Now that the auto industry bailout has failed, I think it might be time to step back and ask if there might be a better way. We all know that the feature that has defined the auto industry is its love of collective bargaining: the only way to hire a good auto worker, it seems, is to let him and all of his friends agree that nobody will be hired unless everyone is hired, and at terms they dictate. That's done just fine for the unions, so it's time to share the wealth. Here's why the Big Three (and their foreign competitors) should for an autoworker-hiring union, and should go on strike (i.e. fire everybody) if their collective demands aren't met: No more wasteful competition. Normally, if Ford wants to cut wages, union members will object, and possibly shut down a Ford plant -- so Ford loses market share to GM. But if Ford and GM collectively agree that if one plant gets shut down, all of them get shut down, this simply won't happen. If a strike is that costly to the union, the union will do anything to avoid it, including More sensible wages and benefits. The auto companies pay ...

Via MauledAgain, I found a fascinating story about New Jersey's tax on telephone poles owned by the 'dominant provider' in the state. As Maule points out, it's a hard law to understand: it's not just about revenue or beautification, because this would apply to taxing any phone company, not just the largest. He adds: One wonders why a tax would be imposed only on the dominant provider. Was it an attempt to disadvantage the market leader in order to boost the competition and level the playing field? It is a rather interesting way to spread the wealth. Imagine an income tax imposed only on the largest software company, the biggest bank, the top-paid baseball player, and so on. Why should New Jersey think twice before imposing such a tax? The worst scenario is a "race for second place". Imagine that this tax works out to a tax of 5% on a company's income. Now, imagine that in New Jersey, Verizon makes $100 million each year (before the tax), and AT&T makes $96 million (again, before the tax). If Verizon finds a way to blow a little more than $4 million, so they earn less than AT&T, they can dodge the ...

We hate losing money about twice as much as we like making it. Seriously. Several studies show that if you unexpectedly lose $1, you won't be happy making just $1 back -- you need $2 to reach an even keel. That's one reason market volatility makes folks so nervous; when losses hurt more than gains help, a market that bounces around a particular level still makes people unhappy. Here are a few ways you can ease the pain: If you're going to own stocks, own them forever. It's not hard. Think about a company's product. Ask yourself if people will still use it in fifty years. If yes, and the stock is fairly cheap, buy. If no, don't. Sure, you could make money figuring out what the next big thing in software-as-a-service, fast-food franchises, or cell-phone chips will be. But it's a lot simpler to buy Procter and Gamble, Coca-Cola, and the like, and expect that, over time, you will be rewarded. When you hold stocks for years instead of weeks, you pay long-term capital gains taxes -- and only when you sell. The savings from this can multiply the value of your portfolio, over a long enough time period. If you must ...

A New York Times editorial by Robert Frank suggests a higher future tax on consumption in order to pay for higher government spending now. He makes a few good points, but seems to miss the larger picture. It is better to tax consumption than savings, because this encourages responsible behavior. As far as the US tax system is concerned, investing in a startup is as economically useful an activity as buying a huge amount of Fritos (the difference being that if your Fritos turn out to be more delicious than you expected, you aren't hit with a capital gains tax). It's not a good idea to raise taxes during a recession, even if you plan for the tax increases to take effect later. Someone who is considering, say, an advanced degree in mechanical engineering might be discouraged by the fact that his future earnings will be taxed, even if current earnings aren't. Sadly, the people whom this affects the most (the ones who make long-term plans, and stick with them) are also responsible for a huge fraction of total tax revenues. On a related note, defining investment is pretty difficult. A 'prestige' stock someone buys so they can look down on people who ...

The latest bailout update is that the investment banking industry may net billions of dollars thanks to an obscure tax law the treasury department is flagrantly violating. Two quick summaries: TaxProf, if you'd like to know why to blame the Democrats, and A Taxing matter in case you'd prefer to blame the Republicans. Essentially, the function of this new rule is that banks that acquire other banks can shelter their own profits by applying the past losses of their acquisition target to their own profits. So if Citigroup buys out a company that just lost $1 billion, Citi can avoid paying taxes on another $1 billion in profits (assuming Citi ever makes a profit again). There are basically two views on this: one view is that it's a terrible move, because the treasury is basically giving away money to the banks; the other is that this is true, and that they're doing so while stealing Congress' ability to make the rules. It's bad enough that the treasury department can invest $700 billion with basically no oversight -- but it's much worse that they can arbitrarily rewrite tax laws without Congress' permission. That said, it's important not to forget the rationale for this move. This law ...

