Rants
Blight
It seems odd to talk about Blight and missed opportunities at the same time, but here we are.
I attended the SBERP RDA ( South Bend Elkhart Regional Partnership Regional Development Authority) board meeting last week and heard presentations of several properties that would benefit from the Lilly Foundation funds that have been pledged to them for blight elimination. As a sign of the times, all of them included some form of housing, as additional and better housing is the biggest perceived need at this time. The project that would be most recognizable to those in our area contemplated a multi-million dollar renovation and repurposing of the old Kamm and Schellinger Brewery in Mishawaka currently known as the 100 Center.
Several properties in St. Joe and Elkhart Counties were submitted. Marshall County was conspicuously absent… thus the missed opportunity.
Blight, as referred to when talking about communities, is generally a reference to systemic vacancies. But it is sometimes referring to buildings with deferred maintenance. I’m sure we all can think of properties in our communities that would fall under one of these definitions. Without even trying, I can name seven properties that fit this definition in Culver. I can think of half a dozen in Plymouth. I know of several in LaPaz and Argos. I’m sure those familiar with Bourbon and Bremen could name similar properties there. So how did we allow this opportunity to pass us by? Couldn’t we have put together something? We are the smallest county by population in our three county regional partnership. There would have been strong incentive to try and share some of the largess if we would have presented something.
We’re at a disadvantage in these things that we need to figure out how to overcome. The internal staff available in South Bend, Mishawaka and Elkhart to throw at these opportunities far outweigh the capacity of any Marshall County community. One Marshall County is being touted as a possible answer to this, but they couldn’t muster the effort to make a presentation as they are still fighting to gain acceptance locally. This is sad, as this could have been an easy win for them that would have shown their value.
Just from attending public meetings, I know of three properties in Culver, two in Plymouth and one in LaPaz that have asked for help and would have qualified for this program. A Marshall County regional submission could have been a combination of projects that would have helped all of our communities. A rail transfer facility was floated at the PIDCO annual meeting for one of Plymouth’s blighted properties. There were opportunities there.
Submitting something would have helped our larger region as well. It’s been clear from the feedback from the Regional Partnership that they need to use some of the funding in Marshall County, but if we fail to give them something to spend it on, it’s hard for us to complain. At some point this could be a problem when the region goes for additional funding. The down state entities want to see the wealth shared.
Some of the issue has been disorganization and some has been a lack of cooperation. Both should be things that can be remedied for the greater good. The sad thing is that most Marshall County residents don’t even know about this missed opportunity. It is likely that most of the property owners of the above mentioned sites don’t know they missed an opportunity. But by definition of the program, the projects must be put forward with government support. Unfortunately, I would guess that the majority of our elected representatives aren’t aware of this either. At least that’s my hope. If they knew and did nothing, that is worse.
There will be more opportunities like this coming down the line. We need to take steps so they aren’t missed too…
What’s in a name?
I’m pretty unhappy that I know the name of the shooter that attempted to assassinate former President Trump. If you don’t know his name, I’m not going to be the one to enlighten you…
My personal feeling is that it’s unconscionable that the press puts the names of such people out there. Law enforcement must, in the name of full disclosure, but it’s the press that gives them posthumous fame. My distaste for this is not because of concern for their families. Often their families are complicit, through ignoring red flags, if nothing else. My reasoning is that many of these individuals are doing it for that fame. How many other disturbed people see this and think, “At least I will be recognized”? What other heinous acts are being contemplated by disturbed individuals seeing this shooters name plastered across all media?
I knew the names of the killers from Columbine. I knew the name of the Boston Marathon Bombers. I knew the name of the Aurora, Colorado shooter and the man that shot up the music festival in Las Vegas. I know the name of Sharon Tate’s killer cult. I know the names of the brothers famous for killing their parents. I know the name of President Reagan’s attempted assassin. I know the names of JFK’s assassin and clear back to Lincoln’s assassin. I’m sure this is enough to bring many of those names to your minds… None of this information is valuable to us nor does it protect us. All of this could be the catalyst that causes a continuation of this murderous loop.
What’s in a name? For some people, this is their way of achieving their 15 minutes of fame. Let’s stop making that possible.
Inflation Allegory
I just heard another sound bite with President (and candidate) Biden touting his administration’s success in bringing inflation down. The 2019 inflation rate was 1.81%, a decrease of 0.63% from 2018. The inflation rate for 2020 was 1.23%, despite or because of Covid. The 2021 inflation rate was 4.7%. The inflation rate for 2022 was 8.0%. The inflation rate for 2023 was 3.4%. As of today, the 12 month rate of inflation is 3.5%… While there is no denying that going from 8.0% to 3.5% is better, it does not make the 8.0% rate (that occurred two years after he took office) go away.
