are taxes (or the lack thereof) inmoral?

This from

..a question for you…are taxes a moral thing? what’s the meaning of “fair share” in the paragraph?

I’d say that either you comply with tax law or not…that makes the issue legal or not…but moral? I wouldn’t say so!…just MHO

Keep reading…

Amazon, Google and Starbucks Attacked over U.K. Tax Avoidance

The public accounts committee of the House of Commons, the parliamentary spending watchdog, has released a report where it condemns Amazon, Google and Starbucks of “immoral” use of offshore schemes, royalties and complex structures in order to avoid paying tax on profits generated in the U.K. It also criticises HM Revenue & Customs (HMRC) for being “way too lenient” in the way it negotiates with companies that pay little or no corporation tax. The chair of the committee, Margaret Hodge MP, said that “this is outrageous and an insult to British businesses and individuals who pay their fair share”. Additionally, she said HMRC “should be challenging this but its response so far to these big businesses and their aggressive tax planning has lacked determination”. Starbucks has already announced that it is reviewing its tax approach to Britain with a view to paying more tax internally. Danny Alexander, the Treasury chief secretary, said “I might be able to buy a coffee from Starbucks again soon”.

If you Want to be Well-off in Life

Couldn’t say better myself…. The author discuss what he has learned about investing from his mother

The money quote: …An eighth point to consider is that money matters temporally.  Eternally, no, it doesn’t matter.  No one can buy Heaven, as Psalm 49 points out.  But you can use your wealth to aid those who are trying but failing.  That’s important.  As John Wesley put it, “Earn all you can, save all you can, give all you can.”…

If you Want to be Well-off in Life
The Aleph Blog

Two Classes Of Management


This from the always engaging blog Farnam Street

Farnam Street Two Classes Of Management

A thought provoking article on strategy. I found this bit particularly insightful:

Practitioners of strategy insist on this distinction between strategic management and lower-order operational management. Strategic (i.e. top) management is a complex, reflective, and cerebral activity that involves interpreting multidimensional matrices. Operational management, by contrast, requires merely the mechanical replication of market practices in order to match market returns. It is a form of action, suitable for capable but perhaps less intelligent types.

This picture of CEO-superdeciders helps justify their huge compensation and the congratulatory press coverage, and yet again, it also has little foundation in fact or logic. The strategy business thus lasted so long in part because it supports and advances the pretensions of the C-suite.

Porter’s strategy theory is to CEOs what ancient religions were to tribal chieftains. The ceremonies are ultimately about the divine right of the rulers to rule—a kind of covert form of political theory. Stewart cites Brian Quinn that it is “like a ritual rain dance. It has no effect on the weather that follows, but those who engage in it think that it does.”

on Attention Scarcity, from Marginal Revolution

excellent points on attention scarcity. critical points in bold by me.

also, the final caveat is worth mentioning. Note the fundamental attribution error

Attention Scarcity, Ego Depletion and Poverty

by  on November 27, 2012 at 7:33 am in EconomicsPolitical ScienceScience | Permalink

Poor people often do things that are against their long-term interests such as playing the lottery, borrowing too much and saving too little. Shah, Mullainathan and Sahfir have a new theory to explain some of these puzzles. SMS argue that immediate problems draw people’s attention and as people use cognitive resources to solve these problems they have fewer resources left over to solve or even notice other problems. In essence, it’s easier for the rich than the poor to follow the Eisenhower rule–”Don’t let the urgent overcome the important”–because the poor face many more urgent tasks. My car needed a brake job the other day – despite this being a relatively large expense I was able to cover it without a second’s thought. Compared to a poorer person I benefited from my wealth twice, once by being able to cover the expense and again by not having to devote cognitive resources to solving the problem.

SMS test the theory with small experiments in which people are asked to play simple games. Poverty is simulated by giving some players fewer game resources. Players in the “poverty” conditions are then shown to devote more attention to the current round and less attention to future rounds, including borrowing more from future rounds. In perhaps the most surprising experiment, SMS have players play a family feud game with and without hints:

Experiment 5 offers more direct support for the notion that scarcity creates attentional neglect. One hundred thirty-seven participants played Family Feud. Some participants could see previews of the subsequent round’s question at the bottom of the screen; others could not. We expected that poor participants would be too focused on the demands of the current round to consider what comes next, whereas rich participants would be able to consider future rounds and whether moving on was beneficial. All participants could borrow with R = 3. As predicted, poor participants performed similarly with previews (–0.02 T 0.87) and without (0.02 T 1.11), while rich participants performed better with previews (0.32 T 0.98) than without (–0.35 T 0.92) [scarcity × borrowing interaction, F(1, 133) = 4.29, P < 0.05, hp 2 = 0.03; for unstandardized scores, see table S5].

One concern might be that the poor did not have enough time to consider the previews. But the experiments above found that the poor were using too much; they were overborrowing. Their performance in the nopreview condition left substantial room for improvement. Even if poor participants had used some of the borrowed time to consider the previews and move on sooner, they could have improved. That is, the previews benefited the rich by helping them save more; they could have benefited the poor by helping them borrow less. But it appears they were too focused on the current round to benefit.

Thus, SMS show that poverty (over)-stimulates attention to urgent problems which results in less attention given to important problems–thus, reduce some day to day urgencies and people may become more open to devoting attention to important problems like deworming or hygiene or paying the rent which would in the not-so-long-run result in greater benefits.

Crucially, notice that SMS’s experiments are about the effect of poverty not about the poor. In other words, at least some of our discussion of the poor may suffer from the fundamental attribution error

The Peter Principle, take 2

The Peter Principle
Farnam Street

Laurence J. Peter and James Hull defined The Peter Principle: “In a hierarchically structured administration, people tend to be promoted up to their level of incompetence.”

I think that’s fairly well understood, but what does it look like if we frame it in an evolutionary perspective?

The evolutionary generalization of the principle is less pessimistic in its implications, since evolution lacks the bureaucratic inertia that pushes and maintains people in an unfit position. But what will certainly remain is that systems confronted by evolutionary problems will quickly tackle the easy ones, but tend to get stuck in the difficult ones. The better (more fit, smarter, more competent, more adaptive) a system is, the more quickly it will solve all the easy problems, but the more difficult the problem will be it finally gets stuck in. Getting stuck here does not mean “being unfit”, it just means having reached the limit of one’s competence, and thus having great difficulty advancing further. This explains why even the most complex and adaptive species (such as ourselves, humans) are always still “struggling for survival” in their niches as energetically as are the most primitive organisms such as bacteria. If ever a species would get control over all its evolutionary problems, then the “Red Queen Principle” would make sure that new, more complex problems would arise, so that the species would continue to balance on the border of its domain of incompetence. In conclusion, the generalized Peter principle states that in evolution systems tend to develop up to the limit of their adaptive competence.


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