Copyright depends, usually, on the medium your work is published in and your history as a writer. For example, most (not all) magazines buy first north american serial rights, giving them the right to print your article in magazines distributed in north america, but you can still sell second/third/etc rights for printing elsewhere. You can sell international rights, movie rights, and so forth. Some publishers insist on all rights. In fact, I once wrote an article on VPNs for Auerbach's data security journal, which I believe is/was a division of CRC press, and their terms were all rights, so it wouldn't surprise me if the whole conglomerate thought that way.
Ok, so it looks like the person running the web site wrote the book, and probably sold all rights to CRC. That stinks. I wonder if they're still making good money off the book?
Not only does it have a complete lineage, but the word used for 'day' in the 7 days of creation was a word meant to be taken literally as a day, not "day 1 lasted 2 billion years" or such. As far as I know, there's a definitely conflict between the belief that the bible can be taken literally (and it claims to be the inspired word of god and not in error), and the simple fact that humanity doesn't seem to be co-created with all other life. The real conflict isn't creation vs. big bang, because the beyond-the-origin question really has little in the way of answers. It's a creation vs evolution question, because taking the bible at face value, it would be absurd to read that evolution was a mechansim used to create life by God. It simply does not say or indicate that. If you want to read the bible as largely personal historic accounts not under the direct control of God, then you can accept this. Many events (like the flood) have historical facts that support localized trauma in the area, even if they don't support literal interpretation (ie, worldwide submersion and an ark).
The concept of a multiverse is not new, as many have pointed out. But what ARE all those other universes and why "are we in this one"? Quantum uncertainty has led to some interesting theories about divergent universes. Anyhow, Feynman has a theory referred to as the Sum Over Histories. It's actually more than a thoery, as it is apparently very predictive of quantum interactions and is fundamental to the field of Quantum Computing. Being a computer geek and not a physics geek, I find it interesting if thick. There's info about how it relates to the universe's formation here.
On a related note, Feynman's books (Surely you must be joking, Mr Feynman & What do you care what other people think?, are both insightful and very entertaining)
I keep hearing that most places that do that will only do it for huge batches of options. (Like Goldman Sachs has a group that will do it for >$50M, I understand -- Po Bronson mentioned it in Nudist.) I'm curious to hear who actually does it, if you know of any? For myself, my agreement specifically prohibits the trading of the options, and my employment specifically prohibits the trading of options on my own companies stock in general (insider trading regs, I guess), so I think I'd be doubly in trouble trying to execute on that one. But I'm still interested for future reference.
Ok. I'll call it over. Still, I think you've ignored the practical points. I agree with you that a strong middle class is good, but part of the point was simply that a strong middle class is actually served by the lower capital gains taxes. The middle class can pay less tax (because the revenue from the capital gains taxes goes up, even though the rate is down), and they have more chances for employment/opportunities (because the capital freed up by the lower capital gains taxes can flow to them, like that plumber from NJ who wanted it lowered so people had money to hire him.)
You keep stating that you're in the top X% as though it makes a difference to the validity of the proposal. Now, I understand your proposal, but its one born of righteous indignation over the ease at which capital multiplies (supposedly). But that's just how it is -- money begets money (or, capital begets production). You can tax the production more, but that just discourages investment.
Second, 'unearned' income isn't truly unearned. The capital is earned, then the income is earned by that capital. It is categorically different from that earned by people who trade time for dollars, but in fact, that time only HAS value because people are willing to trade capital (money) for it. So, it becomes difficult to separate the two.
Personally, I think the issue is too complex to assign simplistic moral values to. Anything beyond flat dollar amounts for services rendered is inherent theft unless freely given. A certain amount of government-compulsed 'giving' via taxation may be necessary for society, and actually benefit the 'givers' more in the long run. That said, people with more owe more to their fellow man, because money isn't created at random. The people with money tend to, (1) Be born into it or (2) (more prevalent in the US) have abilities they were born into which makes the acquisition easier. However, you can never separate how much of wealth was created by effort, dedication, persistence, character, integrity, discipline, and how much was created by luck, intelligence, etc. Therefore the obligation is to tamper as little as possible with the natural order. My view is that fundamentally, people are individuals, not parts of a collective whole. If I believe the other way around, I'd believe socialism was the appropriate system, and the only variance might be effort-based rewards. However, when such systems are in conflict, pragmatism wins. The world works best under certain circumstances, one of which is lower capital gains taxes. (And to put things another way, why should they be taxed at all? You're giving people money, and just happen to be getting more back, but not before they pay taxes on their earnings.) While I can respect a moral view which dictates that a tax system should respect (not value, because that's different and too hard to assess) earned income as much as capital accrual, it makes poor policy, and therefore doesn't deserve to be advocated. Also, as I said, it isn't necessarily unearned, as many people with investments contribute untold amounts of time to their enterprises in order to make sure they succeed, and are compensated only by the appreciation of the assets they work for.
You are allocated the option to buy X shares at price $Y. Let's say, for the sake of example, 10000 shares at $1. Most employees have a 'vesting schedule' so they can't get them all at once, cash, and run. Everyone I know has 2%/month. So, 50 months to get all the options vested. You can't exercise options that aren't vested. (Although I have heard of companies that will allow you to exercise and hold during the period, but you can't take possession/sell until they're vested)
Now, there are two types of options, ISO (Incentive Stock Options) and NQSO (Non-Qualified Stock Options). The ISO shares you can exercise, and if you hold them for a year from exercise and 2 years from the grant date, you can then sell them and the income is considered capital gains, rather than income. For NQSOs, the moment you exercise them you are considered to have realized all the gain between the exercise price and the FMV (fair market value). Still, most employees who come in before or near an IPO, say, get ISOs. However, then comes AMT (Alternative Minimum Tax). When you have AMT 'preference items' in your taxes, you're required to run an AMT calculation. You first do your normal taxes, then you 'add back' AMT preference items, like exercised ISO options, which would not normally be taxable (others include weird oil drilling research credits, some real estate depreciation stuff, etc). You take this new total with the income added back in, and take 31% of it. If the 31% of the AMT income is MORE than your taxes were without those preference items, you owe the AMT instead. The AMT paid that was over your normal tax rates technically carries forward as a credit to future years which you can use, in any year when you don't end up owing AMT because of the same thing. What this means is that if your effective tax bracket is 36% federal (which is your effective tax bracket, roughly, on $500k income), you only have a 5% differential you can squeeze that exercise into. Any big hit on options will blast your AMT so high you can only pay it by selling shares. There's really only 2 ways to get out, exercising the options but not getting hammered by AMT, that I know of. (1) Exercise at the beginning of the year. Hold, sell a year later just after the year is up, so you can pay the tax bill come April. You'll probably have to pay interest on the estimated taxes you couldn't pay -- there are tricks to avoid that if you didn't make a ton the year before, too. (2) Have your options vested before the stock has a high FMV. If you're at a company for 3 years before the ipo, you have vested most of your shares, and can exercise when the FMV is still small.
