Category Archives: Tax System

Capitalism, Libertarianism, Logic & Reason, Social Issues, Tax System

The “Currently Isn’t Working” Fallacy, The 1% Myth, and Misleading Statistics

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On a recent episode of Stossel, Neil Sroka; the communications director for Democracy for America came on the show. He is an ardent supporter of Bernie Sanders, and his ideals of democratic socialism.

Here’s a transcript of a portion I’d like to discuss. I’m not going to type out the entire interview, but since this was the first real question, there was indeed nothing preceding it that would leave you missing any context.

John Stossel - Fox Business Network
John Stossel – Fox Business Network

Stossel: Now socialism generally means that the government owns the means of production. Do you want that?

Sroka: Well, I think there is [sic] some antiquated views about what socialism is. I don’t think anyone’s calling for, you know, state ownership of the gas station down the street. But what we are saying is, is [sic] that the current system that we have right now isn’t working. Uh, you know, when over 40 million Americans are still living in poverty at the same time that, you know, a millionaire and billionaire class is trying to essentially own all political discourse in this country, that [sic] that’s problematic. And that’s what we have to work together to dismantle.

John did a pretty good job of debating the issues with Neil, I don’t need to belabor those further here.

But one thing that is often repeated that wasn’t addressed in the interview, is a claim by many on the left (and the right for that matter); the notion that whatever “it” is in America, “it” somehow isn’t working or is broken.

The United States of America is the single most powerful nation in the world—by a wide margin. Not just in military force, but in economic force.

Misleading Statistics
Misleading Statistics

Neil argued that there are over 40 million people (It’s 45 million, in fact) under poverty in America, but that number is a bit misleading.

Neil isn’t ignorant when he uses that number, it’s such a large number, it sounds horrible—giving it quite the shocking impact.

It convinces people, with actual facts (albeit misleading ones), that there is a massive problem. But the reality is, it’s only about 15% of the American populous, or approximately one out of seven people, as shown in this census bureau report. Which means 85%, or nearly 255 million, are in fact, NOT at the poverty level. Also quite factual, but significantly less shocking when thought of in that light.

While I feel for such people (I am almost one of them, so I really do feel for them), they are at the bottom 15%, and aren’t even close to the majority. Poverty is always a problem for people, and I don’t deny that. But America doesn’t have a poverty problem, I’d argue that the large majority of people under poverty have a personal problem—they’re not doing what is needed to get themselves out of poverty.

Still not convinced? Think about this. Imagine a random seven people you might meet on any given day. Then consider whether you think at least one of them, on average, is not really putting forth the kind of effort needed to be successful enough in life to be above the poverty level. I genuinely don’t feel like that’s a stretch by any measure.

People also love to point at “money buying elections” as part of the problem, but Obama spent less than Mitt Romney in 2012, yet he still won quite resoundingly.

In 2007, Obama didn’t start with a lot of money when he initially ran for president either. Hillary was the one with all the money behind her at the onset of that election cycle.

Presidential candidate Sen. Bernie Sanders, I-Vt.
Presidential candidate Sen. Bernie Sanders, I-Vt.

Socialists like Sanders like to create a cause-and-effect argument between money spent, and elections won, as if the money came first and drove the election results.

But it’s also entirely possible that instead; the money follows the person with the best ideas, and is therefore the effect versus the cause, which seems to be the case with Obama versus Clinton in 2007; assuming we can agree Obama is more charismatic and interesting than Hillary Clinton, and I think we can.

Stating that the system is broken and doesn’t work, appeals to people who are driven to have more, by exploiting the human tendency for confirmation bias. Americans know subconsciously that America is a strong and powerful economic nation. But many of these socialist supporters are unhappy with their own lives because of whatever their shortcomings might be, and it hurts to think of yourself as worse than average in any way.

So when someone points out that the system is broken, it gives such people a way to argue that their own inadequacies aren’t their problem after all; society, corporations, or rich people are actually to blame—just ask that guy.

Everything in the world is capable of improvement, and America is no exception. But if you’re an American, you should be incredibly thankful for what you have. As much as socialists like to talk about the poor 99% in America suffering the top 1%, if you’re an American making over $32, 400, when looking at the rest of the world, you are indeed part of the 1% yourself.

