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2018-06-22 13:41 by Karl Denninger
in POTD , 61 references


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2018-06-22 13:05 by Karl Denninger
in Corruption , 273 references
[Comments enabled]  

The so-called "picture of a toddler being separated" that DemonRats and TIME have circulated was a flat-out lie in all respects.

  • They were never separated.  The mother and kid were both arrested but were not separated.

  • She was not a legitimate asylum-seeker.  The father has stated that she did it for purely economic reasons -- there was no persecution involved.  He said it's "hard to find a good job here" -- that's hardly a reason for asylum in the US.

  • She absconded with the father's kid without his knowledge, abandoning her other children.  In the United States if you did this you'd be charged with parental kidnapping, which is a felony, child abuse via abandonment, which is another felony, and you'd lose physical custody of said child (and the rest of your kids, if any) permanently.  We prosecute US Citizens that do this so why isn't she being prosecuted for felony child endangerment and kidnapping which, I remind you, we are a signatory to a treaty governing (The Hague Abduction Convention.)

  • SHE IS NOT A FIRST-TIME CROSSER.  In fact, she had been previously deported as an illegal invader in 2013 which makes her entry into the United States illegally a serious criminal offense.  So much for my analogy of her doing so with robbery "invalid."

  • She deliberately and intentionally passed through Mexico without applying for asylum in that nation or at any of our consulates or embassy, despite passing several of them and despite Mexico being a "safe nation" where she could do so.

  • She paid a "Coyote" $6,000 to smuggle her and the kid through Mexico and Mexico did nothing to stop either her or the Coyote.  So much for being broke and unable to make a living anywhere else.  Nonsense; if you have $6,000 you're definitely not broke and you definitely are trying to scam our system.


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2018-06-22 10:18 by Karl Denninger
in Corruption , 109 references
[Comments enabled]  

Well here you have it folks:


No, you five-alarm piece of crap.

Cartels are illegal under 100+ year old law (15 USC Chapter 1.)  Congress exempted OPEC specifically in the 1970s.

Rather than demand that Congress rescind that and then prosecute we have this.

Now you know why Trump the "screw-you" President is exactly the same as Obama when it comes to cartel behavior here at home, specifically in the medical industry.

**** you Mr. President and double-**** anyone and everyone waving around a "MAGA" claim of support for as long as this son-of-a-bitch explicitly endorses cartel behavior and monopolists.  This isn't about gas prices, it's about you getting assraped by the medical and health insurance "industries" which are also cartels, have no such legal protection to a large degree, and yet our government will not prosecute same nor remove the protections (e.g. drug reimportation laws) that do exist.

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2018-06-22 10:11 by Karl Denninger
in Small Business , 81 references
[Comments enabled]  

Alright, alright, some of you have 3rd grade reading comprehension.


Or some have simply not bothered to read any of my writing on the sales tax and scam issues over the last 10+ years.  Or you have, and don't care.  And let's face it -- nobody has bothered to raise hell about any of it with politicians, since Spamazon is still seeing sales increases, never mind their adhesion games with Prime.

So, let's talk about the probable impacts of the USSC decision on sales tax, assuming Congress does nothing, which is probably a fair bet (after all, they've only had 20+ years or so to solve this and have failed to do so thus far.)

First, let's disabuse the insanity first: No, Grover, this is not a license for states to screw people across state lines and to enforce jurisdiction without boundary on people with no connection to said state.  Norquist was out with his usual hyperbolic bull**** within minutes of the decision, which means he didn't read it before he commented.  My commentary was an hour or so later -- and I read quickly.  So yes, I read the whole opinion first, including the dissent.

If you're going to offer an informed opinion you must first understand the material, which is impossible if you haven't read it!

The decision was conditioned on a few things in the South Dakota law, and contained a fairly-decent warning to states on any attempt to get crazy.  Specifically, the South Dakota law in question:

  • Required a decent volume -- either in number or dollar value -- of sales before the burden of reporting and collecting tax applied.  200 sales or $100,00 in annual revenue is the boundary condition.

  • The State is obligated to, and does, provide a computer-based tool available at no cost to firms for computing and reporting said taxes.  And, importantly, if you use it you're immune from audit except for willful misconduct (e.g. fraud, concealment, etc.)

There is also a fair jurisdictional question that remains unanswered, and over which there will be quite a bit more litigation.  That's simply this: Can the state compel a firm (or individual) with no tie to the state other than someone who lives within same buying a thing to comply with a subpoena or other process?

This is not a trivial matter; there is no question as to subject-matter jurisdiction where both parties reside within a state, but where that's not the case it's much less clear.  One means to "fix" this is legislation at the state level, much like you have recognition of concealed-weapon permits.  In other words a state may, and some undoubtedly will, simply sign away their jurisdictional rights with an agreement (e.g. an "interstate compact") with other states!