That's the long and short of it. On another note, even aside from the tax consequences, you'd have to sell the shares to diversify, and incur cap gains. As far as fearing the company will tank -- well, yes, and its a rational fear if you score big, to worry about having your eggs all in one basket. If you have 40 years of your salary, say, tied up in options, it only makes sense to diversify.
There aren't people who have to choose between food and medicine or homeless people who have to pay tax. If you want to institute a custodial state that takes complete responsibility for people who can't/won't for themselves, you can say so. But keep in mind, over 1/3 of americans pay no taxes, and the people in the food vs medicine group are in that 1/3. It's very easy to say the rich should give up more to feed the hungry, shelter the homeless, etc. But when you're in the middle class, you could do the same instead of getting a big screen tv, buying a nicer car, etc. You don't have any right to demand others give up things when you won't, regardless of demographics. If people really should be fed/clothed/cared for (medically) by the government, then you shouldn't be waiting for the rich to cough up the money to pay for it all.
(1) Have a capital gains rate equal to normal income tax and collect $X dollars
(2) Have a capital gains rate of 20% or normal income tax, whichever is lower, and collect 140% of $X from (1).
Which would you like? I realize that there are some people, apparently like yourself, who seem to think that rich people, especially those not 'working' deserve to be soaked because, hey, they don't even have jobs. But you're wrong. Not only is it morally wrong to take it from them just because you don't have it, but it isn't even good for YOU to take it from them. Money isn't made by 'moving money around', its made by placing money into investments which create jobs, leverage peoples abilities, and produce a return. All of that is good for the economy. No matter how much you fume over the fact that those rich bastards are getting off less than completely soaked, that doesn't change the fact that not soaking them actually generates more revenue. The rich are not rich because they've simply taken a bigger piece of some nebulous pie, they're rich because they earned it, and they usually contributed a lot more in the process. They usually took bigger risks, delayed their gains longer, worked harder. This is not an aristocracy where billions are passing down in the hands of a few. It's a land of unrivalled prosperity, with millions of millionaires, the vast majority of whom made their own money in their lifetime.
This is another thing entirely. AMT sucks. I see why they put it into place, but paying all this tax on money you don't have is a bit ridiculous.
That's just a personal opinion. Still, why escrow? If you want to tax lear jets and rolls royces, have a sales tax or even a luxury tax. (But the car and plane makers will beg you don't, because when the US implemented the lux tax, there was a huge shortfall of the expected revenue because, surprise surprise, people backed off buying expensive stuff.)
Sorry, have to disagree. Let me first say: you're right about the value of being a millionaire. People don't even classify themselves as 'wealthy' until they hit about $12-14M. But its not the billionaires we can soak for the money. It just doesn't work. They're really, really rich, but soaking them for any amount doesn't help. The Forbes 400 just can't afford the government. It's not them that's footing the huuge portion that the top 5% pay (44 percent, last I checked, of the total tax burder), it is the Millionaires Next Door -- the working 2.5M rich that represent that top 1%. Sure, there's a Gates here and there -- but I have news for you, they're hardly aristocrats. You'll notice the top is dominated by first-generation rich. Sure, there are some Waltons clogging the works, but not for the most part. And that's part of Brins whole letter -- that we shouldn't worry about having a 'rich' elite if they're all earning it. And by and large, they are. And most of them, shocker, really are willing to shoulder progressive taxes. (Probably because most realize, like I do, that they're getting their disproportionate share in some part through luck of birth) Nonetheless, this isn't about that. But there's all sorts of people raging about how we need to raise taxes on the rich -- but there's not a whole lot left to pay for. Granted, the wealthy probably don't need a tax cut. We need to pay down the damn national debt, because it will be a lot better for us ALL in the long run. (If the national debt were eliminated, the taxes taken from the top 10% would cover our budget entirely). But if there's _going to be_ tax relief, the rich should be getting it in proportion to the high amount of taxes they pay.
If taxes are reduced, the government has less money. Therefore the government will spend less money. When people spend more, it will be offset by the government spending less. If the government did not spend it, it would negate government debt, causing holders of that debt to have their principle returned, which they would then spend. The only thing that's going to drive inflation is people cashing out of investments and reducing the amount of capital which produces goods and services, and using those dollars instead on consumption, assuming that consumption drives demand enough to increase prices. In other words, reducing the percentage of capital invested in production and using it to buy the fruits of product will cause inflation.
Please. Whatever you want to give Clinton credit for (maybe welfare reform?), he sure doesn't deserve it for the economy. Or, let's try this another way: what did Clinton do that caused an economic boom? The explosion of the economy in the past 5 years is technological, driven by deregulated finance. It had nothing to do with Clinton. I'll give him a little credit for welfare reform, but it was a no-brainer. And Clinton's real legacy: continuously defending China after we caught them selling nuclear-arms-building equipment to other countries.
Clinton got re-elected because he's a slick-talking demographics-chasing pollhound who was willing to move his party to the right in order to appease pollsters. All the relevent investigating happened post-reelection, which he wouldn't have won if it had happened before, and one of the questions that needs to be asked of both candidates is: When Clinton gets indicted for perjury and obstruction of justice after leaving office, are you going to pardon him?
I'd like to see a 3rd party candidate who was a bit more honest AND practical (heaven forbid, eh?) like Jesse Ventura, who has impressed me with his candor, opinions, and success (at least in contrast to Bush and Gore, although that's not saying much.)
