Who will pay for Gillum’s 41% corporate tax increase proposal?

Andrew Gillum, a candidate seeking to be Florida’s next governor, is proposing to raise the state’s corporate tax rate from 5.5% up to 7.75% (a 40.9% increase) in order to pay for giving teachers a $50,000 per year salary, “raising the state’s minimum wage to $15 an hour, and enacting a Medicare for All policy.” For many, this sounds like a great idea to hit those greedy corporations where it hurts — in their bank accounts. That is until you get into the details of such a proposal in action.

First, and foremost, the proposal, if it ever saw the light of day, would supposedly bring in just over an additional billion dollars to the state coffers. Currently, it brings in around $2.5 billion and theoretically it would bring in $3.52 billion. Many have questioned if an extra billion dollars would pay for all of what Gillum is claiming.  More importantly, if Gillum made it into the Governor’s Mansion, such a proposal would have to be passed by the Florida Legislature for him to sign and that would be quite the feat.

Who would pay this 41% increase in corporate taxes?

Gillum and spinmasters would have you believe those greedy capitalistic corporations would be paying; however, the reality is Floridians will be hit with the tax increase. Corporate taxes are simply a conduit for which consumers pay. If a corporation pays 5% or 50% of their profits in corporate taxes to any government entity, that tax is ultimately paid by their customers a/k/a us as part of every transaction.

Will it raise the $1 billion it says?

Not likely. Many corporations will strategize to reduce their tax exposure so they can remain competitive and keep their prices low for their customers. There are no concrete figures but many believe it will likely bring in an additional $500-600 million. No matter the figure, it is far short of what Gillum is selling or able to deliver.

Unintended consequences…

Although I say “unintended” anyone with even a rudimentary study of economics or having been in business for any length of time, will know the following are what will happen under such a proposal. The proposal would hurt most those who it is intended to help. It would hurt those seeking employment as employers will not hire as many workers, businesses will be forced to let some workers go — finding more efficient and less expensive means of production, and prices of goods & services across Florida would rise. So, in a nutshell, if the proposal was ever enacted it would hamper the economic growth in Florida.

While some will vote for Gillum thinking they are helping the poor, helping teachers, and helping those with serious medical conditions; they are actually doing the complete opposite. And yet others are considering voting for Gillum in order to create a blockage from any legislation from getting through considering we have a Republican-controlled state legislature. There are some of Gillum’s platform to be supportive of; however, his corporate tax plan is not one of them.

If Andrew Gillum truly believes in his tagline #BringItHome he would eliminate the state corporate tax and allow Floridians to keep more of what they earn rather than feed it to those “greedy corporations” and the even greedier state government.

It is everyone’s responsibility to research the candidates running to be Florida’s next governor and spend some time to research whether their platform will have the intended consequences if enacted. Go beyond the rhetoric and the shiny headlines and see if it actually makes sense in the long run.

Some links for your perusal:

The effects of minimum wage

Why Gillum should do the opposite and decrease or eliminate the state’s corporate tax

Gubernatorial candidates whose name will appear on the November ballot:

Ron DeSantis

Ryan Foley (no website found)

Kyle Gibson

Andrew Gillum

Darcy Richardson

Bruce Stanley

NOTE: Bruce Nathan is expected in court later today to argue his case to be included on the November ballot for governor.

The absurdity of Chicago’s rally of Uber & Lyft drivers

Today, drivers for Lyft and Uber are planning a rally to protest their low “wages” and the abuse some have taken while driving. It is absurd because they are all independent contractors and have the option to leave and do something else.

One female driver said she was tired of being “hit on” by riders. Another driver complains that he is only making a net profit of between $10-12 an hour. Then stop driving and do something else. It’s a far better idea than standing around, spending hours protesting for no money when you could be spending those protesting hours finding another gig or driving.

Perhaps these disgruntled drivers could change their mindset from that of an employee to that of a business owner. This can be seen when a driver describes the revenue and profit he or she generates as “wages.” When I have taken rides with Lyft and Uber, I can tell within a minute or two if the driver is thinking like an entrepreneur or an employee. Almost universally, the experience with the entrepreneurial thinking driver is far better than those who think as an employee.

 

This quarter I have set myself a goal of helping 100 people earn $100,000 in 2019

This quarter I have set myself a goal of helping 100 people earn $100,000 in 2019. Now, while many may scoff at such a goal, it is doable and even might I say, likely. Are you going to be one of the 100? For some I know, $100,000 would be a life changer while others I know, the $100,000 would be a nice addition but nothing too remarkable. Whichever group you are in, you are welcome to join my team to make this come to fruition for you. This is NOT a lottery, this is a business which requires work and dedication to earn honest money.

