being focused on.  Even if they are unable to stop destruction, they can vow very strongly to undo destruction.  This is key in both eliminating the extent of destruction and preventing the private commitment to any passed destruction initiatives.

It is natural to worry about democratic party impotence.  If the Democratic establishment wants any credibility and faith in its opposition to Republican control, Obama should at least make a recess Supreme court appointment.

Climate change issues
Dirty Coal is a dead technology that is uneconomic.  Clean coal is even more expensive and uneconomic.  All rhetoric designed to appeal to coal worker voters were outright lies, unless there are plans to nationalize and subsidize the industry beyond simply allowing complete environmental destruction.

Pipelines are 40-100 year payback projects.  The oil economy will not last that long regardless of Republican policy.  Democratic party assurances that all private investment in new pipelines will be made bankrupt the next time they have the authority to do so, should effectively nullify any destructive approvals of pipelines or coal mines.

The same stance will have some effect in limiting the destructive financial deregulation follow through, that republicans are salivating to inflict.

Tax destruction
A bill to criminalize deceptive and false economic theory, basically everything Larry Kudlow ever comments on, but most specifically that lower corporate taxes would increase rather than decrease growth, might stop the economic destruction of America.  If it doesn't stop corporate tax cuts, it will at least serve to link them to the economic destruction that results.  This is a corporatist media problem, but republican zombification of Americans towards corporatist subservience and economic destruction is easy when the lie goes unopposed.

While corporations pay a low percentage of total government revenue regardless of their tax rates, the simplest way for them to lower taxes paid is through any form of spending or investment.  The higher the tax rate, the greater tax reduction they receive and so the lower the risk to investment or hiring.  Low corporate tax rates only benefit successful companies with sure profit formulas.  McD opening a new restaurant or Apple developing iPhone 11 are sure profits, unaffected by tax rates.  Real risk taking investment is encouraged by higher tax rates that mitigate the cost of failure.  End of year purchase decisions for successful small businesses are encouraged (economically stimulative) by high tax rates.  A 50% tax rate is equivalent to a 50% discount on new computers, office furniture, or hiring additional sales staff.

State secession movements
Secession is first and foremost a bargaining position.  Freedom only exists if you have the freedom to walk away.  The ultimately true and resonating Brexit argument was that there is no valid insistence on submitting to Belgian rule.  In an atmosphere of threatening to tear up international treaties and agreements, national agreements should also be up for negotiation.

California Leadership
Leadership by California opens up similar opportunities in other, especially Blue, states.  Clear opportunity for the west coast to unify.  Clear opportunity to unionize with Canada, and clearer opportunity for Atlantic and great lake states to join the new stronger union.

Friendly secession
California will still buy red state corn, and happily sell them tech and entertainment.  Red states will have complete unimpeded freedom in setting up an exploitation and prison economy, and can expel their liberal faggots, and fund all the wars they crave.  Red states can protect their empires of dirt. Even if I/we advise that cooperation and trade leads to greater opportunity and wealth.

The appropriate answer to divisive politics is divorce.  Not submission to the winner.  This approach provides the ultimate freedom to both/all sides to organize their lives and economy as they wish.

It would be less friendly to point out that Red states are economic leeches that  receive a net transfer of tax revenue from productive America, and may be unable to fund every war that would bestow them greatness.

California's power
I believe most people in most states would prefer to be in a union that includes California than the one that excludes California.  If California takes an inclusive stance towards a union with other states who'd prefer not to submit to federal republican rule, the secession initiative will receive significant support among US state populations and Canada.

In terms of the establishment California political system, this should seem like an opportunity for enhanced power and relevance that they should want to seize.

If the old politicians cower at the proposal, it can be a midterm ballot initiative.

Other states could offer ballot initiatives of solidarity with California's decision, if they are concerned about seceding alone.

Secession is awesome
Most Trump supporters commenting on California's secession offer the encouraging "good riddance".  So we can all be happy.  Self determination is the most compelling argument, but another outcome is a new union that includes all 50 states, but with looser or different association contract.  Technology and ethics has advanced sufficiently in last 250 years to reform democratic unions.

The new union, and alliances with previous unions can be as close as each wants.  I have a solution that enhances independence and freedom of association members, which can also be implemented unilaterally though still friendly.

