Links for April 22nd

  • Public Policy Polling: A deeper look at the birthers
    A 2009 "birther" poll of North Carolina residents found that 6% believe that Hawaii is not part of the United States, while 4% just aren't sure. That's one in ten North Carolinians who are not aware of one of the most fundmental facts of our nation.
  • St. Petersburg Times: Can a complete novice become a golf pro with 10,000 hours of practice?
    Malcolm Gladwell wrote in "Outliers" that it takes 10,000 hours of experience to become great at something. This 31-year-old is giving it a whirl, intending to spend 10,000 hours playing golf—a game in which he has no interest or abilities—over the next six years, with the intention of becoming a professional golfer with a permanent spot on the PGA Tour. He's 1,400 hours and one year into this grand experiment.
  • Willamette Week: 9 Things The Rich Don’t Want You To Know About Taxes
    The effective tax rate on the 400 wealthiest Americans is 16.6%. The top 1%? They pay 23%. Remember John Paulson, the hedge-fund manager who made $9,000,000,000 by betting against the housing market? He paid exactly $0 in taxes on that. That's because hedge-fund managers don't have to pay any income taxes—congress exempts them. That must be nice for them.

9 thoughts on “Links for April 22nd”

  1. I can easily get on the bandwagon about how the rich can and should pay more, but the 9b example with the hedge fund manager is disingenuous. You pay taxes on capital gains at the time when you sell the stock. Paulson will pay taxes but it will likely be at a 15% rate for the long term capital gains rate. I have stock that has appreciated as well (albeit not to the tune of 9 billion) that I have paid no taxes on, but I will pay them when I sell. I don’t feel like a tycoon for doing so, it is just how the tax code works. The alternative would be to make every investor report their accrued cost basis and earnings each year. Egads.

  2. Actually, Malcolm Gladwell did not say that the only thing that you had to do to become good at something was to spend 10,000 hours doing it. You had to have some ability, some coaching, etc. What Gladwell said was that, assuming that ability and coaching, someone with a minimal level of competence, with 10,000 hours, would become “expert.” He did not define “expert.”

    Many law students come out of 3 years of law school with about 10,000 hours of law study, and they are NOT “expert.” A lawyer with 5 years’ experience (10,000 hours, roughly) is a WHOLE lot better a lawyer than someone with 0 years of experience. But he or she is still not “expert.”

    I think Malcolm Gladwell would be horrified to think that someone would figure that all that is necessary to become expert is to spend 10,000 hours doing something.

    And then there is Cal Ripken’s advice — it isn’t “practice makes perfect” — it’s “perfect practice makes perfect.” If you aren’t doing it right, doing it again won’t help.;

  3. I can easily get on the bandwagon about how the rich can and should pay more, but the 9b example with the hedge fund manager is disingenuous.

    I follow your point, Duane, but I think the Willamette Week author addresses that pretty well. He writes: “So long as they leave their money, known as “carried interest,” in the hedge fund, their taxes are deferred. They only pay taxes when they cash out, which could be decades from now for younger managers. How do these hedge-fund managers get money in the meantime? By borrowing against the carried interest, often at absurdly low rates—currently about 2 percent.” I’m guess I’m just not sure what’s the proper way to describe taxes that may never be paid within the lifetime of the (ostensible) taxpayer, at least within the context of a three-setence blurb. :) Note, too, that these are taxes that could eliminated entirely with a Bush-style tax cut for the wealthy—an exemption could eliminate that only-on-paper burden, a benefit that your average behind-on-his-taxes schmoe is not likely to ever enjoy.

  4. Actually, Malcolm Gladwell did not say that the only thing that you had to do to become good at something was to spend 10,000 hours doing it. You had to have some ability, some coaching, etc. What Gladwell said was that, assuming that ability and coaching, someone with a minimal level of competence, with 10,000 hours, would become “expert.”

    Well, and if we want to get really finicky, it wasn’t really Gladwell saying that—he was actually citing some other guy. :) (I can’t remember who, because it’s been years since I’ve read the book.) But I think it’s a fair conflation to substitute the phrase “great at something” for “an expert” for the purpose of a playing physical sport. I draw that particular line because I could easily become “an expert” on basketball, but despite being 6’4″, I think it’s a fair bet that there’s no danger of me ever becoming “great at” it. :)

  5. Hell in 2008 Obama thought we had 57 states and now he is the POTUS.

    Not quite. :) He was in the middle of saying that he’d visited 50 states, realized that was wrong, amended it to 47, but paused midway through, saying “fifty…[pause to count the missing states]…seven,” a mistake that he corrected a short time later. That’s really quite different than, upon questioning, insisting that there are, in fact, 57 states or, of course, 49.

  6. Waldo, regarding the 2% loan. This is low, but let’s consider what he will do with the money. If he spends it, he pays sales tax. If he invests it and earns more than 2% he will pay taxes on the gain.

    The real issue here is that a working stiff easily pays 20-25% taxes on earned income while the wealthy pay 15% tax on passive income. While a wage earner can’t defer paying taxes in the future, an investor can. Something is screwy, but people who say that the wealthy don’t pay taxes on investments are plain mistaken.

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