patrick.net

I think this illustrates why I will never become a Democrat, even though the ideals of equality, opportunity and fairness are inline with my beliefs. There can never have a discussion on social policy, or government roles without the immoral direction of someone wanting to punish someone else for being successful. It's like no one realizes when you mold the system that way, it then becomes ever more difficult to attain wealth. Why is wealth viewed so negatively here?

"15% SS gotta count employer cont since it is your pay (AKA Self emp tax)
20-35% Fed
9% State
1% Dis.
7% Sales tax
(Depending on your home, your prop taxes can easily be another 5-10% or more of your income.)"

This is another reason I cashed out my San Jose home and moved to Boise. I live on the interest of the cashout of that SJ home, so no more FICA/Medicare payments, ID state tax maxes at 6%, 6% sales tax, lower property tax.

ID did what CA alledged to do with Prop 13. The selling point of Prop 13 was to "keep seniors from getting kicked out of their houses". The problem is that Prop 13 exempted EVERYONE, including corporations. ID property tax law exempts payment via a sliding scale those seniors who fall below several terraces of income level. For the rest of us, there's a $100,000 homeowner exemption on the assesed value of a primary residence...compare that to the silly $7,000 homeowner exemption in CA. Since a $300,000 house here is a McMansion, that exemption really means something.

My family lived in CA since the 1860's, but I didn't really understand how burdensome was the tax situation until I left and discovered how others live.

The point being I'm living better not working here in Boise than I was working long hours and making a HAHA in San Jose. Surely that should in the long run put downward pressure on BA houses - having the option to just go almost anywhere else.

I did the same Dennis. When given the choice I don't believe most people would participate in the system, but they have to. Work to live, you know it. Passive income is the way to go, now I will only take a job if it is interesting. But yes, I took my gains, paid the taxes no 1031 for me right now, paid my house off, and live off of passive interest income. I guess I am subsidized since I don't pay social secuirty or self employment income tax. I am my own example. I guess I am sticking it to the taxpayer by not earning wages and paying extra taxes.

I don't know how most people do it. A lot of guys my age have a divorce, and child support to worry about, as well as some judgement following them around from job to job as well. Factor those in as well, and now you have an Al Bundy situation. "Out of this dollar, I just earned myself a nickel!"

Another aspect of the foolishness of the 1031 exchange at present is the Democrat's threat to bump the cap. gains up from 15% to around 30%. You should take your lumps now: it may only get worse in the future.

Justme,

If you want to calculate the fuel efficiency of aircraft you may have to average fuel consumption by flight. That is, engine start to engine shutdown fuel consumption for a statically large enough sample. Your sample would be affected by aircraft types, altitudes, profiles, and even direction.

Although as you say, fuel consumption in the climb to cruise altitude is much higher than cruise itself, this is balanced somewhat by the desent phase. So, for long enough flights, cruise fuel consumption may be a close enough estimate of relative efficiency, especially if an enroute climb/desent is used.

But that estimate of relative consumption may be useless for your purpose.

Altitude: At a given indicated aispeed,, a flight at 39,000 ft will consume less fuel and have a much faster true airspeed than a flight at 31,000 ft.

Direction: A typical flight from California to New York has a 50 knot tail wind from the jet stream, while the New York to CA flight will have to fight the 50 knot headwind. So, flying east gives a 100 knot advantage for the same fuel over flying west. Other factors that influence fuel consumption would be differences from "Standard Day" in reference to outside air temp and atmospheric pressure.

I do not think you will get what you are looking for by examining generic aircraft performance data. The same plane with the same takeoff gross weight can have very different fuel consumption on different flights depending on altitude flown, direction flown, mission profile (gradual verses rapid climbs and desents, flying at most economical speed vs meeting a schedule), and other factors.

"I think this illustrates why I will never become a Democrat, even though the ideals of equality, opportunity and fairness are inline with my beliefs."

