In addition, you should still have protected retirement accounts, like now. You get a similar voucher when you withdraw from an IRA or 401K. This way, you aren't taxed on your retirement savings.
Whether or not withdrawals are taxable income today depends on the type of account.
For simple IRAs and 401(k) plans (and 403(b) if you work where they have that instead), withdrawals are considered straight income and you pay tax on it in the year you withdraw it.
Earnings inside the account accumulate on a tax-deferred basis, not a tax-free one.
There are also restrictions on when you MUST take money out of a simple IRA -- the government allows you to defer the taxes, but not indefinitely.
Withdrawals from Roth IRAs are tax free, but there are significant restrictions on who can make contributions to a Roth IRA -- if you make "too much" money, you are not allowed to contribute to a Roth.
I'm taking theory of economics courses this semester and the economists love to make it "formal". Standard utility functions (how much is your money worth to you) are assumed to satisfy:
I'm not totally convinced that the sales tax is the way to go though. In some cases, wealthy people can get around this, such as buying their yacht in a different country and sailing it in, which apparenly happened one time when luxury taxes were increased.
I'm not convinced that a sales tax is the right thing either.
Personally, at the national level and at the percentage that such a tax would require, I'd probably rather see a variation on the current income tax, maybe with the following as a foundation:
Income is income -- salaries, interest, dividends -- it's all income.
Money put into savings of any sort is a deduction from taxable income.
Money taken out of a savings account is income.
Interest that stays in the savings account is not income.
Money borrowed and not put into sorm form of savings is income.
Lots of things that are different today -- 401(k), IRA, brokerage account -- are "savings accounts" under this scheme and get treated the same way.
Income that doesn't go into savings is assumed to be consumed, and is therefore taxed.
I'd probably classify houses and such as a special case of savings, so that borrowing to buy a house doesn't generate a big tax liability.
Taking out a second mortgage to put on an addition doesn't generate a tax liability, but using it to buy a boat does.
Note that almost all of the necessary information is already collected by employers and banks and brokerage houses and such and reported to the government -- no real new information is needed.
There are some obvious shortcomings compared to the sales tax approach:
People who want to keep their savings in cash under the mattress are penalized.
Commercial banks would have to be required to allow everyone to open a no-fee savings account.
We don't get rid of the IRS and tax audits and the whole tax preparation industry.
Drug dealers and others with large streams of unreported cash income still don't have to pay taxes, except for the usual risk of getting caught with undeclared income.
Conversion of existing savings, on which taxes have already been paid, and on which there should be no taxes when withdrawn, is a bit of a problem, but maybe just an accounting problem.
Then don't tax those sales. Why must it be an income tax?
I'm not tied to an income tax -- but believe that in some circumstances, income might need to be recognized in some fashion in order to be "fair" about taxes.
Maybe the right stuff can be classified as a "subsistence" good and not taxed -- no tax on milk but taxes on caviar?
No tax on a visit to the doctor's office but taxes on elective surgery?
I live in a state where some items are exempt from the state/local sales taxes, and there seems to be darned little sense about some of the things that are tax-free.
Only if the $150E3 person actually buys those luxuries. If the $150E3 person only spends as much as the $15E3 person then they have exactly the same standard of living.
The person with $150K who lives on $15K (including a consumption tax on everything) has made some choices -- maybe they got sick, and elected not to see a doctor.
For the person with $15K who gets sick, the tax they paid on other things (under the assumption that everything is taxed) may well have been the difference between being able to see a doctor or not.
Their choice was not between seeing the doctor or leaving the money in the bank -- it was between seeing the doctor and eating.
I've been poor and I've been well-off, and I'd like to see the people who HAVE to choose between eating and medical care get a break.
How? Are different people charged different sales tax rates?
To state the obvious -- no, it's harder on the poor because they're NOT charged different sales tax rates.
A 15% tax on someone trying to live on $15K/year will cut into the basics -- food, minimal shelter, health care.
A 15% tax on someone living on $150K/year will cut into the luxeries -- they can pay the tax and still afford enormously better food, housing and medical care than the person with $15K.
And someone taking home $15M/year won't even notice the 15% tax -- the lifestyle differences between $15M/year and $12.75M/year are insignificant.
Time to get a national sales tax. Quit taking taxes out of people's paychecks, and tax items everyone buys.
While I could be convinced to support a consumption tax in concept, there are some problems with the conversion from the existing income tax that I have never figured out how to handle.
After 30 years of living on less than our income, my wife and I have accumulated a substantial sum that is not in a tax-deferred account.
We have paid the income tax on every penny of it (excepting investment earnings on it in 2004, and we'll be paying those next year).
You have to find some way that we can spend that money and NOT pay a 12-15% consumption tax on those purchases.
All of the approaches I have thought of lose some of the advantages of the simple sales tax approach.
You could keep the IRS in place and make it a different form of income tax -- moneys deposited into a savings or investment account are deductions, and all income that can't be accounted for that way is assumed consumed and therefore taxable.
You could refund the tax I'll pay in advance -- if I've got $100K in a savings account, send me the $12K I'll have to pay when I spend it and I'll be satisfied.
Both of those have problems.
Thoughts?
Oh, and you left out one of the most attractive features of a consumption tax -- it's much harder for uber-rich people to set up tax shelters and avoid paying their share.
Would you let an unlicensed surgeon operate on you? Perhaps one who had gotten his M.D. in the 50's?
How about having an uncertified accountant manage your tax returns?
A license (certification) program, if properly implemented, could at the very least remove the egregiously incompetent from the software industry.
In the 25 years that I've been out of school, the certification of engineers and programmers has come up regularly.
