Citizen Economists » taxation

Digging into the numbers

Christopher Briem — Mon, 06 Feb 2012 17:15:58 +0000

So I lied. I did. But don’t expect much more this week.

Anyway we are getting there.. albeit slowly. Read the PG piece today carefully please: Allegheny County reassessment favors properties with higher prices, review finds…. and the penultimate comment. :-0 Seriously though, I would concur with and beyond what the PG is observing in their ward by ward level analysis. In fact the regressivity of property assessments is a bit starker than you can see when looking ward by ward as they do. Ward by ward tend to even out what is clearly true that the new assessment values are progressively more under assessed (or is the semantics better described as regressively more) for higher valued properties. By the time you get to $300K properties it becomes undeniable yet those are some of the angriest people out there.. at least from whom I hear from directly.

BTW.. note also relevant PG letter to the editor today on topic.

This is entirely an artifact of self-selection, but it is remarkable how many home owners in Shadyside and Squirrel Hill or environs have talked to me about how their own properties were overassessed. Look at the Post Gazette numbers and you begin to see what is incontrovertible that pretty much everything valued over 150K (I would put the point lower actually) is under assessed. As you get into higher valuations the level of underassessment can be quite large. You can go back and look at my own graphing of sales value to new assessment numbers and for properties valued over 100K or so there just are very very few sales in 2010 that came in at values below new assessment values. Virtually all sales transactions are coming in above the new assessment values and far above the old assessment values.

Just a point in passing, but note the clear PG point: “properties that recently sold for between $100,000 and $150,000 were, on average, accurate.”

What the PG analysis does not get into at all is how under assessed the higher valuations are in the current assessments. I think equally incontrovertible is the observation that the base-year assessments currently in use higher valued properties are far more under assessed than in the new numbers. I wish they dug into the comparison of old assessment values to current market values which they mostly skipped in the piece today. But I suspect they will be at this for some time. I do with they did this separately for residential and commercial parcels, but that is more judgment call than anything else. Just lots of different things going on in commercial markets than residential markets in the region.

A point in there is what we should all be focusing on. There is no doubt that the county’s preferred method of ‘fixing’ assessment values though the appeals process is just not a fair way to fix more than extreme cases. If there are systematic problems you want to do it uniformly because the access to quality appeals is going to be highly self-selected with income. I hope someone tracks the appeals process to see if any value changes make the inequity issues being observed better.. or if things wind up worse in the end.

Also with appeals there is a bigger deal. One of the big problems with the political rhetoric of late is that I am speculating most school districts and municipalities are being spooked out of doing their own fiduciary responsibility and appealing the obviously low valued assessments. Just as individuals will appeal their own valuations to get a fair assessment.. if no taxing body appeals the obvious underassessments there are significant tax revenues being left on the table. But I bet the political climate prevents that routine administrative action from taking place. How big a deal could it be? Well.. just looking at the Post Gazette’s own data.. just looking at the 14th ward alone it says the average underassessment to market is 9% on an average market value of 287K. I’ll add a number that there are 10,718 parcels in the 14thWard… so you can do the multiplication of what the total value lost to tax revenues is notionally if you want. That is just one ward mind you. Someone should do the calculation of what the tax revenue lost in the current base year assessments is for the same set of properties which is going to be a much bigger number. Maybe the county should be assisting local school districts in identifying potentially over assessed parcels and assisting with those appeals. Probably not.

Which gets to my comment in that. Property per property the underassessment of the higher valued homes has a far bigger impact on tax revenues at the end of the day. So even fixing half of that underassessment will result in millage adjustments that will in the end benefit lower valued homes that I bet are proportionally higher to lower valued parcels.

and at the end of the day we just miss the forest for the trees. Set aside the level of accuracy in the assessments, new or old, take a look at that table and the average sales value of property in Knoxville! Isn’t that the story here in the big picture.