So unless those of you in that $30k bracket or higher, who are behind socialists like Bernie, are ready to give up 80-90% of your salary to the rest of the world as many socialists suggest the richest 1% in American be forced to give to the rest of us Americans, you are indeed, quite the hypocrite—congratulations and #FeelTheBern.

 

 

Capitalism, Drug Use, Libertarianism, Logic & Reason, Tax System

Liberty With A Price Tag Isn’t Liberty. Colorado’s Legal Marijuana Isn’t As Good As You Think

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Recently it was announced that Colorado’s overwhelmingly successful venture into legalizing recreational marijuana has generated so much tax revenue, that the people are owed a refund.

Before I condemn them on this tax, I must at least give them all due credit for having a clause in their state constitution that limits the amount of tax revenue that Colorado is allowed to collect before it must refund a portion to the people. It’s referred to as the Taxpayer Bill of Rights (TaBOR), and it’s a very pro-liberty thing to do.

Sadly, Colorado Republicans and Democrats alike are now upset they may have to give some of this money back however. I understand the Democrats being upset, they’ve never met a taxpayer dollar they didn’t genuinely believe they could spend better than the person who earned it. But it’s sad that the Colorado Republicans, the party that’s supposed to be about limited government, are somehow upset with this too.

Forget all of that though, because there is a much deeper issue here. This Colorado legal-pot situation is not as libertarian-friendly as one might think.

Marijuana Harvest
Marijuana Harvest

Colorado was smart enough to embrace the science that shows that marijuana is a fairly benign drug that is often less risky in its consumption than alcohol. They were also non-hypocritical enough to know that allowing alcohol while not allowing marijuana made little sense—kudos to them on both counts. But that’s where the liberty segment of their new pot-friendly legislation ends.

Sadly, politicians love new revenue streams more than I love my mom. Because the legislators in Colorado decided that instead of just giving people more freedom to choose what they put in their body, they would give them a way to do it prosecution-free, if and only if, they paid an additional tax over and above the normal sales tax, which exceeds 25% when all of them are added together.

Knowing this would generate a significant amount of tax revenue was certainly part of the equation, if not the impetus for legalization, when the one and only reason should have been that in a free country (or state in this case), it should have never been illegal in the first place.

What Colorado is essentially doing is no different from the sugary drink tax in Berkeley, California, cigarette taxes across the country, or any other tax on a product over and above the standard sales tax. They are using the tax system to encourage behavior like a backwards carrot on a stick. No rights are being protected, nor is any governmental service being offered.

Berkeley Soda Tax
Berkeley Soda Tax

As someone who supports a consumption tax system like the FairTax.org proposal, one might think that I and other libertarians would support a marijuana tax, but it’s very anti-libertarian on multiple fronts.

When sin taxes such as these are passed, it assumes that government has an interest in what you do to yourself and should penalize you for what they have determined is bad behavior. But government’s duty is to protect you from others who would harm you, not from yourself. They have no right to tell you how to live your life or be the arbiter of what is good behavior. Are you comfortable letting them tell you what shows you should watch or what kind of mate you should choose?

The reason to support a consumption tax is that it’s effectively a fee for services rendered. If government builds infrastructure, and enforces contracts between enterprises which allow all of these products to freely come to market, it’s a fair way to charge people for that government service. But what service is Colorado providing for the marijuana tax?

For instance, I can fairly argue it’s okay to add a diesel/gasoline tax, because that money then pays for roads. You’re being charged a fee for services rendered. However, there is no additional service Colorado is providing with their multitude of tacked on taxes to marijuana, it’s simply a revenue stream that goes into the state’s general fund, and the oh-so-common “It will go towards helping schools” argument is also part of the equation.ColoradoMarijuanaTax.thumbnail[1]

I’ll set aside my argument that there shouldn’t be public schools in the first place, but why exactly is a pot smoker disproportionately responsible for educating Colorado children or paying for other non pot-related issues?

If we love liberty, we should never support a tax that cannot be directly attributed to the item being taxed as a fee for a service government is providing. With government, we are often forced to accept compromise to appease the statist-minded voters and politicians, and I’m sure Colorado’s marijuana tax is no different, but we are most certainly not to a point where we can call Colorado’s legal marijuana system a victory for libertarianism.

It’s no more of a victory than if a football team were losing 70-0 and in the closing seconds scored a field goal to avoid getting blown out. Sure it feels good to put points on the board, but you still lost in the end.