Natural taxation - Cashflow based business income taxes
Business Sales are taxed, and expenses and salaries refunded, in the jurisdiction they occur.  Investments received, and repayments made, taxed in business HQ's jurisdiction.
Personal income is taxed at the same flat rate as business tax.  No payroll taxes.  A refundable flat tax credit (potentially equivalent to basic income) creates effectively more progressive income taxation than current systems.  There may be an investment profit surtax, high income surtax, and limits as to the tax deductibility of new investment from employment/business income.  Longer details and justification of tax plan.

The key benefit of this tax system within alliances and unions is that higher tax rates strongly reward employment and other investment within a jurisdiction while compensating the societies that businesses sell to.  The more a jurisdiction wishes to attract business investment/employment, the higher the tax rate it should set.

The proper response to any neighbour or trade partner objecting to your region's natural taxation, as some sort of unfair advantage, is to adopt it themselves.

A tributory tax system for a federation/union/association of regions
Regional/association unity is best enhanced by a tributory tax that is a percentage of each region's tax revenue (say 10%) kicked up to the federation's budget.  While a federation has budgetary needs for common military, food/resource/energy security, and inter-regional infrastructure, its tributory budget should fund only a common revenue service and basic income/citizen's dividend.

The funding for  the federal budget should come from a poll tax/reduction of citizen's dividend, thereby encouraging only efficient and justifiable projects are funded.  A federation carbon tax, if any, should directly increase the social dividend.

The tributory tax system does have successful members contribute more than less successful members.  This serves as economic insurance, but also enhances the alliance economy as a whole by improving market access, and overall development.

A rich area may not have the geographic advantage for a solar or hydro energy project.  Federal assistance in incubating such projects and in electricity distribution networks can facilitate energy security and trade.

Under tributory tax system funding citizen dividends, regions fund whatever empires they wish for themselves through their own funds.  The federation is relatively weak and only able to  fund justifiable projects.  Regional independence is maintained because of this, while unity and cooperation facilitated.

If Nevada can make an argument that the federation very much needs a large desert solar plant it can sell the project/venture more persuasively to citizens if it offers to put up a significant portion of the costs.

Seperation of assets and liabilities
Like divorce, there is a separation of assets and liabilities in friendly secession.  Military assets are likely to be the most touchy.  An honest proposal at a fair separation enhances the friendliness of the secession, though since there are more liabilities than assets, a negotiation breakdown would harm the incumbent union more.  In my opinnion, an honest and fair secession proposal cannot be met by military violence without expressly acknowledging the slave status of subjects to the king.  King succession through electoral games does not weaken the king's power, exposing the weakness and inadequacy of the piece of paper (constitution) we tell our children gives us freedom.

Friendly secession
A successful region that wishes more independence will face less resistance by offering union and federation with its neighbours under terms that include the successful members paying more into the federation than the less successful members.  Doing so invites union and alliance, and enhances the friendliness of secession, and the opportunities that become visible to all.  This also weakens militarist destructive impulses of the incumbent.  If all of its members are more interested in joining the divorcing party than in destroying it, they are more likely to seek reform in their own union membership.  They can even view paths to reform that are purer to their ideals and free from compromise with political opponents.

Comprehensive opposition strategy
The democratic party establishment will do their part, but their only current power is threatening action the next time they achieve power.  The rest of us should not submit to these high stakes electoral contests for dictatorial control, or rely on the success of the democratic party opposition.   The loud discussion and planning of independent alternatives, may be most effective in mitigating destruction and evil.

One natural concern is that if red states are no longer supported by blue state tax revenue, they will have no choice but to rape the environment and planet out of desperation, perhaps turning to North Korean style militarist brinksmanship.

DPRK is the way it is due to imposed isolation forced upon it.  For this reason, friendly/inclusive session should be discussed.  Reforming the USA into a new union that includes all current states is the best and only way to drain the swamp in Washington that the political duopoly is incapable of relinquishing the power inherent in the swamp.

In reforming the USA (into new constitutional arrangement), and using the tributory tax system, there may be more sway in convincing poor states that additional oil development is both uneconomic and destructive.

The uneconomic argument is not only reliant upon properly assessing environmental and planetary damage costs, but also in failing to recognize cheaper and more efficient energy in the present and very near future. Even 10 year payback projects are a failure if oil is dead in 10 years.  It should be.  The rush to invest now is reminiscent of the race to exterminate whales in the 19th century.