For the folks really parsing this. I like the fact the PG looked at the most recent sales, though I wold prefer folks parse commerical and residential parcels separately. There just are some very different things going on in commercial markets here than in a lot of our residential neighborhoods. Also from what I read in the court filings the cutoff of sales data for this assessment happened early in 2011 and more reflects valuations from 2010 or before. Given there is little dispute some neighborhoods are seeing appreciation in the most recent years, it begs a situation where some folks might really want this assessment to conclude quickly. If we do this next year again those in appreciating neighborhoods may see even bigger changes than they are seeing now. At least that is what the PG’s version of this all is saying to me.

and for thos really wondering.. it’s Newark airport.. what else am I supposed to do? Those who have been here understand. Though I have to say it is a far nicer terminal than when I first flew through 30 years ago flying Peoples Express and buying the ticket on the plane. Can you imagine what TSA would say if someone tried to restart that business model?!

A fueling fable: Consumer protection issues with payments

Ajay Shah — Thu, 02 Feb 2012 15:00:46 +0000

On 22nd December 2011, we purchased petrol worth Rs.100 from an Indian Oil fueling station in Bombay using an ICICI Bank debit card. The receipt suggested that we could have saved a fuel surcharge of 2.5% had we used an Indian Oil Citibank credit card. Upon seeing this message, we asked the cashier at the petrol pump if we would be charged 2.5% over and above the Rs.100 that we paid for the fuel. The cashier assured us that only Rs.100 would be debited from the account linked to the card. The chargeslip and the receipt were:

The chargeslip

The receipt

A couple of days later, we viewed the account statement online and found that the relevant transaction had been recorded. A full week later, we observed that an additional charge of Rs.11.03 had been
debited from the account for the same vendor. Not only was the entry unusual, the charge did not match the 2.5% figure which was mentioned on the transaction receipt:

The statement

We wrote to the bank asking them to explain the transaction. The bank explained that for fuel purchased at non-HPCL petrol pumps, a surcharge of 2.5% of the fuel cost or Rs.10 (whichever is higher) would be levied. A service tax would be levied additionally.

There is a consumer protection issue here. After the account had been debited, and up until we sought a clarification from the bank, we were not made aware of the surcharge. The chargeslip gave a false impression of the amount being paid.

Upon delving further, we find various websites where people have complained about this surcharge being confusing. Further investigation revealed an interesting combination of participants:

The surcharge on fuel is mentioned in the fine print in Terms and Conditions of a debit card.
The bank that deploys the POS machine (acquiring bank being Citibank in our example), at the end of day, surcharges the higher of 2.5% or Rs.10 and sends it to the customer’s bank (issuer bank being ICICI Bank in this case).
The issuing bank then creates a separate debit in the customer’s account for the surcharge
The acquiring bank shares much of this surcharge back to Oil Marketing Company (Indian Oil in this example).
Contrast this with typical debit card processing fees in India around 1.5%. In most cases, merchants will inform a customer before surcharging, and the value on the chargeslip is what the
customer pays.
Many banks apply these surcharges weeks or months after the transaction actually occurs, which helps ensure that most customers do not understand what is going on.

When paying for fuel in India with a debit card, the customer pays the surcharge by being misled, the Oil Marketing Company makes higher profits, the charge is administered in a non-transparent way, and is posted late when the customer may not even recall the
transaction. Thus, Government owned companies and banks have created a perverse incentive, whereby customers prefer to use cash rather than pay electronically.

Best and Highest Value Use

Christopher Briem — Mon, 30 Jan 2012 15:10:08 +0000

So this is interesting and no, this isn’t really about assessments. I mean, it is about assessments, but there are so many bigger issues rolled into this new legal development.

In the new litigant a week merry-go-round in Judge Wettick’s courtroom (it really must be getting crowded), the latest is the (collective) property owner of one R.J. Casey Industrial Park who has a slew of issues.

One of many points is a contention that it is against Pennsylvania’s uniformity clause to assess commercial property differently than residential property which is indeed how it is done here and most everywhere else. Problem with that is that commercial properties across the state have been assessed different than residential properties for decades. So I will let the attorneys fight over that one, it is just one of the issues.

Then they seem to point out the dearth of information on the assessment. Here are points 16 and 17 in their filing:

16. Regarding commercial properties, the Property Record Cards available for purchase on the Third Floor of the County Office Building, do not contain any information on the New Assessments.

17. Accordingly, unlike residential property owners, commercial property owners evaluating their New Assessments have no access to any information that the County used to determine the New Assessments.

