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The Tired Donkey

Cocktails, Apple conundrums, taxes and other assorted stuff

Tired Donkey

The Tired Donkey

Sitting Donkey
The Tired Donkey blogs about cocktails, ways to get the most out of your Mac at home, work, college . . . wherever. He used to write about the unending abuse suffered by the 51% of Americans who actually pay the federal income tax. But this became too depressing, and, frankly, no one wanted to read it.

Nevertheless, if you came here looking for the Tired Donkey's brilliant analysis of our dim-witted tax system, you can still find his earlier posts. Just check the archives or the
Site Map.

Note: The Tired Donkey is not advertiser supported, and he gets no benefit from any product mentioned on his site.

The Tired Donkey

Archives

Linguistic Shenanigans

Rethinking Our Tax System




donkey-1
Despite his great wisdom on the matter, the Tired Donkey swore off writing about taxes long ago because (1) of the thousands of visitors his blog gets every month, about two of them look at his tax-related posts, and (2) writing about our tax system became so depressing that the Tired Donkey nearly expired. Unfortunately, the recent brouhaha over the debt ceiling and a run of staggering stupidity at the New York Times is forcing the Tired Donkey to come out of tax retirement. So here we go. The Tired Donkey will try to make it brief.

On the day after the announcement of the debt ceiling deal, the New York Times’ editorial page, under the headline “
To Escape Chaos, a Terrible Deal,” opined that the Democrats “held out for a few basic principles.” Among these, the paper observed, was the principle that there “must be new tax revenues in the mix so that the wealthy bear a share of the burden . . .” Hmmm. A share of the burden? Let’s check that out.
Read More . . .
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Why the Big ISPs Are Lying to You About Net Neutrality




What You Should Know
I wrote about the Net Neutrality debate back in August, and it’s time for an update because you are being lied to on a daily basis by the people who control your access to the Internet. It’s time to get educated.

First, the basics. Last year a federal court of appeals in Washington, D.C., declared that the FCC lacked the authority to prevent Internet Service Providers (ISPs) from restricting the websites their customers could visit. That’s a big deal if you care about an open internet.

An analogy here should be useful. As hackneyed as it is, imagine the internet as a highway over which information flows. The only way you can access any of that information is via an an off-ramp, and the ISPs own all of them. Get your internet from Comcast? You’re at the end of a Comcast off-ramp. The traffic on the highway below you, like the traffic on the internet, flows unimpeded regardless of rules governing the on-ramps and off-ramps. But you can’t access any of it without your off-ramp controller (your ISP), and they are fighting as hard as they can to be allowed to make decisions about what you are and are not allowed to see.  
Read More . . .
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Understanding the Net Neutrality Debate



AlexRossSuperman
The Tired Donkey cares deeply about having unfettered access to the internet. You should too. If you have grown weary of all the network neutrality blather dribbling out of Washington over the past few years, the Tired Donkey understands. It is, after all, a topic that provokes great passion in a small group and eyes glazed like a Krispy Kreme doughnut in everyone else. But now is the time to pay attention, and the Tired Donkey provides you with both background and information about why you should give a damn below; in fact, he is so serious about this subject that he even breaks into first-person prose. That’s serious. If you love the internet, read the rest of this post. Then do something about it.
Read More . . .
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We Are Not Children, Mr. President

Man Wanders in Money Field
The Tired Donkey is no idiot, and he does not like being treated like one. Myrmidon Donkey Obama has proposed a $2.5 trillion budget which includes a $1.2 trillion increase in the federal deficit. These are big numbers. Too big for the Tired Donkey to comfortably contemplate, so he found some help here visualizing how much money $1 trillion is. Take a look. Now imagine how tired this donkey and all the other donkeys out there are going to be when we get done paying off that extra $1.2 trillion in debt; and--if you are a glutton for punishment--go a little further: imagine all the Freeloaders standing by and watching while you do all that work. The Tired Donkey truly regrets doing this to you on a Friday, but sometimes we have to suffer for the truth.

So. To much fanfare on April 20, Myrmidon Donkey Obama
announced that he was going to find some way to cut $100 million from his $2.5 trillion budget, apparently believing that we are so dumb we would find that to be an example of his great fiscal responsibility. It is not an example of that. It is, instead, a sign that our new administration is just as cynical as our last. If you’d like to see another helpful visualization of what that $100 million cut looks like in relation to the whole budget, the video is below:



We are full grown donkeys, Mr. President. Not colts. Speak to us as if we are capable of processing language. When you act as if we are simpletons, it makes you look silly. And it makes us mad.
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Myrmidon Donkey Lies and Treachery

Lie to Me
Today, the Tired Donkey would like to tell you a story about a misbehaving child.

Imagine that you own a beautiful piece of land in the country. You work hard at your job, and this land is where you go to escape. Because you find your relaxation though gardening, you have spent the last twenty years working on the grounds. As a result of your hard work and creativity, you have built what all agree is one of the most beautiful gardens in the world.

