Corporate tax status is in the news lately with Apple but I just read another interesting story about the NFL. It turns out that way back in 1966 in a deal negotiated by then commissioner Pete Rozelle the NFL and sports leagues in general were declared non-profit organizations. What this means in practice is that the NFL doesn’t pay taxes. This despite the fact that the NFL earned about $10 billion in revenue last year.
If the comments on the story are to be taken as any indicator then most people are fairly upset by this state of affairs. Just as many people are upset with GE for paying no corporate taxes or by Apple avoiding paying taxes by shipping billions overseas to phony companies in Ireland.
The question I want to pursue today is the effect of the fact that the NFL doesn’t have to pay taxes. That NFL employees don’t pay taxes on hotel rooms when they come to visit your city, but I pay huge tax rates on my hotel room, on my rental car, on my airline tickets. Those are the taxes everyone is for, taxes on visitors to the city.
The result of this tax-free status is that the NFL has more money to spend on salaries. They have more money that they didn’t spend on tax lawyers. They have more money to build their league. The result is the NFL pays great salaries (which are taxable) and puts out a product that people apparently want to see. I do, I have season tickets to the Rams and gladly fork over my money every year. The result of the NFL not paying taxes is good for everyone. Now, could the NFL do things differently, do I quibble with the way they’ve run their long-term disability insurance for former players injured while playing the brutal game? Yes. But, would taxes help? To my way of thinking absolutely not.
Are corporate taxes, as they are structured today, totally counterproductive? In my opinion yes. Basically, the way it works today is that any business large enough to help Congress members get elected gets laws passed that make it relatively easy for them avoid taxes while small businesses, who can’t afford to bribe congress members, bear the brunt of the corporate tax burden. Now we begin to understand the root of the problem.
Congress passes laws not to help businesses in general but to help a particular business. Generally the one that pays for their political campaigns. When Congress passes laws that will supposedly ensure the safety of our food in reality they are passing laws making it impossible for a small cattle rancher to slaughter cows because the owner of the feed lots foots the campaign bills. When Congress passes a law to help the technical industry with overseas business they are actually passing a law that allows Apple to store huge sums of money overseas to avoid paying taxes while a company like Acumen Consulting gets stuck with the real tax bill.
These laws, passed by supposedly pro-business Congress members discourage competition and destroy business. These laws help huge companies like Pfizer and make it an unfair playing field for small companies like Jost Chemical Co.
Congress is currently in the business of deciding which company will succeed and which will fail. This is not capitalism. This is Crony Capitalism.
Detractors will argue that a business that gets to keep all its profit will simply pay the upper management even larger sums and there is that possibility. The pay structure of average employee to CEO is way out of whack but I think part of that is the unfair business model that Congress has created. When the model is biased towards large companies, and it is, then smaller, vigorous companies have a far more difficult time supplanting the behemoths. Not to say it can’t happen, it’s just more difficult. If a huge multinational company pays all its top executive outrageous sums but neglects its best workers then they will quickly lose all their talented people to smaller companies that treat their employees better.
The current system allows huge companies to pay little or no taxes while small businesses pay close to the ridiculous 35% rate. That’s one reason big companies aren’t all that eager to encourage the Obama administration to lower the corporate tax rate. Or at least those businesses that benefit from the current system. Walmart, for example, doesn’t have a huge corporate tax law division and largely pays their taxes. They want to lower the rate. GE, they like things just the way they are.
I’ve gone on a little long here but I want to sum up. The corporate tax rate as it stands today helps only the largest businesses that help fund the election cycles. It doesn’t help small businesses. It doesn’t help employees, it doesn’t help anyone. One look at the tax-exempt status of the NFL proves it. Their league is doing great and generating profit for many people; jersey sales, parking lots, hotels, construction companies (Jerry Jones spent $2 billion out of his own pocket to build a stadium), and many others. It’s a model we should at least consider. Don’t tax business profits at all. Tax salaries, capital improvement projects, purchases, whatever. At least give it a try because the current system is broken.
Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water (Jon Gray v. Eleniak the Golden Flame c’mon, that’s awesome stuff)
Next Release: The Spear of the Hunt
I don’t think most of my friends will be much interested in the recent USGA ban on anchored, or belly putters, but I find the topic quite interesting for a number of reasons. First a little explanation for those of you who have no idea what I’m talking about.
Normally when swinging at a golf ball a player puts both hands down the shaft of the club and swings freely around his or her body. By anchoring a putter the golfer holds the end of the club against his or her chest or belly and swings it in pendulum fashion with the other hand. This has the effect of using the body to stabilize the club. Unless you move your torso, at least part of the swing is going to remain steady.
This sort of putting first started to gain fashion about twenty years ago and I know all about. Twenty years ago I worked at a golf course as an assistant pro. I wasn’t a particularly good player but the best part of my game was putting. I fooled around with anchored putters and absolutely loved them. They help ensure the club face is “square” or at a ninety-degree angle to the face of the ball when contact is made.
At this time the USGA allowed the practice and has continued to do so until now. The USGA decides the rule of golf in the United States while the Royal and Ancient Golf Club makes them for the rest of the world. Yes, the R&A, it’s a real thing you non-golfers.
There is tumult in the golf world about the USGA decision that effective Jan 1, 2016 anchoring will become illegal. Some players have been putting this way for many years and now it is suddenly against the rules. A number of professional golfers are angry about it but that pales in comparison to the PGA’s opinion. Why, you might ask? I’ll tell you why.
It’s an interesting situation. In most professional sports the rules making body is one and the same as the professional league. If baseball says corking your bat is illegal then it’s Major League Baseball making the rules for its game. If the National Football League says lowering your head to hit an opponent is illegal then it’s the NFL making the rule for the sport it runs. It’s not the same in golf!
The USGA makes the rules but the PGA (Professional Golfers Association) runs most of the tournaments. PGA players argue that anchoring the putter offers no statistical advantage and they are right … for professional players who practice putting hours upon hours every day. They get the putter face square to the ball virtually every time. When they miss a putt it’s because they misread the green or didn’t swing at the right speed. For your average golfer the anchoring, if done properly, is undoubtedly helpful.
The PGA makes their money from members. By that I mean average golfers. Many average golfers love anchoring. Many average golfers play gambling games with their friends while enjoying a round of golf. Many average golfers are older and the act of bending over a putt is not easy for them. Anchoring is very helpful in this regard when a longer putter is anchored against the chest. Many average golfers are rather upset that their friends are going to call them for a rules violation if they anchor their putter as they’ve been doing for twenty years.
The PGA could easily tell the USGA that they are going to ignore that rule for their members and their tournaments. Is it starting to sound interesting yet?
Now, obviously, the USGA can make whatever rule they want but just as obviously the PGA can choose to ignore it.
What will happen? I don’t know but I aim to keep watching. Of course, I wouldn’t be me if I didn’t give my opinion on the subject.
I support the USGA’s decision as it’s their right to ban anchored putters, or square-grooves, or certain dimple patterns on a golf ball. I think the rules of the USGA should be followed by the PGA and by the players of the game, even at a casual level. However, I think that if a group of players wants to “give” a putt of less than the length of the grip on the putter, that’s fine as long as they all agree. Winter rules, Mulligan, all of these things are against the official rules of golf but if a foursome agrees to them then what’s the problem? I say let anchored putting fall into the same category. If the group says it’s OK, it’s OK.
What do you think?
Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water (follow Jon Gray as he tries to find the legendary sword)
Next Release: The Spear of the Hunt
Ok, so it’s a few years from Superbowl LIX but I’m already annoyed. We’re only at Superbowl XLVIII which means we have LIX minus XLVIII divided by L, carry the V and … merciful Flying Spaghetti Monster someone please kill the roman numerals. I mean really, Superbowl XLVIII?! What sort of madness is this? How did the Roman Republic ever last long enough to become the Roman Empire? Roman frigging numerals?!
Thank you, Khwarizmi, for introducing the west to the Hindu-Arabic numeral system. We’re grateful. Really, really grateful.
Why? Because it works. I admit that binary numbers held a certain charm for me as a not so young computer nerd, can you say Superbowl 110000? Of course there is no substitute for hexadecimal – Superbowl 30 it is.