Yeah, but then you step up to a moderate sized family business, say. Under the owner, it takes in $2M a year, and generates, say, $150k in profits. But it can't possibly pay away 1/3 of itself, and the money in the business does nothing but generate power in the economy unless it gets taken out by the family (by the owner OR the heirs) to get expended. I was very much agreeing with Brin until I hit upon this post, and it makes a lot of sense, when you view things in another way: if they aren't spending it, its still doing its job invested. This is something that deserve more airtime in this thread: income vs consumption tax. (Although I'd want to see the consumption tax modified to assist the less-fortunate, rather than blindly applied to every dime spent.)
He also doesn't seem to realize that since the end of income averaging, the tax code taxes many more "rich" people who are
just happen to get a bunch of their income in one lump sum, and thus hit a very high tax rate. For example, if you trade some of
your salary for equity, then when you finally cash in on that equity, you will be "rich" as far as the tax code is concerned, even
though you may end up with no more money than someone who took the money as salary and payed less taxes than you did. It
has happened to me. And it happens to small business owners all the time.
And to top it off, this has the effect of making the economy more stratified, especially today. The super rich are already in the top tax bracket, and always will be. But if you work for peanuts for years, score big with your stock options, you'll be hit with big taxes, too, even if your average income over the longer periods doesn't justify it. The government gets more, and you get less for taking a risk (and succeeding). And this is all aside from the worst case scenario (other than that alternate pay being worth nothing), which is that it only makes up for your lost salary, but you pay more taxes on it.
This is counterintuitive for some people. However, its not as though everyone puts money into the same investment yielding the same rates for the same time. Last time capital gains rates were lowered (to the 20/28 short/long term, not the recent merging to the flat 20% at 12 mo rate),
the revenue realized from those capital gains taxes rose.
Why? It's a combination of factors, but probably the best answer is that taxes are an incentive to leave your money tied up in investments, rather than to free your money to make better investments. The capital gains taxes restrict the liquidity of our capital, and therefore hamper the economy. I think taxing capital gains is reasonable, and agree with Brin. But the lower rates promote investment, _especially_ investment in new enterprises, which are a higher risk and a higher reward.
It might seem convenient to say, "capital gains are just income for the wealthy", but that's not necessarily true, and in the cases where capital gains ARE income for the wealthy, it doesn't assess the whole picture. The gains are made because the value of an asset has appreciated. Those assets tend to be securities of businesses. Investment in businesses creates jobs, and the money invested is used to fund the creation of wealth, and taxes are paid on the wealth through money paid to employees, corporate taxes, etc. And even those considerations only scratch the surface of the dynamic nature of the economy.
For a more detail treatise on the topic, there are a ton of documents you could find. One is here. This was discussed because of the 'Contract with America' capital gains cuts. These predictions came true. Here's are some quotes that illustrate the point:
You're looking at a poor man who thinks the capi-
tal gains tax [cut] is the best thing that could
happen to this country, because that's when the
work will come back. People say capital gains are
for the rich, but I've never been hired by a poor
man.
--New Jersey painting contractor
Or...
The tax on capital gains directly affects invest-
ment decisions, the mobility and flow of risk
capital . . . the ease or difficulty experienced
by new ventures in obtaining capital, and thereby
the strength and potential for growth in the econ-
omy.
--President John F. Kennedy, 1963
And this is why capital gains taxes should be low, and should remain low. Brin is dead on with the death taxes (haha), in terms of their impact, but if you look at this without envy over Other People's Money, you'll discover this works best. (In fact, the whole concept of capital allocation is interesting, because if you instantly redistributed all wealth in the nation so everyone had an equal dollar amount, we'd be set back countless years. Because most people would create consumer demand only with their money. A smaller but significant portion might invest (by pooling funds) to take advantage of that demand (if they had some reason to believe the money wouldn't be redistributed again), and the creation of wealth by entrepreneurs would be likely much more difficult. (Relatively speaking to his net worth, Bill Gates spends little money. If you divided his fortune amongst 1000 people chosen at random, the distribution would be more even, but the allocation would benefit the economy less because those people would spend more on consumerism and less on capital reinvestment, but this is _really_ disgressing...)
On one final note: "we who work for a living". People with a great deal of money tend to work hard with it. Money growing itself does so poorly. These people must select and promote good investments, etc. If you have rich loafers, that's why you get them with the death tax. But just because someone isn't getting a paycheck, and lives on investment income, doesn't mean they're loafing. And the average person in that 1% isn't some stuffy billionaire, he's a small business owner living in the suburbs with a net worth of about $4M, still working, providing jobs, etc.
If I hadn't been posting the hell out of this thread, I'd be moderating that up. There are obviously two considerations, moral and pragmatic. We all have to consider our duty to our fellow man, and we have to evaluate the impact of birth luck (smarter -> more money) on the equation. "From each according to his ability, to each according to his need" doesn't really capture the essence of true fairness. "From and to each, according to his performance indexed against his potential", might be a better way to be truly fair. The pragmatic concerns weigh in against that, to some extent, and much more so against traditional Marxist philosophy. (I think history has, to a large extent, proved human nature disallows it.)
I knew 13% was the wrong number to use. It was in my head because of Forbes, but you'd have to be on crack to exempt investment income. I believe in capital gains being at different rates, because you can't treat $750k earned by a plastic surgeon doing surgery or $5M in book sales the same as you do with $5M earned on invested money, because the $5M invested has another impact on the economy. In fact, the last major lowering of capital gains rates not only increased investment and spawned new jobs and innovation, but increased the total revenue in dollars collected.
But if you went to a flat tax (especially a flat low tax), and everything was subject to it, I agree.
I'll be honest: my view changes a lot on these sorts of things. But let me point out some holes I see in your refutations:
One of the functions of government is to factor in social obligations to its people, especially the ones who need the most help.
While some might argue this should be the job of your fellow citizens to do directly, I agree. And this is why I'm not chanting, 'flat tax!' But the sentence you're claiming to refute specifically disallows this social obligation simply because it needs separate consider from the economic effect of taxation. In other words, just because flat taxes, say, produce the greatest total economic gain (and I haven't said that's the case, either, but making the assumpion (which I don't agree with)), that doesn't mean they are 'right'. But we're not talking about the right government strategy, and I didn't claim that the sentence should become a government motto. It's a statement about the effects of taxation on economic production.
A purely economical standpoint leads to a corporate strategy, not a national one. Or in other words, a fascist state.
