Posts by Kepler

Satya Nadella: Microsoft's new man presses all the old buttons in LONG memo

"We will re-invent productivity to empower . . ."

Satya Nadella has GOT to be the world's undisputed King of Meaningless Jargon. Everything he says or writes is buzzword-compliant and dripping with empty euphemism. Sure sign of a shallow mind.

NASA's Curiosity rover brought Earth BUG to Mars

"Interstellar" RCE

"[I]t is unclear how Curiosity's micro controllers are affected, so the idea of interstellar RCE is in the realm of science fiction."

Um, at this point even interplanetary RCE remains in the realm of sci-fi. Interstellar RCE would reguire not only "uncommonly huge buffer sizes" but, say, either great patience and a very long lifespan, or some way to get around the speed of light as a limit in communications.

Retiring Reg hack explains how bass playing = tech reporting

Re: Fantastic analogy

"You shouldn't be the story, yet without you there is no story. No one should notice you're there, but they should sure as hell notice when you're not."

I pretty-much agree. Good bass playing usually and mostly is something that merely remains in the background but makes the rest of the band sound better. But as I said below, tell that to Stanley Clarke!

"Good bass playing . . ."

"Good bass playing is, unfortunately, invisible to anyone who isn't also a bass player."

Tell that to Stanley Clarke!

Re: "The Joseph Conrad of IT Journalism"

P.S. I met the late Bob Babbitt before he died, at The Lipstick Lounge in Nashville. A great bassist, and also a classy guy. Introduced by a mutual friend, who also plays bass. Loved him and the late, great James Jamerson in Standing in the Shadows of Motown!

http://en.wikipedia.org/wiki/The_Funk_Brothers

Re: "The Joseph Conrad of IT Journalism"

Also sad to learn that we disagree on the subject of whether people banding together to engage in political speech should have to forego the legal protection afforded to almost every other form of cooperative activity, and expose their personal assets to suit, in order to publicize their shared opinion on matters of public controversy. But as skelband pointed out in the very first comment above, the fact that "We may . . . disagree and [even] outright insult each other from time to time" does not diminish my respect for you or your writing, which I have consistently enjoyed over the years. Or our sense of community, etc.

(Hell, many of my best friends — and at least three of my cousins (one a regular contributor to The Daily Kos!) — are unsound on this question, sharing your apparent misunderstanding and metaphysical confusion! (Namely, thinking that there is any such thing as a "corporation" that is somehow capable of speech all by itself, independent of any actual, flesh-and-blood human beings, so that one may somehow limit the speech of "corporations" without also thereby limiting the Constitutionally protected speech of real, honest-to-God people.) But if I were to insist that all my friends agree with me on everything, I would have no friends. I have some very odd opinions!)

So despite your error, I shall be hoisting a pint to you this evening, and I wish you the best in the future.

"The Joseph Conrad of IT Journalism"

So sad to learn that "the Joseph Conrad of IT journalism"* is retiring from El Reg. Your writing will be sorely and dearly missed!

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* Yanks officially recognise the word 'boffin'

http://www.theregister.co.uk/2011/05/26/boffins/

Merger with Sprint is INEVITABLE, suggests T-Mobile chief bean counter

Re: The biggest regulatory obstacle to this merger

You make a good point, Tom. Those words may come back to haunt Sprint's new owners, even though they had no connection with Sprint at the time.

However, the fact that AT&T was already #2 at the time might make a big difference. A merger between #2 and #3 or #2 and #4 is gonna get a lot more regulatory scrutiny than one between #3 and #4. Especially where — as in the U.S. today — we are getting closer and closer to having a de facto duopoly (at least nationwide, though perhaps not in all regional markets), and even the resulting combined firm would still be only #3 in market share. Under all these circumstances, regulators might decide that this merger is in the interest of continued viable competition with #s 1 and #2.

(P.S. I wrote all that before learning that Masayoshi Son — whom I'd never heard of before — said the same thing in support of his proposed acquisition.)

What I don't get: CDMA vs. GSM

What Carter said about economies of scale, and the ability of a combined firm with greater resources to compete with the current #1 and #2 firms, all makes sense. Until one remembers that Sprint uses CDMA and T-Mobile uses GSM! How would the two networks be integrated, and how would the cost and difficulty of that integration not offset the superficial gains to be had from any merger?

I do not ask these questions merely rhetorically, to argue against the merger making economic sense. There may be a very good answer, and I would love to hear it!

But on the face of the situation I cannot see these two particular firms merging. It just doesn't make sense to me.

