AEIdeas » More on the ‘imaginary hobgoblin’ of ‘rising income inequality ’ with new data from today’s Census report

Daniel J. Smith
Sent via iPhone

California Destroys Winery Over Use of Volunteers feedly

California Destroys Winery Over Use of Volunteers
// Reason Magazine – Hit & Run

Enough a drive a guy to drink. Oh, WAIT!Apparently your labor is the opposite of your sexuality in California: You can sell it, but you can’t give it away for free.

California has a state law that prohibits for-profit companies from using volunteer labor. Anybody who knows anything about employment economics knows that this isn’t going to hit those big, dastardly corporations that people hate. No, it’s going to end up destroying small wineries like Westover Winery in Castro Valley. From the Mercury News:

A small-time vintner’s use of volunteer workers has put him out of business after the state squeezed him like a late-summer grape for $115,000 in fines — and sent a chill through the wine industry.

The volunteers, some of them learning to make wine while helping out, were illegally unpaid laborers, and Westover Winery should have been paying them and paying worker taxes, the state Department of Industrial Relations said.

“I didn’t know it was illegal to use volunteers at a winery; it’s a common practice,” said winery owner Bill Smyth.

So instead, the place will shut down. It was open only 10 hours of week and earned about $11,000 a year in profits for the owning couple. The story notes that half of these volunteers were actually students taking a class about making wine and were benefiting from what they were learning. Essentially they were interns:

This was an incredible opportunity for me,” said Peter Goodwin, a home winemaker from Walnut Creek who said he dreams of opening a winery with some friends. “I got to learn from someone who knows the business.”

The winery sometimes asked Goodwin if he wanted to assist in different tasks.

“That’s what I wanted, to be as involved as much as possible — it was all about learning,” he said. “I don’t understand the state’s action. It was my time, and I volunteered.”

A state spokesperson’s response was to whine about what might happen if there were a “catastrophic accident” (lawsuits?) and that it wasn’t “fair” for wineries that have to pay employees to compete with wineries who don’t. I don’t think anybody was worried that this $11,000-a-year empire was going to put anybody out of business, and it’s the state that mandated this system in the first place. Whenever anybody who works in government talks about creating a level field for the marketplace, you know some small business owner somewhere is about to get screwed over. The story notes that there are many small wineries like this one in the area who rely on volunteers. They had to send them all home.

(Hat tip to Hit and Run commenter Old Man With Candy.)


Shared via my feedly reader

Daniel J. SmithSent via iPhone

Why do I have Four Different Retirement Accounts? feedly

Why do I have Four Different Retirement Accounts?
// Tax Foundation – Tax Foundation’s “Tax Policy Blog”

One of the worst aspects of the federal tax code is the way it treats saving. Under ordinary circumstances, saving is treated to double taxation at the individual level, reducing after-tax returns to saving and incentivizing immediate consumption over saving.

There are several ways, though, that the tax code relieves this undue burden. Traditional IRAs, Roth IRAs, defined-benefit pensions, and 401(k) plans are some of the most common. Each of these is (rightly) subject to only a single layer of taxation as ordinary income.

However, these all come laden with all sorts of restrictions. There are limits on contributions, meaning that many Americans – yours truly included – have to split their retirement savings among many retirement plans that are – as far as economics of taxation are concerned – treated identically by the tax code. Given that one can contribute to both a 401(k) and an IRA, and each is taxed the same way, what on earth is the purpose of restricting contributions to each of them separately? Is it really so necessary to defend against the phantasmal threat of people contributing too much to their retirement plans?

There are also restrictions on withdrawals – as if retirement is the only need for large amounts of saving. A down payment on a house needs saving. So does a wedding. So does starting a business. Are these purposes any less worthy?

This rigid and disorganized structure of long-term saving accounts is absurd, and the needless complexity appears to come entirely from the idea that people might save too much in these accounts. But there is no such thing as too much saving. The IRS need not be in the business of deciding what we can or can’t contribute to our retirement accounts. Give us one unlimited saving account, tax it properly, like an IRA, and let us use it how we will.


Shared via my feedly reader

Daniel J. SmithSent via iPhone

Business as a Moral Endeavor

Does Occupational Licensing Deserve Our Approval? A Review of Work by Morris Kleiner

Economists Debate the Minimum Wage

Back to bad schools | Mobile Washington Examiner

Daniel J. Smith
Sent from my iPad


Get every new post delivered to your Inbox.

Join 40 other followers