Again, I wasn't advocating elimination of taxes (or top-heavy taxes) as an economic strategem for the nation. As for corporate strategy, it would be very accurate to say that a corporate strategy tends to be purely economical, but that doesn't mean that any purely economical view shouldn't be considered in relation to the nation. And I don't see where fascism, which is an extreme right-wing authoritarian form of government, fits in. Even _if_ you say that all national economic strategy should be based only on total economic output, that's not fascism. It's not libertarianism either. Because total economic output is not gained from pure capitalistic machinations. Total gain requires that if a large disparity exists that certain things be put in place (such as the redistribution of wealth to educate the people) which have a larger long term total gain, even if they aren't as gainful for those taxed to do the redistribution.
You do *not* want to maximize the total output of a national economy. That's why the Fed has been trying to slow us down. The best national economy is a stable one, not one racing out of control towards a crash.
The Fed isn't trying to 'slow the economy' down to lower the total output, in the purest sense. It is slowing the economy down because people in good economic times demonstrate a tendency to overspend, undersave, underplan, and this leads to both a propensity for bad debt and recession as well as inflationary demand for goods and services. But you're half right -- stability is absolutely required for maximum total output. That's because maximum output requires capital available to be optimally invested, and that requires stability so people don't choose less-apt investments for capital in order to counteract the risk of instability. But an economy that is growing incredibly fast does not necessarily end in a crash. When personal income gains are matched by productivity gains, there's not cause for concern, because goods exist to satisfy the increased demand.
As Brin explained, top-heavy taxation leads to redistribution of wealth through charitable giving.
Actually, Brin explained that inheiritance/death taxes lead to redistribution of wealth through charitable giving. That's not a refutation of my point, but I agree with Brin and with you that the death taxes need to stay put. We were, economically and nationally, counting on this money in one sense, to bail us out of our national debt, by collecting the enormous revenues that will pass on from 2009 to 2023 as the boomers die.
And I agree again with Brin on the point that it isn't about taking half of the first million or two or three, but taking the exorbitant share of the uber-rich and preventing the money from being completely tied up. (Although that money, to some extent, is invested in our economy as capital and helps produce gain, it is likely to be less efficient because the management of such out-of-proportion sums, if not tied up in a business, is likely to be less efficient than if distributed)
Also, for the record, I'm an engineer, and don't like corporate marketing strategies, but I do like economics, and I like taxation which benefits society, but some people don't see the correlation between taxation and the problems it can cause. (Again, notice Brin's observation about the terrible state of many European economies.)
It's a good thing you posted, actually, because its probably worth concern that many people actually DO have that attitude. There's a lot of things to look at, but let's start with the important few.
(1) The US was founded by a bunch of people furious over taxation without representation, among other things. That's what you're talking about. Simply taking money from the rich because they have it and you can "vote it away" is a sort of tyranny of the masses which essentially violates people's right to own property.
(2) We actually don't live in a democracy, with live in a republic, where our elected official make our decisions on our behalf, but we choose those officials. The founding fathers seem to me to consider voting a patriotic duty -- selection of those best capable of leading the country to prosperity for everyone and keeping the nation strong, rather than trying to merely serve the largest demographic interest. Read Federalist #10.
(3) This is possibly the most important point, and its purely pragmatic. Assume for a moment that we did, as a country, all just go vote every year as to who got the money. Now assume that the people of the nation, thinking it 'fair', voted all the money to be distributed equally. Who would work, when they knew money would be doled out equally anyhow? Who would take risks to earn larger sums of money, and chance going into debt to start a business?
Among other interesting points -- most millionaires do shop at JCPenney. And Kmart, Walmart, etc. See statistics in The Millionaire Next Door. Most of them buy used cars, resole their shoes, and more. Most of them are not young. They've often spent their lives working in their own businesses. And yet, these people, taking risks, building businesses, trying to provide better for their children, sometimes work brutal hours under intense stress, all the while providing opportunities for others for employment as well as serving the economy in general by competitively providing goods and services.
Your comments are, in essence, the gist of the 'Class Warfare' attitude. And your post reflects an attitude (which I would have assumed was merely satirical if it hadn't been for the self-righteous profanity) which, if implemented fully, would simply halt the gears of the economy. It's virtually guaranteed. The USSR had that problem, and the only way they kept it going as long as they did was by having totalitarian controls that made sure people at least seemed to be working. But you can't (as a democracy or a republic) redistribute wealth at will and expect anything but disaster. And Brin's notes seem to recognize that.
One place where I'd agree with the 'take it' sentiment, in general, is the inheiritance tax. It was always conceived that our national debt would be largely erased by the predicted death taxes on the some 10-15 trillion dollars expected to free up between 2009 and 2023. Giving a free ride to a generation of rich do-nothings is the likely result of removing the tax; a small percentage of counterexamples don't help the likely outcome.
Still, all in all, your post is an excellent example of the wrong attitude behind many people who support disproportionate taxation, and simply let their envy run their vote. And it isn't good for the country, or even for you (although you may not realize it).
"regressive" is not appropriate, applied to the "flat tax" scheme gaining popularity. That tax
is not a flat dollar amount (which would appropriately be called regressive), but a flat rate, which is constant. If everyone pays, say, 13%, the amount anyone pays is in proportion to their income.
Also, there are other things which factor in to increasing taxes on the wealthy. There's a hidden tax, which is that your deductions are eliminated as your income goes up (starting at around 150k, and bottoming out at 80% 'reduction' at $1M). Also, the tax code increasingly implements tax credits that the wealthy cannot take advantage of. (A good instance, imho, of well directed tax policy. Any tax imbalance that also encourages responsible spending, such as on education, is better than random tax cutting).
And I believe the high tax brackets ran at least thru the 70s into the Reagan administration, which was the one that cut the top bracket to 39.6%.
Still, consider the tax bill on $500k:
36% effective federal rate (some taxes at 39.6, some below, that's roughly the average)
9.1% state (this is California)
2% social security (I'm estimating there)
2% property taxes (based on 1% prop tax on a $1M home)
2% sales taxes (obviously dependant on what you buy)
Now, on top of all these taxes, they get half their itemized deductions removed (1/2 credit on charitable donations, 1/2 on mortgage interest, etc). They can't save into tax advantaged plans beyond a employer (probably themself) sponsored 401k. And, most of all, they can't take advantage of tax credits of any kind. When you add up the tax credits for dependant children, etc, etc, most of the bottom 1/3 of income earners in the US pay no income tax at all. They usually only pay sales tax and social security (plus miscellaneous fees like, say, auto registration, which is based on car-value in many states, such as CA).