Lots of capitals in that, but to be sure I feel their pain. Though I do get a chuckle of someone really digging up (and dusting off) a property record card and expecting to find much relating to the latest machinations written down in ink. Are those things still written in cursive? For the record, the online information is just a small part of what what went into determining new residential values. I see no reduced form from any of the many regressions that were used. ‘Comps’ are at most part of the equation and many overinterpret their role in the assessment I am pretty sure. There is a funny story back from when the original 2001 Sabre numbers came out which didn’t really used comps the same way CLT did. The county web site did not list any ‘comps’ for a property, but people so expected to see them that eventually the web site was altered to show a few comparable properties that were picked ex post… though the properties listed really had no specific input into setting a particular property value becuase of the way the Sabre Systems algorithms worked. (that is a very short version of a very very long story.. but I digress).

To be fair I should go back to point 15 in the filing which is clearer and shows they did start out digitial:

15. Regarding Commercial Properties, the county provides no information online regarding the comparable sales used to determine New Assessments or even the gross square footage of an improvement on a commercial property. The County does provide this information online for residential properties.

Well, some information at least. Otherwise ditto.
Nonetheless, the motivation in the end must be to get a lower assessment and a lower tax bill. First off realize that for commercial property across the nation the standard for property assessment is not market valuation that it commonly is for residential values but “Highest and Best Use of the real property”. For a lot of properties that distinction may not be such a big deal, but for some in certain unique locations it could be a big deal.

So here the property owner is upset having seen their assessment for 6 properties jump from $2.7 million to $11.3 million. A scary 340% increase in nominal value. Even with our notional revenue neutrality it works out to a potential tax increase of 280%, so more than enough to be upset. So.. is the increased assessment some gross error on the part of the assessors, or is something else going on? Could it be the highest and best use for the property has changed?

Again, like the Mt. Washington parking space, we may have found the most exceptional case out there. Is there anything unique about this property?
So where is this property? All of the properties at issue in the filing are located in the otherwise depopulated Chateau neighborhood (why we still call it a neighborhood is another issue since literally no more than 10 people live there.. likely a lot less.. unless you count folks sleeping under the slots machines I guess). The properties in question are all along the riverfront a helf mile from the edge of a property recently redeveloped and otherwise known as 777 Casino Dr. Nice new bike trail cuts through the properties in question and there are some nice marinas there it looks like.

So lets ponder the ‘old’ assessment values which everyone likes to refer to as 2011 values which they really are not. They are, again, base year assessments based on what circumtance were in 2002, if not prior. Yes, the 2002 base year assessment really means that the ‘old’ values were based on what the market would bear for a property in 2002. Back then the idea of a casino was not yet really formed, and even if it was there was no thought the casino would be placed over on the North Shore there where the Rivers Casino wound up. Remember Don Barden really came in with a somewhat unexpected bid and was clearly not expected to beat out the Penguins backed project slated for the Lower Hill District, nor the Station Square locations that everyone was focusing on. The location on the North Shore and the big empty plot of land on the North Shore there was fallow and without anyone really expecting much to be made of it anytime soon. I am pretty sure that was a big drag on all nearby real estate. Even the North Shore Connector was so far from completion, and opposition so loud, that it would not have been reasonable for it to have had any impact on real estate values at the time. Now it is on the verge of opening. Could it not have some positive impact on land values anywhere near it.

So now, 10 years later.. it is not to say there is any vast demand for land over there and I am unclear was nearby development the casino has wrought… but would it really be reasonable to think there has not been any impact on nearby property which. In this case the 5 properties in question are add up to either 5 or 10 acres (I am confued because the itemized parce 22-J-67 is listed as being owned by the URA?? even though there is no mention of the URA in the filing??) of land all effectively riverfront parcels though I am not sure if they own all the way to the river itself.

Someday when we ever really see data out of all this I will work up a map of the value per acre along all of Pittsburgh’s rivers before and after the reassessment. It might be interesting to see how the price gradient moving away from the river has changed over time. It would be an interesting factoid at least to see if any of the vast efforts to redevelop our riverfronts have had any meaningful impact capitalized into real estate values of real estate close to the riverfront. Just imagine the counterfactual if they did not and what that would mean?

So there is a bit of Henry Georgism in the highest and best use construct. It is certainly true that the parcels might not currently be ‘worth’ the new higher assessments placed on them.. but if assessments stay low, and taxes stay low, there will that much less incentive to ever fully develop those properties to the “highest value” use. There is only so much riverfront property near the Casino (and the stadia and the science center) to be had. I think that is the core reason commercial properties are assessed differently to begin with.

