Economics 101 has lessons for Rockville

I live in Rockville, Maryland, which actually has one of the better managed governments I've seen. But everyone makes mistakes.

Until recently, one of the best-kept secrets had to do with parking at the Twinbrook Metro station. In the station parking lots, run by Metro, you would pay $4.75, assuming you've traveled on the subway. Outside the Metro, on the streets, the parking meters cost 25 cents an hour through 6 p.m. If you arrived at 8 a.m. and returned after 6, it would cost you only $2.50. A lot of people didn't know about this at all, and I told only close friends of mine. (Of course, some people knew about it and nevertheless avoided the meters, because they didn't want to keep rolls of quarters in their car or go to City Hall to pick up the electronic meter card.)

Recently, the City decided it needed more revenue from the meters, and effective last week, the price doubled to 25 cents a half hour (50 cents an hour). A 10-hour parking stint now costs $5.00, which makes the Metro parking lot a better deal by a slight margin.

Since the charge went up last week, almost no one has been parking at the meters near the Metro station. It used to be that at 8:00, there were still spaces available on the next block, but the two sides of the street right across from the lot were almost always full. Now, at 8:00, there are maybe four or five cars across from the lot, instead of roughly 30.

I suspect some people will eventually return, once they get over their annoyance at the price increase. But I wonder whether Rockville city council members realized that the City's revenue was going to drop when they raised the meter rates. Economics 101 suggests that there was an intermediate figure by which they could have maximized revenue. A charge of 25 cents for 45 minutes (33.3 cents an hour) or 25 cents for 40 minutes (37.5 cents an hour) might not have driven off all those parking customers.

So basic economics continues to work in Rockville. Increased fees, just like tax increases, can cause people to alter their behavior and reduce revenue in the process.

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Pre-election linkfest

Here's a short linkfest to keep you political junkies from having to hit the refresh button at your favorite news sites and blogs in the hope that you'll get some useful information.

1. Here's an argument against early voting. (via Instapundit) For what it's worth, I'm voting NO on the early-vote ballot issue in Maryland. What could possibly go wrong with early voting?

2. Contrary to some expectations, it seems younger Jews are more likely to vote for McCain than older ones. (via Volokh)

3. If you vote, you might be eligible for, er, sex toys. (via HotAir) If you vote early, you need to work on your technique.

4. Speaking of which, the feds may be moving closer to running a strip joint. Insert your own joke here. (hat tip: fee simple)

5. Headline of the day: "Nudist group wants clothing-optional polling site."

6. Obama salutes McCain.

7. Taxman. (via HotAir)

UPDATE: 8. The six most insane people to run for President. (hat tip: Right Hand Son)

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A quick thought about slots

Usually I'm in favor of having stupid people pay taxes instead of me, as if having slots in Maryland would actually reduce taxes for the rest of us, which of course is not the case in this high-tax dystopia. But this slots issue in Maryland leaves me with one sickening thought:

After the subprime mortgage fiasco, haven't we learned what happens when the government encourages people to spend money they can't afford to spend?

Seriously. And the thing is, the proponents of slots don't even follow through on their own logic. If slots and gambling more generally can save us taxes -- I've received two mailings making such claims -- why not try the Pillage Idiot Plan (PIP) instead?

Under PIP, you abolish the individual state income tax and instead sell $100 tickets for a chance at winning huge payouts from an expected pool of $1 billion. The first prize payout would be $500 million, with four $100 million prizes, four $20 million prizes, three $5 million prizes, and five $1 million prizes. (I think that adds up.)

Even the working poor could afford those tickets, especially if they didn't have to pay state income taxes. Wouldn't you buy one -- or ten -- or even more? I never play the lottery, but even I would have to think about it if I didn't have to pay state income taxes.

The beauty part is that this would raise a huge amount of money for the legislature to blow on its usual moronic spending programs. (All you need is 10 million tickets -- tickets, not people -- to break even, and once people aren't paying thousands in state income taxes, they'd surely be willing to buy a whole bunch of tickets) It would also encourage businesses to relocate to Maryland, because there would be no income tax and its employees could play the PIP lottery.

On the other hand, who knows? Maybe the justifications for my proposal are just as foolish as the arguments for slots.