Wednesday, November 9, 2016

Nationalism and Basic income

Team-ism:  The positive of nationalism

Wishing for success and happiness of your team members, possibly hoping (though not requiring) that they share that success with you, is certainly good for the team.  Humanism is team human, and teamism is not inherently evil.  Cooperation beats individualism, and success of the team (or member) means there is more available to share or trade with all team members.

The propaganda of teamism
Lectures and advice about teamism is exclusively about you needing to pass the puck more to the people of the lecturer's choice.  You making sacrifices for the team leaders.  In nationalism, the media message is dominated by politicians and others high in the hierarchy who can control the media.

Nationalist resentment is a method of harnessing stupidity and hate by directing it away from social dominants.  This point will be explained later in the paper, but there are 2 fundamental choices the wise and smart can interact with the childish and stupid.  Either teach them the truth, or sell them lies.  The latter has significant profit opportunity.

Nationalism as protection from competition
The dominant rationale of nationalist protectionism is the appeal to the protection from competition.  This neglects the opportunities created by trade and immigration.  Specifically, you cannot possibly feel threatened by everyone of these groups:

  • Strawberry pickers and other ultra low wage agricultural "foreign workers"
  • Domestic and gardening servants
  • Parking lot day labourers
  • Street food and convenience store employees.
  • Skilled blue colar work
  • Skilled white colar work, software and tech workers.
  • Doctors, and other healthcare workers
  • Foreign high end home buyers.
If you hope to be a strawberry picker when you grow up, then as long as the immigrants allowed in come with a mix of skills and job seeking, then you gain more opportunities for work than get threatened by competition for work.

For the blue collar worker most susceptible to protectionist and hate propaganda, immigrants typically offer little to no competition to their field.  For those who work in lower paid fields, there is only opportunity created for everyone else, as every penny they receive is paid out to fund other people's work, and more food and housing and other services is produced to let them survive.  Even if you see no direct profit from immigrants' presence, those that do directly profit buy better homes, cars, and other stuff... which you may assist in producing.

For those immigrants who work in higher paid fields, they can directly cause increased consumption of better homes, cars and other stuff, and so overall, there is much more opportunity than competition created by immigration.
Slavery is awesome
Slavery produces consumer benefit of lower prices, and master's benefit of control and power and production capacity.  For the non slave, slavery whether robotic or mexican, frees them from doing the slave's work.  We could have full employment, if we outlawed the mechanical distribution of water and energy through pipes and wires, and instead forced human labour to collect and deliver it.  Full employment but with a standard of living closer to subsaharan Africa, and difficult to justify urban centers.

Immigrants usually earn lower wages than nationals, and the perceived threat from immigrants is quite similar to house slaves fearing encroachment from the field slaves.  A fight among the slaves for the crumbs of servitude.  For those who understand the awesomeness of slavery and servitude, that is the fight they want you to take, the framing they want you to see you define your problems.

Oppressing immigrants and ethnic and racial minorities, depresses their income potential, and increases their desperation to fill a servitude position or to resort to criminal activities on a unionized/gang scale.   If eradicating immigrants is successful (despite your masters craving more of it), then those seeking the advantages of slavery will be compelled to relocate where labour can be more easily oppressed.

So, if you feel threatened by the oppressed, then you are necessarily oppressed yourself.  No one points out the opportunities that the oppressed create for you, only the threats you should imagine.  Nowhere in the world has ever shown success through a declining population.

Many people appreciated this article:  Most people support slavery

1000 new people in your country 
This analysis also applies to, the reverse, removing 1000 people.  60% of non-senior adults are employed.  The general breakdown by industry is linked here.  If all new people subsist on welfare, then 600 new jobs are created to serve their survival needs.  Those who profit from exploiting the poor, trickle up their proceeds into luxury goods purchases.  Both high end and low end consumption increases.  More people also means higher prices for energy/natural resources and food and housing, which attracts more employment in those sectors (higher commodity prices offer greater profit opportunities and more pursuit thereof).

1000 fewer people actually creates more than 600 job losses.  Deflation in commodities causes substantial disinvestment in those sectors.  Empty housing halts new construction.  Disemployment causes more disemployment.  Nowhere in the world or in time will there ever be economic growth accompanying population decline.