Capitalism, Labor Unions, Libertarianism, Logic & Reason, Tax System

Production vs Sales. Let’s redirect our focus for a stronger America

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Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

Read any want ad section and you will notice one thing is abundantly clear. A predominance of the jobs available in the United States are in the field of sales & marketing. This phenomenon has always troubled me.

A salesperson is selling a product, but someone has to produce that product, a process that is surely more labor intensive than selling it. So how can it be that we always need more sales people? Because the production jobs are going away.

I’ll briefly point out that many sales positions are commissioned, so companies often over-hire because they don’t really have to pay salespeople unless they do well. They’re effectively throwing ten darts at once in hopes of hitting a bull’s-eye instead of putting the effort in to being a better dart thrower. It’s both lazy and ineffective. You often damage your brand more than improving your actual sales.

But while advertising is important, it should always play second fiddle to production, let me give an example.

If I were to offer you the car of your choice, cost-no-object, what would it be? All over the world, many of you would choose a Ferrari. Yet, have any of you ever seen a Ferrari television or magazine ad? Likely not.

2014 LaFerrari from Ferrari
2014 LaFerrari from Ferrari

Yet, millions of you would buy one tomorrow if you could afford it, despite never being faced with a single advertisement from them. Aside from their racing efforts and emails, Ferrari doesn’t really do much marketing. People wear Ferrari-logoed clothing and put up Ferrari posters, essentially marketing Ferrari for free. This is genius! You pay Ferrari for the privilege of marketing their stuff, instead of them paying someone to market it for them.

So how is it possible that one of the most desired and recognized objects on the planet does not need to be sold? Because it sells itself, just look at it!

A beautiful design, flawless engineering, a sound that is mechanically orgasmic, and a palpable passion ooze from these machines. This quick video, one of their few actual marketing efforts which will never air on TV, but has been shared (for free) at the time of this posting 5 million times, should illustrate my point.
The lesson here is pretty clear. Too often you see business owners thinking that their issues stem from poor salesmanship instead of poor craftsmanship.

There are certainly bad salespeople, and some turnover should be expected, but marketing in general seems to be where companies want to spend their money instead of research, development, and production. I see (and occasionally have worked for) companies who have incredibly outdated equipment, inefficient internal processes, and products of inferior quality that could be easily updated, but they’ve emptied their bank account on advertising instead.

We’ve all heard the story of The Goose that laid the Golden Egg, this is exactly what many companies are doing. Profit-margin is the holy grail these folks are after, but this is how they kill the goose.

A company with a great reputation will hunt for a more cheaply made product, often in China, and then hope through marketing they can continue holding on to their market share. But once you gut that goose, and people find out you used a respected name to market an inferior product; profit margins may remain high, but overall profits will start to plummet as people take their business elsewhere.

For instance, let’s look at Irwin tools. You may have never heard of Irwin, but you’ve certainly heard of Vise-Grips, and they’re the makers of them. Since 1921, they have been making these pliers that just about every person has in their “tool drawer” at home. Irwin Vise Grips have been a superior quality hand tool for nearly a century, but no more. Irwin moved them to China in recent years as they hunt for greater profit margin.

As a libertarian, I certainly want companies to have the freedom to build wherever they wish to, but that doesn’t mean I don’t think it’s stupid.

These companies are hoping most people won’t notice the loss in quality and continue paying a premium price, but consumers who use products are pretty good at noticing when a product’s quality has been diminished, and it’s insulting. Believe me, I notice the difference—the new Vise-Grips are clearly inferior.

So these days, I don’t mind buying a cheap $5 pair from the local Harbor Freight, because I know they’re probably the same plier at this point, and I’m not paying extra for the Irwin name if I’m not going to get the legendary Irwin quality.

They’re now just another cheap Chinese version no different from all the other copies out there, there’s a good chance they all come from the same factory—China doesn’t exactly believe in intellectual property. We are talking about a country that brazenly opened up an Apple Store that wasn’t actually affiliated with Apple in any way. So it’s not unlikely that the factory Irwin commissioned to make their pliers isn’t selling the exact same pliers to others, literally giving Irwin’s design away to someone Irwin didn’t sell it to.zhuhai-iphone-store[2]

I want to point out that there can be no doubt, with labor unions, overbearing regulations, the highest corporate tax rate on Earth, and the ever-increasing cost of living in the United States thanks to a poor economy, the costs of building in the U.S.A. are ruining our chances of keeping these jobs. Irwin is not completely to blame here.

