The Wine Commonsewer

Tax Rates *Do* Matter

Good Morning Gentle Readers,

I love my high dollar monitor, but its got more than a few miles on it. Like a lot of us, sometimes it doesn't wink into life right away when the switch is flipped in the morning.

Monitor prices continue to fall and with an eye to a long tax season ahead TWC did a little shopping yesterday for a replacement. Found a great monitor at a stunning price over at Costco. I was happy as a clam until I realized that the effective rate of sales tax was 18.75%.

There is, of course, the nearly 9% sales tax rate (almost 10% in the Bay Area and Los Angeles). Additionally, ever-so-progressive Californicate instituted an e tax a few years ago. Ostensibly this tax, which the state calls a fee, is supposed to stem the flow of landfill-bound decrepit TV's and outdated computer equipment. The state slaps a tax onto new purchases so as to pay recycling firms to take your old equipment and do something useful with it.

You know, Recycle! Reuse! A concept that is entirely at odds with the government and greenie push to get everybody to buy new stuff that is more energy efficient and earth friendly. Not to mention that the federal government legislated everybody's television  into obsolescence with the mandated HD format that took effect last year.

Sorry, Girls, you can't have it both ways. If you want energy-wise products than you shouldn't be encouraging people to keep using energy-hogging outdated electronics.

Besides, TWC is a real man and he makes the occasional dump run, where there are sheer mountains of old electronics that seem to exist without purpose. Apparently, they can't just bulldoze them into the pile with the dead bodies and old sofas, but they can't do anything else with them either, such as, ah, recycling them. So the piles grow ever taller. Ever broader.

A lot of really smart people will assure you that tax rates don't matter, but Moi and a lot of other people simply aren't going to pay an effective sales tax of 20%. In simple terms, when you add 20% to the purchase price it ain't such a great deal, so, back onto the shelf it went.

Found one on Amazon. A little less money, no ecology tax, no sales tax (you are required to pay use tax on taxable items purchased out of state), no shipping costs, & UPS delivers it to my door. I think that's called a no brainer. 

As Ever,

TWC

Real Money (371.25 grains of silver)

Good Morning Gentle Readers,

The House Blond picked them up from the counter and excitedly asked.....

What country are these big heavy coins from? 

Found them when cleaning a closet shelf. It's possible that the crazy woman who once lived here hid them there. 

The three 1921 Morgans are worth about $15.00-$20.00 apiece and the nice 1922 Peace Dollar worth maybe $30.00-$40.00. Many of the uncirculated 1921 Morgan Silver Dollars were melted down to make 1922 Peace Dollars.  

Then she discovered a smallish, junk-looking British coin that has been floating around the Casa for years. It turned out to be a 1909 gold British Sovereign worth several hundred dollars. I thought it was just a cheap modern coin because it's small and it takes a magnifying glass for these antique eyes to see the mint date. Been laying around here for years, mixed in with 'coins of interest' like the bicentennial Eisenhower dollars and the Susie's.

Silver dollars have a certain intrinsic value which imparts a characteristic heft that is missing from modern coinage. Drop a Morgan on a tile floor and you hear a distinctive ring rather than a dull thud. The coins are Americana. Survivors. The weight of one in your hand allows you to briefly touch another era that long ago moved on.

As Ever,

TWC

Henry Hazlitt on the Housing Crisis (in 1946)

Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to "buy" houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment

Henry Hazlitt was an economist who wrote Economics in One Lesson, one of the most popular economics texts ever published.

Jacob is The Man With the Can (Snell Soda, Inc!)

Good Morning Gentle Readers,

This is how it works here at Casa de las Rocas Grandes: The Boy and The House Blond get paid for the chores they do. Or they don't (sometimes). But as a rule, we don't do allowances, we do payroll. Cash on the barrel head. It isn't a perfect system and it isn't administered perfectly, but it does approximate real life to some degree. Except that we pay better than Mickie Dees and we're a little more easy going.

So the boy does some cashflow projections and works out the cost of goods sold and figures he's better off to strike out on his own.....

Dad! I could make way more money selling sodas than I can working for *YOU*!

See, Gentle Readers, California's chief health nanny, Governor Schwarzzengroper decreed that California public schools may no longer sell sugary snacks or sodas. And, get this, your mother can't bring home-made goodies to school for bake sales or kid's classroom parties. That purveyor of nutrition, Little Debbie is legal. Grandma's homemade brownies? Ash canned. And you know what I really wanted to say. 

Economics 101 dictates that prohibition always creates a black market, whether it be for bathtub gin, hootchwah, or Coca Cola. Into that void steps my entrepreneurial son, advertising by text message (pass this along to your friends) that he is the Man With The Can.   

The project penciled nicely at seventy-five cents a can but was winner, winner, chicken dinner at a buck per. First day's sales were brisk and The Boy plowed his profits into more inventory. He didn't anticipate the market would put a premium on chilled drinks, but he covered that post haste (Dad told him this would be important). He's also broadened his inventory to include Root Beer and Dr Pepper as well.

