The virtual town hall meeting was on TV the other night. Here's a summary of it.
The phrase use in this article
"In a first for the White House, the president braved a public grilling from a pool of around 100,000 people who had submitted questions via the internet."
is, quite simply, false. The questions were not an ad hoc "grilling" but a carefully culled selection of questions, pre-prepared answers to which the President was able to read from his teleprompter.
I, in fact, submitted a question that I knew stood little chance of getting answered:
Would you eliminate corporate income taxes? This would provide more than $500B of stimulus and make the US the most favorable nation for doing business. You could offset $370B lost
revenue by collecting $300B in annual unpaid personal income taxes.
[Questions were limited to 250 characters. Otherwise my question would have been more detailed, along the lines of my previous blog entry.
Not only were the questions not only carefully selected to enable maximal proselytizing by Mr. Obama, even the people asking the "live" questions were actually all former Obama staffers.
BTW, the #1 submitted question, which they figured they *had* to address even if it was off-topic simply because it was by far the most asked question, was a variation on a theme: "Will you legalize marijuana?"
The answer to that was a simple no, then they moved on the the real show.
Monday, March 30, 2009
Wednesday, March 25, 2009
Vent and an answer
From today's AJC Vent column:
How about the U.S. Mint?
The U.S. Postal Service has to cut services and jobs because it is losing money, but can you tell me a single U.S. agency that makes money?
How about the U.S. Mint?
Tuesday, March 24, 2009
Recession hitting latinos, blacks harder
There's this article that says so.
But I'd like to mention the racism exhibited by one of the people interviewed in the article:
For the record, when my father died, he left each of my two brothers $10,000. He left me nothing, except the non-binding suggestion to his wife (my stepmother) that she sell me his share of the family place on Lake Ontario for the price of $1. On which I immediately began paying taxes. I was 31, hardly "starting out with an inheritance." It's unlikely we would have gotten anything had he lived beyond the age of 55.
Having said that, inheritance is hardly a fact of life for anyone. According to a study conducted by Jagadeesh Gokhale and Laurence Kotlikoff for the Federal Reserve Board, 92% of Americans will receive inheritances of $0, while slightly more than 4% will receive a modest sum (less than $25k).
Clearly it is the case that the very rich will accumulate wealth that is passed down. And further I will submit that the top 1% are very probably white. But it is disingenuous, if not outright racially offensive, to portray that tiny slice of the uber-rich as being representative of the experience of all white people.
For those who do inherit, the primary source of that inheritance is value of the parent's home, and we know where that all just went.
Certainly there is less inherited wealth among blacks because of previous institutional racism. Segregation prevented eariler generations from accumulating wealth. And the numbers now continue to paint a bleak picture, but again, it is not fair to point at white people and say they succeed because they inherited wealth--because it just doesn't happen in any substantial way for 95% of people of any race. Further, this book, says that only 10-20% of the black-white difference in wealth is attributable to inheritance.
According to this book, there's some not-so-shocking nor racist tidbits:
Racism may be a factor, but it ain't the only factor. I think most people would agree that institutional racism has decreased steadily since the '60s. Yet the disparity in wealth between whites and blacks and hispanics has hardly changed at all in the last 20 years. One reason explored in this paper is that blacks may have lower risk-tolerance than whites, and therefore when they do have similar income, education, etc. they simply choose less-risky--and therefore often less lucrative-- investments. On the other hand, stock ownership rates among blacks "grew much more rapidly" than whites between 1996 and 2001, but then the trend reversed between 2001 and 2004.
But I'd like to mention the racism exhibited by one of the people interviewed in the article:
Salter's mother worked as a housekeeper, and his father was a custodian. Before his divorce, Salter's stepdaughter and her four children lived with him for many years. Professional blacks "don't usually start out with an inheritance," he said. "On top of that, quite often things happen in our families to cause us stress. An unexpected child or grandchild, drug problems. When you try to set aside money to put your kids through college, all of a sudden you have to say, 'I can't let this family member fall and become homeless.'The main implication I get from that is that white people usually start out with an inheritance, and it's that reason why they succeed where so many black people may fail.
