It’s OK — But The Time for Tinkering Is Over.

Posted by Mack W. Borgen February 6th, 2019

Blog 92

February 7, 2019

By Mack W. Borgen

Author of National Award-Winning Dead Serious and Lighthearted – The Memorable Words of Modern America- Volumes I (1957-1976), II (1977-1993), and III (1994-2015).  See
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The top 1% of Americans hold the same wealth as the “bottom 95%.”‘
The top 1% of Americans hold almost double the wealth of the “bottom 90%.”
This author recognizes, even respects, that regardless of its spelling, the word “tax” is a four-letter word.  But the subjects of taxation and America’s widening wealthy inequality must be addressed.
Please know that this is not a new subject to this author.  This author is not a Johnny-come-lately economic theorist. I am not climbing on anyone’s political bandwagon.  To the contrary, I passionately try to keep my writings entirely apolitical even though that is challenging in an environment when our preferences in TV shows, coffee drinks, newspapers, and even quarterbacks,  are — for some — matters of passion and political stereotyping.  
But the subject of the perils of extreme wealth inequality is not new to this author. In fact, I first wrote about wealth inequality more than four decades ago.  It was the subject of my thesis at Harvard Law School, and even the below article on this subject was first posted nearly a year ago.
But 1% of Americans owning as much as the “bottom 95%” of Americans is wrong.
Worse yet, it is destructive and dangerous. To all. It is a matter for our wide and shared concern.
You don’t have to look too hard to find Reagan’s Welfare Queen. But rarely do the poor bring beers and party-hearty while waiting in line for their welfare checks. Rarely do the millions of workers of  the proverbially short-changed middle class sleep in, skip work, or toss money out the window.
And the subject of wealthy inequality is not about politics or Trump or Pelosi.
This subject isn’t about Mueller and immigrant caravans.
It isn’t about twisty economic theories.
And it is not a matter of envy, greed, or punishment.
It is a matter of the healthy survival of our dmeocracy.
This is the same stuff that Aristotle wrote about; that George Washington worried about, and that even a stinking Frenchman wrote a New York Times best seller about a couple of years ago.
The reality to all but the willfully blind is that the extreme wealthy inequality in the U.S. has to change.
It has been getting worse for four decades, but in this article there is no suggestion that the consolidation of wealth which has occurred in this country was achieved by devious or wrongful means.  
M ore importantly, we do not have time to fight over blame.  We only have time to fix it.  
The time for tinkering is over.
Lastly, this article is not about corruption. It is not about Citizens United or any abuse of any accumulated economic or political power.  This article is merely about the reality that our country can neither long  nor amicably exist when there is such a disproportionately unequal allocation of wealth. For all of us – the wealthy and the poor – massive disparities in financial security, access to education, health care, or housing cannot continue.
The time for tinkering is over.
A thoughtful relocation of this nation’s wealth assets must be made even though the phrase  “American dream” is not found among the 4,543 words of the U.S. Constitution. Neither are the phrases “equality of opportunity” nor “work hard and play by the rules.”  But even though these phrases are not in the Constitution, they are embedded in the hopes, aspirations, and dreams of our Founding Fathers.
The American Dream is our dream. It is central to what this nation is; what this nation stands for, what we, as a people , hope to offer our children and share with our fellow citizens.
The machinations of our economic and political democracy can by crushed by many variations of oligarchy – a fancy word  describing a power structure in which a small group of people controls a  society.  Oligarchies historically have rested upon the presence of throned nobilities or the power of religious orders or military powers. However, in the 20th Century, oligarchies have more and more been the result of consolidations of wealth and the self-serving exercises of economic and political power.
Please consider my article. It is just one way to get back “home.” As noted above, this article was first posted by me about a year ago. This author well-recognizes that no one needs an alarmist.
But nothing has changed.
This article is here re-posted in part because the subject of wealth inequality has recently become a major component of our nation’s political conversation in anticipation of the 2020 presidential election. Thus, admittedly and as a result, this author is taking the liberty of here re-posting my article from a year ago — for your consideration. 
Enjoy and know that your comments are always appreciated and welcomed.  

A Case for the Elimination of Income Taxation 
 – There Is a Far Better Way –

Mack W. Borgen
Santa Barbara, California

 – Maybe I Was Right the First Time –

Many years ago —- back when I had more energy and exercised less caution; back when I could party all night and still get up in the morning; back when I thought that prudence was for pussies and planning was for nerds, I wrote my law school thesis on the U.S. tax code.

Seriously, the U.S. Tax Code.

Following the mantra of my youth, it seemed like a good idea at the time. I was in law school, but Massachusetts is cold in the winter. It was dark and snowy. The wind was always howling. It was lonely, and I had no money. And, to be blunt, there wasn’t that much to do other than to write my thesis. Page by page.

But I realized, even then, that taxation was an important subject. Although I wasn’t particularly interested in income and estate taxation, my theory was it if I wrote my thesis on it, I would be forced to learn the subject.

So I sat in my library carrel all winter. And I wrote. Isolated deep inside the bowels of Langdell Hall, the Harvard Law School Library, I wrote about a radical alternative to income taxation, which was then and still remains the primary source of governmental revenues.

It seemed to me then, and even more now, that income taxation is an inappropriate basis for the imposition of taxes. It was then and still is. at best, a clumsy, inaccurate, means by which to measure one’s capacity or public duty to pay taxes.

My disdain for income taxation was further fueled by the hours of classes in which we, as students and future lawyers, were taught the wretchedly clever, but lawful, means by which income can be restructured or re-characterized from the high-rate “ordinary income” to lower-rate “capital gains” — you know, by changing standard W-2 income, which is still reported by a vast majority of Americans, to substantially lesser-taxed “capital gain” income. We were taught twisted machinations by which income could be averaged, deferred, or tax-straddled between years. We were taught the use of generation-skipping trusts so that substantial wealth could be passed, tax-free, from one generation to another generation – so properly named, the beneficiaries. And on it went.

One tax maneuver after another was presented as we learned how to guide clients to walk that sometimes perilously thin line between unlawful tax avoidance and lawful tax minimization.

It struck me that the course of correction would not be found by merely tinkering with the tax code or the hundreds of tax regulations. The wasted efforts of 22 Congresses since then have proven, in the opinion of this author, that this early conclusion was correct.

Instead, I thought that there must be a better; simpler; more efficient and equitable manner upon which to base our federal taxes. For the numerous reasons discussed below, I concluded that taxation upon one’s annually declared net wealth would be far superior to taxation of one’s annual declared net income.

It has been decades since I wrote my thesis on the advisability of such wealth taxation. Now, I suggest here again, that taxation should be based upon one’s wealth – not one’s income.

Be assured that this article is not written from the perspective of politics or in order to advance the agenda of any political party. In fact, I am becoming convinced that I am not smart enough to know to which party I belong: with whom I wish to be associated; and, for that matter, who would have me. So, please accept that this article is not about politics. This article is not about class or class warfare. It is merely about seeking the best, most efficient, and most equitable method by which to fund our national government.

One Assumption, One Clarification, and One Observation
– Economists, “Net Wealth” Tax, and Existing U.S. Wealth Taxes –

One Assumption – Economists. Before diving into the subject of wealth taxation, it would be useful to agree that economists and tax analysts rarely agree on anything – except for their delight in using thick talk and their strange love of macro models. While I have the highest regard for economists as an honorable and needed profession and even though economics was the focus of my undergraduate studies, let us agree upfront that no matter what I write here — and however you respond and react —, we can each find herds and gaggles of economists to back up whichever theory we choose to espouse.

One Clarification – “Net Wealth” Taxation Only. This article addresses the subject of a wealth tax, however in reality it is a “net wealth tax” which is proposed since the tax rate, whether progressive or fixed, would be imposed solely upon one’s “net wealth.” Very similar to the calculation of one’s net worth, a wealth tax would be imposed only in the event one’s net wealth (the aggregate value of all assets less the aggregate amount of all mortgages and other debts and liabilities) exceeds an agreed-upon baseline, minimum, and tax-triggering net wealth.1 The minimum net wealth would serve a function similar to that of one’s standard deduction in the context of income taxation.

One Observation – Existing U.S. Wealth Taxes. To a degree, the concept of a wealth tax is not new. As correctly noted and as well said by one writer, wealth is already taxed – “just not very intelligently.”2

The most conspicuous example of an existing wealth tax is property taxation which is the very foundation of the funding of local governments. The property tax rates vary widely from jurisdiction to jurisdiction based upon property tax rates, property valuations, and other factors such as the lock-in provisions of Prop 13 in California. Nevertheless, nearly every jurisdiction in the U.S. imposes taxes upon the raw ownership of real estate.

But I would respectfully suggest that the real question, so steadfastly ignored, is why these taxes are so routinely imposed on real estate — the bedrock asset of Middle America. Stated conversely, why are taxes not imposed on cash, stock and intangible asset portfolios – the bedrock assets of Wealth America?

Other examples of existing “wealth taxes” are estate and inheritance taxes. These taxes, derisively referred to by some as “death taxes,” are theoretical charges upon transferred wealth. However, the loopholes are bigger than the loops.  In the first place, federal estate taxes apply only to estates in excess of $11,200,000 for individuals and $22,400,0003 – an absolutely miniscule percent of the American people. These exemption amounts reflect the 2018 doubling by Congress and President Trump of the prior exemption amounts since the prior $5,490,000 and $10,980,000 ensnared, it was argued, far too many hapless, wealthy Americans.

However, the truth is that any wealthy person worth their weight in accountants knows that the imposition of nearly all estate taxes can be avoided. Estate taxes can be easily avoided by a myriad of estate tax planning techniques. As noted by Gary Cohn, the former White House National Economic Council Director and the former president of Goldman Sachs, “only morons pay the estate tax.” 4

Thus, for all practical purposes and due to the size of the exemptions and the plethora of tax-avoidance mechanisms, the “death tax” is now largely dead. It now only applies to the over-wealthy and under-lawyered.

