economics

Property Taxes

The Florida house of representatives approved a ballot measure for this year’s election. The proposal would allow voters to approve an elimination of all non-school property taxes for homestead property. Sixty percent of those voting would need to approve it, then it would become part of the state Constitution. This proposal still needs to be approved by the state Senate in order to make it on the ballot, and it will have a much harder battle there, because the Democrats are absolutely opposed to it.

You will recall from my post of a couple of years ago:

In Florida, the tax assessor decides what the “fair market value” of your house is. The taxable value is then calculated by taking the market value and subtracting your homestead exemption. In order to have a homestead exemption, the owner of the property must live there as their primary residence. In other words, commercial and rental property doesn’t get a homestead exemption. The taxable value is then subject to being taxed. If you want more detail on how all of this works, click on this link to my previous post.

There are also numerous carve-outs for various groups.

  • The homestead exemption is $25,000 on the first $50k of value, then another $25,000 for the next $50k of value, but that second $25k is only for non-school taxes.
  • Additional exemption for residents 65 or older who make less than $38,686 per year
  • Total exemption for totally and permanently disabled veterans, surviving spouses, or first responders.
  • No property taxes for  active-duty personnel deployed outside the U.S.

The result of all of this is many people already don’t pay taxes. In my town, there are 1,000 homes total. Two neighborhoods were recently built in the town- my own, and one other. Those two communities have 200 homes in them, so 20% of the town’s homes. Those homes pay more than 50% of the town’s taxes. Many homes in the town, including those of three of the five city commissioners, pay no taxes at all.

As a result, taxes are very tilted. Renters pay more than owners (because landlords don’t get tax exemptions). Those who have lived in their homes for a long time don’t pay any (or very little) in taxes.

The left is pissed about this. They are all singing the same song- claiming that this is a tax break for so-called “boomers” because GenZ doesn’t own houses. Isn’t it odd that the left constantly wants corporations to pay taxes, but they finally understand that companies don’t pay taxes- instead, they treat taxes like any other expense, and pass those expenses on to the consumer.

The left claims that property taxes are essential for things like police and fire, but ignore that overall, ad valorum taxes are only 18% of local tax revenues. Still they claim the following would be affected, but are lying:

  • Law enforcement
  • Social services
  • Parks
  • Environmental programs
  • Fire districts
  • Emergency medical services
  • Schools
  • Roads

Law enforcement, fire, EMS, and police are specifically mentioned in the law and will have required funding. School taxes are exempt. What this leaves is Social services (giveaways), Parks and environmental programs (luxury items), and roads (already funded by gasoline taxes and tolls). What the left is upset about is the funding for things like learing centers and other graft that permits them to hand out money to their wealthy well connected patrons.

The Senate session ends March 13. The odds that this gets passed before then are long. It probably won’t happen.

By Divemedic, ago

51 Days

Mayor of New York Mamdani was elected with Socialist promises of free ice cream and a socialist utopia, with a solemn promise of making the rich pay for it. It only took 51 days for him to float the first tax increase on people who aren’t rich.

“This would effectively be a tax on working and middle class New Yorkers, who have a median income of $122,000,” he said

That amount of money is not much in New York. The people making $122k isn’t a lot of money. The proposed tax hike? A 9.5% increase in property taxes. This is why I keep saying New Yorkers need to stay there, and stop moving to Florida where they vote for more of the same policies that made them come here in the first place.

By Divemedic, ago

Scams

A reader recently wanted to know why people make money when owning companies that don’t ever make a product. Some companies are scams, that’s how. Look at this post from Twitter/X:

Believing that a 3D printed filter can eliminate 74% of the CO2 emitted by a car’s tailpipe is ridiculous. The chemistry alone is impossible. Plants don’t just convert CO2 to O2. They are doing so because they need the carbon atoms to make other things, but discard the unnecessary oxygen. The carbon gets turned into other things: cellulose, fructose, proteins, and all of the other things the plant needs. In other words, the plant gains in mass by taking in this CO2. The formula is one that is known and taught in high school biology courses.

