Coyote Blog

Generally, in any discussion of taxes, I focus on the foundations of
property rights, to argue that taxation is no different than
stealing.    Most of us agree that grabbing someone else's money at
gunpoint is immoral.  I do not hold to a theory of government that says
that this immoral action is suddenly moral if 51% of my neighbors
sanction it.

Anyway, I am going to leave behind the moral basis (or lack thereof)
for taxes and focus instead on five practical problems that a
well-crafted tax system should be able to avoid.

1.  Complexity and Preparation Time

I probably don't need to go into great depth on this one to convince you that taxes and tax returns are ridiculously complex.  We all know how complicated even the individual 1040 has become, so much so that using tax preparation software is nearly de riguer for most middle class taxpayers.  Last year, our federal and state income tax returns for the company were over 400 pages long.

For a small business, the tax preparation burden goes much further.  For example, the burden of payroll tax preparation, not to mention staying on top of compliance issues, is so high that no sane business person does payroll in house any more.  Quarterly state and federal unemployment and withholding tax returns must be filed, with salary detail to the last penny for every single employee.   As a result, everyone uses a service like ADP, and though this solves the workload problem, it still costs money - about $12,000 a year in our case.  That's not the tax bill, just the cost to keep up with the government paperwork. 

But with payroll taken care of, businesses still must file sales tax returns, excise tax returns, detailed property tax returns, census data requests, labor and commerce department surveys, and of course income tax returns.  Each of these typically have to be done at the state level and in many cases separately for every single county and city where we do business.  Each in and of itself is horribly time consuming - see this example for property taxes, this one for sales taxes, and this one for government surveys. 

In Kentucky, for example, we have to file quarterly state withholding tax returns, quarterly payroll withholding returns in each county we operate in, a quarterly state unemployment return, an annual property tax return in each county, and annual income tax return at the state level, an annual income tax return in each county, a monthly sales tax return, a monthly survey for the US Department of Labor about Kentucky headcount levels, an annual foreign corporation renewal, a new hire report whenever we hire a new employee, and a monthly report to the workers comp state fund

2.  Disguising the Tax Load

Quick, how much total do you pay in taxes?  Perhaps the greatest innovation of statists in the 20th century was the tax load shell game - the clever balkanization of the tax load that makes it nearly impossible for the average person to truly know how much they pay in taxes to the government.

Start with income taxes.  OK, April 15 has just passed, but even so, how many people know how much they paid in income taxes last year?  For many people, this is the single largest expense they have, but the total amount is disguised by the fact that most income taxes are taken out as direct payroll deduction.  Statists and leftists everywhere in the US should get up in the morning and give thanks for direct payroll deduction -- without it, if every American had to write a single check once a year for the sum total of their annual income taxes, there would have long since been a revolution.

OK, so you don't know how much you paid in federal, state and local income taxes.  But in addition to that, how much did you pay in social security and medicare (typically about 8% of salary)?  Property taxes (typically 1-2% of your home value)?  How about sales taxes (typically 6-9% of your purchases)?  What about vehicle licensing fees and special taxes on hotels and airfare and rent cars?  If you add all these up, the average American pays about 30% of his/her salary in taxes.  The Tax Foundation has a great chart summarizing this shell game, with relative burdens expressed as days of work each year required to pay the tax.  Note that on average, your federal income tax is only 1/3 of the total of what you are paying:

 
So those are the direct ones, but how much are you also paying in higher prices due to government import duties?  What about the 8% FICA and medicare that employers pay on your behalf - how much higher might your salary be if they did not have to pay these?  What about corporate taxes - you may not pay them directly, but they certainly get passed on to you in the form of higher prices and lower dividends.  What else? - try this list on for size.

3.  Taxes on Wealth and Savings

Most taxes are on income or sales, and so they are at least marginally calibrated with an individual's cash flows.  The exceptions to this are property taxes and inheritance taxes.  These two taxes both go after an individual's savings -- property taxes mainly on the home, the primary savings vehicle for most Americans, and inheritance taxes on everything you've saved when you die.

Lets take property taxes first.  Many people complain that modern life has become a treadmill, forcing families to work harder and harder to keep up their lifestyle.  To a large extent, I think this is a myth - people may be working harder but their effective standard of living is way, way higher than say 30 years ago.  But one of the things that definitely creates a treadmill are property taxes. 

Many people have worked hard to pay off their mortgage, thinking they could settle down into their retirement in a paid off house.  Unfortunately, they may find that their home has increased in value so much that their property taxes at retirement are actually much higher than their original payment on the house.  Take the case of a couple who bought their house in an urban area for $25,000 and find its now worth $375,000 forty years later (this is an average urban price increase over the last 40 years).  For simplicity, we will assume the effective tax rate has stayed at $1.50 per $100 for these forty years (though its more likely to have gone up).  In 1965, they paid $375 a year in taxes.  Today, they have to pay $5,625.  In other words, their property taxes today are over 22.5% a year of the original price they paid for the house.  Now, this is all fine if the couple strove to work up the corporate ladder and get promotions and grow their income proportionately.  But what if they didn't want to?  What if they just wanted to buy that house, pay it off, and live modestly selling driftwood sculptures at farmers markets, or whatever.  The answer is, because of property taxes, they can't.  Likely they will have to sell this house, give up the urban life they wanted, and either move to an urban dump they can afford the property taxes on, or they move out to the country.  Here is an example, via Reason, of this process of property taxes forcing out urban residents living small in favor of yuppies living the dream.  It is ironic that a tax initially invented for populist reasons to cut back on wealth accumulation hurts the lower income brackets and those trying to step off of the capitalist treadmill the most.  In fact, it was the poor in the Great Depression who typically lobbied for laws to put moratoriums on property tax collections.

The estate tax has many of the same origins and issues.  The biggest downside of the estate tax is that it tends to force premature sales of productive business assets to pay the tax.  Rather than leaving small businesses in the family, who have the experience and passion to make them work, they typically must be sold to third parties outside the family to pay the estate taxes.  Again, the law of unintended consequences crops up - estate taxes and the sales they force have done more to contribute to merger and acquisition activity, which in turn drives consolidation of economic assets into fewer and fewer corporations.  The tax meant to stifle wealth accumulation among individuals has in fact spurred wealth accumulation among corporations.  While used for many purposes today, LBO's, that bogeyman of the left, were invented to manage this estate tax forced sale problem.

Asymmetrical Information has a thoughtful series of posts going on estate taxes.

4.  Picking Favorites for Special Treatment

One of the defining characteristics of statist politicians of both the left and the right is that they think they are smarter and more moral than the average American, and certainly than the average American businessman.  Statists and technocrats distrust markets and assume that they can succeed in managing the economy in general and individual decision-making in particular where markets have "failed" to reach whatever end-state politicians would prefer.