Malcom,

I though Democrats were more concerned with equality of "outcome" verses "equality, opportunity, and fairness".

I think that is the perversion. It would be OK if everyone were rich but the outcome has to be the same and since not everyone can be rich, outcome isn't equal, so the rich guy has to be brought back down, but then no one else can be rich either.

I would register as a Democrat if they would (as a group) relinquish their self appointed right to judge whether people have more than enough, and stop their self appointed role of allocating resources that belong to someone else.

Airplane guys: the low mileage should be viewed as a per person or group per vehicle mileage. .3 miles per gallon sounds terrible, but that is .3 miles per gallon/X hundred people. If each person had a car, or each 2 people represent a car, the mileage starts looking pretty good, plus it is a single source of pollution instead of all spread out, and it is high up.

Malcolm,

My allegiance is not with the Democratic party. I associate with the Dems because the GOP is such an appalling alternative and 3rd parties in this country are a bunch of wankers. The Dems are a lesser evil, a much lesser evil compared with the alternatives.

You, on the other hand, will continue to vote Republican even if they do appalling things. You'll say you would vote (D) if XYZ happens, but then you'll raise the bar and say the Dems haven't done enough. I've seen way too many people like you already. (End of discussion).

My (ever-changing) standpoint on government is that government should primarily serve three purposes:

1. Enforce property rights, including property rights to intangible property such as life and freedom from harassments. Not absolute right - I do not believe that a book/album should be released into the public domain for non commercial after 20 years, w

2. Provide for public goods - national defense, public education (I favor the Continental approach), public health, policing, roads.

3. Provide some level of subsidies for quasi-public good such as university research and solar panels. Taxation for negative goods such as carbon emission and driving tall vehicles during rush hour.

There are studies in progress which indicate global climate change is driven by sunspot/solar wind suppression of cloud formation.

Henrik Svensmark's work on cosmic radiation/cloud formation and Tim Patterson's (unrelated) research on historiology of ocean sediments - both still in progress - show solar activity correlating with known climate change events, episodes and eras.

Before we get too keen and too expensive about carbon footprint, let's be sure we know what we're doing?

"You, on the other hand, will continue to vote Republican even if they do appalling things. You’ll say you would vote (D) if XYZ happens, but then you’ll raise the bar and say the Dems haven’t done enough. I’ve seen way too many people like you already. (End of discussion)."

Astrid, your tone is borderline offensive. I don't try to size you up, please don't be so rude.

So was yours when talking about the Democrats. You had no problem painting them with a very broad stroke.

I did not turn this particular discussion political, you did.

But I don't get personal, that's the difference. I don't ridicule your beliefs, or try to predict what you believe or what you would do if....

I'll be happy to say some bad things about Republicans if you want. I wouldn't even call what we have representing us right now real Republicans. I am currently registered as Independent FYI.

Though I do apologize for this half completed sentence:

"Not absolute right - I do not believe that a book/album should be released into the public domain for non commercial after 20 years, w"

I meant to type: Not an absolute right - I do believe that a book/album should be released into public domain for non-commerical usage after 20 years and commerical usage after 40.

Malcolm,

On reflection, yes, I came across too strong. I should not have said that sort of thing, period. Though I still don't see how my response was disproportionate to your statement. If you don't want to be sized up based on your opinions, consider them more carefully.

For the past seven years, I've seen people who complain and complain about the Republican party, but then refuse any support to Democrats because of their broad and ill-informed prejudices against the Democratic party, without bothering to learn what the Democratic party actually offers.

To say that the current democratic party is a bunch of egalitarian pacificist is to ignore reality. That socialist fringe has never been more than a fringe, and for you to paint me and other Democrats (many of whom were liberal republicans before they turned away from the current GOP in disgust) all as egalitarian know-it-alls is offensive.