Slashdot Mirror
Copyright depends, usually, on the medium your work is published in and your history as a writer. For example, most (not all) magazines buy first north american serial rights, giving them the right to print your article in magazines distributed in north america, but you can still sell second/third/etc rights for printing elsewhere. You can sell international rights, movie rights, and so forth. Some publishers insist on all rights. In fact, I once wrote an article on VPNs for Auerbach's data security journal, which I believe is/was a division of CRC press, and their terms were all rights, so it wouldn't surprise me if the whole conglomerate thought that way.
Ok, so it looks like the person running the web site wrote the book, and probably sold all rights to CRC. That stinks. I wonder if they're still making good money off the book?
Can anyone fill in on the whole story? What is the basis of the CRC press suit? Was there copyrighted material on the web site or is this groundless?
Not only does it have a complete lineage, but the word used for 'day' in the 7 days of creation was a word meant to be taken literally as a day, not "day 1 lasted 2 billion years" or such. As far as I know, there's a definitely conflict between the belief that the bible can be taken literally (and it claims to be the inspired word of god and not in error), and the simple fact that humanity doesn't seem to be co-created with all other life. The real conflict isn't creation vs. big bang, because the beyond-the-origin question really has little in the way of answers. It's a creation vs evolution question, because taking the bible at face value, it would be absurd to read that evolution was a mechansim used to create life by God. It simply does not say or indicate that. If you want to read the bible as largely personal historic accounts not under the direct control of God, then you can accept this. Many events (like the flood) have historical facts that support localized trauma in the area, even if they don't support literal interpretation (ie, worldwide submersion and an ark).
The concept of a multiverse is not new, as many have pointed out. But what ARE all those other universes and why "are we in this one"? Quantum uncertainty has led to some interesting theories about divergent universes. Anyhow, Feynman has a theory referred to as the Sum Over Histories. It's actually more than a thoery, as it is apparently very predictive of quantum interactions and is fundamental to the field of Quantum Computing. Being a computer geek and not a physics geek, I find it interesting if thick. There's info about how it relates to the universe's formation here.
On a related note, Feynman's books (Surely you must be joking, Mr Feynman & What do you care what other people think?, are both insightful and very entertaining)
I keep hearing that most places that do that will only do it for huge batches of options. (Like Goldman Sachs has a group that will do it for >$50M, I understand -- Po Bronson mentioned it in Nudist.) I'm curious to hear who actually does it, if you know of any? For myself, my agreement specifically prohibits the trading of the options, and my employment specifically prohibits the trading of options on my own companies stock in general (insider trading regs, I guess), so I think I'd be doubly in trouble trying to execute on that one. But I'm still interested for future reference.
Ok. I'll call it over. Still, I think you've ignored the practical points. I agree with you that a strong middle class is good, but part of the point was simply that a strong middle class is actually served by the lower capital gains taxes. The middle class can pay less tax (because the revenue from the capital gains taxes goes up, even though the rate is down), and they have more chances for employment/opportunities (because the capital freed up by the lower capital gains taxes can flow to them, like that plumber from NJ who wanted it lowered so people had money to hire him.)
You keep stating that you're in the top X% as though it makes a difference to the validity of the proposal. Now, I understand your proposal, but its one born of righteous indignation over the ease at which capital multiplies (supposedly). But that's just how it is -- money begets money (or, capital begets production). You can tax the production more, but that just discourages investment.
Second, 'unearned' income isn't truly unearned. The capital is earned, then the income is earned by that capital. It is categorically different from that earned by people who trade time for dollars, but in fact, that time only HAS value because people are willing to trade capital (money) for it. So, it becomes difficult to separate the two.
Personally, I think the issue is too complex to assign simplistic moral values to. Anything beyond flat dollar amounts for services rendered is inherent theft unless freely given. A certain amount of government-compulsed 'giving' via taxation may be necessary for society, and actually benefit the 'givers' more in the long run. That said, people with more owe more to their fellow man, because money isn't created at random. The people with money tend to, (1) Be born into it or (2) (more prevalent in the US) have abilities they were born into which makes the acquisition easier. However, you can never separate how much of wealth was created by effort, dedication, persistence, character, integrity, discipline, and how much was created by luck, intelligence, etc. Therefore the obligation is to tamper as little as possible with the natural order. My view is that fundamentally, people are individuals, not parts of a collective whole. If I believe the other way around, I'd believe socialism was the appropriate system, and the only variance might be effort-based rewards. However, when such systems are in conflict, pragmatism wins. The world works best under certain circumstances, one of which is lower capital gains taxes. (And to put things another way, why should they be taxed at all? You're giving people money, and just happen to be getting more back, but not before they pay taxes on their earnings.) While I can respect a moral view which dictates that a tax system should respect (not value, because that's different and too hard to assess) earned income as much as capital accrual, it makes poor policy, and therefore doesn't deserve to be advocated. Also, as I said, it isn't necessarily unearned, as many people with investments contribute untold amounts of time to their enterprises in order to make sure they succeed, and are compensated only by the appreciation of the assets they work for.