But if the American people demanded our government ease regulations, get rid of the corporate tax rate (they can’t vote, so why should they be taxed?), and make the concept of manufacturing in the United States more viable again, maybe the want ads will be looking for more than just the next Ron Popeil, and real jobs and quality products will again be a part of the American economy.

Libertarianism, Tax System

The Real Cost Of Taxes

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Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

Government, in order to do the people’s business, must pay for itself. Currently, we achieve this by a myriad of taxes such as:

  • Income taxes, which I would argue are a penalty for success.
  • Sin taxes (or social engineering taxes) on things like alcohol and tobacco, that are over and above normal sales tax,  which are designed to deincentivize people to buy these products because somehow, that’s government’s business?
  • Estate taxes, because now that you’re dead, you don’t need that money, and you’re family certainly doesn’t deserve it more than government.
  • Fuel taxes like those on gasoline which also go over and above normal sales, which are designed to drive certain markets in favor of others.

    Gas Pump Tax Label
    Gas Pump Tax Label
  • Property taxes, because just buying the property shouldn’t make it yours to keep.

This list is by no means complete.

In a previous post, I wrote that I supported a consumption tax like that proposed at Fairtax.org. Something that is simple and easy to understand for people and corporations alike, then get rid of all this other nonsense. After that, use fees as much as possible, such as when you buy a driver’s license or plates to shift government income to fees for what they do instead of taxing everyone for something not everyone benefits from. But why do I believe this is important?fairtax[1]

Because government has its tentacles in everything, it can often hide disturbing practices in an over-complicated tax code and regulatory structure.

For instance; subsidies for an industry that can clearly survive on its own which are conveniently hidden in tax write-offs. Or a federal law that serves one locality greater than another. Why should people in Florida pay for a bridge in California for instance?

Between the taxes one is required to pay, the write-offs one needs to know about in order to keep as much as possible of what they’ve earned, and the regulations they must abide by, this creates expenses that destroy businesses, stress households, and wreak havoc on our economy.

As a former small business owner, I can tell you that the idea of borrowing/investing nearly $100k was infinitely scary. But at the early stages of 2007, the economy seemed quite strong, and I decided to go for it. Bad luck for me, the economy collapsed within months after I started and long before I was stable enough to weather such a tough downturn. Sadly, my business failed within 2-1/2 years as a result.

So what makes a business fail? We can debate about certain principles, but the one inarguable truth is that their income was lower than their expenses, and this was my experience.

The problem with our tax structure isn’t just the taxes themselves, it’s the complexity with which it is administered that add additional costs over and above the taxes themselves. If I didn’t have to file for licenses and worry about massive regulatory compliance issues, I could have saved myself a lawyer’s fee. If I didn’t have a myriad of tax codes and write-offs to deal with, maybe I don’t need to hire an accountant.

On a personal level, you and I pay taxes, but then at the end of the year, many of us are forced to hire an accountant for this as well, and this is in essence, a tax on a tax.

These are thousands of dollars I’m talking about, and I was the sole employee of my tiny corporation.

Would it had saved me? Maybe not. But I was close to surviving, and coupled with a lower tax burden, there’s a good chance it very well could have.

A Fortune 500 sized company however spends millions on lawyers and accountants for compliance and tax purposes. This is money that could be used to hire other people and produce more products at a lower cost. While I’m not insulting tax accountants and lawyers as if they aren’t jobs in their own right, both are noble professions, but the fact is they don’t produce anything for the business.By-The-Book-Taxes-CT-1[1]

If my company makes widgets, the lawyers and tax accountants do nothing to increase my widget output nor even assist with customer service or sales of them. They simply make sure I understand an overcomplicated legal structure and tax code that if done properly by government, I would understand without their help.

As always, I understand that the intentions from Democrats and Republicans alike are often altruistic when they pass laws, but laws were supposed to be about one thing; protecting rights. Not social engineering or market influence.

I should generally be entrusted to understand that throughout the course of doing business, I am or am not infringing on someone’s rights without needing a lawyer and an accountant to explain it to me.

A simplified tax code and a federal register that hasn’t ballooned from a mere 11 pages in 1935 when it was the Federal Register Act was enacted, to an astounding 79,435 pages in 2008 would do wonders to help reduce the intimidation of starting a small business, and help those struggling to make it work on a shoe-string budget. I would bet 99% of these laws violate the tenth amendment alone.