When I paint with a broad stroke, I'd like to think it at least comes from a good deal of thought, reading and personal experience; that I'm ready to embrace alternate opinions if those arguments are compelling. Did you do the same before painting Democrats with your broad stroke?

I have a longer response in moderation. The primary response is:

I'm sorry it turned personal and will watch myself a bit closer, but the rest stands. (I also find your characterization of Democrats pretty personal too)

The corollary is:

In online discussions - when choosing between niceness and what I perceive as truth, the latter is much more imporant.

Malcolm Says:
Different Sean:
You understand that income tax taxes income right?

um, yes?

The point is that in Oz a property investor adds on their rental income to personal income, and deducts mortgage interest and other expenses from their personal income. If their investment expenses outweigh their rental income, then the Tax Office owes them a refund at their top marginal rate on the difference.

It was my belief, based on reading, that not all countries allow you to claim tax breaks on rental properties against *personal* income, but you had to treat the investment as a separate income producing entity. However, this could be wrong -- what is the position in the US on MID on investment properties? (You can also count the HOA, council rates, asset depreciation on fittings, etc as deductible expenses in the same fashion.)

Hence, many investors were encouraged (by gurus) to buy investment properties knowing they would make a loss on the income for 20 years, but that the Tax Office would bail them out at up to 50% or so of their loss (depending on their top marginal rate -- the more money you make, the more the Tax Office will refund you, in a perverse irony. Since adjusting the margins recently, tho, it's more likely to be 33%, thus discouraging tax-effective investment in property.) Further, the Treasurer halved capital gains tax, purportedly to benefit buying and selling of stocks, but the reality was that most people stampeded to property, believing yet another hurdle had been taken down to speculating.

The other thing that saves speculative investors who invest at a loss (or 'negative gearing crazies' as called by the SMH economics editor) is inflation. Eventually, the fixed dollar value of the original mortgage attenuates as the dollar inflates, although you've also had to pay interest on the loan throughout. After a decade or two, the mortgage amount is worth about the average annual salary instead of 10x the average salary, or whatever happens... Plus rental amounts have gone up with inflation also... so property investors are really playing a waiting game with inflation for the most part, knowing that inflation is almost inevitable in any economy...

"The point is that in Oz a property investor adds on their rental income to personal income, and deducts mortgage interest and other expenses from their personal income. If their investment expenses outweigh their rental income, then the Tax Office owes them a refund at their top marginal rate on the difference. "

Right, that's called a business loss, that's how it works here. A net loss on a rental comes off of your adjusted gorss income tax.

"Hence, many investors were encouraged (by gurus) to buy investment properties knowing they would make a loss on the income for 20 years, but that the Tax Office would bail them out at up to 50% or so of their loss (depending on their top marginal rate — the more money you make, the more the Tax Office will refund you, in a perverse irony. Since adjusting the margins recently, tho, it’s more likely to be 33%, thus discouraging tax-effective investment in property.) Further, the Treasurer halved capital gains tax, purportedly to benefit buying and selling of stocks, but the reality was that most people stampeded to property, believing yet another hurdle had been taken down to speculating."

You're killing me.
Yes, here as well you can lose money on a rental indefinitely and deduct it, but come on, the notion of someone deliberately losing money on something for 20 years is a bit of a stretch. You need to come and meet some Americans to really understand the pettiness here. The best way to get someone to overpay on a house is to tell them that they are benefiting a landlord by paying rent, and vice versa, the quickest way to get someone to sell a house is to tell them they are subsidizing a renter. BTW what you describe is basically a private rent subsidy, so why would anyone be against that as a matter of policy?

But I'll help you do the same as the gurus. For every dollar you send me for the next 20 years, I will send you back 50 cents.

All kidding aside, here you don't even need it to be an investment property, you can claim a second residence and deduct that interest as well straight off the top. I'll patiently await the knee jerk outrage before I explain the thinking behind the 2nd residence rule, although I know there are people here smart enough to know the reasoning.