It tends to work like this:
You are allocated the option to buy X shares at price $Y. Let's say, for the sake of example, 10000 shares at $1. Most employees have a 'vesting schedule' so they can't get them all at once, cash, and run. Everyone I know has 2%/month. So, 50 months to get all the options vested. You can't exercise options that aren't vested. (Although I have heard of companies that will allow you to exercise and hold during the period, but you can't take possession/sell until they're vested)
Now, there are two types of options, ISO (Incentive Stock Options) and NQSO (Non-Qualified Stock Options). The ISO shares you can exercise, and if you hold them for a year from exercise and 2 years from the grant date, you can then sell them and the income is considered capital gains, rather than income. For NQSOs, the moment you exercise them you are considered to have realized all the gain between the exercise price and the FMV (fair market value). Still, most employees who come in before or near an IPO, say, get ISOs. However, then comes AMT (Alternative Minimum Tax). When you have AMT 'preference items' in your taxes, you're required to run an AMT calculation. You first do your normal taxes, then you 'add back' AMT preference items, like exercised ISO options, which would not normally be taxable (others include weird oil drilling research credits, some real estate depreciation stuff, etc). You take this new total with the income added back in, and take 31% of it. If the 31% of the AMT income is MORE than your taxes were without those preference items, you owe the AMT instead. The AMT paid that was over your normal tax rates technically carries forward as a credit to future years which you can use, in any year when you don't end up owing AMT because of the same thing. What this means is that if your effective tax bracket is 36% federal (which is your effective tax bracket, roughly, on $500k income), you only have a 5% differential you can squeeze that exercise into. Any big hit on options will blast your AMT so high you can only pay it by selling shares. There's really only 2 ways to get out, exercising the options but not getting hammered by AMT, that I know of. (1) Exercise at the beginning of the year. Hold, sell a year later just after the year is up, so you can pay the tax bill come April. You'll probably have to pay interest on the estimated taxes you couldn't pay -- there are tricks to avoid that if you didn't make a ton the year before, too. (2) Have your options vested before the stock has a high FMV. If you're at a company for 3 years before the ipo, you have vested most of your shares, and can exercise when the FMV is still small.
That's the long and short of it. On another note, even aside from the tax consequences, you'd have to sell the shares to diversify, and incur cap gains. As far as fearing the company will tank -- well, yes, and its a rational fear if you score big, to worry about having your eggs all in one basket. If you have 40 years of your salary, say, tied up in options, it only makes sense to diversify.
There aren't people who have to choose between food and medicine or homeless people who have to pay tax. If you want to institute a custodial state that takes complete responsibility for people who can't/won't for themselves, you can say so. But keep in mind, over 1/3 of americans pay no taxes, and the people in the food vs medicine group are in that 1/3. It's very easy to say the rich should give up more to feed the hungry, shelter the homeless, etc. But when you're in the middle class, you could do the same instead of getting a big screen tv, buying a nicer car, etc. You don't have any right to demand others give up things when you won't, regardless of demographics. If people really should be fed/clothed/cared for (medically) by the government, then you shouldn't be waiting for the rich to cough up the money to pay for it all.
Let's review. You can:
(1) Have a capital gains rate equal to normal income tax and collect $X dollars
(2) Have a capital gains rate of 20% or normal income tax, whichever is lower, and collect 140% of $X from (1).
Which would you like? I realize that there are some people, apparently like yourself, who seem to think that rich people, especially those not 'working' deserve to be soaked because, hey, they don't even have jobs. But you're wrong. Not only is it morally wrong to take it from them just because you don't have it, but it isn't even good for YOU to take it from them. Money isn't made by 'moving money around', its made by placing money into investments which create jobs, leverage peoples abilities, and produce a return. All of that is good for the economy. No matter how much you fume over the fact that those rich bastards are getting off less than completely soaked, that doesn't change the fact that not soaking them actually generates more revenue. The rich are not rich because they've simply taken a bigger piece of some nebulous pie, they're rich because they earned it, and they usually contributed a lot more in the process. They usually took bigger risks, delayed their gains longer, worked harder. This is not an aristocracy where billions are passing down in the hands of a few. It's a land of unrivalled prosperity, with millions of millionaires, the vast majority of whom made their own money in their lifetime.
This is another thing entirely. AMT sucks. I see why they put it into place, but paying all this tax on money you don't have is a bit ridiculous. That's just a personal opinion. Still, why escrow? If you want to tax lear jets and rolls royces, have a sales tax or even a luxury tax. (But the car and plane makers will beg you don't, because when the US implemented the lux tax, there was a huge shortfall of the expected revenue because, surprise surprise, people backed off buying expensive stuff.)
Sorry, have to disagree. Let me first say: you're right about the value of being a millionaire. People don't even classify themselves as 'wealthy' until they hit about $12-14M. But its not the billionaires we can soak for the money. It just doesn't work. They're really, really rich, but soaking them for any amount doesn't help. The Forbes 400 just can't afford the government. It's not them that's footing the huuge portion that the top 5% pay (44 percent, last I checked, of the total tax burder), it is the Millionaires Next Door -- the working 2.5M rich that represent that top 1%. Sure, there's a Gates here and there -- but I have news for you, they're hardly aristocrats. You'll notice the top is dominated by first-generation rich. Sure, there are some Waltons clogging the works, but not for the most part. And that's part of Brins whole letter -- that we shouldn't worry about having a 'rich' elite if they're all earning it. And by and large, they are. And most of them, shocker, really are willing to shoulder progressive taxes. (Probably because most realize, like I do, that they're getting their disproportionate share in some part through luck of birth) Nonetheless, this isn't about that. But there's all sorts of people raging about how we need to raise taxes on the rich -- but there's not a whole lot left to pay for. Granted, the wealthy probably don't need a tax cut. We need to pay down the damn national debt, because it will be a lot better for us ALL in the long run. (If the national debt were eliminated, the taxes taken from the top 10% would cover our budget entirely). But if there's _going to be_ tax relief, the rich should be getting it in proportion to the high amount of taxes they pay.
If taxes are reduced, the government has less money. Therefore the government will spend less money. When people spend more, it will be offset by the government spending less. If the government did not spend it, it would negate government debt, causing holders of that debt to have their principle returned, which they would then spend. The only thing that's going to drive inflation is people cashing out of investments and reducing the amount of capital which produces goods and services, and using those dollars instead on consumption, assuming that consumption drives demand enough to increase prices. In other words, reducing the percentage of capital invested in production and using it to buy the fruits of product will cause inflation.
Please. Whatever you want to give Clinton credit for (maybe welfare reform?), he sure doesn't deserve it for the economy. Or, let's try this another way: what did Clinton do that caused an economic boom? The explosion of the economy in the past 5 years is technological, driven by deregulated finance. It had nothing to do with Clinton. I'll give him a little credit for welfare reform, but it was a no-brainer. And Clinton's real legacy: continuously defending China after we caught them selling nuclear-arms-building equipment to other countries.
Clinton got re-elected because he's a slick-talking demographics-chasing pollhound who was willing to move his party to the right in order to appease pollsters. All the relevent investigating happened post-reelection, which he wouldn't have won if it had happened before, and one of the questions that needs to be asked of both candidates is: When Clinton gets indicted for perjury and obstruction of justice after leaving office, are you going to pardon him?