I’m thinking there is a future casino-annex hotel latent in the geography there. Best and highest value use?

Education in India at the crossroads

Ajay Shah — Thu, 26 Jan 2012 20:10:35 +0000

The debate

Roughly one decade ago, there was a strong debate in India about how we should tackle the problem of education. There were two
views:

Intensification: On one side were those who felt that nothing was fundamentally wrong; all that was needed was more money. So we should just continue building more government schools and hiring more civil servants to act as school teachers, and we’ll be fine.
Reform: On the other side were the reformers, who argued that the basic incentives in Indian education were wrong. Putting more money down a dysfunctional system was pointless.

The Intensifiers won this debate. An informal coalition of educationists (i.e. the incumbent education system) and leftists came
together, supported by the World Bank, which pushed for mere enlargement of Indian education, without questioning the foundations.

All of us are involved in this story at many levels. At the simplest, we are the customers of the education establishment. We pay income tax and VAT and a few other taxes. On top of this, we pay the 2% education cess. In return for this, we get certain educational
services. These influence our kids, and they influence all the young people that we encounter in this young country. Trillions of rupees have been spent, and more than a decade has gone by. It is time to assess the performance of this strategy.

Three blocks of evidence are now visible, which tell us that the Intensifiers were wrong. The old strategy, which was invigorated by a
vast rise in spending, was the wrong one.

Evidence #1: OECD PISA results for India

This story is well told in a recent blog post by Lant Pritchett. Bottom line: The first internationally comparable measurement of what children learn has been done. The sample correctly includes urban and rural children; it correctly includes children going to private or public schools; there are no first order mistakes in what was done. It tells us that Indian education policy has failed miserably: the results have come out at the bottom of the world.

Evidence #2: ASER 2011 results

Pratham has been running surveys which measure characteristics of children and schools in rural India (only). Their latest survey results, for 2011 show the following facts.First, rural kids learn less at public school. Here’s a simple example of what the evidence shows. Surveyors ask kids in class III to recognise numbers upto 100. Here are the numbers, for the proportion of kids in class III who cannot recognise numbers upto 100:

In 2008, the failure rate with private schools was roughly 17 per cent. Government schools were much worse at over 30 per cent. A short three years later, conditions had deteriorated sharply in government schools. The failure rate had gone up to 40 per cent. Private schools had also worsened slightly, to a failure rate of 20 per cent. By 2011, a big gap had opened up between the two: private schools are failing to teach 20 per cent of the kids while government schools are failing with a full 40 per cent of their kids.

Parents in India face the choice between sending their children to a government school, which is free and serves a mid-day meal, versus sending them to a private school where they pay fees. Yet, an increasing fraction of parents choose to send their children to a private school, paying tuition fees from their own pockets, while government schools are free. The relationship between a parent and a private school is a transaction between consenting adults. The relationship between a parent and a government school involves all of us, because we are paying for it.

Given the low income of parents in India, their use of private schools is a striking indictment of what the Intensifiers have wrought:

At class II, the fraction of rural children in private school went up from 19 per cent (2007) to 23 per cent (2011). At class VII, this
rose more slowly to levels slightly above 20 per cent.

Evidence #3: CMIE household survey

CMIE has data for the year ended March 2011 about the behaviour of 169,492 households, about their expenditure on school/college fees and tuition fees. Here’s the picture for the quarter ended September 2011; all values as percent of overall expenditure:

Income class	School/college fees	Private tuition fees
Rich – I	4.79	0.66
Rich – II	3.79	0.51
High Middle Income – I	3.54	0.63
High Middle Income – II	3.12	0.65
High Middle Income – III	2.44	0.68
Middle Income – I	1.93	0.59
Middle Income – II	1.62	0.45
Lower Middle Income – I	1.38	0.49
Lower Middle Income – II	1.05	0.60
Poor – I	0.76	0.58
Poor – II	1.13	0.28
Overall	2.10	0.57

If parents chose to stay within public sector schools, their expenditure on fees would have been zero. The table shows that across
all income groups of India, there is movement towards private provision of education, both by paying fees at schools and by paying
for private tuition classes. These two elements add up to 2.67 per cent of overall expenses of households. (The CMIE household survey separately measures expenses on books, journals, stationary, additional professional education, education overseas, hobby classes and other education expenses. This helps us gain confidence in the extent to which the two fields in the table above narrowly pin down the feature of interest).