This, my friends, is exactly why I don't fret about The Boy's future. 

Despite his observance of the maxim that discretion is the better part of anything, TWC anticipates that the school will shut him down at some point. In the meantime, he's learned a valuable life lesson.

Good job, son. Daddy is proud.

And then I get a text message from The Boy*. His signature is: SNELL SODA, INC.

As Always,

The Wine Commonsewer

*Jacob Michael Snell is The Boy's name.

I'm Already Broke

Tip of the glass to Mrs TWC

A Regressive Tax on the Mathmatically Challenged

Good Morning Gentle Readers,

What if lottery tickets told the truth?

• The odds of winning a Mega Millions Jackpot are 175,000,000 to one.
• The odds, as an American Male, of being Tom Cruise are only 150,000,000 to one.
• You are more likely to call heads twice, roll a six and then be struck by lightning than win a regular 6/49 lottery.

In final proof that He Who Is Satan has not only come to Earth but set up a business, California is combining reality TV and scratch cards in "Make Me A Millionaire" - a game* where contestants pay for scratch cards for the chance of winning an appearance on TV. The moment people stopped dreaming of being millionaires, and instead dreamed of maybe having the chance to be on reality TV, is recorded as the exact date hope died.

Gotta love the Golden State.

Whole thing here.

As Ever,

TWC

*God Awful Moron Experience

Tip of the glass to Franklin H

Teach Your Children Well

Good Morning Gentle Readers,

This originally appeared at TWC on August 26, 2005

As Ever,

TWC

Tip of the glass to JC for reminding me much it makes me chortle

City of the Angels Not Bound By Ruling (Only Taxpayers Are)

Good Morning Gentle Readers,

This kind of stuff may seem especially egregious to you, Gentle Reader, but it is really just the Soup de Jour for most government bureaucracies.

Everything was fine until the city started running out of money in 2007. Suddenly, the city announced that it was going to ignore its own ruling and reclassify us in the higher tax category. Even more incredible is the fact that the new classification was to be imposed retroactively to 2004 with interest and penalties. No explanation was given for the new classification, or for the city's decision to ignore its 1994 ruling.

Their official position is that the city is not bound by past rulings -- only taxpayers are. (emphasis TWC's) This is why we have been forced to file a lawsuit. We will let the courts decide whether it is legal for adverse rulings to apply only to taxpayers and not to the city.

And when LA wins, they lose, because Creator's Syndicate will leave town, taking their jobs, revenue, and tax base with them.

Money quote.....

As long as City Hall operates like a banana republic, why is anyone surprised that jobs have left the city in droves and Los Angeles is teetering on the brink of bankruptcy?

Whole thing here at WSJ.com

As Ever,

TWC

Tip of the glass to Steven D

Putting Tax Funded Bailouts in Perspective

Good Morning Gentle Readers,

Without remark. The Man In Black narrates.

If you can't see the vid look here.

As Always,

The Wine Commonsewer

Tip of the glass to Mrs TWC & Erin K

Fifty Bucks For A Pepsi May Be A Bargain

Good Morning Gentle Readers,

The DeLorean leaves the skyway. Sign in the background says.....

Phoenix : Boston : London

and underneath

Local traffic: Hill Valley exit next right.

After leaving the skyway it passes a floating sign.....

Welcome to Hill Valley. Goldie Wilson II Mayor. A Nice Place To Live.

Please fly safely. Ejection Seats Save Lives

The DeLorean descends down into Hill Valley. Cut to an alleyway, where the DeLorean lands. Discarded piles of laser discs and a "Fusion Industries" generator are in the background. Doc opens the DeLorean doors.

Doc: In exactly 2 minutes, you go round the corner into the Cafe 80's.

Marty: Cafe 80's?

Doc: It's one of those nostalgia places, but not done very well. Go in and order a Pepsi.

Doc pulls a $50 note from his trousers.

Doc: (continued) Here's a Fifty. And wait for a guy named Griff.

While Marty's fifty dollar Pepsi Perfect is clever bit of commentary on monetary inflation in 2015, it also may be a bit more prescient than the directors imagined  when the Back to the Future II script was penned back in the late 1980's.

For starters, from Brian S. Wesbury, Chief Economist and Robert Stein, CFA, Senior Economist at First Trust LP, who were recently seen waving a caution flag at the deflationistas at the Fed.....

In the first two months of 2009, consumer prices are up at a 4.1% annual rate while producer prices are up at a 5.8% rate.

Whole piece here.

That should come as no surprise to anyone. Pumping trillions of new dollars into the economy will inflict distortions upon the market, one of which will be rising inflation. The question is not if, but when will we feel it and how much will it be.

 

Payable to the Bearer on Demand

TWC has already noticed upticks in wine prices that don't seem to be connected to rising demand. Several spot checks reveal twenty percent bumps in price just since the fall of 2008. Not Zogby, but instructive nonetheless.

As Always,

TWC

Tip of the glass to Del Mar Dave