Plus for Nader: he actually has opinions on things, and isn't simply catering to raw demographics.
Minus(es) for Nader: Ow, that smarts.
I'd like to see a 3rd party candidate who was a bit more honest AND practical (heaven forbid, eh?) like Jesse Ventura, who has impressed me with his candor, opinions, and success (at least in contrast to Bush and Gore, although that's not saying much.)
Yeah, but then you step up to a moderate sized family business, say. Under the owner, it takes in $2M a year, and generates, say, $150k in profits. But it can't possibly pay away 1/3 of itself, and the money in the business does nothing but generate power in the economy unless it gets taken out by the family (by the owner OR the heirs) to get expended. I was very much agreeing with Brin until I hit upon this post, and it makes a lot of sense, when you view things in another way: if they aren't spending it, its still doing its job invested. This is something that deserve more airtime in this thread: income vs consumption tax. (Although I'd want to see the consumption tax modified to assist the less-fortunate, rather than blindly applied to every dime spent.)
And to top it off, this has the effect of making the economy more stratified, especially today. The super rich are already in the top tax bracket, and always will be. But if you work for peanuts for years, score big with your stock options, you'll be hit with big taxes, too, even if your average income over the longer periods doesn't justify it. The government gets more, and you get less for taking a risk (and succeeding). And this is all aside from the worst case scenario (other than that alternate pay being worth nothing), which is that it only makes up for your lost salary, but you pay more taxes on it.
This is counterintuitive for some people. However, its not as though everyone puts money into the same investment yielding the same rates for the same time. Last time capital gains rates were lowered (to the 20/28 short/long term, not the recent merging to the flat 20% at 12 mo rate), the revenue realized from those capital gains taxes rose.
Why? It's a combination of factors, but probably the best answer is that taxes are an incentive to leave your money tied up in investments, rather than to free your money to make better investments. The capital gains taxes restrict the liquidity of our capital, and therefore hamper the economy. I think taxing capital gains is reasonable, and agree with Brin. But the lower rates promote investment, _especially_ investment in new enterprises, which are a higher risk and a higher reward.
It might seem convenient to say, "capital gains are just income for the wealthy", but that's not necessarily true, and in the cases where capital gains ARE income for the wealthy, it doesn't assess the whole picture. The gains are made because the value of an asset has appreciated. Those assets tend to be securities of businesses. Investment in businesses creates jobs, and the money invested is used to fund the creation of wealth, and taxes are paid on the wealth through money paid to employees, corporate taxes, etc. And even those considerations only scratch the surface of the dynamic nature of the economy.
For a more detail treatise on the topic, there are a ton of documents you could find. One is here. This was discussed because of the 'Contract with America' capital gains cuts. These predictions came true. Here's are some quotes that illustrate the point:
Or...
And this is why capital gains taxes should be low, and should remain low. Brin is dead on with the death taxes (haha), in terms of their impact, but if you look at this without envy over Other People's Money, you'll discover this works best. (In fact, the whole concept of capital allocation is interesting, because if you instantly redistributed all wealth in the nation so everyone had an equal dollar amount, we'd be set back countless years. Because most people would create consumer demand only with their money. A smaller but significant portion might invest (by pooling funds) to take advantage of that demand (if they had some reason to believe the money wouldn't be redistributed again), and the creation of wealth by entrepreneurs would be likely much more difficult. (Relatively speaking to his net worth, Bill Gates spends little money. If you divided his fortune amongst 1000 people chosen at random, the distribution would be more even, but the allocation would benefit the economy less because those people would spend more on consumerism and less on capital reinvestment, but this is _really_ disgressing...)
On one final note: "we who work for a living". People with a great deal of money tend to work hard with it. Money growing itself does so poorly. These people must select and promote good investments, etc. If you have rich loafers, that's why you get them with the death tax. But just because someone isn't getting a paycheck, and lives on investment income, doesn't mean they're loafing. And the average person in that 1% isn't some stuffy billionaire, he's a small business owner living in the suburbs with a net worth of about $4M, still working, providing jobs, etc.
If I hadn't been posting the hell out of this thread, I'd be moderating that up. There are obviously two considerations, moral and pragmatic. We all have to consider our duty to our fellow man, and we have to evaluate the impact of birth luck (smarter -> more money) on the equation. "From each according to his ability, to each according to his need" doesn't really capture the essence of true fairness. "From and to each, according to his performance indexed against his potential", might be a better way to be truly fair. The pragmatic concerns weigh in against that, to some extent, and much more so against traditional Marxist philosophy. (I think history has, to a large extent, proved human nature disallows it.)
Haha, too true. I've had the feeling that when they passed the 16th amendment, they didn't imagine 40% taxes. I think the income tax started at 3%.
I knew 13% was the wrong number to use. It was in my head because of Forbes, but you'd have to be on crack to exempt investment income. I believe in capital gains being at different rates, because you can't treat $750k earned by a plastic surgeon doing surgery or $5M in book sales the same as you do with $5M earned on invested money, because the $5M invested has another impact on the economy. In fact, the last major lowering of capital gains rates not only increased investment and spawned new jobs and innovation, but increased the total revenue in dollars collected.
But if you went to a flat tax (especially a flat low tax), and everything was subject to it, I agree.
I'll be honest: my view changes a lot on these sorts of things. But let me point out some holes I see in your refutations:
One of the functions of government is to factor in social obligations to its people, especially the ones who need the most help.
While some might argue this should be the job of your fellow citizens to do directly, I agree. And this is why I'm not chanting, 'flat tax!' But the sentence you're claiming to refute specifically disallows this social obligation simply because it needs separate consider from the economic effect of taxation. In other words, just because flat taxes, say, produce the greatest total economic gain (and I haven't said that's the case, either, but making the assumpion (which I don't agree with)), that doesn't mean they are 'right'. But we're not talking about the right government strategy, and I didn't claim that the sentence should become a government motto. It's a statement about the effects of taxation on economic production.
A purely economical standpoint leads to a corporate strategy, not a national one. Or in other words, a fascist state.
