The post-fact universe has arrived

[say1988]

LIFO inventories is only used in the United States and Japan.

I use AVCO tbh since that is more acceptable than FIFO

Why is average cost (I assume) more acceptable than FIFO? FIFO is simpler and (from my experience) generally the official policy of businesses. Even if a company is selling something like nuts and bolts they will want to sell the oldest stuff first. There are some situations where FIFO isn't as good, but in general I would think FIFO is the more logical method.

Depends on the nature of the business, it is possible to be a "profitable" company with a tight cashflow.

In the short term, yes, but you obviously have to convert those profits to cash at some point. And if you are too tight for cash there are signficant issues. Even if your cashflow is tight a business in a good position will have sources of cash that can be used in unforseen circumstances. This example assumes that this does not exist. I seriously doubt there are more than a few businesses that go out of business primarily because taxes made them insolvent that weren't within a cycle or two of hitting that point anyway.

our professor didn't say it was illegal here and she's good about that stuff. Plus we had to learn it.

Depends on what you mean "illegal"
You have accounting standards (which can vary between public and private corporations), tax standards, and internal use. I believe it is restricted to just Japan and the US (and maybe some third world countries) in the first two, however. For example of how they differ, until recently it was allowed for accounting but not tax purposes in Canada (of course basically nobody actually used it in those circumstances).
But internal use it is still allowed and has value in some circumstances (mainly in estimating cost of sales going forward, but there are better analysis you can do).

 

[say1988]

However, I'm surprised that LIFO is used in the USA tbh

It is all about minimizing taxes. It actually makes their financials look worse (lower profit and assets) but saves them money. I think most larger corporations have moved to FIFO because of international operations.

There are also some who argue for it under accounting theory due to conservatism (as costs are generally inflating). But modern accounting theorists are actually moving away from Conservatism wanting more accurate numbers.

 

[WindFish]

Why is average cost (I assume) more acceptable than FIFO? FIFO is simpler and (from my experience) generally the official policy of businesses. Even if a company is selling something like nuts and bolts they will want to sell the oldest stuff first. There are some situations where FIFO isn't as good, but in general I would think FIFO is the more logical method.

I dont know, I was just taught that AVCO is what most people use.

In the short term, yes, but you obviously have to convert those profits to cash at some point. And if you are too tight for cash there are signficant issues. Even if your cashflow is tight a business in a good position will have sources of cash that can be used in unforseen circumstances. This example assumes that this does not exist. I seriously doubt there are more than a few businesses that go out of business primarily because taxes made them insolvent that weren't within a cycle or two of hitting that point anyway.

I see

Mitt Romney pays 14% income tax. How is LIFO in the US a surprise in light of that fact?

Its possible in my country to abuse charitable donations to reduce your taxbill to zero

 

[hobbsyoyo]

Its possible in my country to abuse charitable donations to reduce your taxbill to zero

It's possible here as well. Mitt Romney set an arbitary floor on the % of taxes he would pay and told his accountants to keep his taxes above that so he didn't come off as a tax evader.

Totally serial.

 

[bhsup]

Mitt Romney pays 14% income tax. How is LIFO in the US a surprise in light of that fact?

Just a nitpicky, but it's not 14% income tax. He pays 14% of his income in taxes, but it's probably mostly capital gains tax and not actual income tax. IF he made the bulk of his money via a salary which was subject to income tax, it would be substantially higher. Yeah, I think capital gains should be taxed as normal income, but they're not and I thought I should just point that out here.

 

[hobbsyoyo]

Just a nitpicky, but it's not 14% income tax. He pays 14% of his income in taxes, but it's probably mostly capital gains tax and not actual income tax. IF he made the bulk of his money via a salary which was subject to income tax, it would be substantially higher. Yeah, I think capital gains should be taxed as normal income, but they're not and I thought I should just point that out here.

I know. You've knocked me over this before and I keep making the same mistake.

You're right, most of his tax is on capital gains because that's how he makes his most of his money.

But I am also fairly confident that he his accountants could find a way to <14% in taxes even if he was taxed by regular income tax rates instead of capital gains.