First, however, let's dispel a myth -- that this was some "brand new thing" the other day.  It's not.

Economic Nexus, for example, has existed for quite a long time.  Michigan is one example -- they passed an "economic nexus" law in 2008 with a $350,000 threshold.  Cross it on property and poof!

There are many other states with similar laws -- Tennessee has one, for example, although they claim to be a "low-tax" state.  Nope.  Ohio, Connecticut, Colorado and Alabama also all have these laws; Alabama is often thought of as "low tax" as well.  Uh, nope.  What's worse are those states without "bright line" tests; nearly all states have a general clause of "doing business in", so..... yeah.

As I have previously noted my knowledge of this goes back to my childhood when the City of Detroit was playing games with employment taxes on work performed not in the city nor by residents of same with a company that my father was the Controller for -- in the 1970s!  There was plenty of screaming and litigation over this issue even then, so no, it's not new -- at all.

Reality is that this decision at the USSC is the culmination of over two decades of abuse by Spamazon and their ever-shifting means of playing their get out of prison free card, mostly.  That Wayfair and Newegg were two of the folks who took the case of the USSC belies the fact that it was specifically Amazon's continued tax-dodging using questionably-legal means, including until fairly recently their claim of "no nexus" through setting up captive LLCs to own distribution centers, that prodded states into passing these economic Nexus laws and, ultimately, this decision.

Of course nobody wants to hold the behemoth company that is actually responsible for this crap to account -- by killing them legally through an economic boycott, nor to go after state law enforcement which has steadfastly refused to indict the firm and its officers for what has amounted to 20+ years of tax dodging via legally-infirm schemes -- the fact of which has been essentially universally confirmed by Amazon itself in that despite their cross-ownership games as soon as a state has come after them they have folded rather than tell the state "Go ahead and sue us; we're right and you're full of crap!" and taken them to court.

So what we have now is a step over the line in the other direction, sort of, and a leveling of the playing field, sort of.

Oh, and a means for even more extortion.

You see, there are firms that will "do your sales taxes across state lines" for you.  Typically, however, they want 3% or so of your gross online receipts to do it.  That's an outrageously extortionate percentage that approaches half of your sales tax liability in most states!  So no, it's not 6% sales tax, it's 9% because of that "additional fee" that just got rammed down your throat.

South Dakota resolved that with their free software and audit protection if you use it.  And it is that feature, mostly, that likely led the USSC to rule as they did.

What should a small online retailer do in response?

First, assess each state.  For those states that have a reasonable threshold and compliance system (e.g. South Dakota; one rate, they provide the reporting tools at no cost to you and if you use them you are immune from audit other than for fraud) then I'd say this is a positive, playing-field leveling step.  There's no reason on God's Green Earth that as a seller of goods you should be enlisted by the residents of a state to help them engage in what amounts to tax fraud!

For those states (cough-Florida-cough-cough-cough!) that think sales tax should be multi-jurisdictional, complex, overlaid and with multiple rates making it damn near impossible for you to comply without paying another 50% on top of the actual tax to be collected and remitted (e.g. Spamzon's and others "offerings" to do compliance for you) block purchases from customers in said states and tell the customer why.

The federal constitutional privilege of regulation on Interstate Commerce does not prohibit you from refusing to deal with people in a state where said said state imposes a burden that is unreasonable and discriminatory.  Indeed the Constitution, if anyone gave a crap about that, prohibits enacting structures that amount to interstate tariffs.

That a state does this via indirect means (e.g. essentially forcing you to pay an additional 50% "tax surcharge" to some firm or absorb it in internal expense) to ship to a given state is, effectively, an interstate tariff, no matter who gets the money.

GIVE THEM AND THE RESIDENTS IN THOSE STATES THE FINGER, and by doing so bring pressure for the States to adopt one rate and a reasonable set of constraints on who and how one must collect, report and pay said amounts.

What's reasonable?  South Dakota's law looks reasonable to me.  There is an economic threshold, they provide the software and absolute defense against cross-state audit liability if you use it.  Between these two things for merchants with small volume into the state the obligation is zero and for those with large volume the compliance costs are not materially different than those for in-state sales.

And let's cut the crap, eh?  State tax regimes are in many cases repressive and ridiculous but screaming about this from merchants and individuals amounts to intentional dereliction of one's civic responsibility to take this matter up with their state governments and eject those lawmakers that continue to promote and create said structures.

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I've written much on the health scams -- especially pricing.

10x or even 100x as much for a drug here in America as in Canada, France, England, Spain, anywhere else -- all made by the same company.