The Place to Begin
In Considering the Advisability of Wealth Taxation

I noted above that this article is not intended in any manner to be political, and in reiteration of that point, the place to begin in considering the advisability of using wealth taxation is to understand that wealth taxation is not a Left-Wing, Bernie-rant.

First, when I initially wrote my thesis on wealth taxation as a substitute for income taxation, Bernie was still learning his “right” from his “left.” He had not yet ascended to any national stage. My proposal was written nearly 36 years before he even became a U.S. Senator. He was just another young man working as a carpenter after having moved to Vermont and after having graduated from the University of Chicago. So let’s not blame Bernie or any other liberals on this one.

Second, it has been my experience and, for all purposes of this article, this author happily and without reservation assumes that a vast majority of the wealthy are good and fine people. This article is not written from a place of envy, covet, or disgruntlement. For purposes of this article, this author is willing to readily assume that the assets, the life advantages, and the personal and financial security of the wealthy have been earned and that in a vast majority of instances, the wealthy currently protect and preserve their income and assets in wholly legal manners (albeit with a cadre of skilled lawyers and accountants). But none of these experiences or assumptions about the wealthy in America change the fact that many things must change in America – and one of them, one of the easier changes, is the basis upon which this nation collects its taxes, seeks to reduce its debt, and provides necessary governmental services.

Third, this author is no longer alone in this recommendation. Over the last couple of decades, a few people with widely disparate political and economic views have proposed implementing a wealth tax. In the late 1990s, even Trump proposed a one-time 14.25% wealth tax on individuals and trusts in excess of $10,000,000 in order to eliminate the national debt. Less surprisingly but more articulately, Robert Reich, the former Secretary of Labor under Bill Clinton and now a professor at the University of California at Berkeley, likewise advocated what he referred to as a “surtax” on the super-wealthy as a means to “rebuild our schools and infrastructure (and for) saving Medicare and reducing the long-term budget deficit.”5 The problem with both Trump’s and Reich’s advocacies are, however, that they sought to use a wealth tax as a curative measure (Trump to eliminate the national debt and Reich for a number of reasons – schools infrastructure, Medicare, and deficit). The proposal in this article is for the use of a national wealth tax as a permanent substitute for the archaic and burden-distorting income tax.

Fourth, in many parts of the world community, wealth taxes are not unusual. They exist in various formats in a number of countries – Argentina, France, Italy, Netherlands, Norway, Spain, and Switzerland. A number of other Western European and Scandinavian countries had wealth taxes but over the last couple of decades have discontinued their use for various reasons.6 Thus, while the U.S. has the dubious distinction of being the lone(ly) chair in the room as the only major industrialized country without any form of national health insurance, the U.S. would not be alone, or even particularly unique, if the U.S. adopted a form of wealth taxation.

Lastly, despite an anticipated initial reluctance of many wealthy families to embrace the idea of a national net wealth tax, many American families — and especially the middle income and moderately wealthy families — may pay considerably less under a net wealth tax system than they currently pay under America’s income tax system. This is definitely the case when one takes into account (i) the year-in and year-out costs of lawyers, accountants, and trustees, (ii) the complexities and time-consuming burdens of annual income tax preparations, and (iii) the hard- and soft-costs incurred and the contract and market distortions caused by tax-structuring transactions.

But there are many definitions of “wealthy” and there are many possible variants of a wealth tax which could be adopted.

The Relative Definitions of “Wealthy”
and the Many Possible Variations of a Wealth Tax

Defining when a person or family is “wealthy” is, at best, challenging. It can lead to heated debates at both the corner store and the local country club. However, despite the debates about where to draw the exact lines, clearly some people are “wealthy.” Clearly, some people are not. In this sense, the difficulties of definition are not of themselves justifiable reasons for not implementing a wealth tax.

For purposes of even preliminary agreement, let us agree that there is some net wealth number which approximates a valid distinction between the poor and middle persons and between the middle and the wealthy persons. Arguably, the appropriate exemption would be based at that point where a person has enough wealth to cover his or her immediate needs (food, transportation, housing, health, and other basic needs) plus a reasonable cash or other asset reserve.

Defining the threshold net wealth amount is generally beyond the scope of this article; however this author would suggest that it might be in the $3,000,000 or $5,000,000 net wealth range rather than the current absurdity of the $11,200,000 to $22,400,000 estate tax exemptions. Part of the reason for this proposed lower $3,000,000 to $5,000,000 range is because the wealth tax would be used as the primary source of revenues for the payment of national defense and public services. A wealth tax is not proposed as a grabbing super-tax by the 99%  of the wealth of the supposed 1%. To the contrary, it would be advisable for the tax burden to be more widely shared by using broader concept and definition of the wealthy. Thus, the $3,000,000 to $5,000,000 range is proposed as an initial working number. Although there are many gradations of wealthy and although American society now routinely talks about and magazines list “billionaires,” most Americans might readily agree that a person with a net wealth of “even” $3,000,000 to $5,000,000 is, at a minimum, colloquially, wealthy.

This author realizes that it is terribly dangerous to speak about other people’s wealth and, certainly likewise, to spend other people’s money (although this is addressed below). Nevertheless, it would preliminarily be useful if some numbers were used; some examples were displayed; and some orders of magnitude were presented.

Therefore, consider, as examples, the relative impact upon certain middle-income and wealthy families upon their following respective amounts of net wealth. Even assuming a fixed annual wealth tax rate of, say, 2%, and a flat net wealth exemption of $3,000,000, the amounts of such annual taxes and the post-tax net wealth of such families would be as follows:

Pre-Tax Net Wealth 500,000 3MM 10MM 100MM 500MM
Net Wealth Tax Liability (2%) 0 – Note 1 0 – Note 1 200,000 2MM 10MM
Post-Tax Net Wealth 500,000 3MM 9.8MM 98MM 490MM

Note 1: Assumes a $3,000,000 exemption amount.

As is evident and as noted above, some wealthy families may pay substantially less in wealth taxes than they currently pay in income taxes. Also as noted above, this is especially the case if one adds back to these families the “public monies”7 which they spend every year on tax advisors, financial planners, and accountants.

In the next section, other reasons for the adopting a net wealth system of taxation are presented.

Reasons for Wealth Tax

Reason One:
Net Wealth a Better Measure of One’s Capacity to Pay

Let us start with the obvious. People compare balance sheets. They don’t compare tax returns. There is a reason for this. Wealth, not income, is a far better measure of one’s financial condition and security; of one’s capacity, and arguably one’s civic obligation, to pay taxes.

When someone wishes to review or present their financial well-being, they look to their net worth – not their tax return from last year. Everyone knows that taxable income fluctuates. Everyone knows that income can be buried under artificial depreciations, by tax-year straddling, and by the careful timing and characterization (or, re-characterization) of tax-flows.

For these reasons alone, wealth, not income, is the best measure of one’s capacity to pay.

It is acknowledged that in the course of making lending decisions, banks routinely ask for one’s most recent tax returns in addition to basic asset and liability information. However, to a considerable degree, the lender’s insistent review of tax returns is because lenders know that tax returns approximate an “official document” since they are filed by the taxpayer/applicant under penalty of perjury. If people had to file net worth statements under penalty of perjury (rather than the crude bank form assets and liabilities listings provisions), this author suggests that — in quick order — balance sheets would become the primary loan application submission document. Thus, there is a both a simplicity and propriety in the use of balance sheets rather than tax returns to most accurately measure one’s ability.

It is also acknowledged that net worth does not necessarily reflect one’s cash liquidity, i.e. the amount of assets which are or can quickly be converted to cash. However, most persons (an admittedly dangerous vague phrase) have broad enough asset compositions so that tax payment liquidity should rarely be a problem. This is underscored by the amount of highly liquid, financial assets held by the wealthy.

There is much press, banter and discussion about the many forms of retirement plans — 401(k)s, IRAs etc., but the truth, so often ignored or forgotten by the wealthy, is that most Americans do not closely track the Dow or the S&P. This is because 90 percent of the financial assets in the U.S. – including both stocks and pension-fund holdings – “are owned by the richest 10 percent of Americans. The top 1 percent owns 38 percent” of all financial.”8 Wholly apart from pension funds (which are ever-declining in the U.S.) and maybe some mutual funds here and there, over-whelmingly stocks and bonds are (always have been) held by the wealthy. The rise and falls of the market ultimately affect all members of society, but such rises and falls only indirectly affect the lower and middle classes. In this sense, it is almost unsurprising that the financial markets are rarely a focused matter of interest for the middle or lower classes.

It could be argued by the wealthy that even with the access to cash liquidity for the payment of taxes, the imposition of this type of tax may force these wealthy citizens to liquidate assets in an untimely manner for tax payment purposes. However, think about this comment. Think about this concern. Is a wealthy family’s tax-driven liquidation of some financial holdings really different from a middle income family deferring a vacation because they have to pay taxes; from not funding their child’s college savings plan; from putting off some medical procedure or some desired home improvement? Even with the best planning, every family, rich and poor, incurs inconveniences, disappointments and even losses as they assemble cash for scheduled tax payments — and certainly liquidating stocks in a down market is not qualitatively different than deferring a deserved vacation or postponing a needed surgery.

But there is another asset-composition factor to be considered. That factor results from the fact that the dominant asset and most of the net worth of middle–income families and the only moderately-wealthy families is the highly illiquid and, if you will, necessitous family residence.