Most states require that if you want to be a "professional" engineer -- hang out a shingle and sell your services to the general public -- that you pass some sort of certification and be licensed, much like a public accountant.
Large companies have successfully resisted the occasional demands that their employee-engineers be individually certified for years, viewing it as an unnecessary expense.
Periodically the subject of licensing for "software engineers" is debated at least somewhat publicly -- the state of New Jersey introduced legislation to require such a license in the late 1970s, and it was voted down after every large corporation in the state threatened to leave if it were passed.
The difficulties with a system like this for programmers are even worse than they are for more traditional engineering fields.
Where would you draw the line between software that must be done by a licensed professional and that which can be done by an unlicensed programmer?
Should a spreadsheet for a business case require a professional?
How about if it includes large, complex macros?
How about if a custom ActiveX component is written and embedded in it?
What if the same functionality is coded in assembler language and run on an embedded device?
Or would business planning applications be excluded from the requirement for certified programmers entirely?
Would there be distinct disciplines within the licensing program -- "I'm sorry, I can't write that administration script because I'm only licensed for embedded designs" -- in the same way that a licensed mechanical engineer can't do civil engineering design work?
Most of your analysis is spot on.
I can think of at least two problems you don't mention that are going to come up early and often with co-lo.
First, upstream bandwidth is a really scarce resource for most cable companies.
It's already in use for the cable company's DOCSIS cable modem system, for RF return from set-top boxes for premium video services (PPV, VOD and the like), and in some cases for telephony service.
Upstream bandwidth limitations will impose a definite limit on the number of co-lo DOCSIS systems that could be run, and in some cases that limit will be zero.
Not because the cable company is being a bad guy, but because of the physical reality of limited bandwidth, noise ingress, etc.
Second, many (most?) cable companies bridge multiple nodes together in the RF domain so that a single CMTS (or single blade in a big CMTS) serves the customers on all those nodes.
An ISP using co-lo will have to live with whatever node aggregation the cable company is providing.
The ISP might WANT to allocate more bandwidth per subscriber, but the RF-level bridging might make that impractical.
It seems unlikely that the local franchising authority would make the cable company rearrange their network, possibly breaking other services, at the whim of the ISPs.
When I worked on multiple-ISP architecture questions for a large cable company, one of our basic assumptions was that all ISPs (including ourselves) would ride on the single DOCSIS system operated by the cable company.
To the best of my knowledge, the ISPs were all in favor of that practice -- they WANTED to leave all of the ugly RF issues in the hands of the cable company.
But in my opinion this is a terrible system. The bell curve has no true logical basis. And even if it did, this system would still be flawed: assume a company of 1000 people split into 10 divisions of 100 people each. Under this system each of those 10 divisions must utilize this ranking system. But what if one division has all 100 of the "superstar" employees, and another has all the worst employees?
Many years ago, exactly this type of situation was one of the principle reasons that I decided to quit being a manager.
As part of a corporate reorganization, we had assembled a team that was truly excellent -- everyone had been in the top third of the performance "ladder" in their previous organization.
The next department over had not done nearly so well in the reorg and had a lot of dead wood.
During a budget crisis, each department was required to put together a 5% list of the people that they would let go (fortunately, the crisis was more imagined than real and no cuts were made).
One of the last chores I did before I went back to just being on the technical staff was to discuss everyone in my group's career plan with them.
For two of them, I had to suggest that they might want to look for a position in a different department so that they could be "stars" rather than "duds".
At that time, there were only a handful of places where I could do the work that I wanted to do, and all of them used a system like this.
I could live with it as a worker, but not as a manager.
Still not sure, despite many years, if retreating from management rather than staying on and trying to change the system was the right thing to do or not.
In many places there isn't a monopoly, government-granted or otherwise, on pay-TV service.
Some franchising authorities have granted permission for overbuilders to construct a second, competing cable system.
In most areas there's a choice between cable and satellite.
There are two satellite providers, since the FCC had the good sense to disallow the merger of Echostar and DirecTV.
Where there is a monopoly cable provider (ignoring satellite), the monopoly was not granted by the Federal government but by the local franchising authority.
If a la carte pricing is going to be a requirement, shouldn't it be a requirement imposed by the authority granting the monopoly franchise?
Finally, if Congress is going to require that the cable operators unbundle channels, then they better be sure that they require the media companies to unbundle as well.
That is, if Comcast is required to sell ESPN without a dozen other Disney-owned channels, then Disney should also be required to make ESPN available to Comcast at a lower price than the bundle of ESPN plus other channels that they require Comcast to buy today.
It would be interesting to see, should the cable and satellite providers sell those channels on a cost-plus-markup basis, how loud the end-users scream at ESPN's 20% annual price hikes:^)
In 1960 we where gong to have fusion in 1980.
In 1980 we where going to have fusion in 2000.
In 2004 we'll have it in 2014.
Things are starting to look optimistic!
And a good thing.
China and India appear to be getting their acts together so that their economies can develop.
Industrialized economies need a LOT of energy.
If they're ever going to approach the level of per-capita energy consumption of the US, or even Japan, we need some good new sources.
Every time I've ever tried to lay out a long document in Word with figures and graphs, especially if they have captions, I've found myself wanting to pull my brain out through my nose with a pair of kitchen tongs. They fly all over the place and sometimes completely disappear. The only reliable way I've found is to write the whole thing and then put the pictures in at the end, which is incredibly annoying if you're writing a 20,000 word dissertation.
Word has never been a suitable tool for writing academic-styled publications -- people manage to do it, but as you point out, it's a struggle.