Why not simply Superbowl 48? Good old Khwarizmi would be proud. If we continue down this path of madness we have Superbowl LI and Superbowl LIV on the horizon. Sure, it was cool back in Superbowl XIX and Superbowl XXI. Roman numerals have a certain romance up to a point.
I wore a toga at a few college parties back in the day and I have a fondness of Julius Caesar (yes I practice a day of mourning on March 15 and I don’t think there’s anything wrong with that) that some people don’t understand but even I’ve had enough of this number craziness. How can anyone say Superbowl XLVIII with a straight face? It’s only going to get worse. Someone has to take responsibility and step in before it’s too late.
Stand up! Join me! Say no to Superbowl XLVIII. Shirt printers out there, I beg you to try the number 48. It’s a good number. A sound number. It foreshadows the deliciously round 50. It says I’ve been around a while. Maybe I’m not the 139th running of the Kentucky Derby (who doesn’t like to say Ooooooooooorb). Maybe America’s Pastime has had 109 Fall Classics (go Cardinals!). But 48 isn’t anything to smirk at.
I’ll not besmirch anyone who tries forty-eight. It’s a double-factorial of six (whatever that means). It’s a semiperfect number. Did you know that 48 is the smallest number with exactly ten divisors? I didn’t but now I do. 48 is a Stormer number, it’s a Harshad number, and believe it or not, it’s a Narcissistic Number if subtracted instead of added.
So, join me my loyal followers, find your black sharpies! Where you see the offending XLVIII take to the warpath!
For – tee – Ate!!
For – tee – Ate!!
For – tee – Ate!!
Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water (300+ pages of ripping good fun)
Next Release: The Spear of the Hunt
A recent spat of stories about the daughter of former major league baseball player Ken Griffey Jr. reminded me of what a player he was. More importantly, what a player he was compared to his peers. Most importantly, what a player he was without using Performance Enhancing Drugs (PEDs).
In an era when PEDs were becoming prominent Griffey didn’t use them. The reason I come to this conclusion is that as the years went on his performance declined and his injuries increased. That’s the opposite pattern of players who in advancing years see increases in their performance and recover more quickly from injuries. That pattern of improvement in later years is by far, in my opinion, the strongest indicator of PED use.
Griffey was truly great and had he not suffered a series of injuries or had he chosen to take PEDs he would probably be considered one of the best baseball players of all time along with Babe Ruth and Willie Mays. He was much like Mays with power (630 home runs), speed, and defensive greatness (10 gold gloves). In his first eleven seasons he produced 1,752 hits, 398 home runs, 1,152 RBI, and 167 stolen bases.
The important point for me is that Griffey played in an era when PEDs were being used and, I think, he chose not to use them. When Barry Bonds and Roger Clemens, great players both, decided to become even greater they needed to use PEDs, Griffey Jr. chose to play without them.
When many of his peers were using steroids and other PEDs he gritted his teeth, went out there, and played with whatever his body had left. I think it’s difficult for everyday fans to understand the pressure a professional athlete faces in regards to performance. Imagine if tens of thousands of people watched you do your job every day. Imagine if younger, healthier workers came to your office every spring with the stated intention of taking your job, your livelihood. For a star, for a superstar, for a player just trying to make the team, the temptation to do anything to win, is strong. Especially if you know your main competitors are doing it.
I’m convinced that Barry Bonds turned to human growth hormone (HGH) only when he saw lesser peers exceeding his achievements. Can you imagine watching someone cheat away and get praised for it? Cheat away and make more money than you? Cheat away and maybe take your job?
Head on over to the Baseball Almanac and take a few turns around the hitting categories. See how Griffey Jr. compares to the all time greats and then start removing the PED abusers from the list.
I was lucky enough to be in the park the day he hit homer 500 on Father’s day with his dad there. Here’s to you Junior! From a National League St. Louis Cardinals fan. Thank you for the great memories.
Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water ($2.99 for 300 pages of rip-roaring sword and sorcery excitement)
Next Release: The Spear of the Hunt
The National Transportation Safety Board recently recommended that the drunk driving limit be reduced from .08% to .05% in order to save lives. When I first heard about this I scoffed at the idea as a further example of the nanny-state of our country. But, I wanted to be fair so I started to look up some numbers.