Because of the high wealth tax exemption amount (e.g. $3,000,000- $5,000,000), the taxpayer’s residence will rarely be at risk due to his or her tax liability. Future year tax liabilities may affect the size of one’s home. They may affect the advisability of purchasing second and third homes, etc., but this is no different than any other form of financial planning. We all buy homes and make investments with a prudent eye upon our foreseeable futures obligations and liabilities. And projecting one’s net worth (and resultant net tax liabilities) may be far easier than projecting one’s future income (and resultant income tax liabilities).

However, apart from one’s capacity and liquidity to pay taxes, the concept of using a wealth tax should also be based upon the relative receipt of public benefits. For some readers, this component of the wealth tax argument may generate more debate, but please consider the following reasoning.

Reason Two:
Wealth Taxation As a Means of Eliminating the Absurdity of the Stepped-Up Basis

This reason requires my advance apology because it requires getting a little tech here, but a basic understanding of what is known as the “stepped-up” basis is necessary. Although financial/estate planning tools utilizing a stepped-up basis are not a secret and are commonly and routinely utilized in estate planning, it also not widely known or understood by the general public. But it should be.

Very summarily, the use of a stepped-up basis is a lawful means by which capital assets (think stocks, bonds, real estate, mansions, works of art) can be passed on tax-free from one generation to another. If any of these assets had been sold during one’s lifetime, then the appreciation component of the sales price would ordinarily be subject to at least the capital tax rate upon their sale. In other words, in very general terms, the tax would be imposed upon the difference between the sales price and the seller’s original purchase price since this is a taxable gain’ a form of “income.” However, even though part of the reasoning for the adoption of the estate and the capital gains taxes was to prevent (or at least limit) the growth of familial dynasties in the U.S. and to reduce inequality, it is obvious from especially the last several decades that these taxes have not achieved these goals. Part of reason is because if the wealthy during their lifetimes do not sell a capital asset (and don’t have to sell a capital asset to raise money to pay taxes for example), then the capital asset can be passed on to their heirs without ever having to pay capital gains on such assets. The gain — the appreciation – is safe. It is never taxed. It stays home free and clear. The deemed “purchase price,” i.e. the basis, of the asset in the hands of the heirs is the value as of the date of death of the benefactor. In this manner the heirs get a stepped-up basis. And on and on. Especially in an age where there is substantial wealth inequality, this results in capital gains taxes being avoided. Game. Set. Match. And the appreciated assets of huge estates are passed on tax-wisely and tax-free from one generation to another. From a economic-social perspective this reinforces the possibility, even likelihood, of impregnable wealth consolidations to be created within families. As despicable as it is to quote Leona Helmsley, maybe she was partly right – “only the little people pay taxes.”

With the adoption of a national wealth tax, a small percentage of the asset’s appreciation would be paid annually. Assets could still be conveyed from one generation to another, but the stepped-up basis mechanism of tax-free conveyance and assured inter-generational tax avoidance could be eliminated.

Reason Three:
Wealth Is a Better Measure of the Receipt of Public Benefits

Since the inception of our country, there has been debate about the value of government and the efficiency and utility of public services. That debate is set aside for another day; for another wave of our respective energies. This article accepts, for purposes of its analysis, the value and necessity of some level of governmental services.

And it is suggested that from a number of alternative perspectives discussed below, the wealthy – not the poor and definitely not the middle class – oftentimes disproportionately both structure and reap the benefits of those governmental services.

Admittedly, this is not inherently obvious. However, whether it be from the perspective of the recipients of defense policies and initiatives; from the perspective of business’ benefits from the (de-) regulation of the financial markets and the public investments in infrastructure improvements; from the educational training of our work force; and even from the slow, but determined, processes of our judicial system, it is the wealthy that receive the most public benefits — as much if not more, much more, than the lower and middle income classes. Reagan’s “welfare queens” get most of the press but that is not where the real money is.

The poor are the primary recipients of many forms of public benefits – from welfare to Head Start to government housing to, in some cases free, emergency medical care. But it is also the wealthy who rarely participate in military service. It is also the wealthy who, through a million machinations, receive many other, less visible, clusters of governmental contracts and services. In the context of the judicial system and access to judicial remedies, from the perspective of this author, it should be obvious that for hard cost reasons alone, the judicial process and the routine use of lawyers now lie solely within the province of the wealthy. Except in few and extraordinary circumstances, no poor person and very few middle income families can respond to the “so sue me” challenges which have come to dominate our economy and our society. The wealthy have growing influence, if not control, over our political processes and many of our governmental policies. Thus, it seems evident that the wealthy are well-aware of the impact and importance of government.

In 2010, a 5-4 majority held in the U.S. Supreme Court held in the Citizens United case9 that political spending is a form of protected speech under the Fist Amendment. As a result, the government may not keep corporations or unions10 from spending money to support or denounce individual candidates or parties in public elections. For reasons beyond the scope of this article and in part as the result of the Citizens United decision, it is increasingly difficult to track political contributions, but with respect to even reported contributions, the dominating influence and power of the wealthy is evident. In the 2016 election, for example, federal candidates received contributions from more than 3,200,000 Americans. But it is far more significant (and here relevant) that 50 percent of those total funds came from just 0.5 percent (i.e. just 16,000) Americans—wealthy Americans.11

For all of these reasons one’s net wealth, rather than one’s income, may be a far superior, mechanism for measuring the receipt and allocation of the government’s good and services being paid by taxes.

Reason Four:
The Need for Wealth Taxation May Be a Matter of Timing
And May Be Necessary Now (More Than Ever Before)

Whether America has been missing the mark by using income rather than wealth as the basis for it tax system can be left to historians and economists to argue about. The debates will be endless, and they’ll love it.

But there are new and clear reasons for shifting to a wealth tax which are relevant to all of us. These new reasons for shifting to a wealth tax are now compelling because the American economy is evolving to, in effect, a new form of capitalism.

Evidence of this evolution can be presented in many different ways — both in tone and use of terms. However, all of the evidence revolves around the undeniable fact that both income and wealth inequality have been growing. This has been especially true over the last three decades – from the Go-Go Years of the 1980s to the present.

We are far past Robin Leach’s Lifestyles of the Rich and Famous (1984-1995). Now, we are at point where conspicuous consumption has been displaced by dangerous, and dangerously entrenched, income and wealth inequality.

There is every reason to have a continued, deserved reverence for individualism and to have every respect for one’s desire to keep their “hard-earned money.” Such concepts are easy to grasp. They are tempting in their seeming fairness, indeed their almost morality. But such concepts are too simplistic. The real challenges come not from matters of individuals and ownership, but from the more subtle questions relating to such income and wealth inequalities.

For example, what are the ramifications to a society where there is a heightened concentration of wealth? What are the long-term effects of allowing such concentrations of wealth to be lawfully protected and passed one generation to the next without the “burden” of taxation or even partial disbursement – you know, as was done for hundreds of years in feudal Europe. There are ready examples of honorable largesse such as those extraordinary men and women who have joined Bill Gates and Warren Buffett’s Giving Pledge. But society cannot afford to wait and rely upon the beneficence of the wealthy… because the steady reality is that wealth is rarely disbursed.

Once wealth is assembled, it’s kept. Once it’s concentrated, it remains so. Except in those rare instances such as the Giving Pledge participants noted above and except in small doses resulting from periodic and percentage-of-wealth charitable giving, wealth is rarely disbursed except over the dead bodies of lawyers and the exhaustion of all appeals. There is nothing surprising about that.

For those readers who need harder evidence, they can read about the increased concentration of wealth in Thomas Piketty’s Capital in the Twenty-First Century. There is a reason this 2013 book, an economics book of all things, became a New York Times Bestseller.Americans can try to stubbornly try to dismiss Piketty as another intruding Frenchman, but it is in our country’s best interests to recognize that there are solid reasons to conclude that Piketty (and, if I may, me 40 years ago) may be right – that some form of a net wealth tax is necessary. Furthermore, to the extent that Piketty was right – that over time inequality is not an accident but a feature of capitalism which can be reversed only through state intervention – then obviously America’s lame and avoidable estate tax is not going to achieve this necessary re-distribution of wealth.

A brief digression is necessary because an insistent dismissal of the alternative and cynical concept of a “flat tax” is necessary. Some politicians  –speaking on behalf of themselves, their benefactors, and their benefactors’ lobbyists, suggest that flat tax upon income (rather than a progressive tax) is preferable. Unfortunately, this simplification is made at the expense of both equity and logic largely because, by almost any measure, the flat tax greatly benefits only the wealthy.

I have no objection to simplicity – and the flat tax does offer that — but not if that simplicity is delivered as a means of palpable misdirection; not if that simplicity comes at the price of stupidity; and, most importantly, not if that simplicity is far removed from the needs of this nation and its people.

The harshness of this digression is results from two facts. First, the absurdities of a flat tax are not just hidden. They are also obvious and counter-intuitive. Despite the equitable marketing ring of “everybody pays the same flat tax rate,” the tax burden and the true capacity to pay vary radically. Ten percent of one’s income to a low income family is a matter of rent. Ten percent of one’s income to a wealthy family is a matter of one less vacation. This is a coldly delivered example, but it is impossible to believe that the cynical proponents of the flat tax are unaware of the adverse impacts of such a tax. Ask any economist – or at least any economist not running for political office. By way of another flat-tax example, this is why our schools and our military are not funded by sales taxes.

On a more optimistic note, there may be positive socio-economic effects of adopting federal and/or state net wealth taxes in place of their income taxes.

Reason Five:
Positive Socio-Economic Effects of a Wealth Tax

Our respective teams of economists will fight till sundown, but it is here suggested that there would be numerous, positive socio-economic effects which would result from adopting a thoughtful form of net wealth taxation in substitution of income taxation.

Unburdening lower and middle classes would increase consumption and stir the economy. The economic elevation of the lower and middle classes would, over time, reduce their reliance upon the complicated and inefficient delivery of goods and services by governmental and quasi-governmental agencies and private charities. Lastly — in the long run and possibly the most important, the adoption of a wealth tax may lessen the growing cynicism of both the lower and middle classes about the financial equity of American life. Stated more positively, the adoption of a wealth tax may help regenerate this country’s faith in the American Dream.