You have a son. He is twenty-two years old, and just out of college. Unfortunately—because of the poor economy and his horticulture degree—he has no job prospects. He begs you to be allowed to live in the cottage near your gardens; he assures you that he wants to help with the garden, to take some of the load off your shoulders.

You are suspicious; he has friends in the area who are dirt-bikers, and you think he might allow them into the garden. You ask him about it directly: “Son, you are going to be controlling the keys to the grounds. It is very important that you take that responsibility seriously; I can’t have a bunch of dirt bikers ruining the garden.” He assures you he would never do such a thing. “Dad, I promise I will let no dirt bikers into the garden.” You assent; he needs a place to stay, and he ought to be helpful.

Several weeks after he moves in, you go to your garden and find it utterly ruined by dirt bikers. You confront your son. “Dad, it’s not my fault,” he says. “It wasn’t my idea to ride dirt bikes in the garden, and I didn’t even ride one myself. All I did was let them in when they asked.” You stare at him. Then you . . . what? What do you do?

The Tired Donkey is curious because he would like to know what we are supposed to do with our Myrmidon Donkey president. During the campaign, Myrmidon Donkey Obama criticized Myrmidon Donkey McCain mercilessly about his plan to tax healthcare benefits. MD Obama said he would never allow such a thing because it would amount to the highest tax increase in history on the middle class. Now we learn that MD Obama is, in fact, open to taxing health benefits. But he won’t be the one to propose it; he’ll just be willing to sign the law if Congress does the dirty work.

Like the son in the Tired Donkey’s sad story, MD Obama is either too weak to shoulder his responsibilities or is already showing himself to be an unapologetic liar. Character matters. The Tired Donkey understands that politicians must change their mind in the face of facts from time to time. In fact, he encourages it. But he expects to be treated like an adult. How hard would it be to say to us, “People of America, I said one thing on the campaign trail, but financial realities have forced me to change my mind”? The Tired Donkey has an answer: it would be easy. But—like all the other Myrmidon Donkeys—MD Obama is unlikely to say this because he believes most of the population is too dumb to remember what he said a mere six months ago. He may be right.

There is nothing MD Obama could say to convince the Tired Donkey that any taxes on medical coverage would be a good thing. But he could say things that would allow the Tired Donkey to respect him; the Tired Donkey is not holding his breath.
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Lingusitic Shenanigans

Geithner Reaches for Donkey Money
The Tired Donkey is interested in language, and he must wrestle with it often in his day-job. He is forced to spend a few days every so often in Washington talking to Myrmidon Donkeys and—as is more often the case—their just-out-of-college aides. In this environment, the side that seizes the linguistic high ground is usually the side that wins the day, so the Tired Donkey spends a lot of time considering what to call things. Unfortunately for all of us, the Freeloaders—working through their Myrmidons Donkeys on Capitol Hill—carried the day on tax language decades ago, but that does not mean we should not be sensitive to its ever-present distortions. The Tired Donkey will now dispense some wisdom on this subject.

In an
article earlier this week in the New York Times, Jackie Calmes and Carl Hulse discuss Democratic opposition to various provisions of the Obama budget proposal. They highlight the opposition of creepy-looking Senator Max Baucus (D-MT) and Representative Charlie Rangel (D-NY) to the president’s proposal to limit tax deductions for the wealthiest 1.2% of donkeys; Myrmidon Donkeys Baucus and Rangel cite a potential drop in charitable giving as their reason. The Tired Donkey is skeptical about this “reason” and finds it more likely that these Myrmidon Donkeys enjoy the patronage of some rich Steadfast Donkeys who don’t want to pay more taxes, but he will have to explore this suspicion in more detail on a later date since his purpose today is to discuss the language of taxation.

Reading on, the Tired Donkey came across this curious sentence regarding the strange Myrmidon Donkey opposition to more taxes on rich donkeys:

The next day, however, Mr. Geithner* staunchly defended the proposed limit, telling the House Budget Committee it would affect few taxpayers and still let them take deductions at the same level as in the Reagan years: a 28 percent rate, nearly twice what most taxpayers can claim.

What, you may ask, is wrong with this sentence? The Tired Donkey will tell you. It implies that under the proposal, rich donkeys will be getting a real bargain. “Good heavens! Deductions at twice the rate most taxpayers can claim. What a deal!” Wrong. The Tired Donkey is tempted to use a prison sex metaphor here, but he will refrain because he is aware that he has some younger readers. Instead, he will give it to you straight, just like the tax code does: in 2006—the latest data the Tired Donkey can find (
here)—the rich donkeys Myrmidon Donkey Geithner is referring to paid 39.89% of all income taxes collected by the federal government. Yes, you read that right: 39.89%. The highest marginal tax rate is what applies to the vast majority of these payments, and that rate was 35% in 2006. Myrmidon Donkey Geithner may consider it a deal to pay taxes at a 35% rate and only get deductions at a 28% rate, but the Tired Donkey has a different term for it. He calls it getting the shaft.

