Why do some people hate Barack Obama? Is it because he’s black?

Why do people try to climb Mt. Everest? Because they can.

There are literally over 7 billion people on this planet. If you asked (even just the English-speakers) what the answer to 2+2 is, you would get probably get multiple percentage points worth of people not saying 4.

If you ever get a job calling people on the phone and asking them about their opinions (which I did for about a year in college), I can virtually guarantee that you will be shocked at the number of people who say things that are completely ridiculous, dumb, and/or based on obvious factual inaccuracies.

I worked for a summer in a congressional office, and I didn’t answer the phones (luckily), but there was this one guy who just kept calling and asking ridiculous questions about President Obama’s positions, and the weird thing is that we were pretty sure he actually believed what he was saying.

So, yeah, there are a shockingly large number of people that are just unimaginably dumb, or downright crazy. But, there are a few more answers to your question:

1) Yes, some people hate Obama because he is black. Probably something like 5% of the population would actually admit that they hate him because of his race. Another 5%-10% of the country is likely influenced by a more subtle, but still substantial racist element. Perhaps they feel threatened in general or they are afraid of what he represents. Perhaps they are afraid that their kids or grandkids might someday NOT be on top of the world, and their natural instinct is to try to make sure that “someone” from some other demographic stays down.

a) NOTE: People’s satisfaction with their lives is largely relative, not absolute.If you ask people whether they are happy with their standard of living, people in first world countries who have running water, televisions, computers, cars, and savings will say “no” because they are comparing themselves to those around them. In that sense, then, being part of the “in” crowd, or the group that is on top is by definition a zero-sum game.

2) There is this psychological effect called “lens vision.” People CRAVE stability in their lives, and especially in their perspective of the world. Partisan identification starts to develop in childhood before most people are capable of seriously vetting issues. Then, later, when they are confronted with a statistic or an argument that undermines the supremacy of their choice, they subconsciously look for a way to justify retention of their partisan ideology. The result is that in a world where sociopolitical issues are complex, it is very difficult to change someone’s partisan identity. When people’s partisan identity DOES change, it is usually because it didn’t mesh well with that of the people around them.

In other words, partisan ideology is as at least as much about identity and social relationships as it is about actual issues.

In that context, it should not be hard to see how the story unfolds: In the information age, as it becomes increasingly possible for people to segregate into communities where they only live near people that are like them, where it is possible to only get news from news sources that don’t piss you off (news sources that match your ideology), people begin to experience an amplified “echo chamber” effect: The people around you, the news, and your own gut all tell you the same thing, and they all reflect and amplify eachother, reinforcing your partisan identity and your lens vision, and generating increasingly strong sentiments about political issues.

Due to your partisan tunnel vision, you don’t realize that you haven’t actually thoroughly vetted a lot of the things that you say. You aren’t particularly careful about how you say what you say, since you are already pretty sure that you are right.

HERE’S THE KICKER: People in the other party are going through the same process. They are certain that they are right. They are overly certain about the things that they say, and don’t adequately vet themselves.

Then, people from opposing partisan ideologies get into a conversation, and it quickly escalates. Over multiple conversations, dormant emotional memories arise irrationally to the surface and cause increasingly quick emotional escalation. The more emotions rise, the less the parties bother to vet themselves, and the less credence they give to the other party’s opinions and perceptions. In other words, they trust themselves MORE and the other party LESS. Since this process is occurring on both sides, it becomesincreasingly difficult to find compromise, because you are both demanding an extraordinary burden of proof from eachother both to prove one’s own point, AND to dissuade the other from his/her irrational position. You both rightly feel that the other party is being unfair, and you eventually give up and go back to your echo chamber to complain.

CONCLUSION

To a greater or lesser extent, this cycle of doom is responsible for the increasing partisan rancor in the United States. There are a lot of factors, but they all seem to feed on eachother. In the end, it is hardly surprising that you end up with a shockingly large percentage of Republicans who believe the most asinine things about President Obama, and have actual hatred for a man that they have never even met.

If nothing else, they hear infuriating things about him on a near-daily basis from their colleagues, friends, news sources, and (Republican) elected representatives. They can’t understand how he can believe such infuriating liberal nonsense, or they see him as the face of hypocrisy and greed (redistribution). Perhaps they see him as a threat (or a representation of a threat) to their lifestyle. Perhaps they believe that HE hates THEM.

