Pro-tax university professors find a tax that they don’t like

A lot of my Facebook friends are university professors. As such they get, as part of their compensation, free tuition for their children (or, oftentimes, partial payment for tuition if they send their kids to other colleges). Some of them have graduate students, who get their fictitious tuition paid when on research or teaching assistantships.

All of these folks publicly supported Hillary Clinton prior to the election, denounced the Trumpenfuhrer’s hints about shrinking the government’s role in our society, and generally advocate for higher tax rates so as to enable the government to fulfill all of our collective dreams.

How are they reacting to the latest proposed tax law changes? With desperate lobbying efforts to preserve their own tax exemptions. Examples:

To my California friends and family, especially those who have children to educate: Republican representatives in these CA districts near you have BIG influence over *which version* of the tax bill—including whether it taxes things like tuition remission, etc.—eventually gets approved. It’s not an exaggeration to say the future of American higher education is at stake.

A crucial decision remains to be made between the House and Senate versions of the GOP tax bill. So here’s a plea to everyone who cares about the future of American universities: not only must we CALL OUR REPS, we must urge our friends and family to do so as well! I’m calling not just my own reps and senators but others’ too, identifying myself as a professor and trying to convey my sense of urgency about this bill.

[mass email to faculty at University of Chicago] Doubtless all of you are thinking about the potential effects of the Republican tax bill, which appears bent on directly attacking higher and lower education in the United States. …  The bill passed by the Senate *does not* include the grad student tuition waiver tax proposed by the House bill. …

For students like Mollie Marr, pursuing her M.D. and her Ph.D. in behavioral neuroscience in the OHSU School of Medicine, losing the tax waiver could mean dropping out of OHSU. Paying the estimated tax on top of her non-deferrable undergraduate student loans would leave her about $ 500 a month to live on. … students, staff and faculty to share their personal stories and perspectives about the impact of losing this tax waiver … Call and email your U.S. representatives and senators.  [official OHSU news release]

If universities actually are delivering something of value to professors’ children via tuition waivers, shouldn’t these good folks want to pay tax on that value? A core principle of U.S. income tax is that you pay tax on the fair market value of stuff that you receive in exchange for work. Also, if universities are delivering something of value to graduate students in exchange for work, why should a Walmart cashier have to work extra hours to make up for the tax not collected? (see Ugliest part of the Republican tax plan: What if universities were forced to calculate the value of a graduate education? for an exploration of what the imputed value of this tuition waiver should be, though)

These same folks have spent years on Facebook arguing for the government to collect more in taxes. Now they’ve found a tax that they don’t like!

Related:

Philip Greenspun’s Weblog

Facebook against net neutrality because they are afraid of a no-Facebook plan?

“F.C.C. Plans Net Neutrality Repeal in a Victory for Telecoms” (nytimes):

The Federal Communications Commission released a plan on Tuesday to dismantle landmark regulations that ensure equal access to the internet, clearing the way for internet service companies to charge users more to see certain content and to curb access to some websites.

“Under my proposal, the federal government will stop micromanaging the internet,” Mr. Pai said in a statement. “Instead, the F.C.C. would simply require internet service providers to be transparent about their practices so that consumers can buy the service plan that’s best for them.”

“We are disappointed that the proposal announced today by the F.C.C. fails to maintain the strong net neutrality protections that will ensure the internet remains open for everyone,” Erin Egan, a vice president at Facebook, said in a statement. “We will work with all stakeholders committed to this principle.”

In some ways this is a yawn because it takes us back to where the Internet was for decades. But, on the other hand the Internet didn’t always have the addictive services that it has now.

What if Verizon were to offer a plan to businesses that limited access to non-work sites, e.g., Facebook, to 15 minutes per day? That would be illegal under the regulations adopted recently, but legal if the current FCC revokes them.

A lot of companies, of course, run firewalls that block Netflix, Facebook, et al. But if the company provides a phone with unlimited data maybe there is no current practical and legal way to stop employees from spending time on these services during the workday.

[What do my Facebook friends say about this return to the 2014 rules? “This is huge. This is terrible. This is the beginning of the end. This is fascism. … This is the beginning of censorship the likes of which we have never seen.”]

On the third hand, how would it be possible for Internet providers to block particular sites as the New York Times suggests? If consumers are using a VPN service (example) then how would the ISP have any idea which sites were being visited?