One principle reason is that the software does not support the concept of displays, floating displays in particular.
Pick up almost any textbook on a technical subject, or look at journal articles, and they are full of floating displays.
It's pretty easy to recognize typesetting software written by/for academics -- TeX and troff come to mind -- because they make it easy to handle floating displays.
Add three paragraphs, delete four others in a different place, rearrange text, and the displays still come out intact, and in sane places.
I have wondered for many years why MS has refused to incorporate a serious display capability into Word.
Perhaps because it's hard to do in a WYSIWYG way -- until the software is doing the final page layout, the positions of the collection of floating displays is not precisely known.
That will be from the baby-boomers retiring in droves, so the jobs will not much be in CS. Maybe a few, but not significant numbers. They'll be more likely to be in things that we're already short on, like nursing, teaching, etc. I'm hoping a lot of them are public-sector, so that my MA in Urban Planning will be worth something (assuming I actually finish it by June...;-)
It will be interesting to watch the retirement of the baby boomers unfold.
On average, the boomers have done a miserable job of saving for their own retirement (I'm at the tail end of the boomer generation, I'm allowed to criticize us).
Most of them will not be able to live on Social Security alone (and despite assertions to the contrary, the boomers will get their SS payments, unless the US decides to ruin the world economy by starting to default on their bonds).
The worker shortage seems likely to hit in very specific situations where the boomers have other retirement funding available.
I would expect to see lots of boomer doctors retire (they've been able to save),
boomer teachers and government workers retire (they have nice government-funded pensions),
boomer owners of successful small businesses retire if they can find purchasers for those businesses.
Many boomers who thought they were prepared have seen their plans implode in the past five years -- the stock market unpleasantness drastically cut the value of many 401(k) and similar accounts, and too many have discovered that a corporation going through bankruptcy court can make drastic, unilateral cuts in the pension promises. It appears likely that there will be corporate bankruptcies caused by pension obligations in the not-too-distant future -- GM has almost two retirees per active employee, and Lucent has almost eight!
Re:The wrong analysis
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· Score: 2, Insightful
Columbus probably came as close to the army of analysts as the technology of his day would allow -- consider the amount of analysis that went into the South Sea Company in 1710, a couple of hundred years later. Those guys would have done Enron and Worldcom proud:^)
I am not opposed to us going into space.
In fact, I'm strongly in favor of it, although I'm realistic enough to believe that it will take longer than most optimists think.
I think the government is going about it in very much the wrong way.
Suppose that JFK had announced, not that we would send a man to the moon, but that we would put a 20-ton payload into LEO in ten years, and every five years after that we would cut the price for such a load in half.
Had we continued that successfully from 1970 or so (the Saturn V could deliver that much to LEO, I believe) to the present, look at where we would be.
If it cost $1,000 per pound in 1970, we would now be closing in on $8 per pound -- a 20-ton payload to LEO for under half-a-million dollars.
I'd cheerfully bet that commercial ventures would be lining up to put all kinds of payloads in orbit at that point.
Lunar missions would be "cheap" -- one or two loads for the spaceship, one or two loads for the fuel, a load for the reentry vehicle -- and off you go.
Two more reductions -- $2 per pound -- and I'll bet you would see a private Mars expedition mounted.
Also permenantly orbiting "tugboats" to go get sick satellites, etc -- leave the tug in orbit, throw up a pilot and a load of fuel when you have something you need to do.
Probably orbiting repair shops on the same basis.
Government ought to be in the infrastructure business -- it's much more useful for them to build roads than to build autos, and the returns from a dirt-cheap heavy lift capability would be much more valuable than a one-shot deal to bring back some moon rocks.
If the eary explorers had taken the same route we had, it would have been hundreds if not thousands more years before the early 'explorers' laid out their shipping routes. I doubt if Christopher Columbus had a detailed business plan showing return on investment before he went and ask for his backing. He had a idea, which is of far more importance.
Bzzzzt!
Wrong.
Columbus justified his initial voyage on the basis of establishing a trade route to the Far East.
At the time, the Italians (okay, the city-states that would eventually become Italy) controlled the overland routes.
The Portuguese controlled the sea routes around Africa.
Columbus proposed an alternate route that the Spanish (okay, what was in the process of becoming Spain) could control.
Concrete business plan,
known products and markets,
immediate profits anticipated.
Columbus was supposed to return with a hold full of spices, and was nervous about returning without a profitable cargo.
Voyages for "research" were a very small minority compared to those intended for military or commercial benefit.
Cook's first Pacific voyage started in 1768, nearly 150 years after the British began establishing colonies in North America.
Darwin's Beagle voyage started at the end of 1831, 60 years after Cook.
Almost all of the early "explorers" were seeking immediate commercial or military advantages for their country.
Re:Expencive? off course it is expencive
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The first automobiles (better know as 'cars' today) were hidiously expencive and highly unreliable machines. Horses were cheaper, more reliable and even selfreprodusing. By applying the same echonomic logic, people should not have started using cars at all, but keept to the horse... or at least done so until cars could be massmanufacured cheaply (hint: ford would never have started massproducing cars if there wasn't a market - catch 22 anyone?)
I think your economic history is mistaken.
First, there was a demand for transport capabilities that horses could not meet.
There are restrictions in terms of the load horses can move -- teams of 200 or 300 horses are not practical and cannot be made practical.
Further, horses came with their own set of problems -- for example, removing the daily output of horse manure from New York City or Chicago had become a serious problem by 1900.
Second, experiments to develop sufficiently efficient internal combustion engines could be funded by individuals or small companies -- the unusual engine that powered the Wright brothers first airplane was built by one individual in a matter of a few weeks.