CO₂ + H₂O + light → biomass (carbohydrates) + O₂

What makes this impossible is the numbers involved. Burning gasoline produces about 8.9 kg CO₂ per gallon. So at 30 mpg, that’s about 0.30 kg CO₂ per mile. To reduce CO₂ by 74%, you’d need to remove roughly 0.22 kg CO₂ per mile. At 60 mph = 1 mile/min → you’d need to remove ~220 grams of CO₂ every minute. That doesn’t seem to be too bad, on its surface. So why is this impossible?

At a conservative microalgae fixation rate of 4 g/L/day, you’d need ~106,600 L of culture. At 1 g/L density, that’s ~107 kg dry algae. That’s not all- that dry algae would need a water bath in order to function. Once the water is added, that amount of algae would have a mass of 107,000 kg- more than 100 tons. Fit in a plastic tailpipe adaptor. Obviously not possible in any practical sense. It’s like discovering your dog eats dog poop, so there’ll be no more dog poop if you just get your dog to eat its own poop.

So these kids are not the first ones to run a scam like this. There is the company website at https://www.gogreenfilter.com/ and they have corporate sponsors, including T-Mobile. They are marketing and selling these things.

Back in 2018, there was a post I did about a Canadian company claiming to be able to make gasoline from CO2. This is what I said then:

This company is hoping that those watching don’t understand the First Law of Thermodynamics. Carbon dioxide is NOT energy. Taking CO2 and converting it into hydrocarbon fuel USES energy. Thanks to inefficiencies in ALL chemical reactions (First Law of Thermodynamics) it takes more energy to create the fuel than the fuel itself contains.

I thought it was a joke, it was so stupid. I thought — it’s junk science, junk commerce, nothing makes sense about it. But look how pretty it is.

About a dozen years ago, there was another college concept where women could paint on a drug detecting nail polish that would change colors when exposed to date rape drugs. A woman could simply stir her drink with a fingertip and make sure the polish didn’t change colors. For numerous reasons this is impossible, but there are sill tons of people out there who are wanting to buy this stuff. I could swear I did a post on this years ago, but I can’t seem to find it. They were collecting funding to get the company off the ground. In other words, scamming investors.

The point is that there are tons of scams out there, and people will happily hand over their cash without bothering to check the claims of the person making them.

If you make a product while making claims about its performance, but you don’t test to make sure the product works as you claim, that is fraud or a scam. If I tell you that I have a machine that creates gold out of lead, then sell them for $10,000 each, but I never test to see if it actually works, that’s a scam. If I collect investor cash to develop this product, it’s a scam.

On the other hand, if I convince a company to fund my development of an idea for a product, or develop some technology with possible future value, that’s R&D. Sometimes R&D leads nowhere, and that is why companies have an R&D budget. Sometimes it pays off, sometimes it leads to a dead end.

It’s a line to be drawn- if I tell you up front that this is research of concept, it isn’t fraud. If I tell you that I have a working prototype that I want to bring to market and I don’t, that’s a scam.

By Divemedic, ago

TANSTAAFL

The story is titled Denmark’s generous child care and parental leave policies erase 80% of the ‘motherhood penalty’ for working moms. The story begins with this premise: motherhood tends to depress women’s wages, something social scientists call the “motherhood penalty.”

Then it goes on to point out Denmark policies intended to help mothers stay full time employed.

  • subsidized child care is available for all children from 6 months of age until they can attend elementary school. Parents pay no more than 25% of its cost.
  • payments made to parents of children under 18. These benefits are sometimes called a “child allowance.”
  • housing allowances, that are available to all Danes, but are more generous for parents with children living at home.
  • In the year they first gave birth to or adopted a child, women received over $7,000 more from the government than if they had remained childless. 
  • the Danish government offset about 80% of the motherhood earnings penalty for the women we studied. While mothers lost about $120,000 in earnings compared with childless women over the two decades after becoming a mother, they gained about $100,000 in government benefits, so their total income loss was only about $20,000.