To elaborate on my 1st post because this is more an ideological discussion since facts aren't in question. Like gambling, you have to take the losses with the wins. The state can't have an income tax that only taxes the profit without allowing for the losses. I'm really struggling with the notion that somehow when a loss is applied against income it is somehow a subsidy by the state. Frankly that thinking scares me, but I realize there are two points of view here. Mine is that the state derives it's powers and revenues from taxes paid from wealth, whereas the other point of view is that everthing starts out as belonging to the state, and the state takes what it deems a fair amount. The latter is distinctively un-American.

"everthing starts out as belonging to the state"

This was the norm throughout history. Pharoes owned all land, property and people. The Moi of Hawaii likewise owned all property. Each time a new Moi came to power, all property (even the huts) was redistributed. This same theme prevailed for every "divine right" king and "beloved" emperor and is even present in modern times by those going by "General Secretary," "Dear Leader," or "Commandante."

The idea that people can own their own lives and property is a relatively recent and localized phenomenen.

I abhor all things political. I don't care about (oft mislabeled) "liberals" and (oft self proclaimed) "conservatives". I care about science, data, technology and solutions.

I've said it before, imagine a big f'ing asteroid is hurling at the Earth. Say it's about 150 years away. But science isn't perfect, neither is data complete. It *could* miss us. Some experts will make very passionate cases that it will miss us. Others will say we have no way to be sure at all. Some otherwise esteemed crackpot will surely stand up and pronounce that we, in fact, shouldn't try to do anything because that would disrupt the natural order of things. But let's assume that the majority of the scientific community agrees there is a "very good" chance it will hit us.

Then what comes next? I fully expect there will be a raging political debate. What should be done? Who will pay for it? Are the "liberals" just trying to find new ways to raise our taxes? Are the "conservatives" just trying to make sure someone else pays for it? Is the "right" just trying to let their own version of some ancient mythological savior decide fate? Is the "left" trying to use this all as an opportunity to decide upon a new world social order in which the meek (and organically, bio-dynamically, artistic, anti-capitalistic) inherit the earth?

In my opinion, I don't care about any of that. Not a bit. I just want to see capital allocated to figuring out the potential problem, assembling technology to confront it, and funding an attempt to make 100% sure that damned asteroid doesn't even get close enough to Earth to hit us. Is that a "liberal" or "conservative" position? I'd call it a practical one. I leave the ideology to those with too much time on their hands.

Just my 0.02USD nominal.

"I just want to see capital allocated to figuring out the potential problem, assembling technology to confront it, and funding an attempt to make 100% sure that damned asteroid doesn’t even get close enough to Earth to hit us"

Uh, those tasks would require cooperation and cordination of lots of people. Managing such a large group of naturaly diverse individuals will require leaders who can convince, motivate, and compromise. Who will pay? Who will get the contract? How do stop the power hungry or the bought off? That is in essence politics, and the baggage that comes with it.

If you are going to wish away politics, why not just wish away the asteroid?

I do agree about the labels, though. "Democrat," "Republican," "Liberal," and "Conservative" are about as meaningful as "Whig."

I don't wish away politics. I didn't say it wasn't necessary, inevitable or even sometimes useful. I simply said that *I* don't care about it. Let those who find such endeavors as a calling attend to matters Byzantine. We each have our limitations and specialties.

Re "taxing wasteful behaviour".

This sort of thing has no end. Examine the billions spent each year on cosmetics, or...... well name your topic. CEO stock grants, congressional retirement funds. Perhaps booze? Cigarettes? Everyone has something they despise money being wasted on. For me it's golf, can't say building a green manicured golf course in the desert makes a bit of sense, but people do it. The answer to something you don't like is often expressed in the form of taxation. Yeah a GOLF TAX, I'd vote for that one. Make them pay double for their water bills too, instead of discounted.

