Tuesday, April 21, 2015

[DONDEQUIERA] The Illusion of Fairness: Part 1

As promised here is the follow-up on the "Incentives for the Payment of Taxes in Advance of the Tax Transformation Project Act."  In this installment, I'd like to breakdown the provisions which allow for citizens to prepay taxes.

First of all, it should be crystal clear to everyone, that tax reform is coming to Puerto Rico.  There is no question whether the IVA will pass or not, it is only a matter of time.  How else can you explain the Puerto Rican government creating a process for citizens to prepay taxes?  I mean let's get real here, it's in the title of the new law.

Our old friend Occam's Razor almost guarantees us that the only way to explain the creation of this new law is because it is a forgone conclusion that tax reform is coming.  I would go further to suggest that this law represents an unspoken covenant between the richest citizens of Puerto Rico and the Puerto Rican government.

Still not convinced?  Let's just imagine that the tax reformation does not happen.  If that's the case, then the Department of Hacienda has quite a mess on their hands.  They will have received payments for taxes, based on future tax rates that did not become law.  I guess they could simply refund the payments, that is, unless they really needed the cash (which they do).  What happens if the government spends some of the money?  Where will they get the money to make the refunds?

As I mentioned in the previous post, this program is aimed at a very selective group.  Here is a summary of the types of taxes eligible (PDF) and who would be likely to benefit from the discounted taxes.

Type of tax Beneficiaries
Annuities

Owners of life or endowment insurance annuities
Capital Gains Individuals, estates, trusts
Capital Gains Corporations
IRA's and
Educational IRA's
Individuals with IRA or IRA educational accounts
Dividend Distributions Share holders of public corporations issuing dividends
Implicit
Distributions
Corporations with accumulated earnings and profits

Secondly, as you can see, these discounted tax payments are aimed at any citizen with annuities, IRAs, and stocks.  In other words, these discounted taxes will benefit the richest of our citizens.

In addition, it is also aimed at companies large enough to have long term capital assets and those fortunate enough to have large profits.

I'm always suspicious of laws that claim to be doing one thing, but actually authorize something completely different. In this instance, the press release from the Department of Hacienda claims the governor signed into a law a tax amnesty program.  However, if you read the release or review the law (Ley de Incentivos para el Pago de Contribuciones en antelación a la Transformación Contributiva), you will realize that it also sets up a new program for the most wealthy Puerto Ricans to prepay taxes at discounted rates.

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Publicado por Blogger en DONDEQUIERA el 4/21/2015 11:18:00 a. m.

Monday, April 13, 2015

[DONDEQUIERA] Photographic Collection From Okeanos Explorer: Exploring Puerto Rico’s Seamounts, Trenches, and Troughs



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Publicado por Blogger en DONDEQUIERA el 4/13/2015 02:57:00 p. m.

[DONDEQUIERA] Science Alert: Exploring Puerto Rico’s Seamounts, Trenches, & Troughs

Mona Passage
NOAA To Explore the Puerto Rico Trench in Historic Dive

The National Oceanic and Atmospheric Administration (NOAA), on whose work we rely on during all tropical storm activity, is currently operating an exploration of the ocean surrounding Puerto Rico

The expedition will explore Puerto Rico's seamounts, trenches, and troughs.  Using both at-sea and shore-based science teams, the expedition will investigate unknown and poorly known areas, including the Puerto Rico Trench, Muertos Trough, Mona Passage, and the Virgin Islands Trough.

NOAA Okeanos Explorer Program
Amazingly, the expedition is able to live stream the dives over YouTube, as illustrated in this image from the mission plan.

Blast From The Past

I remember my teacher wheeling the television into my classroom so we could watch video from Apollo 16.  Truth be told, now that I think about it, that experience fundamentally changed my life.  It kindled a life long passion for science, to which I am forever grateful.

ROV Deep Discoverer 
So when I watch live video from our exploration of uncharted territory right on my very doorstep, forgive me, it gets me going.  It takes me right back to that classroom in the dark, watching my life change before my very eyes.  I hope it takes you there too, for we are witnesses to history in the making. Truth.

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Publicado por Blogger en DONDEQUIERA el 4/13/2015 08:33:00 a. m.

Friday, April 10, 2015

[DONDEQUIERA] Prelude: Corrupt is as Corrupt Does

Puerto Rico Tax Collections Take The Easy Road

https://youtu.be/uwlAvsPvPfg
Very quietly this week, Governor Garcia Padilla signed into law, the 2015 Puerto Rico Incentives for the Payment of Taxes in Advance of the Tax Transformation Project Act. The new law offers an amnesty for payment of taxes.  The hope of the Garcia Padilla administration is the new incentive will encourage the payment of overdue taxes.  Beginning immediately, the amnesty will be open until June 30, 2015.

With the new law, the Puerto Rico government is looking to raise around $290 million during its operation.  The taxes collected are predicted to help reduce the government's fiscal deficit for this year.

Analysis

What surprised me most about the news is who the new law is targeting.  Besides snuggling up to those evil evasores, with the new law:

"taxpayers can prepay, at incentivized rates, tax that will be payable in the future on the capital gains arising from the increased value of certain assets, including equity investments, and contributions to individual retirement and savings accounts."