Related:

Philip Greenspun’s Weblog

Why young people don’t like the Republican tax plan: they are planning to be W-2 wage slaves

The Republican tax plan makes it more rewarding to do business in the U.S., whether as a corporation or as a part-owner of an LLC or similar pass-through structure. The proposal does not seem to have caught on with young people. Why not? I’m reading a book by a psychology professor who studies American generations. This one is about Americans born since the mid-1990. From iGen:

As it turns out, iGen’ers are actually less likely to want to own their own business than Boomers and GenX’ers were at the same age, continuing a trend started by Millennials (see Figure 7.4). Just as they are cautious about driving, drinking, and dating, iGen’ers are cautious about going into business for themselves.

Entering college students show the same trend: in 2016, only 37% said that “becoming successful in a business of my own” was important, down from 50% in 1984 (adjusted for relative centrality). So, compared to GenX college students, iGen’ers are less likely to be drawn to entrepreneurship. These beliefs are affecting actual behavior. A Wall Street Journal analysis of Federal Reserve data found that only 3.6% of households headed by adults younger than 30 owned at least part of a private company in 2013, down from 10.6% in 1989. All the talk about the young generation being attracted to entrepreneurship turns out to be just that—talk.

So it makes sense that they don’t like business tax cuts if nobody among their peer group is involved in business, except as a wage slave.

[Of course, one could argue that a business tax cut makes it more likely that iGeners will have a W-2 job to begin with and that jobs will pay more because global business will be more enthusiastic about headquartering and operating in the U.S. But I wouldn’t expect the average American to see things that way. People seem to evaluate tax policy on the theory that everyone’s behavior will remain unchanged after a massive change to tax rates.]

Philip Greenspun’s Weblog

Why do people vote to have the government make them do something that they would never do voluntarily?

Another Election Day question…

“Marco Rubio: Tax Reform Should Help American Families” (nytimes) tries to sell the latest Republican tax proposal on the grounds that, compared to the current system, there will be more handouts for Americans with children under age 18. The discussion is framed by pointing out what money-sinks children can be:

According to federal data adjusted for inflation, from 1960 to 2015 the average annual cost of raising a child in a middle-income family rose by over $ 11,000. It’s now estimated that middle-class parents will spend more than $ 230,000 over the course of their son or daughter’s childhood — and that doesn’t even include college tuition.

[The Senator and the NYT Editors don’t explain the arithmetic here. The cost is $ 11,000 per year higher over 18 years. That’s a total of $ 198,000. If we subtract that from the current cost of $ 230,000 we find that the cost to parents back in 1960 was only about $ 32,000 in today’s mini-dollars. Does that make sense given that food and clothing are cheaper than ever? (and, of course, the paper does not have the bad taste to point out that an American who has sex with a dermatologist can get $ 230,000 per year in tax-free child support, depending on the state) Senator Rubio also claims that this $ 230,000 is more than it costs to buy a house, which sounds wrong to those of us living in on the sacred coasts of righteousness, but is close to being true nationwide according to realtor data (median existing single-family home sold for $ 246,800 in September 2017; used condos sold for a median price of $ 231,800).]

The article goes on to say that some Americans aren’t having as many babies as they would in a world where children were cost-free (i.e., paid for by someone else). This is a serious problem in a country with a population of 325 million that, apparently, seeks to overtake China and India.

My comment:

“Having kids is one of life’s greatest experiences.” [the article’s first sentence]

Hard to argue with this, but then why can’t we parents pay for our own kids instead of asking childless Americans to pay yet more for them? The childless already pay for a share of K-12, right? When we go to a restaurant with our kids ([a] mercifully infrequent [event]) we don’t say “This must be one of life’s greatest experiences for the childless people in this restaurant” and then go around asking other diners to chip in for our meal. Yet that is exactly what the government is doing via a tax code that makes the childless give up a higher percentage of their income.

Given that there are more voters (the childless and those with adult children) who will pay for this compared to the number who will enjoyed the reduced tax rates, I’m wondering why this is a selling point.

Childless Americans don’t voluntarily go around to those with children and offer money, do they? If not, why would a majority of childless Americans vote to have the government take money from them and give it to Americans with minor children?

Most of the top-rated comments on the piece demand yet more handouts or complain that others are richer:

So if you value families, Senator, how about paid family leave, quality prenatal care and healthcare throughout a child’s life, and universal childcare and preschool? And how about quality K-12 schools and educational opportunities, not just for the elites but for all Americans, investing in the future of our country?