Euro cops on free Wi-Fi not-so-hotspots: For pity's sake, don't use them for email

How insecure is HTTPS over a public Wi-Fi hot spot?

The article itself makes it sound like VPN is the only possible way to make communications over a public Wi-Fi hot spot secure. For some reason it doesn't even mention SSL or HTTPS.*

Unlike the article, a number of the posts above discuss SSL. While it is by no means perfect — being subject to attacks such as man-in-the-middle, and to bugs such as OS X's and iOS's problem of potentially accepting bogus certificates — the bottom line seemed to be that (as Destroy All Monsters said) "It should be secure enough."

I have long had Facebook set to use HTTPS by default, and every e-mail service I know of also uses HTTPS by default — even (shudder) AOL. Just how vulnerable are communications via e-mail or Facebook made over a public Wi-Fi connection, if SSL/TSL and HTTPS are used, but VPN is not?**

Or shopping or on-line banking?

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* I view SSL and HTTPS as essentially interchangeable for purposes of this discussion. Likewise, I have paid no attention to the different versions of SSL, or to SSL's having been succeeded by TLS. If anyone believes that is not accurate (SSL and HTTPS "essentially interchangeable for purposes of this discussion"), and that we need to be more specific, by all means set me straight.

http://en.wikipedia.org/wiki/HTTP_Secure

http://en.wikipedia.org/wiki/Transport_Layer_Security

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** According to its creator's description, Firesheep does not appear to work where SSL and HTTPS are utilized.

http://codebutler.com/firesheep/

It does not appear to work on e-mail accounts, and appears to work on Facebook only in cases where the user has not already told Facebook to use HTTPS.

http://www.pcworld.com/article/209333/how_to_hijack_facebook_using_firesheep.html

http://en.wikipedia.org/wiki/Firesheep

Sysadmins and devs: Do these job descriptions make any sense?

Re: Chiefs and Indians

P.S. Every time I read a story here at El Reg quoting any of the new upper-level management at Microsoft, I am instantly reminded of the people at Dell. Microsoft appears to have caught the same disease.

Re: Chiefs and Indians

During a stint I had working at Dell, I repeatedly had the experience of observing 8 "chiefs" standing around just watching, as 3 "indians" did actual work. Arms folded, whispering to each other, occasionally taking notes. But never doing any actual work themselves.

They were, of course, studying work methods and procedures, as a prelude to going off to analyze and discuss these methods and procedures with a view toward improving them — something I have no objection to in principle, but that clearly had gotten totally out of hand at Dell. They frequently held meetings to discuss quality circles, kaizen, lean (using the word by itself — as a noun, not an adjective), TQM, and I believe at least one other Japanese word that I have since forgotten. (It clearly was considered much cooler and more insightful to say anything possible in Japanese rather than in English.) I could not count all the buzzwords that appeared on the meeting announcements that were tacked to the bulletin board, but these folks clearly were determined to be 100% buzzword-compliant.* The elevation of jargon over substance was so obvious a blind man could see it.

If — as I strongly suspect — the entire company is managed this way, it's no wonder that HP and Lenovo are eating its lunch.

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* If I remember correctly, I first encountered the phrase "buzzword-compliant" in an article here at El Reg. I instantly realized what it meant, and immediately thought of all the mid-level bureaucrats I had seen at Dell. (As well as of several press releases I had read over the years announcing some new DBMS! — usually some kind of object database.) The phenomenon of buzzword-compliance is of course the epitome of shallowness and lack of understanding.

Re: You're lucky! @LaeMing

I'm afraid I must agree with Tom Welsh. As much as I wish to applaud any and every reference to Married . . . with Children, AC did indeed appear to miss LaeMing's point. Which in turn I think was entirely valid and well-taken.

If we are to apply the principle of the episode in which Kelly crams for a sports trivia quiz, and then can no longer remember that it was her own father who scored 4 touchdowns in one game for Polk High, because she has filled her head with other tidbits, then upon each successive reading of the article and the ACS's jargon, one's head would take in some new piece of information at random from the surrounding universe — or else perhaps reacquire some old piece of information previously displaced.

Either way, the point was that what the article and its extensive quotations from the ACS document put into one's head constitutes anti-information. And again, I think LaeMing probably is onto something.

And now to quit typing, place my right hand back inside my pants, and return to watching Archer! (Who at the moment is not getting along very well with Kenny Loggins.)

The long war on 'DRAM price fixing' is over: Claim YOUR spoils now (It's worth a few beers)

Why not just put a levy on their earnings and put the money back into "the government"?