 

[WindFish]

Just a nitpicky, but it's not 14% income tax. He pays 14% of his income in taxes, but it's probably mostly capital gains tax and not actual income tax. IF he made the bulk of his money via a salary which was subject to income tax, it would be substantially higher. Yeah, I think capital gains should be taxed as normal income, but they're not and I thought I should just point that out here.

That makes more sense that his taxes are CGT rather than income tax. Tbh, I would stagger CGT in the same way as income taxes with the same brackets and rates rather than the current system of your CGT rate being based on your income.

It's possible here as well. Mitt Romney set an arbitary floor on the % of taxes he would pay and told his accountants to keep his taxes above that so he didn't come off as a tax evader.

I see.

 

[say1988]

That makes more sense that his taxes are CGT rather than income tax. Tbh, I would stagger CGT in the same way as income taxes with the same brackets and rates rather than the current system of your CGT rate being based on your income.

Just treat capital gains as employment income. If you want a favourable rate I do like how Canada does it, your taxable gain is 50% of the actual net capital gain and that 50% simply gets added to your income pool which makes the rate graduated on the same scale as employment income.

 

[Cutlass]

???

The US federal government spends (long term average, not right at the moment) 20-21% of GDP. State and local governments spend another ~15%. It's got to be paid for somehow.

Er, that's precisely my point. Factoring in transportation necessities, regional cost of living and other such things makes it far too complicated for the federal government to do on an individual level. Hence why tax brackets exist, even though two people with the same income and tax bracket are going to have a totally different standard of living. Just because the census nominally accounts for these things doesn't mean it does a good job of doing that.

But, as I already explained, the federal government already does it. So why do you believe they cannot do what they actually do do on a daily basis and have done for many years?

Explain what you mean by "the driver of the overhead costs is the local components and the fact that there are 2-3 components instead of one"?

1 bureaucracy can do things cheaper than 3 bureaucracies doing the same job overlapping. Economies of scale give the edge to the feds. But it's also true that state and local governments are far more likely to waste money on making the recipient jump through a lot of hoops to get the benefits. People justify that on the basis of eliminating welfare cheats. However as a taxpayer you should want them to not do that, because they waste far more money making people jump through hoops than they save catching the trivial number of cheats.

 

[Chimera Kitty]

Do you even know why Libertarians are aligned with the Republican party ? Do you even have a clue why US libertarians are not in favor of capitalism-libertarianism. but want armed invasions to support capitalism and government suppression ?

When you phrase something in the form of "do you know why x is the case", when x is not the case, this is a logical fallacy called "begging the question".

A few libertarians have joined the GoP as a matter of pragmatism and aligning themselves with the lesser of two evils. The LP, meanwhile, is urging its members to NOT vote for Republicans. Their argument specifically against Romney was that when a Democratic president pushes big-government bills, a Republican-controlled house will try to block them, but if a neo-con or RINO pushes big-government bills, Congressional Republicans typically just play follow-the-leader.

The LP is vehemently against foreign interventionism. "Armed invasions to support capitalism and government suppression" have always been the domain of Democrats and Republicans.

Any reasonable tax system* will...

* I admit that I don't know if the US system is reasonable. Somehow I expect it isn't.

Your expectation is correct. That's why scrapping and replacing the tax code has such a special place in the tiny, black, shriveled hearts of many Republicans.

Try getting a face-to-face meeting with your state senator. Hell, try getting a face-to-face meeting with Chuck Reid. It ain't gonna happen. What makes you think a government based in California having to oversee 50 million people is going to be any more effective at serving the needs of the populace than a government based in DC having to oversee 350 million people is?

CA has 37 million people. These 37 million people get 80 delegates to the state Assembly, 53 Representatives in the House, 40 state Senators, and 2 Congressional senators. Thus, each individual's vote for Assemblyman counts for 40x as much, and a state senator 20x as much, as a vote for Boxer or Feinstein, and 51% more than a vote for Representative. All are in the realm of "Face to face meeting? LOLOLOL"

Curiously, each vote counts for more in the House than it does for the CA state Senate. This is because of two very significant factors, the huge size of the House and California's extremely large population, one of which is exclusive to California and don't really translate to other states. NH, for example, has 1.3 million people served by a 400-member state house, 24 state Senators, and 2 Representatives, so each person's vote counts for 12x as much in the state Senate and 200x as much in the state House as it does in the Congressional House. This also means that each person in the state House represents barely 3,000 people, well within the face-to-face-meeting range.