We are all well aware of Keynes’ reminder that in the long-run we are all dead, but all Americans should care about the “long-run.” Almost definitionally we will not be able to be there. We will not participate in the later-years wealth, prosperity, and the democratic economy. Nevertheless, many Americans – both the poor, the middle-class, and the wealthy care about this country on par with themselves. Many Americans care about the America which we bestow to our children and grandchildren. And even if they don’t care, the intelligent wealthy know that in both the mid- and the long-term it may be in their own self-interest to more appropriately and equitably re-distribute wealth in this country. The Caymans and Belize may be fine off-shore habitats for one’s money, but not many account owners choose to have to reside there permanently in a self-imposed, or at least self-initiated, exile.

Author’s Note
This author well-realizes the harshness, even shrill, alarmist tone of the foregoing paragraph. However, in my humble defense, I have recently re-read Sinclair Lewis’ 1935 political novel It Can’t Happen Here which is premised upon the unwritten subtitle that “Yes It Can.”

In the next section this author has tried to recognize that there are valid concerns about the substitution of a wealth tax for the existing income tax. While this author does not believe that they support a rejection of the needed change to a wealth tax, these objections and concerns should, nevertheless, be noted.

Arguments against the Use of a Wealth Tax

The arguments against the wealth tax fall into two distinct categories. The first set of arguments relates to economic effect objections (e.g. capital flight and disproportionate burden) and administrative, valuation and enforcement issues. The second set of arguments relate to possible equitable and economic effects (impacts upon agricultural and family businesses and liquidity issues).

Capital Flight Issues

Some argue that a wealth tax would trigger capital flight from the United States to various tax havens around the world. However, capital flight already exists. It exists in the form of the almost understandable incorporation of their businesses in foreign jurisdictions (think, for example, Ireland) or the extensive use of foreign subsidiaries (think, for example, nearly every major international business) as a means of legal and illegal parking of off-shore income.

The imposition of wealth tax would have to address these issues, which is why Piketty, for example, recommended the imposition of a global wealth tax. However, the point to note is that in especially the electronically wired, global economy, this is already occurring. In the opinion of this author the associated problems are not unique to wealth vs. income taxation.

Administratively Burdensome
Complicated by Challenging Asset Valuation Issues

One of the most curious objections to the wealth tax is that it would be administratively burdensome and would be inherently complicated due especially to asset valuation issues. As noted by one Wall Street Journal writer, “the wealth tax has a fatal flaw—valuation.” 12 With a seemingly uniquely tin ear, that writer sought to underscore his point by noting that “62% of the wealth of the top 1% is ‘non-financial – i.e. vehicles, boats, real estate, and (most importantly) private business….” 13 Even ignoring the slightly “listen-to-yourself” echo of this statement and even admitting that some assets would be challenging to value for purposes of calculating one’s net wealth, these types of challenges are not different from the myriad of challenges inherent in our existing income taxation system

There would be issues of imprecise or even fraudulent valuations and appraisals, but are these issues materially different from the issues attendant to the almost routine billions of dollars of misclassified business expenses that are currently claimed under our income tax system? Are these types of valuation issues more complex than the definitional issues of income, deductions, and exemptions which are now built and buried in the 75,000 pages of our nation’s income tax laws?

Taxpayers may certainly require the assistance of more appraisers in order to substantiate their net worth valuations, but commensurately there may be less need for every taxpayer (and in fairness, especially every wealthy taxpayer) to have all of their transactions winnowed through the channels and loopholes of the existing income tax system.

Disproportionately Burdensome on Agricultural Business
and Marginally-Profitable Family Businesses.

It has also been suggested that the adoption of a wealth tax would be disproportionately burdensome on certain types of businesses – such as agricultural business and marginally-profitable family businesses. The suggestion and concern of these related issues is that it would be unfair to force families to sell, leverage, or close their agricultural businesses (the “family farm” argument) or their marginally-profitable family businesses. While this author is respectful of these arguments and while the shift to a wealth tax in all events should be imposed only after the provision of an honorable, multi-year advance notice, these disproportionate burden arguments are, upon closer examination, specious.

First, there is the obvious, almost dismissive retort. Yes, taxes are rarely fun to pay, but they are a “cost” of wealth. Just like now, tax payment dates would need to be honored, and some manner of achieving the necessary liquidity assured. But how is this different from the annual imposition of an income taxes or the multitude of other capital, wage or operating expense dimensions of the “family farms?” The same is true of small businesses except that such businesses are rarely asset-based (or, more particularly, real estate-based) enterprises. Thus, by definition, if they are only “marginally-profitable,” then this would be reflected in their low valuation and their possible full exemption from the triggering of any wealth taxes.

A second, more cynical interpretation of the “family farm” and the “small business” arguments is that they are economic variants of the politicians’ shameful invocations of “Middle  America” and “Main Street” and the “Common Man.” No article should ever engage in arguments of “trust me,” but be assured that few politicians can define winter wheat. Few politicians set aside winter money. Few politicians run a convenience store and even fewer have kicked dirt in Kansas. One of the true challenges to the wealth tax is that it is far more likely that its acceptance or rejection will be decided in the Hamptons and not on some  homestead in the Far 40 of Montana.

Burdensome if Taxpayer’s Assets Are Illiquid

Liquidity has been discussed above, but it needs to be again briefly addressed here in this section about the “Arguable Reasons Against the Net Wealth Tax.”

This author respects these liquidity concerns, but the liquidity concerns are common to both income tax and wealth taxation. Yes, the scheduled imposition of wealth taxes may require advance planning, but this is the same planning as is necessary in the case of income taxation.

Neither wealth nor income assure liquidity, and there nothing more illiquid than a low or moderate income striving to meet its income tax liabilities by deferring vacations, by depleting saving accounts, or by driving old cars. Unquestionably, families who have net wealth tax payment obligations may have to take some steps to assure payment of its annual net wealth tax liability, but – again – this is really, neither in a moral or economic sense, different from the current liquidity burdens faced each April by low- and middle-income families.

Disproportionately Burdensome upon Seniors

The last ditch argument of nearly every counter-campaign usually includes strutting out the widows and orphans, the old, aged, and infirm. And here we go again. This interposed argument against the wealth tax suggests that somehow it would be disproportionately burdensome upon seniors.

Firstly, allow us to be careful of the argument itself — the argument is not that it would be disproportionately burdensome upon seniors – but, more precisely, wealthy seniors.

Secondly, though a bit lame and for what it is worth, allow me to remind the reader that this author may well fit into this category — I am, by nearly all measures, a senior.

But, mostly, this argument fails precisely because it is irrelevant. The net wealth tax would be imposed upon wealth – not age. The fact that a disproportionate number of wealthy persons are older does not means that they have diminished capacity to pay; that they are incapable of tax-obligation liquidity planning; or, for that matter, that they too have not enjoyed the net wealth exemption during their younger years during which they assembled their wealth.

To the contrary, this is the exact generation which is oftentimes the most thoughtful, the most capable of managing its assets and making payments, and the most experienced, if and as necessary, in the use of financial planners and other advisors.


Thus, despite the fact that there are arguments against the use of a wealth tax, in the opinion of this author, the arguments favor its adoption. When I initially wrote my thesis about the necessity of adopting a wealth tax, I was far too young and dumb to be able to assuredly foresee the future. But, even at that time,  a wealth tax seemed like a (darn) good idea.

Now, I am old. Much older. Some things have changed only in the context of adjectives. For example, I am now too old and too dumb to assuredly foresee the future. But a wealth tax (still) seems like a (darn) good idea. Income taxation in our country is not working efficiently, effectively or equitably. For reasons of fairness and simplicity and because of the dangerous and growing inequalities of wealth in our country, the adoption of a wealth tax would trigger a thoughtful and equitable economic readjustment.

The most I can do is to humbly ask you to consider it. Seriously. Closely. And now.

Notes and Citations

Theoretically, such net wealth taxes could be imposable upon all parties, what are sometimes referred to as “legal persons” including corporations, however this article assumes that the reach of the net worth tax would be limited to natural persons (or families, in the case of, for example, jointly filed tax returns).
Yglesias, M., moneybox, March 6, 2013
For purposes of simplicity, this article focuses the estate tax, but there are multiple and parallel exemption amounts applicable to federal estate and generation-skipping transfers.
As quoted in Frank, R., August 29, 2017. (Quoted remark of Gary Cohen to “group of  Senate Democrats”).
Reich, Robert B., “The Widening Wealth Divide, and Why We Need s Surtax on the Super Wealthy,” See also, Reich, R., “To Restore Democracy We Must Tax Wealth,, September 18, 2017.
See, e.g. Denmark (1995), Finland (2006), Germany (1997), Iceland (2006), Luxembourg (2006), and Sweden (2007). Year of the country’s discontinuation of such taxes are indicated in parentheses.
The phrase “public monies” is used because, in a sense, without any impact upon the taxpayer, the monies spent by the taxpayer on legal, accountancy, and tax planning fees could be re-allocated to the government which, in turn, would lower – even further – the effective, necessary tax rate.
Reich, R., The Widening Wealth Divide, and Why We Need a Surtax on the Super Wealthy,”,, March 12, 2012. Author’s Note: First, allow me to again remind the reader that my recommendation for a wealth tax is not politically driven. While I have a high regard for former Secretary of the Labor Reich, the recommendations in this article were initiated by this author nearly forty years ago. They are not derived from any agenda, liberal or otherwise, and they are not a feed-off from Mr. Reich. In fact, I respectfully disagree with Professor Reich’s concept of a “surtax” on the super wealthy. This author believes instead that a annual, low rate, progressive tax upon all persons or families of wealth – not just the super-wealthy, would be far more advisable. It may be far more equitable and enhance public revenues, and it may lessen incentives for capital migration.
Citizens United v. Federal Election Commission, 558 U.S. 310.
10 Some commentators have suggested a certain political-impact “balance” in the Citizens United decision because it arguably empowered both corporations and unions to make unlimited political contributions. However, this balance is not supported by the reality of the demise of unions as a major component player in U.S. political elections. According to the Bureau of Labor Statistics, as of 2018, there were approximately 161,000,000 American in our country’s work force. Of those, only about 14,800,000, i.e. only 9.1%, were members of  unions. In other words, the equivalence is not there. More than nine out of ten workers are non-unionized.
11 The Week, February 2, 2018, p. 16 (Citing The Washington Post).
12 Frank, R., The Problem with a Wealth Tax, The Wall Street Journal, January 11, 2012.
13 Ibid.

