Tuesday, January 19, 2010

Wednesday's Varied Thoughts

Wednesday was a great day for things to think about. I had five very different topics to keep my brain busy and happy.

First, during breakfast I studied Oregon Ballot Measures 66 and 67 (PDFs for 66 and 67). Both are dreadful, but the state legislature has backed Oregon into a corner where not passing them may be as harmful as passing them.
A general summary is here. Compare S-Corporations and C-Corporations here.

Measure 66 sounds just, but between 65% and 75% of the "individuals" hit by it will be small businesses measuring income and taxes through the personal incomes of their owners. Sure, some small business owners should be paying more taxes. But hitting too many small business during a big recession is not the right answer, and a tax retroactive-for-2009 is unjust.

Measure 67 taxes corporate sales instead of profits. The large businesses it hits (pdf flowchart) will simply raise prices to effectively give Oregon consumers a sales tax. Sure, some large businesses should be paying more taxes. But giving Oregon a sales tax is not the right answer, and again a tax retroactive-for-2009 is unjust.
LinkSecond, after breakfast I checked my e-mail and an old friend me had asked me two religious questions.
  • How do I respond to stuff like this?
  • Do I accept that non-Jewish Christians should convert to Judaism, as per James in Acts, or do I believe Christians should only keep Noachide laws while Jews must keep Torah laws?
The linked argument can be paraphrased: "You believe A, and then later B and C caused by X. I believe A and C, caused by Y. I'm open to dialogue when I see A and C caused by X." This is obviously nonsense not worth a reply.

I talk with Yeshua a lot, and such a relationship makes eschatology seem unimportant. When someone says, "if you even happen to see [Jesus] around at that time..." the reply that comes to my mind is a quotation from the movie Ladyhawke: "Sir, the truth is I talk to God all the time, and no offense, but He never mentioned you."

Regarding the second topic, James didn't say that. The motivation for the group decision loosely based on the Noachide Laws is ambiguous. What is meant that the reason for non-Jewish followers of Yeshua to refrain from a certain four things is because Moses is read in every city? Is the rationale merely that Yeshua's followers need to be able to eat meals together, or is there an expectation that Jewish culture will be contagious?

In any case, currently (no Temple) no one can keep Torah. The Mosaic Law is a covenant. Obeying some but not all of that legal agreement is as invalid as paying only two-thirds of your mortgage. Fortunately, scripture is consistent and clear that eternal judgment examines a person's heart, not his or her legalistic innocence.

There are two reasons to obey any scriptural commandments. First, they show God's ways: those who love God will want to follow his ways, and are called to demonstrate their validity even in a broken and sinful world. Second, we should be Yeshua's disciples, which in context means we should mimic our teacher's lifestyle in all practical ways.

So Yeshua's non-Jewish followers need not convert to Judaism, but should be sufficiently knowledgeable and respectful of all God's commandments to be able to represent God's ways on whatever paths he guides them.
Third, I mentally composed some encouragement for math class after I handed back the term's first test. I decided to share a paraphrase of one paragraph from my e-mail to my Fall 2009 class after their final exams were graded and their overall grades were posted online. The original paragraph read:
I think many of you were aiming for a C and succeeded, which can be as praiseworthy and honorable as acing the class. Often someone with jobs and kids cannot invest in a LCC class the time and energy required to earn a high grade; successfully balancing numerous real-life responsibilities and distractions while pacing yourself to be successful and not burned out in math class is a noteworthy accomplishment. This term many of you dealt the flu, either yourself or a child. Many were dealing with job loss. Several were caring for very ill or troubled extended family members. One student had a new baby. I also heard about a failing marriage, an unexpected pregnancy, and living in a tent. In other words, there were lots of C's, but some of those C's hide tremendous amounts of fortitude, energy, study habits, and goals achieved. In class you were all sitting next to some very heroic people, whether or not you knew it or the grade book shows it.
Fourth, while Smiley napped I read Shamus's post about guns in role-playing games. and thought about my older thoughts about the topic as well as Shamus's issues.

Fifth, I thought some about my growth in becoming warm as well as kind, a process that began with a dream I had in December of 2005. I have had very few dreams about Yeshua, but this was obviously one of them and a clear message from God.
The scene was a round hilltop. The sermon on the mount had just ended. Yeshua was walking down the mountain, pausing to talk with many individuals. He approached me and said, "You are kind. But your kindness helps little until more people come to you for support. Be welcoming so that people seek out your kindness. Be warm as well as kind."
So for several years I have been aware of the task of creating a welcoming space. I pray daily that Smiley will have both warmth and kindness (so far he does). I have seen the odd truth that people appreciate peace but seldom want it badly enough to mimic people who project it.


Steve said...

Mr Maggid:

I'd like to share my perspective on the measures you think are "dreadful."

They won't harm small businesses, or cause any job losses. In fact, they will create tens of thousands of jobs, because they will stimulate over $1 billion of economic activity in Oregon. The money will come largely from the federal government in the form of matching funds and deductibility of state taxes from federal. Most of the corporations paying higher income taxes are based out of state, so those taxes won't be passed on to Oregon citizens. Instead, they'll come out of profits and bonuses of Fortune 500 executives.