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The value of the settlement is silly.

Should it be higher or lower in your opinion?

And keep in mind, according to the theory underlying antitrust law, it should only be equal to the amount of harm that the 12 defendant companies have done to consumers by overcharging for DRAMs, and by not selling enough of them as a result.

You are of course free to offer and go by a different theory — indeed, I have a different one of my own that I have thus far chosen to keep to myself — but that is the standard theory on which lawsuits of this sort are predicated.

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Why not just put a levy on their earnings and put the money back into the government?

That's a good question, but it has a reasonably compelling answer in this case: None of the 33 states whose attorneys general decided to sue is in a position to impose the levy you suggest. And while the private lawsuits and all the state lawsuits were consolidated in the U.S. District Court for the Northern District of California, the U.S. Government itself had no direct part in this suit. Neither the Justice Department nor the Federal Trade Commission had any involvement in the case at all.

I assume that by "the government" you meant the national government, and that what you had in mind was a sweeping levy that would be effective nationwide. But in fact there was not one government involved here but 33. Including not only big ones like New York, Florida and California, but Maine, Rhode Island, Louisiana, Arkansas, Iowa . . . I doubt these are the taxing jurisdictions you had in mind! And I especially doubt you were advocating a levy that would have effect in Rhode Island but not Connecticut, in North Dakota but not South Dakota, and in New Mexico but not Texas.

(See item 7 on the FAQ page of the lawsuit's Web site for a list of the 33 states whose attorneys general were involved. It isn't clear whether these state AGs sued under federal law, state law, or both.

Item 9 identifies the 12 defendant companies.)

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Where it will be used for something useful like 3 hour breaks for road crews.

Agreed. Plowing the money back into government, even if feasible here, would be tantamount to setting it on fire.

And it would not confer any benefit on the supposedly injured parties.

(Nor would bestowing a $40 million windfall on a select group of "non-profit" organizations chosen by the lawyers and the courts confer any benefit on the actual victims. This BS "general benefit" of the victims theory is just that — BS. It is a pretext for bestowing an unearned $40 million windfall on friends of the lawyers, while the lawyers pocket an additional $10 million for themselves. Leaving the actual victims conspicuously empty-handed and out in the cold.)

Re: Waste of time for anyone but the lawyers

Ken Hagan, you win the prize!

With no proof or documentation of a purchase within the covered time period required, it is indeed free money to anyone who asks for it.

Except if enough people ask for it, none of them will get any of it! As soon as that 5,000,001st "Small Claimant" shows up, the lawyers are relieved of the burden and expense of writing and mailing all those checks (which probably would cost one or two million dollars in postage alone), AND they get to pocket another $10 million for themselves!

(The difference between the $50 million allocated for payments to "Small Claimants" and the $40 million that will be paid to complicit "non-profit" organizations "for the general benefit" of the over 5 million Small Claimants who are not being paid!)

Viewed in this light, the Web site's assertion that it "is not anticipated" that "there [will be] more than 5 million Small Claimants" does indeed sound disingenuous, or at least highly questionable, and the site's dismissal of the "possibility that Small Claimants will not receive an individual payment" as "highly unlikely" looks like mere preemptive, anticipatory posturing: "We don't expect to be forced to keep another $10, 11 or 12 million for ourselves. No siree, Bob, we definitely do not! (Of course you never know.)"

However sincere or insincere their prediction, the lawyers behind the site have done everything in their power to rig the game in favor of more than 5 million Small Claimants showing up, and therefore of another $11 or 12 million falling into their own pockets. They have done everything they can to encourage as many people as possible to submit claims, and gratuitously imposed a rule whereby if too many people submit claims then none of them will be paid, and the lawyers will benefit personally if this should end up happening.

Are we really supposed to believe — or care — if the people who invited the entire town to their party feign surprise when the entire town shows up? Their prediction that this will not happen, and that their own decisions will not have the obvious consequence — or at least tendency — that Ken Hagan points out, means nothing.

Re: lawyer get-rich fund

And all the state attorneys general get something to brag about in their campaigns to be reelected or reappointed, or to be elected or appointed to the governorship, the U.S. Senate, or the state supreme court.

Excuse me. I meant they all get the deep satisfaction of knowing they have served the public they were sworn to protect!

Re: Really?

Just give the lot to some secular charity.

