On  the Peoplenomics side of the house, we will be taking on a very complicated subject in the ChartPack tomorrow:   How much of our contradictory signals in the economy right now can be traced back to corporate tax reform?

And while THAT debate (and modeling) continue, there’s the matter of the coming jobs collapse thanks to robotics.  One of our astute readers caught the headline “Introduce robot tax, or face massive economic disruption warn lawyers” and was kind enough to pass it along.

The problem with robotics (*and factory automation of any sort) is that it displaces workers.  Remember, when HUMANS work, they generate income taxes, payments into Labor and Industries, they buy (at legal gunpoint) insurance…and the list goes on.  Right down to buying a car and gas, oil, tires etc. to commute.  Robotics?  Nope.  Screws everyone.

(Continues below)

 

To be sure, there is likely some level of power tool use that could be logically argued against.

Take the construction worker putting a deck on a house;  Should they pay a tax on the power screw-gun, for example?  No, obviously not.

BUT, if half the UAW rank and file in Detroit are displaced by robots on the production line, shouldn’t there be some quid pro quo from the Factory Owners who just removed several thousand primary jobs – not to mention going out to tertiary jobs  (day care workers, quickie-mart people selling coffee and doughnuts in the morning) perhaps 10’s of thousands?

These jobs – the ones being replaced by ROBOTICS are not apparent now – because we are in the OVERLAP BOOM.  This is where the factories still have workers – but only until the machines get dialed in.  Right now, though, workers plus robot builders.  But then what?

They’re toast in the longer-term.

But:  How to tax?

The Internet as a prototype:

This “tax robotics” question actually has one of its roots in how things are taxed on the Internet.

Don’t know if you noticed, but a group of republicans are trying to shove a “net sales tax” through.  And, honestly, it’s not a bad idea.

It’s a terrible idea.

The problem is one we’re familiar with because we actually do pay sales tax on our Internet information product (www.peoplenomics.com) for those sales in the state of Texas.

Should our subscribers in Switzerland pay sales tax?  Or, those who live in a state without a sales tax – like Oregon?

Would it bother us to pay sales tax on all states?

Depends how it is structured.

If we were to pay sales taxes based on our tax home (Texas), no big deal.  Press button (*6-3/4%) and write the check.  Increase subscription cost from $40 to $45 to cover it all.  Ebd of story.

Here’s where the (stupid) GOP gets it wrong:  Should I, as an internet-based “product” producer, have to pay “sales tax” to New York?

The (dimwits) will argue yes, if the product is consumed in New York, but remember, Peoplenomics is a news/information product.  Enter the Freedom of Speech issue.

For now, New York lays it out this way in this tax advisory  (Tax Bulletin ST-620 (TB-ST-620)):

“If you sell publications that qualify as newspapers or periodicals for sales tax purposes, you don’t need to charge sales tax because they’re exempt. “

So, let’s see how the dimwits roll with this one:  It’s arguable we shouldn’t even pay sales tax in Texas, but we do, because we don’t begrudge the government its slice.

The problem is when I start up my next company – let’s call it Chester Industrie – and we begin to sell online some incredibly neat products.  If the dimwits get their way, I would end up having to do sales tax filings in 50-states under their plan.

Better:  Sales taxes should be based on the point of manufacture, or if in reselling (Amazon et all) then based on the point of shipping.  Amazon has warehousing in Texas already and charges sales tax here.

One company, one location?  Taxes to one state – not 50.

Would this tend to drive business to lower (sales tax) cost states?  Duh.

Why, hell YES!  And you’d begin to see some long-overdue restructuring of America – the decentralization that has led to lemming and demagogue politics.  The free-lunchers.  Only way to teach ’em a thing, or three, is to cut ’em off at their pocketbooks.

I’ve been through this on the local sales tax side.  Eventually, cities like, Seattle, start to drive out new business with their exorbitant local option sales taxes..,.

And if you really want to see some of the worst taxes in the country, look at the metropolitan utility districts of Texas. Gawd-awful.

Anyway, since I may get Chester Industrie going, it’s laughable to see the dimwits trying to deal their own broke states into another tax and spend scheme.

When government wants to “expand it’s partnership role” with tax grabs like this – instead of taxing the human job-killing machines upstream…it shows you how little these people – many of whom have never worked a day in their sorry lives in the Real World – know about the country they are pretending to govern.  Around the corner and up your tax, types.

(Hmmm…anyone I haven’t offended yet?)

Where was we….ah…over here:

Housing Starts

Just out from Census this morning:

If you prefer verbose?  (*Boy, did YOU come to the right place, or what?)