Therefore politicians insist on using tax policy to reinforce (or discourage) certain behaviors or to influence certain outcomes or to frankly enrich some favored group.  Examples are all around us, but include:

• Subsidizing farmers and propping up farm commodity prices for no apparent reason than because farmers somehow have a moral halo around them that other businessmen do not.  This is not a big-small issue, since much of these subsidies go to huge conglomerates and millionaires.
• Subsidizing corporations in many industries
• Subsidizing local relocation of favored industries
• Subsidizing billionaire sports team owners  and the local lodging industry
• Subsidizing billionaire movie producers
• Taxing certain non-politically-correct products (and more)
• Subsidizing home buyers vs. home renters
• Subsidizing corporate debt vs. corporate equity

5.  Class Warfare and Punishing Success

Many of the taxes we pay - income, property, estate - have strong class warfare origins.  Heck, the income tax and the Constitutional Amendment that made it possible because Americans were told that only the richest 1% or so would ever have to pay it.  Today, tax debate is littered with class warfare arguments. 

Today, the richest 1% of Americans pay about a third of the total individual taxes, and the richest 10% pay two-thirds.  The richest 50% of Americans pay 100% of the taxes (in the other half, some pay a bit, and some get a bit back in EITC, but the net is zero).  So, a small percentage of Americans pay for the services and government
cash subsidies enjoyed by the majority.  So how do we treat these
people?  As heroes, or benefactors, or as the most productive?  No we treat them as evil parasites who are not
doing their fair share.

By the way, These shares paid by the rich actually went up after the Bush tax cuts (yes, that's not a typo).  The very fact that this statement might seem unbelievable points to how much ridiculous class warfare demagoguery permeated the last election.  By the way, these numbers are for income taxes.   The numbers for total taxes, including the regressive payroll taxes, yields slightly different numbers but the same results, as outlined in TaxProfBlog today.

The fact is that most "progressive" taxes are in fact punishing the successful and most productive.  The Left loves to wave Paris Hilton around as an example of the useless and unproductive rich who presumably should be taxed into poverty.  They want to obscure the fact that 99% of the rich got to be rich honestly, through hard work, and via the uncoerced interaction with others.  Because saying that your government rewards success with its highest tax rates and confiscates the vast majority of its operating funds from the people who would employ this money the most productively, um, doesn't sound very good.

UPDATE:  I have more here, including a rebuttal of Kevin Drum.

Forget the UN and judge nominations and other trivial matters.  This weekend is the NFL draft.  Via Marginal Revolution comes this cool article about the economics of the NFL Draft.

The article is pretty long, so let me summarize the couple of things I thought were pretty interesting.  The first was the relative value of draft picks.  They did a lot of work quantifying the performance of players selected at different positions in the draft (i.e first pick, second pick, etc).  You'll have to see the detailed study as to their methodology, but it struck me as pretty reasonable.  They also looked at the cost or salary by draft pick.  Combining the two got this curve:

The "surplus" line is the difference of the curves, ie performance value minus compensation cost.  Since compensation costs fall faster in the late first round (the first round is 30 picks) and into the second round than does performance, the surplus value peaks in the second round.  This does not mean the best players can be found in picks 25-75, but it does mean that the best values can be found there.  Since the NFL works under a salary cap that equalizes total compensation, the best team should be the one that consistently picks these value players (this is different than the baseball / NY Yankees model, where there is no cap, and maximum performance presumably comes from getting the top players, irregardless of salary).

If this is correct, teams should be willing to straight-up trade a pick in the top 15 for a pick around 35.  However, in reality, they can usually trade a pick in the top 15 for two or more picks in the 25-75 ranges, which should make the trade a no-brainer.  Interestingly, the market for picks is actually going the other way:

The researches studied hundreds of past draft day trades of picks to generate these curves.  It basically says that early picks are valued exponentially higher than even late first round picks, and this preference for very early picks has actually increased in the past few years.  This curve says that a #5 pick might be worth at least 3 and possibly many more picks in the 25-75 band.

Given these two curves, if they are correct, why don't more teams trade their top picks into the 25-75 band.  There are at least 3 answers to this:

1. Read Moneyball.  Once you read it, you will understand that sports GM's do not understand these concepts of value.
2. There may be other values, other than player performance, that teams get from top picks.  For example, most fans will have heard of the top ten people drafted, but will know few from the 25-75 band.  The top, well-known picks generate a disproportionate amount of fan excitement and "hope" which can translate into more paying butts in seats, which this study does not take into account
3. Some teams are getting it.  In listening to several mock drafts lately, it is clear many teams want to trade down from the top picks this year - no one wants to pay the signing bonuses commanded at these levels.  By the way team that has traded for the most picks in this band is ... Philadelphia.  Who has been in the NFC championship game 4 years in a row, so maybe someone out there does get it.

Apparently, the mortality rates from obesity that the media has been breathlessly lecturing us with were overestimated by at least 1500%:

But in a study released this week by the CDC
and published in the Journal of the American Medical Association ("Excess Deaths
Associated with Underweight, Overweight, and Obesity"), the public health
community has finally owned up to their massive fib by acknowledging that the
number of deaths due to obesity in the US is closer to 26,000 not 400,000 as
previously reported.

The part of the earlier study that really got people's attention was the fact that even those slightly overweight but well short of obese had a significantly increased risk of death.  Now, the CDC channels Emily Littella in saying "never mind":

for the merely overweight with BMI's from 25-30 there is no excess mortality. In
fact, being overweight was "associated with a slight reduction in mortality
relative to the normal weight category." Being overweight not only does not lead
to premature death, something that dozens of other studies from around the world
have been saying for the last 30 years, but it also carries less risk from
premature death than being "normal" weight. In other words the overweight=early death "fact" proclaimed
by the public health community is simply not true.

In fact, the study argues, the risks from being underweight are greater than overweight, something that resonates with me having known two women who died due to complications from anorexia.

Other studies will have to replicate these findings, but this study does seem to have taken a more careful approach than previous approaches.  One thing you can be sure about, is that this will not stop lawsuits against fast food companies, since overwhelming medical evidence of the safety of breast implants has not stopped litigation in that arena.  Heck, the fact that most people who are suing asbestos companies admits they are not even sick has not stopped litigation in that arena.

Lynne Kiesling of the Knowledge Problem has been blogging on just what chocolates are the best in the world (her normal beat is economics and electricity markets).  In this post, she answers my question about my wife's favorite, Maison
du Chocolat, and how it compares to her favorites.

I am reminded of my kids' favorite Johnny Depp line from Chocolat:  "good, but not my favorite".

By the way (just to make this post totally stream of consciousness), I think it would be impossible to have Lena Olin's character in Chocolat be any different than her role as Sydney's mom in Alias.

A few weeks ago, I was admiring some of the recent art of my 8-year-old daughter (art being one of her passions).  Some time in the last year, her art ability crossed an imaginary line where her drawings are better than what I am able to produce (don't worry, I do bring this back to blogging before the end of the post).