"I would say eight out of 10 people I know have a similar situation."
For the record, when my father died, he left each of my two brothers $10,000. He left me nothing, except the non-binding suggestion to his wife (my stepmother) that she sell me his share of the family place on Lake Ontario for the price of $1. On which I immediately began paying taxes. I was 31, hardly "starting out with an inheritance." It's unlikely we would have gotten anything had he lived beyond the age of 55.
Having said that, inheritance is hardly a fact of life for anyone. According to a study conducted by Jagadeesh Gokhale and Laurence Kotlikoff for the Federal Reserve Board, 92% of Americans will receive inheritances of $0, while slightly more than 4% will receive a modest sum (less than $25k).
That means that for most Americans, any inheritance will not be a “life-changing event.”Nearly 92 percent of the population will receive nothing at all, the study concluded.
Of the 8 percent who stand to inherit something, half will inherit less than $25,000, while just 1.7 percent of the population can expect to inherit more than $50,000.
The study was initially published in 2000, but the authors say if anything, the picture has worsened.
Clearly it is the case that the very rich will accumulate wealth that is passed down. And further I will submit that the top 1% are very probably white. But it is disingenuous, if not outright racially offensive, to portray that tiny slice of the uber-rich as being representative of the experience of all white people.
For those who do inherit, the primary source of that inheritance is value of the parent's home, and we know where that all just went.
Certainly there is less inherited wealth among blacks because of previous institutional racism. Segregation prevented eariler generations from accumulating wealth. And the numbers now continue to paint a bleak picture, but again, it is not fair to point at white people and say they succeed because they inherited wealth--because it just doesn't happen in any substantial way for 95% of people of any race. Further, this book, says that only 10-20% of the black-white difference in wealth is attributable to inheritance.
According to this book, there's some not-so-shocking nor racist tidbits:
- 62% of households headed by single parents have no savings or other financial assets
- 40% of households with only high-school educations have no nest egg
- nearly 1/3 of all households are without financial resources
Racism may be a factor, but it ain't the only factor. I think most people would agree that institutional racism has decreased steadily since the '60s. Yet the disparity in wealth between whites and blacks and hispanics has hardly changed at all in the last 20 years. One reason explored in this paper is that blacks may have lower risk-tolerance than whites, and therefore when they do have similar income, education, etc. they simply choose less-risky--and therefore often less lucrative-- investments. On the other hand, stock ownership rates among blacks "grew much more rapidly" than whites between 1996 and 2001, but then the trend reversed between 2001 and 2004.
Based on a logistic regression model, Black households had the same predicted stock ownership rates in 1998 and 2001 as White households that were otherwise similar in terms of income, net worth, risk tolerance, and other characteristics, but in 2004 Black households had significantly lower predicted stock ownership rates than White households.While doing some reading on this topic, I found some gems:
All researchers have found that Black and Hispanic households are less likely than White households to own risky assets than White households. Previous research has also found that Black and Hispanic respondents are less willing to take investment risk than White respondents. The level of investment risk a household is willing to take has implications for the household’s financial behavior and future well being. Owning high return investments is necessary for households to be able to reach long term goals such as having a comfortable retirement.
- "Wealth has never been democratically distributed in U.S. society."
- While the stated intention of most asset building policies is to benefit working and poor families, a deeper look shows that they have failed to benefit low-income families; in large part owing to the predominance of asset building policies that operate through the tax code. Currently, almost $300 billion per year in federal tax expenditures goes to support asset building among individuals in the form of tax credits, deferments, or exemptions for investments, homeownership, and retirement accounts. These policies are of little benefit to many low-income individuals who do not have tax liabilities.
- "Lack of wealth is both a cause and an effect of low income and poverty, and the two are highly correlated."
AIG bonuses returned--tax implications?
Just a quick thought, since I am again too busy to really put in the effort here today.
As I understand it, you owe taxes on money you have been paid. In particular, you are responsible for taxes in the year in which you take constructive receipt. So those AIG folks who were paid bonuses took constructive receipt of that money. At that moment, it became income which they must report and pay taxes on. What they do with it after that is up to them.