Often nowadays the charities to whom the lucre is given in lieu of actual injured parties are in league with the class-action plaintiffs' attorneys. Who are not mentioned in the article, but are unmistakably alluded to at the Web site linked to in the article.* The unmentioned presence of these private attorneys is the reason why the settlement is not limited to residents of the 33 states whose AGs chose to sue, each of whom is legally authorized to represent victims only in his own state.

And no doubt the $10 million missing or unaccounted for when "only" $40 million, instead of $50 million, gets funneled to these "non-profit" organizations — "for the general benefit" of the (by hypothesis) over 5 million actual victims who are classified as "Small Claimants" — represents a commission or finder's fee — i.e., a kickback — paid to the lawyers by the organizations receiving the windfall. It's win-win for everyone except the actual victims, who end up with nothing. (Except of course that lovely, vicarious "general benefit.") And the courts look the other way.

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* The article only mentions state attorneys general — at one point even calling them "US Attorneys General," even though none of them has ever actually been the U.S. Attorney General.

However, the Web site linked to in the article ("dramclaims.com") says right up front that there were class action lawsuits as well as suits by the state AGs. Class action lawsuits are always and inherently private lawsuits brought by private attorneys representing individual clients, and the fact of these private lawsuits is what explains the fact that the settlement is not limited to residents of the 33 states whose AGs brought so-called "parens patriae" suits on behalf of residents of their respective states. See items 6 and 7 of the site's FAQ page.

Humdrum Documentum momentum makes EMC glum? Off alone into the scrum it should be spun

Am I the only one who noticed?

Underneath a chart showing "Comparative Growth," it says "lick to enlarge."

No sex please, we're Twit-ish. Vine bans non-educational nudity

Re: I thought the concept of Twitter was bad.

After reading your reply, TitterYeNot, I just had to Google "Oh, the huge manatee!" to see what the Hell you were talking about.

Gosh, how I wish I hadn't.

Squidge-droids maker updates iRobot for SUCK, SCRUB action

Re: Skutters

They converted an unmitigated piece of shit into a mitigated piece of shit.

Well and nicely put!

And not too far off as description of Windows 8.1 as well, I should think.

Google! and! Facebook! IDs! face! Yahoo! login! BAN!

Re: Yahoo still going?

Inertia and path-dependence are powerful forces! The last time I made a "public service" Facebook post about the immediate need of all Yahoo! users to re-set their passwords -- was it 2 or 3 weeks ago or so? -- I found out that many of my friends still use Yahoo! for their e-mail.

But they're not half as stupid or lazy as I am: I still use AOL for my primary e-mail address! And curse it every single time I sign in. Even just using their Web site (I stopped loading their God-accursed software onto my computer years ago!), the ads and the memory leaks quickly bring my computer to its knees.

But moving would be such a royal pain in the arse. And GMail (the most obvious alternative) would bring its own set of myriad annoyances. While it does several things better than anyone else I know of, it does a whole slew of things wrong, too. Including several that even lowly, God-accursed AOL gets right!

Google's motto could be: "We usually suck a bit less than the others. But sometimes we don't."

Google, Foxconn team to build ROBOT ARMY

Re: Will they call it the T1?

"Oh, and we're defintely gonna need the 'rise of the machines' section reinstated."

Amen! PLEASE bring it back!!!

James Dyson plans ROBOT ARMY to take over the world

Re: What sort of Dyson product will these robots be?

"No doubt they'll either suck or blow, anyway."

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(1) Good one!

(I for one didn't get it the first time I read your post, Michael. I thought you were just being very critical of Dyson products when you wrote "suck or blow," and did not realize you were also being descriptively and technically accurate, and specific: his vacuum cleaners DO suck, and his fans DO blow!

My apologies if everyone got this immediately but I.)

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(2) If Bart Simpson is to be trusted as an authority, it MIGHT be possible that they will end up doing BOTH! That the new Dyson robots will suck AND blow, at the same time!

http://www.snpp.com/guides/bart.file.html

http://simpsons.wikia.com/wiki/Marge_Simpson_in:_%22Screaming_Yellow_Honkers%22

http://en.wikiquote.org/wiki/The_Simpsons/Season_10#Marge_Simpson_in:_.22Screaming_Yellow_Honkers.22

(Although the second and third URLs probably extend beyond the visible right edge of the comment display box in your browser, as they do in mine, you still can select either or both of them in its or their entirety.)

Re: ROTM

"My generation believed the world would be overrun by robots by the year 2014."

Wasn't it closer to 2029?

Re: ROTM

Thank God someone mentioned the Rise of the Machines!

Speaking of which, what the Hell ever happened to "The Rise of the Machines™"? And why wasn't this article included in the series?