I was telling her that the art was beautiful, and expressing what a relief it is to critique her art nowadays vs. when she was much smaller.  I told the story from when she was four or so of looking at a drawing she brought home from school with pride and my saying "nice bunny".  Of course, every parent knows what happened next - she responded "dad, that's a fire engine".  And my saying, "oh, yea, I see, there's the ladder" and her saying "dad, those are the wheels", and, well, you get the idea.

So about a week after I told her this story, she was telling me about something that happened that day at school.  As sometimes happens to her, she got excited and that made her story kind of disjointed and hard to parse.  At the end of it, I said something like "that's great".  She looked at me for a second in the eye and said "nice bunny".

The more I think about it, the more proud I am of her.  She was telling me, in two words, that she was self-aware enough to know that she had done a poor job telling her story.  She was also telling me that she realized that I was patronizing her and she didn't like it.  I am a little sad that she might be this cynical at such a young age, but really I am happy to move our relationship to a more grown-up level.

Today, "nice bunny" has become our family in-joke, and we all use it now (ex:  my wife comes home with a new haircut, that I of course totally miss.  She says "do you like my haircut" and I of course say "it looks great".  She now responds "nice bunny")

Last time I hosted Carnival of the Vanities, about 5 of the submitted posts made absolutely no sense to me, no matter how I hard I read them, but I dutifully included them with some kind of neutral introduction.  Next time I will be tempted just to say "nice bunny", but I am not sure anyone would know what the hell I was talking about.

I don't know John Bolton from Michael Bolton, so I can't comment on whether he is an appropriate choice for the UN.  Nevertheless, there are a couple of things I do know:

1. Absolutely no one in the Senate gives a crap if Bolton has a temper or sometimes was tough on subordinates.  I am willing to wager about any figure you can name that many of the Senators commenting on Mr. Bolton are themselves strutting prima donnas who have blasted subordinates.  I remember that former CA Governor Gray (Grey?) Davis supposedly had some incredible temper tantrums with subordinates, but at the time that was not thought to be a disqualifier for office.  Why is it that stupid issues like this (or the immigration status of nannies) seem to dominate confirmation hearings rather than the person's qualifications and philosophy?
2. I have worked for not one but two men who have been featured on that famous "Toughest Bosses in America" list.  Compared to some of my encounters with these two, the stuff being talked about with Bolton is a joke. 
3. When you hear "the UN" when any senator is talking, substitute the word "Enron".  This is not quite appropriate, because in many ways, as referenced here, the UN scandals are much worse than Enron.  However, if this comparison is at all apt, why is it so inappropriate to send an ambassador who is openly skeptical of the UN in its current state?  When the feds sought out a prosecutor to oversee the Enron investigations, did they go looking for a person who had a high degree of respect and friendship for Ken Lay and Jeff Skilling?

The Suns are the best in the West, and for the first time since Charles Barkley wore a Suns uniform, the town is excited about the team´s chances.  My wife was commissioned to design a handbag for the wife of one of the Suns owners (in Suns' colors, of course) for her to display during the playoffs.  It was finished just in time:

Frequent readers of this site may know that my day job is running a company that manages recreation sites under concession contract to a number of public landowners, including the US Forest Service.  I take a lot of pride in this job, as our company helps keep recreation facilities open that the government might not have the personnel or the skills or the money to run.  The Forest Service's budget gets cut about every year, such that tax money comes nowhere near covering the cost of managing recreation sites.

Of late, the Forest Service has begun looking to actually close some recreation facilities:

The cash-strapped
U.S. Forest Service can no longer afford to maintain many of its parks
and has started ranking recreational sites, including campgrounds and
trail heads, for possible closure.

Supporters of public lands generally hate the onset of fee-based recreation, and wish it was still possible for all public recreation facilities to be free.  This was a realistic goal back when recreation facilities were cheap to run, but today campgrounds and other such facilities can be tremendously expensive(a single large campground might cost as much as a half million a year to operate), in large part due to actions by the same people who support free use of public lands.  Some examples:

• 50 years ago, campgrounds labor was essentially free because it could be staffed with volunteers.  With current labor laws, this is no longer possible (even if people still want to volunteer), and a large campground can require hundreds of thousands of dollars of labor to maintain each year, even at minimum wage.
• 50 years ago, people in the outdoors just drank water from a stream or out of the hand pump.  Today, in certain complexes, we spend tens of thousands of dollars keeping water systems in compliance with complex state laws.
• 50 years ago, if someone tripped over a root in the forest or twisted their ankle on a rock, they accepted that as a normal risk of being out in nature.  Today, everyone calls their lawyer.  Each year, campground visitors file millions of dollars of lawsuits for accidents once thought to be normal hazards of nature.
• 50 years ago, active timber sales in the forest helped fund recreation programs.  Today, timber sales in many forests are at an all time low, due in large part to opposition by nature lovers

So, I admit I don't know the person who said this:

"They will close
those sites the public has always enjoyed but which they cannot afford
because they are not profitable," said Scott Silver of the Bend group
Wild Wilderness. "It's the complete perversion of the meaning of public
lands."

But I would bet quite a bit that he supports some or all of the laws and government regulations listed above that make running recreation facilities so much more expensive than 50 years ago.

Update: By the way, though I might disagree with Scott Silver on the necessity of use fees at developed facilities like campgrounds or boat ramps, he is dead on in certain respects:

• Politicians love to fund splashy new recreation projects, but hate to fund basic maintenance.  This means that at the same time campgrounds and facilities are closing due to lack of maintenance dollars, new facilities are being opened all the time.  This strikes me as absurd. 
• Recreation facilities on public lands are missing the boat when they attempt to emulate private operations too much.  There are plenty of KOA's next to the interstate with pools and video game rooms.  Campgrounds on public lands have typically taken a different approach and served a different niche, that of providing a more primitive experience closer to nature, and I think its a mistake when they move away from this approach.

Unfortunately, as is often the case, I will never be able to see eye-to-eye with such groups because they refuse to acknowledge that as a private company I can be anything but Darth Vader with secret plans to put up a Walmart in Yosemite or put up billboards along a nature trail.  Crusading socialists often have the funniest ideas about the profit motive.  For example, if I make most of my money at a recreation site catering to people who want a wilderness experience, why in the world would I do anything to interfere with that experience?  It does not matter what the situation or the facts or the company, the first arguments are always that private companies just want to take a natural setting and put up advertising, then build a shopping mall.

By the way, Mr. Silver sees conspiracies among the private recreation companies.  I have sat on some committees in the "evil" organizations he cites, and I will tell you with complete assurance that these groups would have trouble crafting a successful plan to buy a 6-pack of beer from the local 7-11, much less shape government policy to their ends.  But maybe I got left out of all the really cool SPECTRE-type meetings. 

Marginal Revolution notes a recent piece by Jeffrey Rosen about potential libertarian supreme court nominees.  In particular, they noted this quote:

...Epstein was promoting a legal philosophy far more radical in its
implications than anything entertained by Antonin Scalia, then, as now, the
court's most irascible conservative. As Epstein sees it, all individuals have
certain inherent rights and liberties, including ''economic'' liberties, like
the right to property and, more crucially, the right to part with it only
voluntarily. These rights are violated any time an individual is deprived of his
property without compensation -- when it is stolen, for example, but also when
it is subjected to governmental regulation that reduces its value or when a
government fails to provide greater security in exchange for the property it
seizes.