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From the Pillage Idiot "Spam Period"

In Peter Schickele's hilarious biography of P.D.Q. Bach, the author divides the composer's work into three periods -- the "Initial Plunge," the "Soused Period," and "Contrition."

I thought it was the least I could do to create a period for myself called the "Spam Period," the roughly 48-hour period when Pillage Idiot was shut down by Blogger as a potential spam blog. I'm going to post some junk I was unable to post during that period. And I'd like to make it clear that I have not yet reached "contrition," if I ever do.

Kool-Aid party over at Rabbi Jack Moline's place

I'm relieved to see that nothing, nothing can shake the Jews out of their politika mi-sinai (my bastardized Hebrew approximately meaning "politics given at Mount Sinai"). According to the Washington Jewish Week, Northern Virginia Jews are mobilizing to support Obama. Isn't that special?

Rabbi Moline is actually a pretty sensible guy in general (but see), so it's even worse for him to be trying to sell undecided Jews like this:

Moline assured his listeners that Obama's record on Israel is "stellar," and that there is "nothing in the senator's record to indicate that he would make any other concessions than the current president" would make.

Questions about Obama's support for Israel are a cover, Moline said, for underlying prejudice.

"We have to own up to the prejudice in our own community. There are plenty of people who say they're ambivalent about him because he's black, he has a middle name that sounds like the deposed president of Iraq, that he's the son of a single mother," Moline told the gathering. "Those prejudices in our community generally don't get spoken. They get expressed in questions about Israel."

I guess Rabbi Moline thinks Jews can't legitimately be concerned about Obama's associations with folks like Rashid Khalidi or his 20-year association with Jeremiah Wright, whom he disowned for calculating political reasons, or his association with William Ayers and Bernadine Dohrn, two domestic terrorists, whom he's never disowned, or an ever-emerging cast of characters. No, it's got to be prejudice, because what right-thinking Jewish person could not want to place hope in someone like him? Did the Children of Israel doubt Moses himself? And when the Torah said (Deut. 34:10), v'lo kam navi od b'yisrael k'moshe, could it possibly have meant to exclude Obama?

In all seriousness, I'm sure that when Obama says he supports Israel, he's as sincere as he is about anything. But really, why should Jews who are concerned about Israel not have the right to doubt a guy who wants to scale back American power? Without American power, Israel is doomed, no matter what nice things a political candidate says.

But it sure is easy to dismiss the concerns that some Jews have about him as purely based on prejudice. Thanks a bunch, Rabbi Moline.

Economics 101 -- tax policy

I thought everyone knew that when you cut taxes your revenue dropped and vice versa, so that when you doubled taxes, your revenue would double. It's called "static revenue analysis."

Apparently not.

The Washington Post reports: "Cigarette sales have dropped by nearly 25 percent in Maryland since the state's tobacco tax doubled in January, as sticker shock apparently has curtailed some residents' smoking and sent others across the border for better deals."

And of course, the folks who think government exists to change human behavior often have a totalitarian mentality -- when people react rationally to your policies, you try to squash them:

Maryland law seeks to limit out-of-state cigarette purchases. It is illegal for Maryland residents to be in possession of more than two packs of cigarettes lacking stamps showing that taxes were paid in the state.

We're not crashing into people's homes to see if they've purchased a pack or two more than they should out of the state, but we have a very aggressive effort concentrated on larger smugglers," said Joseph Shapiro, a spokesman for the Maryland Comptroller's Office.

So this is the way it works: Try to increase revenue by raising cigarette taxes. People reduce smoking or shop elsewhere. Tax revenues go down. So you call these smokers smugglers and threaten prosecution. Brilliant.

Miscellaneous

Pillage Idiot appears 4,000 years ago in Sumer: "Flatulence joke is world's oldest"

Say what you want about the President, but he's a really decent guy: The Party Crasher

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Sunday evening linkfest

Passover has (finally) ended, and now, once again, it's time for a linkfest of links that have been forming plaque on the walls of my intertubes for the past two weeks or so. Some of them are seriously OLD, but I want you to have them, anyway. Please stay with me till the end, because way at the bottom of this post, I have a couple of future classics from the Sunday New York Times that are almost worth the price of the paper.

1. In the past couple of weeks, the biggest issue in politics, in case you're a Japanese World War II fighter who's been holed up in the Pacific until yesterday, has been whether Obama flipped the bird at Hillary while speaking to his supporters following the final debate in Pennsylvania. The Hillarosphere demands to know. And Baseball Crank has another photo that may provide circumstantial evidence.