$1M in increased Chinese GDP/wealth
China imports 5% of its economy, and another 5% in net capital outflows.  Its growth has fueled high commodity prices which has kept US employment in those sectors high.  The capital outflows has propped up housing and stock markets.  These benefits primarily flow to rich Americans, but while rich Americans doing well absolutely does not trickled down as a broader benefit, it does prevent economic collapse that does trickle down.  The raw imports number does mean that $1M in increased chinese economy does create 1 foreign (to China) $50k job.  A bit more than that due to inflationary pressure in commodities.  $1T in increased Chinese economy directly creates 1M foreign jobs.  $50B in foreign (to China) investment, which is money going to people in your nation.

Balanced trade vs. higher trade
Considering 2 proposals:
  1. Trade balance of $10B exports and $10B imports
  2. Trade deficit of $100B exports and $150B imports.
Although nationalists would fan resentment over the 2nd scenario, that one includes $90B of additional job/wealth creating national value (excluding addtional distribution and retail work/value).  Intangible consumer value is also much higher.  You are much more likely to be happy and buy  a $300 TV than a $1000 TV.

Trade protectionism
International trade benefits you through lower prices, and retributory opportunities of access to trading partner markets.  As a consumer, it gives you more choice.

As an affected worker, you may wish that your job is perpetually protected, but such protection comes at the expense of others' opportunity, and all consumers choice and value.

More importantly, today's and tomorrow's threat to your work is not globalization, but instead automation.  This too is more opportunity to more than threat to some.  We further all want to free ourselves from work that is by definition (mechanization more efficient than manual) unnecessary.  So, insisting that others be forced to hire us breaks with any principles of justice and fairness we would want to enhance.

Basically we cannot principally object to the rich corrupting protections for their empires of gold, if we insist on protecting our empires of dirt.

Nationalism as capturing hatefulness
A hateful person is going to feel resentment towards someone that outcompetes them for their ambitions regardless of the ethnic makeup of that competitor.  Nationalism provides a socially expressible way for people who hate everyone all the time, to rally around other hateful people.

Politics can successfully achieve popularity by selling you the lie you want to hear.

Hatefulness is fundamentally a product of environment.  You live in a harsh world where the only political options you are likely to know about are having to seek permission from capitalist assholes or socialist assholes.

Unconditional Basic income (UBI)
is a cash payment paid to citizens and tax payers that is a necessarily affordable tax cut the higher the basic income amount because the higher the UBI, the more existing programs can be cut, and so more "tax disbursements" (refunds) are made than taxes collected.  The simplest implementation is as a refundable tax credit.

Basic income as freedom from servitude
Servitude as an employee has provided over the earlier part of the last 75 years, tremendous opportunities for income security that permitted a fulfilling lifestyle.  The desire to idealize and protect those lifestyle opportunities is natural.

UBI does not prevent you from accepting employment in any way.  Contrary to welfare system, no benefits are taken away from you when you earn more income.  A fearmongering stupidity critical of UBI is that it may promote laziness.

The freedom of others to choose not to work is a significant benefit to anyone who seeks work.  Less competition for work directly enhances your bargaining for servitude positions.  That more people have the funds to purchase goods and services ensures that more work is available to try to take all of their money.

Furthermore, UBI makes it much easier for you to attempt to start your own enterprise.  You can survive without immediate profit.

Even if no new opportunity given to you through UBI appeals to you, there is no reason to deny it to others.  UBI improves your pursuit of an employee lifestyle, decreasing your competition, and increasing the supply of potential employers.

UBI makes competition easier and more profitable
That work is awesome and fulfilling, and lets you afford nice things should be a secret that you try to keep away from the masses.  The lazier and rejecting of work the rest of them are, the easier it is for you to get to do it all and take all their money in exchange.

Easier competition reduces unethical and criminal behaviour and hatefulness
Labour (and work/entrepreneurial) markets that are free of the oppression of starvation/survival as a method of forced participation, reduces the ruthlessness and hatefulness that is conditioned into those whose life is a survival challenge

An easier life allows individuals to place higher weight on ethical concerns, and the harm, danger and repercussions.of criminal choices.

UBI allows a reactionary attitude to job displacement as "oh well, someone or something else is doing the work so that I don't have to.  I'll just do something else." instead of promoting hatefulness.