California's unusually high sales tax may get even higher thanks to a new tax plan. The weird part isn't that California will be raising sales taxes from 7.25% to 8.75% -- it's what the planned tax increase will pay for. The core of Arnold Schwarzenneger's new budget plan is an increase in taxes to pay for the state's current budget shortfall: in addition to raising the sales tax, he wants it to apply to some services. He's also raising taxes on alcohol, cigarettes and energy. But one industry gets a tax break: TV and movie companies could get millions from other initiatives. It's not surprising that the state would want to tax some industries and subsidize others, but it's disturbing that they'd need to help that particular industry: there is no state with as much access to the talent, capital, and expertise necessary to make movies. There is almost no reason for an ambitious person who wants to enter that industry to go anywhere but California. Schwarzenneger could easily get away with taxing them more, instead: ask yourself how high taxes would have to be for Universal Studios to relocate to, say, Milwaukee. One of the most common problems with tax policy is that ...

Today's taxosphere focused on some pretty surprising political developments. After a landslide Presidential victory and a strong showing in Congressional elections, Democrats are considering -- cuts on income taxes and corporate taxes. Or are they? Via TaxProf, I found this incredible story of a UK government tax service that was shut down when twelve million users had their data compromised due to a single lost memory card this aptly demonstrates that it's always important to know you can trust the tax services you work with (if you're given a choice, of course). Russ Fox is disappointed in the election, which he views as bad for the country but good for the tax-preparing business. We will have a Congress where both the House and Senate are controlled by the Democrats (though it appears that Republicans will have enough votes to filibuster in the Senate). In the past, when this has occurred taxes have gone up. I've always viewed a divided government as a very dangerous thing, because the easiest way to negotiate is logrolling: we might find ourselves spending more on Republican pet projects, in order to convince those Republicans to play along with huge new Democratic programs. According to Kay Bell at Don't Mess With ...

Although most people were paying closer attention to the Presidential election, some local votes might have a bigger impact in the long run: Massachusetts voted against a ballot initiative to end their state income tax, surprisingly basically nobody. According to the AP, "virtually every elected official in the state" opposed the initiative. Interestingly enough, one third of the voters supported it, even though opponents spent ten times as much on ads. Apparentlty the voters in Massachusetts have a hard time electing anyone who feels the way they do about taxes. On the other hand, Maine voters decided to abolish taxes on beer and soda, thanks in no part to funding from the beverage industry. In a move that only a committee of committees could have dreamed up, this measure was somehow attached to a statewide health insurance rule which had previously been funded by charging the insurance companies directly. Michigan, Massachussets, and California weighed legalizing certain vices, which could make them eligible for taxation. Michigan legalized medical marijuana, and Massachussets decriminalized the regular kind, while California stopped short of allowing prostitution in San Francisco. And even though Americans are having more trouble saving than ever, voters were happy to approve billions of dollars in ...

Here are some of the jobs that are featured on Craigslist as of today for Wasilla. I want to make her return to Wasilla as easy as possible, so I have gone ahead and taken a look at what jobs she could apply to and given her sample responses to each post.   1.) Wanted - Customer Service Specialist (see original) Looking for a highly motivated (YES!) Customer Care Specialist for an established Modeling Agency. This position will be responsible for all Customer Service needs that are required from all of our clients. This job is also the main connection between the client and the customer. We need someone who can work diligently under little supervision and solve problems.  (DOH! NO!) CONCLUSION: NOT QUALIFIED   2.) Admin Assistant -part time (see original) Experienced administrative assistant (DOH! NO!) needed for part-time afternoon hours. Minimum requirements for position include excellent oral and written communication skills (DOH! NO!); proficiency in Microsoft Word, Excel, Publisher, Access, and Outlook(DOH! NO!); experience in designing and creating forms, spreadsheets, brochures, signs, etc.; excellent proofreading skills; experience in records management; ability to work well independently; (YES! MAVERICK!) clean driving record; must pass drug test . Salary DOE. If you meet these minimum requirements, please e-mail resume to karenh@tayloredrestoration.net or fax to (907) 373-1237 Attn: Karen. NO PHONE CALLS. If ...

Many people (the Tax Rascal included) have gotten up painfully early today to cast votes in this historic election. It's a common argument that the voting process is flawed because voting happens on a day when most people would be working -- so Democrats argue that it punishes students and blue-collar workers, while Republicans claim that it helps out welfare recipients. Both sides also argue that civic participation has value, regardless of who wins. So should we have a tax credit for voting? The opposite idea has already been tried, and thoroughly discredited. One popular technique in the segregated South was to require a poll tax. This flat fee charged to every voter discouraged the poor -- and was designed to target black voters in particular by eliminating the tax for anyone whose grandfather had voted, too. So the idea of a poll subsidy already has a dubious history: if money and voting mostly mix in Bull Connor's Alabama (and Richard Daley's Chicago), it might behoove us to think carefully about trying it again. The strongest argument in favor of a poll subsidy is that the current voting system puts some people at a disadvantage. But using a monetary incentive to fix a ...