I Don’t Think Sin Taxes Are a Sin

When times get tough, the government needs more money, what gets raised? You got it, taxes.  And if taxes are already raised, what happens?  You got it, higher taxes.  And what gets taxed? Often the sin items, those items which we can do without (supposedly) and if we are so willing to smoke/imbibe/swallow/use/abuse – so called sin items –  then we must be able to throw in a little for the government, right?  Well…not so fast.

The Rights as I See It

Notice the careful wording of that subheading?  It’s my “caveat in disguise”. Any time I have no reason to believe I know what I’m talking about, which includes politics, I listen as well as I speak.  I listen even better than I speak.  The rights as I see it are that:

  • The money has got to come from some place, right?  And leaving aside whether taxes are the way to raise any money, it is not going to fall out of the sky.  So applying taxes anywhere is better than nowhere.
  • If most, as in the majority, of the population would rather be taxed on stuff they don’t need rather than stuff they do need, then we should first tax the stuff they don’t need.  And if that stuff isn’t being taxed at all, then let’s tax it.  So, even though St. Louis’ soda pop tax was vastly unhappy, it’s better than taxing water.  By contrast, Massachusetts proposed tax on highways everywhere and anywhere, even non-highways, is aggravating every hard-working worker.

The It’s Not Rights as I See It

  • So far as I’ve observed, I’m one of the few who thinks for the good of society even if it’s not good for me.  So I notice that the ones who squawk about taxes on something are usually (I polite way of saying always) the ones who use it.  So in St. Louis we probably had the water-drinkers saying taxing soda made sense, while the soda-drinking people said it was wrong, while the diet-soda drinking people said that the diet-colas weren’t really soda, and so on and so forth.
  • Sin taxing is a way for over-controlling government bodies to even further control how people behave.  If they are moral they want pornography

And the Verdict Is

Happily, I’m one of those who sees two sides to everything and rarely think either is the clear choice.  This is no exception.  That said, I’m in favor of sin taxes, for the reasons given above.

Have a Great Day,

Michael Emerald, CFA

Wall Street Analyst, Owner Performance Business Design


Categories: Thoughts on Politics

THOUGHTS ON POLITICS: The US Should be Holding Long-term Discussions About Syria, Reserving Arms for Later

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You’ve heard it from me before: I’m no political expert and I always welcome counter-arguments.

With that, I feel that because Russia is allied with Bashar Assad, striking his command posts is provoking Russia.  And so we have a complicated situation, in which our enemy is supported by our “alleged” friend, Russia.  Why is alleged in quotes.  Certainly because we are not in confrontation with Russia.  Also because we do not want to be in a confrontation with Russia.  Yet, tensions run high, and the friendship deserves quotes.  So what are the pros and cons of limited military strikes against Assad’s regime?


  • It signals – loud and clear – that chemical weapons won’t be tolerated

  • It signals that we are decisive and not afraid to take action


  • One which is little talked about is who will replace Assad if he is overthrown.  His people know him to be brutal, but the competing players aren’t much better, and may be even worse.  So, we may be shooting off our nose to spite our face.

  • Assad has done terrific damage with non-chemical weapons.  So putting an end to chemical warfare isn’t likely to reduce the lethalness of his regime, only the manner in which it is implemented

  • It increases the risk that we’ll have a direct confrontation with Russia, a downside most will agree is an outcome to be avoided


As in business, I believe in a lot of talking, discussions, and negotiation, in this case with Russia.  Signaling strength is usually okay, but when tensions run high, and we have many instances of strengths in other countries, reducing the strength in favor of a willingness to talk is a good thing.  Supporting this is that not everything is known.  Did Assad use the weapons?  Why is Russia supporting Assad?  It’s fine to presume, but when lives are involved via weaponry it’s important to “Ask questions, shoot later”.  It’s good that NATO supported our actions, but I feel that international politics can get a bit too black and white, even though most things are NOT black and white.  “They used chemical weapons we punish them” seems fine at first blush, but the points brought up in this blog-post suggest there are other factors which must be considered. Finally, Putin, whether we like him or not, is respected by his people, considered a good leader, and was touted by Trump as one.  So, to bomb his allies, unilaterally, is inappropriate.

What are your thoughts?

Categories: Thoughts on Politics

Trump Will Bring Back Business. But will he bring back job?

So let’s presume for the moment that President Trump will cause firms operating overseas to re-establish themselves, or their operations, in the United States.  And let’s suppose, as well, that he mitigates the problem of companies moving to other countries.  He’s apparently going to do this via a combination of lower taxes, tariffs imposed on domestic companies on goods shipped back to America, and finally using moral suasion.  Indeed, we’ve witnessed most of these already during his first two weeks of office (excluding lower taxes).