What the article is saying is every woman who has a child receives $10,000 a year, simply because they had a child. Where does that money come from?

Denmark has one of the highest personal income tax burdens in the world. It includes:

  • State income tax
  • Municipal income tax
  • Labor market contribution (AM-bidrag) – an 8% tax on gross income
  • Optional church tax (if a member of the Church of Denmark)

Altogether, income-related taxes make up the largest share of total government revenue, with VAT taxes being the second largest share.

The median worker in Denmark makes about $89,000 per year, before taxes. Here is what happens to that:

  • $33,000 is taken in payroll taxes
  • an average of $3500 per year in VAT tax
  • $4500 in a mandatory pension payroll deduction
  • there are also other taxes for Capital gains, electricity, food, alcohol, etc. These other taxes average another $2000 per year.

In all, taxes take about 53% of the median Dane’s income. At any given time, roughly 30–35% of Denmark’s population receives some form of public transfer payment. That includes:

  • Early retirement programs
  • State pensions (old-age pension)
  • Disability benefits
  • Unemployment benefits
  • Student grants (SU)
  • Social assistance

With all of that, among working-age adults (roughly ages 18–64):

  • About 15–20% receive some form of income transfer in a given year.
  • A smaller share (often under 5–7%) receive long-term social assistance.

Another advantage Denmark has, is they have a different racial makeup.

If translated loosely into U.S. census-style categories:

  • ~80–85% White
  • ~5–8% Middle Eastern/North African
  • ~3–5% Asian
  • ~2–3% African

Now compare that to the US: In the US, about 45% of citizens are receiving government payouts, but in Denmark, college and healthcare are free of charge to the user.

So how does Denmark afford it? No one is excluded from income taxes. In the US, more than half of the country doesn’t pay income taxes.

Now imagine the howling if the US announced “free health care” and college, but changed to a simpler, no deduction, everyone pays income tax of more than 50%, up from the US average of about 30%. Yeah.

By Divemedic, ago

Lending

I want you to look at this post, then I will explain my position (as if you don’t already know)

I once tried peer to peer lending as one of the lenders. I wanted to see if it worked or not. I ‘invested’ $1000 in Prosper. Here is how I remember it working: a person applies for a loan. The application, along with the person’s pertinent financial information (Credit score, income, etc.) is listed. You as an investor can then offer to fund some of the loan. Once the loan is fully funded, the lenders offering the lowest interest rates are the ones who fund the loan. At the end of the bidding period, those people are the ones who ultimately fund the loan. All loans are for 36 months and are unsecured. Example:

Person wants to borrow $3,000.

Person A agrees to loan $1000 at 18 percent. Person B $2000 at 18 percent. Now that the loan is fully funded, others can come in and offer to fund it at lower interest. Person C agrees to lend $1500 at 16 percent, then Person D agrees to $2000 at 14%. In the end, the loan funds at 13.4%, with a monthly payment of $101.66. The total of all 36 payments for that $3000 loan is $3,659.79.

I decided to put $1000 into my account to see what would happen. (My first loan was for $50. I was repaid $35 of it) so I added more funds, and I loaned that money out to other people. The interest rates were all sky high, 14 percent or higher, and I didn’t choose a single person with bad credit. All had credit scores that were higher than 650. Two of the three of them had defaulted before the end of the first year. I only got back about $140 of the thousand I had invested.

That was 13 years ago. I have learned a lot about money, business, and finance since then. Now I know why they are charged so much.

