Archive for October 7th, 2010

What if the rich leave the building ?

October 7, 2010

I think this is the fatal flaw in Obama’s class-warfare tax plan.

Initially, high earners will push their tax deductions to the absolute limit (no, I don’t think they’re doing that now).

…  then they’ll just re-create tax shelter devices reminiscent of the pre-Reagan days (e.g. rental properties; gas, oil, timber partnerships)

…  and finally, they’ll take their bank accounts to safe havens.

A couple of vignettes bring the dynamics to life.

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According to FBN’s John Stossel …

New York billionaire Tom Golisano isn’t stupid.

With $3,000 and one employee, he started a business that processes paychecks for companies. He created 13,000 jobs.

Then New York state hiked the income tax on millionaires.

“It was the straw that broke the camel’s back,” he says.

“Not that I like to throw the number around, but my personal income tax last year would’ve been $13,800 a day. Would you like to write a check for $13,800 a day to a state government, as opposed to moving to another state where there’s no state income tax or very low state income tax?

He established residence in Florida, which has no personal income tax.

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Maryland created a special tax on rich people that was supposed to bring in $106 million. Instead, the state lost $257 million.

Former Gov. Robert Ehrlich, who is running again for his old job, says: “It reminds me of Charlie Brown. Charlie Brown was always surprised when Lucy pulled the football away. And they’re always surprised in Washington and state capitals when the dollars never come in.”

Some of Maryland’s rich left the state.

“They’re out of here. These people aren’t stupid,” Ehrlich says.

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Donald Trump, who knows something about making money, says of course the rich will leave when hit with higher taxes.

“I know these people,” he told me.

“They’re international people. Whether they live here or live in a place like Switzerland doesn’t really matter to them.”

You haven’t left, I told him.

“I haven’t left yet. … Look, the rich people are going to leave. And other people are going to leave. You’re going to end up with lots of people that don’t produce. And then that’s the spiral. That’s the end.”

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Excerted from John Stossel, Taxing the Rich, September 29, 2010
http://www.realclearpolitics.com/articles/2010/09/29/taxing_the_rich_107350.html

Posted in Taxes | Leave a Comment »

Your choice: 4 Corvettes or a college diploma ?

October 7, 2010

Parent’s lament: “It’s like driving a new Corvette to the campus every September, leaving the keys and taking the bus home.”

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Excerpted from: RCP, Why Corvettes Cost Less Than College, September 21, 2010

American colleges continue to float in the bubble of economic exceptionalism once occupied by Detroit carmakers.

American median income has grown 6.5 times over the past 40 years, but the cost of attending one’s own state college has ballooned 15 times.

American universities now rake in $40 billion a year more than they did 30 years ago. And most of that money isn’t going for academics.

  • For starters, the money is going to more numerous and more pampered sports teams. Duke University in Durham, N.C., spends over $20,000 a year per varsity golf player. And these squads rarely pay for themselves. There are 629 college football teams, and only 14 make money.
  • The number of administrators per student at colleges has about doubled over 30 years, according to Hacker and Dreifus. Their titles point to such questionable duties as “director for learning communities” and “assistant dean of students for substance education.”
  • Full-time faculty members are being paid more for teaching less. Some elite colleges now offer sabbaticals every third year instead of the traditional seventh. Harvard has 48 history professors, and 20 of them are somewhere else this year.
  • Compensation for college presidents, meanwhile, has soared to corporate CEO levels. Vanderbilt University in Nashville, Tenn., pays its president $1.2 million a year!
  • Universities are also competing to make their on-campus experiences more like a resort than a bookish monastery. Some dorms feature granite counters, kitchens and walk-in closets. Fancy health clubs have replaced musty gyms.

What else are students getting in return for their enormous college bills?

They do receive an education, though the quality doesn’t seem to justify the rising costs.

Bill Gates recently predicted: “Five years from now on the Web for free you’ll be able to find the best lectures in the world. It will be better than any single university.”

A year at a university costs an average $50,000, the Microsoft founder and Harvard dropout said last month. The Web can deliver the same quality education for $2,000.

The market will eventually recognize the out-of-whack economics of today’s “place-based colleges” and intervene. Some day soon, Web alternatives will be a force to be reckoned with.

Full article:
http://www.realclearpolitics.com/articles/2010/09/21/why_corvettes_cost_less_than_college_107241.html

Posted in Education - Academics | Leave a Comment »

Kodak tries to hang on …

October 7, 2010

TakeAway: For years Kodak’s photo kiosks received little traffic as people decided that they’d rather print at home or keep their photos in digital form.

Now Kodak has caught on that consumers are interesting in specialty printing, such as collages, so the company is updating its kiosks for this functionality.

It’s an insight that the company hopes will change its stodgy brand association into something more cutting edge.  But there’s a catch.  You have to buy a mat or a frame.

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Excerpted from Brandchannel, “Kodak Touts Innovations at Photokina,” by Barry Silverstein, September 21, 2010

Kodak, a brand name that may find it a major challenge to shake its association with conventional photography, is doing everything it can to become a hip, socially aware digital photography provider. …

Kodak’s latest entry into the “cool, hot and worthy” category was unveiled this week … The company’s new retailer photo kiosk “automatically enlarges, shrinks, crops, aligns and arranges as many as 13 images on one print.”

… The new “collage option” software will be introduced in December at some 5,000 CVS stores in the US.

There is one catch … The consumer is required to purchase a mat, or a frame with a mat, along with the collage. …

“Most creative collage systems in the market don’t really take the presentation into account — you create the collage but then you have to mount or frame it. Kodak is taking it all the way to the wall,” …

While traditional photo prints have dropped in popularity because of digital photography, specialty printing is now booming for that very same reason.

Specialty sales of such items as posters, postcards and t-shirts made from digital images have increased from $738 million in 2006 to $1.3 billion last year.

Clearly, Kodak is looking to create its own “Kodak moment” and ride the wave with specialty photography products of its own.

Edit by DMG

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Full Article
http://www.brandchannel.com/home/post/2010/09/21/Kodak-Photokina-Collage.aspx

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Posted in Mktg - PLC | Leave a Comment »