Dallas, even! Home of Mark Cuban
Now, Cuban’s politics are generally a bit bonkers, to put it excessively kindly — he is, (wait for it) a Randian, seemingly of the high-functioning sort, and endorsed Michael Bloomberg in the 2008 election (sic!) This time around, he’s signed on to one of those centrist third party rich-guys’ playgrounds so beloved of Thomas Friedman.
At the same time, he isn’t frothing at the mouth about the current President. He complains that the Obama administration has been insufficiently transparent, which may be true, but would be a low-on-my-list concern given what’s happening in, you know, reality.
But, even if Cuban were born at night, it wasn’t last night. None of the GOPsters running impress him, he says, because “all of them are just spouting ‘doctrine'”….
That’s one word for it, but at least he noticed.
What caught my eye in that interview, though, wasn’t the horse-race stuff, nor his transparent (and justified) pleasure in his Dallas Mavericks’ defeat of “the Evil Empire,” Miami. (Pat Riley = Sauron — works for me.)
Rather, here’s the guy who became the supermodel-on-the-wall of every dot-com geek when in 1999, he sold his company, Broadcast.com, with all of its mighty $13.5 million in quarterly revenue sales, to Yahoo, in exchange for $6.5 billion in stock. And then he took the necessary next step, turning a ton of that stock into cash fast.
So, lucky, good, and filthy rich. And he wants to pay his share to the country in which his success could occur:
Cuban did say he agrees with Warren Buffett’s recent assertion that the wealthiest Americans should pay more taxes.
“He’s right,” Cuban said. “Not only should we pay more taxes . . . there should not be a differentiation between capital gains and regular income.”
Well yeah. More of this please — backed by lobbying money to defend the principle.
Image: Francisco de Goya, Las Gigantillas, 1791-1792
Zifnab
This, more than anything, needs to change. The capital gains tax rate is the most regressive and backward assed provision of the US tax code. There is absolutely no reason we should have billionaires paying into a bracket normally reserved for folks making less than $30k / year.
Monkey Business
Cuban may be a Randian, but he’s also not stupid, which I think puts him in that rarified air of wanting to make money, but recognizing that he needs the rest of society to do it too.
danimal
We have won this fight with everyone in the country except, perhaps, the only people that count: the elected officials with (D) after their names. Let the Bush rates expire. All of them. Then move on to other topics as the deficit/debt hysterics die down.
I know, a man can dream.
Also, please note that the list of elected officials with a (D) after their name includes a hell of a lot more names than B. Obama. Thank you.
Villago Delenda Est
@Monkey Business:
He knows that the thin veneer of civilization is subject to very quick rot that deals with people like him in a most uncivilized manner.
Some rich people are actually not total greedy assholes, but are in fact greedy assholes who know they need to keep the numerically superior peasants from getting riled up. Because if there’s no beer and no TV, Homer something something.
dpCap
I don’t get it. How is he a Randian and yet in favor of taxes?
Tom Levenson
@dpCap: cites Rand’s writing as a major influence, but seems to know better when it comes to actually living his life.
NobodySpecial
@Tom Levenson: I put it down more to he’s never really had to sit down and examine what his politics entails and where the policies he favors leads. Like most rich guys, he’s more worried about the next deal than the next meal.
dpCap
Well, from what I recall from reading Atlas Shrugged Ayn Rand herself wasn’t completely opposed to government. So maybe that’s where he’s coming from.
Then again, she hated Christianity/religion, and yet that doesn’t stop these idiots from adoring her. They probably never actually read any of her works.
handy
@danimal:
FIREBAGGER!
catclub
You know, if there was ONE prisoner who said that his term was too short and guys like him should get a longer term,
the law would get changed yesterday. Unlike the individuals
(lone wolves) who say that cap gains taxes should be higher on them and nothing happens.
Outliers, class traitors, argle bargle
Non-Existent Patricia
@Villago Delenda Est:
Go crazy?
…
Don’t mind if I do!