Can we really call ourselves a free nation with 80,000 pages of laws on the federal books? I don’t know about you, but the thought of it doesn’t make me feel very free. I suspect I’m a criminal already and don’t even know it.

Capitalism, Guns & The 2nd Amendment, Labor Unions, Libertarianism, Logic & Reason, Social Issues, Tax System, The United States Constitution

Democrats and Republicans: They can be a crazy bunch!

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Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

In matters of choice, there are two basic options: those made by logical thought versus those made from emotion. As I read about those who attack libertarianism, I can’t help but note that their opinions often eschew logical thought and dive head first down the hole of hypocrisy and illogical assumptions. So with that in mind, let’s explore the hypocritical logic of those who think libertarians are “crazy.” I may use some tongue-in-cheek humor and hyperbole here, but there is a mountain of truth to all of it, the facts are the facts.

  • The media constantly push to infringe our right to bear arms, yet they’d be apoplectic if we attempted to infringe on their freedom-of-the-press rights. They’re welcome to show me where the Constitution indicates one right as more negotiable than another, but I’ve actually read it, it’s not there.
  • The left staunchly support a woman’s right-to-choose regarding something as important as aborting what is arguably a life. Yet they think choosing an incandescent light bulb or a toilet that can flush more than 1.6 gallons of water is a choice people cannot be trusted with. I am pro-choice on all accounts, but certainly think the choice to end a potential life is a decision that is infinitely more important than my choice of household appliances.
  • The left are constantly fighting against hatred and bigotry stating we cannot judge people by their race, religion, sex, etc. They couldn’t be more right—denying the rights of a specific group of people en masse is immoral. Yet they have no qualms with infringing on the rights of those who earn six-figures or more. Apparently, the rich are the new “separate-but-equals”? This should come as no surprise since Democrats have a history of such rights violations with their pointy white hats in tow. Only four Democrats voted to abolish slavery, after all. Hats off to Democrats though, they’ve done a phenomenal job of pinning their own documented history of bigotry on Republicans. While we’re at it,  women can thank Republicans for their rights as well.
  • Democrats will argue we need to improve education in order to win votes—the youth are our future, right? Yet they attack private schools which generally outperform public schools. Then they champion teacher’s unions which have policies like tenure; a system by which teachers remain employed based on their time on the job while ignoring their actual job-performance. I’m curious what would happen if you asked one of them regarding their own children, “If you had the choice of a teacher with documented positive results versus a disinterested teacher just waiting it out until retirement, which one would you choose?” How do you think they’d respond then?
  • Social conservatives claim to be the party of liberty, limited government, and Constitutionality, yet the liberty of homosexuals or those who wish to engage in paid sexual activity where there is no victim, just two consenting adults…well…we can’t give them liberty, they’re sinners. These “social conservatives” should just ask that we change the first amendment from “establishment of religion” to “establishment of religion unless it’s the King James Bible” and get it over with. As long as I’m potentially forbidden to buy liquor on Sundays in this great nation, I do not live in a country free from religious oppression. It is free-ish at best.

    The 1st Amendment
    The 1st Amendment
  • Both sides of the aisle claim to be against government waste, yet have you ever seen a government building? They’re often ornate structures with massively expensive architecture. If they were serious about reducing government waste, city halls would be as sparse as pole barns, if they even existed at all. They could meet at private meeting halls for much less money. I look at the White House, Congress, and the Supreme Court buildings, and all I can think about is how much of the cost of those monoliths affects my ability to pay my electric bill each month. While I’m at it, no American branch of government should be permitted to buy statues, paintings, or other decorative items either. How exactly do they serve the people’s interest?

