TAXPROF ROUNDUP: The IRS Scandal, Day 831.
Archive for 2015
August 18, 2015
GEE, WHO COULD HAVE SEEN THIS COMING? Minimum-wage offensive could speed arrival of robot-powered restaurants.
Many chains are already at work looking for ingenious ways to take humans out of the picture, threatening workers in an industry that employs 2.4 million wait staffers, nearly 3 million cooks and food preparers and many of the nation’s 3.3 million cashiers. . . .
The avalanche of rising costs is why franchisers are aggressively looking for technology that can allow them to produce more food faster with higher quality and lower waste. Dave Brewer is chief operating officer with Middleby Corp., which owns dozens of kitchen equipment brands, and is constantly developing new ways to optimize performance and minimize cost.
Remember, the campaign to raise the minimum wage isn’t being pushed for the benefit of the working class. It’s being pushed for the benefit of the political class.
JOURNALISM: NYT: Donald Trump’s Littlest Victims. “Ever since he began his campaign for the Republican presidential nomination with a vicious screed against Mexican immigrants, Donald J. Trump has become a figure of dread and comic-book meanness to the Latino community. He’s a villain in a flaccid pompadour, spewing threats and insults that have filtered down into the bosom of many a Latino family, to be heard by children gathered by the television set or at the dinner table.”
Boo!
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FRED BAUER: Republicans Could Win Votes by Opposing Guest-Worker Programs. “As they currently exist, guest-worker programs tend to be a species of crony capitalism in their creation of a caste of workers without full access to the free market. One of the defining features of a guest worker is that she cannot bargain for her labor with the same flexibility and freedom of a legal permanent resident or a U.S. citizen. This disadvantage distorts the free market and undermines the position of the average worker. Guest-worker programs allow the rich and connected to pit worker against worker in order to have an economic race to the bottom. . . . If you support a command-and-control economy run from Washington, the Gang of Eight’s vision for guest-worker programs might make sense. If you believe in the free market, this model is far more troublesome.”
DAVID BARON, CALL YOUR OFFICE: Former Marine, 66, survives bloody hand-to-claw combat with black bear. “Standing 5-foot-9 and about 165 pounds, Yepez took on the bear late last week at his home in Midpines, a small mountain town in Mariposa County where bears have recently become a problem, according to KABC-TV. Residents have discovered their trashcans overturned and found bear droppings on their land. But, until now, no one had been attacked by one.” No one is, until someone is.
DO WE DESERVE A SERVICE AS AWESOME AS UBER? “Today’s ‘progressives’ would have protested the horseless carriage,” Walter Hudson writes.
“Would have?” Just check out the first production model car trashed in Time magazine’s infamous 2007 “50 Worst Cars of All Time” article.
THANKS TO TRUMP AND BERNIE SANDERS, Populism Is Back, on Both Left and Right.
Don’t worry — what could go wrong this time?
HEY, SHE OPENED THE DOOR: Ashe Schow: College responds to allegations it inappropriately sought woman’s sexual history.
WIPING ISRAEL OFF THE MAP: “If Israelis aren’t paranoid, they should be. Every time they turn around, someone is trying to wipe their country off the map. Literally.”
Of course, Mr. Obama’s would-be deal with Iran is designed to simply take that punitive worldview to its ultimate end game.
RELATED: “Obama lawyers intervene to protect PLO funds in terrorism cases: In an unusual legal move, the Obama administration has taken the legal side of the Palestinian Authority and Palestine Liberation Organization in a federal court case that American terrorism victims’ families had already won.”
Unexpectedly.
BECAUSE WE PUNISH THEM FOR STAYING HERE: Why U.S. Companies Are Moving Abroad.
Because the American taxman has unusually long arms, companies based in the United States who earn profits abroad can end up with piles of cash “stuck” overseas: earnings that face hefty corporate taxation the instant they are brought to America (for example to pay staff or to invest). . . .