So, rewind to a smaller level: you were working for one of this companies, they moved overseas, and you lost your job.  You’ll get it back, right?  Let’s look at the facts, thanks to the MIT Technology Review of November 18,2016.  Since 1980,1/3 of manufacturing jobs have been lost.  The employment base has gone from 18 million to 12 million.  So, one might incorrectly assume that if ALL the companies re-located here, we’d get that base near to where it was before.  However, the article points out that for every 25 jobs it took in 1980 to manufacture goods, it now takes 5 jobs.  And, it costs $25 an hour to hire a worker, whereas it only costs $8 an hour to use a robot.

Thus, while bringing back companies is a good thing, it’s not going to help so much to restore lost jobs.  Especially since the loss of jobs due to automation is accelerating, and moving into sectors other than industrial.

Michael Emerald, CFA
Owner Performance Business Design and Wall Street Analyst

Categories: Thoughts on Politics

Prioritizing America’s Issues

German Shephard at Howard's 1507

I’m not a political pundit, but like one of our front-runners, I am a businessman, and business people know how to prioritize.  We have a lot of issues on the table in the United States.  To me, the most important are:

  • Dealing with ISIS with the objective to reduce terrorism

  • Setting fair trade with other countries

  • Reducing the country’s deficit and with it the outstanding debt

  • Dealing with immigration issues

  • Reducing unfavorable global climate problems

But how do you prioritize these?  Each of these is a monumental task.  Do you focus on the most important of the most important or dilute your efforts across several of them?  Or do you delegate to staff the least important of them?  What would a CEO do?

While no CEO thinks the same, here is what I would do.  I would identify a small set of realistic objectives for each and then put actions in place to achieve those objectives.  What do I mean by realistic?

A realistic objective is one that is clearly defined, has a stated time horizon, and is realistically achievable.  Typically, it won’t be as “giant-step” as one would hope.  For example, “Reduce the government deficit to zero” is defined, but it’s not realistic, nor has a stated time horizon.  “Reduce the government deficit by 5% during 2017” meets all criteria, however.

And so, I would create a palette of realistic objectives, write them in cement, and then activate the necessary resources to get them done.



Categories: Thoughts on Politics

Once We Clean Up our Political System, Our Judicial System is Next


I’m not a political nor criminal expert, but like most of you, I have opinions that I’m willing to share.

I was delighted to find out that the reason I like Trump are the same reason everyone else likes Trump: he represents change to a political system that is no longer working for us.  And while I was thinking “Gee, and I thought I was the only one who thought that way!” you were probably thinking the same thing.  Ends up eight million people were.

So I’m going to take a guess that a few of you are also thinking “These judges and lawyers are living in their own world. Their sentences don’t make sense much of the time.  Small civil crimes result in prison terms, while shocking criminal cases result in light sentences.”

Were you thinking that in the now infamous case of the woman who got raped, unconsciously, by the security guard.  Simply put, as I understand it, a college women was at a party, drank too much, and passed out behind a dumpster.  A security guard found her unconscious, dragged her into an elevator, up to the roof, then raped her.  He didn’t know her.  She didn’t know him.  No date rape here.

The result?  Six months.  The judge didn’t want to “upset his future since he’s young” (paraphrased).  She’s suing that since she was on college property, she wasn’t adequately protected.  The university put in it’s court papers that: “it is not seeking to blame the woman for being raped but challenged her claim that school officials were negligent in their protection of students.” <excerpted from the Boston Globe>  They said that she was partially to blame for her rape.

In essence, someone drinks too much and passes out, and they are partially responsible for a violent crime…against them.  This is what makes it into the court nowadays.  And lawyers will debate it, and the judge will listen, and a jury will deliberate.  And we all know that nowadays there is a likely chance that the court finds HER partially responsible for the crime against her, and the school, who presumably hired the security guard, is innocent.  Again, the case hasn’t been heard, but we all know that nowadays stories like that are in the papers DAILY.  In my opinion they shouldn’t be there AT ALL, so let’s clean up the judicial system by putting people with common sense in there.

Michael Emerald, CFA


Categories: Thoughts on Politics

Thoughts on what the present election means to business owners

Relaxing Polo Pony

CAVEAT: I’m no political expert,

so here’s my un-expert opinion of what the present election means to us.

As a consultant responsible for the growth in my client’s profits, I like Trump.  Why?  Mostly because, as a businessman, he knows that the flow of money is what keeps this country going.  He knows that the flow of money offshore is what makes this country sink and that when a large chunk of our taxes is being used to pay interest on the government debt, then it’s time to reduce the government debt.   He also knows that we’ve been treated unfairly in foreign trade negotiations.

Trump is focused on the economy, while the Democrats are focused on the individual.  But I would argue, that righting the wrongs of a large government debt, the wrongs of off-shore money flows (companies relocating) and the wrongs of unfair international trade will quickly help EVERY individual.  On the other hand, focusing on the individual won’t cure those larger problems.

What are your thoughts?

Michael Emerald, CFA

Business Strategy Consultant

Categories: Thoughts on Politics