Comments on economics, mystery fiction, drama, and art.

Sunday, January 14, 2018

Blue Snow


Thursday, January 04, 2018

Contra Gerrymandering

My contention is that gerrymandering would be less of an issue—because it would be less possible—under the system (or something similar) I'm about to describe. To me, at least, it seems worth considering.


Apparently independent commissions don’t work all that well to prevent gerrymandering, largely because political parties (and incumbents) lobby the independent commissions against is [using, or course, arguments other than “protect my (party’s) advantage].  (https://fivethirtyeight.com/features/even-a-gerrymandering-ban-cant-keep-politicians-from-trying-to-shape-their-districts/).  But what would work?

Indiana, for example, has a House or Representatives composed of 100 members, who run for election n single-member districts.  Drawing 100 coherent legislative districts is difficult under any circumstances, but especially in states with major population centers and several/many sparsely settled areas.  In Indiana, again, as an example, the 10 most populous counties have about 49% of the (2010) population, while the 10 smallest counties combine for about 1.6% of the population.  Or, the 10 largest counties “deserve” to elect nearly half the legislature, while the 10 smallest counties, between them, ”deserve” less than 2 members of the Indiana House (if we apportion representation strictly by population).  Creating 100 (roughly) equally populated legislative districts is both difficult and allows great scope for ingenuity.

What if we created multi-member districts, where all counties are comprised of whole counties?  What if we created 10 legislative districts composed of whole counties or contiguous groupings of counties, and, from each district, elected 10 members of the House?  (The one exception would have to be Marion County, which would get 14 Representatives; one implication of this approach is that we might have to increase modestly the size of the Indiana House of Representatives.)

For example, in Northwest Indiana, the legislative map could combine Lake and Porter Counties (both fairly strongly urban)—they, together, had 9.88% of the state’s population in 2010.  The north and east “collar counties” around Indianapolis had nearly 10% of the population as well.

Each “legislative district” would have as many representatives as it’s (approximate” share of the population, and each voter would have as many votes as there are representatives in their districts.  So (for example) voters in the Lake-Porter County district would have 10 votes.  They could, then, cast their 10 votes in any way they desire to divide them up (into whole votes)—1 vote for each of 10 candidate, 10 votes for 1 candidate.  And the 10 (or whatever number works) candidates with the most votes are elected.

It’s still essentially local representation.  But it also more clearly reflects the population distribution.  Many districts would be multi-county—but also with multiple representatives.  Having to apportion votes among those candidates is likely to lead to the election of at least a few minority party candidates in most districts, which would, in many ways, increase fairness of representation (e.g., a party whose adherents represent, say, 15% of a district’s population are likely, now, to have no representatives.  This would likely lead a minority party representative (probably only 1) from that district.

In Indiana, the State Senate has 50 members.  Using this system, it would be possible for the Senate and House districts to coincide (with 5 senators, for example, per district).  Or not.


Saturday, December 30, 2017

GDP and Employment Growth


Sunday, December 24, 2017

And Happy Winter Solstice Festival Holiday Of Your Choice To All

I'm trying something a little different this year, writing about the year and including one photo from each month.  So we'll see how this goes.

As years go, this was a fairly quiet year; we didn't travel much, we had no medical or family emergencies; we stayed home a lot, read a lot, and played with the Menina T. Dog a lot.  (Unfortunately, MtD did not cooperate much when I tried to capture her in pixels, so you're not going to see much of here...except this picture of her sniffing the lawn out back.  And we think she will have her 10th birthday in January or February...


I taught at Butler in the spring (and will again this spring, although I think this will be the end of the part-time teaching gig).  The kids at Butler have been a good group to work with, and I enjoyed it.  One thing that teaching has done is keep us close to home during the semester, and we stayed close...I did carry a camera with me at all times (usually the cell phone), and got this shot in January on my way home from class one night.


I did try to get out and take pictures when the opportunity presented itself.  Fortunately, the property around our place has some interesting aspects, and I liked this (February) picture.  The amount of snow was pretty representative of the year, too.


Also this evening photo in March.