Basic income as nationalist policy: Citizen's dividend
The simplest recommended implementation for basic income is through refundable tax credits.  This is a tax filer benefit independent of citizenship.  A citizen's dividend is specifically a benefit only for citizens.  The reasons leaning towards making it a tax filer benefit are:

  1. Immigrants pay taxes too.
  2. Our team can mostly be defined as those who choose to live here.
  3. Poverty programs designed just for special groups have nearly the same expensive bureaucratic overhead, and are recipes for manufacturing ghettoization, crime and hatefulness.
  4. Nationalist/racist resentment of welfare is tied to benefits going to groups that they perceive exclude them.  Asset tests and other conditionality for welfare often prevent you and your family members fr om receiving the same benefit.  A refundable tax credit would eliminate the stupidity of Bill Oreily explaining to you how much more privileged the poor are compared to your group.

mix of tax filer and citizen benefits
The simplest mix of benefits are a basic fixed amount, and a supplementary variable citizen's dividend paid from a targeted surplus, and dependent on society's economic success and tax revenue.

Life accounts or Unconditional Loan Income (ULI)
Life accounts are like student loans, but without the conditionality of spending the funds on education.  Recipients can use the cash anyway they like.   Repayment is through income based royalty administered through the tax code. Features include:

  1. Low interest rate of 2% or less.
  2. An annual new loan withdrawal limit of $5k-$10k.
  3. Maximum outstanding balance (~$100k) that either reduce or eliminate the annual new loan amount when the cap is reached.
  4. 10%-15% of income repayment rate while an outstanding balance exists.  So no repayments are owed if no income is earned.
  5. To help overall funding, those with no outstanding ULI balance (usually rich through previous full repayments) can pay a 3%-7% income surtax
ULI as a social investment is extremely similar to UBI.  A personally accountable income royalty replaces a general income surtax.  But rather than faith in higher future tax revenues as a result of investing in citizens, the personal life account makes a direct connection between personal future funding of your own past benefits.  The loan program is likely to have a moderate loss, but its a lower accounting loss than marking UBI as an unrepayable gift.  Many of the loans will be repaid, and the interest and surtax on those who do not have life account balances makes up the funding shortfall.

Compared to UBI, ULI does mean slightly higher clawback/surtax rates, because spectacular home run successes (ex: Mark Zuckerberg) only repay their loan amount + surtax instead of an extra $1B in taxes under UBI.  The latter pays for 75000 people's UBI who make no contributions to society.

Life accounts and nationalism and the politics of UBI
UBI is said to be pollitically difficult only because politics are dominated by hatefullness and protection of lobbyists.  UBI provides a tax cut to 90%, the greatest possible leap in human freedom and economic growth, and so greater after tax income to 95%+, and elimination of poverty and servitude.

The only objection to UBI is protecting lobbyist and rulership empires, and the irrational value of the objectives of hatefulness to others over one's own prosperity and freedom.  Structured servitude and  international competitiveness are economic and political theories that justify manufacturing hatefulness and revering empires (more on this next section).

ULI acknowledges the entreneched politics of hate by attaching individual accountability to basic income.  It becomes an easier introduction to UBI.  The model of UBI personal successes paying for "failures" becomes more evident with the inherent trackability of past ULI access.

But the key takeaway from this and following sections is that basic income and life accounts can serve and be structured to serve nationalistic populist objectives better than nazi mexican hunting parties or hate-fulfilling political promises that your troubles are caused by slaves more oppressed than you.

Structured servitude
Servitude is systemically structured in order to ensure an abundant supply of soldiers, servants and minions.  The masters use the strongest language of freedom, because unlike slavery, structured servitude provides a security/resentment free illusion of freedom..

Conscripted soldiers are the closest class to slavery as they give up autonomy towards life preservation.  More generally, the culture of employee status seeking, through tying health and family-permitting-stability benefits is the main form of structured servitude.  Welfare systems guide the poor towards servitude.

Client-supplier/contractor relationships are not the servant system.  Supplier/contractors can value freedom over the security of servitude.  They can still struggle financially, but that struggle occurs somewhat independently of the systemic structured servitude that is inflicted on society as a whole.

Most people support slavery and structured servitude even when they are near the bottom of the pyramid.  Its entirely stupidity and the acceptance of lies that drive it, but the good news is that the masters no longer need to systemically structure servitude.  Foreign policy and murder can be asserted in the comfort of one's own pajamas (drones), and structuring desperation such that work paying $8 or $15 per hour is begged for is no longer necessary if machines can do it for $1 or $5 per hour equivalent.

International competitiveness
Structural servitude and oppression at home is meant to keep wages low, and labour competition and desperation high.  This enhances employment and profit for those who control work.