These decisions of well intentioned parents are the strongest indictment of education policy in India. The product being given out
by the Intensifiers is such a terrible one, the parents of India are walking away from it even though it is free and the alternative is
not and the parents are poor.

Implications

For more than a decade, the Intensifiers have controlled Indian education policy. They have said: Leave education to the education
establishment, do nothing radical, just give us more money, we will deliver results. Now we know that they were wrong. They took the money, but failed to deliver the results.

Kapil Sibal has said that his ministry should not be held responsible for the stream of bad news that is coming out. This seems to me to be dodging accountability. His ministry is responsible for Sarva Shiksha Abhiyaan, for the Right To Education Act, for blocking OECD PISA from being done in India, etc. The bureaucratic consensus of his ministry represents the education establishment.

This brings us to accountability. If a contractor took money from you, and failed to deliver on building your house, you would sack
him. (You would also take him to court, to recover the money that was paid to him, for services not delivered). In similar fashion,
education is too important to be left to the educationists. We need to start over.

What is to be done

We need to start over in the field of education, with a fresh management team, one that is not a part of the status quo, one that is rooted in the worlds of incentives, public policy and public administration.
The flow of public money into the status quo needs to go down sharply. There is no reason to put money into something that fails to deliver the goods. First we must prove that a mechanism delivers results, and only after that should we put money into
it. This is the common sense that a housewife would apply. She would not spent gigabucks on promises from people who have failed to deliver.
OECD PISA measurement needs to take place every year at every district.
The education cess was always a mistake and needs to go. Public expenditures on education should always have come out of general tax revenues; there is no need to have a cess.
Civil servant teachers, who have tenured (permanent) have no incentive to teach well, regardless of their qualifications or high income. We can’t sack them, but what we need to do on a massive scale is to stop recruiting them. The existing stock can be reallocated to other civil servant functions where staff is in short supply. Through this, it would become possible to whittle away at the accumulated stock over the coming 20 years.

Homework

Christopher Briem — Thu, 26 Jan 2012 15:05:09 +0000

It’s like the county is giving me programming homework.

OK. All ‘new’ assessment values for City of Pittsburgh commerical parcels are in a comma delimited file online here. Just two fields, Block and lot number (one field) and the 2012 assessment. Scraped with this program if you are interested.

So the top 10 new commercial vauations in the city that I come up with are….

500 Grant St. $242 million
Rivers Casino $242 million
1 PPG Place $238 million
600 Grant St. (aka Steel Tower) $233 Million
301 Grant St. $167 million
1001 Liberty $149 million
500 Ross St. $102 million
210 6th St. $98 million
401 Liberty $93 million
625 Liberty $92 million

So yes, I am sure they will all appeal and some may be overassessed. But it begs some questions on others. Look at the Steel Building (or Steel Tower or 600 Grant St. or whatever its moniker is these days). $233 million dollar assessment, but it is reported to have sold for $250 million last year all while it paid no real estate transfer tax on the deal. In past years the City of School District might have appealed against the assessment, but I suspect the political climate precludes that happening this year. This is speculation, but that steel building sale may be setting the market in the valuations.

Likewise the casino valuation will be appealed (again?), but realize that since it’s base year assessment value set all sort of things have happened. The law changed allowing them to engage in the much more profitable table games was enacted and in a sense that would impact what the property is worth. For an establishment reportedly set up with $800 million in investment, you think it might be worth a third of that in the assessment valuation?

I have an idea.. they would need to change some laws for this to happen, but for anyone really balking at their assessment valuation then the fallback could be to use replacement cost.

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At Least They’re Upfront About It

Simon Grey — Mon, 23 Jan 2012 20:00:33 +0000

The University of California wants to enslave students:

The students’ proposal fits right in. Instead of paying tuition – currently at $12,192, not including mandatory fees, room, board or books – the “UC Student Investment Proposal” would require that students commit to paying 5 percent of their annual income for 20 years after graduating.

…

Students who pay $2,500 a year – 5 percent of $50,000 – for 20 years, would end up paying $50,000 for their education, slightly more than the $48,768 they would pay over four years if UC tuition were frozen at its current level.