Time was when one could count on El Reg to keep one abreast of such doings, but the venerable series has languished, with only a handful of updates over the past five years, and none—at least officially—since November of 2012.

http://www.theregister.co.uk/Tag/rotm

http://search.theregister.co.uk/?q=ROTM

The present article should count as an update, but for some reason was not connected with the series to which it obviously belongs. Obviously someone is trying to keep things quiet and not draw any further attention to the Rise of the Machines as a larger phenomenon that connects and underlies individual incidents. The Register still publishes the occasional story, as here, but no longer connects the dots.

Has Lester been co-opted by the Lizard Alliance?

Pity. He used to be at the forefront of this sort of practical journalism that all other news outlets—having already been co-opted—always shied away from, as these now-ancient but astonishingly apposite examples attest:

Dyson unleashes self-replicating hoover http://www.theregister.co.uk/2005/03/11/self_replicating_hoover/

Killer hoover attacks Scotsman http://www.theregister.co.uk/2004/12/24/killer_dyson/

Both examples—and countless others like them—bore Lester's byline. He was the leading contributor to the series, by far. But now he appears to be quietly spiking it, in an effort to downplay the concerted nature of the threat. Heaven only knows where we can turn to to be kept informed, now that even El Reg is dropping the ball (at the behest of its reptilian overlords?).

Re: Squalor is the prime irritant

"Yup, they evolve into huge disgusting sluglike things, . . ."

That eat lots of spice, do fancy maths in their heads, and fold space for a living? I think they eventually form a guild.

Re: "The Chocolate Factory has been not-so-quietly hovering up companies"

"I think you mean either Hoovering, or possibly Dysoning."

Thank you! I'm glad someone noticed that and pointed it out!

(The typo, too, but mainly the oddity and irony of saying "hoovering" when James Dyson, of all people, is the subject of the piece!)

Of course, in an article about robots, Roomba-ing also might have been a better choice than the standard and otherwise-superior term Hoovering.

(A quick Google search informs me that Hoover now offers a robot model too, but surely Roomba is the one and only name that is synonymous with robotic vacuum cleaning.)

Re: In the UK?!

"So you'd sooner buy products from the USA and China then?"

The American government is well on its way to becoming East Germany, but the culture of the American people remains solidly libertarian in THIS area (i.e., personal privacy, though not in others), for the most part. The government has gotten away with its march forward to 1984 largely by keeping it a secret from the American people, and by using the terrorist threat when necessary to cow us into submission. Now that the people have found out what has been going on, however, the process of reigning the government back in has commenced; we shall see what happens. I expect the progress to be slow, but ultimately substantial. And if tomorrow's festivities* end up sparking a quantum leap in the right direction, I will be happy to have proved wrong in my caution.

I clicked the "Up" arrow anyway, because I think wolfetone's point is perfectly fair in view of PRESENT circumstances, and VERY well taken.

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* The Day We Fight Back

http://en.wikipedia.org/wiki/The_Day_We_Fight_Back

IBM nearly HALVES its effective tax rate in 2013 - report

Re: The Capital Gains Non Sequitur

When I wrote above

"Remember, a capital gains tax is ALWAYS part of an income tax,"

I meant only that whenever there is a capital gains tax, it exists only as part of a larger, more comprehensive income tax. Capital gains are taxed only because, and to the extent that, they are considered a species of income.

I did NOT mean that whenever there is an income tax, it always MUST include a capital gains tax. It is perfectly possible, in principle, to have an income tax that excludes capital gains from its definition of "income." I have not heard of anyone doing this, but it is possible in principle.

Corporate Management's DUTY to Minimize Taxes Paid

Every corporation, and every director, has a fiduciary duty to the corporation's shareholders. That is why minimizing taxes in any way possible is not merely morally PERMISSIBLE, but morally OBLIGATORY. And LEGALLY obligatory as well -- subject to certain caveats.

One of these caveats has to do with something called the "Business Judgment Rule," a doctrine arising out of case law and applicable only within the United States.

http://en.wikipedia.org/wiki/Business_judgment_rule

In Delaware and any other US jurisdiction, a lawsuit against the directors of a corporation, or any of them, will fail so long as the directors' decisions can be defended as a valid exercise of the directors' good-faith business judgment. Thus, for example, if the directors of a company consider the matter and decide in their best business judgment that exploiting a particular tax loophole would not be in the corporation's best interest -- perhaps because of the negative publicity that might ensue, or out of fear of IRS or even Congressional retaliation, or because doing so might leave funds offshore and unavailable for the payment of dividends -- the courts will not second-guess them, and will not compel them to reimburse the company or its shareholders out of their own personal funds and assets for the excess taxes paid unnecessarily.

