Here's a link to an article I wrote for the Dec. 4th, 2008 ACE Weekly:
http://aceweekly.blogspot.com/2008/12/work-hard-for-money-if-youre-small-biz.html
Here's the text in it's entirety:
If you ask anyone that has started their own business, they will tell you that it is a lot of work. You have to deal with three levels of government, make sure you have all the required licenses, set up business bank accounts, get insurance, and maybe even hire a lawyer and or accountant for accounting and tax advice. This is true even if you don't plan on having a lot of business activity. For example, someone with a full time job may want to set up a small side business to sell their photography or art work in hopes that it may some day turn into a full fledged business. A student may need to set up a small business to help pay for school. Many people have hobbies that are considered businesses because they generate some revenue. In our current financial climate, many people may be cutting back on their business income to try to get stable employment, like construction contractors taking full time work at the local big box hardware store but keeping their business open just in case some work comes along.
Well now in Lexington, you can add another $100 of prepaid tax onto your businesses expenses if you don't plan on making more than a few thousand dollars.
No one likes paying taxes, but most people can understand why we need them. Currently if you own a business in Lexington, you are required to pay an Occupational License Fee. It's not a huge amount compared to state and federal taxes, just %2.25 of your net earnings. So, if you made a net profit of $2000 selling photographs, you would have to pay the city $44.50 in business tax. That's not a big deal although it is a bit of a pain to fill out all the paper work (which is actually pretty complicated) just to send a check in for forty or fifty dollars a year. With the new plan, you are now required to prepay $100 in tax, so if you wind up only owing $44.50, you lose the other $65.50. Or to put it another way, you tax rate goes UP if you make less money.
Here's the reasoning for the new tax (from Mayor Newberry's budget address on April 8th, 2008): “... there are hundreds of businesses filing for licenses, yet they generate no revenue for the community. In those instances, the fee [the $100] will serve to pay for the cost of administering the program or will serve to discourage businesses which are not active from filing for a license. In FY09, this fee will generate approximately $2.7 million, and in subsequent years, we anticipate that it will add approximately $1.4 million each year.”
Basically, what he is saying is that there are business in Lexington (actually about 12,000 of them) that are filing for licenses but then don't have much if any net income. Well, like I described above, there are lots of small business out there that are just small side interests or hobbies which maybe just generate a small amount of money. To suggest that these businesses should pay the city so that the city can in turn afford to processes the returns of these small businesses is a bit ludicrous - it's a 'make work' project funded by people who can't really afford to pay for it.
So now, it's gets even worse for these very small business in Lexington. If you are running a small side business (you or your spouse work full time), you may not be able to write off many expenses, and even though the business does not generate much revenue, you will be taxed at a higher rate as the profits are added to your regular income. So, going back to the $2000 in net profits selling photographs: You're looking at 25% in federal income tax ($500), 15% federal self employment tax ($300), 6% state tax ($120), state business taxes (flat $165, for a LLC) and Lexington's $100 = $1185 in taxes or a marginal rate of roughly 60%. Surely anyone in this position is doing it as a labor of love. If you just wanted to make money, you would be better off with a part time job at Target.
Other cities that we are trying to emulate, that are vibrant and foster the creative class tend not to place any taxes on these types of small businesses. In Austin, Texas, they have no business license requirements. Same for Boulder, Colorado although they do have a city sales tax. In Bellevue, Washington, you need to pay a one time registration fee of $29.00, but then only pay taxes if your gross income is over $135,000.
It seems to me that the city could save a lot of time and money by using rules similar to those of Bellevue, WA. Have a registry of businesses set up for a nominal fee, but only tax businesses that are making a certain amount of money or more. This would reduce the amount of labor required to process the 12,000 tax forms with zeros all over them and remove the need to generate another $1.4 million in revenue to pay for this processing. The key though is to encourage people who want to run a small business in Lexington, not make yet another hurdle for them to jump over.
At this point, most people would agree that McCain's problems really started right around the time that the whole bailout thing was going on. McCain's performance at this time was not inspiring and his poll numbers reflected it - this is still before people were starting to form much of an opinion about Palin. Everything I have read would indicate that this was the beginning of the end for McCain. Surprisingly, there does not seem to be much mention about what really triggered the "Economic Crisis". The signs of a weakening economy have been around for a few years. Bush's policies have created huge amounts of debt. More recently, sub-prime loans, banks and brokers going bankrupt or needing assistance from the government to stay afloat are pretty good indicators that things are not going well, but for the most part, we were muddling through it.