    Library of Congress
    Library of Congress
  • The left tout small business as the people they are vehemently in support of. Yet somehow, when a small business owner gets it right and becomes a large corporation, they have suddenly become evil and should be taxed to hell and back? At what point exactly did they become evil? Was it the part where they had a good idea, wanted control of their own destiny, or just the part where they made a profit?
  • If we disagree with Barack Obama or Hillary Clinton, it’s because we’re racist and/or sexist. If we support Thomas Sowell or Ayn Rand, we’re still somehow racist and/or sexist.
  • The left often champion socialist policies like Social Security or single-payer healthcare, ignoring the history which shows the deplorable living conditions and human rights violations of Cuba, North Korea, China, Nazi Germany, or the former Russia, all shining examples of what socialism is when taken to its ultimate conclusion. If the left could supply one example of a socialist nation whose people live in conditions that are remotely as good as those in America, I’ll be willing to talk about the logic of social engineering. They argue that there is a good balance between socialism and capitalism to be met. I like to retort, “then there must be a good balance between a healthy diet and an arsenic diet as well.” They’re usually not amused.
  • A man solely with a law degree, two years of senatorial experience, and no private sector work experience was eminently qualified to govern the United States. Two former governors with a plethora of executive experience and both highly successful business owners as well (Mitt Romney and Gary Johnson) somehow were not.
  • The left will complain about the right’s advocacy of the death penalty and our staunch rebuke of Democratic policies, but then wear a Che Guevara shirt, a man not only famous for executing people who didn’t agree with him, but often for doing so without a trial.
  • The left complained about The Patriot Act, drone strikes, and Guantanamo Bay under Bush. Obama has either carried these policies on, or even grown them, but it’s now magically the right thing to do.
  • When Obama lies about keeping our health care plans, Benghazi, etc., it’s OK because he knows what’s best for us and he meant well. When Bush received what appeared to be bad intelligence in hindsight, and then acted earnestly on that bad info to protect American interests, he should have been impeached and imprisoned. There was never a shred of evidence that Bush knew the info was wrong, making it an error, not a lie. And there is evidence the weapons were simply relocated out of Iraq prior to the invasion. I am neither accepting or rejecting this theory without more info, and I’m not condoning the Iraq war either, but it leaves reasonable doubt about whether Bush was inaccurate on Iraq’s WMD’s.
  • While I could go on forever it seems, let me end it here: Princeton University defines classical liberalism as “a philosophy committed to the ideal of limited government and liberty of individuals including freedom of religion, speech, press, assembly, and free markets. So what has transpired here? There is a stigma attached to socialism and communism. As such, leftists who are fully aware they are promoting socialist policies have decided somehow to call it liberalism, something big government and non-free markets certainly are not. If socialism really works, let it stand on its merits, don’t lie and call it something it is not. I intend to never to call them liberals again. But to be clear, I won’t call myself one either just to avoid the confusion. That word is dead to me.
Capitalism, Drug Use, Justice System, Libertarianism, Logic & Reason, Social Issues, Tax System

Libertarianism: The Non-Hypocritical Ideology

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Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

The word liberty is rooted in the word *libertarian—makes sense, right? That’s the cause for which we always fight. But believe it or not, while it may often not seem like it, Democrats and Republicans fight for liberty also.

For instance, Democrats often push for it on social issues such as gay rights and abortion, but they push just as rigorously to deny fiscal liberties to those achieving the American dream of unfettered wealth.PHP491F5DFE68687[1]

Republicans strive for liberty on financial issues such as lower taxation and corporate rights, but they attempt to deny social rights to people via legislation such as the Defense of Marriage Act or The War On Drugs.

Libertarians like myself of course, take liberty to the brink of anarchy and fight for both. We generally believe government’s role should be restricted to protecting our rights to life, liberty, and property as enumerated in the Constitution.

As we libertarians watch Republicans and Democrats squabble over which liberties are important and which liberties are expendable, we wonder why those parties don’t agree that liberty for all is best. It’s in our pledge of allegiance after all.

To be fair to the GOP, there is a new sect of libertarian-leaning Republicans like Rand Paul and Justin Amash to whom this rarely applies, and their rise in popularity is encouraging. I cannot recall a libertarian-leaning democrat, or I’d mention them too.

Congressman Justin Amash (R)
Congressman Justin Amash (R)

In matters of issues like assisted suicide, recreational drugs, prostitution, gay marriage, and gambling for instance, these acts rarely involve a party whose rights were violated. But all of these practices are still often considered socially unacceptable despite the fact that if you’re not an active participant, they don’t affect you in the slightest.

Legislators tend to look at a behavior they don’t agree with and determine it is their civic duty to legislate it away in order to elevate our collective moral compass. Their proposed legislation being a mirror image of how they would choose to live their own lives. But when it comes to fighting for liberty for those who don’t share their views, they often can’t find the will to do so. Instead, they insist on making futile attempts to socially engineer our great nation.

