Government Intrusion VII


Government Intrusion VIIWhat can we do about government intrusion?

gary-scott swamp tags:

Swamp near Lake Dora.

This series on government intrusion began when I took our daughter, son-in-law and granddaughter to Lake Dora for a boat ride through a cypress swamp.   While photographing the trip my camera began giving me location sensitive advertisements… a feature I did not know existed.   I realized I was being tracked through my own camera!  That’s to me too much intrusion meaning it is time to adapt.

While on the trip we saw some of the ways nature intrudes on swamp life… like the alligator above.

That is the cycle of nature in the swamp… each type of life intruding on the next… in a struggle to survive and adapt.  I guess we should not be surprised when there is intrusion in the human swamp as well.

gary-scott swamp tags:

Some of cypress in the swamp are estimated to be 2,000 years old.  I bet they think our concerns about intrusion are quite comical.

That’s when I realized that dealing with intrusion is like hiking through a swamp.  These trees have been smart enough to realize that there are dangers but that swamps can be very supportive to life as well.

When we wrote about the problem of government intrusion in the 1970s and early 1980s the answer was simple… bank abroad and be a multi currency investor.

In the late 1980s and 1990s owning real estate abroad became appealing and we conducted real estate tours in Switzerland, Isle of Man, London and Dominican Republic as well as Ecuador.  Those areas have seen phenomenal appreciation versus the US dollar.

Now we have to do more as we adapt.

Many readers are liking the ideas we are sharing on how to adapt.

One wrote: Thank you. : When people speak out, and raise awareness, I feel extraordinarily grateful, for the times we live in, it’s all the more precious.  :)

Another sent this email: Nice one man, keep waking people up.

This suggestion to “adapt” has not pleased all readers though.

One reader wrote: I think you are sending the WRONG message, “adapt” – which is what the Germans did prior to Hitler taking over.  Maybe, it is true that you are CIA.  Stop sending me your propaganda. A,

I think this reader misunderstands the meaning of the word “adapt”…  I did not say “submit”… “bury head in the sand” nor did I say “subvert”.

I am not sure where the CIA thought came from but somehow I do not think that CIA stood for Charming… Intelligent and Appealing in the reader’s mind.  Fortunately Merri disagrees!

This particular reader has a Chinese name so perhaps she came from China which makes her especially sensitive to Government Intrusion.  According to an article in the Economist magazine on US defense spending, China spends more on internal security than defense… so the government intrusion there must be extraordinary.

The lesson from that note is that we should not let our anger at our perception of change nor our fear cause us to stop looking for the silver lining in change.  “Adapt” to me means to turn reality to our favor… or get more in tune with reality.

If we close our minds, we miss the fact that this growing intrusion in our lives is mainly created by the power of convenience.

We all open ourselves to intrusion because our virtual electronic world is so convenient.  There is a saying “Man can achieve the impossible… travel through space… even go to the moon and beyond… yet he can never overcome the inconvenient”.

We choose to use our electronic banks, our cell phones, our computers, our GPS. These choices make us easy targets  big business intruders and others.

What are our options?

Another reader asked about these… options and wrote:  Gary, This is not an original thought, but here goes.  We’re dealing with 2 separate intrusive governments: One is our security- and control-obsessed multi-level police state, which is tracking us on the local, state and federal level. The other is a supra-national state of global businesses whose dimensions are not yet clearly seen because we imagine that it’s “just” national industries tracking us.

I guess you should be happy that you were just being tracked for camera purchases rather than dissident political activity (as in China, Syria, etc. etc.), although really the only difference is between one tracking entity chasing your money and the other your life.

Incidentally, don’t miss the front page article in yesterday’s NYT about how Apple evades taxes. Leaving aside the whole tax fairness discussion, consider the army of experts hired to disperse individual units to best advantage. And while you’re at it, consider the report that G.E.’s tax division has 1000 lawyers and accountants. Not surprising that the company is able to pay less taxes than you.

Are we approaching the point where our only escape is either to go totally off the grid or to develop an independent network of hackers?