Small businesses won't have to pay taxes more than $150 a year. And the claim that they'll be hurt by the additional taxes on their owners is just hokum. The money flows from the companies to their owners. Only 2 percent of "active" small business owners will pay the added taxes, and those are the people who are doing just fine in the recession, netting over $250,000.

The "no" campaign focuses on greedy unions and public employees, but those folks have given till it hurts already. Over 40 leading and reputable Oregon and national economists agree the measures will be good for Oregon and its businesses. Claims to the contrary are just repetitions of the Big Lie about taxes on business hurting workers. We've seen how well "trickle down" has worked in the recent past, with the wealthiest garnering all the wage and wealth gains over the past decades, and workers lucky to break even -- and now losing their jobs and homes because of this culture of excessive greed. It's time we tried "percolate up" instead, by preserving family-wage jobs in local communities and asking the wealthy few to carry a little more of their share.

By the way, thanks for posting the flow chart I developed.

David V.S. said...

Hi, Steve,

Thank you for developing that chart. It really helps voters see that Measure 66 affects S-Corporations whereas Measure 67 affects C-Corporations.

I cannot agree with the prediction that the taxes will come from the pay of "Fortune 500 executives". It may happen, but I do not see how.

That claim is not about Measure 66, since an S-Corporation can have at most 75 shareholders. Perhaps this measure will do more good attracting Federal dollars than harm chasing away small business owners. Time will tell. To me, it still seems unjust and risky. If a small business owner is "doing just fine in the recession" we should ask what they are doing, not chase them to another state.

The Measure 67 taxes do affect big companies, but I cannot see how it will lower executive pay. Measure 67 is a sales tax. These big companies sell their stuff at a much lower price than a small business can. That low price will go up to offset the Measure 67 tax. We as Oregonian shoppers will pay.

I did not mention the "yes" and "no" campaigns because they don't matter. The text of the measures is easy to read.

(And, as an employee of LCC, there is still plenty of trim from LCC's budget. The college may have "given until it hurts already" but not with much hurt. If the college was a private company there would have been greater payroll cuts, project cancellations, and budget trimming.)

By the way, people often lie with statistics to claim that Americans have little income mobility. Honestly using the statistics shows that most Americans have substantial mobility: for the lower class an increase of one income quartile is standard and two quartiles is common. You may refer to my Math 25 workbook, Activity 12, for details.

Steve said...

David, thanks for your response.

Regarding corporate executives, I said "corporations paying higher income taxes" so I was referring to the corporate taxes in M67. And you seem confused about what M67 does. It's not a sales tax. By far the bulk of revenue from M67 is the 1% increase in income taxes on C-corps over the $250k threshold. A very small number of C-corps will pay more than $150 in minimum taxes, and what they will pay averages 0.09 percent - that's less than a tenth of a percent - on a sliding scale based on their sales in Oregon in the range of $500,000 to $100 million. A sales tax, in comparison, is imposed on consumers and applies to the first and last dollar they spend on taxable goods and services. And sales taxes in various states range from 5 percent to 10 percent of purchases, 50 to 100 times more than Oregon's new minimum tax.

Unjust? How about the inequity of poor people paying a larger share of their income in state and local taxes than wealthy people? M66 doesn't go far enough to redress that imbalance (8.2% vs. 6%).

I fear you have fallen prey to the "no" campaign's incredible ability to lie with statistics, and I hope you take a close look at their misstatements so that you may not be misled in the future. Your view of M67 as a sales tax is an example. Perhaps an example will help. Say MegaCorp has $10 billion in national sales, of which $100 million are in Oregon (Oregon's population share is about 1%). And its national profits are $500 million, so taxable profits in Oregon would be$5 million. If M67 passes, MC will pay $380,000 to Oregon instead of the $330,000 it would otherwise pay. How will this $10 billion company, which rounds off its financial reports to the nearest million, respond to the extra $50,000 in taxes? It is already setting prices to maximize its profits, so raising prices an extra percentage point hardly seems wise, and very unlikely. That's why I claim the $50,000 will just reduce MC's profitability by a (negligible) smidgen, and would come from the same place profits would otherwise be distributed: executive bonuses, dividends, and retained earnings, none of which would affect Oregon at all.

But you're right, some large companies don't show a taxable profit and would pay the 0.09% minimum tax INSTEAD of income tax. How would they respond? First let's concede that companies become large through success of some sort. Most such companies have generated substantial profits in the past and have retained earnings to show for it.

David V.S. said...


Please stop the double-speak. Nothing in the text of Measure 67 mentions profit or net. Sales are the only item taxed (called "sales" in Section 1 and "income" in Section 5). True, it is a sales tax much less than 1%; but I still don't want to pay it.

Why wouldn't a company given a new cost adjust its products' prices accordingly? You don't seem to understand the process of "setting prices to maximizing profits".

I've read nothing from the "no campaign". I just read the text of the measures.

Please cite the source of your "8.2% versus 6%" statistic, and explain why you believe most government services are enjoyed proportional to income and not per capita.