Paul in KY
I imagine the pushback would be ‘Sure this guy doesn’t mind raising the taxes, he’s got 2 or 3 billion. He can afford to have em raised. What about the poor small businessman who’s only just getting by?’
dpCap
@Paul in KY:
Yeah, the poor businessman who’s earning 250,000 a year and doesn’t want to earn 250,001 because of OMG TEH TAXESSS!!!
Belafon (formerly anonevent)
@Paul in KY: And yet the pushback contains the answer: Raise taxes on those who can afford it.
danimal
Paul-that kills me. Just getting by on 250K+? These folks have big, brassy ones, that’s for sure. Disclaimer: I know that if ALL the Bush rates were allowed to expire, there would be a small increase for actual middle class taxpayers; this can be addressed with subsequent, targeted legislation as politically necessary.
ColdACW
“—he is, (wait for it)”
“in, you know, reality”
“Sauron—works for me”
“supermodel-on-the-wall of every dot-com geek”
“Well yeah. More of this please—”
Please, just stop.
Brachiator
@Zifnab:
Really? After capital gains, what would you rate as regressive and backwards? And there is a lot of this, apparently, all over the world. Take the Canadians, for example:
It is surprising to see the number of countries, even progressive ones, that have low or zero tax rates on capital gains.
And by the way, there is not just a single capital gains tax rate in the US. And thanks to the Bush tax cut extension, the effective capital gains tax on some incomes can be ZERO.
But the capital gains rates are not just available to billionaires. Do you also want people who sell their homes at a profit (if such a thing happens anymore) and small business people to also pay their gains at ordinary income rates?
drkrick
@dpCap: Right, the taxes that are going to take an extra dime out of the 250,001st dollar. It stops them in their tracks, it does.
Roger Moore
@danimal:
IOW, if Congress never sends Obama an extension to the Bush tax cuts, he can’t sign it.
Capri
I once heard Mark Cuban give a radio interview about his time as a student at Indiana University. His instincts when it comes to turning a little bit of money into a lot of money are huge.
He took his student loan money and used it to purchase a bar close to campus. He then proceeded to make money hand over fist. He went to classes by day and managed the bar at night.
It was closed down when the picture of the winner of a wet T-shirt contest was printed in the newspaper. The girl’s parole agent recognized her and knew she was underage.
One of questions that came out of this was how a 18-year-old could get a liquor license. Turns out, he was never asked his age, and I guess it never occurred to anyone that someone under 21 would apply for one.
I realize Cuban may have made the entire story up, but it was very entertaining.
drkrick
@Brachiator:
Yes to the second. If you keep the rollover rule in place, yes to the first, too. I wouldn’t object to some kind of indexing for inflation over the time the asset was held if it can be implemented relatively simply.
jonas
@dpCap: This is what kills me about this whole debate. The Tea Party is filled with self-described small business owners (like the clownish “Joe the Plumber”) who are never, in a million years, ever going to come close to *grossing* $250,000 in a year, much less taking home that much in net earnings. These are guys running a local landscaping business or something who make maybe on the outside about $45,000. And they’re apoplectic about raising taxes on people making ten time what they do as though it’s so unfair. I can see them grousing about the county requiring new certification to apply some new insecticide or something and how that’s bullshit and they’ve been putting that stuff in their coffee for years and it never hurt them and now the Man’s telling them they have to have certification, blah, blah, blah Obama sux. But taxes? I don’t get it.
If you *are* a “small business owner” clearing a cool quarter million a year, you’re pretty damn successful. And if you don’t “feel rich” making that kind of income, you’re doing it wrong.
Jager
Broadcast.com was a superb idea, it grew out of Cuban’s love of IU basketball, when he left Bloomington and moved to Texas he couldn’t hear the play by play, he cut a deal with IU’s broadcast partner to run the games on the internet. At that time the schools and broadcasters had no idea what the fucking internet was, they said ‘sure”…he proceeded to cut deals with every college program in the country. Cuban realized he wasn’t the only person in American who wanted to follow their alma mater or favorite teams live! Hell, if you were a Minnesota Duluth hockey fan living in Argentina you could listen to every Bulldog’s game, thanks to Mark Cuban. Cuban said years ago that before Broadcast.com popped into his head, he used to call the radio station carrying IU games and listen on hold!
dpCap
@jonas:
So damn true.