The cost of building a one-off truck or car was small.
US economic success has a very long history of individuals taking gambles on new technology.
Third, when Ford built his factory, there was an established market for automobiles for the rich.
The gamble was whether there was a market for a cheap car for the non-rich.
But again, the gamble was of such a size that a small group of investors could provide the money to build the factory and start production.
And the risk that the mass market existed was not so large as it might appear -- when have the middle class not wanted goodies similar to those enjoyed by the rich?
Unfortunately, technology at this time is such that a launch capability requires a national effort to implement.
Your analogy would be much better if the government had stepped in to fund the development of the automobile in a situation where horses were still working out well and things had turned out nicely.
Re:Personned Space Travel
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· Score: 2, Informative
Give it a few more years (50 or so) and things will be vastly different.
The first moon landing was 35 years ago this coming July.
In that interval, we have lost our ability to put people on the moon and the price-per-pound for large payloads to LEO has changed very little.
Why should things change in the next 50?
So long as the fundamental limit is the use of the energy from chemical reactions to lift objects to orbit, there won't be substantial change in the costs.
Alternatives all appear to require breakthroughs in engineering and/or fundamental science -- space elevators require large volumes of material with insane tensile strengths, there are no demonstrable theories that might lead to "massless" drives, even compact and lightweight life support for extended periods is a problem with no obvious approaches.
If you had said 500 years I might buy it.
Re:Neither right nor wrong: just necessary
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· Score: 1
I think space exploration is a necessity and not a commodity. The complete ecological system is so fragile and many parameters (asteroids, energy output of the sun) are out of human control that it would be negligent not to secure the prolonged human existence by going into space.
If you really believe that, then you have to be opposed to NASA's current manned space efforts.
The goals would have to be (a) figure out how to have robots assemble a functioning, self-sustaining, underground habitat from the raw materials available there and (b) transporting people to the moon and leaving them there.
It is not practical to lift enough air, water and food to the moon to allow people to build the initial habitat -- machines are going to have to do it.
It is not practical to lift enough people, even on one-way trips, to populate the moon -- it will have to be done the old-fashioned way, people having kids and raising them.
There will be unusual and unexpected problems.
The ISS seems to be slowly being rendered uninhabitable by mold and fungus growing almost everywhere.
But the billions of Federal dollars that flowed into the computer and semiconductor industries as a result of the Apollo probes certainly jumpstarted the computer revolution that began in the 70's.
And the tens of billions of dollars from other customers that flowed into those same industries at the same time had nothing to do with it?
IIRC, no single-chip microprocessor has ever been certified for use as a controller in a NASA manned space vehicle -- it's all still basically early 1970s technology.
Also from memory, the onboard computers for the shuttle were designed by IBM by borrowing the best ideas from their existing products of the time -- they did not create any important new hardware technology to do the job.
The shuttle's onboard computers do use semiconductor memory now, but I believe that is a fairly recent development.
Fuel Cells. Contact info is on my homepage. I'll be expecting a check in the mail shortly:-)
As an unbiased observer (ie, not being paid by either side), my judgement is that this doesn't meet the criteria.
How much of the electric power that I consume at home or work is generated by fuel cells?
What fraction of the passenger-miles for people or ton-miles for cargo are in vehicles using fuel cells?
How many laptops or handheld electronic devices are powered by fuel cells?
"Incalculably valuable spinoff" requires that the devices be in widespread use and that there is no alternative with similar capabilities and economics.
The reason high-tech jobs are being outsourced is because there are fewer high-tech skills being taught domestically. Universities at the undergraduate level have become what "high school" used to be -- a piece of paper that says you've got the minimum skills and education necessary to participate in the economy.
Fascinating.
I know a number of unemployed technical people who not only have the basic skills and education, but also have 15-30 years experience.
Who can not only do the technical work, but can run a meeting or communicate with the marketing folk.
Currently under-employed or unemployed.
Why?
They can't give a company 60 hours a week in the lab or on the road because they're trying to raise kids and make a marriage work.
They can't afford to move from this area of relatively low-cost housing to either coast because it means starting over on a mortgage that they won't have time to pay off.
They're at an age where they HAVE to save 15-20% of their salary if they're going to be able to retire when they're not able to continue with the physical effort of full-time work (and if you don't believe a coding job in SV can be physically demanding, try that commute, or finding your way from the airport to the hotel in a strange city, after dark and with 50-year-old reflexes and eyesight), and they can see that time coming.
The supermarket pulled up the guys shopping records over the last year or so. It turned out that he bought only alcohol 90% of the time while in the story. They defense team implied that he was an alcoholic and was drunk at the time, and that was why he fell, not because of the glass & liquid on the floor.
Did the supermarket win?
IANAL, but this seems to have enormous holes that any competent attorney could make use of.
Consider how silly the argument "He buys booze in closed containers from us regularly, so he must have been drunk at the time" sounds to a jury.
Did the supermarket introduce any witnesses to behavior at the time indicating intoxication?
Attempt to obtain blood-test results from the hospital admission -- hey, if you really broke your hip, you're not going to walk away from it, you're going to the hospital on a stretcher.
It seems like a high-risk tactic for the supermarket, since if they can't provide reasonable proof that the person was intoxicated, they leave themselves open to a slander (or would it be libel since there's a printed court record?) lawsuit.
Doesn't this support the argument that the best form of research is publicly funded, open research?
Perhaps, but there are a lot of problems.
One of them is direction.
Many of the important discoveries at Bell Labs came out of work intended to address specific problems of the company.