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The Best Song Lyrics of Modern America – Part 4 – Enjoy

Posted by Mack W. Borgen January 16th, 2019

 Blog No 91

 January 17, 2019 


The Best Song Lyrics of Modern America – Part 4

– The Poetry of Modern America –

By Mack W. Borgen

National Award-Winning Author, Dead Serious and Lighthearted – The Memorable Words of Modern America (Vols I, II, and III) (2018-2019); The Relevance of Reason – The Hard Facts and Real Data about the State of Current America (Vol I (Business and Politics) and II (Society and Culture)) (2013)).


 Introduction and Background

Song lyrics are the real poetry of Modern America. The lyrics of our favorite songs roll around in our heads for decades. Almost unconsciously, every day we honor the words of America’s songwriters who said something in that perfect, poetic, or clever way. These lyrics are not the words of Homer or Yeats or Byron or Tennyson, or even Poe or Frost, but they are ours. Many of us can remember them easily. We can remember them easily. And, maybe best of all, all of the lyrical poetry of Modern America comes with a song!!

Here is Part 4 of my assembled list  — done over the last nine years in conjunction with my research for my last series of books, Dead Serious and Lighthearted – The Memorable Words of Modern America.  For a more detailed explanation and background of this Best Song Lyrics project — why and how the lyrics have been assembled — see the “Explanation and Background” section below.

Also, please see my publishers new Direct-From-Publisher Special Book Sales Offerings. Just go to  All directly ordered books will be signed by the author and shipped within five business days. Free shipping for orders of 10 or more books for your family, friends, or clients.

But, now, … 

The Best Lyrics of Modern America

– From 1957 through 2015 –


The Mid-1960s 

Crying in the Chapel

(Elvis Presley) (1965) (B: 1935, Tupelo, MS – D: 1977 (Age 42), Memphis, TN) 

“Just a plain and simple chapel

Where humbler people go to pray

I pray the Lord that I’ll grow stronger

As I live from day to day.”

. . .

“Ev’ry sinner looks for something

That will put his heart at ease

There is only one true answer

He must get down on his knees.”

“Take your troubles to the chapel

Get down on your knees and pray

Your burdens will be lighter

And you’ll surely find the way.” 

The Seventies 

Sing a Song

(Earth, Wind and Fire) (1976) 

“When you feel down and out

Sing a song, it’ll make your day

Here’s a time we to shout

Sing a song, it’ll make a way.”

“Bring your heart to believing

Sing a song, it’ll make your day

Life ain’t about no retrieving

Sing a song, it’ll make a way.” 

I Have to Say I Love You in a Song

(Jim Croce) (1973) (B: 1943, South Philadelphia, PA –D: 1973  (Age 30) Natchitoches, LA) 

“Well, I know it’s kinda late.

I hope I didn’t wake you.

But what I gotta say can’t wait.

I know you’d understand.”

 – – – 

“Every time I tried to tell you,

The words just came out wrong,

So I’ll have to say I love you in a song.”

The Eighties 

Like a Virgin

(Madonna) (1984) (B: 1958, Bay City, MI)

“I was beat


I’d been had, I was sad and blue

But you made me feel”

“Shiny and new.” 

Hoo, Like a virgin

Touched for the very first time

Like a virgin

When your heart beats

Next to mine.”


Too Much Fun

(Daryl Singletary) (1995) (B: 1971, Cairo, GA – D: 2018 (Age 46), Lebanon, TN) 

“ … I said officer what have I done

He smiled and said boy you’re havin’ too much fun”


“Too much fun what’s that mean

It’s like too much money there’s no such thing.

It’s like a girl too pretty with too much class

Being too lucky a car too fast

No matter what they say I’ve done

Well I ain’t never had too much fun.” 

Explanation and Background of These

“The Best Lyrics of Modern America” Blogs

Song lyrics are the real poetry of Modern America. The lyrics of our favorite songs roll around in our heads for decades. Almost unconsciously, every day we honor the words of America’s songwriters who said something in that perfect, poetic, or clever way.

About nine years ago, in 2010, when I started my research for my books, Dead Serious and Lighthearted – The Memorable Words of Modern America. I spent much of the initial year assembling, sorting, and selecting those “memorable” song lyrics to be included in my books.

However, I eventually decided that it was necessary to exclude song lyrics from my books. This was done partly in deference to the needs of book brevity and in bowing recognition to the unavoidable subjectivity of making such selections. But it was also done because most songs are almost definitionally “intra-generational” in that they remain the separate and proud province of each generation. They are a part of each generation’s formative and collective memory – but not beyond that.

Nevertheless, as a result of that year of research, I assembled a relatively massive collection of what may be, by some measures of broad consensus, the greatest song lyrics of Modern America.

I have decided to start presenting them here for your remembrance and enjoyment. I confess that this is partly triggered by the fact that I have already done the fun, but painstaking, work of such assemblage. However, these lyrics blogs are also triggered by the fact that America needs – maybe now more than ever — to reach back and enjoy something or, as best said in 1967 by the Beatles in their song A Day in the Life” — “I read the news today, oh boy.”

Thus, starting on October 9, 2018 with Blog No. 83, I have started posting some excerpts of this author’s humble suggestions of The Best Lyrics of Modern America.


The other “serious” and “lighthearted” words of our generations are presented in my three volumes of Dead Serious and Lighthearted – Volume I (1957-1976), Volume ((1977-1993), and Volume III (1994-2015). All three volumes (and my earlier books, The Relevance of Reason (Vols I and II)) can now be ordered. Just go to for the Direct-from-Publisher prices. All books will be signed by the author and will be shipped within five business days. My books are, of course, available on Amazon, Barnes & Noble, etc. and at some independent book stores.

You Are Invited – Mack W. Borgen on Dr. Elizabeth Stewart Radio Show – Release of Volume III (Years 1994-2015) in Dead Serious and Lighthearted Series

Posted by Mack W. Borgen January 5th, 2019

Blog 90
January 6, 2019

Author Mack W. Borgen

. . . You Are Invited . . . 

Join Us and Listen to Radio Interview

with Mack W. Borgen about his Latest Book

on The Dr. Elizabeth Stewart Radio Show

Tuesday, January 15, 2019*

10:00 AM

KZSB AM 1290

*Show also tentatively planned on being re-broadcast at 8:00PM, Tuesday, January 15, 2019


(Years 1994-2015) (572 pp)

Dead Serious and Lighthearted

The Memorable Words of Modern America

This last volume presents the memorable words of the last years of Modern America — the serious and the lighthearted words of social, cultural, political and economic impact — which were written or spoken during the years of Clinton, “W”, and Obama; from the rise of terrorism and the wars of Afghanistan and Iraq to the humor of Seinfeld and the darkness of Breaking Bad; from the release of Tuesdays with Morrie, Sh*t My Dad Says, The Da Vinci Code, Fifty Shades of Gray to the endless books of political vitriol and discord; and from the Great Recession to the dominance of technology and omnipresence of the Internet and iPhones.


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The Best Lyrics of Modern America – Part 3 – Dead Serious and Lighthearted

Posted by Mack W. Borgen December 17th, 2018

Blog No 89 

December 18, 2018 

The Best Lyrics of Modern America – Part 3 

Song Lyrics – The Poetry of Modern America

Mack W. Borgen

Introduction and Background

Song lyrics are the real poetry of Modern America. The lyrics of our favorite songs roll around in our heads for decades. Almost unconsciously, every day we honor the words of America’s songwriters who said something in that perfect, poetic, or clever way.

Here is Part 3 of my assembled list  — done over the last eight years in conjunction with my research for my last series of books, Dead Serious and Lighthearted – The Memorable Words of Modern America.  For a full explanation about the background of this Best Lyrics project, see below.

Also, please see my publishers new Direct-From-Publisher Special Book Sales Offerings Just go to All directly ordered books will be signed by the author and shipped within five business days. Free shipping for orders of 10 or more books for your family, friends, or clients.

          But, now, …

 The Best Lyrics of Modern America

– From 1957 through 2015 –


The Late 1950s 

Wonderfully Innocent Buzzword Lines of the Era

Rockin’ Robin

(Bobby Day (1958) (B: Robert Byrd, 1930, Ft Worth, TX – D: 1990 (Age 60) Los Angeles, CA))
            “He rocks in the tree-top all a day long,
                        Hoppin’ and a-boppin’ and a-singin’ the song .…”

Do You Wanna Dance?

(Bobby Freeman (1958) (B:1940, Alameda County, CA – D: 2017 (Age 76), San Francisco, CA)).
 “Well, do ya wanna dance and a hold my hand,
 Tell me I’m your lover man
 Oh baby do ya wanna dance?” 

School Days

(Chuck Berry (1957) (B: 1926, St. Louis, MO – D: 2017 (Age 90), Wentzville, MO))            
“Hail hail hail rock n roll
Deliver me from the days of old
Long live rock n roll
The feeling of drums loud and bold
Rock, rock, rock n roll
The feeling is there body and soul.”