Tom Levenson
@Jager: Absolutely. Cuban is really smart at his work, and worked hard to get there. He was also hugely lucky…to which he added precisely the right kind of smarts: he was able to distinguish between that part of his success that was down to his ideas and execution, and that part (the bubble) that was sheer luck — and to protect his new fortune accordingly.
Paul in KY
@dpCap: Oh noes, teh taxes!!! Now I’ll only have $230,000 (the horror)
Paul in KY
@danimal: That’s what they will say (I think).
Paul in KY
@Belafon (formerly anonevent): Which they all can afford. Methinks they will lie their asses off.
Fucen Pneumatic Fuck Wrench Tarmal
last time i looked at cube’s blog, he was spouting off about how google was buying up patents and engaging in a patent cold war, whereby you had to hold a ton of patents, to keep people from filing what he thinks are frivolous patent infringement lawsuits.
his claim is that this is why so much venture capital is currently on the sidelines, the cost of defending against lawsuits is preventing galtian types like him from working their magic.
guilty conscience, perhaps, but i am always skeptical of the line that deregulation and tort reform or in this case patent reform, is going to spring an innovation bounty.
but that is his economic cure-all, take it for what you will.
eyelessgame
“high-functioning Randian” absolutely made my day. Please, have an internet.
Djur
@Fucen Pneumatic Fuck Wrench Tarmal: Take it from a non-Galtian: patent reform would be a really good thing for the tech industry. He’s completely right on that score.
James E. Powell
@dpCap:
If you do a little checking, you’ll find that most of them haven’t read the Bible either.
Villago Delenda Est
@James E. Powell:
I know for certain they have not read The Wealth of Nations.
burnspbesq
@drkrick:
This is an experienced tax lawyer saying “Bwahahahaha” to the notion that there is any indexing scheme that isn’t far more trouble than it’s worth.
catclub
@drkrick: Indeed. Suppose you hold some asset for five years and have a cap gain on it.
IN years 1-4 you paid no taxes on those accruing gains.
Now if inflation indexing included paying taxes on pro-rated gains of the unpaid tax years, and interest on those payments, then it would work out closer to regular income tax rates for income earned each year. It might take a calculator, but it could be done.
But multiple tax brackets are too complicated fr the flat taxers.
Tom Levenson
@burnspbesq: Word.
My uncle/godfather was a tax lawyer who was heard to say precisely this in these contexts.
catclub
@burnspbesq: But even someone like me can figure out a revised tax form for previous years, when it is to my benefit. Likewise for the ungodly complicated income averaging – just ask any dumb as dirt farmer and he will understand it. When it benefits him.
No one who benefits from complicated tax codes complains about those particular complicated parts of the tax code.
catclub
@Tom Levenson: Aren’t depreciation tables just indexing formulas?
Calouste
@Brachiator:
The Netherlands don’t have a capital gains tax because they have a wealth tax of 1.2% (30% tax on a assumed yield of 4%).
Jager
@Tom Levenson:
Interesting how some people can take something they love like Cuban and IU basketball, create a solution for a problem and the money comes. Walt Disney always kept in the back of his mind how much he loved to take his girls to the Santa Monica Pier and how much fun they had. Disney wondered why the fun and excitment had to be marred by dirty surroundings, greasy rides and surly employees. He stuck the idea on his “story board” and he eventually came up with Disney Land. He simply removed the negatives. Like Cuban he took something he loved and made it available to the public.
J Beverly
To digress from the important political discussion, the painting took me way back. I remember the first time I saw that painting at the Prado, I wondered why Goya was painting a picture with Bobby Hill in it.
Chris T.
@Zifnab:
Not any more, anyway.