Again, I wasn't advocating elimination of taxes (or top-heavy taxes) as an economic strategem for the nation. As for corporate strategy, it would be very accurate to say that a corporate strategy tends to be purely economical, but that doesn't mean that any purely economical view shouldn't be considered in relation to the nation. And I don't see where fascism, which is an extreme right-wing authoritarian form of government, fits in. Even _if_ you say that all national economic strategy should be based only on total economic output, that's not fascism. It's not libertarianism either. Because total economic output is not gained from pure capitalistic machinations. Total gain requires that if a large disparity exists that certain things be put in place (such as the redistribution of wealth to educate the people) which have a larger long term total gain, even if they aren't as gainful for those taxed to do the redistribution.
You do *not* want to maximize the total output of a national economy. That's why the Fed has been trying to slow us down. The best national economy is a stable one, not one racing out of control towards a crash.
The Fed isn't trying to 'slow the economy' down to lower the total output, in the purest sense. It is slowing the economy down because people in good economic times demonstrate a tendency to overspend, undersave, underplan, and this leads to both a propensity for bad debt and recession as well as inflationary demand for goods and services. But you're half right -- stability is absolutely required for maximum total output. That's because maximum output requires capital available to be optimally invested, and that requires stability so people don't choose less-apt investments for capital in order to counteract the risk of instability. But an economy that is growing incredibly fast does not necessarily end in a crash. When personal income gains are matched by productivity gains, there's not cause for concern, because goods exist to satisfy the increased demand.
As Brin explained, top-heavy taxation leads to redistribution of wealth through charitable giving.
Actually, Brin explained that inheiritance/death taxes lead to redistribution of wealth through charitable giving. That's not a refutation of my point, but I agree with Brin and with you that the death taxes need to stay put. We were, economically and nationally, counting on this money in one sense, to bail us out of our national debt, by collecting the enormous revenues that will pass on from 2009 to 2023 as the boomers die. And I agree again with Brin on the point that it isn't about taking half of the first million or two or three, but taking the exorbitant share of the uber-rich and preventing the money from being completely tied up. (Although that money, to some extent, is invested in our economy as capital and helps produce gain, it is likely to be less efficient because the management of such out-of-proportion sums, if not tied up in a business, is likely to be less efficient than if distributed)
Also, for the record, I'm an engineer, and don't like corporate marketing strategies, but I do like economics, and I like taxation which benefits society, but some people don't see the correlation between taxation and the problems it can cause. (Again, notice Brin's observation about the terrible state of many European economies.)
It's a good thing you posted, actually, because its probably worth concern that many people actually DO have that attitude. There's a lot of things to look at, but let's start with the important few.
(1) The US was founded by a bunch of people furious over taxation without representation, among other things. That's what you're talking about. Simply taking money from the rich because they have it and you can "vote it away" is a sort of tyranny of the masses which essentially violates people's right to own property.
(2) We actually don't live in a democracy, with live in a republic, where our elected official make our decisions on our behalf, but we choose those officials. The founding fathers seem to me to consider voting a patriotic duty -- selection of those best capable of leading the country to prosperity for everyone and keeping the nation strong, rather than trying to merely serve the largest demographic interest. Read Federalist #10.
(3) This is possibly the most important point, and its purely pragmatic. Assume for a moment that we did, as a country, all just go vote every year as to who got the money. Now assume that the people of the nation, thinking it 'fair', voted all the money to be distributed equally. Who would work, when they knew money would be doled out equally anyhow? Who would take risks to earn larger sums of money, and chance going into debt to start a business?
Among other interesting points -- most millionaires do shop at JCPenney. And Kmart, Walmart, etc. See statistics in The Millionaire Next Door. Most of them buy used cars, resole their shoes, and more. Most of them are not young. They've often spent their lives working in their own businesses. And yet, these people, taking risks, building businesses, trying to provide better for their children, sometimes work brutal hours under intense stress, all the while providing opportunities for others for employment as well as serving the economy in general by competitively providing goods and services.
Your comments are, in essence, the gist of the 'Class Warfare' attitude. And your post reflects an attitude (which I would have assumed was merely satirical if it hadn't been for the self-righteous profanity) which, if implemented fully, would simply halt the gears of the economy. It's virtually guaranteed. The USSR had that problem, and the only way they kept it going as long as they did was by having totalitarian controls that made sure people at least seemed to be working. But you can't (as a democracy or a republic) redistribute wealth at will and expect anything but disaster. And Brin's notes seem to recognize that.
One place where I'd agree with the 'take it' sentiment, in general, is the inheiritance tax. It was always conceived that our national debt would be largely erased by the predicted death taxes on the some 10-15 trillion dollars expected to free up between 2009 and 2023. Giving a free ride to a generation of rich do-nothings is the likely result of removing the tax; a small percentage of counterexamples don't help the likely outcome.
Still, all in all, your post is an excellent example of the wrong attitude behind many people who support disproportionate taxation, and simply let their envy run their vote. And it isn't good for the country, or even for you (although you may not realize it).
Also, there are other things which factor in to increasing taxes on the wealthy. There's a hidden tax, which is that your deductions are eliminated as your income goes up (starting at around 150k, and bottoming out at 80% 'reduction' at $1M). Also, the tax code increasingly implements tax credits that the wealthy cannot take advantage of. (A good instance, imho, of well directed tax policy. Any tax imbalance that also encourages responsible spending, such as on education, is better than random tax cutting).
And I believe the high tax brackets ran at least thru the 70s into the Reagan administration, which was the one that cut the top bracket to 39.6%.
Still, consider the tax bill on $500k:
36% effective federal rate (some taxes at 39.6, some below, that's roughly the average)
9.1% state (this is California)
2% social security (I'm estimating there)
2% property taxes (based on 1% prop tax on a $1M home)
2% sales taxes (obviously dependant on what you buy)
Now, on top of all these taxes, they get half their itemized deductions removed (1/2 credit on charitable donations, 1/2 on mortgage interest, etc). They can't save into tax advantaged plans beyond a employer (probably themself) sponsored 401k. And, most of all, they can't take advantage of tax credits of any kind. When you add up the tax credits for dependant children, etc, etc, most of the bottom 1/3 of income earners in the US pay no income tax at all. They usually only pay sales tax and social security (plus miscellaneous fees like, say, auto registration, which is based on car-value in many states, such as CA).