My reply. This is a good question.

Going off the grid is an option for eliminating intrusion.  I can do this. One of my residences is a really remote farm with gravity fed water and potential for hydro power.  We have a super insulted house… tons of fuel (wood) and wood burning stoves.

For a modest investment right now I can electrify… grow my own food and live off the land and already have a wood fired hot tub so I can lean back, enjoy a soak (heat provided by wood) and watch the world go by.

But what about the grand kids and the children and my mom and friends and all of you?  The 30,000 plus people I communicate with every single day?

Or I can move to Europe and live there.  Plus I have a thriving business in Ecuador so I could go there.

Yet we do not give up our phones, computers, credit cards, GPS and other electronic stuff because they are so darn convenient.

We also did not buy our farm nor get our European residence nor live in Ecuador for 15 years to escape intrusion.  We  went to these places because we liked them.  Then we figured out how to gain the maximum options for adaptation as reality unfolds.  Our farm just happens to provide a nice anti intrusive element.

Using the system to beat the system is another way to beat intrusion.  Take the reader’s comments above about Apple and General Electric reducing tax.  This exemplifies another aspect of adaptation.

Both companies are huge because they were leaders in adapting… GE in an earlier era became a leader in using electricity.  Apple became a leader in using computers and later cell phones and other mobile devices.

Without electricity and computers… we would have a lot less intrusion in our lives… but I think that both GE and Apple prefer reality the way it has evolved.  Plus I do not see many of us turning out the lights either.

One way to adapt is to learn from successes such as Apple and GE.   They use “reality created by rules” to get ahead. 

They gain favor by being big, but the little guy can also gain favor by being small.  Small businesses can “profit from the very same algorithms that create intrusion”. For example, if  income is below $250,000 and if we file electronically… no person looks at our tax return.  Chances of being audited are less than 1%.

If we understand how to file correctly and understand the algorithms, we can do something like Apple.

A recent Economist article entitled “Guides through the swamp” says about tax:  Paying tax always hurts. But America’s tax code seems designed to make it hurt as much as possible. It contains 3.8m words, and was changed 579 times in 2010 alone. Taxpayers must wade through a swamp of gobbledygook: tax compliance consumes 6.1 billion man-hours annually, according to the Internal Revenue Service (IRS). That’s the equivalent of 3m people working full-time, year-round—more than the entire federal workforce. Each year,  Joe Taxpayer must sign a thick return that he cannot plausibly understand. And woe betide him if any of its contents should turn out to be inaccurate.

This overwhelming tax code is about as intrusive as it gets… yet we can turn this reality to our favor by learning how to file correctly and by having a good tax preparer.

The government by the way is intruding on tax preparers as well.

The same Economist article tells how two government regulatory changes threaten to crush small, local tax preparers.

The article says:  The first change is the decline in “refund anticipation loans”. Many poorer workers have too much tax deducted from their paycheques over the course of the year. So they tend to file almost as soon as the next calendar year begins, anticipating a refund from the IRS. For years, tax preparers (both H&R Block and the mom-and-pop shops) offered loans against this money, earning themselves a tidy revenue stream. But increased federal scrutiny of such loans has caused several banks to quit their partnerships with the tax preparers. The loss is a modest one for Block. For many of the little guys, it may be enough to cause them to look for more profitable work elsewhere, says Thomas Allen of Morgan Stanley, an investment bank.

The second regulatory change is even more likely to push mom and pop into another line of work. Last year, the IRS issued a rule requiring most tax preparers (those who are not certified public accountants, lawyers or otherwise exempted) to take a test certifying their skills, and thereafter, 15 hours of “continuing education” annually.

Of course the big tax prepares (H&R Block and Turbo Tax) stand to gain from this and according to the Economist article say: Protecting you from mom and pop. The big boys say the new rule will protect taxpayers from incompetence. 

The Institute for Justice argues that the real problem is not small tax preparers but complex code and that big preparers also err.  Plus we know that the IRS is often wrong.  This suggests that once again bug business and government could be working hand in hand to intrude.

How do we see the Silver Lining?