2. The Democrats' Nightmare Scenario (via Instapundit)

3. More popcorn, please!

4. McCain goes to NOLA, and an African-American participant at a town-hall meeting says this: "I want to inform you that everybody in the camp here is not a Republican." Does he mean (a) literally no one is a Republican, or (b) colloquially, not everyone is a Republican? Who cares, anyway, besides anal-retentive grammar wackos like me?

5. As Warner Wolf might have said, if you studied math in school since about 1961 . . . YOU LOST! On a related topic, Hillary Clinton does some math trolling for delegates and votes from Michigan.

6. Gov. O'Malley calls a special session of the legislature to pass a law declaring the official state dessert of Maryland. (Only kidding about the special session. Beats the hell out of raising our taxes, though.)

7. The man-cave: "Like most stories that end up with a man mowing his friend's lawn in a dress, it started out innocently enough." (via Fark, of course)

8. Sometimes it pays to test your personal machinery before reporting its theft by voodoo to police. As the police chief himself put it: "'I'm tempted to say it's one huge joke,' Oleko said.
'But when you try to tell the victims that their penises are still there, they tell you that it's become tiny or that they've become impotent. To that I tell them, "How do you know if you haven't gone home and tried it",' he said."

9. Public Service Announcement: Be careful when eating in Canadian restaurants.

10. "Le Petit Singly is a farm that specializes in making cheese from women's breast milk." (via Ace)

11. This one's so old, it's already been overtaken by events. You remember the McLean school that banned tag in the schoolyard? Well, tag's back, but not before a week of "reorientation lessons on playground safety." I swear I'm not making that term up.

12. Patch (for women) aims to make you (not you, you) feel sexy. (via Ace)

13. Rick Monday saves the flag. In 1976. But now, there's a video.

14. American expat in Paris whines about the falling dollar. My heart bleeds.

15. False advertising from Moron Pundit: a very non-moronic defense of the tax deduction for child dependents.

16. Doubleplusundead on more misery with McCain. For me, if you want to know why McCain hasn't sealed the deal with conservatives -- I'm going to vote for him, anyway -- read George Will's column this morning. Two words: campaign finance.

17. The Children of Israel were enslaved in Egypt by a Pharaoh who took great pleasure in persecuting gays, who were brutally forced to arrange flowers for the Egyptians. Hence, the orange on the seder plate. Funny, I had always heard that it was supposed to represent Pharaoh's fear of the vagina.

18. And finally, the moment you've been waiting for -- the two classics from today's New York Times: (a) In the travel section: "In 2007, nude recreation represented a $440 million industry — up from $400 million in 2001 and $200 million in 1992." (b) In Sunday Styles: A family adjusts to the father's sex change -- "Through Sickness, Health and Sex Change."

Click here to read more . . .

Exxon undertaxed?

Paging John Edwards!

What do you mean, he's taking a well earned vacation?

Let's all beat up on major greedy corporations, because their profits are astronomical. And while we're at it, let's complain that ExxonMobil paid roughly $27 billion in taxes in 2004. That's billion with a capital B.

This is fascinating, actually:

Over the last three years, Exxon Mobil has paid an average of $27 billion annually in taxes. That's $27,000,000,000 per year, a number so large it's hard to comprehend. Here's one way to put Exxon's taxes into perspective.

According to IRS data for 2004, the most recent year available:

Total number of tax returns: 130 million

Number of Tax Returns for the Bottom 50%: 65 million

Adjusted Gross Income for the Bottom 50%: $922 billion

Total Income Tax Paid by the Bottom 50%: $27.4 billion

Conclusion: In other words, just one corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers, which is 65,000,000 people! Further, the tax rate for the bottom 50% is only 3% of adjusted gross income ($27.4 billion / $922 billion), and the tax rate for Exxon was 41% in 2006 ($67.4 billion in taxable income, $27.9 billion in taxes).

(via Instapundit)

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Question of the day (yesterday)

From the Washington Post's letters to the editor yesterday:

Instead of the Maryland General Assembly giving us a $1.4 billion tax increase and a referendum on slot machines [front page, Nov. 19], why don't lawmakers just give us the slots and let us vote on the tax increase?

