East and West Projected Seedings

This offseason has been relatively timid. Despite hosting the largest trade in NBA history, the big names have been few and far in between, with players like Shareef Abdur-Rahim, Antoine Walker, Larry Hughes, and Joe Johnson being the big movers. The Miami Heat have gone for the Twolves/Lakers approach of trying to pack as many name-talents in one roster as possible. A recipe for implosion? Perhaps. Joe Johnson, Michael Redd, Ray Allen, Samuel Dalambert, and a horde of other players got horrible contracts (read: they are horribly over-paid).

Anyway, here are my picks for how the East and West will look next season.

East
1. Heat - the Posey+Walker+Williams pick ups could be an implosion or genius. Can shaq be a legit cop?
2. Pacers - with Artest back, and the additions in Granger
3. Pistons
4. Nets - should have gone with Abdur-Rahim. Either a huge mistake or a genius rejection. They still look good.
5. Bulls - this is probably hoping for too much, but I like the core.
6. Cavs - LeBron will make the playoffs this year. Donyell+Hughes+Z+Gooden is pretty legit 5.
7. Wizards
8. Bucks
9. Knicks
10. Sixers - sigh.
11. Celtics - will be a great team in the future.
12. Magic
13. Hawks
14. Raptors
15. Bobcats

West
1. Spurs - no one is really touching them.
2. Kings - Awsome moves, as I outlined in a previous post, adding Abdur-Rahim, Wells, and Hart.
3. Rockets - Great job in addressing their need for a legit 4 in Stro Swift.
4. Suns - They won't run and gun like before, and their defense won't be stellar, but they can still sorta score.
5. Denver - can't shoot a 3. Should have gotten Garcia in the draft. But are deep in the bigs department.
6. Mavs - sigh..
7. Warriors - the Ike Diogu pick up was brilliant. If BDiddy is healthy, they will make playoffs.
8. Sonics - they are only here if Vladimir Radmonovic doesn't leave.
9. T'wolves
10. Lakers - sorry LA fans.
11. Clippers
12. Jazz
13. Memphis
14. Blazers
15. Hornets

Your thoughts?

Response to Comments: A&F, Naked, and the Death Tax

I like the format of responding to comments in a new post instead of writing it as another comment. If you haven't noticed, I am straight ripping this idea from the Becker blog, but hey, the man is considered a genius for a reason. Let's spread the wealth.

Man, I didn't actually think anyone would talk to me about the death tax. A tax! Yes, I'm a little surprised. But hey, I was planning to do a post pretty soon on my views on affirmative action. This probably bodes well for that.

Most of the criticisms were very good as well. I especially like Raghu's counter to my Paris Hilton. Touche. As for the economic criticisms themselves, most were spot on in terms of some of my own doubts about this tax. I suppose I should have put a bit more meat or detail into the original post and addressed these concerns there, but - well - I didn't want to make a post on taxes any longer than it had to be. Now on to responses.

By the way, I don't find the argument that I have to defend redistribution to be very compelling in a society with social insurance schemes and oodles of public services.

I will spend the rest of the time dealing with the claim that I am not considering taking care of families who seek income for the familial unit and Kuru's somewhat related comment on familial businesses. Kuru, you are absolutely right in that the commenter's notion of a familial unit vs. my notion of an individual creates conceptual friction in the way income is thought of. That said, however, I do think that there are a few compelling reasons as to why(s) he can still jump ship without abandoning the family.

First, we must realize that we are not talking about families that are scrounging up to keep the family together. We are talking about families with a per capita income placing them within the top 1 to 2% of wealth. They are the creme de la creme.

Second, it is important to see that there is a second way in which the tax is not a double tax. Contained in the estate tax is a tax on unrealized capital gains. This has, by definition, never been taxed before. So while my individual monetary circulation example explains as to why I think the notion of "double taxation" itself is silly, I think that this provides more compelling evidence for those who disagree with me in that view. By the way, unrealized capital gains tend to be huge in these families. They comprise nearly 40% of the value of all estates subject and nearly 60% of the value of all estates from which a significant tax is levied. Yes, this does imply that a large number of estates are levied a very small tax. And that the super-rich do pay a bulk of the tax - as they do in terms of income tax as well.