I'm extremely skeptical of this. As a start-up business-thingy guy, my experience has been quite the opposite. If anything, the tax code is skewed to keep my piddly little venture going for quarter after quarter, year after year, no matter how poorly my cash flow is....

So I live in Long Island City, Queens County, New York City.

Well then, your local tax code is indeed pretty skewed. Not all places are as favorable to business as Long Island City.

here's my experience with responsive government:

I have had multiple in-person conversations with my city councillor, some fewer with my state assembly-person, a couple with my state senator, and several email exchanges with both my House Representative and one of my Senators. The senator who has been entirely unresponsive? Chuck Schumer. Go figure :rolleye: Senator Gillibrand has been fine, but not worthy of mention in this regard. But that's not a mark against her, only that I haven't had reason to contact her.

The exchanges that I was most floored by was with current Secretary of State Clinton - but back when she was a Senator we had a little back and forth about the confirmation hearings for Condoleeza Rice's appointment to be Secretary of State. The responses to my questions may not have been written by her, nor the electronic signature clicked by her, but these were not form letters. Her 3 replies addressed my points specifically. True, it could have been a staffer, but that isn't unreasonable - perhaps a distinction without a difference. As long as my concerns were being communicated, I'm a satisfied customer. In fact, she disagreed with my premise - and told me why. After the second reply I came to see the wisdom in her position. And, frankly, I want a wiser person than me making decisions for me. Don't you?

Lucky son of a...

Citation needed [I learn from the best ]

http://en.wikipedia.org/wiki/Phase-out_of_incandescent_light_bulbs#United_States

Fallacy: a government staffed by nearly 40,000 civilian legislative branch employees can only do one thing at a time.

I never said or implied otherwise :\

However, if you're referring to the federal ban on selling incandescent bulbs, then you're completely mischaracterizing the goal here. Incandescent bulbs are stupendously inefficient. Only something like 20% of the energy they use is converted to light - their very purpose.

There are already other products on the market which are not only more efficient, but also cheaper to operate.

Defending incandescent bulbs is no different than proclaiming the benefits of a rawhide buggy whip in 1910, as the industrialized consumer automobile supplants horse-based transport. Go ahead an die on that pitard if you like, but banning incandescents for domestic use is smart policy.

Unless, of course, you need the heat for something like a reptile tank or Grandma's vintage Easy-Bake oven.

So you want government to be more oppressive and less responsive.

No, state governments are more responsive.

If they had any interest in changing it, then why haven't they done so?

Changing WHAT? Massachusetts had a $1.5 billion deficit when Mittens took over. CA is expecting $15.7 billion in deficit spending this year. The 50 states combined are drowning in more than $4 trillion in red ink:

http://www.huffingtonpost.com/2012/08/28/state-debt-report_n_1836603.html
http://washingtonexaminer.com/study-states-over-4-trillion-in-debt/article/2506157

If they were required to balance their budgets, then where did all of that debt come from? Did some kind of magical Debt Fairy visit their accounting books in the middle of the night?

The point is that in modern political discourse in the US the "libertarians" and the "anarchists" don't know which is which.

That's funny. In my experience, they're the ones who are most insistent on distancing themselves, and it's the more authoritarian/interventionist types like you who can't distinguish them.

Doesn't he kind of define the notion of the post-fact universe anyway?

Honestly, I think The Social Contract was the only thing he wrote that made any sense. This was a guy who claimed that republics were best-suited to temperate climates, despotism to polar climates, and anarchy to tropical climates (or was it despotism to tropical areas and anarchy to cold weather?) because of what the people ate.

Regardless, I consider a reading of The Social Contract to be necessary prior to any discussion about what is or isn't a "right".

This is how it works in the US. Businesses don't pay taxes when they are making losses. They only pay on profits, which leads to misleading accounting tricks, but that's another issue.