Then, faced with this, Bush all of a sudden decides that it's a real crisis and that we need to take emergency actions NOW! People started really freaking out, they started taking their money out of the market and closing their bank accounts. When the first draft of the bailout bill was not passed, the market tanked "the worst losses since 'the Great Depression'" or maybe even ever. It was this over reaction by Bush - and to some extent the media - that started it all though. If Bush continued to muddle through the problem, he may have been able to delay the inevitable - at least until after the election. If he was really smart, he may have been able to skillfully move through this problem in such a way that mass panic would not take hold, that we would not completely lose confidence in the markets. Instead he but a huge exclamation mark at the end of a disastrous term in office. He reminded us that he is still the president, a Republican, and essentially made the economy the number one issue in the election and, on the process, severely crippled any gains McCain had made after the Republican convention.
Update: letter published on June 14th, 2008 here!
This is my response to a local developer's response to an article on a new study that shows that the city of Lexington has the largest carbon footprint of any city in the US.
Here's the original article.
The local developer's response.
My letter to the paper:
It's not surprising that developers like Joe Hacker are so upset. People who used to buy his houses are starting to think twice about wanting a McMansion way out in the burbs - and for good reason. The commute into the city is getting longer, the price of gas is sky rocketing, the cost to heat and air condition a 3500+ square foot house is prohibative. When you factor in the extra costs, a nice condo a ten minute walk from work starts to look a look more and more attractive. The fact that a ten minute walk is much better for your waist line and the environment is a bonus.
If Mr. Hacker were a smart man, he would build walkable/bikable communities with highly energy efficient homes. He would support public transit so that people could easily get into town without blowing a couple hundred bucks on gas to sit around in traffic for thirty of forty minutes a day. But let's be realistic, he's really just in it for the money and the more costs that he can pass on to the buyer the better. For example, the reason he does not like infill housing is because it's far cheaper for him to buy a horse farm or rip down a forested area to build houses than it is to build one house at a time in an established neighborhood. It's much cheaper for him to build ten identical new houses than to try to build a house that maintains the character of a neighborhood, the land is cheaper and there are no architectural issues - one set of plans works for hundreds of houses. In the end, someone will shell out $400,000 for a house that costs them more to heat than a house in the city with the added bonus that they get to spend an extra $300 a month for gas and parking. Even worse, once the buyer realizes that their subrban dream home is not worth the aggravation, they can't sell it because Mr. Hacker has built another 500 brand new houses exactly like theirs just down the street.
He sees the city's push to bring another 30,000 people into the city as a way to make even more money. What he fails to realize is that the city is trying to attract knowledge workers, people who live in cities like Seattle, San Francisco, Boston, and Austin, people who want to live in a more urban environment, that are used to taking public transit, that want to walk downtown and bike to work.
People aren't that stupid Mr. Hacker. Your tirade is all about you, and the fact that your business is in for hard times unless you are willing to make some changes in your strategy (as many builders have already done). Blaming everyone else for your problems, from the oil companies to the environmentalists is just a waste of time. The price of gas is likely not coming down again any time soon and sitting around in traffic all day is just no fun.
Using wave power to generate electricity:
This is all great until you become a bit more of a seasoned user.
If someone sends you a message on Facebook, it goes in your Facebook Inbox and you also get a copy in your regular email - so you get to read the message twice. Then, in some cases, you are on an email list - like say the Oxfam email list, and you join the Oxfam group on Facebook - so now you get an email from Oxfam, the same message in your Facebook Inbox, and yet another email from Facebook telling you that you have a new message in your Facebook Inbox. I could opt not to join the Oxfam group on Facebook, but then my Facebook friends would not know that I support this fine organization. Herein lies the problem. Facebook wants you to go to their site all the time - they would rather you give up all the other web applications you regularly use and just use there interface to the web. Of course, from a business perspective, this makes perfect sense. But the user experience can be frustrating as you may not be able to send a friend an email directly, you have to go through Facebook, and the same for all the people you have added as Buddies in your IM. Technically, it would be very easy for Facebook to allow you to interface with their system so that your friends could be accessed through your email software's address book. It would have been easy for them to use existing IM software, or allow you to interface to their system through existing IM clients.
What would be better?