Pulling off a successful inversion requires only a modest sleight of hand. When company A (based in America, say) acquires company B (based in Ireland) the managers of the combined A+B entity get to choose a domicile. If they choose the United States, they are in effect choosing to pay relatively high American corporate rates—up to 39%—on all the overseas profits they repatriate; unusually, the IRS taxes income on a global basis. If they choose Ireland instead, they will have to pay a much lower tax rate (12.5%) on profits generated in Ireland, but the crucial bit is that they will pay only the local rate on whatever profits are generated in foreign subsidiaries—because Ireland, like most other countries, taxes on a strictly territorial basis. That means paying, for example, 39% on profits generated within the United States, 20% in Britain, or 0% in Bermuda. A third option is to choose a neutral country, such as Britain or the Netherlands which, like most of the world, also have lower rates and a territorial system. Few global companies would choose to stay in America given that choice, though plenty remain based there, often for publicity reasons. Walgreen’s bosses abandoned plans to move to Europe last year, but only after calls for a consumer boycott. The IRS managed to tighten some rules in September, which seems to have made it slightly harder for other companies to invert.
But simply making it harder to leave is surely not the answer. It has the effect of increasing the chances of hamstrung American firms being swept up by foreign rivals. This has already happened to American targets valued at $315 billion, all sold to foreigners this year, on the calculations of S&P Capital IQ, a data provider. So long as America’s tax code is out of kilter with the rest of the world, its firms will find reason to sail for fairer shores, whether the IRS likes it or not.
A more rational tax policy, and one more consistent with what the rest of the world does, would put an end to this.
WHITE AMERICA DONS THE SHROUD OF GUILT: Well, the left half of America, to be specific:
The racial horrors of the past are undeniable. But the reality of black life has changed immensely since the ’50s. Black governors, mayors, and a president are the new normal. Black families are far more prosperous. Although discrimination has by no means disappeared, social attitudes have undergone a revolution. Yet even as racial attitudes and racial equality evolve, enlightened people rush to don the shroud of guilt.
Much of the liberal establishment today is obsessed with white supremacy, and what to do about it. Schoolteachers are required to take “cultural proficiency training,” so that they can “recognize the impact of systemic oppression of people in America who are not heterosexual white men.” The New York Times is currently publishing an exhaustive series on white privilege that features interviews with intellectuals such as Joe Feagin, a (white) sociologist who claims that Americans are no less racist than they ever were (they just disguise it better), and that children are indoctrinated into racism from the time they’re babies. When Mr. Coates published an article in The Atlantic last year calling for trillions in reparations, it was received with widespread enthusiasm.
Some black intellectuals, however, are not all crazy about the cult of Coates. The political commentator John McWhorter argues that the doctrine of structural racism according to Mr. Coates has become a new form of liberal religion. His book is not so much an intellectual argument as a fiery testament from the pulpit. White progressives have embraced the gospel because it allows them to feel absolved from the charge of racism. By professing their guilt, they can also display their virtue to their peers. “You have original sin, you have this guilt, you acknowledge your guilt,” Mr. McWhorter said in a recent podcast. “What you’re doing is being religious – eating the wafer and life goes on.”
Having declared that “God is Dead” in 1883, from white guilt to veganism to radical environmentalism, what part of the left isn’t an attempt to build a replacement religion?
THEY BEGAN A NEW ERA: How the Wright Brothers did it.
Imagine how badly — and in how many different ways — they’d be demonized by the left today.
HIGHER EDUCATION BUBBLE UPDATE, LEGAL EDUCATION EDITION: UConn Law School Enrolls 100 1Ls, Down 38% From 2014’s 160 1Ls.
At the University of Tennessee College of Law, we’re experiencing the opposite, with a better than 25% increase in enrollment over last year, with no drop in the credentials of the entering class. We seem to be outperforming the national average, though I’m not entirely sure why.
ANDREW KLAVAN: Science Plus Politics Equals Politics:
“In any compromise between food and poison, it is only death that can win,” wrote Ayn Rand. And, with considerably more charm, Mark Steyn wrote, “It’s a good basic axiom that if you take a quart of ice-cream and a quart of dog feces and mix ’em together the result will taste more like the latter than the former.”
Read the whole thing.
LATERAL CAREER MOVE: Jon Stewart Will Quickly Come Out of Retirement to Host Some WWE Pro-Wrestling at SummerSlam.
FUNNY HOW INCOME INEQUALITY IS ALWAYS THE WORST IN BLUE STATES AND CITIES: Want to increase income inequality? Raise the minimum wage.
Minimum wage jobs are not careers. They provide critical work experience that school simply cannot teach for those who haven’t worked before. If young people cannot get their first jobs, they cannot get their second or their third jobs.