I say “futile” because anyone who has ever been told they aren’t allowed to do something they really want to do and wouldn’t harm anyone doing it, knows that the simple act of telling them “no,” often incites them to do so even more—making a special effort to not get caught. So these laws don’t prevent such acts, they merely add a new element of danger for those who will likely do them anyway.

I want liberty for everyone, including the people I have little to no respect for. If you’re a member of the Ku Klux Klan or the Black Panthers and want to open a white/black only business establishment; go for it! I think your bigotry and hatred make you a vile human being, but I’ll still fight for your rights to be the biggest piece of trash you want to be and let the market sort it out.

Black Panthers
Black Panthers

Want to go on a crack bender until you fall off a twenty story building because you thought you could fly? I think you’re an idiot, but go for it! It’s your life, live it or end it how you see fit. Just be sure not to land on someone on your way down, thus violating their right to life.

I want to fling poo like a zoo monkey at Westboro Baptist Church members every time I think about those hateful bastards. As I’m writing this, I wish them all the worst possible outcome in life. But if I were a legislator tomorrow, I wouldn’t dream of putting my pen to paper to draft a bill denying their right to spew their massively bigoted and ignorant rhetoric.

Westboro Baptist Church Member
Westboro Baptist Church Member

So why would I support these people’s rights to be this way?

It’s important for us level-headed people to know such demons exist. We can choose to either encourage them to change, or marginalize them and ignore them. But believe it or not, I feel they do serve a purpose. It is hard to explain “good” when you don’t have a “bad” standard-bearer to compare “good” to.

It is human nature to want the freedom to do the things you want to do and therefore fight for the liberty of people like you—it’s why all three political camps do so. But the minute you try to quash the liberty of someone you don’t agree with, you have stumbled your way into the land of legislative hypocrisy. It takes a much stronger conviction to fight for the rights of those you despise, but it’s the only way to legislate without being a hypocrite.

So my request to Democrats and the non-libertarian Republicans is simple. Give me one good reason your liberty is important but the liberty of others who don’t share your ideology isn’t. If the answer to this question renders you stumbling for an answer that makes any logical sense, welcome to the libertarian camp—we’re happy to have you. Now stop writing so many new laws; you’ve done enough damage already.

*Libertarian with a capital L represents the Libertarian party. But with a small L, it represents people who just champion liberty regardless of party affiliations. For instance, Gary Johnson is a Libertarian and a libertarian, whereas Rand Paul is just a libertarian.

Capitalism, Justice System, Libertarianism, Logic & Reason, Social Issues, Tax System

Poker Players Are People Too. Get Government Out Of Our Way!

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Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

In 1986, a professional poker player named Billy Baxter fought the law, and the law didn’t win. Baxter v. United States was a landmark decision that forever changed the lives of American professional poker players from that day forward.

Prior to this, Baxter, like all poker professionals, had been taxed on his poker winnings as if what he had done was simple luck, such as winning the lottery—a whopping 70% based on the tax code at that time. However, Baxter argued that poker is a game of skill—he was not just stumbling aimlessly into good fortune the way people who play actual games of chance like roulette, craps, and slots occasionally do.

As such, he deemed he should be taxed under the “Personal Service Income” code at the time, similar to other skilled trades, which had a maximum rate of only 50%. Billy felt the government owed him 20¢ back for every dollar he had been taxed on, and when the arguments were all over, the Ninth Circuit Court of Appeals agreed with him.

Professional Poker Player Billy Baxter
Professional Poker Player Billy Baxter

Please allow me to explain how poker is different from other methods of gambling.

A true professional poker player is someone who consistently wins, and there are thousands of them. If it were a game of chance, the winnings would be divided up randomly amongst all parties playing. One person might win more than the other in a short span, but over time, unlike actual games of chance, poker has shown that people can consistently win by employing effective strategies.

A Nevada judge who sided with Billy was quoted as saying to one of his differing-opinion counterparts, “I find the government’s argument to be ludicrous. I just wish you had some money and could sit down with Mr. Baxter and play some poker.” His point being that the dissenters who thought Baxter was just lucky shouldn’t be afraid to play against him with their own money to prove it—there were of course, no takers.

Another important point in his favor is that depending on the variant of poker being played, a high percentage of poker hands are won without any player’s cards being shown. This is due to all other players folding as a result of the actions of the hand winner who may or may not have been bluffing. It cannot be the luck of the cards, when the cards often don’t factor in.