On the other hand, students earning $100,000 would pay $5,000 a year, or $100,000 for their education over two decades.

This is basically no different than the student loan scam, except in that it may possibly be cheaper for students. It functions the same way as student loans—you basically have to work for someone else for an extended period of time, making you essentially an indentured servant. This will thus be the its downfall: it’s too direct about enslavement.

Expert says: Money spent on gold is practically wasted

Bron Suchecki — Wed, 18 Jan 2012 14:55:28 +0000

Regular readers of this blog know I watch reports from Vietnam as an indicator of how Governments deal with large flows of money out of fiat and into gold. Non-first world countries feel this more I think and thus they give us a view into the future as to how first world countries will respond when they get hit with a real loss of faith in the ability of fiat to hold value over time and/or a view that there are few productive investment opportunities in the economy.

This Mineweb article on India raising import taxes on gold and silver has some interesting quotes in this respect:

“…this hike will discourage imports … that is what the government wants, since imports have made a huge dent in India’s growth story and growth seems to be flagging”

“The shift away from financial savings to something which will just lie in lockers around the country could be a large contributing factor to lower growth…”

“Another expert with a nationalised bank pointed out that money locked up in the yellow metal effectively disappears from the economy to become jewellery or sits idle in cupboards and bank lockers.”

“Money spent on gold is practically wasted and it is also excluded from the financial intermediation system. Imports needed to be curbed.”

“The massive jump in gold imports has also led to an increase in current account deficit.”

No surprise that most of this plays on the “gold is useless” meme. In actual fact I agree with that. One’s savings are better invested in productive businesses and entrepreneurs rather than an inert metal.

However, what the financiers, technocrats and politicians don’t get is that movements into gold are a clear signal or vote by savers that the economy is crap. The solution is not to block the signal, but to solve the underlying problem. Actually the way to solve it is to get out of the way and stop fiddling with the economy but that would put them out of a job I suppose.

What these guys are doing is taking painkillers so the pain in their chest won’t bother them. Then they’ll all be surprised when they get a heart attack. Indeed, money flowing into gold is painful. That’s the point.

Steerage lost

Christopher Briem — Fri, 06 Jan 2012 14:55:00 +0000

I said recently that it would soon be All Assessment All the Time for much of the 2012. It was no joke. Think I could get away with writing on something else today? Guess not. Some quick hits:

PG talks about possible contempt of court outcomes in the latest develoments. Truth is I am quite sure the county (the county itself, or its apparachiki in their official capacities) has most certanly been past the point of possible contempt citations many times in the past in all of this. The problem is, as I am sure Judge has pondered, what exactly does that mean? Does the Judge really want to be in the situation of holding a County Executive in contempt. Then what? Put his top functionaries in jail or fine them? Seems pretty unfair to do it to the underlings, but just impractical to do much to the top dog. Fine the county $ per day for noncompliance? Well then, who is going to collect from the county if they prove to be continuingly uber beligerient? Would county sheriff go around serving the county executive or otherwise enforce the judge’s rulings. All becomes painfully more complex than even it is now and I suspect Judge Wettick has considered all that in detail. Likely would get other common pleas court judges involved in related rulings that could themselves be inconsistent in the end. Not good.
So if it is true that commerical values went up by 71% in the city of Pittsburgh, then to follow up on my post yesterday on the distribution of changes in assessment values, and the winners and losers that result, here some back of the envelope calculations. Roughly I think 60% of city property tax revenue is from residential and 40% from commerical property. If you don’t believe commercial is that much of total revenues then remember this graphic which shows a huge, almost entirely commerical, Downtown impact all by itself. So if residential values went up on average 46% and commercial went up by 71%, it means the overall average is more like 56%. The article says it is 57.89% (there are some significant digits for you). Now go back to the distribution I put up there yesterday. If millage is adjusted based on that calculation even roughly, then it is more lopsided and OVER 2/3rds of all city residents would see their property tax revenues go down resulting from the new assessment, yet people are univerally livid. At the same time barely any public anger over the county’s recent 20% property tax rate increase. I am missing something.