DOUGLAS E. McNEIL

Baltimore

This question answers itself.

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Nation of the apes

It may sound as if the Swedes have begun to outsource government jobs to apes, but that's not what's going on at all.

A reorganization of workers at the Swedish Tax Authority is partly shaped on studies of apes, according to a leaked internal report. Employees are not flattered by the comparison.

The tax authority is currently undergoing its largest reorganization for many years. One of the foundations of the restructuring plan is a report which says that studies of apes show that people work best in groups of 150.

According to the article, which I strongly suspect is a hoax, the report says: "Evolutionary biologists have seen that primates live in social groups of varying sizes." It then compares the size of human brains to the size of the brains of other primates and concludes thus: "Based on this formula we have concluded that the optimum (or largest possible) group of people is 147.8."

A group of 147.8 people? No social scientist could be this idiotic. Oh, wait a minute...

There was a Dilbert cartoon about a dozen years ago that went like this:

Pointy-haired boss: We ranked all the engineers from best to worst.

Pointy-haired boss: We plan to get rid of the bottom 10%. That includes you, Wally.

Wally: Your plan is logically flawed.

Wally: If you fire the bottom 10%, you'll still have a bottom 10%.

Wally: You'll fire and fire but there will always be a bottom 10%, until finally . . .

Wally: When less than ten people are left, you'll have to fire body parts instead of whole people!!!

Wally: We'll have torsos and glands wandering around unable to use keyboards . . . Blood and bile everywhere!!!

Dilbert: How'd it go?

Wally: He fired my hair.

(hat tip: fee simple, who, when asked what this article meant for his own organization, replied, "Sorry, I can't answer right now. I'm on my afternoon banana break.")

Click here to read more . . .

Unequal treatment under law

Governor O'Malley called for a reform of the Maryland criminal code today, stating that the current structure was "patently unfair." He argued that Peter Angelos, the wealthy trial lawyer who owns the Baltimore Orioles, should not have the same rights as "the woman who cleans his office."

Oh, wait a minute! I think I got that wrong. He was talking about the tax code, not the criminal code, and he said Angelos shouldn't pay the same rates as the woman who cleans his office.

Whew, what a relief! We're all in favor of progressive taxation, aren't we? It's just not fair that Maryland taxpayers all pay the same basic tax rate. As the Governor put it:

"I'm in favor of progressive taxation, where people who make a lot more pay more," O'Malley told reporters recently.

Because, you know, in a flat tax system, people who make a lot more actually pay a lot less. Or something. Oh, never mind.

In a flat tax system, the tax rates people pay on net taxable income are the same, regardless of income level. Maryland's is a modified flat tax system, because the state collects a local income tax for the counties, who "piggyback" on the state tax by adding to the state rate for their own taxpayers. We'll ignore that here for the sake of simplicity. Maryland's state tax rate is flat at 4.75%, after the first $3,000, which is taxed at a lower rate.

So let's do the math with the Governor's example. For these purposes we'll simplify by assuming Angelos, who's probably a billionaire, has a taxable net annual income, after deductions and exclusions, of $100 million and that the cleaning lady has a taxable net annual income, after deductions and exclusions, of $10,000.

Let's compute their taxes under the current flat-tax scheme. For simplicity, we'll ignore the differential rate on the first $3,000.

Angelos:

.0475 x $100,000,000 = $4,750,000.

Cleaning Lady:

.0475 x $10,000 = $475. (It's actually $424 under the tax tables, but we're ignoring that here.)

Hmmmm. Angelos, in our example, pays 10,000 times as much in state taxes as the cleaning lady. I guess Governor O'Malley is right -- we need progressive tax rates to make sure "people who make a lot more pay more." What's that? He pays a lot more under a flat tax already? How can that possibly be?

I'll tell you how it can be. Governor O'Malley's argument for progressive tax rates is a phony. It's a way of punishing wealthy people for having created wealth. It's a scheme based on ideology, not economics, and on envy, not fairness.

Believe me; I hold no brief for Peter Angelos or anyone else who's a trial lawyer and sleazy sports team owner. I'm merely using him as an example, because the Governor chose him as his poster boy for progressive taxation.

There's an old joke that a lottery is a tax on people who don't understand math. Progressive taxation is a tax scheme pushed by people who do understand math but hope other people don't.

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