The transistor was a result of work to develop an electrically controlled variable resistor, which would have immediate and valuable applications in circuit design.
Identifying the background radiation from the Big Bang was a result of work to solve particular interference problems on microwave transmission links.
I'm not sure how you would maintain the focus that makes much research effective if it were truly publicly funded.
In some ways, the Bell System was a unique sort of accident.
At the time, most people recognized the benefits of having a near-monopoly provider of telephone service, so long as it was prevented from expanding its monopoly into other businesses.
There were still opportunities for substantial growth within that business (it was 1934).
The company had an intensely service-oriented culture of long standing (and that culture was still strong when I joined Bell Labs in 1978).
The stock was widely held and valued based on its dividend payments.
In short, the government and public were willing to accept a monopoly, the company was willing to accept the restrictions on its business, and the shareholders weren't going to be hurt.
Imagine you were going to do that with Microsoft.
You have to tell Bill Gates that his profit margins are to be controlled -- and the government will be auditing the books in order to make sure there's no hanky-panky.
Then you have to deal with the shareholders (including Bill) whose stock will be worth only 10% of what it's worth today, because today's value is based on 80% gross margins.
You have to deal with that portion of the public that is going to scream when you announce that the Windows monopoly is being made official.
Microsoft does not appear (to me) to be run by people who will be satisfied with a single-minded determination to produce a highly-reliable operating system at a modest cost.
And the result will no doubt suffer from one of the problems that the Bell System suffered -- people who wanted new features quickly but didn't mind if they were sort of half-broken were not happy with the slow pace of innovation.
The truth is, none of the world-class pure research labs (Xerox PARC, Bell Labs, TJ Watson, etc.) do a good job of helping their parent companies in the long run. How much money did Bell Labs directly make on the transistor? The Laser? The C programming Language? C++? Unix succeeded in large parts despite the efforts of USL.
At least in the case of Bell Labs, this is hardly a fair criticism.
Of the technologies listed -- transistor, laser, Unix, C -- all were developed while AT&T was a regulated monopoly.
AT&T was not allowed to go into businesses other than telecommunications and their profits were restricted.
Within those limitations,
the transistor revolutioned telephone switching systems (stored-program control switching in the early 1960s),
the laser eventually revolutionized transmission systems (fiber optics), and
Unix and C had an enormous impact on operations support systems and other software applications within the Bell System.
Certainly Bell Labs was successful at applying these technologies to design and build a network whose low costs and high reliability were the envy of the world at that time.
It seems pretty clear that Microsoft is bent on controlling every aspect of computing... Microsoft aims to make themselves synonymous with the very word "computer" and they're doing a pretty darn good job.
If this comes to pass, it will be interesting to watch and see what effect it has on the rapid innovation that has characterized the history of software.
Despite their claims, I don't see where MS is much of an innovator.
Of the things that are making money for them now, they didn't invent word processing, spreadsheets, data base servers, GUIs, Web browsers, network media players, e-mail clients, online communities, interactive television, or PDAs.
They have done a very good job of recognizing products once someone else has invented and introduced them, but they do not seem to be good at inventing new things themselves.
They have the resources now -- cash on hand, staff, market leverage -- to arrive "late to the party" and still become dominant.
But despite their claims to a $5B/year R&D budget, they don't seem to invent new stuff.
Slashdot Mirror
Whether or not withdrawals are taxable income today depends on the type of account. For simple IRAs and 401(k) plans (and 403(b) if you work where they have that instead), withdrawals are considered straight income and you pay tax on it in the year you withdraw it. Earnings inside the account accumulate on a tax-deferred basis, not a tax-free one. There are also restrictions on when you MUST take money out of a simple IRA -- the government allows you to defer the taxes, but not indefinitely.
Withdrawals from Roth IRAs are tax free, but there are significant restrictions on who can make contributions to a Roth IRA -- if you make "too much" money, you are not allowed to contribute to a Roth.
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f(0) is zero,
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f'(0) is positive infinity,
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f'() is always positive,
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f''() is always negative, and
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the limit of f'(x) as x goes to infinity is zero.
Smile, it's supposed to be amusing.I'm not convinced that a sales tax is the right thing either. Personally, at the national level and at the percentage that such a tax would require, I'd probably rather see a variation on the current income tax, maybe with the following as a foundation:
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Income is income -- salaries, interest, dividends -- it's all income.
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Money put into savings of any sort is a deduction from taxable income.
Money taken out of a savings account is income.
Interest that stays in the savings account is not income.
Money borrowed and not put into sorm form of savings is income.
Lots of things that are different today -- 401(k), IRA, brokerage account -- are "savings accounts" under this scheme and get treated the same way.
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Income that doesn't go into savings is assumed to be consumed, and is therefore taxed.
I'd probably classify houses and such as a special case of savings, so that borrowing to buy a house doesn't generate a big tax liability. Taking out a second mortgage to put on an addition doesn't generate a tax liability, but using it to buy a boat does. Note that almost all of the necessary information is already collected by employers and banks and brokerage houses and such and reported to the government -- no real new information is needed. There are some obvious shortcomings compared to the sales tax approach:I'm not tied to an income tax -- but believe that in some circumstances, income might need to be recognized in some fashion in order to be "fair" about taxes. Maybe the right stuff can be classified as a "subsistence" good and not taxed -- no tax on milk but taxes on caviar? No tax on a visit to the doctor's office but taxes on elective surgery? I live in a state where some items are exempt from the state/local sales taxes, and there seems to be darned little sense about some of the things that are tax-free.