The NTSB makes their recommendation largely on the idea that a number of European countries reduced their own legal limit to .05% and saw a reduction in drunk driving fatalities. The board certainly implies, but does not state explicitly, that the reduction in fatalities is related to the new laws. The reality is that in recent years the number of fatal crashes has declined across the board, largely because of huge strides in vehicle safety systems. The total number of accidents, fatal or not, has stayed relatively stable over the years.
Also, the number of fatal car accidents related to alcohol is highly skewed towards very drunk, or hardcore drunk, drivers. Drivers with a blood alcohol content above .15% cause 70% of fatal accidents and the curve follows a predictable path. As blood alcohol rate goes down, increasingly fewer accidents occur.
I think it’s safe to say that such a reduction will result in lives being saved but that reduction will be limited in effect. Drunk driving accidents caused by drivers between .05% and .08% are small in number. There is a reasonable argument that it’s worth it even if one life is saved. The question then becomes what are we giving up if we reduce the limit?
One argument is that we are giving up our freedom. That it is our right to drive in whatever condition we want to drive in. This is patently false. Any activity that is inherently dangerous is subject to reasonable restriction by the government. So, now we must ask our ourselves, is .05% a reasonable restriction?
Depending on the weight of the person; a relatively small amount of alcohol will produce a blood alcohol content between .05% and .08%. For people of smaller stature this can be as little as a single drink. But, should people be driving at all if they are impaired? Even if by only a single drink as it is clear that such impairment does indeed cause accidents and cost lives?
All right, I’ve examined the facts and made points in both directions and now it’s time for me to state my opinion. It seems clear that lowering the legal limit of blood alcohol content necessary to operate a motor vehicle will produce a small decrease in traffic fatalities. It is also clear that as citizens we enjoy certain freedoms and the vast majority of people drink moderately and drive safely. That laws designed to reduce fatalities will inordinately effect such people.
I think every state has a right to make it illegal to drive under whatever level of intoxication they choose. Drinking and driving, even in small amounts, is not a constitutionally guaranteed right. I also think lowering the limit to .05% is largely pointless. I do think that advancements in car safety will largely eliminate the need for this entire argument. Cars will continue to be safer as collision avoidance systems develop.
Frankly, I eagerly await the day when my car drives itself and all I have to do is get in and tell it where to go. Then fatal accidents, drunken or not, will drop to almost nothing and we can eliminate all laws having to do with drunk driving as they become obsolete We can also get the police back to the job of stopping crime and hospitals back to the job of helping the sick instead of spending billions on emergency room care for the uninsured who get in car accidents.
But in the end I must come to a decision. I decide that reducing the rate to .05% is unreasonable. That the safety engendered by such a move does not rise to the level of the loss of freedom that it entails. What do you think?
Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water (300 pages of awesome adventure for $2.99)
Next Release: The Spear of the Hunt
The rounding up and penning of wild horses in western states has gotten both a great deal of national news and personal Facebook postings of late. One of my good friends is an animal activist from Colorado and I’ve been reading about this activity, thanks to her links, for several years now. It seems to be finally getting some national attention as I spotted a lengthy story on the subject yesterday.
The reason I want to write about it today has to do with the complexities of the issue and the difficulties of finding solutions. Let me first describe the problem. Wild horses are not actually wild horses at all, they are feral horses. That’s not really pertinent to the issue but interesting nonetheless. These animals are the descendants of domesticated horses that escaped captivity long ago. In the western states there is a population estimated at about 82,000. Of these, 32,000 are free in the wild while another 50,000 are held in pens. These 50,000 horses were largely captured in annual roundups. According to the Bureau of Land Management’s (BLM) own statistics about 1% of all horses captured this way end up dying because of injuries sustained in the operation. One percent doesn’t seem like a lot but it’s a significant number. Many other horses are badly hurt being driven into barbed wire fences among other things.
After roundup the horses are offered for adoption but the number taken in has been dropping and those in captivity rising. Capture operations and ongoing housing and feeding costs an estimated $78 million dollars a year. The costs are rising as more animals are being held. That’s taxpayer money.