Whoa, how crazy is that?  I find it depressing that believing in the right to part with property "only voluntarily" is today considered so wildly out of the mainstream that it is necessarily a disqualification to be a Supreme Court judge.  The courts today are terribly important battle ground in protecting individual rights against both creeping socialism and paternalism.  Unfortunately, neither Republicans nor Democrats can be trusted with leading this battle.  Each wants the judiciary to protect individual rights in one area and restrict them in another.  The left supports limitations on political speech via campaign finance restrictions and an unfettered right of government to invade personal property.  The right wants limitations on non-political speech via "community standards" on entertainment and hopes to regulate America's sexual practices.

Most people interested in politics are constantly hoping their party is the winner in the race to power.  I just wish I had a horse in the race.

There is a price one pays for slipping into the Harvard Business School through some mysterious hole in the Harvard admissions process:  From time to time, one must be ready to be humbled by their peers.  Of course, with nearly 900 people in a graduating class, one expects someone in that group to distinguish themselves at some point.  However, this large groups is somehow indistinct - at HBS one spends most of their time with 90 people in their "section", spending the vast majority of waking hours, both in class and in the pub, with this group.  After a couple of years with the same 90 people, one gets the overwhelming impression of normality -- these people are just as full of shit as anyone else I have gotten to know.

So it is both expected and with some surprise that I have begun to see these 90 people start making headlines.  My section-mates have distinguished themselves as executives and industry leaders and entrepreneurs  and lifestyle writers and business writers and fashion moguls and artists even as the notorious.  Humiliating levels of fame and success seem to be the rule among these ostensibly ordinary people.

This week, however, another member of our 90-person section (1989-B, on the off chance you are a fellow alum and were wondering) has gone to the next level.  This week Time magazine named Jim Balsillie, CEO of RIM (the Blackberry people) to their list of the 100 most influential people.  Wow.  Congratulations Jim.  The bad news is we are all totaled humbled about our own success trajectories in comparison.  The good news is that Jim will obviously "draw fire" away from the rest of us when Harvard comes looking for money.  Its a funny combination of old and new to think about the CEO of Lili Pulitzer and the CEO of Blackberry sitting next to each other all through our first year.

Postscript:  By the way, for those of you who may be tempted to put me on suicide watch, I am pretty much joking, though not about my section mates - they are all as awesome as portrayed here -- but about any dissatisfaction with my career.  Several times in my life I have been presented with opportunities to pursue high-profile wealth.  In most cases, I have turned these down, with zero regrets.  In fact, since one of the first of these rejected opportunities involved following Jeff Skilling from McKinsey to Enron, I really, really have no regrets.   Each day I am out visiting my operations at some National Park or other, I will think about the rest of you filling out your TPS reports.

UPDATE:  Welcome to fellow sectionmate Karen Page, author of numerous Amazon 5-star rated books on food, wine and becoming a chef, who links to me today (oops, Karen is slipping - a few of the books only have 4-1/2 stars).  Not only is Karen part of that vast section B conspiracy to make me feel inadequate, she also has a much cooler blog than mine.

Small Business Trends publishes weekly reviews of business-oriented web sites called "Power Blog Reviews".  This week, they have a very nice review of Coyote Blog:

The Power of the Coyote Blog
is the straight-shooting way its author comes right out and says what
he means, without dancing around subjects. And the real-life business
experiences he conveys are eminently helpful, providing information it
is hard to get elsewhere.

Thats really generous, thanks!

Update: I deeply resent the suggestion of several of my "friends" that some other blogger must have been spoofing my IP address the week I got reviewed.

This week's Carnival is up at Gongol.com. 

Continuing in the efforts of the host last week, Brian has tried to reformat that Carnival to make it more useful and user-friendly than the data-dump model.  I think he has done a really nice job, and I am not just influenced by the fact that my article this week gets an "editors choice".

There is a widespread notion that the Scandinavian countries somehow have crafted for themselves the highest standard of living in the world.  This never made much sense to me, since I just couldn't believe their socialist economies could really create the wealth needed to support this alleged standard of living.  As it turns out, they can't and don't, and owe their reputation more to PR than reality:

THE received wisdom about economic life in the Nordic countries is
easily summed up: people here are incomparably affluent, with all their
needs met by an efficient welfare state. They believe it themselves.
Yet the reality - as this Oslo-dwelling American can attest, and as
some recent studies confirm - is not quite what it appears....

All this was illuminated last year in a study by a Swedish research
organization, Timbro, which compared the gross domestic products of the
15 European Union members (before the 2004 expansion) with those of the
50 American states and the District of Columbia. (Norway, not being a
member of the union, was not included.)

After adjusting the
figures for the different purchasing powers of the dollar and euro, the
only European country whose economic output per person was greater than
the United States average was the tiny tax haven of Luxembourg, which
ranked third, just behind Delaware and slightly ahead of Connecticut.

The next European country on the list was Ireland, down at 41st
place out of 66; Sweden was 14th from the bottom (after Alabama),
followed by Oklahoma, and then Britain, France, Finland, Germany and
Italy. The bottom three spots on the list went to Spain, Portugal and
Greece.

Alternatively, the study found, if the E.U. was treated
as a single American state, it would rank fifth from the bottom,
topping only Arkansas, Montana, West Virginia and Mississippi. In
short, while Scandinavians are constantly told how much better they
have it than Americans, Timbro's statistics suggest otherwise. So did a
paper by a Swedish economics writer, Johan Norberg.

So Europeans, in terms of being well-off, rank right up there with... Appalachia.  "Jimmy, you have to finish that liver - you know there are starving kids in Norway that would love to have that food."

Anyway, if this topic interests you, of true comparisons of US vs European economies, income distribution, work weeks, etc., Cowboy Capitalism is a good place to start.  (hat tip Instapundit)

Reason reports that the ACLU is jumping into the fray to try to prevent Las Vegas from levying a special sales tax on strippers (emphasis added)

A Nevada bill that would impose a
10 percent tax on strip club dancing will be struck down in
court if lawmakers pass it, an American Civil Liberties Union
lawyer said on Wednesday.

"You can not have a special tax aimed at First Amendment
activity based on content," said Allen Lichtenstein, general
counsel of the ACLU of Nevada.

"Adult entertainment, which is protected by the First
Amendment, is being targeted to bear the burden of taxes where
other businesses are not," Lichtenstein said, referring to the
bill. "To single out a particular business based on content and
tax it with a special tax is unconstitutional."

