The $1,200 chair you didn't know you had

Last fall, BOE member Jerome Horton faced some heat for spending around $130,000 on new office furniture.1 This included 24 white leather chairs at $1,200 a pop, a matching couch, new cabinetry, and a $115 umbrella stand (in the third driest state in the nation), to furnish the glass-walled offices that staff apparently refer to as "Jerome's aquarium."2

The furnishing of Horton's new office is a byproduct of the BOE building woes at 450 N Street, which forced BOE staff out because of structural leaks, toxic mold, bursting pipes and corroded wastewater plumbing, faulty exterior glass panels, a bat infestation, unreliable elevators, noxious odors, and trace amounts of toxic chemicals.

Most state agencies are required to buy new office furniture from the Prison Industry Authority, which uses inmate labor to build furniture. But apparently the project manager redecorating Horton's office asked for a waiver to buy his furniture from a different source. (The other three board members took hand-me-down furniture for their offices.)

When pressed by reporters to explain himself, Horton claimed he wasn't involved in the furniture selection process and also noted: "And of course, at the end of the day, the chair, the office, whatever, actually belongs to the people of the state of California."

Excellent. I'll be stopping by later to rest in one of "my" chairs. Hope I don't spill any coffee on the white leather.


Slurping a strawless Slurpee

The plastic bag ban is final, and we're all carrying around an assortment of mismatched bags to take our groceries home in. Now, a Huntington Beach resident has taken up the challenge to right another wrong: plastic straws.

The Pollination Project, a nonprofit that gives $1,000 a day to individual "change-makers" worldwide, recently awarded a grant to Diana Lofflin, the founder of, the Huntington Beach ocean conservation group that wants to reduce or eliminate the use of plastic straws to reduce ocean pollution and global warming. They suggest replacing them with bamboo straws, which conveniently are available for purchase on their website.

A bamboo drinking straw is $1.50, but you must purchase at least 10. So, including shipping ($7.50) and tax, the total comes to $23.78. The website also includes instructions on care and maintenance of said straws and a variety of straw size options (like the bamboo Boba straw for $2.25 each).

Opponents say eliminating straws and drinking directly from a cup or glass is a health issue. An easy alternative could be paper straws, but envision jamming the paper straw into your Starbucks iced caramel macchiato with soy milk and three shots — I envision a macchiato mess.

Prepare for your Powerball win

Even though you're more likely to have conjoined twins than win the lottery, when a jackpot builds to a staggering amount ($1.5 billion Powerball in January of 2015), we all probably dream of how our lives would change for the better.

Although, sometimes a big win is just the beginning of some sad consequences. Winners have committed suicide, been the target of hit men hired by relatives, poisoned their spouses, and generally mismanaged funds and ended up in bankruptcy.

To avoid such a fate, the American Institute of Certified Public Accountants has come up with tips to manage such newfound wealth.1 First, according to,2 the jackpot will shrink by approximately two-thirds. So based on a $1.5 billion pretax value for annual payments (or a $930 million pretax value for a lump-sum cash payment), the U.S. government will take approximately 25% off the top in taxes and another 14.6% at tax time, leaving a measly $561.7 million in states that do not tax winnings, which includes California.

According to the AICPA, winners should try to keep a lid on the news. The Multistate Lottery Association runs the Powerball and identifies only five states where winners have the legal right to remain anonymous: South Carolina, Delaware, Kansas, Maryland, North Dakota, and Ohio.3 In California, the law requires the California State Lottery to release the winner's name and the location and name of the retailer who sold the winning ticket.4 Some attorneys have recommended creating trusts or forming an LLC to at least shield a client's identity.

If winners are doing everything right, they'll pay off debt, save, do some serious tax and estate planning, and give to charitable organizations. Lastly, the AICPA recommends that the winner not stop working. Really??


Let's be more creative about tax reform

In writing an article for our next edition of Spidell's Federal Taxletter®, I came across a case where the judge found the IRS's actions so spurious that he compared it to the actions of Caligula, who would post the tax laws in such fine print and so high that his subjects could not read them. By doing so, it made it quite easy to be far more creative and/or selective in their enforcement.

Having been raised in Chicago, such type of actions felt fairly familiar, in a very Machiavellian kind of way. In Chicago in the 60s and 70s under Richard Daley Sr. (aka "The Boss"), things ran very smoothly — at least for his machine — and although some "taxes" may have not been specifically listed in the books, collections were rarely a problem.

Comparatively, all the "reforms" we're hearing about recently appear rather gray and bland. So I started thinking — what would Caligula do in terms of tax reform? What other creative schemes that were used in the past might we resurrect? I mean, why reinvent the wheel? Here are a few old tax "reforms" that caught my eye:

  • Caligula proposed taxing marriages, prostitution, and lawsuits — although I could see the Bar Association fighting this one for a variety of reasons;
  • Ancient Egypt taxed cooking oil, which produced a double benefit for the Pharaohs because everyone was required to buy cooking oil from them and people were prohibited from purchasing previously used oil — old-time Chicago politicians must have read up on their Egyptian history;
  • Roman Emperor Vespasian placed a tax on urine, which was purchased for a variety of purposes such as tanning and as a source of ammonia to wash clothes and bleach their white togas — I'm never going to a toga party again;
  • Russian Emperor Peter the Great put a tax on beards as part of his effort to clean up the Russian image — they may need to impose a tax on computer servers now; and
  • In England, Oliver Cromwell placed a tax on his political opponents, the Royalists — oh for the good old days.

A few fun facts about this week's writers:

Lynn Freer, EALynn Freer, EA, is a French literature major, so of course her favorite vacation destination is France. Here she is dining on mussels and fish stew near Nice.
Last great book I read: "The Wrong Side of Goodbye" by Michael Connelly

Kathryn Zdan, EAKathryn Zdan, EA, is not only director of the editorial department, she also "rocks the house" as a regular in curling bonspiels around the country. She also enjoys foreign and avant-garde film, baking, and the Investigation Discovery channel.
Last great book I read: "Shadow of the Wind" by Carlos Ruiz Zafón

Diane FullerDiane Fuller is a woman of many talents which include writing children's poetry, taking unwitting challengers to town in poker, and whipping up Michelin-worthy dishes from scratch. Find her laughing with her two grandkids.
Last great book I read: "The Goldfinch" by Donna Tartt

Sandy Weiner, J.D.Sandy Weiner, J.D., as California editor, loves all things California. Whether it's hiking at Big Sur or playing at the beach in San Diego where she lives, Sandy takes full advantage of all that California has to offer as a way to clear her head after trying to comprehend and explain California's Revenue & Taxation Code.
Last great book I read: "Last Bus for Wisdom" by Ivan Doig

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