Randy,

I'll try not to turn this political again, but I just read a review of a new book that you might find interesting:

http://www.newyorker.com/arts/critics/books/2007/07/09/070709crbo_books_menand

Vicente,

It doesn't make sense to tax all activities individually. Makes more sense to provide subsidized water for household use and then let the market bid on everything else. Ditto energy. Ditto carbon emissions. Ditto pesticide usage. The government can set a goal and then let the market sort it out. There's no need for a specific golf course tax - if the golf course is willing to pay more money than the municipal swimming pool or the local rice farmer, so be it.

"Makes more sense to provide subsidized water for household use"

Even household use needs limits. I would like to see water priced at X/gallon for the first 100 gallons then 3X/gallon for each additional gallon.

I say this because I see so many houses in working class and up neighborhoods watering lawns for hours at a time. I use 3X because the cost of purifying sea water is three times the price of purifying fresh water. If the price goes up after water use beyond "necessities", people will respond by planting low water use grasses, more efficient water use toilets, dishwashers, washing machines, etc. The first hundred gallons stays cheap so we don't penalize the poor for bathing their children or who cannot afford to fix that leaky faucet.

Here in Virginia, rather than desalinate water from the ocean and brackish inlets and charge accordingly, we will build a reservoir by damming up a river and flood out a 400 year old Indian Reservation. That way we have cheap water for the lawns.

Headset,

Sounds good to me. I hate lawns and find them extremely wasteful. However, I also advocate high density housing and commercial development, and I loath big SUVs and trucks in suburban areas...so I might just be un-American.

"and I loath big SUVs and trucks in suburban areas…so I might just be un-American."

I hate the SUV fad as well. And it is a fad. People own SUVs for the same reason people wore disco garb in the 70s - to fit in.

I also hate the load pipes on some motorcycles. I thought we had laws requiring mufflers on motor vehicles. Don't know why these fat boys on the fat boys are not ticketed by the cops.

Also, I do not thing having a distaste for waste is "unAmerican."

Bap,

We have something like that here in Boise. Water rights run with the land, so my subdivision's homes have a percentage right to the irrigation water formerly supplied to the farm on which the subdivision is built.

The irrigation water goes from the canal into a holding pond, and from there goes into a pump to supply pressurized water through an irrigation water system to the individual homeowners. We also get potable water from the city system. My sprinkler system is plumbed into the pressurized irrigation water, and my use thereof is......FREE. We only pay a $40 annual fee for the power to run the pump and pump maintenance. My actual use of city water is tiny. My last bill was 5 CCF a month, for which I paid $8 meter fee and $7 for the potable water itself.

I guess I need to complete the water path. There's a diversion dam upstream of Boise cith which sends a portion of the Boise River water into the main "New York Canal" which proceeds by gravity across the county. A latteral goes from the NY Canal through my section and then by gravity into the holding pond. This system was built circa 1900 and is gravity fed the entire way.

Since you are in the business, you may find the following of interest.

Diversion dam www.usbr.gov/dataweb/dams/id00281.htm

NY Canal http://imnh.isu.edu/digitalatlas/hydr/cnlsirr/cnli1.htm

Malcolm Says:
Yup, the only way it works is for the end harvest to not only be a larger gain than all of the combind losses but it also has to outweigh the opportunity costs on the principal fo the whole time. Historically houses don’t go up 10% a year, since that would mean they would double in value every 7.5 years.

I’m not sure still what the problem is. I think you are more irritated by low gains rates since in your scenario you have to have a huge gain at the end for it to work. If it doesn’t work and the house also goes down in value, the house ends up becoming a large loss for the bank when the investor walks away from it.