Don't get me wrong, I am certainly happy that the ACLU has suddenly discovered the rights of taxpayers, but they seem a bit late to the party.  I mean, states that charge the same tax to every business, especially the same sales tax rate, are the exception.  States all charge special hotel rates, rent car taxes, airport fees, long distance surcharges, etc etc.  For example, here are just a few of the special unique industry-specific taxes on the California BOE site (by the way, you know you live in a socialist state when your tax department is called the "Board of Equalization"):

• Alcoholic Beverage Tax
• Alternative Cigarette Tax Stamp Program (ACTS)
• California Cigarette & Tobacco Products Licensing Act of 2003
• California Tire Fee
• Cigarette and Tobacco Products Tax
• Emergency Telephone Users Surcharge
• Energy Resources Surcharge
• Integrated Waste Management Fee
• Natural Gas Surcharge
• Tax on Insurers
• Oil Spill Response, Prevention and Administration Fee
• Underground Storage Tank Maintenance Fee
• Childhood Lead Poisoning Prevention Fee
• International Fuel Tax Agreement (IFTA)
• Interstate User Diesel Fuel Tax (DI) Program
• Motor Fuels
• Aircraft jet fuel tax
• Diesel fuel tax
• Motor vehicle fuel license tax
• Motor vehicle fuel tax
• Use fuel tax
•  Hazardous Substance Tax
• Environmental Fee
• Facility Fee
• Generator Fee
• Disposal Fee
• Tiered Permitting Fee
• Activity Fee
• Occupational Lead Poisoning Prevention Fee
• Ballast Water Management Fee
• Rent car taxes (by city and county)
• Hotel/motel special tax (by city and county)

This is far from a complete list, but you get the idea. This article from the Tax Policy Center explains that narrow industry specific excise taxes have a very long history in this country.  And this completely leaves off the issues of subsidies that are targeted at particular industries, such as the billions in direct subsidies received by farmers, not to mention the additional billions in price supports they get as well.  (Reason, by the way, has done some entertaining research on the millions of dollars of farm subsidies received by the family of Farm-aid founder John Cougar Mellancamp).  I am eager to see the ACLU begin tackling these other "special taxes" on "particular businesses".

I am not sure what motivated the ACLU to finally join the taxpayer cause, other than perhaps a personal financial interest their leadership team might have in this particular tax, but I for one am happy to welcome them to the cause.

Update: I am still having fun trying to imagine how the ACLU, the supposed protector of individual rights that has never had a problem up 'till now with our class warfare tax rates that are zero on some Americans and 40+% on others, suddenly had an epiphany about unequal levels of taxation when it comes to taxing strippers.  I have this visual picture in my head of the local head of the ACLU slipping a five into an entertainers g-string but getting mad when he couldn't get the two extra quarters in there to pay the tax.

Update #2: By the way, for all the flippancy in my post about the ACLU, they are absolutely right in this case, if way too narrowly focused.  I criticize the ACLU often because of the 21 policy areas it considers critical to individual rights, none have anything to do with property rights or economic freedom.  However, the ACLU is a strong and consistent defender of free political speech during a time when speech is under attack from all sides of the political spectrum.  The ACLU realized early on something the left still won't acknowledge, that it is impossible to separate regulation on spending for speech from restrictions on speech itself. 

Unfortunately, what the ACLU refuses to recognize is that all commerce, not just purchasing political ads or buying couch dances, is a form of communication and free expression.  The economy is nothing more than individuals, millions of times a day, communicating and reaching agreements to trade for mutual benefit.   Why is it any less of a restriction of free speech when the government places restrictions on this communication, say by restricting the range of wages I can offer an employee?  Or, more obviously, how can the government place regulations on what I can say about my company in an advertisement, but not on what I say about a political candidate?

The ACLU in this case seeks to evade sanctioning free speech in that dirty commercial world by apparently arguing that stripping is not commerce but artistic expression.  But by that logic, the government shouldn't be allowed to tax building and construction, for surely buildings are a strong and lasting form of art and expression.  Or how about cars - I certainly consider a Ferrari a much higher form of expression than a couch dance.  How can the government tax cars?  Or what about T-shirts with a political message -- can governments charge sales taxes on those?  What about the lawn service I pay to have a beautiful green lawn, which is the ultimate form of suburban expression?

At the end of the day, it is impossible to separate money and commerce and property from speech and expression.  Commerce is the most ubiquitous and important form of free expression we have in this country.  So far, the ACLU seems to acknowledge this fact only for topless dancers and politicians.  I wish they would extend their efforts to protect both free speech and free commerce to the rest of us.

I resisted blogging about it when a woman claimed to have found a human finger in her Wendy's chili.

I was tempted to blog when it was discovered that the woman had a suspicious history of torts against other restaurants and public companies.

I still held out when authorities began searching the woman's home, supposedly to find evidence that she put the finger in herself, perhaps from her dead grandmother's hand.

However, I just can resist this new addition to the story:

A woman who lost part of her finger to a leopard in Nevada thinks it
somehow ended up in a bowl of chili in a California Wendy's.

Her
lawyer says Sandy Allman wants to participate in any DNA test on the
finger. The lawyer says Allman last saw her digit packed in ice in a
Las Vegas emergency room. Doctors had told her it couldn't be
reattached.

The hospital says it can't account for the three-quarter-inch fingertip.

Las
Vegas resident Anna Ayala claimed she found an inch and a-half
fingertip in her chili about a month after the leopard attack.

Update: Unfortunately, authories are now leaning away from the leopard story.  Have they checked Roy Horn?

Politicians seem to love the movie business, or so I infer from the rash of proposals of late to subsidize the movie business. 

New York City seems to have been first out of the blocks, with this program to provide tax rebates and free advertising for shooting movies in NYC.  The article tells us this is the only industry being so targeted at this point by NY.  Why?  Why are movie jobs and movie makers somehow better than every other kind?  Maybe its because they think the movies provide good advertising for NYC, like the great light they cast on the city in movies like this and this.

Anyway, the trend got my attention when our own Arizona governor lamented that Arizona is no longer home to as many movie shoots as it once was decades ago.  Far be it for me to suggest that this is probably more of an issue of westerns going in and out of style (since about a majority of movies shot in Arizona were westerns).  Nevertheless, Napolitano is pushing ahead with her plan to improve the net income line of Hollywood studios by subsidizing production in Arizona.

Finally, via Reason, we see that Hollywood is worried that it is being left out of the subsidy competition, by actually paying companies to film in LA:

Mayor James K. Hahn on Thursday announced a plan he hopes will keep Hollywood in
Hollywood "” by paying film production companies to shoot in Los Angeles.

Hahn's proposal, which was inspired by a program that New York City
adopted in December, would use as much as $15 million in public funds to
reimburse companies that make a movie in Los Angeles, paying them 5% of their
production costs or up to $625,000.

OK, so one would think that all these locations have struggling media and production industries.  But in fact, just the opposite is true.  In New York:

But Wylde thinks film is just the tip of the iceberg. The city's entire media sector is growing explosively, she notes. From Time Warner to Hearst to Bloomberg LLP, media firms account for $13 billion in city wages, 50% more than tourism.