 The Sixties 

Eve of Destruction

(Barry McGuire (1965) (B: 1935, Oklahoma City, OK))
“The eastern world it is exploding
Violence flaring and bullets loading
You’re old enough to kill but not for voting*
You don’t believe in war but what’s that gun you’re toting…”
            . . .
            “But you tell me
Over and over and over my friend
Ah, you don’t believe we’re on the eve of destruction”
“The pounding of the drums pride and disgrace
You can bury your head but don’t leave a trace
Hate your next door neighbor but don’t forget to say grace….”
* Note: In 1965, 18-year-olds were subject to the draft and were allowed to join the military without parental consent. However, it was not until the closing days of the Vietnam War and the passage of the 26th Amendment on March 23, 1971 that the U.S. voting age was lowered from 21 to 18. See, Borgen, M., Dead Serious and Lighthearted – The Memorable Words of Modern America – Volume I (1957-1976), p. 297.  


The Seventies 

Hollywood Nights

(Bob Seger (1978) (B: 1945, Detroit, MI)) 

“…He was a midwestern boy on his own.
He knew right then he was too far from home.”
. . .
“In those Hollywood nights, in those Hollywood hills,
She was lookin’ so right, in her diamonds and frills,
Oh, those big city lights, in those high rollin’ hills,
Above all the lights, she had all of the skills.”
. . .
            “In those Hollywood nights, in those Hollywood hills,
She was looking so right, it was giving him chills,
Oh those big city nights, in those high rollin’ hills
Above all the lights, with a passion that kills.” 

Country Music

The Devil Went Down to Georgia

(Charlie Daniels Band) (1979)

“Devil went down to Georgia,
He was looking for a soul to deal,
He was in a bind,
‘cause he was way behind,
So he was willing to make a deal.”
      . . .      
“… Devil said, Boy, let me tell you what,
I guess you didn’t know it,
But I’m a fiddle player too,
And if you’d care to take a dare, I’ll make a bet with you.”
“Now you play a pretty good fiddle, boy,
But give the Devil his due,
I’ll bet a fiddle of gold against your soul,
‘Cause I think I’m better than you.”
“My name’s Johnny,
And it might be a sin,
But I’ll take your bet,
You’re gonna regret,
‘Cause I’m the best there’s ever been.”
“The Devil bowed his head because,
He knew that he’d been beat,
And he laid that golden fiddle
On the ground at Johnny’s feet.”

 – – – 

Explanation and Background of These

“The Best Lyrics of Modern America” Blogs

Song lyrics are the real poetry of Modern America. The lyrics of our favorite songs roll around in our heads for decades. Almost unconsciously, every day we honor the words of America’s songwriters who said something in that perfect, poetic, or clever way.

Eights years ago, in 2010, when I started my research for my books, Dead Serious and Lighthearted – The Memorable Words of Modern America. I spent much of the initial year assembling, sorting, and selecting those “memorable” song lyrics to be included in my books.

However, I eventually decided that it was necessary to exclude song lyrics from my books. This was done partly in deference to the needs of book brevity and in bowing recognition to the unavoidable subjectivity of making such selections. But it was also done because most songs are almost definitionally “intra-generational” in that they remain the separate and proud province of each generation. They are a part of each generation’s formative and collective memory – but not beyond that.

Nevertheless, as a result of that year of research, I assembled a relatively massive collection of what may be, by some measures of broad consensus, the greatest song lyrics of Modern America.

I have decided to start presenting them here for your remembrance and enjoyment. I confess that this is partly triggered by the fact that I have already done the fun, but painstaking, work of such assemblage. However, these lyrics blogs are also triggered by the fact that America needs – maybe now more than ever — to reach back and enjoy something or, as best said in 1967 by the Beatles in their song A Day in the Life” — “I read the news today, oh boy.”

Thus, starting on October 9, 2018 with Blog No. 83, I have started posting some excerpts of this author’s humble suggestions of The Best Lyrics of Modern America.

The other “serious” and “lighthearted” words of our generations are presented in my three volumes of Dead Serious and Lighthearted – Volume I (1957-1976), Volume ((1977-1993), and Volume III (1994-2015). All three volumes (and my earlier books, The Relevance of Reason (Vols I and II)) can now be ordered. Just go to for the Direct-from-Publisher prices. All books will be signed by the author and will be shipped within five business days. My books are, of course, available on Amazon, Barnes & Noble, etc. and at some independent book stores.


Posted by Mack W. Borgen December 5th, 2018







Dead Serious and Lighthearted

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Posted by Mack W. Borgen December 4th, 2018

Announcing Completion of Volume III 

DEAD SERIOUS AND LIGHTHEARTED – The Memorable Words of Modern America

The Biggest Book Yet (574 Pages of America’s Most Memorable Words from 1994 to 2015)

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Saving State Street (and Main Street) – A New Plan

Posted by Mack W. Borgen November 27th, 2018


Blog No. 87 

November 28, 2018 

Saving State Street (and Main Street)

 – The Stores Have To Be Open and The Lights Have To Be On 

– – –

We Can’t Stand By and Merely Hone Our Pouting 

By Mack W. Borgen. Author, Dead Serious and Lighthearted – The Memorable Words of Modern America (Vols I, II, and III) (2018 and 2019) and The Relevance of Reason – The Hard Facts and Real Data about the State of Current America (Vols I and II) (2013). See New Book Specials at Book Ordering Tab. Order your books today!! Copyright 2018. All right reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or otherwise except in the case of brief quotations and reviews, without the prior written consent of the author.

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Every community has its special places. Some are nationally famous — Chicago’s Miracle Mile; San Francisco’s North Beach, Union Square, and Fisherman’s Wharf; New York’s Times Square, TriBeCa and Soho; San Antonio’s Riverwalk; Portland’s Pearl District; Seattle’s Pioneer Square and Pike Street Market; Los Angeles’ Rodeo Drive and Venice Beach; New Orleans’ Bourbon Street; San Diego’s Gaslamp Quarter, and on and on.

In a parallel manner and based upon varying blends of history, architecture, shopping, and commerce, even smaller cities like Santa Barbara, California have their own special places and city centers. They have their “old towns,” their landmarks; their historic districts; their city parks; and their defining shopping districts and neighborhoods.

These special places are usually “central” to not only the economic well-being of the city but also the community life and spirit of the city. These special places help define the town and are understandably viewed as community assets even though they are oftentimes, if not almost normally, composed of both private property and public lands.

The ideas and recommendations contained in this article could theoretically apply to many cities and towns and shopping centers and districts in America. However, every town and every circumstance is, to a degree, unique. The specific issues relating to every parcel of land, every stretch of highway, and every downtown are best specifically addressed by those persons who know the area well. Thus, this article is intended to focus upon Santa Barbara, California — and, more precisely, SB’s Downtown State Street.

Santa Barbara’s Downtown State Street

Santa Barbara is blessed with many landmarks – the Mission, the Beaches, the Zoo, the wonderful neighborhoods, the many parks, and nearby Montecito and UCSB. But this article focuses upon the 1.6 miles of SB’s Downtown State Street.

The reason for this focus is because Downtown State Street is the main tourist and shopping and dining and drinking and strolling and people-watching “center” of our city. Fourteen great blocks of unique shopping, great food, and distinctive architecture — anchored by the Arlington and Granada Theaters at one end and Stearns Wharf on the other end with the wonderful La Arcada and El Paseo Mall in the middle. Downtown State Street is complete with electric-shuttle bus service, and the area is designed with wide sidewalks and numerous sitting benches. Beautifully and carefully planned, Downtown State Street is supported by nine parking lots and five parking structures nearby with a combined more than 3,000 parking stalls. Downtown State Street is the “center” of our city.

But now, like downtowns all across America, Santa Barbara’s Downtown State Street is in trouble. Its retail stores continue to struggle or, worse yet, have closed. Once decorated windows have been replaced with the cold stare of plywood. Unsurprisingly Downtown State Street’s very vitality is challenged. Downtown State Street, and Santa Barbara with it, is in trouble.

The Impact of Shifts in America’s Shopping Patterns Upon Downtown State Street

As noted above, the analysis contained in this article may also be applicable to many downtowns and arguably many shopping centers as they also try to adjust to our country’s new shopping patterns and to the onslaughting impact Internet shopping and, more particularly, the rise and omnipresence of Amazon. On a more minor and lighter note, the word “onslaughting” doesn’t exist. But it should.

In 2002, just 16 years ago, online commerce represented only $42BB of U.S. commerce. By 2010, that number had more than tripled to $142BB. By 2017, it had more than doubled again to $336BB. In the last 15 years, online commerce has grown eight-fold, and there is neither reason nor expectation that this trend will change. Unlike Sears, Brookstone, NineWest, Claire’s, The Walking Company, Kiko, A’Gaci, Wet Seal, Toys “R” Us, Rue21, Radio Shack, BCBG, Sports Authority, Frederick’s of Hollywood, Cache, and a couple thousand more stores, online “stores” never close, and online commerce is here to stay. And to grow.

The most direct competitor to online shopping remains the bricks-and-mortar stores which comprise most of America’s historic downtowns – although to SB’s great credit and distinction, many of Downtown State Street retail stores were not chain stores.  But it needs to be remembered that it is not merely retail commerce which is at stake. Downtown State Street is historically where much of our community gathered for dining and drinking and coffee and strolling. Those “community activities” can be destroyed by empty shops and the ugly aura of abandonment.

Certainly, there is always a churning of some stores – and particularly restaurants. But in the last year, Downtown State Street has deteriorated. In the last six months, State Street lost 17 storefronts[i] – including Aaron Brothers, Chipotle, Peet’s Coffee, Staples.  As of October, 2018, there were 37 vacancies within just ten blocks along Downtown State Street corridor from Gutierrez to Sola – a 14.9 percent storefront vacancy rate.[ii]

Some Early Ideas, Responses, and Changes

This downturning has been accelerating for the last several years, and many good and honorable ideas have been proposed to increase the economic vitality of Downtown State Street.