The mom’s [sic] I talk to tell me that daycare runs about $ 15,000 a year per child. If we really want to help families, how about funding daycare like those awful freedom robbing socialist European countries do? We can’t do that here because that would entail federal spending and the federal government isn’t supposed to spend money on the little people. We give them paltry tax breaks which doesn’t cover the cost of daycare or health insurance and other socialist programs that all other modern industrialized nations provide.

For someone who is currently deciding on whether or not to have a second child this article really angers me. My husband and I make a good living, but we are both self employed. Our insurance is going up next year and premiums will be over 1k a month. We don’t quality for tax credits for health care and we would have an out of pocket cost of over 7k for having another baby. This is on a silver plan. After having a baby we would need extra childcare which would cost us at least 1200 a month on top of preschool cost for our son. We don’t need a measly $ 2k tax credit, we need affordable childcare, affordable healthcare and paid parental leave. Being from a Northern European country originally, my husband and I have decided to move to Europe in 2019. Unfortunately, the United States is not a good place to raise a family.

A $ 2,000 tax credit won’t do much. If you really want to help working families, provide them with affordable healthcare, childcare, and education. That will require a tax increase on the wealthy, not the huge tax breaks you’re giving them now.

If your party would do something about the problems you mention here, like a mandatory living wage, daycare as part of public education (thus free), paid family leave, free community college, a functioning healthcare insurance system as opposed to sabotaging it), perhaps things would be a lot better.

And kids over 18 going to college, while still dependents, don’t qualify for the child tax credit making the loss of the personal exemptions even more onerous to the family finances. [at least in Massachusetts the child support profits can continue to flow until age 23]

Keep the inheritance tax – families with that much money do not need our help.

You mention student loans in the very first para. Why not do something about the cost of college education as your Democratic colleagues want to do? Affordable college education can not only help parents but will make the country competitive in a global market.

As someone graduating college and looking to embark on my own “American Dream” the increasing pricetag of raising kids is a point of real concern for me. Because having children is a top priority in my life I want to do so without continual financial anxieties, yet with the new proposed tax plan and the current infrastructure, it seems to be increasingly difficult. It affects my career choice, place of residence, pregnancy timing and everyday spending.

The last one is my favorite. The author identifies him/herself as “Luke Yeager” from Boulder, Colorado and therefore the implication is that someone named “Luke” will be pregnant. He/she says “having children is a top priority in my life,” but not such a high priority that Luke wants to work to support the prospective brats: “I want to do so without continual financial anxieties.” Maybe Colorado doesn’t offer free housing to those with kids and zero income? Luke needs to come to Massachusetts and discover the miracle of means-tested public housing (sometimes in newly constructed luxury commercial apartment buildings), Masshealth (our Medicaid), food stamps, etc. We will be happy to pay for as many children as his pregnancies produce. If he and his adult partner have two children and don’t want to stay home all day playing Xbox they can earn up to $ 78,150 per year and remain in Boston public housing (chart).

There are a few NYT readers guilty of “maybe we don’t have infinite money” thoughtcrime:

Households of childless couples or single men and women already have their taxes used for public education and related expenses which are significant. Yes, I can see the collective good there. But to add further tax burdens/costs to those who, by great measure, choose not to have children out of being financially responsible and realistic of their earning powers to have to finance the raising of children by shouldering further tax breaks for those that choose (or recklessly) have children is starting to approach a point of grossly unfair. Add food assistance programs and healthcare….we’re talking real money. The single or childless household is being unfairly burdened.

In general, individuals and societies who can most easily afford more children tend to have fewer of them and vice versa. Thus, I question the proposed correlation between fertility rates and taxes. More importantly, we have an appalling rate of child poverty in this country (about 20%). Supporting the education and welfare of these children should be the top priority, not encouraging everyone to have more of them.

i’m all for helping to defray the cost of child-rearing, but as a happily single and childless fully self-employed adult, i need some help with payroll taxes, too. right now, i have zero confidence that i will ever live to collect social security. lifting the income cap on the payroll tax would save that program for all american workers, those with children and those without.

The article concludes with “Raising children is the most important job we will ever have.” (he does not cite Bill Burr on how it is also the toughest)

Readers: What do you think? Is it strange that people vote to have the government make everyone do something that practical nobody does voluntarily? (and Happy Election Day if you’re voting!)