And, in LA:

Last year, however, film, video and television production in Los Angeles
actually reached record highs. Entertainment Industry Development Corp. issued
permits for 52,707 location production days "” one day representing a single day
of work on a single project "” a 19% increase over 2003.

Doesn't sound like they are in much trouble.  Their film and media businesses are already growing explosively to record highs.  So why do they need a subsidy?  Doesn't exactly sound like the New England textile business.

Look, at the end of the day, this is about politicians handing taxpayer money to powerful media people, people who have the ability to disproportionately influence public opinions and things like ... elections!  This is a barely disguised campaign expenditure, except for the fact that taxpayers pay the bill.

I wrote more about the idiocy of subsidizing corporate relocations to one's state or city here.

Update:  Match Welch has more

Here is a great link page to tax and employment related agencies in the 50 states.  And this is a good link page pointing to the text of labor law from all 50 states.  This is particularly useful if you do business in multiple states or you are considering growth into a  new state.  Thanks to George's Employment Blawg for the link.

We are big Harry Potter fans in our house.  The world has been warned that another major character will buy it in the next book Harry Potter and the Half-Blood Prince (similar to Sirius Black's death in the last book).  Trust the Brits to have a betting line on it:

When it comes to defending abortion, women's groups are great libertarians. They will point out that abortion is about the right to choose and about protecting the "fundamental civil and human right of women to make the most intimate decisions about their bodies and their lives".  Its about not letting the government interfere with individual decision-making or a "woman's right to privacy".  Its about assuming women are grown-up enough to make difficult choices about their fetus and their own health and safety.  Opponents of such choice are "ultra-conservatives trying to deny women control over their own bodies".  (all quotes from the NOW web site).

So, women's groups seem to be good libertarians concerned with the primacy of women's decision-making over their own body.  Except when they're not.  NOW has been feverishly campaigning to get the government to limit a women's right to choose breast augmentation, despite the fact that the science is overwhelmingly behind the safety of implants.  Sure, as in any medical procedure, there are some risks, but I defy anyone to tell me that the risks associated with breast implants are greater than the risks associated with abortion.  Abortion is a much weightier and more difficult decision, and, unlike breast implants, it is irreversible.  If women are mature enough to make abortion decisions, they certainly are mature enough to weigh the risks of breast implants.  Or take the birth control pill -- the impact to a woman's body of silicone sacks in their boobs is far less than that of trashing their entire hormone balance.  Sure, the pill makes sense for a lot of people and its great that the option exists, but don't tell me that the the changes the pill engenders in the body are OK but bags of silicone are not.

The real issue, as pointed out early and often by Virginia Postrel, is that feminists consider breast implants as at best frivolous, and at worst a demeaning surrender to male objectification of the female's body.  They don't think women who choose these implants are making the right choice, so they, in their elite holier-than-thou wisdom, want to take the decision away from women.  Hmmm.  Freedom for me but not for thee.  More along the line of distrusting individual decision-making here.

Update:  My main point of this post was on breast implants, and comparing feminist retoric on that issue vs. their retoric on abortion.  I feel the need, though, to mention that I don't accept that abortion is necesarily a pure individual choice situation.  Individual decision-making should be trusted when individuals make choices that affect only themselves, without coersion or fraud.  The problem in the case of abortion is whether the fetus is a piece of tissue that is a part of a woman's body, or an independent life.  In the former case, its removal is subject to individual decision making, but not in the latter.  As I have written before, I think the fetus is protoplasm at 1 week and a baby at 8 months.  At some point in between we draw an arbitrary line between part-of-the-mom and independent life.

Many abortion supporters, unwilling to risk that society might draw this line earlier in the pregnancy than they might want it, take the extra step of arguing that the very determination of whether the fetus is a life or not at 2 or 5 or 7 months should be up to individual taste, and that the government should have no say in that determination.  That strikes even me as the hardcore libertarian as going too far.  Certainly in its limited role of protecting individual rights, the government has a role in determining just who is an individual with rights subject to protection.  Determining if a fetus is an individual with independent rights and at what point in the pregnancy it is treated as such are reasonable roles for government legislation.

Hans-Hermann Hoppe is finally able to tell his story of his academic inquisition at UNLV, all begun because one student in one of his lectures felt that his feelings had been hurt.  Kudos to the ACLU for supporting professor Hoppe.  Here was his crime (via this article comparing Hoppe's aggressive defense of himself with Lawrence Summers total capitulation):

Hoppe's
violation of thought control was the view that homosexuals, along with others
who tend not to have children, have a higher than average time preference rate.
They are willing to trade more future income for present gratification than
others, such as parents.

Neither of these
claims is at all unexceptionable "“ within economics. Both would be widely agreed
to within this profession. Certainly, neither would raise any untoward number of
eyebrows within this discipline.

By the way, I am officially declaring that the term "hate speech", as currently used, has joined the ranks of completely useless terminology.  This term is being used as a lever to attack the first amendment all over this country, and not just on campuses.  Like any assault on fundamental rights, it begins by defining a very narrow category of speech that is so offensive that people will accept an exception to first amendment protections.  Then, once that exception exists, the definition of hate speech is expanded to include, basically, "any speech I don't agree with".  That's why I am opposed to any exceptions to the first amendment, even for outlawing hate speech.  To be a true defender of the first amendment, you have to be ready to defend the speech rights of some of the most outrageous and grotesque people.

Socialists and "progressives" of various stripes always want to argue that the distribution of wealth among nations is basically due to luck, in large part related to the distribution of natural resources.

This is disprovable in about 2 seconds:  Russia (via Cafe Hayek) and the Netherlands.   Russia, resource-wise, is perhaps the richest country in the world.  It is, our could be, among the largest producers of any number of natural resources, from diamonds and gold to oil and uranium.  But its economy is a disaster.  The Netherlands, resource wise, has about nothing.  There are few third world economic hell-holes that don't begin with infinitely more resources than the Dutch, but the Dutch are among the richest nations in the world. 

Wealth comes not from labor or capital or resources - wealth comes from the mind, and as such requires a rule of law where the mind is free not only to imagine new ideas but to pursue and reap the fruits of these ideas.  As I said in this article:

From the year 1000 to the year 1700, the world's wealth, measured as GDP per capita, was virtually unchanged.
Since 1700, the GDP per capita in places like the US has risen, in real
terms, over 40 fold.  This is a real increase in total wealth - it is
not money stolen or looted or exploited.  Wealthy nations like the US
didn't "take" the wealth from somewhere else - it never even existed
before.  It was created by the minds of human beings.

How?  What changed? 

1. There was a philosophical and intellectual
   change where questioning established beliefs and social patterns went
   from being heresy and unthinkable to being acceptable, and even in
   vogue.  In other words, men, at first just the elite but soon everyone,
   were urged to use their mind rather than just relying on established
   beliefs
2. There were social and political changes that greatly increased
   the number of people capable of entrepreneurship.  Before this time,
   the vast vast majority of people were locked into social positions that
   allowed them no flexibility to act on a good idea, even if they had
   one.  By starting to create a large and free middle class, first in the
   Netherlands and England and then in the US, more people had the ability
   to use their mind to create new wealth.  Whereas before, perhaps 1% or
   less of any population really had the freedom to truly act on their
   ideas, after 1700 many more people began to have this freedom. 