Malcolm, you don't seem to have got the gist of my post at all. There is no real rationality behind the stampede towards over-priced property with a poor cash return -- it is based on wishful thinking, the content of RE seminars and sales pitches by developers, tracking secular trends over the last 3 decades or so and cherry-picking the best figures, etc. I'm not saying property goes up 10% every year, the gurus and salesmen say it. This is the whole point of the post. You seem to think the world follows your logic, and you view the world through the prism of your logic, rather than seeing the world as it really is, irrational exuberance, unenlightened selfish individualism and all. The fact is that many people have been influenced to buy investment property even though it is heavily cash-flow negative at the outset, in the hope of making capital gains. One commentator has indicated there could be billions of dollars lost by these purchasing mistakes over time, and people are too embarassed to talk about their losses...

You don't get a 'huge gain at the end', there is supposed to be some sort of steady gain outstripping inflation, as per my post text. The fact that the economic fundamental of wages and salaries would suggest that this is not sustainable for very long doesn't seem to occur to the people stampeding into property purchases. As for the dot com boom/bust, with its crazy P-to-E ratios. In turn, the real estate industry then tries to keep the party going when it appears capital gains are not going to occur by raising rents, if that is possible in an oversupplied market.

The observations I have made represent about half the rationale of this web site. I'm not sure why you keep quibbling with everyone over every little thing.

Bap33 Says:
HeadSet … I am in the public water profession and I agree with you 100%. People waste water like crazy. Only 3% of the water produced for public use is consumed. But, 100% of the water produced has to be ridiculously perfect. My thought’s for a remedy are different though. I think we should capture the grey waste water (everything but the toilet) seperate at each subdivision ( just an example, and a lift station is pretty common at each subdivison and a lift station would be a great collection point) - anyways - a waste water system, a simple pre-treatment system for a seperate non-potable(means not for human consumption...

bap, we need you here... I'll put you onto The Greens, and Sydney Water CEO ;)

Jimbo, The vast majority of tax is based on income - especially at the federal level where most of the taxes are collected. Income taxes provide the majority of the federal government’s revenue. When you include Social Security taxes (also a tax on income) the total share of revenue generated by taxing income is about 93%. So, only 7% of the federal revenues come from other sources.

As for sales taxes and use taxes being regressive – that is misleading. The rich spend more than the poor so they pay much more of these taxes as well. And the sales tax or a VAT could be made very progressive by exempting basic necessities, thus pushing the tax to discretionary and luxury purchases.

Tax hummers not corollas, tax dinners out not groceries, tax jewelry, yachts and travel, not medicine, food and shelter, etc.

bap, you would be feted by The Greens and Sydney Water in equal measure ;)

You could have a look at their websites in turn, although there are probably very similar analogous organisations in CA. Sydney Water are desperate to save water these days, and are looking for innovations.

I'll try to suppress the hyperlinks switching on, just add a www:
greens.com.au
sydneywater.com.au

Some key differences:
- Big biting creatures are OPTIONAL, depending on location
- Benies come FREE from the welfare state, regardless of work status
- Private health insurance is therefore OPTIONAL
- Voting is COMPULSORY
- Housing is still expensive :( (until they effect my policies, or the peasants revolt, whichever comes first)

More importantly, you could get one of these, courtesy of Casey Serin's photo library...

greens.org.au, what am i thinking...

hate the SUV fad as well. And it is a fad. People own SUVs for the same reason people wore disco garb in the 70s - to fit in.

Maybe in the cities but in the suburbs not so much. I think people out here generally have more kids and a mini-van or an SUV is much easier to cart around 3+ kids in. I had a mini-van and hated the thing--it drove like crap.

I've mentioned my shameful ownership of an SUV before, but I don't really regret having one. It's just too darned convenient. I don't use any more in gas than I did with a mini-van and where I live there is no stigma to owning one. One of my mom's best friends has been driving Chevy Suburbans since the 70's so they've been around awhile. The only thing that has really changed is that we've gone from the traditional station wagon to mini-vans and SUVs.

I think the social influences come in where things like Hummers are concerned. They are definitely for show since they have no cargo space. Even in the suburbs we don't really get the whole Hummer phenomenon.

Looks like they learned their lessons from the Tulip mania days.