One of my favorite parks in Indianapolis, and one we had not visited since we moved back here, is Holiday Park.  It has a "ruin"--the façade from Western Electric's headquarters building in NYC that was going to be demolished back in the 1950s.  The company offered the façade (with money to move and install it) to whichever group put together the best plan, and Indy won.  Weird to have your own urban ruins, even (or especially) when they are from another city.  We were there in April and took Menina with us; she had a ball sniffing a hitherto unknows set of places.


We also had more ducks than usual this year--and, if anything, fewer geese.  The ducks have usually stayed pretty close to the pond (where the fountain is), but in May a pair of them managed to wander out in front of our house and even across the road.  So of course I had to capture the event.


Our first actual time away from home came in June--the HOA has having the streets and driveways resealed, so for nearly two days we would not be able to get into or out of the place.  So we went to Brown County State Park, driving down Indiana Highway 135, a 2-lane, fairly twisty road.  And of course we ran into road work and a detour, which was not well marked, but we avoided getting lost.  And after we got to the park, we decided to drive around, and wound up in the tiny, tiny town of Story (which is well known, strangely enough, for its restaurant).  We didn't eat dinner there, for two reasons.  We got there too early, and the whole place had been taken over by a bunch of car geeks...all of whom owned one (or more) Shelby Cobras...who were doing their annual road trip.  And of course, we wound up talking to one of them (these are his two cars), and discovered just how expensive those cars can be to buy and maintain (we're not getting one any time soon).


We were home again for July and August.  For us, the eclipse was pretty much a non-event--clouds, so all we could really see was whatever "leaked" around the clouds.  And then it rained.  So we saw nothing interesting and I got no interesting photos.  Boo.

In September we spent a week at a "Road Scholar" (formerly Elderhostel) workshop.  Really, two workshops.  In, of all places, Ripley, West Virginia.  We drove there and back (in our nearly brand new Accord--it had well under 1000 miles on it when we started out).   Loryne did a watercolor workshop and I did photography.  The classes were pretty good, the accommodations were adequate, but the food was, well, not good.  Here's one of my photos from the week.


The house (above) and a covered bridge on the property had been moved there in the 1950s.

October brought another road trip, this time with a group from First Friends Meeting in Indianapolis, east from Indianapolis on US 40, almost to the Ohio state line, then north to Fountain City.  Which is where the Levi Coffin House (a major stopping place on the underground railroad) still stands.  The house (built in 1837) has been remarkably well preserved, both the exterior and the interior.  (The Coffins were Quakers, hence the trip.)


We also stopped at a farm which also served as an inn and store on the old National Road and at an Amish market.  (The market was a very commercial operation, I should add...electricity, telephones, all the modern conveniences.  And since it was a modern building surrounded  by a huge parking lot, not very photogenic.)  I did get a couple of nice photos of the National Road farm (which had been operated by a Quaker family in the 1800s).


November and December have also been quiet months.  Loryne's kids have joined us for Christmas, and so the year is ending on a very nice note.  My final photo for the year was pure serendipity.  I went out one evening and discovered a mushroom that had popped up behind some shrubbery.  So, of course...

We hope you are all well and happy and continuing to have adventures.  And we're looking forward to a personally rewarding 2018, albeit one in which the external events are a little, well, quieter.

Peace and love,
Don and Loryne






Wednesday, December 20, 2017

My corporate income tax proposal

I've been advocating one simple, if radical, reform corporate income taxation for decades.

1) Attribute all net corporate income to shareholders in proportion to their share holdings. For example, in 2016. WalMart had earnings per share (net income) of $4.56. If I own 10,000 shares of WalMart stock, then I have an attributed income of $45,600. Which is, for me, taxable income. Jim C. Walton--Sam's grandson--owned 10.5 million shares in 2016. So his attributed income would be $47.88 million--taxable.

2) Expense capital spending.  If a corporation purchases $50 million in new capital during the years, that's treated as a current expense.  Depreciation, as a tax issue goes away.
3) Eliminate the corporate income tax.

This would discourage the piling up of huge cash resources in the hands of corporations and encourage dividend payments.  After all, the shareholders own the corporation, so the earnings of the corporation are, in some sense, theirs...

And, incidentally, this actually would encourage new capital spending, because that would reduce the net income.

The probability of this happening, as a friend used to say, approaches zero from below.