We’ve got animal cruelty and big expenses. So, why is it happening?
The western lands where the horses roam is also home to sheep and cattle ranches. These animals need the grass to breed and survive. The ranchers who own these animals depend on the land for their livelihoods.
Environmentalists and animal lovers want the animals to roam free. Ranchers want to kill them all. The roundup as it stands is a compromise solution but it’s beginning to fail. So, we need to figure out something else.
The biggest problem is the BLM refuses to sell the horses for slaughter. Animal activists regard such a solution for the horses as anathema. So, to appease the ranchers we keep rounding them up and to appease those who love the horses we don’t kill them.
I know I’m not going to be popular here but the fact is we need a hunting season on horses. Sell permits and let people go out there and shoot them. Horse meat largely isn’t eaten in the United States but it is elsewhere in the world and for good reason. It is lean, low-fat, high-protein meat. Yes, we love horses, yes we find watching them roam the western lands beautiful. Here’s the glory, if we’re willing to compromise we can have it all.
Hunt the horses to keep numbers at a level satisfactory to ranchers and activists. Eat the meat and enjoy it. Allow thousands of the animals to roam the western landscape for the enjoyment of endless generations to come. The horse lives a life free to roam until it is killed. That’s a good life, maybe not as long a life as they would have naturally but better than being in a pen.
The best solutions generally don’t make anyone perfectly happy. That’s often the sign of a good compromise.
As for me, I’m digging my bunker and getting my food and water supply ready for what will surely be an assault by my horse-loving Facebook friend!
Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water (full-length fantasy fun for $2.99)
Next Release: The Spear of the Hunt
An interesting case is taking place in England about a poker player who won a significant amount of money from a casino. The casino is refusing to pay because the player supposedly cheated. What I find intriguing about the case is that the so-called cheater, Phil Ivey, is not accused of breaking the rules but of taking advantage of the failure of the casino to note a printing error on its cards.
Basically, Ivey and a companion at the table supposedly noted a mistake on the cards which allowed them to correctly identify which cards were dealt even when face down. The question becomes: Is this sort of behavior is cheating? Is taking advantage of a weakness in the system cheating?
To my way of thinking this is different from cheating in that a cheater doesn’t play by the rules to gain an advantage. In this case the casino dealer had access to all the same information as Ivey. It all becomes rather interesting from a philosophical point of view.
I think we can say without reservation that it’s unethical. If you are playing baseball and note that your opponent’s shoelace has become untied, the sporting behavior is to point out the potential game-changing lace in order to even the playing field. It’s certainly the morally correct behavior but I’m of the opinion that ignoring the shoelace in the hopes your opponent falls down at a crucial time in the game does not rise to the level of cheating. If the casino’s accusations are true, that Ivey noted the printing flaw and played with that advantage to win a large sum of money, his behavior is unquestionably unsporting but, in my opinion, doesn’t rise to the level of cheating.
On the other hand, if he was somehow involved in introducing the printing flaw to the cards, then I think his behavior is not only cheating but criminal. In that case he committed fraud and theft. I don’t think anyone is accusing Ivey of such a thing and I only mention it as a philosophical idea.
The real question I’m pondering is at what point I would engage in unethical behavior myself. I like to think that in a friendly game of cards with friends; if I noticed that the cards were printed badly and I had an advantage, I would immediately alert my friends and we would get a new deck. I know that if a friend of mine noticed such a mistake on the cards and didn’t notify the rest of us and went on to win some money I would be somewhat angry. Not to say they cheated, just that I would consider it poor behavior.
I think it’s become normal behavior in our society to win at all costs. That taking advantage of a situation rather than pointing it out is largely the way we function in the modern world. I don’t think it’s a good thing but I do think it’s accepted. Judging by the comments I read on the Ivey story most people think what he did was perfectly reasonable. I don’t think so. I think it was unethical. I also think the casino owes him that money. He didn’t cheat, he just took advantage.
Would you take advantage of misprinted cards in a game with friends? In a game with tens of thousands of dollars at stake? Does the prize make the behavior acceptable? Interesting questions. What do you think?
Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water ($2.99 for 300 pages of action packed adventure!)
Next Release: The Spear of the Hunt