Well, for starters, a common sign-on that can be used across multiple sites and applications. I find myself listing a bunch of IDs as long as my arm so that people can contact me - my Yahoo ID is jawyllie, Google is wyllie42, Facebook is Andrew Wyllie and LinkedIn as Andrew Wyllie, I do not have an MSN account, but my twitter id is @wyllie, my blog is at www.omasum.com, but I also proxy blog on thecruft.blogspot.com, oh, and my email address is ... etc. etc. All this makes me "more connected", but it's a lot of work to keep track of all this various information as well as occasionally checking in on all these site to see if anyone is trying to connect to me. OpenID helps with this issue, but it's not supported by Facebook (yet).
Sites that can talk to each other would be useful too. I have a long list of friends on Facebook, many of them are also contacts on LinkedIn. It would be better if I could just have an easy way to keep my own personal list of friends and decide which sites I would like to interact with them on. So, I could have social friends on Facebook and professional acquaintances on LinkedIn and some on both, but they all come from my own private lists. Right now, these sites overlap too much to be very useful - I find my self using one site all the time and the other infrequently only to find that people have been trying to contact me at the other site without me knowing.
What I want to have is my own private space, my own contacts list and the ability to decide who is allowed to see information in my own space. If I join a website with social features enabled, I should automatically be able to see the people I have determined are my friends on that new site (at least, I should be able to see friends that make themselves available on the site). Sites should provide unique applications - I don't need instant messaging and email - I do like to share pictures, maybe play a game, or discuss politics. I want to have an easy way to track what my friends are posting (like with an RSS aggregator) without having to visit a ton of different websites to see what's going on. Ultimately, I would like to have all of this hosted on my own local computer or server so that if I decide to take myself off the net without a trace, I can - I don't have to worry about my profile information sitting around in someones database and in their backups.
Not surprisingly, Google has figure this out. They have created a system that will allow you to add friends, from a common list, to any site you visit that supports their technology. While this solution still relies on a central friend database, it's a step in the right direction. Not surprisingly, Facebook wants nothing to do with it as it means that people will create their own sites instead of trying to write apps that run inside the Facebook framework.
In the end, I think we will find that it's near impossible to control the internet - which is what Facebook is trying to accomplish. The best way to be big a big player long term on the net is to embrace, use and promote open standards, much in the way Google has done. Do not try to control how people use the technology, but provide tools which facilitate it's use.
The New York Times has a great little app that shows where an average consumer spends their money. It's mostly what you would expect - the biggest chunk is housing followed by transportation and the food. I guess for the average person it's exactly what you would expect. A couple of places where I'm not average - which surprised me a bit - is how much people spend on cable as we are one of those $13 a month kind of households, gas, and eating out compared to eating in. It looks like people eat out about a third of the time, or at least, spend a third of their food budget eating out which seems on the high side to me. Anyway, check it out if you have a few minutes (oh, you may need to register on their site - it's free).
But not Officially. While it now looks certain that Obama is the nominee, he can't be declared the winner until Clinton officially drops out. Here's the issue though, since Obama cannot achieve a majority 2025 pledged delegates from primaries and caucuses around the country he has to rely on votes from the super delegates. These votes are not actually counted until the convention in August which means that they can change the candidate they support to the other candidate at any time. So while realistically Clinton has lost the race, technically, she will not be eliminated before the convention unless she decides to "do the right thing" and announce that she is dropping out.
But she continues to press forward. The problem I see with her campaign now is that she is moving more and more to the right in order to capture more conservative voters - especially in open primaries (primaries where Republican voters can vote for a Democratic candidate). Seriously, the "Obliterate Iran" comments are certainly not what I would call a typical left wing approach to dealing with the situation in the Middle East, in fact, it's not only a bad approach, it's against the UN charter to threaten another country in this way - and the Iranians have issued a complaint. Her comments about working class, white voters not wanting to vote for Obama also sounds like something Bush or McCain would say, a divisive statement at a time when the party needs to reunify. Her staying in the race cannot end happily for the democrats. She will either, somehow steal the nomination from Obama, or she will bring the whole party down in an intra-party war which may not have time to recover before the election in November.
UPDATED May 11th: The latest super delegate count shows Obama up by 4 - this is a good site to see what's going on with the supers.
In this case "it's about teaching to the test" and you could see this one coming from miles away. A principal at one of the local elementary schools was forced to resign after irregularities in the school's conduct preceding the standardized testing at the end of the year.
This is not terribly surprising. There is so much pressure on the schools and the students to do well on the standardized tests that the main focus of school work becomes more about teaching to the test than teaching the students. The scores achieved on the tests determine how the school will be funded in the following years with schools scoring higher getting more funding. To add even more pressure, at the beginning of the school year there is a huge award ceremony for all the kids that did well on the tests as well as for the schools that performed well on the testing. While, it's great for the kids to be recognized, hearing that some school mottos are 'drive to 95' (to get a 95 on the next year's test) is a bit scary.