*Tired Donkey Note: Mr. Geithner is Secretary of the Treasury and a
tax cheat of some renown; he may very well be the Queen of the Myrmidon Donkeys.
Comments

Parents Warn Your Children: NYTimes Shades Truth

Pasted Graphic 1
The Tired Donkey knows that the visitors to his website are critical readers, but he also knows that most people—donkey and freeloader alike—are not. In fact, most people are idiots. So he presents this object lesson to help his readers educate their children and their co-workers.

This will likely come as no surprise to you, but the New York Times often publishes articles that obscure the truth. Take, for instance, an
otherwise interesting piece published today and written by David Leonhardt. The article contains the following paragraph:

The second reason is government policy. The Obama administration plans to raise taxes on the affluent, cut them for everyone else (so long as the government can afford it, that is) and take other steps to reduce inequality. Franklin D. Roosevelt did something similar and it had a huge effect.

The Tired Donkey respectfully suggests that there is something wrong with the information in this paragraph, and he believes you know what it is. Right! It is impossible to cut taxes for “everyone else” since—depending on whether or not you and the NYTimes define “affluent” the same way (the Tired Donkey suspects there would be a difference)—less than half of the people remaining after the affluent are removed pay any taxes that could be cut.

Since this paragraph is short, the Tired Donkey suggests that you have your children and/or idiot coworkers read it. Then ask them if they know what is wrong with it. If they do, congratulate them, remind them that if they choose to read the New York Times they should approach the experience as they would approach a combat patrol in the
Waziristan Hills, and, finally, invite them to visit the Tired Donkey. If they do not pick up on the glaring error, mock them without pity and warn them against the danger of believing all they read.
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Magical Bearded Gnome Declares Reaganomics Dead

Reisch with Chuck Mod
Robert Reich, Magical Bearded Gnome and former Clinton Administration Secretary of Labor, declared on the Marketplace Morning Report today that Reaganomics is dead. It has, apparently, been supplanted by Obamanomics. Magical Bearded Gnome Reich is crafty with his use of statistics, but the Tired Donkey urges you not to be fooled. Magical Bearded Gnome Reich uses two faulty assertions as his central thesis: (1) that the Reagan tax cuts of 1987 began a period of relative wealth transfer to the already-wealthy at the expense of the poor and middle class, and (2) that deregulation is bad. The Tired Donkey disagrees with both, and he will now explain why; what he is about to tell you will make some of you mad. Too bad.

President Reagan’s policies which both flattened the tax code and championed deregulation were proper and ushered in a long era of prosperity. Unfortunately, the people who championed Reagan’s ideas after he was gone were idiots, and
—as idiots often do—they carried things too far. There was too much regulation in the 1970s. The Tired Donkey can’t even locate a Stockholm Donkey who argues otherwise. The problem came later when dim-witted Republicans began arguing that constant deregulation is a good thing, an idea so dumb that only people running for elective office could champion it. Allow the Tired Donkey to state the obvious for a moment: too much regulation is bad and so is too little. That is a piece of why we are in the mess we are in right now. But there is another piece to this puzzle, and the Tired Donkey will now return to the tax question.

You may find yourself asking, “Tired Donkey, if Magical Bearded Gnome Reich is wrong, what did cause the wealth transfer and the terrible economic state we are in right now?” Here is the answer:
changes in the treatment of capital gains. As you can see at the link, in 1997—during the Clinton administration—the capital gains tax rate changed dramatically. Prior to 1997, capital gains were taxed as about the same rate as other income; after 1997—particularly for donkeys who made enough that most of their income was taxed at the highest marginal rate—the gap between long term capital gains taxes and the highest marginal tax rate was as high at 19.6%.

Now donkeys are not idiots, at least not most of them. So what did they do? They began shifting all the income-making activity they could into the stock market. And they were willing to take big risks to do it because a 19.6% tax gap can cover a lot of risk. This activity led to (1) the wealthiest of donkeys being taxed at rates much lower than the less well-healed donkeys; (2) the incredible stock runs of the past ten years; and (3) the long-term trend of the rich donkeys getting richer (which—were it not caused by stupid tax polices that messed up the country—would be fine with the Tired Donkey). And so—at the risk of alienating his readers—the Tired Donkey will once again state the obvious:
a tax incentive to take obscene risks in the stock market combined with deregulatory zeal beyond all reason will lead to disaster. So here we are. And here is what is going to make you mad: the Tired Donkey declares that capital gains taxes need to be raised at the same time as the Freeloaders begin contributing to this country again. Don’t like it? Send the Tired Donkey an email; there’s a link at the bottom of the page.
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The Tired Donkey

Sitting Donkey
The Tired Donkey blogs about cocktails, ways to get the most out of your Mac at home, work, college . . . wherever. He used to write about the unending abuse suffered by the 51% of Americans who actually pay the federal income tax. But this became too depressing, and, frankly, no one wanted to read it.

Nevertheless, if you came here looking for the Tired Donkey's brilliant analysis of our dim-witted tax system, you can still find his earlier posts. Just check the archives or the
Site Map.

Note: The Tired Donkey is not advertiser supported, and he gets no benefit from any product mentioned on his site.

The Tired Donkey

Archives