An easy way of enhancing international competitiveness is to lower the national currency value.  This forces lower real earnings for everyone in the nation.  If this is something anyone actually wants, then that person could instead individually request or accept to be paid less.  If the US as a people want to produce socks and underwear for the Chinese, they can achieve that goal instantly through a 90% currency devaluation.  Few people would be able to afford a cell phone, but you might also put your children to work in coal mines to earn enough to get one.  The view on work that gets lost is that having others make your underwear is a position most children would genuinely prefer when they grow up.  If you resent Mexican gardeners and housekeepers, currency devaluation can give you the opportunity to emigrate to Mexico to serve Mexicans.

International competitiveness and oppression of the local labour force is the main reason to oppose UBI.  Differential tax rates have 0 effect on globalization.  Exploiting desperation is what drives manufacturing or international service production decisions, and UBI reduces local desperation levels and puts upward pressure on work conditions and income.

These policies benefit less than the top 1%, but its easy to scare people into subservience and enhanced desperation.  Structured servitude, and a harsh world, provides you with your place in the hierarchy and visibility for the next rung up and down, and so visibility for the behaviour to strive or avoid.

Trying to force purchase of nationally pure labour is a stupid myopia that misses the new opportunities created by new money and people comming in, money staying in, and serving the needs of new people.  Forcing higher priced local labour, increases the cost, and limits the selection, of purchases, and necessarily increases overall poverty.  If a foreign good can compete with a local good despite the transportation costs involved, then protectionism forgoes the better option, and also eliminates the extra transportation and distribution jobs created by competition.  Retaliatory protection eliminates export jobs, and the associated distribution, and lessens economies of scale benefits (products cost and price) for larger local and international production demand.

Bringing the jobs back
Even if you forbid foreign slavery and exploitation for protection of home markets, globalization will still be tempting to better access foreign markets.  If forced to produce local consumption at home, heavy automation is likely to be pursued to ethically keep the benefits of slavery without any responsibility for harm to any individual.  Without UBI, this causes a poverty spiral where increased desperation unable to find employment sinks consumer spending and business revenue and profits and employment.

The only jobs politicians create is through, often wasteful, direct government employment and spending.  The US and Obama were doing much better than international peers in maintaining employment.  The art of the deal involves great sincerity when lying to people filling them with hope for what they want to hear.  Lowering taxes on the rich and corporations, will not help coal and steel companies that are not making money.  It will lead to all companies reducing expenses and investment (a tax deduction) that have any uncertainty to their profitability.  Enhancing profits only for the most successful companies that know ahead of time that they will get a positive return on their investments.

Begging politicians to create or flatter you with the promise to create jobs for you is not the right request.  You want the pay/money of a job.  With that money, you can create your own work, or help someone else that creates their own work.  Its up to 300M people with the power to create work/jobs instead of at most a limited number of uncaring officials.

Trump's domestic economy plans, unimpeded by congressional opposition, are a worsening of GW Bush's policies that, we are told, brought civilization to the brink of economic collapse (just domestic policy.  Excludes more liberal use of nuclear weapons, child torture, and wars for the express direct pillage of oil).  Hoping that the art of the deal was BSing republican elites in his support for the enslavement of Americans was the real con, is a long shot on the day after the election, and the unification platitudes speech writers always present.

Solutions with some Libertarian, Republican and Trump appeal
  • Flat tax combined with universal refundable tax credits (UBI)
  • Equal high corporate and personal tax rate 
  • Elimination of payroll taxes.
  • Territorial tax system.  Revamping international tax system to tax sales where sold.  Expenses (deducted) where spent.
  • Cashflow based taxation to eliminate all avoidance
 These policies would tax people and companies based on the profits that they extract from society.  Exporters are subsidized with tax rebates for what they spend locally, enhancing job creation.  Foreign companies are taxed on the full sales price (instead of just profit) of the goods they sell to us.  This is a better solution than tariffs because it enhances trade and global work/value while compensating the nations with trade deficits.  It significantly enhances investment in small and uncertain businesses by simplifying tax refunds if the investment fails.  Protectionist sentiment is best served through higher rather than lower taxes.

Importantly it also allows a union of independently governed states and regions to unilaterally apply tax rates in their own interests, with the trade and work effects they prefer.

Basic income/refundable tax credits creates smaller government while eliminating poverty and empowering real freedom, including not impeding great wealth from being accumulated without permission or cronyism, and despite any high tax levels.   Supposed libertarian goals.