So today's wealth, and everything that goes with it (from shorter
work hours to longer life spans) is the result of more people using
their minds more freely.

I've written a couple of times about how I find the whole process of tipping in this country to be irritating.  There is absolutely no logical framework you can come up with to say why we are expected to tip restaurant workers but not, say, retail workers.  Tipping has long, long ago passed the point where it was a practice to reward good service and has instead become a way for employers to shift the burden of paying wages to their employees onto their customers.  For example, I wrote (or more accurately, ranted) here:

Unfortunately, restaurants and other service establishments have
twisted this act of reward and generosity into having customers pay the
wages of their staff.  Restaurants are simultaneously increasing
tipping expectations (from 15% to 20%+) while requiring tips on more
and more occasions by building them automatically into the bill.

The event that brought my irritation to a boil the other day
actually happened valet parking my car at a restaurant.  As background,
the establishment charged $4 to valet park your car.  Now, I am not a
socialist, so I accept that value is not driven by cost but rather by
what I am willing to pay for it, and I was willing to pay $4 to avoid
having to walk a few blocks from the free lot  (those of you from
Boston or NY are wondering what the fuss is about -- a valet parking
charge of any amount is virtually unprecedented in Phoenix, at least
until recently).

So I paid my $4, and then I saw the sign:

"Our employees work for tips"

What?
You mean I just paid your company $4 for what amounts to about 5
minutes of labor, and now you are telling me that in addition, I need
to pay your employees' wages for you too?  This is pretty nervy - I
mean, other than a percentage concession payment they are probably
making to be the parking company at that location, what other costs do
they have?  I didn't want to hurt the young guy actually doing the
parking, but for the first time in years I didn't tip the valet.  That
little sign turned, for me, an act of goodwill into a grim obligation,
extorted from me by guilt.

I bring all this up because I saw an interesting piece the other day on Marginal Revolution:

1. Two studies show little relationship between quality of waiter service and
size of tip.

2. Hotel bellboys can double the size of their tips, on average, by showing
guests how the TV and air conditioning work.

3. Tipping is less prevalent in countries where unease about inequality is
especially strong.

4. The more a culture values status and prestige, the more likely that
culture will use tipping to reward service.

5. Tips are higher in sunny weather.

6. Servers can increase their tips by giving their names to customers,
squatting next to tables, touching their customers, and giving their customers
after-dinner mints. (query: how do lap dances fit into this
equation?)

7. Drawing a smiley face on the check increases a waitress's tips by 18
percent but decreases a waiter's tips by 9 percent.

8. In one study, waitresses increased their tips by 17 percent by wearing
flowers in their hair.  In general it pays to look distinctive albeit not freaky

Per the Tax Foundation:

The report compares the number of days Americans work to pay taxes to the number of days they work to support themselves.
      

"Despite
all the tax cuts that the federal government has passed recently,
Americans will still spend more on taxes than they spend on food,
clothing and medical care combined," said Hodge.

In
2005, Americans will work 70 days to afford their federal taxes and 37
more days to afford state and local taxes. Other categories of spending
measured in the report include housing and household operation (65
days), health and medical care (52 days), food (31 days),
transportation (31 days), recreation (22 days), clothing and
accessories (13 days), saving (2 days) and all other (42 days).

Tax Freedom day has moved around over the last few years:

Enjoy!

After my earlier post on Walmart, I got to thinking about a number of Walmart-related topics.  My brain is a bit too fried on Friday night to organize these thoughts too much, so here they are, roughly following my stream of consciousness:

Exxon may have finally handed off the Great Satan title

The socialists of this country (who now generally call themselves progressives but its pretty much the same thing) usually need a company they can focus their attention on.  In the 1960's, this was probably General Motors, though defense contractors in the Vietnam War made a run at the title.  After the oil embargo of 1972, that title clearly moved to Exxon. I remember in one month in the early 1970's, the head of Exxon got called into Congress twice in a few weeks, once to combat the urban myth that oil companies were greedily holding oil off the market to drive up prices, and once to explain to Congress why they were greedily trying to expand oil production in Alaska.  My family and many of my friends worked for large oil companies, and we had several friends who were injured by letter bombs from domestic leftist terrorists (though the media did not call them terrorists then).

Exxon held the great Satan title for a long time.  It probably could have shed the title with low oil prices in the 80's, but the stupidity of the Valdez mess in the mid-80's and the vociferous opposition to the politically correct Kyoto accords in the mid-90's help them retain the title for a record number of years.

Finally, however, it appears that a new contender is at hand.  Walmart, so recently the most admired corporation in America, has become the new socialist whipping boy and lawsuit magnet.  Just search for Walmart in Google and you will get pages and pages of Wal-mart bashing sites.  Its kind of an amazing story how the former blue collar low-price hero of the working man trying to make ends meet has suddenly become a class enemy.  However, coming from a family that had many members who worked for Exxon, it comes as some relief to pass the Great Sata title on.

I wish everyone at Walmart could make $100,000 per year

In this, I am exactly in the same boat as Walmart detractors.  I would love for everyone at Walmart to make a ton of money.  Whether this is realistic is another story.

In America, people take jobs voluntarily

I would generally class this as a blinding glimpse of the obvious, but it appears that it has to be said.  And, if you accept that people are operating in their own rational self-interest (by the way, this is not a given -- many on the left do not think the average American is smart enough to make decisions for themself and that they need smart technocrats to look after them).  Anyway, were was I?  Oh yes, if you accept that people operate in their own rational self-interest, then by definition the job for Walmart employees is their best option, and any other option is worse.

This is the logical fallacy of those who attack Walmart (or offshore companies) for paying too low of wages.  Their concern is that these wages are lower than they, as an outside obviously smarter than everyone else observer, think they should be.  The reality is that these wages are higher than that employee's other options, and therefore is an improvement over that job not existing at all.  Note this story I told in an earlier post:

Progressives do not like American factories appearing in third world
countries, paying locals wages progressives feel are too low, and
disrupting agrarian economies with which progressives were more
comfortable.  But these changes are all the sum of actions by
individuals, so it is illustrative to think about what is going on in
these countries at the individual level. 

One morning, a rice farmer in southeast Asia might face a choice.
He can continue a life of brutal, back-breaking labor from dawn to dusk
for what is essentially subsistence earnings.  He can continue to see a
large number of his children die young from malnutrition and disease.
He can continue a lifestyle so static, so devoid of opportunity for
advancement, that it is nearly identical to the life led by his
ancestors in the same spot a thousand years ago.