I fancy myself as a fairly intelligent, even-tempered person, and an experienced debater. But even I have difficulty sometimes with keeping political discussions cool and focused. For people who are not experienced, or who are less intent on keeping the discussion under control, it is hardly surprising that emotions accelerate and leave ordinary americans spitting bile at one another.

President Obama SHOULD Make Death a Taxable Event

I recently stumbled across a Forbes article complaining that President Obama would like to make death a taxable event. The article was referencing a January 17th, 2015 press release that called for, among other things, a new realization event when appreciated property is received by gift or bequest.

Vocabulary

In tax law terminology, if you own property that increases in value (or “appreciates”), you have “income” because your net wealth has increased. But, the tax code doesn’t usually make you “realize” that income (and pay taxes on it) until you actually sell the property and “realize” the income.

Why? We are concerned that you won’t have money to pay the tax, or the value of the property might go back down before you sell it, or we didn’t have an easy way of accurately measuring its value in the first place. It just wouldn’t be feasible or enforceable.

The tax law has both “realization” events and “recognition” events. You have to both realize income and have the tax law recognize that you realized the income, otherwise you don’t have to pay tax — yet.

The amount of money you pay for a property is its “basis.” Basis gets adjusted by certain things, and so your “adjusted basis” is supposed to represent your investment in a property. The actual fair market value of the property minus the basis equals the amount of income/gain that is built into the property, and which can be realized/recognized at an appropriate event.

So what is the problem? 

Americans decided long ago that 1) people shouldn’t pay taxes at death; and 2) the heirs shouldn’t have to pay taxes on appreciation that occurred when they didn’t have control of the appreciated property. Hence, the “stepped-up basis” rule. When you die, the basis in the property is automatically “stepped up” to fair market value at the time of death.

Ordinarily, realization and recognition rules only ever delay taxation on income. But, the stepped-up basis rule means that if you can hold off on selling those stocks of Apple that you bought back in the 1980’s long enough, then neither you, nor anyone you know or love will EVER have to pay taxes on your gains.

Take, for example, a hypothetical guy named Larry. Larry decides to found a massive corporation and call it Moracal. Since he built it from the ground up, his basis in his personal Moracal shares is approximately $0. Decades later, Larry’s net worth is around $50 billion. But Larry is getting old. He knows that if he can just hold out for a few more decades, he will have built a massive empire to last his family through the next, say, 20 generations+, all without ever paying any income tax whatsoever.

Suppose Larry wants to buy an island. He locates one that costs about $1 billion. Larry would have to sell over $1.2 billion worth of shares in order to generate $1 billion in after-(capital gains) tax return. Then, he would have to fork over about $250 million to the government. Larry would rather have his kids inherit that $250 million. So, Larry decides to take out a loan from his friend, Bill, instead. Larry agrees to pay 5% interest (capitalized into the loan), with the full principle and any accumulated debt payable one year after Larry’s death. Larry puts up $1 billion of Oracle stock as security for the loan. Larry has successfully purchased his island and avoided paying any income taxes ever. In fact, if Larry wants to, Larry can set up shop and run a tourism business on his personal island to help defray the interest expense from his $1 billion loan.

So what is the solution?

There are a number of possible solutions.

1. We could put a cap on the amount of time that an asset could appreciate without being taxed (say ten years or five years).
2. We could simply tax all gain every year, and do away with these rules.
3. When we DO finally collect taxes, we could charge interest on any tax that might have been levied, but was instead deferred (this is actually the best solution, in my book, for reasons that I will explain in a later post; in particular, it would seriously undermine the current incentives to waste billions of dollars on clever tax-planning).
4. Or, we could get rid of the stepped-up basis rule and make billionaires who have deferred taxes their entire lives finally pay a tax on their estate when they die.

So what is wrong with this last solution, which Obama has proposed? 

Nothing. There’s not a damn thing wrong with it, unless you happen to be a billionaire looking for ways to avoid ever paying a fair tax on your income.

As previously mentioned, I have plenty of other ideas about how the tax code could be improved. But that simply isn’t and can never be a criticism of a completely rational, non-partisan, sensible, and obvious solution to a single, discrete problem in the tax code.

The Carrot Spatula

Have you ever found yourself cooking meat and onions and at the same time holding a raw carrot? If not, you should try it, because it’s fun.