There was a time, back around 1980 or so, when inflation was steep, and if you bought shares of (say) IBM for $1000 and held them for ten years and sold them for $2500, you had actually lost money on the deal (because the ~10%/yr inflation meant that you needed $2590 to have the same purchasing power ten years later). Yet you would pay taxes on the $1500 “gain”.
There were some who argued for “indexing” capital gains to inflation. This is probably still appropriate … but with inflation running pretty much at 0%/year right now, if you buy for $1000 and sell for $2500, you really do gain about $1500. If inflation does rise—and it probably will starting around 2018 or so—so that $1000 has to become $1340 over ten years to hold its purchasing power, then the indexing will be useful.
It is also a lot easier now than it was in the 1980s, when indexing would have been a sort of Full Employment For Accountants program. Now, the IRS just needs a web site to publish the annual deflators.
steve
ugh. Dear Tom: this is not 2004 and you are not Jon Stewart.
Also, the thing after the phrase ‘wait for it’ needs to be ironic or contradict something, if the phrase is used at all, which it shouldn’t be. That comedy well ran dry long ago, like saying ‘all over again’ after deja vu.
ColdACW
I wrote a post a couple of hours ago that listed “wait for it” along with:
“in, you know, reality”
“—works for me”
“here’s the guy who became the supermodel-on-the-wall of every dot-com geek”
“Well yeah. More of this please—”
But I guess it got moderated away. I don’t mean to bash Tom, I like most of what he says, it is just painful to read. What he is saying has merit, it doesn’t need the strained hipness.
honus
@Brachiator:”Do you also want people who sell their homes at a profit (if such a thing happens anymore) and small business people to also pay their gains at ordinary income rates?”
Most people do. If your effective tax rate is 15% or near that, you are paying roughly the same rate on ordinary income and capital gains. In fact, when deductions, exemptions and credits are figured, many lower and middle income people are paying a higher rate on capital gains than on their regular income. when you get into the 28-30% tax brackets the benefit of capital gains really kicks in.
As far as the sale of a long term residence, there have long been exceptions for such capital gains. Traditional economic/financial theory holds that a capital gains preference of about 2% below the top marginal rate has the maximum effect in generating investment. Any more than that is simply a windfall for the investor class. No doubt Buffett is aware of this, and likely Cuban, too. hence their comments.
Odie Hugh Manatee
This guy is clearly wrong about taxing the rich. He has no idea how hard it is to be rich since he’s “new rich” and not “old rich”.
Get back to us when his money ages a bit.
Signed,
The Koch Brothers
Brachiator
@honus:
Uh, no. That’s not how it works.
When people talk about taxing all capital gains at ordinary income rates, it is not clear at all that they want to retain any of these exceptions. Hell, I think a case could be made for allowing capital losses on the sale of a home, which is currently not allowed.
Bill Murray
@Capri:
If it was the low interest federal loans, this was almost surely illegal, but impossible to prove. I guess he should be given props for buying a bar rather than a car like most of the fartknockers that used the student loans to get low interest loans for things not school related. But it did cause the Reagan administration to put in family income caps in 1982 (after Cuban had graduated), so Cuban is one of those that killed the goose that laid the golden egg and led to the sorry state of college lending today.
Many states had 3.2 bars that catered to those between 18 and 21, by serving 3.2% alcohol beer. 18 was old enough to drink, but not the hard stuff, so he could have easily been able to do this if Indiana had 3.2 bars, but checking wikipedia, it appears that Indiana was always a 21 state after the repeal of prohibition.
Booda
Yeah – despite the Frankenstein hair situation and his on-court drama queen antics (before last season) we kinda like Cuban here in Dallas. He occasionally veers into irritating glibertarian territory, but more often seems to have sane political instincts. Believe me, we’ll take any scraps of sanity we can get here in the belly of the teahadist beast and the land of Rick “the crotch” Perry
Paul in KY
@Villago Delenda Est: I have ordered it & hope to read it next week sometime.