(Although Wikipedia does not mention this, the fact that personal financial liability of a director or directors would be the consequence of finding in favor of the suing shareholders is one reason why the bar is set so high. Individual directors could easily be bankrupted by one adverse decision.)

While I have not read the case to which Mole5000 alluded, it sounds like a textbook application of the Business Judgment Rule. What Mole5000 pointed out is true (I assume), but almost certainly does not have the meaning or significance he ascribed. It does NOT mean -- as Mole5000 suggested -- that directors do not have any legal obligation to maximize corporate profits and returns to shareholders in the first place, and therefore to minimize taxes of all kinds paid by the corporation. It only means that, in judging whether directors have satisfied their common-law duty to maximize net-of-tax financial returns to shareholders, the courts will always give the directors the benefit of the doubt.

(Naturally, if my guess is wrong and the Delaware case in question did NOT involve the Business Judgment Rule, then I welcome correction. And in case I do not come back on-line and see that correction on a timely basis, then I apologize here and now to Mole5000! But I will be VERY surprised if my guess is wrong, or more than a little off.)

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P.S. Concerning this Companies Act of 2006 that several of you mentioned: Does it displace the common law of directorial fiduciary duty to shareholders?

Fiduciary duty has remained a matter of common law in the United States, under the corporation law of each of the 50 states (well, except for Louisiana), and I am surprised to learn that it may no longer be a matter of common law in the UK.

Obviously IBM and Apple are American companies, so the Companies Act does not apply to them, but I would enjoy learning more about this anyway.

A Flat-Rate Income Tax (whether at a rate of 15 percent or otherwise)

A flat income tax rate of 15 percent is, BY DEFINITION, flat, not regressive. Provided of course that it is applied even to the first penny of income, with no initial amount of income exempted from taxation because it is deemed too small. Earl Grey's assertion to the contrary is innumerate -- contrary not only to the laws of economics, but of arithmetic!

(If you have a tax code in which all income above a certain level is taxed at a uniform rate of X percent, but all income below that level is exempt from taxation, then you do not have a true flat-rate tax. By definition you have a PROGRESSIVE tax code, with TWO rates instead of just one -- one of which is 0 percent, and the other X percent. Good or bad, progressive is not flat.

Keep in mind that there are other ways besides conferring an exemption to deal with the problem of people whose incomes fall below a certain level not being able to afford to pay the X percent income tax. The best and most obvious is a lump-sum rebate.)

And the contention of both Earl Grey and Uncle Ron that a flat tax is somehow bad for the poor is economically misinformed. A flat tax **set at the proper rate** (whatever that is, and however we would discover it) would in fact be better for the poor, and conducive to a HIGHER measure of progressivity OVERALL, than ANY non-flat alternative.

(I leave aside here such complexities as the choice among an income tax, a retail sales tax, a value-added tax, and other possible tax bases that might be considered in place of income.

Also, a flat tax set at a grossly excessive rate would be far more destructive than a mildly progressive income tax under which even the maximum rate remains reasonably low. But that is why I added the qualifying words "set at the proper rate." While one can imagine a progressive income tax that would be less destructive than SOME imaginable flat taxes, there will ALWAYS remain one or more possible flat taxes that would be even less destructive than ANY given progressive income tax, and consistent with even more OVERALL fiscal progressivity once government spending is taken into account.)

Concerning progressivity, it is vital to remember that one cannot judge the progressivity of each specific tax in isolation. One MUST look at the total system of taxation, with all taxes taken together. And not only that, but with government spending taken into account as well.

In practice, there is only so much progressivity -- or equalization of after-tax incomes -- that can be attained, regardless of where and how we try to obtain it. And trying to obtain it **via the TAX code** inevitably creates powerful distortions that shrink the economy -- often substantially -- and reduce tax revenue commensurately. (Thus leaving the government with less money to spend on or transfer to the poor.) FAR better to tax income at a uniform rate, and then obtain one's progressivity via the SPENDING side of the ledger. Targeted expenditures for the benefit of specific groups, and payments to desired transfer recipients, will give you as much progressivity as can possibly be attained in practice, will do so at a reduced cost to the economy, and will also do so by lifting people at the bottom up instead of by pulling people at the top down. It may be less satisfying to those whose desire is solely to hurt "the rich," for the sake of hurting the rich, but it will do FAR more good for those at the bottom, and for society as a whole.