More details on the tax plan:

Detailed Overview
Focus on how it eliminates international arbitrage

Basic income rationale and funding :

Refundable tax credits and financing overview

Philosophical justifications 

Friday, August 5, 2016

Linkedin and Microsoft merger

This is likely the final post in the series critical of Linkedin as a stock proposition.  Last entry in the series.  Microsoft will acquire the company for $26B.  The previous entries go into detail why the stock is relatively worthless.  This final post takes those conclusions for granted.

Linkedin 2Q-2016 results
Another consecutive loss and negative free cashflow.  Though they did significantly outperform guidance based on strong international revenue recovery.  Still their US business is dying, and international spike is more likely a recovery from previous macro headwinds, thanks to refugee migration, than sustainable growth.

The signal of LNKD accepting $26B
Reid Hoffman understands that the company is a piece of shit not worth the $35B market value that it had previously reached.  Previous stock compensation would also get management on board with cashing out, if they understood that the option strike prices they were holding were unreachable.

The mistake in my previous analysis was considering Hoffman an insider of the company.  Its his sole voting discretion to sell the company, and treating the corrupt stock structure that allows management insiders to use the stock as a golden goose to enrich themselves with stock compensation is fundamentally a liability to Hoffman.  The realization that the company is a worthless no margin enterprise, brings up the double edge of stock compensation:  Retaining talent is difficult and causes even more business deterioration when the talent realizes their past compensation is worthless.  A realization that would have occurred as a result of previous stock price drop.

Reid Hoffman understands (by accepting the buyout) that it is unreasonable for him to hope the company would ever be worth $26B (after compensation dilutions).

Microsoft's strategy
There are zero synergies between the businesses.  MSFT's reasons for the acquisition are to go after a different business that makes no money: CRM. ( which is B2B sales facilitation.  Its reasons for wanting to get into this unprofitable business are only indirectly related to better penetration of its cloud and database services.  Competing with CRM might drive its purchaseable value down to $50B.

Linkedin's non-HR B2B platform (premium subscriptions) is its smallest and most stagnantly growing segment.  It will require significant development and investment to create a platform that competes with CRM.

This strategy theory is not public, but even if terrible, is far less stupid than Nadella's moronic public justifications for the merger.  The reasons for keeping it non public are that it would admit anti-competitive intent towards CRM, and expose the Linkedin membership proposition as a ruse to sell unsolicited (non-job offer) communication access to the membership.  The common mistake in valuing web site membership assets is treating the asset like a 90s cable/phone subscriber that have no other choice but to perpetually pay the membership costs.

If MSFT had any interest in the HR business, it could have bought for under $1B, and invest in it to clone linkedin offerings.  Linkedin's enginering metrics (cost of revenue including depreciation (server costs) are the worst in the industry.  MSFT's declaration to leave the company alone admits that it has no interest in leveraging its own IT skills to create value in the business, and admits to seeing no value in the HR industry.

The cost to Microsoft
$26B purchase price is being financed by nearly $20B in bond offerings.  The contracted interest expenses for those bonds are $11.568B over their terms.  The annual interest cost is $530B.

Very optimistic forecasts for Linkedin's growth (consistent with the most bullish analyst projections) will result in $100M incremental annual profit over the next 10 years, and then likely stop growing.  Under this model, profits over the next 11 years will equal the cummulative interest expenses over those 11 years.  Then bring in $1B in profits per year thereafter.

The optimistic profit stream would contribute $500M over interest expenses starting in 2027.  To pay back the $37.5B acquisition costs will take about 86 years.  A different payback calculation is 11 years to pay $5.5B of interest cost.  Another 6 years to repay remaining interest cost balance.  26-52 years to repay debt principal and additional $6B cash purchase price:  43-79 years payback.

Microsoft Stupidity:

Microsoft logic:
  1. Everyone loves to buy Nokia phones
  2. Lets overpay to take them over, then spend massive resources on an operating system for their phones.
  3. If everyone loves Nokia phones so much that they will overpay for them then there is some hope we can make our investment back.
  4. ?
  5. Write off the entire Nokia acquisition years later and close down the division.
The repeat of the Nokia mistake in the Linkedin acquisition is mistaking linkedin members or Nokia customers as captured slaves.  Linkedin members sign up purely in the hope that it will lead to employment opportunities.  Massive development effort designed to leverage assumed captured slaves may not payoff.  43-80 year payback timeframe excluding new development efforts means even lower success probability than its Nokia strategy.