The person with $150K who lives on $15K (including a consumption tax on everything) has made some choices -- maybe they got sick, and elected not to see a doctor. For the person with $15K who gets sick, the tax they paid on other things (under the assumption that everything is taxed) may well have been the difference between being able to see a doctor or not. Their choice was not between seeing the doctor or leaving the money in the bank -- it was between seeing the doctor and eating. I've been poor and I've been well-off, and I'd like to see the people who HAVE to choose between eating and medical care get a break.
To state the obvious -- no, it's harder on the poor because they're NOT charged different sales tax rates. A 15% tax on someone trying to live on $15K/year will cut into the basics -- food, minimal shelter, health care. A 15% tax on someone living on $150K/year will cut into the luxeries -- they can pay the tax and still afford enormously better food, housing and medical care than the person with $15K. And someone taking home $15M/year won't even notice the 15% tax -- the lifestyle differences between $15M/year and $12.75M/year are insignificant.
While I could be convinced to support a consumption tax in concept, there are some problems with the conversion from the existing income tax that I have never figured out how to handle. After 30 years of living on less than our income, my wife and I have accumulated a substantial sum that is not in a tax-deferred account. We have paid the income tax on every penny of it (excepting investment earnings on it in 2004, and we'll be paying those next year). You have to find some way that we can spend that money and NOT pay a 12-15% consumption tax on those purchases.
All of the approaches I have thought of lose some of the advantages of the simple sales tax approach. You could keep the IRS in place and make it a different form of income tax -- moneys deposited into a savings or investment account are deductions, and all income that can't be accounted for that way is assumed consumed and therefore taxable. You could refund the tax I'll pay in advance -- if I've got $100K in a savings account, send me the $12K I'll have to pay when I spend it and I'll be satisfied. Both of those have problems. Thoughts?
Oh, and you left out one of the most attractive features of a consumption tax -- it's much harder for uber-rich people to set up tax shelters and avoid paying their share.
In the 25 years that I've been out of school, the certification of engineers and programmers has come up regularly. Most states require that if you want to be a "professional" engineer -- hang out a shingle and sell your services to the general public -- that you pass some sort of certification and be licensed, much like a public accountant. Large companies have successfully resisted the occasional demands that their employee-engineers be individually certified for years, viewing it as an unnecessary expense. Periodically the subject of licensing for "software engineers" is debated at least somewhat publicly -- the state of New Jersey introduced legislation to require such a license in the late 1970s, and it was voted down after every large corporation in the state threatened to leave if it were passed.
The difficulties with a system like this for programmers are even worse than they are for more traditional engineering fields. Where would you draw the line between software that must be done by a licensed professional and that which can be done by an unlicensed programmer? Should a spreadsheet for a business case require a professional? How about if it includes large, complex macros? How about if a custom ActiveX component is written and embedded in it? What if the same functionality is coded in assembler language and run on an embedded device? Or would business planning applications be excluded from the requirement for certified programmers entirely? Would there be distinct disciplines within the licensing program -- "I'm sorry, I can't write that administration script because I'm only licensed for embedded designs" -- in the same way that a licensed mechanical engineer can't do civil engineering design work?
Most of your analysis is spot on. I can think of at least two problems you don't mention that are going to come up early and often with co-lo.
First, upstream bandwidth is a really scarce resource for most cable companies. It's already in use for the cable company's DOCSIS cable modem system, for RF return from set-top boxes for premium video services (PPV, VOD and the like), and in some cases for telephony service. Upstream bandwidth limitations will impose a definite limit on the number of co-lo DOCSIS systems that could be run, and in some cases that limit will be zero. Not because the cable company is being a bad guy, but because of the physical reality of limited bandwidth, noise ingress, etc.
Second, many (most?) cable companies bridge multiple nodes together in the RF domain so that a single CMTS (or single blade in a big CMTS) serves the customers on all those nodes. An ISP using co-lo will have to live with whatever node aggregation the cable company is providing. The ISP might WANT to allocate more bandwidth per subscriber, but the RF-level bridging might make that impractical. It seems unlikely that the local franchising authority would make the cable company rearrange their network, possibly breaking other services, at the whim of the ISPs.
When I worked on multiple-ISP architecture questions for a large cable company, one of our basic assumptions was that all ISPs (including ourselves) would ride on the single DOCSIS system operated by the cable company. To the best of my knowledge, the ISPs were all in favor of that practice -- they WANTED to leave all of the ugly RF issues in the hands of the cable company.
Many years ago, exactly this type of situation was one of the principle reasons that I decided to quit being a manager. As part of a corporate reorganization, we had assembled a team that was truly excellent -- everyone had been in the top third of the performance "ladder" in their previous organization. The next department over had not done nearly so well in the reorg and had a lot of dead wood. During a budget crisis, each department was required to put together a 5% list of the people that they would let go (fortunately, the crisis was more imagined than real and no cuts were made). One of the last chores I did before I went back to just being on the technical staff was to discuss everyone in my group's career plan with them. For two of them, I had to suggest that they might want to look for a position in a different department so that they could be "stars" rather than "duds".
At that time, there were only a handful of places where I could do the work that I wanted to do, and all of them used a system like this. I could live with it as a worker, but not as a manager. Still not sure, despite many years, if retreating from management rather than staying on and trying to change the system was the right thing to do or not.
Finally, if Congress is going to require that the cable operators unbundle channels, then they better be sure that they require the media companies to unbundle as well. That is, if Comcast is required to sell ESPN without a dozen other Disney-owned channels, then Disney should also be required to make ESPN available to Comcast at a lower price than the bundle of ESPN plus other channels that they require Comcast to buy today. It would be interesting to see, should the cable and satellite providers sell those channels on a cost-plus-markup basis, how loud the end-users scream at ESPN's 20% annual price hikes :^)
And a good thing. China and India appear to be getting their acts together so that their economies can develop. Industrialized economies need a LOT of energy. If they're ever going to approach the level of per-capita energy consumption of the US, or even Japan, we need some good new sources.