Some of these ideas seek to directly counter the wave of retail vacancies, but most do so only indirectly — by seeking to enhance Downtown State Street by addressing infrastructure problems, by minimizing nuisance behavior and addressing public safety issues, by improving transportation and parking, and by generating larger crowds through, for example, the sponsorship or facilitation of more downtown shopping, arts and cultural events.

The Downtown State Street problems also have triggered many good and honorable land use planning and permitting ideas.

And as is always the case, some of the debates have essentially been prioritization debates. Some people argue for an immediate focus upon the implementation of short-term solutions. Others have encouraged the community to focus upon longer-term solutions.

Thus, in sum and regardless of one’s project preferences or desired prioritization of efforts, there now have been meetings, hearings, conferences, studies, reports, commissions, and the usual hover-gathering of consultants. The State Street Task Force was formed, and more commendable ideas have surfaced.

The following is a list of some of the good ideas which have surfaced and some of the good changes which are being instituted:[iii]

1 –        Hiring economic development consultant;

2 –        Formation of Economic Development Department or retention of a retail recruiter;

3 –        Changing planning codes to allow more downtown housing, higher density, and residential parking in city lots;

4 –        Streamlining the permitting process for downtown commercial space;

5 –        Block-by-block recommendations as done by American Institute of Architects;

6 –        Opening of the new visitor center and public restrooms at Hotel California complex;

7 –        Expanding bike and scooter sharing programs;

8 –        Replacing trash cans and upgrading streetlights;

9 –        Rebooting First Thursday events and sponsoring more block party and area events on State Street such as the annual Small Business Saturday held each year on the first Saturday after Thanksgiving;

10 –      Allowing food trucks, more live music, and more events;

11 –      Incorporating the steady involvement of outside organizations such as the SB County Office of Arts & Culture;

12 –      Engaging the participation and involvement of business organizations such as Downtown Santa Barbara and The Chamber of the Santa Barbara Region;

13 –      Increasing police presence;

14 –      Changing SB’s alcohol policy to addresses some of the drunk in public issues;

15 –      Increasing the allocation of funds to mental health services and for more beds for the homeless and transient populations;

16 –      Allowing, even encouraging, temporary tenancies and pop-up stores such as Halloween costume and Christmas season stores;

17 –      Installing better wayfinding signage around town; and

18 –      Installing more public art and improving the Highway 101 Underpass.

But, so far, nothing is really changing. We all know that. And we cannot stand by and hone our pouting.

And while this author wishes to commend all of these thoughtful ideas, the real problem is that only a few of them[iv] focus directly upon the core issue – filling the store vacancies. Few of the ideas are targeted. Few of the ideas force the attention of those parties which can most aggressively and most quickly eliminate the vacancies in Downtown State Street – the landlords. In this article such landlords, building and property owners, and even their real estate and leasing agents and representatives are collectively referred to as the “property owners.”

The Need to More Directly Incentivize Property Owners

The need to target property owners is so many of the key problems relating to Downtown State Street are the result of the growing number of retail space vacancies. The property owners alone have the sole and real power to fill vacancies. Theoretically, property owners can define the terms of the lease — the rent, the term, the property usage, the annual escalation, percentage terms etc. But property owners cannot be allowed to exercise that discretion in isolation from the valid needs and reasonable expectations of our community. The time has come for more aggressive incentives to get these properties leased — both the retail and the commercial properties in Downtown Santa  Barbara.

This author has been a real estate attorney for decades. That is certainly neither a good thing or a bad thing — but from that perspective, this author can attest that properties can assuredly be leased if that is the serious objective of the property owners.  Alternatively, waiting for the market to shift or rental rates to increase may be a myopic, even delusional, plan. More importantly, such waiting should be viewed as unacceptable both for the preservation of Downtown State Street and from the perspective of our community.

As with many downtown retail store closure and the attendant area deterioration issues, circular chicken-or-egg debates can continue endlessly about whether the area’s problems caused the vacancies or whether the vacancies caused the area’s problems. But the entwining inter-relationship between the downtown problems and the downtown vacancies is obvious. Many of the fine ideas listed ideas should be implemented for a multitude of reasons, but nothing will get seriously better until the number of downtown vacancies declines. And, to date, that has has been allowed to lie (in a sense, too much) within the power and the prerogative of property owners.

Stores have to be open. Lights have to be on. Restaurants have to be serving meals. Coffee houses have to be pouring their coffee and bars have to pouring their drinks. There has to be a sense of crowd and community and a plethora of reasons to be there – you know, to be downtown.

The sad, but stubborn, truth is that small steps are not going to suffice. New trash cans and more downtown events are not going to generate the needed impact. They will not deliver the vitality for our downtown. That can only be done by more stores; by increased storefront occupancies; and by more shopping and dining.

A carefully designed – but more aggressive and targeted – approach is necessary.

So far, this article has referenced Downtown State Street as a “community center” and a “community asset.” And there is no doubt that it is in Santa Barbara’s “community interest” to rejuvenate our downtown. However, it is also time to be more blunt – not to offend, but to motivate.

In the end, property taxes aside, it is the property owners who or which take home the profits.[v] It is the property owners — acting through their LLCs, partnerships, corporations, trusts, or leasing agents or property managers – who directly and rightfully benefit from the receipt of rental payments from occupied retail and commercial spaces.

It is arguably wonderful, albeit to some curious, that property owners can so well, begrudgingly or otherwise, tolerate such vacancies presumably in the hope that the rental market will return or while they patiently formulate new long-term alternative plans for their properties. In other words, it is good that Downtown Santa Barbara’s property owners have the means and the time to wait. But we do not.

Santa Barbara cannot wait, and Santa Barbara should not have to so wait because it is necessary for Santa Barbara to finally (and more firmly) recognize that the property owners are the real keys to resolving the glut of Downtown State Street store vacancies.  And property owners should find some cold comfort in the uniqueness of the Santa Barbara market.

A Brief Digression on the Uniqueness of SB’s Downtown State Street

There are some communities where there is no rental market. No lowering of rental rates will attract prospective tenants.

There are some downtowns that have long turned to dust. There are some communities (such as in some of the smaller western towns in which I have lived) that have had their downtowns permanently Walmarted — and those downtowns are not coming back.

There are some downtowns (such as in many of the Rust Belt or factory towns of the Midwest and Northeast) that cannot generate downtown vibrancy because the city’s population base has long since moved — and those downtowns are not coming back.

But that is not the case in Santa Barbara.

In Santa Barbara, the customers are here, but the stores are not.

In Santa Barbara, the restaurant patrons are here, but the restaurants are not.

In Santa Barbara, the tourists are still coming, but there is less to see. There are fewer places for them to spend their time and spread their wealth.

In Santa Barbara, the tenants are here, but the rental rates are not.

Thus, while again commending the many fine “Save Downtown State Street” ideas which have been presented and which are listed above, it is time to more narrowly focus. It is time to have the property owners better and further incentivized to get their properties leased.

The Needed, Careful Use of an Escalating Vacancy Charge and the Sixth Truths

And, thus, this article proposes what is colloquially known as a vacancy tax, fee. or charge. Since this charge is not truly a tax[vi] (partly because it is wholly voidable at the election of the property owner), it is referred to in this article as the Contingent Vacancy Charge (“CVC”).

The CVC here proposed is very carefully and very narrowly designed. Because any proposal for additional charge, no matter how denominated (tax, fee or charge), can trigger instinctive objections by some persons, the following preliminary considerations are offered in support of the adoption and use of such CVC.

First, the CVC would not be not punitive, and it would be entirely voidable. It is merely a means of better incentivizing property owners but it admittedly (and intentionally) would financially punish those property owners which allow their properties to languish; to remain empty for long periods of time.

The rough concept is that if, for whatever reason, a property owner elects not to lease its property for a sustained period (and thereby failing to contribute to the vibrancy of the Downtown State Street area), then such property owner should be obligated to remit escalating CVC payments to the City of Santa Barbara. Upon receipt of these payments, the City can use such monies in order to fund the many other programs and ideas necessary to preserve, protect, and enhance Downtown Santa Barbara for the benefit of such property owners and for the City of Santa Barbara.

This proposal is respectfully mindful of the Six Truths which are – or at least should be — associated with this proposal. 

Truth One:     “Four-Letter Word.” Even a CVC will be seen by some as a tax or a fee, and despite the three-letter spellings of both “tax” and “fee” – they are still four-letter words.

Truth Two:    “Easier to Make Less Than Pay Anything.” Although wholly illogical, property owners (admittedly like many of us) find it weirdly easier to make less than to pay anything. 

Truth Three: Other People’s Money Issues. The CVC proposal is unavoidably an OPM (Other People’s Money) resolution, but it is the best, most effective, and possibly only way to rejuvenate SB’s Downtown State Street.

While the above Truths are easy to agree with and are almost definitionally true,

it is humbly suggested that the next set of three truths

should also be accepted

since they, too, are almost definitionally true.

 Truth Four: Downtown State Street Should Be Viewed As What It Is —–—- A Grouping of Publicly- and Privately-Owned Properties Which Collectively Comprise a Valuable Community Asset. Despite the private ownership of most of the buildings and retail space on Downtown State Street, the area should be recognized as a community asset. Although the property owners receive and rightfully retain nearly all of the rental (and sometimes sales) proceeds flowing from their commercial retail, and storefront properties, our community has the right to care about Downtown State Street and to take steps to protect and preserve our Downtown State Street as a unique community asset.