Still despite such changes we can gain. We can adapt. We can prosper.

One way to adapt is to have your own micro business.  The same technology that allows intrusion also makes it really easy to operate your own business!

Combine this fact with these thoughts from the New York Times Magazine article: (linked below – bolds are mine) that says:   If economists ran the tax system, there would be virtually no exemptions or loopholes. But economists don’t run the tax system! Instead, businesses, rich people, Congressmen and attorneys spend a shockingly large amount of time lobbying for tax breaks or exploiting the ones that exist. When the modern income tax was created in 1913, the code was 27 pages long. Last year, it was 5,296 pages. What in the world does it say? After surveying 20 accountants, tax lawyers and policy wonks, we’ve boiled down their arcane knowledge to this short list of things you might want to know.

So what’s the easiest way?  Run your own company.

More specifically, as Greg Kyte, a Utah C.P.A., puts it, be the sole proprietor of a Schedule C business. Then you can buy stuff for yourself and probably write it off as a business expense. “You can look through your receipts for the year and say, ‘Here’s some stuff I bought at Home Depot,’ ” says Kyte (who, for the record, says he never does this). “The I.R.S. would have no idea if I bought that for my house or for my business.”

There were more than 20 million Schedule C returns filed in 2009, with receipts of more than $1.2 trillion.

Upstanding Schedule C filers have options, too. They can legally write off payment for office work done by family members, even if they’re in middle school. “I’ve seen people with infant children claiming that their kids are doing work,” says Howard Rosen, a St. Louis-based C.P.A. “I’m talking about a 3-year-old doing filing,” Rosen says. “He didn’t even know the alphabet.”

That article gives some other clues on how to put the algorithms to work:  “There’s an old saying in the I.R.S.,” says David Lifson, a C.P.A. in New York. “Look at T. and E. and get out by 3.” Because people are aggressive about writing off travel and entertainment expenses — and because regulations for deducting T. and E. expenses are Byzantine — this is low-hanging fruit for auditors.

Another thing that makes people more likely to be audited: being rich. Those with income of at least $1 million are 11 times as likely to be audited as the average taxpayer; those with incomes of $200,000 or more are 4 times as likely.

Having had our own Chapter C micro business for over 25 years I can attest to enormous tax benefits.

The tax breaks are so great that there is never a  need to cheat on taxes.

There are many many tax benefits in a micro business.  A Chapter C corporation provides innumerable ways to reduce tax.

Always Look for the Silver Lining

I am already taking advantage of some of the changes mention above about tax preparers and micro business tax benefits.  I am always looking at how change can benefit readers.  For example we have been working with a tax preparer who understands the new dreaded form 8938 and can help US readers living abroad correctly prepare their tax returns.

Ecuador Living and Multi Currency readers can contact this specialized tax preparer now.

For contact with this tax preparer club.garyascott subscribers click here.

For contact Ecuador Living Club members click here.

 A second great benefit I see for those of you interested in having an events business is the opportunity to create continuing education courses for tax preparers!
Learn about our course on how to have a seminar and course micro business here.

Third, we have expanded our micro business of teaching Super Thinking + Spanish Teachers. See how to become  a teacher here.

See the Spanish teacher’s scheduled courses here.

We have tripled the number of our new Writer’s Camps.

Plus we have expanded our Self Fulfilled  – How to be  Self Publisher course so more of our readers can have their own Chapter C micro business in writing and publishing.

Here is an excerpt from the latest lesson of “Self Fulfilled- How to be A Self Publisher 202 Tidbits on Kindle”.

Self Publishing 202 Tidbits on Kindle – Lesson Nine – Using the Algorithms at Amazon.com

This lesson looks at some of the negative issues of an algorithmic business.

algorythms tags:

Algorithms at Amazon.com have selected these books as best sellers which then sells even more of them.

Algorithms Rule!   Algorithms are the new front of the store, end of the row bookshelf when it comes to marketing.   When it comes to moving books to readers, every writer and every publisher used to always work first and foremost to get their books displayed at the entrance of the bookstore or second on the ends of shelves where most readers pass.