 

Some of my business background is being a franchisor, so in deciding which vehicle I could use to propel this goal forward it seems like this is the best business model for rapid growth. The only issue with my particular franchise company is that the average investment is around $300,000 — an amount unattainable by most people. So, similar to franchising is direct selling which has many of aspects to franchising, but with a much lower threshold initial investment. This is a business model that I have also been involved, which has been very good to me in the past. As with any new business, participants will need to work hard and follow a proven system to succeed; and though there are no guarantees, I genuinely believe we can have a winning team of 100 people, each earning over $100,000 next year.

 

In my search for which company to align myself with, I chose the long-standing and well-respected company Shaklee.

https://bluesharkhealth.myshaklee.com/us/en/join-options/distributor-benefits

 

Through my Blue Shark Health entity, I am seeking 100 people devoted to growing an international business — your own international business. We will show you exactly what to do based on a proven success model. Do not deviate from this model and we will all benefit, very similar to a typical franchise business model.

 

We are operating in the United States as well as several countries around the world. Joining now is ideal for your future growth and your future earnings.

 

So, I ask that you take a leap of faith by joining my team TODAY so that by the close of this year, your bank account is greater, the vacations you take (some fully paid for by Shaklee) are in the very best locations on Earth, and you ease the stress associated with NOT HAVING ENOUGH MONEY.

 

Lastly, if you think earning $100,000 is too lofty, that perhaps you’ve never earned that much in any year, then, even though we’ll help you get there, set your goal at $50,000, because I know if you dedicate yourself, you can do that! JOIN NOW to make 2019, your best year ever.

 

https://bluesharkhealth.myshaklee.com/us/en/join-options/distributor-benefits

Three Year Update to Permanent Portfolio

So, although the portfolio is doing well overall, I almost feel like Warren Buffett during the late 90s runup of tech stocks. The portfolio has taken a hit over the last six months, while the overall market is running on all cylinders. NVR and Bitcoin are notable hits and the overall portfolio wiped out 50% of gains over the last six months. It is still up over 125% since I posted it three years ago which is an average of over 42% per year. That sounds great, but the original 3% of funds to buy Bitcoin messes with the numbers a bit as it has now grown to be 37% of the portfolio. Not that that is bad, as it was originally a speculative investment, but in the real world I would have sold off a large chunk of it. The four main contributors to the growth of the portfolio have been PYPL, Bitcoin, VSMAX, and NVR. As well, there have only been two securities which have turned in a loss, and those losses are tiny (around $5,000 of a $1 million portfolio). This portfolio is meant to be truly static so Bitcoin will remain whether it goes to zero or to $500k a piece. The portfolio has not fully been tested and for that we will need to wait over time and/or a serious challenge to the traditional markets, not just a correction.

See here: https://karldickey.wordpress.com/karl-dickey-investment-portfolio/

Paul Tudor Jones rolls out “JUST” ETF with Goldman Sachs in effort to ‘modernize capitalism’

Today, June 12, 2018, legendary macro investor Paul Tudor Jones did a commercial free interview on CNBC to promote tomorrow’s rollout of the new ETF “JUST”. Jones is someone I have followed for decades and is someone worthy of respect as he has built a multi-billion dollar fortune while privately preserving thousands of acres of land around the globe. Jones has long had the confidence of life and business strategist Tony Robbins and recently opened offices on Palm Beach, Florida.

“JUST” is based on backtesting the performance of socially responsible companies based on a nationwide poll of Americans to their definition of what it means for a company to be socially responsible. Based on that backtesting it is projected to outperform the Russell 1000 and the S&P 500. As one can imagine, there is a wide array of opinions about social investing and conscious capitalism.

First and foremost, there is nothing wrong with conscious capitalism and I personally would subscribe to many of its standards. Conscious capitalism is completely in tune with the base term of capitalism though some try and twist its true meaning. Before going further, I welcome JUST to the ETF stage so this is simply a brief examination of Jones’ interview and whether we need to “modernize capitalism.”

During the interview, Jones took issue with the Milton Friedman philosophy that the responsibility of a corporation is to return profits to its shareholders. Jones said, “When Milton Friedman said, that tax rates had just come from 91 percent to 70 and income inequality was one-fifth of what it is today. You can see how it was relevant at the time but fast forward to where we are today, it’s a different deal.”