In an amazing feat of skill, poker pro Annette Obrestad famously won a tournament online without ever looking at her own cards, simply by employing behavioral analysis of her opponents and the mathematics of odds and probabilities. To argue that this was luck would require a gross misunderstanding of the word luck.

Professional Poker Player Annette Obrestad
Professional Poker Player Annette Obrestad

So why is poker and gambling in general treated differently in the eyes of the law?

Well, the historical issue I suspect, is that gambling of any kind is considered a sin in the eyes of many religions. Older repressed generations conditioned people to believe such activities are bad, and like any old dogma, it can take generations before logic wins out over ignorance.

Poker is simply math, game theory, and psychology; fields that are well-respected on their own. But those who don’t play poker simply don’t know that.

Thanks to the movie Rounders, (a phenomenal cast and script; I highly recommend it) and to the Cinderella-story win of Chris Moneymaker at the 2003 World Series of Poker’s (WSOP) Main Event, where a simple $40 entry fee into a lower-level qualifying tournament was parlayed into a $2.5 million dollar payday, poker has started to permeate the mainstream as more people see the allure of this mentally challenging game. The fact that it can also be a decent source of revenue if done right doesn’t hurt either.

Gone are the days of thinking poker players are degenerate gamblers—these folks are often brilliant minds, like M.I.T. grads, Mensa members, or both in the case of award-winning actor James Woods, who often plays in the WSOP Main Event, along with many of his other acting peers like Ray Romano and Jason Alexander.

With Baxter’s 1986 court case win coupled with the evolution of knowledge of poker, you would think poker players were free from government intrusion, but you’d be dead wrong. This brings me to the point of this blog.

On April 15th, 2011, the U.S. government decided to intervene into the law-abiding actions of poker players throughout America. In United States v. Scheinberg, the case that brought about poker’s “Black Friday.” The government shut down three major online poker sites, Poker Stars, Full Tilt, and Absolute Poker. Full Tilt Poker, as it turns out, was engaged in nefarious activity, which I won’t go into here, but here’s a link. The other two sites however are still quite legitimate, albeit outside the U.S.

Actor James Woods
Actor James Woods

The issue with this was quite simple. Thousands of people were making a living playing poker on these sites. They weren’t competing with us normal folks for jobs, they already had one. On Black Friday, the government not only infringed on the American people’s right to pursue happiness, but they actually rendered thousands of professional poker players effectively unemployed.

Barack Obama has stated he intended to create jobs during his presidency, so I’ll never understand why he allowed his justice department to put so many out of work.

A recent Rasmussen Poll shows that only 40% of Americans oppose the government allowing and regulating online gambling, and for poker players like me, it is encouraging the majority favor and/or are open to it. But I hope that more limited-government minds will start to get behind the idea of getting government out of the way of those of us who used to like to play online.

Some conspiracy theorists think the government is simply concerned about its ability to collect tax revenues from these players. While this may also be true, logic dictates I shouldn’t engage in such theories without empirical evidence to support them.

There is hope however; on April 30th, 2013, Station Casinos went live with UltimatePoker.com, albeit, only for residents of Nevada.

I believe there is a reasonable libertarian case to be made for a federal gaming commission to exist; protecting our rights to property by ensuring these games are on the up and up, even if the anarchist wing of libertarianism hates me for saying it. But as long as we continue criminalizing online poker, these sites will go outside the U.S., and a good source of income and tax revenue will be lost.

Even if the tax collection issue is real, legalizing it could simply be a matter of requiring online poker sites to submit W-2’s at the end of the year for all winners, or better yet, get rid of income tax in favor of a consumption tax as the Libertarian Party promotes, and stop worrying about it altogether.

Poker players are intelligent and respectable competitors in a sport of the mind, and it’s time to let us play without government intrusion. Whether it’s a game of skill or a game of chance, one thing’s for sure, it’s none of the government’s concern whether I fritter my hard-earned money away on poker when they wouldn’t care if I did so playing golf or on a $40,000 plate from a Democratic fundraiser.

So I implore those of you who don’t play to not be part of the ignorant group of folks who want to take our rights to compete from us based on old biases, but instead, stand with me and repeat the libertarian code, “Mr. politician, mind your own damn business.”