10x as much paid by one person for the same procedure as someone else.

3-4x as much for an MRI in Michigan if you need it due to a car accident as opposed to falling while walking your dog.

A local hospital here that has been repeatedly accused of gouging people for 200, 300% or more the price of the same procedure performed in a hospital 15 miles south in the same county.  This, incidentally, is the closest hospital to a county jail -- recently our county commission claimed that six-figures worth of medical care for two people detained there -- along with medical costs for their employees, many of whom live near that hospital -- as justification for an 11% property tax hike.

All of this is contrary to 100+ year old felony anti-trust law in the United States, which makes criminally illegal any attempt to fix prices or restrain trade (15 USC Chapter 1.)


Now let me add to this.

There are a fair number of individuals who have intentionally, through their own hand, destroyed their own health.  They then successfully go on disability.  Once being on disability they are entitled to Medicare, even if not yet 65.

These individuals then can, and do, often run up six figure or more medical bills which occur entirely because of their own lifestyle choices. 

I am talking about people who literally drink or drug themselves to death and the slow destruction that occurs lands them in the hospital repeatedly with life-threatening conditions, from congestive heart failure to cirrhosis, liver cancer, sepsis and similar.

They have no money to pay for any of this and it all gets billed back to the taxpayer with the damage continuing to mount both personally and in medical bills for which they are not responsible in any way as a direct result of their refusal to make any lifestyle change -- including ceasing their extreme consumption of alcohol and/or drugs.

We are told we must be "compassionate" and yet this "compassion" comes with forced payment by others at extortionate pricing for whatever it is they might need on any given day.

There are those who claim this isn't all that frequent.  Oh yes it is; never mind that at a half-million a crack 2,000 such people nationally wind up running a billion dollar tab.  May I remind you that last year somewhere between 40,000 and 60,000 people killed themselves with opioids and most of them managed to do a lot of damage and run up a hell of a bill first?

Does anyone honestly think this isn't a $50 billion a year problem -- that would be 10,000 such people nationwide.

Of course it is.  Indeed that's probably a low estimate.

Now add to this Type II diabetes, most of which is directly caused by insane consumption levels of carbohydrates and sugars and which, for 90+% of the people involved, can be either completely mitigated or substantially alleviated by simply stopping that, exactly as someone who is trashing their body through excessive alcohol consumption can stop accumulating more damage by ceasing the consumption of booze.

Again, when you begin to suffer the severe consequences of Type II diabetes, such as blindness, amputations and similar you also become unemployable, you thus qualify for disability and Medicare.

At that point you can mass 500lbs and yet are not responsible for a single nickel of your medical bills, which will inevitably total well into six figures by the time they get done cutting off both your feet and you go through dialysis (the final stage) and die, all of which is quite miserable to boot.  The cost of this is well into the hundreds of billions every single year.

We cannot, in a free society, tell people they cannot drink or eat lots of carbs and metabolically destroy themselves.  Freedom includes the freedom to kill oneself, whether immediately or via slow destruction and lifestyle choice.  We can argue morality and such all we wish but in the end only a fascist government can prevent someone from undertaking such lifestyle decisions.

But it is indeed another form of fascism to force others to pay for these choices and those of us who do so must refuse to do so including enforcing that refusal by any means necessary.

In addition, we must refuse to allow rampant price-fixing, extortion and monopolist felony conduct, all of which is illegal at a criminal level under 100+ year old law, to continue onward and enforce that refusal as well by any means necessary.

In a nation with a Rule of Law those means are quite simple, since law enforcement and judicial process at local, state and federal levels are all sufficient, since these acts are crimes, to put a stop to it.  Every State has an anti-trust law similar to the Federal laws on the same subject they can apply to commerce within their borders -- including medical care, never mind licensing processes at both state and local levels that can be conditioned on non-discriminatory conduct.

In a nation without the Rule of Law it is inevitable that you will eventually have a Civil War if you do not resolve this problem because as these acts of extraction and extortion continue in the name of "profits" and "stock market support" the inevitable point is reached where the majority of the population is unable to retain anything approaching a reasonable standard of living.  When, not if, this occurs -- and it already has occurred in the United States today -- it is merely a matter of time before some material percentage of those permanently suppressed by these scams and schemes decide that if they are going to die destitute, demoralized and destroyed by such policies, corporations and individuals they will make damn sure as many others as possible go to Hell with them.

We are not far from that happening folks and once it does there is no way backMedicare goes broke in under 8 eight years and that assumes no recessions, which never is the case.

When the next recession occurs that timeline will be shortened, through a lack of tax receipts, to an essential zero.

We either act to fix this problem now before that occurs or it isn't going to make a damn bit of difference who you vote for.

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