Trying to make the system even more progressive by making the **tax collection** part of it progressive as well inherently backfires, and makes the OVERALL system of taxation and spending -- taken together -- LESS progressive rather than more.

(Not that this is an easy thing to see. Most people are oblivious to it.)

The Capital Gains Non Sequitur

Capital gains taxation SHOULD be scrapped, as Hammarbtyp remarked. But that fact has nothing to do with THIS discussion, as Uncle Ron pointed out in reply.

(And neither does Bretton Woods! What the Hell does any of this have to do with the gold standard or fixed exchange rates?)

Then again, in the context of the rest of his comment, it appears that Hammarbtyp PROBABLY meant corporate income taxation, not capital gains taxation, anyway.

Of course in that case, Hammarbtyp is even more correct -- because the case for abolishing the corporate income tax is even stronger than the case for abolishing the capital gains tax -- and relevant after all! Although the turnover tax with which he would replace the corporate income tax (or else the capital gains tax?) would raise problems of its own.

I'll not digress into ALL that is wrong with capital gains taxation. That is a complex topic, involving MANY important legal as well as economic considerations.

Suffice it for now to say that properly designing a capital gains tax so that "income" is not found to exist where in fact it is absent is very difficult. (Remember, a capital gains tax is ALWAYS part of an income tax. Capital gains are taxable only because, and to the extent that, they constitute a form of income.) By failing to index the taxpayer's "basis" in a capital asset for inflation (gain = sale price - "basis"), one can easily end up in a situation in which someone who actually has suffered a capital LOSS, in real terms, is deemed to have enjoyed a capital GAIN. By taxing him on an illusory, NOMINAL gain that is an ACTUAL loss, one is applying an EFFECTIVE tax rate greater than infinity! This is not good, or wise.

(As the taxpayer's real capital gain approaches zero while remaining positive, his effective tax rate approaches infinity. Once his real gain reaches zero, let alone becomes negative -- an actual capital LOSS -- his effective rate becomes undefined, and then negative. (He is being taxed on losses instead of gains, but not on purpose -- to penalize failure and unproductivity or anti-productivity -- and not in accord with a rate schedule that is knowable in advance so that decisions may be based on it.) That is why I chose the peculiar and mathematically impossible phrasing that I did.)

Granted, the objection I have presented goes more to indexing the capital gains tax for inflation than it does to taxing capital gains -- or not -- in principle. There are other arguments that apply against capital gains taxation per se, but they are subtler and more complicated, so I omit them here.

(They have to do with avoiding redundant, and therefore excessive, taxation of income, due to taxing the appreciation of an income-paying asset when the increased future income whose expectation is the basis of that appreciation will itself be subject to taxation -- provided of course that the expected increase in future income materializes.)

The problems that arise under a capital gains tax that is not indexed for inflation can become quite severe. I am not familiar with the British experience, but capital gains taxation surely was a major factor contributing to the anemic performance of the American economy throughout the 1970s. The problem I mentioned above of effective rates vastly exceeding 100 percent, or of even taxing people on nominal gains that were actual losses, actually manifested itself; it was not just a theoretical possibility. In times of low inflation it is a far less severe problem, but still real. (Especially for assets that have been held for several decades or longer.)

The problem of finding "optimal" tax rates cannot be separated from that of properly defining the tax base. And nowhere are the two tasks more intertwined than they are in regard to the taxation of capital gains.

Capital gains taxation is so economically destructive in practice that it is quite POSSIBLE, in principle, that it reduces collections from other taxes (including the rest of the individual income tax) by more than it takes in directly. In which case it would be better for the government's OVERALL collections to set the rate of the capital gains tax to ZERO!

Of course, there is no iron law that magically creates a discontinuity at zero. It is possible in principle that the globally revenue-maximizing rate of the capital gains tax is actually NEGATIVE, and that governments would collect more revenue overall if they were to SUBSIDIZE capital gains. (And tax capital losses?)

None of which am I advocating. Just pointing out the mathematical possibilities.

Fundamental Threshold Question

Leaving aside the undeniable and inescapable fact that taxation is theft, which makes this sort of tax avoidance not only NOT "morally questionable," as Hammarbtyp would have it, but perfectly legitimate and even morally OBLIGATORY once fiduciary duty to shareholders is taken into account (more on that in a moment, below), no one has yet remarked on the obvious threshold question of whether income should be taxed at the corporate level in the first place. (Taking the existence of taxes, including income taxes, as given.) It should not. "Income" should not be "recognized" -- and taxed -- until it is paid out to shareholders in the form of dividends.