Philip Greenspun’s Weblog

Why do they play the national anthem at football games? Do other countries do this?

I checked the news to see what was happening in Puerto Rico, curious to know when the millions of fellow citizens who live there might get electric power back, for example. The leading headlines, however, were all about football players refusing to stand for the national anthem and Donald Trump offering his opinion regarding this behavior. (To Americans who worship their president as a demigod on Earth, of course it was very exciting to receive President Trump’s opinion!)

This leads me to ask… if Americans are going to fight about how to behave during the national anthem at football games, why play the anthem at all? Football is not a governmental ceremony, right? It is plainly possible to play an epic game of football without first hearing the “Star-Spangled Banner” because that’s precisely what happens at the Cleary family’s vacation home in The Wedding Crashers. What happens in other countries? Are national anthems played before European soccer games, for example?

[Separately, folks who refuse to respect the U.S. national anthem as a protest against the treatment of black Americans might be on the right track. Slavery in Europe had ended by 1000. Britain abolished slavery throughout its empire in 1833 (Wikipedia). If the American Revolution had never occurred, in which case we’d not have our own anthem, black Americans would have escaped at least one generation of slavery. On the third hand, do these anti-American football players have a practical plan for re-joining the United Kingdom?]

Philip Greenspun’s Weblog

If employers want 50 percent women, is it obvious that they must pay them more?

The Google Heretic is the gift that keeps on giving for anyone publishing a blog.

The Heretic’s memo and firing wouldn’t have happened but for Google’s desire to have a workforce that is “representative” of the general population, i.e., roughly 50 percent women. Despite management’s noble sentiments and the preponderance of Hillary supporters within the company, Google failed at their stated goal. This led the former science grad student (and current heretic) to turn to his science journals while it led me to ask “Why not pay women more if you’re so keen on hiring them?”

Supposedly it is illegal to pay women more simply because they are women. I’m not sure if this is true in practice because we are told by various politicians that employers pay women less because they are women.

I’m wondering if the sex discrimination laws that were enacted to help women get higher pay are now working to reduce female pay below market-clearing levels.

BLS data show that male labor force participation rate for ages 25-54 was 88 percent in 2014. Female labor force participation rate the same age range only 74 percent. With approximately equal numbers of men and women in this age group, there will be 88 men for every 74 women in the labor force, right? If every employer wants to have a 50/50 gender ID distribution not all of them can succeed. In a market economy, the typical way in which a scarce resource is allocated is via pricing. Women should be worth more in the labor market than men and companies such as Google would have to outbid other firms that seek gender ID balance in order to achieve it.

Readers: What am I missing? Now that being seen as pro-women is a business necessity, given the relative scarcity of women in the American labor force, are laws requiring equal pay to men and women working against women?

Philip Greenspun’s Weblog

Will California taxpayers pay your employees if they say they are transgender?

“Going From Marginalized to Welcomed in the Workplace” (nytimes):

… TransCanWork, a nonprofit that has teamed up with the California Restaurant Association, among other groups. The program trains employers to become transgender-friendly in their hiring practices and their overall operations. It also connects transgender people with employers; a state grant pays for the first 60 hours of each new employee’s wages.

If you’re an employer, why not ask every new-hire to identify as “transgender” (Wikipedia says that this is “an umbrella term” that covers potentially almost anyone)? At that point state taxpayers are funding most of your costs of bringing a new person on board.

What’s the flaw in this strategy for cutting costs and increasing profit?

Philip Greenspun’s Weblog

Dumb Question #8241: why screen passengers who slip through security after they deplane at their destination?

Traveling today from Beaver Creek back to Boston and thinking about “Security Breach Allows Unchecked Passengers on Flights at JFK: Officials” (NBC):

Eleven people walked through an unscreened security lane at John F. Kennedy International Airport in New York on Monday morning and apparently boarded flights, authorities said.

Three of the 11 were later identified through video and were believed to have boarded a flight to California, where they were to be screened upon arrival, the Port Authority said. The eight other passengers remained unidentified, it said.

Here’s my dumb question for today: What is the point of screening these folks after they’ve arrived at their destination? To make sure that they don’t have weapons to use for hijacking their Uber?

Philip Greenspun’s Weblog

Hawaiians are happier than other Americans; are they also smarter?