Now, many of them have returned the money. They have given AIG a gift. They did not return money paid to them by mistake, as if their paycheck accidentally got an extra zero. They did not refuse to money when it was offered (an act which would negate constructive receipt). They just dipped into their cash-on-hand and wrote a check to AIG. Anytime you render a gift to anyone other than an IRS recognized charity in excess of $13,000 ($26,000 per couple) you will be required to pay a gift tax.
On top of all that, Congress is moving to tax the money at 90%. I don't expect Congress to so carefully craft such a law so as to exempt from normal income or gift taxes money that gets returned. They might not even think to exempt returned money from the 90% threat!
So the people who have returned their bonuses face normal income taxes, plus gift taxes, on money they have returned! And they may owe 90% taxes on top of that!
So a guy who was given a bonus of $1M in January, returns the money in February. He took constructive receipt. He owes 35% income tax on the $1M, ignoring deductions etc. That's $350k. He "returned" his $1M bonus, by giving AIG a gift. He's now out the $1M, but still owes $350k in income tax (maybe $900k!!). Adding insult to the injury, he may face up to 45% gift taxes. So returning his $1M bonus has may now cost him $1.7M.
As I understand it, you owe taxes on money you have been paid. In particular, you are responsible for taxes in the year in which you take constructive receipt. So those AIG folks who were paid bonuses took constructive receipt of that money. At that moment, it became income which they must report and pay taxes on. What they do with it after that is up to them.
Now, many of them have returned the money. They have given AIG a gift. They did not return money paid to them by mistake, as if their paycheck accidentally got an extra zero. They did not refuse to money when it was offered (an act which would negate constructive receipt). They just dipped into their cash-on-hand and wrote a check to AIG. Anytime you render a gift to anyone other than an IRS recognized charity in excess of $13,000 ($26,000 per couple) you will be required to pay a gift tax.
On top of all that, Congress is moving to tax the money at 90%. I don't expect Congress to so carefully craft such a law so as to exempt from normal income or gift taxes money that gets returned. They might not even think to exempt returned money from the 90% threat!
So the people who have returned their bonuses face normal income taxes, plus gift taxes, on money they have returned! And they may owe 90% taxes on top of that!
So a guy who was given a bonus of $1M in January, returns the money in February. He took constructive receipt. He owes 35% income tax on the $1M, ignoring deductions etc. That's $350k. He "returned" his $1M bonus, by giving AIG a gift. He's now out the $1M, but still owes $350k in income tax (maybe $900k!!). Adding insult to the injury, he may face up to 45% gift taxes. So returning his $1M bonus has may now cost him $1.7M.
Friday, March 13, 2009
"Shoot it, whitey!"
I was at the Georgia Dome yesterday for the ACC Basketball tournament, disappointed at watching my Clemson Tigers lose their opening game.
A game during which, a loud fan yelled the above. See, Clemson has a wing player (shooting guard) who happens to be a white kid. He normally is a very effective 3-point shooter but was off his game yesterday, so I can only imagine that this fan (who happened to be black and who happened to be wearing the other team's colors) wanted to see him to continue to miss.
But I was left thinking about what would have happened had the racial situation and epithets been reversed?
A game during which, a loud fan yelled the above. See, Clemson has a wing player (shooting guard) who happens to be a white kid. He normally is a very effective 3-point shooter but was off his game yesterday, so I can only imagine that this fan (who happened to be black and who happened to be wearing the other team's colors) wanted to see him to continue to miss.
But I was left thinking about what would have happened had the racial situation and epithets been reversed?
Friday, March 6, 2009
Supreme blunder?
[Update: The WSJ has an opinion piece on this topic]
http://blogs.usatoday.com/oped/2009/03/opposing-view-t.html#more
An unfortunate error cost a woman her arm. She had been given a drug, administered in a manner that was strongly warned against in the drug's documentation, that caused gangrene. But now the Supreme Court has ruled that warning labels are simply not enough, even though the FDA strictly advises on how labels are written and what they must contain.