Word has never been a suitable tool for writing academic-styled publications -- people manage to do it, but as you point out, it's a struggle. One principle reason is that the software does not support the concept of displays, floating displays in particular. Pick up almost any textbook on a technical subject, or look at journal articles, and they are full of floating displays. It's pretty easy to recognize typesetting software written by/for academics -- TeX and troff come to mind -- because they make it easy to handle floating displays. Add three paragraphs, delete four others in a different place, rearrange text, and the displays still come out intact, and in sane places.
I have wondered for many years why MS has refused to incorporate a serious display capability into Word. Perhaps because it's hard to do in a WYSIWYG way -- until the software is doing the final page layout, the positions of the collection of floating displays is not precisely known.
It will be interesting to watch the retirement of the baby boomers unfold. On average, the boomers have done a miserable job of saving for their own retirement (I'm at the tail end of the boomer generation, I'm allowed to criticize us). Most of them will not be able to live on Social Security alone (and despite assertions to the contrary, the boomers will get their SS payments, unless the US decides to ruin the world economy by starting to default on their bonds). The worker shortage seems likely to hit in very specific situations where the boomers have other retirement funding available. I would expect to see lots of boomer doctors retire (they've been able to save), boomer teachers and government workers retire (they have nice government-funded pensions), boomer owners of successful small businesses retire if they can find purchasers for those businesses.
Many boomers who thought they were prepared have seen their plans implode in the past five years -- the stock market unpleasantness drastically cut the value of many 401(k) and similar accounts, and too many have discovered that a corporation going through bankruptcy court can make drastic, unilateral cuts in the pension promises. It appears likely that there will be corporate bankruptcies caused by pension obligations in the not-too-distant future -- GM has almost two retirees per active employee, and Lucent has almost eight!
I am not opposed to us going into space. In fact, I'm strongly in favor of it, although I'm realistic enough to believe that it will take longer than most optimists think. I think the government is going about it in very much the wrong way. Suppose that JFK had announced, not that we would send a man to the moon, but that we would put a 20-ton payload into LEO in ten years, and every five years after that we would cut the price for such a load in half. Had we continued that successfully from 1970 or so (the Saturn V could deliver that much to LEO, I believe) to the present, look at where we would be. If it cost $1,000 per pound in 1970, we would now be closing in on $8 per pound -- a 20-ton payload to LEO for under half-a-million dollars. I'd cheerfully bet that commercial ventures would be lining up to put all kinds of payloads in orbit at that point. Lunar missions would be "cheap" -- one or two loads for the spaceship, one or two loads for the fuel, a load for the reentry vehicle -- and off you go. Two more reductions -- $2 per pound -- and I'll bet you would see a private Mars expedition mounted. Also permenantly orbiting "tugboats" to go get sick satellites, etc -- leave the tug in orbit, throw up a pilot and a load of fuel when you have something you need to do. Probably orbiting repair shops on the same basis.
Government ought to be in the infrastructure business -- it's much more useful for them to build roads than to build autos, and the returns from a dirt-cheap heavy lift capability would be much more valuable than a one-shot deal to bring back some moon rocks.
Bzzzzt! Wrong. Columbus justified his initial voyage on the basis of establishing a trade route to the Far East. At the time, the Italians (okay, the city-states that would eventually become Italy) controlled the overland routes. The Portuguese controlled the sea routes around Africa. Columbus proposed an alternate route that the Spanish (okay, what was in the process of becoming Spain) could control. Concrete business plan, known products and markets, immediate profits anticipated. Columbus was supposed to return with a hold full of spices, and was nervous about returning without a profitable cargo.
Voyages for "research" were a very small minority compared to those intended for military or commercial benefit. Cook's first Pacific voyage started in 1768, nearly 150 years after the British began establishing colonies in North America. Darwin's Beagle voyage started at the end of 1831, 60 years after Cook. Almost all of the early "explorers" were seeking immediate commercial or military advantages for their country.
I think your economic history is mistaken. First, there was a demand for transport capabilities that horses could not meet. There are restrictions in terms of the load horses can move -- teams of 200 or 300 horses are not practical and cannot be made practical. Further, horses came with their own set of problems -- for example, removing the daily output of horse manure from New York City or Chicago had become a serious problem by 1900. Second, experiments to develop sufficiently efficient internal combustion engines could be funded by individuals or small companies -- the unusual engine that powered the Wright brothers first airplane was built by one individual in a matter of a few weeks. The cost of building a one-off truck or car was small. US economic success has a very long history of individuals taking gambles on new technology. Third, when Ford built his factory, there was an established market for automobiles for the rich. The gamble was whether there was a market for a cheap car for the non-rich. But again, the gamble was of such a size that a small group of investors could provide the money to build the factory and start production. And the risk that the mass market existed was not so large as it might appear -- when have the middle class not wanted goodies similar to those enjoyed by the rich?
Unfortunately, technology at this time is such that a launch capability requires a national effort to implement. Your analogy would be much better if the government had stepped in to fund the development of the automobile in a situation where horses were still working out well and things had turned out nicely.
If you really believe that, then you have to be opposed to NASA's current manned space efforts. The goals would have to be (a) figure out how to have robots assemble a functioning, self-sustaining, underground habitat from the raw materials available there and (b) transporting people to the moon and leaving them there. It is not practical to lift enough air, water and food to the moon to allow people to build the initial habitat -- machines are going to have to do it. It is not practical to lift enough people, even on one-way trips, to populate the moon -- it will have to be done the old-fashioned way, people having kids and raising them.