So, here’s my favorite explanatory allegory… explained in pounds. Fat pounds, not British pounds…
Lets say your heathy weight is 160 lb. You’ve maintained that weight for years, but at your annual check-up in 2021, your doctor notes, “You’ve put on 4.7 lb. You need to keep an eye on that.” You note it. You watch your weight, but at your 2022 check-up, your Doctor’s not happy. “You’ve put on another 8 lb since your last visit. Here’s some diet and exercise suggestions to get this under control.” You make an effort. You weigh yourself before going to your 2023 check-up. You’ve gained another 3.4 lb. What do you think the chances are that the Doctor congratulates you on ONLY gaining another 3.4 lb? Hmmmm… Zilch. Nada. Not gonna happen. He’s going to tell you to get your ass to the gym and get a lock for the refrigerator because in the last three years, you’ve gained 4.7 + 8.0 + 3.4 = 16.1 pounds! You now weigh 176 lb!
Inflation accumulates in a similar matter. Even at the Fed’s target 2.0%, that means things are 2% more expensive every year, so what costs $1.00 this year would cost $1.02 next year and $1.04 the next year.
Inflation is equivalent to a regressive tax, as in the less net worth you have, the harder you’re hit by it. If you have $10 to your name and inflation is 8%, you have to spend it for whatever you can afford at the inflated rate. If you have $1,000,000, your spending money is affected in the same way, but inflation increases the value of your house, stock portfolio and provides a higher interest rate for you at the bank. All the things you have when you’re worth $1,000,000 that you didn’t have when you were worth $10. Makes it damn hard to get from $10 to $1,000,000!
DST Here we go Again
For the TL;DR crowd, I am not a fan of Daylight Savings Time and more specifically the silliness of changing clocks all the time. Here’s a new video that explains it and tells why it’s antiquated.
Even Neil deGrasse Tyson says it’s ridiculous now (below), and “No One Gives A Rat’s Ass”. We invented electricity. Duh!
Wealth Tax
August 19, 2024
Kevin Berger
Commentary, Personal, Politics, Rants
Community, government, Rants, taxes, Trends
There is an old adage regarding investing that when your stocks are down, you haven’t actually lost any money until you sell the stock. Because of this, the corollary has always been, that likewise, the gain is not realized until you sell the stock. Gains and Losses “on paper” don’t really matter, until they are realized when they are converted to cash or traded for other things. President Biden and now candidate Harris, along with some members of Congress are pushing a Wealth Tax, which would tax these paper gains.
As an example, if you bought 100 shares of Apple’s stock in 2010, it was 6 dollars a share. It cost $600 to make that purchase. It is now over $200 per share so your $600 investment is worth upwards of $20,000 or a 33 times as much as when you bought it. But that gain is on paper. You’re not able to use that value to purchase anything until you sell the stock, at which time you’ll take a $5,800 capital gains haircut.
The wealth tax proposal suggests that you should pay tax on that unrealized gain now. But how will the unrealized tax be determined? Apple’s stock’s all time high was $237, but its highest day end value was $234. And on August 5th with the short crash, it was at $207. Those numbers all are within the past month. With the constant fluctuation of stock prices, will there be an arbitrary day chosen? The all time high? An average of the past year? At a minimum, this seems like a record keeping nightmare. Record keeping is already a problem with the current capital gain tax where you have to keep documentation of a stock purchase price, transaction costs, and splits along the way… sometimes over decades. This is worse with a business or property where you have to track expenditures on improvements, depreciation and other things that affect value.
Another local example is what has happened to many families around Lake Maxinkuckee. Their ancestors owned a lake cottage which was bought decades ago. The property was passed down to descendants. Not all of these descendants were wealthy, but suddenly they were wealthy on paper because of the appreciation in lake property values. They were then forced to sell property that may have been in the family for generations because they couldn’t afford the real estate taxes on the appreciated value. The wealth tax could be another hit on unrealized generational wealth like that.
In a Kiplinger.com article, John Goralka posits this concept about estate planning, “The cash people receive from you is more cash than you have.” This translates to day to day things as well. Wealthy people don’t live like Scrooge McDuck, with a vault in the back of their home where they swim in gold coins. How much money do you think Elon Musk or Jeff Bezos have that they can access immediately? More than me, I’m sure, but as a percentage of their wealth, I would guess the percentage is smaller. Wealth is generally tied up in “things” and those things are working to help you create more wealth. Some of those things employ people who provide goods and services. It’s likely that a wealth tax would require forced liquidation of those things to pay the tax. That would result in less investment in those things so that cash that should be put to work in the economy is held back in anticipation of tax liabilities.
John Goralka’s article has made me think about my own situation. I own my home and currently have no plans to sell it. That value adds to my net worth, but it’s not money I can spend. But when I die, that home will be converted to cash to distribute to heirs. A smaller version of what Elon Musk has with Tesla and Jeff Bezos has with Amazon, but the concept is the same.
In our current DEI world, it has become de rigueur to bash successful people. Hard work, saving and investing are out of fashion. Along with the wealth tax, there are discussions about taxing 401(k)s and IRAs where people have saved too much or invested successfully. Envy of wealth has replaced the aspirational goal of becoming wealthy. Most wealth is the result of some risk. Most wealth remains at risk as it remains invested. No government has been good at playing Robin Hood. We should push back on this, as a tax on those creating wealth by a government that can’t live within its means won’t end well.
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