Happiness and “well-being” research tends to rank Hawaii in the #1 spot among American states. Today let’s consider if Hawaiians are also more intelligent.

Let’s consider a Boston-area resident who will be happy to tell you how intelligent he is. He works 60-hour weeks and is trying to build up a nest egg so that he can do the following:

  • not go into work every weekday
  • spend a lot of time with friends and family
  • live in a warm sunny climate
  • go to the beach
  • snorkel
  • fish

In other words, his dream is to live like a Hawaiian on welfare. But if he were actually as smart as he claims to be, why did he spend 40 years slaving away in an office when he could have been in Hawaii living on welfare? (The public housing that I saw in Hawaii was wonderfully located, oftentimes walking distance to the beach or a school, and was sometimes brand new. There is presumably a waiting list but perhaps that can be shortcut by having a child? CATO Institute said that, in 2013, Hawaii offered a welfare family a package of benefits worth $ 49,175 per year or the equivalent of earning a pretax salary of $ 60,590 per year.)

Unlike in Manhattan, for example, the recreational pursuits of rich and poor are similar in Hawaii. The rich resident of Hawaii will have a much nicer house, of course, but there is seldom any reason to stay indoors.

If “Most Americans Are Unhappy At Work” (Forbes), why are we not forced to conclude that most Americans have less practical intelligence than a Hawaiian on welfare?

[The analysis should be similar comparing a Hawaiian with a job. I know a lot of folks in Massachusetts who say “I am doing X, Y, and Z because 5-10 years from now I hope to be doing A, B, and C.” Whereas Hawaiians who worked seemed to be content with their lives overall and weren’t living for the future.]

Related:

Philip Greenspun’s Weblog

Why accept any refugees to the U.S. if they are welcome in Canada?

“Justin Trudeau responds to Donald Trump’s immigration ban by saying refugees are welcome in Canada” (Independent):

Justin Trudeau has responded to Donald Trump’s immigration ban by saying Canada welcomes refugees who have been rejected from the US.

Does this mean we should shut down our politically divisive refugee program? If the purpose of the program is to save people from danger, and anyone whom we reject will be accepted by Canada, a far safer country than the U.S. (compare Toronto to Chicago!), what is the rationale for continuing the program?

Related:

Philip Greenspun’s Weblog

The Gold Manipulators Not Only Will Be Punished, They Have Been Punished

I have not gone off the deep end and joined the “community” of boosters, promoters, pompom waving cheering squads and general cult figures who you can just tell not only want you to adore gold, but in some cases need you to act on your adoration and buy gold or gold stocks.  Read into that […]
Slope of Hope

Online communities for photographers… what do they add to Facebook?

Those of you who are approaching 100 may recall that I started photo.net back in 1993. It started out as a place for people to learn from tutorials (example: Making Photographs) and engage in a text-based discussion of technique- and gear-related issues (there was no Trump v. Hillary campaign at the time to consume 100 percent of Internet users’ attention). In the late 1990s we added a photo sharing system that let people show off their best work and/or get feedback on attempted great work. I spun off the site in late 1999 to some grad school friends who had a plan to surf the dotcom wave with photo.net as a base, but instead they were pounded into the sand when the market collapsed.

Continuing the occasional theme of this blog of “What is the point of the Internet if we have Facebook?” I am wondering if there is still a place for online communities for photographers and, if so, what the main purpose would be. Gearheads seem to post a lot of comments on the articles at dpreview.com. Is this sustainable, though? If you care about photo quality a little you would presumably buy either the latest iPhone or the latest Samsung, If you care a little more you buy a Sony mirrorless such as the A6300 and leave it on green idiot mode or maybe kick it into “sports” mode as the occasion requires. How many people are there for whom anything further is required these days?

How about showing off one’s best work? If the audience is on Facebook, why display photos anywhere else? Admittedly most people have only 500 or so Facebook friends, but isn’t it possible to mark a posting as available to the public and then a great photo can get more widely shared on Facebook?

Discovering the best work of other photographers? That seems like something that is hard to do on Facebook.

What do folks think? The things that people accomplished with photo.net in the 1990s… what’s the most popular way of accomplishing those things now? And is there a long-term place for niche online communities such as photo.net and, in particular, niche online communities for photography enthusiasts? (If the answer to the latter is “yes”, to what extent is it required to tie in with Facebook, e.g., for user authentication and maybe to users’ public content from Facebook?)

Philip Greenspun’s Weblog