If you're talking about income/corporate taxes, then yes, but those aren't the only kinds of taxes that businesses have to pay. Have you ever heard of property taxes?

Also, I find arguing against them kind of like arguing over mileage standards in cars.

Yeah. Both restrictions are stupid.

The main problem with social programs not being handled at a less local level is that the local governments are far more likely to screw over the poor for other political considerations. Particularly race to the bottom economic competitions.

There is no "race to the bottom". There is only a race to determine the true value of things... except when it comes to the environment/pollution/resources, which is a different can of beans.

racism has been a major factor as well.

It's irrelevant, so long as it's contained to the local or state level so people can vote with their feet.

only the federal government can match spending to need when the economy goes south through deficit spending.

Citation needed.

The feds are also far better in keeping the bureaucracy to a minimum

Post-fact universe indeed!

the one and only way for you to pay less at your income is for the wealthy to pay a great deal more.

Or for Congress to spend a great deal less.

Look at the overhead of Social Security compared to the overhead of any state income support program. Whether it is more flexible is a moot point because nearly all the programs are joint fed/state/local programs. And the driver of the overhead costs is the local components and the fact that there are 2-3 components instead of one.

So the primary driver of overhead is that we have local, state, AND Federal involvement in something that really should be handled exclusively by state or local governments.

Big shocker there.

To clarify:
What I was talking about was corporations having profits in reality and losses for tax purposes.

You can have both cases because the government has to set some standards to limit the corporations screwing with the numbers (though they still do with crap like LIFO inventory). This results in taxable and accounting income being different. In addition, due to estimates and accruals neither income necessarily provide an actual picture of the company as they ignore cash flows.

It sounds to me like this "income/corporate tax" is nonsense and has a lot of flaws. Can't we switch to a property or consumption tax?

 

[Rashiminos]

Congressional Republicans squashed a Congressional Research Service report on the economic effects of tax cuts. Andrew Rosenthal comments:


Here's betting you won't hear much if anything about this from anyone but me, or a few other internet crackpots. The post-fact world is upon us. The truth is out there, but no one's there to keep it company.

(Points to chair by the fireplace.)

It has merely resumed its customary seat.

 

[hobbsyoyo]

Someone learned to multi-quote!

Hoorah!

 

[Leoreth]

Someone learned to multi-quote!

Hoorah!

G-Max has always made those posts. *files further evidence*

 

[hobbsyoyo]

Ah I see.

I thought Chimera Kitty always spams out 4 or 5 posts in a row.

Or is that Chitlins?

They're indistinguishable.

 

[Leoreth]

They're easy to distinguish. One's illegal immigrants is the other's Prometheus.

 

[hobbsyoyo]

They're easy to distinguish. One's illegal immigrants is the other's Prometheus.

Oh right

 

[Borachio]

But I thought Chiteng was the illegal immigrant guy. Chi... ah!

 

[hobbsyoyo]

But I thought Chiteng was the illegal immigrant guy. Chi... ah!

No he's the second coming of Katrina.
jk

 

[Cutlass]

No, state governments are more responsive.

Only to those people who want big oppressive government to be big and oppressive.

Changing WHAT? Massachusetts had a $1.5 billion deficit when Mittens took over. CA is expecting $15.7 billion in deficit spending this year. The 50 states combined are drowning in more than $4 trillion in red ink:

http://www.huffingtonpost.com/2012/08/28/state-debt-report_n_1836603.html
http://washingtonexaminer.com/study-states-over-4-trillion-in-debt/article/2506157

If they were required to balance their budgets, then where did all of that debt come from? Did some kind of magical Debt Fairy visit their accounting books in the middle of the night?

Mittens raised taxes a lot and then lied about doing so. That does not change the fact that when the economy forces falling revenue on a state, the state scrambles to cut the budget. And that the poor take the brunt of that.

That's funny. In my experience, they're the ones who are most insistent on distancing themselves, and it's the more authoritarian/interventionist types like you who can't distinguish them.

Then why is it that "libertarians" side with authoritarians against liberty and "anarchists" side with plutocrats?

