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Thursday, August 07, 2003
My Own Rational Exuberance
Yay! I finally submitted the article on venture capital startups to the law reviews today. The article, The Rational Exuberance of Venture Capital Startups," argues that organzing a startup as a corporation rather than a partnership or LLC is rational, not irrational. I'll blog more about it when I have a link to SSRN.
I used ExpressO, an on-line submission system that Bob Cooter and others have created. If it works as advertised (and early reports seem to be favorable), it should ease the submission process considerably.
And now it's back to planning the Deals course before the students arrive in ... yikes, two weeks.
State tax guru (and my office neighbor) Kirk Stark directed me to the following explanation of the state tax exemption for prepared food for students on campus:
Not to be a sourpuss, but I'm not sure that the food on campus any more healthy than the food off-campus, so I'm not sure that the subsidy is encouraging proper nutrition.
Another reader (who is obviously less lazy than me) found the text of the provision, sec. 6363:
The reader notes that the provision was enacted in 1943 -- at that time, I imagine campus food was healthier than off-campus food. Nowadays it's Taco Bell, Panda Express, Krispy Kreme, and so on. If proper nutrition is the goal, we ought to give UCLA students a discount at Whole Foods and enact a "fat tax" on campus eateries.
Wednesday, August 06, 2003
Schwarzenegger and California Taxes
Quick reader quiz: is this quote from The Onion or the L.A. Times:
"The people are doing their job in California, the politicians are not doing their job," Schwarzenegger said. "The person who has failed the people more than anyone is Gray Davis and that is why I'm going to run for governor."
Strange state I just moved to. And no one seems all that worked up about it. Except the bondmarket, which likes California debt only a little more than Enron's.
A tax puzzle for the day:
I've had lunch at the student "commons" here at UCLA a few times now, and the cashier sometimes asks if I'm a student. I assumed that there is some student discount, but as it turns out, the cashier told me that students are exempt from tax, but others are not. I am guessing that this relates to a general CA state tax policy that self-prepared food is not taxed (either at the grocery store or at home) but that it is proper to tax prepared foods just as you would any other product. I'm guessing this policy (if it exists) applies EXCEPT for students, who cannot be expected to cook, since they are busy studying and drinking beer. Anyone know if this is what's going on, or am I way off base?
Follow up question: is it ethical for me to pose as a student if asked? Presumably not. If they don't ask, do I have an ethical duty to inform the cashier that I am, in fact, not a student? After all, the State of California needs all the pennies it can get.
Tuesday, August 05, 2003
Krugman on Treasury Bias
Here's a Paul Krugman column calling the Treasury Dept. intellectually dishonest.
Given the Treasury's long tradition of producing good work, I'll need to see more evidence before I'm convinced that the Treasury "has become an arm of the White House political machine." I'm sure there are some folks at Treasury who work closely with the White House and follow orders from Karl Rove. And I'm all in favor of scrutinizing the Treasury's work -- as we all did when the produced the misleading tables during the budget process. But must we dismiss the work of the whole department as politically tainted?
Corp Law Blog has a nice post about how Expeditors International talks to analysts.
RothCPA pitches "Tax Stories" as beach reading. Good to know there is someone geekier than me out there.
As for my own beach reading, I just finished Maria Flook's "Invisible Eden," a nonfiction account of the Jan. 2002 murder of Christa Worthington on Cape Cod, in Truro. I happened to have spent a few days the summer before that in Truro and Wellfleet, and I enjoyed the author's obvious love of the place.
The book has some well-written passages, but it really needed some better editorial assistance. I assume they were in a rush to get it into print while the murder was still fresh. But several times there were stories or anecdotes repeated, sometimes with people's quotes changed slightly, which makes the reader wonder which account is more accurate. And she misspelled "pedaled" (as in Tony pedaled his bike to the store) at least a half dozen times. So far as I know, pedaled can be spelled pedaled, or pedalled, but NOT peddled. Seeing those sorts of mistakes makes me question the author's attention to detail.
Monday, August 04, 2003
NYT profile of Steven Levitt
NYT magazine profile of Econprof Steven Levitt. I'm not familiar with most of his work, but I did happen to read the paper where he argues that legalized abortion contributed to the drop in crime in the late 1990s. I don't find the paper as objectionable as some --- after all, one of the reasons for being pro-choice is that unwanted pregnancies lead to other bad consequences; I suspect the backlash from the left was simply a reaction to Levitt's consequentialist view of the world. Like Levitt, I am a skeptic about the value of community policing (remember the war on squeegee men?), and I think the waning of the crack epidemic is probably the biggest factor of all in the drop in crime.
On the importance of turning square corners
AP story on the woes of Tax Court nominee Glen Bower, who is alleged to have taken some improper deductions for unreimbursed employee expenses and the like. Thanks to Taxprof Paul Caron for the pointer.
Without knowing the details, it's hard to know if Senator Baucus is right when he questions Bower's suitability to be a competent U.S. Tax Court judge. The returns were reportedly prepared by an accountant, and I suspect this is a case of inadequate supervision over an aggressive accountant. Maybe that's enough to disqualify him, maybe not.
I suppose if we are going to disqualify district court judges over failure to pay "nanny taxes," then we ought to disqualify tax court judges for allowing accountants to screw up their tax returns. But another way to look at it is to say that if even tax court nominees have trouble figuring out their own taxes, then the problem lies in the complexity of the rules themselves, and that's what the Senate should be talking about.
Personally, I'm not expecting to pursue a political career, but just in case I someday have to get confirmed by the Senate for a Treasury position or something, I've been very conservative in taking deductions.