Tuesday, December 19, 2017

The Johnson Amendment and the First Amendment

Over the past few weeks, I've read a lot about a bit in the tax bill before Congress having a provision that would repeal the "Johnson Amendment."  The most compact description of the Johnson Amendment* is that it tells certain organizations that they must, in effect, choose between having tax exempt status and being able to endorse or oppose publicly a candidate for public office.  Specifically, if says that certain organizations may be granted tax-exempt status is, in addition to meeting other requirements, the organization "...does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office."

Recently, some religious organizations have raised the issue of whether the Johnson Amendment is an unconstitutional infringement on the freedom of religion guaranteed under the First Amendment, or, alternatively, an infringement on the First Amendment's guarantee of freedom of speech.  (Most of the current discussion has involved religious organizations; why similar concerns are not raised on behalf of educational and charitable organizations that are not religious organizations (e.g., private schools) is unclear to me.)

What strikes me, though, is that the Johnson Amendment does not prohibit (say) the Catholic Church from taking a public position about political candidates.  It says, fairly explicitly, I think, that you can take such a position, but, if you do, you have to relinquish your tax exempt status.  Which entails, it seems to me, the following consequences:

1. Those organizations will be treated as businesses and, as a result, must file tax returns, with any "surplus" being treated as taxable income.
2.  Contributions to such organizations could no longer serve as deductions from taxable income by individuals, families, or other entities making contributions.
So there are tax implications both for the organizations and for their supporters.

Perhaps I'm missing something, but it seems to me that tax exempt status is a privilege, not a right.  I, for one, might  be perfectly willing to become a member of a religious organization and make contributions to it.  But that does not lead to a presumption that I agree with any political position taken by the organization.  As the law stands now, I don't need to worry about that, so long as I generally support the organization's actions and policies.**  Indeed, I could see that repealing the Johnson Amendment could lead to a wave of internal dissent within tax exempt organizations, as the members of those organizations grapple with the question of taking any particular political position. 

More concretely, the Johnson Amendment says, "If you want to endorse political candidates, you can't have this benefit.  But you can endorse all the candidates you want to--we won't stop you, feel free, but if you do, you play by the same tax rules as avowedly for-profit businesses do.  You pick."

*This amendment was proposed by Lyndon Johnson when he was a senator, and was adopted by Congress, as a part of the Internal Revenue Tax Code, in 1954.

**Oddly, there is currently a case being heard by the U.S. Supreme Court on a very closely related issue, which is whether public sector unions can charge non-members representation fees.  The plaintiff in that case argues that such representation fees violate his First Amendment rights.

Saturday, December 16, 2017

What if all the part-time college faculty became their own businesses?



Colleges and universities in the U.S. have moved, over the years, to a model in which an increasing share of undergraduate (and, in some MBA programs, graduate) teaching is done by part-time (adjunct) faculty.  I myself have been, and am again, an adjunct faculty member.  This is not my situation, but a large number of people teaching as adjuncts work for more than one institution, cobbling together something like a full-time work load (without, it should be said, full-time pay).

But the changes being made to the tax code will have lower tax rates for “people whose income comes from owning a business rather than in the form of wages,” as Krugman puts it. 

So what if…

What if higher ed institutions and adjunct faculty re-define their relationship…What if, instead of an employer-employee relationship, it gets restructured as the institution contracting with an independent business that does on-demand teaching?  I think this would actually further reduce the expenses of the colleges—they would not, for example, be paying the “employers’ share of OASDI taxes,  But, depending on the specifics, might it not also reduce the taxes of the adjunct faculty enough to make them better off as well?

Consider an institution such as the one I used to work at full-time.  Back then, it employed something over 100 part-time faculty who generally taught 2 courses per semester (4 per academic year), at a per-course compensation of around (these days) $3500 per course.  That’s about $1.5 million per year (including the institution’s share of OADSI).  The institution would save something over $100,000 in OADSI taxes by changing the relationship. 

And if the effective tax rate on the income of adjunct faculty members fell by 10 percentage points, the part-timers would save about $140,000 in income taxes (with the OADSI saving, that’s nearly $250,000;if the relationship gets structured as the law proposes, there would be no OASDI tax for the faculty to pay—this would be business, not labor income).  Win-win!