Building Permits Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,298,000. This is 5.7 percent (±0.7 percent) below the revised January rate of 1,377,000, but is 6.5 percent (±2.4 percent) above the February 2017 rate of 1,219,000. Single-family authorizations in February were at a rate of 872,000; this is 0.6 percent (±0.9 percent)* below the revised January figure of 877,000. Authorizations of units in buildings with five units or more were at a rate of 385,000 in February.

Housing Starts Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,236,000. This is 7.0 percent (±16.7 percent)* below the revised January estimate of 1,329,000 and is 4.0 percent (±12.2 percent)* below the February 2017 rate of 1,288,000. Single-family housing starts in February were at a rate of 902,000; this is 2.9 percent (±10.8 percent)* above the revised January figure of 877,000. The February rate for units in buildings with five units or more was 317,000.

Housing Completions Privately-owned housing completions in February were at a seasonally adjusted annual rate of 1,319,000. This is 7.8 percent (±14.8 percent)* above the revised January estimate of 1,224,000 and is 13.6 percent (±16.0 percent)* above the February 2017 rate of 1,161,000. Single-family housing completions in February were at a rate of 895,000; this is 3.0 percent (±10.6 percent)* above the revised January rate of 869,000. The February rate for units in buildings with five units or more was 418,000. “

I’d look for things to remain somewhat even-keeled until we see if the market will allow the Fed to raise any more this year.

They’re between a rock and a hard spot next week for the FOMC because it’s great to have a bubbly stock market and repatriation of Apple dough from the Tax Reform sounds good – and sure, let’s clean off the balance sheet at all…

But, how long in all this money flood back to the US before some foreign bank bites the big one and sets off the Global Panic?  We shall see.

Futures:

While waiting for the industrial production and utilization report things were slightly red.

I look for the market to be somewhat down – toward the close.

Meantime, we see the old Dow record 26,616 and change is STILL 350-points from a new high by our 55-day mark.

As of this morning, though, the odds of another year of upside are about even.  The risk the Crash repeats right here, right now is 52.5% using my incredibly convoluted way of thinking.

What could drive it?

War

You should keep tabs on the story about how the US is now, for the first time, blaming the Russians for attacks on the US power grid.

We wouldn’t be surprised to see some REAL Russian hacker prowess demonstrated in response.  A kind of “No, if we had, it would feel like this…” from Putski et al.  Telling you, having worked with Ukrainian contract programmers, you’d be hard-pressed to find better in Seattle, for example.

They aren’t “good” – they’re awesome and not to be trifled with.

Sometimes, I think the whole pseudo-battle over Ukraine was less about the warm water port than about software HR…Eastern Europe (Poland east) is hot with grand programmers.

Oh, sure, and Chinese spoofing the ruskies, too.  Plausible de-what-ability?

More at Feds: Russian Hackers Are Attacking U.S. Power Plants.

I checked with our source warhammer – a former oak leafy type  – who’s active in this area:

No surprise here.  It’s been a poorly kept secret that much of America’s critical internet-based infrastructure has been compromised since the get-go.

I was involved in a meeting back in 2000 in which the National Security Agency expressed concern that systems once analog, which had network tech overlaid upon them (e.g. power and water distribution systems), had exploitable flaws which were totally unknown.  The rub was how to identify those security flaws.  Essentially, the answer is to pay hackers to find them.

Russia, China, the Norks and Israel all seem to have done precisely this.  In effect, the Internet boom of the 90s was a modern equivalent of a Trojan Horse.  We’ve since fully embraced an initially non-secure technology, trying to overlay security on top when it should have been baked-in in the first place.  But adding security made networking difficult, less marketable.  So we fully accepted pumping out innovation with exploitable flaws.  Sadly, history shows there is a  price to be paid for such narrow-mindedness.

I fully believe Putin could turn elements of American infrastructure dark with the proverbial flip of a switch.  That is quite dramatic, so instead, the mere threat of doing so provides negotiating power.

This is the anvil hanging over technology’s head.  It is not as secure as we hope and are often led to believe.”

And when comes to “bit-measuring” contests between Trump and Putin, let’s just say those could be a stormy sessions.

Speaking of Which

See the George Nader story in the Sacto Bee.  They headline “Mueller witness is convicted pedophile with shadowy past.”

Reward POOR Performance?

Deutsche Bank boosts bonuses to 2.3 billion euros despite bigger 2017 loss.

Gotta send them my resume – I can piss money away like crazy and I don’t even need a co-CEO to help.

Awrightthen – Moron Monday!