I would argue that trying to redefine “capitalism” or “modernize” the word is an unneeded exercise. People need to understand what capitalism actually is as opposed to the distortions made by many. Capitalism is only the free voluntary exchange of value from one to another. That is it. There is no other valid definition. Where we run into the weeds is when we confuse cronyism and government force with capitalism. When a company uses government force or taxpayer money in the name of “economic development” to advance itself over its competition then that is NOT capitalism. When are corporate uses fraud and other deviant means to profit, then that is NOT capitalism.

An interesting fact not asked of Jones during the interview is that arguably the best investor alive today is Warren Buffett and he has long held through his Berkshire Hathaway (BRK) the same opinion of Friedman. Buffett holds that it is the duty of the corporation to profit well, compensate employees & stockholders, and through an employee’s personal income and investor’s profits of stock to donate to their preferred charity. It is not the corporation’s responsibility to be charitable, but to maximize profits. BRK and Buffett do not believe corporations should give charity directly but it is expected of their employees and shareholders to perform charity on their own terms.  So, while Buffett is personally the single most charitable man in America, one would be hard-pressed to find any meaningful charity from BRK. It is because BRK has grown to such a level that Buffett is able to personally be as charitable as he is.

It is important to bring up Buffett because he is mostly an equities investor as JUST will be as well, while Jones is more of a macro investor which extends far beyond equities. It will be interesting to see how JUST develops and performs over the coming years in its returns to investors and society as a whole. And by the way, although I hold Buffett in high esteem, he is not without his own flagrant crony capitalistic exploits.

Jones and Buffett do agree that the government is a horrible redistributor of capital and it is best to leave it to private business through voluntary exchange rather than forced government takings. Buffett has said, “The free market’s the best mechanism ever devised to put resources to their most efficient and productive use. … The government isn’t particularly good at that. But the market isn’t so good at making sure that the wealth that’s produced is being distributed fairly or wisely.” On the same issue of government redistribution, Jones said during the interview, “THAT’S THE WORST OF ALL OUTCOMES BECAUSE THAT’S THE WORST WAY TO REDISTRIBUTE INCOME.” Through JUST and his other causes, Jones is looking to redistribute wealth organically, outside the inefficiencies and force of government.

President Trump, end ALL subsidies, not just renewable energy

“President Trump’s administration is reportedly seeking a 72 percent cut to the budget of Department of Energy programs related to energy efficiency and renewable energy,” The Hill reports. “Draft budget documents obtained by The Washington Post show the Trump administration will ask for $575.5 million in spending for the Energy Department’s Office of Energy Efficiency and Renewable Energy. The office’s current spending level is set at $2.04 billion for the fiscal year.”

That’s a great start and we should not just isolate this aspect of the energy sector; it should extend to ALL sectors. Renewable energy subsidies distort the free market and keep electricity prices high for all of us. This distortion is true in all areas of government subsidies.

Farm subsidies, crony capitalism, sugar, golf courses, corporate welfare, oil, etc. The list of subsidies provided by the federal, state and local governments is nearly endless. It has become so entrenched in our society that we no longer know the true cost of anything Americans purchase.

So, while the different levels of government in our country try to push various agendas to make our world “better,” they all-to-often go the wrong way and almost always with unintended consequences. Additionally, one cannot forget the corruption that quickly follows most subsidy programs.

Will the new tax bill be as great as some say or as apocalyptic as others say?

“Many politicians tend to be drama queens and are on stage every day with their political theater. Suddenly some on Capitol Hill are talking about how concerned they are with the growing federal debt when they have been voting to increase the debt through dramatic spending programs for years. Apparently, they are betting on Americans either being stupid or having short memories.”

Palm Beach Free Press

The new Tax Cuts and Jobs Act affecting federal taxes was signed into law yesterday, December 22, 2017, by President Donal Trump and depending upon what political affiliation you are with, it is either the end of the world or the best thing since sliced bread. So, let’s try to distill the shrill and get back to reality as it is neither of those things.

First and foremost, we must understand, that according to the Internal Revenue Service (IRS) that over 45 percent of Americans do not pay federal income taxes as they are not required to do so. So, for over 45 percent of Americans, this will have zero impact because they are not paying into the system already. They may be paying other taxes such as federal Social Security and state sales taxes; however, none of those have any bearing on this issue.

If you wish to look…

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