The Estate Tax – An Immoral Tax on Success

Over the past few months we've heard a lot about the estate tax. This opinion piece in the Cleveland Plain Dealer about the estate tax summarizes the opinions of many of course unaffected by the tax. The writer, like many others believes the estate tax is a valid tax simply because it applies to so few. He says, "if you are fortunate enough to receive a windfall of money from a deceased person, then a portion of that windfall should be taxed and go to the government. No one likes taxes, but certainly this tax is one of the most fair. It applies only to a very small percentage of his estates." "Estate taxes opponents argue that the estate tax is unfair because it taxes people twice. Of course we tax people twice on lots of things, including our purchases and our income. The fact that something is taxed twice hardly makes it unfair." "Here's a tax that only affects those who benefited the most economically from government and society, namely the wealthy."

This remains to me to be the continuing effort to tax success regardless of its form. The argument that "we tax lots of things multiple times anyway" is again stating that is okay to tax the same things over and over again simply because one is successful. When you consider that by the time net worth is passed down, it will have been taxed at least 3 to 4 times, it is absolutely immoral. The argument that "it only hurts a few, therefore it's okay", is scary because it simply states that you should be taxed because you're successful.  Finally, the argument that one somehow benefited from our government in his or her success in therefore should return that success back to the government is simply illogical and stupid. We constantly pay for the cost of government multiple times over.  Most of estates belonged to small businesses that lack the liquidity to be able to pay the onerous estate tax and are forced to make poor decisions or make complex decisions to avoid paying it.

The bottom line – I have yet to hear one clear, sound argument that would support this immoral and unethical tax.

My Poor Shriveled Cleveland Sports Heart Revisited

How much more can one take? While Pittsburgh is in the Super Bowl for the umpteenth time, our Cavaliers have lost 24 straight, our Browns are going through yet another coaching change, and our Indians are once again position for mediocrity.

When I wrote my blog on my poor, shriveled Cleveland sports heart about a year ago, I never dreamed it could get worse. But yet here we are with three losing sports teams. It is a test of intestinal fortitude.  Fortunately, we have Cleveland State basketball, we have Ohio State football and basketball, and the endless abundance of high school sports. Our shriveled pro sports heart can get filled from other venues. Looming strikes in the NFL and NBA will not stop us from getting our sports fix. In fact in Cleveland, it may be a good thing because there will be no more pain.

WikiLeaks – The Ugly Side of the Internet

I saw an interview with Julian Assange the founder of WikiLeaks last Sunday. In the interview, he completely defended the publication of classified materials as "freedom of speech". He even said that he went well within the bounds of the law that any newspaper publisher would follow.

In life, there are often things that we could do, but we just shouldn't do. WikiLeaks does not exist to promote some higher calling, but to bring down others. It appears to be a clear manifestation of an individual's ego and not some higher purpose of free speech. By publishing classified materials and threatening to publish other classified materials, I cannot imagine that anyone would think that good could come out of that. And we have already seen the damage that this can cause.

The Internet is a wonderful thing. We can make ourselves heard in a nanosecond across the world. But with that kind of power comes the need to have restraint. Just like in a conversation, we don't say everything that we could say but we exercise restraint in saying the things that we should say. The mark of a human being is being able to control his tongue.  The Internet has the ability as an unmonitored  conversation to wield great damage. WikiLeaks is nothing more than unbridled lack of restraint whose intent is to bring harm. It is particularly sad when such lack of restraint hurts innocent bystanders. It also serves to restrict the flow of conversation between the published parties which would seem to be the opposite intended effect.

Recalling the Blizzard of 78

This past week much of the midsection of the United States was hammered with a major snowstorm. It was deemed "one of the worst snowstorms in years". As we all get older we remember how difficult we had it and we often make comparisons to other similar events in our lives. So of course the blizzard of 2011 was compared to the blizzard that I went through in 1978 as a student at Valparaiso University.

I was on the wrestling team as a freshman and we were making a trip to southern Indiana to wrestle Franklin College. We were on our way back from the event when it started snowing and blowing hard. I remember the radio blaring to "seek shelter immediately". Our coach who was also our driver decided to stop at a hotel on the way back and see if we could bunker down for the evening. The hotel was full but there were cots in the lobby. The hotel owner graciously offered to let us stay in the hotel, but our coach decided to press on.  What turned out to be almost a catastrophic mistake.