Or, he can go to the local Nike factory, work long hours (but
certainly no longer than he worked in the field) for low pay (but
certainly more than he was making subsistence farming) and take a shot
at changing his life.  And you know what, many men (and women) in his
position choose the Nike factory.  And progressives hate this.  They
distrust this choice.  They distrust the change.  And, at its heart,
that is what opposition to globalization is all about - a deep seated
conservatism that distrusts the decision-making of individuals and
fears change, change that ironically might finally pull people out of
untold generations of utter poverty.  (update:  good post in the Mises blog on Taco Bell and wages here)

It's Wages vs. Prices, not Wages vs. Profits

In aggregate, because they have so many stores, Walmart makes about $10 billion a year in pre-tax net income.  Which is a lot.  But when looked at as a percentage of sales, it is pathetic.  Given its nearly $300 billion in sales, this is about a 3.5% return on sales, which while not unusual for retailers, in the grand scheme of American business is pathetically low.  I would have to shut down my business tomorrow if I only made 3.5% of sales -- I couldn't support the investments I have to make.

Its illuminating to compare this to all those small family owned boutique
businesses that Walmart supposedly shuts down.  So here is a little
example.  Lets say that the alternative to Walmart in Smallsville, USA would be a series of boutique stores, like
the mythical Nan's Clothing Shop.  Lets
say Nan does $250,000 a year in sales,which
would actually make her shop more successful than average, particularly for smaller town mid-America.  If Nan had to live with Walmart's profit margin of 3.5%, she would end up with an annual profit of  ... $8,750.   And, if Nan is working full-time trying to make the store work, and assuming 2300 hours a year, which is probably low for a small business person, she would be making a whopping  $3.80 an hour running her store, such that she would be much better off (leaving out the personal satisfaction of running your own business) working for Walmart at the average wage there of $6.50 an hour. 

While socialists and progressives are programmed in the deepest recesses of their DNA to blame everything on profit, the wage savings Walmart may get are not going to profit.  Their profit margins are low, in fact lower than most of the smaller stores they are replacing.  If there is a wage trade-off going on, it is between lower wages and lower prices to consumers.  Which obviously makes socialist demagoguery a bit less compelling, since it means that in some sense consumers and not Walmart are to blame if wages are too low, since presumably it is consumers who make the choice to switch from the higher cost traditional boutique alternatives to Walmart.

Walmart detractors have one good point - Walmart gets far too much preferential tax treatment

I don't know why it is, but Walmart is a magnet for taxpayer subsidies.  Not only does the government love to hand out tax breaks to Walmart, it local governments go so far as to use eminent domain to put together land parcels for them.  If I was a local retailer and had my tax money used to subsidize a new competitor, or worse got my land siezed to hand over to Walmart, I would be pissed off too.

I have not really studied Walmart's tactics in this, but my sense is that they have gotten good at getting neighboring communities competing with each other.  This is a crock and a waste of taxpayer money, and nearly as bad as subsidizing sports teams.  I have a long post on the sad practice of subsidizing business relocations here.

A final thought on the most unpublicized economic miracle of the last century

Since many of Walmart's attackers focus on their treatment of women, in part due to numerous accusations of discrimination in pay and promotions, it led me to a final thought about a great economic miracle that occurred in this country in the last decades of the 20th century.

Check this data out, from the BLS:

• In 1968, the unemployment rate was 3.8%.  22.9 million women were employed in non-farm jobs, accounting for 34% of the work force.
• In 2000, the unemployment rate was 4.0%.  62.7 million women were employed in the work force, accounting for 48% of the total
• In these years, the number of women employed increased every single year.  Even in the recession years of 1981-1983 when employment of men dropped by 2.5 million, women gained 400,000 jobs

This is phenomenal.  After years of being stay-at-home moms or whatever, women in America decided it was time to go to work.  This was roughly the equivalent of having 40,000,000 immigrants show up on our shores one day looking for work.  And you know what? The American economy found jobs for all of them, despite oil embargos and stagflation and wars and "outsourcing".

I would love to see women at Walmart making more money, and some day they probably will.  Even so, though, the fact that so many have found work there is a miracle unto itself. Remember that the alternative to a $6.50 job at Walmart if the left is successful in eliminating these jobs is probably not new $15.00 jobs - it is no job at all.  Just ask the French.  Also see my recent post on the minimum wage.

Update:  This is some pretty smart PR by Wal-Mart to deflect the sprawl argument often used against it.  By the way, I challenge someone to define sprawl adequately for me in the context it is used by people who are decrying it.

Like a smoker trying to quit for the twenty-seventh time, I have tried really, really hard to limit the number tort-related rants in my blog lately.  I sometimes go for weeks without falling off the wagon,and then something comes along that is so insane, I can't resist.

Via Overlawyered.com comes this site from attorney Lewis Laska dedicated to outlining all the ways people too bored or incompetent to make money the old fashion way can try to support their lifestyles by suing Walmart.  Don't miss this page, where the attorney will sell you packets of information for how to sue for various occurrences, such as:

Parking Lots- Uneven Surface and Protrusions (16 items, $135)

Parking Lots- Improper Parking Lot Design or Marking (11 items, $90)

Entering the Store - Entranceway Floors and Floormats (21 items, $160)

Entering the Store - Doors and Doorways - Tracked-in Water (32 items,
$200)

Aisle Ways - In-Store Consumable Food on Floor (18 items, $160)

Aisle Ways - Out-of-Store Consumable Food on Floor (14 items, $120)

Aisle Ways - Unknown Substance on Floor (59 items, $200)

Aisle Ways - Packaged Product on Floor (14 items, $110)

Aisle Ways - Unpackaged Product on Floor (13 items, $100)

Merchandise - Merchandise Protruding (1 item, $15)

Shelving and Racks and Displays - Vegetable Produce Displays (1 item,
$15)

Shelving and Racks and Displays - Water/Condensation From
Vegetable/Refrigeration/Freezer Displays (6 items, $55)

Shopping Carts - Overloaded (4 items, $45)

Shopping Carts - Defective (4 items, $45)

This is only a very short sample of the whole list.  I especially like the packaged product on floor.  Get your friend to drop a box of Wheaties on the floor, and then you follow him and sue.  And how the heck is Wal-Mart at fault if you overload your own shopping cart?  Anyway, I am going to order one to see what I get.

By the way, I especially liked this whopper, I guess because he is trying to portray himself as the brave man taking on huge odds:

Most lawyers are not interested in filing suits against Wal-Mart.
The company is reluctant to settle cases promptly and fairly and almost
seems eager to take cases to trial. One of the goals of the Wal-Mart Litigation
Project is to identify lawyers who are ready, willing and able to sue the
company where a case has merit.

I hardly know where to start.  First, if lawyers are so reluctant to sue Wal-Mart, why does Wal-Mart have like 20,000 suits pending against it? (note the numbers in this article, and it is 4 years old) Second, you gotta love the part about the attorney put out because Wal-Mart won't play the part of the victim like other companies and actually demands their right to a trial.  In this one statement, you see exactly how the plaintiff's bar works - they don't really want to go to a trial.  They want to force a fast settlement that requires little of their own time and move on with their 30+% of the take.