Nowadays writers and publishers want their titles to appear in or akin to the best selling lists at Amazon.com Kindle Books section.   Every book selling system has some Algorithm designed to get the books that readers will buy most on this list.   Ruling the Algorithms from this point of view is good!

However Algorithms can also create obstacles and delays from writers and publishers at the least… disaster at the worst.

I recently received this note from Amazon.com

Subject: Information Needed About Your KDP Book(s)

Hello,

During a review of your catalog, we found that several of your titles contain content that is freely available on the web.  Copyright is important to us – we want to make sure that no author or other copyright holder has their work claimed and sold by anyone else.

If, in fact, you have the sole publishing rights for the books listed above, please provide the URLs for all websites where you have previously published this or any other Kindle content. Please respond within five business days with the requested URLs so we can verify you have the sole publishing rights, or the books will be removed from sale in the Kindle Store. If the book(s) are in the public domain, please confirm this and include the information you used to make this determination.

We ask that you unpublish any other book that closely matches content that is freely available on the web for which you do not hold the sole publishing rights, or which is not in the public domain.  If we discover any other titles you have submitted fail to comply with these conditions or do not meet our Content Guidelines in any other way, your account may be terminated.

Instructions on how to unpublish your books can be found here:

Regards,
Amazon KDP

The writing style at my website is to back up a lot of my thinking with excerpts from mainstream media articles. I am extremely careful to give credit and link each the articles I quote…. probably more than required by the Fair Use Doctrine.

The Fair Use Doctrine is described at Wikipedia:  Fair use is a limitation and exception to the exclusive right granted by copyright law to the author of a creative work. In United States copyright law, fair use is a doctrine that permits limited use of copyrighted material without acquiring permission from the rights holders. Examples of fair use include commentary, criticism, news reporting, research, teaching, library archiving and scholarship. It provides for the legal, unlicensed citation or incorporation of copyrighted material in another author’s work under a four-factor balancing test.

      1)   the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
      2)  the nature of the copyrighted work;
      3)  the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
      4)  the effect of the use upon the potential market for or value of the copyrighted work.

There has never been a single problem with this in almost 15 years of running our website until now.  This style evidently does not sit well with Amazon’s algorithms as you can see from the message above they sent.

I had several reports posted at Amazon.com compiled from my website.  These reports are also available at my website and were only sold at Amazon.com for readers who prefer to read on Kindle rather than on their computer.  They had not sold much so it was far easier for me to pull them off Amazon.com rather than go through a laborious process proving to Amazon.com that they were correct.

The cutting edge here is that some geek at Amazon who prepared this algorithm does not recognize the fair use doctrine… a legitimate right for writers.  Their legal eagles also probably were concerned over liability issues and since they do not generate enough revenue to have a human examine the manuscripts so writers become guilty until they prove themselves innocent.

That’s not a problem for my novels or for anyone who does not use quotes.  This is  a warning that like everything else algorithms are a double edged sword.   We can gain a lot from the algorithms but just like anything else we should not place all our eggs in just the Amazon or a similar basket.

Amazon is no longer an 800-lb. gorilla.  This company is more like 1500 lbs–with the same gorilla mindset.   A friend of mine who is a very successful writer has had several algorithm run-ins, mostly over “permission” to sell his out-of-print books for which he owns the copyrights.  The good news so far is that he’s always been able to straighten out the matter with a live human on the phone.  However be wary… if you fall in the algorithm’s sites… they are inhumane and can treated you unfairly… incorrectly and be one of the most intrusive mediums of all.

END OF EXCERPT

Algorithms and the electronic world can be like many other life… ever changing… necessary… not very fair at times…  and they can be destructive… just like big business and governments.  Yet we want them… use them and probably couldn’t get along without them.  Observe… learn and understand the good parts and the bad.  Avoid the dangers and take advantage of the blessings each brings so each change brings favor to you.

Gary

Guides through the swamp

What’s the easiest way to cheat on your taxes

Wikipedia Fair Use  Explanation


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