(It is ironic that, in the United States at least, the people who complain that corporations do not pay enough in taxes tend to be the very same people who complain about the "legal personhood" of corporations. If a corporation is but a legal fiction and not a real person at all, how can it have income?)

Alternatively, if logic and common sense do not prevail, income MAY be taxed at the corporate level. But IF it is, then dividend payments to shareholders should not be counted as part of shareholders' income (for income tax purposes), because the income has already been taxed at the corporate level. Alternatively, if dividends ARE counted as income taxable to the shareholders, then dividend payments should (just like interest payments) be deductible from the corporation's taxable income.

One of these three expedients MUST be taken if double-counting and double-taxation (or more) of income are to be avoided. But the best expedient of the three is simply not to tax the "income" or corporations in the first place.

Why? Because without corporate income taxation, we would not have all these perverse incentives for all this silly gimmickry: investment tax credits (which are crude proxies for proper expensing of capital investment, and which inevitably misdirect capital -- subsidizing the PURCHASE of capital equipment instead of properly treating and taxing income from the EMPLOYMENT of capital equipment), accelerated depreciation and artificial inventory accounting methods (LIFO and the like), the shifting of income from one jurisdiction to another (with a lower tax rate, or none at all) via arbitrary intra-company transfer pricing, and so on. All of these economically counter-productive gimmicks exist because, and only because, governments insist on taxing income prematurely -- before it has actually been paid into the pockets of real human beings.

The urge to criticize Apple, IBM, et al. for what they are doing implicitly presupposes that, as corporations, they SHOULD be paying income tax in the first place. But the best and most economically defensible answer is that they should not. And even if the income of corporations IS taxed (which will inevitably bring with it unseemly and AESTHETICALLY objectionable practices of the sort documented in the article), fairness, logic and economics all dictate that the corporate income tax be integrated with the individual income tax as it presently is not (at least not in any jurisdiction I am aware of).

Economists have known all of this for over 50 years now -- at least since 1962, if not before. Arnold Harberger's seminal 1962 paper on the incidence of the corporate income tax gave rise to a gigantic literature on both the incidence (who actually pays it?) and the efficiency effects of the tax. Short answer: we have no friggin' clue who ACTUALLY bears the brunt or burden of the tax (customers, in the form of higher prices; employees, in the form of reduced wages and/or reduced employment and scale of the business; other suppliers, in the same way as employees; or shareholders -- who in turn may be poor workers or widows invested in pension funds as easily as they may be rich fat-cats), but we know it creates all sorts of perverse incentives for highly inefficient investments and business practices. All of this is well- and long-established, and none of it is controversial.

(There are disputes and qualifications in regard to certain ancillary or subsidiary matters of technical detail, but not in regard to any of the basic principles.)

In the face of all this, the burden is on him who would complain about corporate tax avoidance strategies -- such as the shifting of income from one jurisdiction to another via the rigged pricing of intra-company sales -- to justify the taxation of CORPORATE income in the first place. Why on Earth should Apple, IBM, or any other corporation -- **as distinct from its shareholders** -- pay an income tax rate (average or otherwise) any greater than ZERO?

. . . . .

Leaving aside the fact that taxation is theft, and therefore ALWAYS immoral, and confining ourselves to economics, I say that the shareholders should pay income tax, but the corporation itself should not.

And even those who disagree with me about abolishing the corporate income tax generally agree that we should do one or the other -- tax income that is earned through corporations at the corporate level OR at the individual level -- but not both. NO ONE defends double-taxation AS SUCH. (Although a few economists try to argue that taxing corporate income and then taxing what's left after corporate income tax a second time, when it is paid to shareholders, somehow isn't really double-taxation at all.)

. . . . .

P.S. Just in passing, for his pathbreaking analyses of the economics of taxation, and for a variety of other contributions to other subjects (including the economics of monopoly and antitrust law, and international trade theory), Arnold Harberger almost certainly deserves a Nobel Memorial Prize in Economic Sciences. He will never receive it, however, because he had the temerity to advise the government of Chile back when Pinochet was in charge.

Not that his advice on economic policy had anything to do with the policies or practices for which Pinochet is reviled, of course, but some people -- evidently including the Swedes on the Prize Committee -- just think it was too unseemly for Harberger to have anything to do with the dictator.

. . . . .

In separate posts below I shall address three issues that do not bear directly on the threshold question of whether corporate income should be taxed in the first place, but that came up in the discussion above -- in the comments before my own.