As we started up highway routes 65, it began to get worse and worse. Visibility was near zero and wind chills were well below zero. Then, a defining moment. Our van battery froze over and we were stuck on the highway with no visibility. When this happened, our coach uttered a line that I will never forget. He said, "Men, we're F – – – – D". Obviously this is a family blog and I don't want to repeat what he really said but you get it. Within a short amount of time, a trailer tractor almost ran right into us and jackknifed into the median. That was our first close brush with death. Fortunately, the driver was not injured and one of us talked to him and found out there was a Holiday Inn about a little over a mile up the road. Given that we were sitting ducks sitting on the highway, we decided to walk in blizzard conditions to the hotel.  Further, sitting there was not a good option because even though we could see rescue snowmobiles, they could not see us because we had no lights.

Wrapping up in our singlets and our warm-ups, we bravely walked up the highway shoulder led by our captain until we could see the hotel lights. We had to jump over a fence into about 6 foot high snow drifts and by that time many of us were getting frostbite. Fortunately, by God's grace (I was not a Christian then either) we were able to get to the hotel where we were stranded five days. As it turns out, we were snowed in with the University of Minnesota basketball team and bonded with them (remember shooting pool with Mychal Thompson and Randy Breur) in the boredom of being stuck. I was able to find this archive from the front page of the Chicago Tribune with a brief mention of our ordeal.

So now any major snowstorm is met by skepticism on my part that nothing could beat my experience as an 18-year-old in 1978 going through that snowstorm.

And I have the clippings to prove it!!

The Accountants and Lawyers are Running the Show

It is hard to fathom how many decisions in business are made based on what the accountants and lawyers dictate. I recently experienced yet another situation where a poor business decision was driven by an accounting or legal principle.

Two years ago we ordered 15 subscription licenses from salesforce.com, a CRM company. We had anticipated that the business was going to grow and that we would use those licenses. It became apparent that our business was not going to grow and that we would not use those licenses. After a year and a half of paying for 15 subscription licenses, while using less than five, I refused to continue to overpay. The idea of the subscription is that you pay for what you use. I had used salesforce.com in multiple other businesses and our businesses had generated hundreds of thousands of dollars in revenue to that company. Yet the answer I got when asking for relief was essentially "tough". I ordered 15, I would pay for 15.  As an accountant, I am familiar with the fact that revenue recognition precedes good customer relationships. As a former head of sales in a public company, I saw firsthand how the pressure of recognizing revenue came oftentimes at the expense of good business. I told salesforce.com I would no longer do business with them and they now had lost a customer for life because of their shortsightedness.

I really get tired of seeing commercials with all of the legal gibberish that basically means nothing. It is solely a CYA maneuver. How much money and effort are wasted in good customer decisions because of CYA accounting and legal stuff? My goodness, half of drug commercials is telling you all about the side effects and not about what it does for you. Does anybody ever read a software subscription license, let alone understand it? It seems to only get worse every year.  Our country could do so much better if we focused on customers and service and a little less on accounting and legal.  Spoken by a reformed accountant.

Apple Ecstasy

I am a proud owner of an iPhone.  I am amazed at this device.  It does everything in one device that previously would have required multiple devices.  I have my music, my book abstracts, my bible and commentaries, a GPS, home movies, etc., etc.  However, occasionally things go wrong and you have to make an appointment at the Genius Bar.  They Genius Bar is located at every Apple Store. The Genius Bar is the technical group that can fix your problem with your Apple product.

When you walk into an Apple store your confronted by all sorts of people. There are the runners, who make sure that you are guided to where you need to go but do not deviate from where you shouldn't go. There are the browsers who are always looking at the latest and greatest products in the Apple store. There are always people in the Apple Store and it always feels like it's an event when you go in. And that is intentional.  They want to make it feel like there is always an event going on in an Apple Store. I remember going to the annual radiological tradeshow in Chicago and GE putting all sorts of staffers around the booth to make it look like they were really busy and there really was an event going on. Same kind of thing in an Apple Store.

The folks in the Genius Bar are usually young and kind of Hip. That is got to be an awesome job for a young techie. Basically you get the play all day long. Most times the techies in the Genius Bar are able to solve the problem. But even if they can't you feel like you just came from an event and therefore did not waste your time.

When Technology Violates

I first heard this story on my WSJ This Morning Podcast.  Take a look!

Where was the mistakes made?

• The trucks were a classic case of cost cutting for technology sake.  Never let technology drive the answer in a vacuum. 
• Toledo decision makers did not listen to or observe their customers.  The one-size fits all cans did not fit the needs of the residents.  It cut down on the service and the elderly could not even manage the new cans.
• The city did not contemplate the residual costs associated with the program, i.e. the call center, the additional supervision, etc.
• There was no test marketing of the concept. No risk reduction therefore no fall back.
• No educational transition to residents.