In this case, the principal is being accused of demoting fourth grade students to third grade after they did not perform well on practice tests prior to the official testing period. Of course, this was a year ago and the story broke in the paper the day after testing finished which means that more of this may have been happening during the latest round of testing. In my own experience, I have had a teacher tell me that they will not be teaching science for the rest of the year because science was not going to be on the test. Our old school was not very happy when we moved our kids to another school to take advantage of a special program being offered (because they did well in testing). I also know of a number of parents that have held their child back a year, usually in Kindergarten, because the school did not feel they were ready to move on. This is fine if it's true, but you also have to remember that it's in the schools best interests to do this as they get an older, and presumably smarter, student body when testing rolls around.
While I see a need for the schools to track how well students are progressing, this idea of having two weeks set aside for standardized testing of all students to determine how the school will be funded in the following year is just asking for trouble. It's just too easy for the schools to bend rules and too tempting for the school to cheat.
Here's what they should do. Now that most of the marking is tracked on central servers they have a pretty good idea of how the students in a particular class are doing relative to each other. To test if the class is performing at the proper levels, a randomized testing scheme should be put in place. On the day of the test, a randomized sample of students will be picked, say a quarter of the class, to work on the tests. The grades from this group can then be mapped against the general marks for the class to get a set of marks for the whole class. To be doubly sure that no cheating is going on, the tests themselves can be altered so that the questions are in a different order on each test, numbers in math questions are different for each student, and/or the answers for each question are not the same (so for one student, question one's answer is (a) and for another student it's (d)). This would make it very difficult and time consuming for someone to go through and fix a students answers. In order to prevent the school from demoting students before the test, the actual day of the tests could also be randomized. With these procedures in place, the school would have a much harder time teaching for the test which would mean that the results would be more representative of the students' true capabilities.
The fact that a school is funded based on the test results is also a problem. The school board needs to spend more time evaluating schools and teachers to determine where money is best spent. By only using the test results, they are over simplifying the problem as the schools also need to be evaluated on the types of extra (non tested) subjects and extra curricular activities they offer the students. For example, many of the schools that are considered 'problem schools' which have lower test marks are often in poorer neighborhoods. Even if that school is meeting the needs of the community, engaging the kids, and creating a positive learning experience for them, if their marks are not high enough, the school could be funded at a lower level or even shut down and the kids shipped to other schools around town. I'm not saying that they should not try to achieve high marks on their testing, because they should, but it should not be the only factor that determines the fate of the school. The goal is not to create child robots that all have the exact same level of knowledge, but to create well rounded students that are ready to handle the problems of the world.
Check out the video from youtube here of Hillary working the bar and sipping on her shot of whiskey as if it were a martini. The look on the guys face sitting at the bar (the only guy not wearing a suit) at the end of this clip really say it all.
I just finished reading "The World Without Us", written by Alan Weisman.
The premise of the book is that all the people of the earth suddenly disappear due to some kind of disease that only affects humans, or Jesus comes and takes us all away to the rapture, or more realistically, alien spaceships come and take all of the humans off the earth and put them in some kind of zoo on their own planet. Regardless of how it happens, the earth no longer has any humans on it - so now what happens? Is the world better off without us?
There have been a whole slew of books about the environment and what we can do to be better world citizens. 'The World Without Us' takes a slightly different approach by showing us what our impact on the earth is by showing what the earth was like before we took over, and whether it would return to that state after we are gone.
Some of the changes we have made to the earth are irreversible - like the invention of plastics that never decompose. In the Pacific Ocean, between Hawaii and California, there is a current known as the North Pacific Subtropical Gyre. This current is like a whirlpool, it just circles round and round. At the center lies an estimated 3 million tonnes of floating plastic debris, an area roughly the size of Texas. As this plastic breaks down, it just gets smaller and smaller, but it does not degrade, it remains plastic and will not be going away for a long time.
Other changes we've made, may not be as irreversible as we may have thought. In the areas surrounding Chernobyl in Russia, wildlife is returning where one might think that nothing would ever live again for a very long time.
By showing what our impact has been, and what the world was like before we started messing with it, we get a better idea of how we can protect what we have left.
Anyway, Highly Recommended!!!
Available at Powell's and Amazon.