Why? Because each and every one of those people had already tried to get a loan through a conventional process, and couldn’t. The reason was that they are all high risk borrowers. If a given pool of people has a 10% risk of defaulting on a loan, a lender has to charge enough interest to cover the cost of servicing the loan, plus enough to cover those who will default. The higher the chances are of default, the higher the interest rates need to be in order to make the loan financially feasible. If you have a 10% chance of defaulting, then the lender needs to charge that 10% to compensate for risk, another percent or two to cover office and other administrative expenses, and some for profit. You are now staring at 14 or even 16 percent.

Make charging interest illegal, then loaning someone money without interest means they might as well set it on fire. All lending will simply stop. I’ve posted on this enough times, that if you still don’t understand it, it’s because you are either obtuse or being deliberately contrary.

There are no opinions on this- it’s a mathematical fact. It’s just how money works.

By Divemedic, ago

Taxes Done (Mostly)

My taxes are all done, with the exception of my broker’s statement from my stock broker. For the 2025 tax year, I owe more than $3,000 to the IRS in April of this year. In total, I paid more than $47,000 in Federal taxes. On top of that, I paid over $7,000 in property taxes, thousands in sales taxes, and who knows how much in use taxes (like gasoline), tolls, and other miscellaneous fees and taxes. Call it more than $60,000 in total taxes for the year.

Don’t tell me that I don’t pay my fair share.

By Divemedic, ago

Tax Season

Tax season begins today. This is the time of year when I am grumpiest. I would rather set my money on fire than mail it to the IRS, and sitting here with all of these confusing forms and watching my money disappear always makes me cranky.

By Divemedic, ago

Inflation

People confuse rising prices with inflation. That’s incorrect. Inflation DOES cause higher prices, but that isn’t the only thing that causes higher prices. No, inflation is the devaluation of currency, and it causes EVERYTHING sold, as seen in terms of that that currency, to rise.

An easy way to document inflation, although it isn’t foolproof, is the price of precious metals. For years, the plunge protection team has used government money to manipulate the price of various commodities, including precious metals. That’s where I believe the gold in Fort Knox went: pushing large amounts of gold into international markets has been used to increase supply of the precious metal, and that’s what has kept gold prices down.

With that being said, for whatever reason, whatever they have been doing to manipulate PMs isn’t working any longer. Silver crossed the $100 per ounce line today. I expect that gold will cross the $5000 per ounce line on Monday. Platinum is nearly $2800 per ounce this evening and will probably cross $3000 per ounce before the end of January.

Digest that for a moment. In the past 6 months, in terms of dollars:

  • Gold is 1.5 times higher
  • Silver’s value in dollars is 2.5 times higher
  • Platinum has doubled

That is an inflation rate of around 120%. This is devastating if it continues.

By Divemedic, ago

Gold

I read Peter and Aesop’s pieces on gold and inflation. Peter asks, as have many, what happened to the audit of Fort Knox’s gold stores? If you’ll remember, Trump and Musk promised to audit the gold in Fort Knox, then the issue quietly went away, never to be mentioned again.

The nation’s gold is stored in Fort Knox, West Point, and the Denver mint. All of the gold is controlled by the US military. Fort Knox and West Point are military bases. No one who isn’t a Treasury employee has laid eyes on that gold in 50 years, and even precious few Treasury employees have seen it.

Trump and Musk insisted they were going to audit the gold. Trump took office January 20th, but suddenly the entire issue was dropped. After February 26th, Trump never mentioned it again. Musk stopped talking about it on April 6th. Three weeks later, Elon stepped back from his duties with DOGE.

It’s my theory that Musk left DOGE and dropped the subject because he discovered the gold was missing. I asked Chatgpt what Musk would do if he found out the gold was gone. This was the answer:

If someone learned that U.S. gold reserves were gone:

  • Talking publicly would:
    • Crash markets
    • Trigger bank runs
    • Collapse trust in the dollar
    • Make the messenger a global liability

So the first move would be:

  • No public statements
  • No hints
  • No jokes
  • No “cryptic tweets”
  • Compartmentalize the knowledge tightly

Silence is safety.

