Has the housing bubble burst?

Has the housing bubble burst?

Every year, I do an annual column on taxes. It is a little later this year than last year and all I can say in my defense is that I filed an extension and that Austin is in the hurricane affected areas (at least according to the IRS).

I have a surefire way for taxes to be reduced. Republicans claim to be for low taxes. Democrats should be. Do Democrats really want Republicans to spend more than $2 trillion every year that they are in power on their own things?

Here’s the three point plan:

1. Express tax owed as a percent of the dollar you get to keep as opposed to the last dollar of “gross” income. I put gross in quotes because for most people everything beyond net goes straight to the Government in the form of payroll deductions. In my book, if you don’t get it, it’s not income.

In the top tax bracket (ignoring various phaseouts), if you take home $0.65, you pay $0.35 in income taxes for the privilege. That’s a 54% tax rate if you look at it like sales tax. If you add in medicare, it’s a 57% tax rate. You and your employer pay $36.45 for you to take home $63.55.

Government expenditure can be reported as 25% of private GDP instead of 20% of the economy.

Living in a city where more than 50% of property taxes leave the jurisdiction, I can say from experience that people get real mad when more than 50% of anything is going away (or more than 100% of what stays in the district). Framing it that way will reduce taxes.

2. Report employer “contributions” toward social security and medicare as a percent of net take home pay and lump it together as a sum. Paying 16.6% of take home pay seems more like a crisis than 6.2% and 1.45% of “your share”. I put “contributions” and “your share” in quotes because an employer considers the entire cost of an employee. If that money was not paid as taxes, that could be paid as salary and the employer would still be hiring.

3. Have all people file quarterly tax returns and write a check for their taxes. Dick Thaler has done research showing that the more often people consider their st0ck market portfolio, the more unhappy they become even if the daily fluctuations even out and people make a bundle. They turn out to be extra sensitive to small losses and become more unhappy frequently they consider them.

This can be turned to advantage for tax cutters if people are forced to consider the burden of taxes more than once a year. If instead of direct payroll deductions, taxes were put in a notional federal checking account and taxpayers had to write a big check every quarter instead of be pleasantly surprised by a small refund, we would see a lot of unhappy people.

The Mugabe (mis)government has come up with a novel solution to inflation:

Official sources said the recent 150 percent pay rise for soldiers, teachers, policemen and nurses had put a strain on money supply.

Reserve Bank officials told IRIN that plans to print about Zim$60 trillion (about US$592.9 million) were briefly delayed after the government failed to secure foreign currency to buy ink and special paper for printing money.

Brings a whole new meaning to the phrase “not worth the paper it’s printed on.”

This whole article almost reads like something from the Onion, it seems so absurd, but it seems to be a real story. Has any nation in recent history declined so far as the current Zimbabwe has from the Rhodesia of the sixties, then one of the richest nations on the African continent?

The Senate immigration bill extends Davis Bacon to private businesses. In addition to being a blatant violation of federalism (though sadly no more so than much other federal legislation), this would be a disaster for small businesses nationwide. Encourage your congressperson to kill it in the House.

Epstein in WSJ and Satel in NYT both say something needs to be done about kidneys (reversing the Ethicist’s stand). They both look to big payments to kidney sellers as a way to stop “6,500 excess deaths” due to lack of kidneys.

It is against the law to offer “valuable consideration”. Kidney buyers can take the matter into their own hands and not wait for a law change. Instead of a “valuable” consideration for a sold kidney, consider the following proposal:

• Small payments to lots of prospective sellers upon death
• A contract that pays a buyers organization a large sum of money from the estate if the organ sale is obstructed by family

It would work like life insurance in reverse. Kidney buyers would pay lots of people a consideration that doesn’t trigger the “valuable” language. In the absense of a kidney being delivered on death if one is available, the estate of the deceased would owe a payment. Some donors might sign the commitment without a consideration just to create a strong incentive for their family to honor their wishes with regard to donation.

The proposal is not sensitive to the needs of the grieving family, but I would rather have 3250 irate families than 6500 extra prematurely grieving ones due to a lack of kidneys.

Thomas Sowell asks if thinking has become obsolete.

I doubt if this is a new phenomenon. I suspect that it’s been a problem down the ages, as have many aspects of human nature.

[Update a couple minutes later]

More evidence for my proposition.

The carbon emission offset market in Europe is in crisis because of an unexpected 50% price drop in the last couple of weeks. True to Europe, the traders are demanding government intervention to prop up the price(!) of carbon offsets. While it is true that the governments can afford to buy more, why would they want to? The high price of hydrocarbons will curb carbon emissions.

Assuming that the coal/methane/nuclear balance continues to move toward nuclear for electricity, high gasoline prices mean less carbon. So either we will run out of oil or we will have high CO₂, not both.

Louis Ruykeyser has died.

This is really a shame, because in the context of modern lifestyles and medicine, he wasn’t that old. I was a devoted Wall Street Week fan for decades.

Despite his loss of the ultimate battle, I’ll always remember him as the eternal optimist, an attitude well justified by events.

According to this, pennies are now worth less than their cost of manufacture. My rule for getting rid of a coin is the point at which you can no longer purchase anything with a single one of it. In fact, at this point, with multi-hundred-thousand-dollar houses, and new cars costing over twenty thousand dollars, is there even anything that you can buy with a nickel any more?

Time to can the coin, and come up with some other way to honor Mr. Lincoln.