The proper tax rate on capital income is zero

http://www.economist.com/economics/by-invitation/guest-contributions/proper-tax-rate-capital-income-zero?scode=3d26b0b17065c2cf29c06c010184c684

To see why this is so, consider twin brothers who each make $100,000 in wage income. Most people would regard these two people as equally well off, even if one freely chose to consume his income now, while the other chose to consume later. But not advocates of the income tax. They insist the more patient twin brother is “richer” and deserves to be taxed at a higher income tax rate. For instance, compare a 40% wage tax with a 40% income tax. Under the wage tax (sometimes called a “payroll tax”) the spendthrift brother is able to consume $60,000, which is 40% less than in a no-tax economy. Now assume the thrifty brother invests the after-tax wage income for 20 years, and sees the money double to $120,000. Then he can consume $120,000 20 years in the future, which is also 40% less than the no- tax consumption level. This sort of tax is neutral with respect to saving and investment; it’s essentially a flat rate tax on consumption, whenever it occurs.

 I'd counter that the higher $200,000 post-investment income should be taxed at a higher rate than the $100,000 pre-investment income.

In general I'm in favor of inflation adjusted capital gains, even after this article.  However, I feel it's more important to tax wealth transferred between generations (inheritance tax).  Treat inheritance the same as gifts or prizes, and tax all of them along the lines of: $0-$10,000 exempt; $10,000-$100,000 @ 10%; $100,000-$1,000,000 @ 50%; 1,000,000+ @ 80%.

The Psychology of Security

http://www.schneier.com/essay-155.html

A lot of this can be chalked up to simple ignorance. If you think the murder rate in your town is one-tenth of what it really is, for example, then you're going to make bad security trade-offs. But I'm more interested in divergences between perception and reality that can't be explained that easily. Why is it that, even if someone knows that automobiles kill 40,000 people each year in the U.S. alone, and airplanes kill only hundreds worldwide, he is more afraid of airplanes than automobiles? Why is it that, when food poisoning kills 5,000 people every year and 9/11 terrorists killed 2,973 people in one non-repeated incident, we are spending tens of billions of dollars per year (not even counting the wars in Iraq and Afghanistan) on terrorism defense while the entire budget for the Food and Drug Administration in 2007 is only $1.9 billion?

Q: Why haven’t we discovered Earth-like planets yet?

http://www.askamathematician.com/2012/05/q-why-havent-we-discovered-earth-like-planets-yet/

Finding an Earth-like planet will require a lot of patience and more powerful telescopes and telescope arrays, but that’s just an engineering problem. It’s just a matter of time (and probably not even that much!). Once found, the next challenge will be to determine whether or not the newly found tiny-as-Earth planets are covered in plants and critters. Already there are some ideas being floated that involve analyzing the atmosphere of the exoplanet to find signs of life (specifically, water vapor and oxygen). As impossible as that sounds, considering that we can’t actually take pictures of exoplanets (and again, every time you look at a star you can’t do better than a point of light) we’ve actually managed to do it a few times! Unfortunately, the first atmospheres we’ve seen were only visible because they were forming huge “comet tails” by being blown off of the surface of “hot-Jupiters” orbiting practically within high-fiving distance of their host stars. So, not Earth-like, but it is a step in the right direction.

Chances are, we’ll find an Earth-sized planet inside of the goldilocks zone of another solar system, and be able to determine if there’s life on it or not, within the next few decades. Copernicus would crap himself with joy if he were alive today.

A limited version of federalism is a less miserable solution than the break-up of the euro

http://www.economist.com/node/21555916

That is why we have reluctantly concluded that the nations in the euro zone must share their burdens. The logic is straightforward. The euro zone’s problem is not the debt’s size, but its fragmented structure. Taken as a whole, the stock of euro-zone public debt is 87% of GDP, compared with over 100% in America. Similarly, the banks are not too big for the continent as a whole, just for individual governments. To survive, Europe has to become more federal: the debate is how much more.

With euros leaving Greece, Greece may need to leave the euro

http://www.economist.com/blogs/freeexchange/2012/05/euro-crisis-4

The question is how long this can continue. Greece has no money. Revenue collections are falling short, and one suspects Gresham's Law may begin operating. One doesn't turn over precious euros to the Greek government if an exit is looming; one hoards them, bringing forward the day when an alternative scrip begins circulating. The mere prospect of bad money may drive out good money. Meanwhile, the flow of euros into depositors' hands ultimately originates at the European Central Bank, and the ECB is no doubt very nervous about continuing to supply them for fear of huge, open-ended exposure to a Greece that is potentially on its way out. The ECB may already be rationing euros to Greece. If that continues or scales up, we are then talking about effective capital controls—the ATMs no longer dispense euro notes—and more pressure for the introduction of alternative scrip in Greece. Exit, in other words, becomes a fait accompli.

The Trouble with Airport Profiling

http://www.schneier.com/blog/archives/2012/05/the_trouble_wit.html

Why do otherwise rational people think it's a good idea to profile people at airports? Recently, neuroscientist and best-selling author Sam Harris related a story of an elderly couple being given the twice-over by the TSA, pointed out how these two were obviously not a threat, and recommended that the TSA focus on the actual threat: "Muslims, or anyone who looks like he or she could conceivably be Muslim."

This is a bad idea. It doesn’t make us any safer -- and it actually puts us all at risk.

Good for Obama, bad for gay marriage

http://www.economist.com/blogs/democracyinamerica/2012/05/obama-endorses

As of today, gay marriage is once again a partisan issue at the heart of a presidential election campaign. Many Republicans who might have had flexible opinions as of yesterday are now going to find themselves psychologically inclined to move towards the party line. Mitt Romney will be forced, within the next hours or days, to come out with a full-throated argument against gay marriage. Republican office-holders will have to vocally support that position. Republican media outfits (Fox News, conservative talk radio, RedState and so forth) will have to join the attack. Millions of GOP voters who otherwise might have gradually reconciled themselves to gay marriage within the next few months will be held back by the ideological alignments created in this presidential campaign.

A good example of unintended consequences.

Punk

http://www.youtube.com/watch?v=dJoo7Tgjr8U

Jeff sent me this video.  At first I doubted the punkness level of some of the songs (like Don't Dream it's Over aka the gayest song I've ever heard).  Also it seems like punk girls are only capable of saying "yeah".

But I guess this song is pretty punk after all:
http://www.youtube.com/watch?v=SiQmzz_MjsU

Direct Democracy vs Representational Democracy

A Slashdot story on the Pirate Party lead to an interesting discussion about direct democracy vs representational democracy.  It starts around here:
http://yro.slashdot.org/comments.pl?sid=2832491&cid=39912541

Q: What would life be like in higher dimensions?

http://www.askamathematician.com/2012/05/q-what-would-life-be-like-in-higher-dimensions/

If you set off a firecracker in 3, 5, 7, etc. dimensions, then you’ll see and hear the explosion for a moment, and that’s it.  If you set of a firecracker in 4, 6, 8, etc. dimensions, then you’ll see and hear the explosion intensely for a moment, but will continue to see and hear it for a while.  For light the effect would be fairly subtle, except for extremely long-distance effects, like somebody reflecting a bright light off of the moon.  You probably wouldn’t notice the effect day-to-day.  However, it would ruin the experience of sound.  In 4 dimensional space the firecracker, even in open air, would sound like thunder; loud at first, and leading into a drawn out boom.  It may not even be possible to understand people when they speak.