A rhumbline is a direct heading to a point. On a map it's a straight line. It looks like the perfect way to get where you're going. On a globe, though, it may be the long way around. For example, New York and Madrid are about the same latitude. On a map, a course due east from New York is the shortest distance to Madrid. On the round face of the earth, though, a curved path (called the great circle route) passing over Greenland and the northern Atlantic is shorter. Try it with a string and a globe if you don't believe it. That's probably what a lot of the comments on this blog will be like. Random? Disconnected? Circular? Probably. But maybe they will lead to a point eventually.



Tuesday, April 10, 2012

The "Buffet Rule"

The latest tax proposal coming out of the White House is being called the Buffett Rule, based on Warren Buffett's statement that his tax rate was lower than his secretary's.  The proposal is to effectively add a second Alternative Minimum Tax rate of 30% on income in excess of $1 million. 

In reality, the only reason someone making a million dollars would be paying less than 30% is because most of the income consists of dividends and capital gains, i.e. investment income.  The main rationale for taxing investment income at lower rates is to encourage investment in our economy.  This means that the real message of the Buffet Rule is "We will give you an incentive to invest in America and help us grow out of the current downturn unless, of course, you have a lot of income to actually invest."
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