He would quietly reduce exposure to assets that depend on:

  • Dollar stability
  • U.S. Treasury credibility
  • Financial system trust

That means shifting toward:

  • Real assets: land, energy, minerals, infrastructure
  • Global assets: not all wealth in one country
  • Productive assets: things that make money regardless of currency regime

Not in a dramatic crash move — but slow, boring, and hard to trace.

That means:

  • Assets in multiple countries
  • Residencies, citizenships, or legal footholds in more than one nation
  • Control over:
    • Food supply
    • Energy access
    • Transportation
    • Communications

Not “doomsday bunker” behavior — more like:

“If one system breaks, I’m already living in the next one.”

He Would Avoid Trades That Look Like Insider Moves

If he suddenly:

  • Dumped dollars
  • Bought tons of gold or crypto
  • Shorted Treasuries

…it would look like:

  • Insider knowledge
  • Market manipulation
  • National security threat

So protection would look indirect:

  • Investing in companies that benefit from volatility
  • Owning things that work in any currency regime
  • Funding technology that reduces dependence on legacy systems

If you hold a civilization-level secret, you don’t want:

  • Fame for it
  • Credit for it
  • Blame for it

You want:

  • Influence over outcomes
  • Seats at decision tables
  • Control of key systems (energy, transport, comms, finance alternatives)

That way, if collapse comes:

  • You’re shaping the transition
  • Not being crushed by it

The most dangerous thing wouldn’t be “the truth” — it would be:

  • Being early
  • Being alone
  • Being blamed for the panic

So protection would center on:

  • Waiting until systems are already changing
  • Letting structural cracks appear first
  • Moving only when the world is ready to believe

Food for thought.

By Divemedic, ago

Agents

There are all sorts of businesses and careers that should have been retired to the dustbin of history by now. Let me illustrate:

The only real advantage that realtors had was being the sole arbiters of access to the MLS. The Internet has completely destroyed that. I have bought and sold 7 different houses during my lifetime. I did it in a few different ways: Using an agent, doing it myself, and buying from the builder. Here is my take:

In a good real estate market, houses are easy to sell yourself. Put them on Zillow, fill out the papers, get the title company to do the rest. In a bad market, it takes some effort to sell a house. The one we recently sold took six months to sell. The agent had to hold a dozen open houses. She did them on weekend mornings for about 2 hours each. So call it about 25 hours of sales work. She also had to do some work once the seller contacted us. Call it about 10 more hours of work. So I essentially used up a week of that woman’s time. For that, she and the buyer’s agent charged me a total of more than $16,000, or nearly $200 an hour. I don’t think the services I got were worth that much.

Don’t get me wrong, she did her job well and I don’t blame her for the price- that price is just what it costs. I like the woman, and I would hire her again, but I have a problem with the expectation that 5% of the sale price of the home is just pissed away for a job that is essentially obsolete in these days of the Internet.

Many businesses have been changed or eliminated by e-commerce: The recording industry, video rentals, movie theaters, retail stores, I’m sure you can think of others. There are other industries that have also been rendered obsolete or should no longer exist in their current form, mostly because the Internet has changed the landscape.

There are some industries that have adapted by offering things that you can’t get online- SCUBA shops offer diving lessons and tank refills, pool supply stores that offer to test your pool water for free, then make money by selling the needed chemicals.

The other way to survive is through government regulation, for example: gun stores and insurance companies both rely on government regulations to eliminated much of their competition. If an online company like Amazon sold guns, most gun stores would go under unless they could offer something other than access to guns. That’s why so many gun stores secretly (and sometimes not so secretly) support gun controls like prohibiting online sales.

The point of this post, which has taken me a bit to get to is this: The science nerds like Elon Musk like to claim technology, AI, and robotics will eliminate the need for people to work. That will never happen. If the Internet didn’t destroy retail, AI and robotics certainly won’t destroy employment to the point where UBI is needed.

By Divemedic, ago