Further it means it is now far less than 5 percent who would expect to see taxes go up by 100 percent or more. More like 3.5 percent now. I really need to see if I can calculate a total estimated savings in $$ from all the homes that lose out if there really is going to be no assesment. Must be some dollar amount to all of that,

For school districts or other municipalities worried about a month delay in getting their property tax revenues through the door… realize that short term municipal paper is yielding close to 1% or less (at an annual rate) interest these days. What does that work out to for a month or so? So all I have to say is: Tax Anticipation Bond. Done all the time in lots of places quite routinely for precisely the same reason as may be needed here (without the soap opera of course). What is routinely dealt with as a matter of routine elsewhere is some inconceivable trauma for us. Can be said for more than assessments of course as well.

and yes.. there will always be assessment mysteries. The Casino which supposedly had well over $400 million in construction costs, something like an $800 million total cost, is still appealing it’s $199 million dollar assessment.. an assessment which I think was set before they got their approval for table games which would impact an income based assessment.

The old RET and older Alcoa building is upset over an assessment increase from 10 to 30 million. This is for an entire skyscraper. Scrap aluminum is pretty expensive these days. Might be 3-4 million in aluminum value alone in there, let alone the value of the XPlorion. That cost a million to install I bet at one point. Whether it counts in the cost of the building these days would not even be a rhetorical question.

On this notion that canceling (I am struggling with the correct verb to describe what actually happened yesterday) a new property assessment will help property values in the county.. what will be the impact of the years of uncertaintly and confusion this is going to have on property values in the future? High taxes are one thing, but not really knowing what taxes will be is another thing altogether. Sometimes the devil you know…

Crystal ball. Barring some quick resolution. If no reassessment I suspect there will be strong patterns in the new (’old new’?, or ‘new, now old’?) assessment numbers that correlate with race in some way which will prompt some sort of filing in Federal court on this and I suspect the Federal bench in town are collectively Wettick supporters. Just a guess.

and just from the archives. October 19, 2009: “We’re here because of the Supreme Court’s mandate to me,” Indeed ……….Ditto

Eliminate the Complexity

Simon Grey — Wed, 21 Dec 2011 14:55:10 +0000

That’s my recommendation for the corporate tax:

Those advocating a cut in the corporate tax rate today generally ignore the tax on dividends, as well as many other provisions of United States and foreign tax law that may reduce the effective tax rate well below the statutory rate.

A recent study found that only 25 percent of the largest American corporations pay anywhere close to the statutory corporate tax rate of 35 percent on their earnings, while 40 percent pay less than half that rate.

Indeed, General Electric, the nation’s largest corporation, paid no federal corporate taxes in the United States in 2010, according to a report in The New York Times.

The sheer diversity of effective tax rates binding corporations—even though there is only supposed to one rate—suggests that the corporate tax rate is being used as a political tool. This perception is certainly encouraged by GE facing an effective rate of zero. If, as the current evidence suggests, the corporate tax rate is used as a political tool for punishing and rewarding certain corporations, then perhaps abolishing the corporate tax rate would be a good step.

While abolishing the corporate tax would not lead to massive economic growth, it would certainly be a step in the right direction. In the first place, corporations could actually focus on producing things instead of playing pointless political games. Furthermore, government costs could be slightly reduced—the natural result of reduced compliance requirements and the corresponding enforcement costs.

While corporate taxes do not apply to the vast majority of businesses, nor do they account for anything but a minor amount of tax revenue. However, this is no reason to accept an incredibly stupid, highly politicized tax system.

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Solid BitCoin Consolidation Finally Bears A BitCoin Breakout

Trace Mayer — Tue, 20 Dec 2011 20:00:21 +0000

Few assets are as volatile as BitCoins have been. Over the past 365 days they have ranged from about $0.05 to over $30. After a solid consolidation BitCoins have now broken out and the next upleg appears to have appeared with a 35% rise in the past 10 days.

BitCoin makes this payment efficiency possible because it is based on cryptographic protocol where its security is grounded in the laws of mathematics not laws of men which may or may not be enforced profitably.

THE BITCOIN RANGE

Back in June 2011 I wrote about how I supposedly missed the trade of the year where I could have “with a completely non-levered investment that would have turned [$5,000] into slightly over $550,000 in 8 months. $550,000 in a completely anonymous account with neither a paper or audit trail nor a 1099 and the asset would have been purchased with $5,000 of physical cash.”