While some workers will get a raise if the minimum wage is increased, this will come at the expense of cutting off opportunity for the young. Unsurprisingly, because the minimum wage makes it effectively illegal for employers to hire the least-skilled workers, the unemployment rates for teens in high-minimum wage states are higher than those in low-minimum wage states. The real minimum wage is $0 an hour, because employers always have the choice to let employees go, or not hire them at all.
Once the minimum wage increases in Seattle, San Francisco, Los Angeles, and New York are fully phased-in, their levels will be higher than any other country’s minimum wage — meaning these cities are moving into uncharted territory. After adjusting for purchasing power, the highest international minimum wages are in France ($10.70) and Australia ($10.50). Instead of offering entry-level jobs, employers who can stay in business after they are forced to pay these wages will rely on increased automation or skilled workers.
While proponents of increasing the minimum wage believe that they are leveling the playing field, they are actually removing the first few rungs of the career ladder for young Americans. No matter how well-meaning the proponents of raising the minimum wage may be, constructive policy should be judged on results, not intent.
I actually don’t think they’re well-meaning at all. I think they want to produce a large, dependent population that can be farmed for votes.
IS THERE NOTHING THAT OBAMA CAN’T DO? Obama shorts coal; Soros buys shares dirt cheap.
Even George Soros is planning ahead for January of 2017 and what Victor Davis Hanson once dubbed the Coming Post-Obama Renaissance.
CARLY FIORINA DROPS BY THE ACE OF SPADES PODCAST: Click here to listen.
K-12 IMPLOSION UPDATE: Homeschooling in the City: Frustrated with the public schools, middle-class urbanites embrace an educational movement.
Not so long ago, homeschooling was considered a radical educational alternative—the province of a small number of devout Iowa evangelicals and countercultural Mendocino hippies. No more. Today, as many as 2 million—or 2.5 percent—of the nation’s 77 million school-age children are educated at home, and increasing numbers of them live in cities. More urban parents are turning their backs on the compulsory-education model and embracing the interactive, online educational future that policy entrepreneurs have predicted for years would revolutionize pedagogy and transform brick-and-mortar schooling. And their kids are not only keeping pace with their traditionally schooled peers; they are also, in many cases, doing better, getting into top-ranked colleges and graduating at higher rates. In cities across the country, homeschooling is becoming just one educational option among many. . . .
Like other homeschoolers these days, urbanites choose homeschooling for various reasons, though dissatisfaction with the quality and content of instruction at local public schools heads the list. “I got through public school, but it was never something I thought was an option for my children,” says Figueroa-Levin. A native Staten Islander, she is a columnist for amNewYork, a free daily newspaper, and creator of the satirical Twitter account @ElBloombito, which gained 76,000 followers for its gentle skewering of former mayor Michael Bloomberg’s halting attempts at press-conference Spanish. She calls her local public school “awful,” but she’s not interested in moving to a more desirable school zone, as some New Yorkers with small children do. “We like where we live. We have a nice-size apartment. Sacrificing all that for a decent public school just doesn’t seem worth it,” she says.
But even after more than a decade of aggressive education-reform efforts, the “decent public school” remains a rarity in New York and in other American cities. With urban public schools inadequate or worse and quality private schools often financially out of reach, “homeschooling becomes an interesting study in school choice,” observes Brian Ray, founder of the National Home Education Research Institute (NEHRI) in Portland, Oregon. “You pay taxes, so the public school system in your city gets that money, then you can make the ‘choiceǒ of paying even more to send your kid to a private school, or to a Catholic school. More and more people are saying, ‘I’m going to homeschool.’ It’s not that weird anymore.”
All is proceeding as I have foreseen.
BEING A WOMAN THE WRONG WAY: Bill Kristol interviews Christina Hoff Somers for 1:03:49
Somers: “They say ‘oh, we’re for sexual liberation’ but they’re not really because if you’re conventionally feminine — which many women are — or conventionally masculine, then that’s, they ‘problematize’ that or they feel sorry for you or they think you don’t have free will.”Kristol: “What’s sad about gender studies … it’s a very interesting topic … there’s all kinds of lessons to be learned … but there’s no actual study of gender in gender studies.”
THE DOGS THAT HOWLED IN THE NIGHT: Why the Puppies did it.
DISPATCHES FROM THE CULTURE WARS: Director Blue, Donald Trump, Sad Puppies and Niche Markets.