Have you ever been slowly poisoned by something without really noticing? It’s generally something considered “inadvisable.”

Anyways, now you can COMBINE your desire to not be slowly poisoned to a cruel and painful death WITH your desire to hold and consume a raw carrot while cooking meat and onions.

I call it… The Carrot Spatula.

Here’s how it works: You take the fork out of your right hand and stab it partially into a piece of meat so that the sharp tines are muted. Then, you take the carrot, and you use its blunt, crisp, delicious end to stir the meat and onions. This allows you to consume your meal of meat and potatoes without risking the consumption of any toxic poisonous flakes of non-stick frying pan.

Plus, it makes your pictures look WAY better. First, check out this perfectly gorgeous-looking full-colored pan of food.

Now, compare this ugly, sepia-toned picture of THE SAME FOOD sans carrot.

Tragic.

AND BONUS —

Your carrot is likely to soak up freaking delicious meat and onion juices, fat, and spices, and thereby increase its flavor factor substantially WITHOUT ceasing to be an official health food.

Brought to you by your local carrot snapper (person from Utah).

 

A Better Primary System

1. Let Iowa and New Hampshire continue holding nominating contests in early February.
2. Then, sort all remaining states (and voting territories, like Guam) by size, and classify them into three tiers, with an approximately equal number of delegates at stake in each tier.
3. All states in the first tier (the smallest states) vote on the second Tuesday in February.
4. Tier two votes on the second Tuesday in March.
5. Tier three votes on the second Tuesday in April. And then you can hold the conventions in May.
6. Tiers 1 and 3 rotate places every four years.

WHY SHOULD WE ADOPT THIS SYSTEM?

The current primary system is a mess.

Almost every state is faced with a dilemma: 1) leave the primary where it is and resign oneself to a state of irrelevance, or 2) move the primary inexorably earlier, wasting millions, or even hundreds of millions of dollars (as in the case of California in 2008) just in the transaction costs of hosting Presidential primaries separately from local primaries. The alternative (moving all of the local primaries earlier and earlier every year) is likewise sub-optimally palatable.

The public are forced to coexist with an inexorably lengthening election cycle, in which national elections have become a near-constant phenomenon.

Those few states that take a moral stand and refuse to move their primary to gain influence are punished for it.

Finally, the primary system is lumpy. Some states’ primaries are all alone amidst a sea of media coverage. Others’ are all clogged into Super Tuesday.

It is, quite simply, a senseless mess. And, everyone knows it.

If everyone knows and agrees that it is a mess, then why hasn’t anyone changed it? 

That’s a great question. One might similarly ask why Congress never seems to get around to passing budget bills until the government is brought to the brink of collapse. The simple answer is that a complex system with many stakeholders contains a lot of obstacles to doing things. Few states have a strong interest in reforming the primary system. But, the traditional first few states have a very large interest in retaining their primacy.

Plus, not everyone has coalesced around the same solution yet. A lot of people would like the states to all be equal. Iowa and New Hampshire want to retain their primacy. Some people think that the race fundamentally changes once the first couple of actual votes are cast and recorded, and so it is a good idea to put a couple of states without a ton of delegates a bit ahead of everyone else, so that the system has a chance to adjust to whatever happens and really vet the candidates. Some people want a drawn out primary, so that the candidates are more thoroughly vetted. Other people advocate a shorter primary, so that the eventual winner is less damaged by the time they go up against the opposition.

This system gets around those concerns. 

By retaining Iowa and New Hampshire as the first states, this plan simultaneously avoids pissing off those states and retains the advantages of having a couple of states out front for early vetting. The inhabitants of both states are actually quite used to performing this job, and take cultural pride in it. Anyways, they really only have a few delegates between them, so it doesn’t make that much difference to everyone else.

Then, this system puts all of the other states on equal footing with eachother. Under this system, there are no states that are truly irrelevant, as there is a substantial possibility that any given competitive election will still be undecided by the time it gets to the third wave.

In the current system, campaign events are heavily concentrated in the first 4 states, and almost non-existent for states whose contests occur after Super Tuesday. This system would allow candidates to focus their efforts in states that are conducive to their message. All states would see campaign events.

By the same token, we should do away with the electoral college, and enter an era of true representative democracy.

Just saying.