There will be unusual and unexpected problems. The ISS seems to be slowly being rendered uninhabitable by mold and fungus growing almost everywhere.
And the tens of billions of dollars from other customers that flowed into those same industries at the same time had nothing to do with it? IIRC, no single-chip microprocessor has ever been certified for use as a controller in a NASA manned space vehicle -- it's all still basically early 1970s technology. Also from memory, the onboard computers for the shuttle were designed by IBM by borrowing the best ideas from their existing products of the time -- they did not create any important new hardware technology to do the job. The shuttle's onboard computers do use semiconductor memory now, but I believe that is a fairly recent development.
As an unbiased observer (ie, not being paid by either side), my judgement is that this doesn't meet the criteria. How much of the electric power that I consume at home or work is generated by fuel cells? What fraction of the passenger-miles for people or ton-miles for cargo are in vehicles using fuel cells? How many laptops or handheld electronic devices are powered by fuel cells? "Incalculably valuable spinoff" requires that the devices be in widespread use and that there is no alternative with similar capabilities and economics.
Fascinating. I know a number of unemployed technical people who not only have the basic skills and education, but also have 15-30 years experience. Who can not only do the technical work, but can run a meeting or communicate with the marketing folk. Currently under-employed or unemployed. Why? They can't give a company 60 hours a week in the lab or on the road because they're trying to raise kids and make a marriage work. They can't afford to move from this area of relatively low-cost housing to either coast because it means starting over on a mortgage that they won't have time to pay off. They're at an age where they HAVE to save 15-20% of their salary if they're going to be able to retire when they're not able to continue with the physical effort of full-time work (and if you don't believe a coding job in SV can be physically demanding, try that commute, or finding your way from the airport to the hotel in a strange city, after dark and with 50-year-old reflexes and eyesight), and they can see that time coming.
Sorry, I'm feeling disgruntled this evening.
Did the supermarket win? IANAL, but this seems to have enormous holes that any competent attorney could make use of. Consider how silly the argument "He buys booze in closed containers from us regularly, so he must have been drunk at the time" sounds to a jury. Did the supermarket introduce any witnesses to behavior at the time indicating intoxication? Attempt to obtain blood-test results from the hospital admission -- hey, if you really broke your hip, you're not going to walk away from it, you're going to the hospital on a stretcher. It seems like a high-risk tactic for the supermarket, since if they can't provide reasonable proof that the person was intoxicated, they leave themselves open to a slander (or would it be libel since there's a printed court record?) lawsuit.
Perhaps, but there are a lot of problems. One of them is direction. Many of the important discoveries at Bell Labs came out of work intended to address specific problems of the company. The transistor was a result of work to develop an electrically controlled variable resistor, which would have immediate and valuable applications in circuit design. Identifying the background radiation from the Big Bang was a result of work to solve particular interference problems on microwave transmission links. I'm not sure how you would maintain the focus that makes much research effective if it were truly publicly funded.
In some ways, the Bell System was a unique sort of accident. At the time, most people recognized the benefits of having a near-monopoly provider of telephone service, so long as it was prevented from expanding its monopoly into other businesses. There were still opportunities for substantial growth within that business (it was 1934). The company had an intensely service-oriented culture of long standing (and that culture was still strong when I joined Bell Labs in 1978). The stock was widely held and valued based on its dividend payments. In short, the government and public were willing to accept a monopoly, the company was willing to accept the restrictions on its business, and the shareholders weren't going to be hurt.
Imagine you were going to do that with Microsoft. You have to tell Bill Gates that his profit margins are to be controlled -- and the government will be auditing the books in order to make sure there's no hanky-panky. Then you have to deal with the shareholders (including Bill) whose stock will be worth only 10% of what it's worth today, because today's value is based on 80% gross margins. You have to deal with that portion of the public that is going to scream when you announce that the Windows monopoly is being made official. Microsoft does not appear (to me) to be run by people who will be satisfied with a single-minded determination to produce a highly-reliable operating system at a modest cost. And the result will no doubt suffer from one of the problems that the Bell System suffered -- people who wanted new features quickly but didn't mind if they were sort of half-broken were not happy with the slow pace of innovation.
At least in the case of Bell Labs, this is hardly a fair criticism. Of the technologies listed -- transistor, laser, Unix, C -- all were developed while AT&T was a regulated monopoly. AT&T was not allowed to go into businesses other than telecommunications and their profits were restricted. Within those limitations, the transistor revolutioned telephone switching systems (stored-program control switching in the early 1960s), the laser eventually revolutionized transmission systems (fiber optics), and Unix and C had an enormous impact on operations support systems and other software applications within the Bell System. Certainly Bell Labs was successful at applying these technologies to design and build a network whose low costs and high reliability were the envy of the world at that time.
If this comes to pass, it will be interesting to watch and see what effect it has on the rapid innovation that has characterized the history of software. Despite their claims, I don't see where MS is much of an innovator. Of the things that are making money for them now, they didn't invent word processing, spreadsheets, data base servers, GUIs, Web browsers, network media players, e-mail clients, online communities, interactive television, or PDAs. They have done a very good job of recognizing products once someone else has invented and introduced them, but they do not seem to be good at inventing new things themselves. They have the resources now -- cash on hand, staff, market leverage -- to arrive "late to the party" and still become dominant. But despite their claims to a $5B/year R&D budget, they don't seem to invent new stuff.