There is no "race to the bottom". There is only a race to determine the true value of things... except when it comes to the environment/pollution/resources, which is a different can of beans.

There is a race to see who can give the most corporate welfare to the biggest plutocrats. "Conservatives" are winning that race.

It's irrelevant, so long as it's contained to the local or state level so people can vote with their feet.

So it's OK if big oppressive government is big and oppressive as long as it's victims can flee their homes. Nice of you.

Citation needed.

It's called opening your damned eyes and not living your entire life as if Republican press releases were the bible and Rush Limbaugh was your Jesus.

Post-fact universe indeed!

You've never encountered the government, clearly.

Or for Congress to spend a great deal less.

Can't be done. If you try, the economy will shrink and tax revenue will shrink and the deficit will remain.

So the primary driver of overhead is that we have local, state, AND Federal involvement in something that really should be handled exclusively by state or local governments.

Big shocker there.

The state and local governments should have nothing to do with it. Those people like yourself who love big oppressive government simply because you love big oppressive government and for no other reason than your rabid hatred of freedom and your desire to hurt innocent people also love the fact that you are wasting the taxpayers money by doing things as crappily as possible.

 

[Chimera Kitty]

Someone learned to multi-quote!

Hoorah!

G-Max has always made those posts. *files further evidence*

Cutlass also appears to be a fan.

Only to those people who want big oppressive government to be big and oppressive.

...which, sadly, make up well more than 50% of our population.

Mittens raised taxes a lot and then lied about doing so.

Okay. Yes, he's a lying sack of Neo-con crap. And?

That does not change the fact that when the economy forces falling revenue on a state, the state scrambles to cut the budget. And that the poor take the brunt of that.

You said there was a LAW requiring all 50 states to balance their budgets.

Link to the law. Show me your source. I swear I'll believe you if you can point to a fact to back up your assertion.

Then why is it that "libertarians" side with authoritarians against liberty and "anarchists" side with plutocrats?

Remember what I said about a logical fallacy called "begging the question"? Yeah, you're doing it. Stop.

There is a race to see who can give the most corporate welfare to the biggest plutocrats. "Conservatives" are winning that race.

I see that you put "conservatives" in "quotation marks". This implies that you know the difference between true fiscal conservatives and the lying sacks of Neo-con crap who are running the GoP.

You'll get no disagreement from me.

So it's OK if big oppressive government is big and oppressive as long as it's victims can flee their homes. Nice of you.

Stay on topic here. We're talking about entitlement spending, and yes, it's OK for governments to be big and oppressive in that regard as long as its victims can flee to a place with lower taxes and less entitlement spending

It's called opening your damned eyes and not living your entire life as if Republican press releases were the bible and Rush Limbaugh was your Jesus.

I'm sorry, but I didn't see any links in that sentence. Could you perhaps link to a source of facts to back up your claims?

You've never encountered the government, clearly.

Actually, I have. Perhaps my encounters have differed from yours.

Attempting to get food stamps, county level: got EBT card immediately

Attempting to get disability insurance, Federal level: took about 6 months, got turned down.

Can't be done. If you try, the economy will shrink and tax revenue will shrink and the deficit will remain.

Yes, millions of government employees have to find real jobs

But seriously, the economy and therefore tax revenue will only shrink in the short term. Look at what happened after World War II. Spending on the war ended and we suffered a huge drop in GDP... but as the government shrank, it created room for the private sector to grow. Our economy rebounded rapidly and we got a 25-year Golden Age. I'm not quite sure how much of our post-WW2 growth was due to the Fed issuing endless amounts of monopoly money that we were able to trade for real wealth due to the dollar's newfound status as the world's reserve currency, but that's still pretty impressive.

Similarly, Shock Therapy destroyed the economies of former Warsaw Pact countries, but they've been regrowing rapidly ever since (or at least Russia has been).

people like yourself who love big oppressive government simply because you love big oppressive government and for no other reason than your rabid hatred of freedom and your desire to hurt innocent people also love the fact that you are wasting the taxpayers money by doing things as crappily as possible.

How do you get away with saying stuff like this?