Wait a minute, hold the phones. This is a pretty dense way of saying that, if you're rich enough to actually have capital gains, you can reduce your income taxes with this new amnesty law.  How convenient for those who have the "burden" of capital gains.

Conclusion

I'm saddened that our government doesn't have the will to pursue the taxes our laws demand be paid.  But, I've seen this before, it's fairly common.  In fact, our legislators are offering a two-fer, consequently with the Hacienda amnesty, CESCO is also currently offering an amnesty on toll violations

In a previous life I worked in IT for a major wireless carrier, so I know what collections is all about.  Cutting edge technology was always a factor in collection rate optimization.  Because going in, it was already accepted that collections would never reach 100%, ni por tanto.  If memory serves me, I think we had an average  30% success rate on past due collections.  Your company's rate may vary. ;-)

I offer this anecdote to provide a perspective for these questions:

  • What is the minimum accepted collection rate for this program?
  • What is the overall amount of past taxes due?  And how many people or companies are we talking about?
  • Just how many toll violations are there and how much is owed in the corresponding fines?
  • Don't we have their contact information?  What, we don't know how to "find" them?  
  • What is the Government's resolve concerning enforcing the rule of law? 
Puerto Rico's Prepaid Tax Program

Rarely do you see the clear intention of laws made to benefit the few, maybe only the "1 percent" of the Puerto Rico general population.  Of course, since corporations are now people, they're included in the 1% as well. For brevity's sake, I'll break down this new program and prove that it straight up "informal corruption."


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Publicado por Blogger en DONDEQUIERA el 4/10/2015 09:29:00 a. m.

Wednesday, April 8, 2015

[DONDEQUIERA] It Takes A Pueblo - Culture Change in Puerto Rico

You need to walk a mile in the shoes of a (hu)man before you can understand the (hu)man.  In order to teach that (hu)man, you must understand the (hu)man.

Recent articles by Jay Fonseca and Samuel Oakford call our attention to the immigration of young upwardly professional Puerto Ricans p'al norte (migration to the US of A).  Here's another perspective to consider...

Where Do We Learn?

Without out access to a formalized school system, mankind suffers.  To doubt this suggests you doubt science.  And we know what Neil deGrace Tyson shows us; science doesn't need your belief to still be true.

However, whether a child relieves a formal education or not, they will always get educated by his(her) pueblo.  Especially so, by her parents,  his immediate family, or even groups and individuals outside their family (media,church, politicians, etc.).

Gettin' Schooled!

Melvin Resnick studied the history of English bilingualism in Puerto Rico and shared his findings in the 1990's.  In a landmark paper, he observed "motivated failure" within the English as a second language, educational system.

Most ESL students on the island confront real obstacles to learning English.  To illustrate the failure of teaching English, consider that most school children in Puerto Rico receive 12+ years of English (SL) education, but some 80% of Puerto Ricans remain functionally monolingual (Spanish only).

Resnick points to effort to convince the Puerto Rican people that the learning of English meant the loss of identity and subjugation to a foreign colonial power (coming after 400+ Spanish colonialism, in the end, most Puerto Ricans were pretty sick of the treatment by the Spanish).

The rhetoric can even go so far as suggesting that the resistance to learning English was a simple rejection of the United States' attempt to Americanize Puerto Ricans through the public school system.

Finally

This is just one motivated failure example, among an infinite others that occurs outside of the formal education system.  Me, I was raised in a pluebo that was prejudiced against the black.  In others it might be homophobia or prejudism against Dominicans.  Or maybe even as extreme as pueblos which forbid women from showing their faces or receiving any formal education.  For certain, in all of the varied places around the world, it's our pueblos that define who we are and how we see the world.

Throughout (hu)mankind's existence, we've repeatedly seen that only through education and community can we get (hu)man to act against his self-interest.  Just as our ancestors used a new found respect and belief in science to bring us out of the dark ages and into the age of enlightenment, we too must find our way out of the blinders which keep (hu)mankind ignorant and afraid.

So while we must depend on public and private schools to teach our children reading, writing, and arithmetic, we must find new ways of teaching our children something which goes beyond technology or even information literacy, let's call it perspective(science) literacy.  In perspective literacy we use science to teach (hu)man his place in the universe, her place in her pueblo, and how that science dictates our place within them all.

Into The Future

A new digital generation will soon bear the burden of humanity.  Grown from long term technology literacy and digital independence, this new generations relates differently; it doesn't need television news, consumes mass quantities of modern media, and shares nearly everything that happens in their lives on the Internet.

It will take considerable study of the impact of this new generation.  What tragedies are bound to happen?  Which tragedies have the highest probabilities of impacting our well-being?  How will this generation (or the next) be any less self-serving than most of it's predecessors?  Unfortunately, all of this a big ask of any pueblo, even for any group of (hu)mans.

Of course there are always tragedies which bring about the end of the world as we (Puerto Rico) know it; who knows it may even be a large scale extinction event, the kind that forever changes a pueblo.  It's been a while since Puerto Rico has faced one...we can only wonder what might be the first, or the next.  How will our pueblo change?  How will our pueblo survive?

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Publicado por Blogger en DONDEQUIERA el 4/08/2015 12:03:00 p. m.