Third, (and Kuru - this responds to your point as well) for various reasons that I don't want to get into, the way the law is structured, small family business and family owned farms do pretty well. It might be easier to show you the data. For example, a TPC study recently demonstrated that only 37% of cases have any demonstrable trace of family business/farm value, and of that 6% were significantly comprised of the family farm/business. That means that families with significant business constraints are only 2% of all of the estate tax cases.

But wait, it gets better. Of these 2% of cases in which the family owned business is significant, over 43% are levied only an ETR (effective tax rate) of 1.6%. Just under 25% more are taxed at approximately 9.5%. This means that over 70% of these guys are being taxed peanuts. But here is the kicker, the bottom 93% of these guys pay under 20% of the overall amount collected from family farms/businesses, meaning the top 7% of these wealthy family businesses pay nearly 80% of the tax. But even with them, their ETR never exceeds 23%. This means that these exceedingly wealthy folk (already in 2% of overall wealth as well as in the top decile of family business) aren't taxed too badly either - in relative terms, anyway.

Lastly, I think it is very important to keep in mind the revenue generated by this tax at all times. $70 bn/year is quite a hefty sum. I still don't understand if critics just want government revenue to contract by $1 trillion over the next decade or if they have an alternative.

Oh yah. I should probably add this in: The Bush administration has a policy to drop the tax rate incrementally and until 2010 in which case they completely eliminate it that year. (What, are all the old guard rich folk going to die in one year?) Then it is reinstated in 2011. Strange.

A&F, Naked, and the Death Tax

Let's say that I work as an Abercrombie & Fitch model. Say I get $20 per spread that I do, in which I show off my tight, tone, sexy body. And just for kicks, let's track what happens to the money I get from doing 1 spread. Nothing too detailed or formal.

We know that the minute I get a paycheck, we should expect to see a reasonable chunk withheld by my employer for a governmental income tax. Say for kicks that this tax is $5, leaving me with a usable income of $15, called disposable income. Next, say that I am a fan of Naked Juice: Protein Zone. Packed with 34 grams of protein per bottle, it keeps me in shape to be a sexy underwear model. I go down to Albertson's and purchase a bottle for $5, leaving me with $10. But Albertson's really doesn't get the whole $5, for there is a sales tax of $1 included in the price I pay. Effectively, they get $4 and chalk another $1 up to the government.

Now Albertson's has to pay Jayne the janitor for cleaning up my messes, so Jayne gets a wage of $2. But of course, the government levies an income tax on Jayne, and in our bizzare world, it takes $1 from her (just to keep things on whole numbers). So Jayne has a disposable income of $1.

What's my point? Money circulates. No real surprise there. And that same "money" is taxed over and over again as it circulates. Everytime it hits a new agent, some of it is taxed. No surprise there. And those who want to abolish taxes aside, most of us take the fact that money is "double" or "triple" or "quadruple" taxed everyday. (In fact, there is a huge branch of economics devoted to just studying how money circulates.)

Which brings me to what is called the "double tax". The double tax, or better known as the "death tax", is nothing more than an inheritance tax on estates. It simply taxes a person when they receive a large estate from someone else. The estate tax, however, is neither really a double tax nor a death tax in any unique sense. Well, I suppose it sort of is - you are dead. But the tax isn't on you at that point, precisely because you are dead. It is on property that is no longer yours precisely because you are dead. In other words, the money has gone to someone else, and now that person is taxed on it as if it were an income, which in fact it is. So it is not at all that much different than the transfer of money from me to Jayne with the government taxing every step of the way - a process that you and I seem to take for granted everyday.

It is worth noting that both terms double tax and death tax were popularized by the Republican pollster Frank Luntz who felt that they would get voters all riled up about having to pay this tax. Those in favor of killing this tax will have you believe that most Americans are subject to this tax. Statistically speaking, about half of you probably think that. A 2003 poll found that over 49% of Americans believed that nearly all Americans were subject to the inheritance tax.

The truth, however, is quite different. Less than 2% of all American estates - and consequently a signficantly fewer percentage of the population - are subject to the tax. Still, the tax is very important because it provides a signficant chunk of the governmental income. The repeal of the estate tax, as urged on by the Bush Administration and the Republican Congress, would cost more than $70 billion a year in governmental revenue over the next 10 years, according to Professors Michael Graetz and Ian Shapiro of Yale. Other estimates show it having nearly a $1 trillion ($1,000,000,000,000) cost over the 10 year period.