This drug has been approved and used since 1955 with very few unfavorable results "It had been used beneficially and with very rare incidents more than 200 million times since 1955 under FDA-approved labeling." One botched injection in violation of the warning on the label and poof, expect this mfr to lose lots of money. And the inevitable negative impact is that drug prices will increase to cover potential losses across the board--I mean even more so than already.
Of course USA Today's editorial board feels differently. And the initial jury found Wyeth liable for $7.4M.
USA Today and the Surpreme Court seem to think that a warning label written for medical professionals under federal guidelines is not enough. "The drug label's warnings had been approved by the U.S. Food and Drug Administration, but a Vermont jury found that Wyeth could have — and should have — made those warnings stronger." And according to one article I read "Wyeth has never been remiss in reporting incidents of gangrene from Phenergan via IV push, this is not the kind of Merck/Vioxx-type case in which a drug company deliberately withheld risks from the FDA."
I can tell you one way that Wyeth could have avoided "acting negligently". They could have decided that this exceedingly small risk (by my short googling research, about 50 incidents...math follows: 50 / 200e6 = 0.000025%) meant that they ought not to sell this drug.
Thirty seconds of googling show many journal articles discussion the danger, although they certainly can be related to this case. I'd love to cut&paste the actual warning as printed, but the PDF document does not allow text extraction. So follow this link and read along. On page 2, it says "Under no circumstances should PHENERGAN Injection be given by intra-arterial injection due to the likelihood of severe arteriospasm and the possibility of resultant gangrene (see WARNINGS-Injection Site Reactions)." [bold face and capitalization as in the document]. Now scroll down to middle of page 4 "Injection Site Reactions" and the two paragraphs describing the results of Inadvertent Intra-Arterial Injection. Gangrene and amputation are listed at least twice!
Does this look like a "mild warning" per this article?
http://blogs.usatoday.com/oped/2009/03/opposing-view-t.html#more
An unfortunate error cost a woman her arm. She had been given a drug, administered in a manner that was strongly warned against in the drug's documentation, that caused gangrene. But now the Supreme Court has ruled that warning labels are simply not enough, even though the FDA strictly advises on how labels are written and what they must contain.
This drug has been approved and used since 1955 with very few unfavorable results "It had been used beneficially and with very rare incidents more than 200 million times since 1955 under FDA-approved labeling." One botched injection in violation of the warning on the label and poof, expect this mfr to lose lots of money. And the inevitable negative impact is that drug prices will increase to cover potential losses across the board--I mean even more so than already.
Of course USA Today's editorial board feels differently. And the initial jury found Wyeth liable for $7.4M.
USA Today and the Surpreme Court seem to think that a warning label written for medical professionals under federal guidelines is not enough. "The drug label's warnings had been approved by the U.S. Food and Drug Administration, but a Vermont jury found that Wyeth could have — and should have — made those warnings stronger." And according to one article I read "Wyeth has never been remiss in reporting incidents of gangrene from Phenergan via IV push, this is not the kind of Merck/Vioxx-type case in which a drug company deliberately withheld risks from the FDA."
I can tell you one way that Wyeth could have avoided "acting negligently". They could have decided that this exceedingly small risk (by my short googling research, about 50 incidents...math follows: 50 / 200e6 = 0.000025%) meant that they ought not to sell this drug.
Thirty seconds of googling show many journal articles discussion the danger, although they certainly can be related to this case. I'd love to cut&paste the actual warning as printed, but the PDF document does not allow text extraction. So follow this link and read along. On page 2, it says "Under no circumstances should PHENERGAN Injection be given by intra-arterial injection due to the likelihood of severe arteriospasm and the possibility of resultant gangrene (see WARNINGS-Injection Site Reactions)." [bold face and capitalization as in the document]. Now scroll down to middle of page 4 "Injection Site Reactions" and the two paragraphs describing the results of Inadvertent Intra-Arterial Injection. Gangrene and amputation are listed at least twice!
Does this look like a "mild warning" per this article?
The FDA has ostensibly known about the drug’s gangrene risks for many years, and despite the over 50 amputations that have resulted from the IV push method of administration, has continued to approve the drug for IV push use, including only a mild warning on the label to advise doctors of the risk.I just can't see how anyone could rightly think Wyeth is at fault here.
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