Some say hindsight is 20/20, but I do not think so, because it still takes the gathering, analyzing and understanding of the data before one can get a picture and sense of what has happened. Before there were no data points to use in predicting the sustainability of the unsustainable BitCoin upleg. But this time around we can make slightly more grounded prognostications.

Filtering out the daily noise of the markets is essential if one is going to hone in on the signal. One of my favorite tools to accomplish this is the simple 200 day moving average. Taking into account almost seven months of data it is long enough to filter out daily noise, like the MF-Global or MyBitCoin fiascoes, but still close enough to capture the general trend of long-term secular markets, whether bullish or bearish. To derive a relative price I take the current price divided by the 200 day moving average.

In BitCoins case we now have a tremendous upleg and crash in the history books. An analysis of the data reveals the low end of the relative price is around 0.35x (cheap) while the high end was about 12x (expensive).

To create the organized cryptographic hash required energy which had value in the market.

BITCOINS PROVIDE UTILITY AND ARE VALUED

BitCoins are a decentralized peer to peer digital currency. They are the most efficient and safest form of currency I am aware of. Sure, they have neither the intrinsic value nor depth of volume like gold but they are still harmonious with the regression theorem. To create the organized cryptographic hash required energy which had value in the market just like gold had value in the market for jewelery before it acquired additional value from its utility from moneyness and currency applications.

For example, I was reading a blog which recommended the application Total Finder. Total Finder allows one to open multiple tabs in the Mac Finder which makes dragging, dropping or locating folders and files much easier. It is a feature that should be built into the OS but is not so a creative entrepreneur saw a market need and filled it.

I immediately recognized that this application would save me time and decided to purchase it. The price was $18 and it is available in the Apple store. Then I did a Google search for “Total Finder bitcoin” and found the author’s article Trade Total Finder for BitCoins. As expected there was a discount, 50%. Why is that?

Because the current payment systems are too expensive. Apple takes 30%, the credit cards and processors take 1-7% and require the identity of both the buyer and seller along with sales and income taxes which are much easier to enforce plus your accounts can be arbitrarily frozen like with the Wikileaks banking blockade. By removing all these middlemen moochers and looters from the transaction both parties are better off with a 50% discount in price.

I think everyone should hold some BitCoins, perhaps at least 0.1% of their net worth, in their portfolio.

BITCOIN VOLUME HAS INCREASED TREMENDOUSLY

The rise in BitCoin’s exchange rate has surprised me. First, BitCoins are currently being inflated at approximately 42% per year. That is quite the increase in the currency supply. Second, early adopters are sure to control tremendous amounts of BitCoins and I would think they would be divesting themselves as the market would bear without sinking the price too drastically and third the BitCoin economy is still in its infancy.

Over the last six months I have watched the average transactions in the public block explorer grow to about $1 million per day. The exchanges have increased their trading volume from about 40,000 coins per day to approximately 200,000 on 19 Dec 2011. With about 8 million BitCoins in circulation there is plenty of volume to provide a bid for any early adopters who decided to disgorge large amounts of coins.

BitCoin is an illusion like the FRN$, Euro or Yen. The market is deep enough that I would place it in the cash portion of your balance sheet. Additionally, if you take the proper steps it is the most portable money ever. For that element of safety and liquidity therefore I think everyone should hold some BitCoins, perhaps at least 0.1% of their net worth, in their portfolio.

CONCLUSION

Watching this breakout and ensuing upleg in BitCoins is going to be exciting. Since the last rally in June there have been real life applications developed from mobile payments to massive online stores with hundreds of thousands of items, entrepreneurs have stepped in to accept BitCoins as payment, the client has been greatly improved, exchange security has been enhanced, with proper privacy hygiene your cryptographic hash is more secure than even a gold coin and more people understand what BitCoins are, how they work and why they want some.

Taking the current price of $4.00, the 200 day moving average of about $8.50 and extrapolating this upleg with a 12x 200dma top we could see a price of around $80.00 per BitCoin. Is this speculative? Yes. Would I bet on seeing $80 per BitCoin by around June or July? Maybe if the odds are around 5%. But I would take a bet for BitCoins to hit $7.50 by June or July at around a 50-70% probability.

So, if you want to buy any Run To Gold products using BitCoins just contact me and we can make a deal with a substantial discount. If you need a place to get any BitCoins then I recommend the Tradehill exchange.