I don't think that any of us enjoy the taxation process. It is tiring and tedious and feels pretty horrible to see someone else taking money right out of your pocket. But the thing is, none of us like a society without public services either - be it radio broadcasts, roads, schools, medical facilities, armed forces, or anything else that America offers. We can only enjoy comforts and protection through a government with resources-a-plenty. And with such a repeal, we would strip the government of direly needed funds. Unless we find a better way to let the Paris Hiltons of the world keep all of their inheritance (that they clearly earned) and still raise $70 billion per year for the provisions that the other 98% of Americans need, it would seem ridiculous to repeal the estate tax.

Notable Moves by the Kings and the Cavs

The offseason has been full of headline-worthy moves. The Heat have shipped out Eddie Jones and brought in Jason Williams, Antoine Walker, and James Posey. The Lakers picked up Kwame Brown and dropped Caron Butler. The Bucks dropped $80 million for a player who is essentially a poor man's Steve Kerr. And Joe Johnson is being treated by the Hawks as if he is LeBron James.

But two teams made moves that will likely fly under the radar, but are definitely worth noting.

The Sacramento Kings once again showed why they have been such a consistently solid team under GM Geoff Petrie. After picking up a great shooter in Francisco Garcia in the draft, they supplemented with a solid 1-guard and an excellent power forward in Jason Hart and Shareef Abdur-Rahim, respectively. Hart played last year as a backup in Charlotte with an astounding PER (player efficiency rating) of 16.87, scoring 15 points with just under 8 assists per 40 minutes. In fact, this little known backup pg was among the best in the league last year. Still, they got him for a measley $3.5 million over a two year period.

The Shareef pick up was key as well. The 9-year veteran has averaged just under a 20 PER through his career, with a rating of 19 last year. In limited time, he has demonstrated that he is a remarkably efficient scorer, going at 20 pts/40 minutes last year with a TS% (true-shooting %) of 58%. While historically he is a slightly sub-par defender, his offensive talent is unquestionable. Perhaps the most striking thing is that when a similarity analysis is done, of all the NBA players that Abdur-Rahim has been most like through his career, names such as Kevin Garnett, Bob McAdoo, Grant Hill, Pau Gasol come up. To be able to get Shareef for a rather cheap price, especially considering that he made over $14 million last year alone, is quite a steal for the veteran who has never played in a playoff game.

It is worth noting that a similarity analysis is essentially taking a number of factors (rebound rate, assist rate, 2-pt rate, 3-pt rate, PER, etc.) and then calculating the "distance" between two players for all these factors. The player who has the least distance (error) from our player in question is the one that is most similar.

Discussion of similarity scores gives us a good transition to look at the Cavs under-the-radar acquisition of Donyell Marshall. The similarity scores of Donyell Marshall over his career have put him close to Jason Richardson, Josh Howard, Rashard Lewis, Shareef Abdur-Rahim, Shawn Kemp, Rasheed Wallace, and Bill Lambier. While this list is no Michael Jordan, Larry Bird, Dr. J style list, it is worth noting that there are some very talented power forwards and small forwards that Marshall has played like. He is a double-double on a per 40 minute basis going at 18 pts and 10 boards a game. On top of that, much like Rasheed and Rashard, he is a talented big man with a deep range. He attempted nearly 9 3's per 40 minutes last year, hitting on 42%. He is a fairly solid defender with capacity to be a tremendous offensive force (Offensive rating of 120 last year, league avg. was 106). And he plays remarkably efficiently, with a TS% of 59% and a PER of 20. Getting Marshall for just over $5 million/year playing fifth fiddle to LeBron, Hughes, Z, and Gooden? Seems like a steal to me.

First Post

I thought that a change might be nice. It seems that xanga has run its course. For me, xanga was an experiment in maintaining long-distance contacts - a way to "facebook" with people in a pre-facebook world. But now I find it to be both cumbersome and obsolete. Unlike blogspot, xanga does not allow non-members to comment on posts, and in doing so, seems to severely limit any wide discussion on a topic. Hence the switch.

Of course, much like my previous blog, this one will hardly be a personal page. Commentaries on economics, politics, films, and sports - with a special emphasis on sports, I suppose - will dominate the content. Mostly, the blog serves as a forum for me to sketch my own thoughts, whatever the subject may be, and allows me to get near-immediate feedback.

Hopefully this project is a successful one. Time will tell.