Stated conversely, property owners in and around Downtown State Street[vii] have a limited, but dutiful, public responsibility to community to keep their buildings and retail storefronts occupied. It is good, and it is in SB’s own self-interest that Downtown State Street is blessed with wide sidewalks, electric shuttles, and ample parking – but this is a (no pun intended) two-way street. It IS the obligation of property owners to keep their buildings both occupied and in good repair. 

This author is well aware of the probable responsive don’t-tread-on-me clamors which a CVC proposal will generate. However, the frontier closed more than 100 years ago. Cities in fulfilling their public mandates rightfully and routinely exercise certain powers over the use of private property in many ways – from zoning to building codes; from parking ratios to architectural and design restrictions; and on and on. Properly drafted, this is no different. The adoption of a CVC ordinance is also closely analogous to the myriad of effectively similar provisions which are common to all major shopping center leases wherein landlords routinely not only require occupancy but also imposes open-for-business, stores hour requirements and even product definitions (and limitations) and signage mandates.  Whether it be homeowners association’s CC&Rs, shopping center master leases, or zoning ordinances or building codes, private property – and especially urban, private property, is rarely owned “free and clear” of the city or town in which it is located. 

Truth Five – Commercial and Retail Vacancies Have To Be Eliminated or Minimized – For Benefit of Both Property Owners and Community. Despite the many good Downtown State Street ideas which have been developed over the last several years and which are noted above, Downtown State Street cannot become revitalized until the number of commercial and retail vacancies is drastically eliminated or minimized. For this reason alone, property owners should have taken the lead. Since they have not, city should adopt a CVC ordinance. 

Truth Six – In Santa  Barbara There Remains a Direct Correlation between Rental Rates and Occupancy Levels. There is a direct correlation between rental rates and occupancy, and at least for the foreseeable future, the rental rates must be adjusted, i.e. lowered, in light of the market impacts of, especially, Internet-shopping. Legal challenges aside, it is not here proposed that the city seek to mandate any leasing or to set any rental rates. However, if a property owner elects to keep his rental rates above the true market rate and if the subject property remains vacant after a designated period, then the building owner should be required to remit to and for the benefit of SB a charge.

As noted above, sometimes even lowering of rental rates will not generate tenancies. However, that is not the case in SB. But for the currently demanded, high rental rates for Downtown State Street retail and commercial spaces, many SB stores and businesses would welcome the opportunity to relocate to Downtown State Street. In this sense, Downtown State Street remains distinguishable from other languishing downtown areas that have been, as noted above, been Walmarted and box-stored out of meaningful existence and similarly from distressed residential communities. Thus, the stubborn (and good) reality is that many retail stores and other commercial tenants would readily relocate to Downtown State Street – except for the rent rates still demanded by Landlords. The CVC, if high enough, will motivate some property owners to lease their properties or will impose upon them a charge payable to the community for its use in enhancing Downtown State Street.

Vacancy-Based Charges, Fees, and Taxes in Other Jurisdictions

It should be noted – and may be comforting to some – that the concept of a CVC is not entirely unique. Variants of CVC ordinances have been adopted in many domestic and even foreign[viii] jurisdictions. Some of them can be traced to a community desire to enhance, if not try to ensure, the commercial vibrancy of neighborhoods. In other cases – easily distinguishable from Santa Barbara, CVC-type ordinances have been adopted to impose vacancy-based charges upon property owners in the hopes of minimizing the number and impact of “ghost buildings” or the rows of empty and abandoned residential homes. In these instances, vacancy charges have been used as a means of deterring landlord abandonment of poor-quality urban housing.

In the opinion of this author, it appears that some charges in these other jurisdictions are more in the nature of “taxes.” Unlike the CVC proposed in this article, these jurisdictions seem to impose a far less targeted, vacancy-based tax, and certainly some of these “taxes” are rooted in revenue-raising motivations. For example, a jurisdiction-wide and more complicated approach is used in Washington, DC where a higher tax rate is imposed on vacant property (5% of assessed value) and blighted property (10% of assessed value) as compared with occupied property tax rates which vary from 0.85% to 1.85% depending on use. Somewhat similarly, San Francisco imposes a small $771 per property annual fee upon owners of vacant properties, but it relies upon self-reporting, and it is widely acknowledged that this fee is rarely paid.

Only New York seems to be considering the use of a vacancy charge in response to vacancies in retail districts such as SB’s Downtown State Street. This more closely analogous case has occurred in certain areas of New York where there are a number of retail corridors “struggling with double-digit rates, from 27 percent … (in parts of) the Upper West Side to 20 percent on a stretch of Broadway in Soho.”[ix] Angering both city officials and area residents many of “these overpriced, beautiful properties” have remained empty for years solely because many property owners (possibly like Santa Barbara) prefer to wait for area rents to increase before committing their real estate to long-term leases with relatively fixed rates. But, also just as in the case of Downtown State Street, these “abandoned storefronts are an eyesore,” and collectively they are impacting wholly communities.

Thus, the reason being given to the imposition of vacancy-based charges in New York is, once again, the same as it is in SB. In effect, property owners cannot be allowed to decimate city “assets” merely because they can, for whatever reason, “afford” to wait for market rental rates to increase.

It is right that property owners should be allowed to take home their rental profits, but their properties continue to benefit from the efforts and reputation of our city. Property owners cannot be allowed to stand by and step back. As noted in the context of the many New York City neighborhood vacancies, “online shopping is here to stay, … and these dead (vacant storefront) spaces hurt, and neighborhoods have a right to protect themselves.[x]

The Careful and Balanced Terms of Contingent Vacancy Charge Ordinance


The structuring of the CVC must be carefully designed – especially since the objective of the CVC is not revenue generation. Instead, it is to eliminate, or at least, minimize long-period retail vacancies in Downtown State Street.

Thus, the drafting of an effective and fair CVC ordinance should be viewed from two perspectives. It can be viewed as motivational and incentivizing in that it will hopefully encourage property owners to take steps (including, if and as necessary, the lowering of their rental rates) to avoid long-term vacancies in their properties. Alternatively, it can be viewed as punitive in that it does, admittedly — but only after the property owners are given ample time to re-lease their subject space – impose an escalating charge payable by the property owners with respect to their vacant space.

The CVC should not be drafted as a complicated ordinance. It should not become buried with regulations, wrapped in nuance, and tied down by litigation. Instead, the CVC is suggested as a direct charge which can be easily understood and easily communicated to property owners.

In the case of a Downtown State Street CVC ordinance, it is recommended that the following provisions be included for, alternatively, the property owners or the City. 

CVC Protections for Property Owners 

  1. Advance Notice of Implementation. The CVC, even though voidable, would be a potential new charge imposable upon property owners. Therefore and because it is new, property owners should be given reasonably sufficient time to lease their properties before the imposition of any CVC. 
  1. Reasonable Allowance of Time for Landlords to Market and Lease Properties. Despite the recommendation for the adoption of a CVC, it is recognized that leasing, and especially commercial and retail leasing, can be a lengthy process. Properties must be vacated by prior tenants. Thereafter, properties must be inspected. Leasing and marketing plans must be made. Brokers must be retained. Prospective tenants must be identified and evaluated, and the proposed property usage(s) must be carefully considered. The author of this article is an experienced commercial leasing attorney, and – as such – it is readily acknowledged that  rental rates, usage definitions, and many other leasing terms can be complicated and the subject of protracted negotiations. Even upon agreement of the primary lease terms, the lease itself must be negotiated, finalized, and executed. Furthermore, it is not uncommon for there to be ancillary transactions and documents which are necessary relating to, for example, the incorporation or limited liability company formation of a tenant entity or the negotiation and preparation of lease guarantees. Lastly, in most cases, there are property adaptations and tenant improvements to be planned, permits to be obtained, and certificates of occupancy to be issued. All of these matters take time, and this period is herein referred to as the “Leasing and Improvements Period.” Under any adopted CVC ordinance, property owners should be allowed a reasonable Leasing and Improvements Period prior to the triggering imposition of any CVC. Contrariwise, if for any reason, the subject property has not been leased and is not occupied and open to the public within such Leasing and Improvements Period, then the property owner should start remitting a vacancy tax for each month, or portion thereof, the property remains unleased, unoccupied, and not open to the public.
  1. Streamlining of Permitting Process. Although not a necessary component of a CVC ordinance, it is recommended that the City streamline its permitting process for all commercial and retail spaces within the defined Downtown State Street area and with respect to all proposed property alterations and improvements necessary to be completed prior to the property being issued a certificate of occupancy and open to the public. 
  1. No Diversion of CVC Fee Revenues. Even though the long-term objective of the CVC ordinance would be to collect zero dollars, to the extent CVC revenues are collected, these revenues should remain isolated and earmarked solely for usage in supporting Downtown State Street rejuvenation. CVC revenues should not be allowed to be viewed at any time by the public or by its elected officials as another general revenue source.

Protections for City of Santa Barbara

  1. Tight Definitions of “Vacancy” and “Occupancy.” The definition of “vacancy” is critical. A store can and in some cases should be deemed “vacant” if there is no occupant on-site and if the premises are not open to the public. Thus, even though the space may be under lease, for purposes of any CVC determination, the property should be deemed vacant if it is not being used, is not occupied (with some adjustment for construction and tenant-preparation or tenant- improvements work) and is not open to the public. Without going far afield from the subject of this article, such “open-to-public” definitions are necessary since, without them, property owners could easily avoid the imposition of any vacancy tax by merely having the property under a lease whereby a tenant, even a landlord-affiliated tenant, could execute a ghost lease and assert that the property is “occupied.” Similarly, there must be a tight definition of the term “occupancy.” For purposes of any CVC ordinance, a property should be deemed “occupied” only if, when and so long as the property is routinely and regularly open and available to the public during normal business or retail hours. These types of mandates and provisions would not be unique since, as noted above, these types of open-to-the-public provisions are commonplace in shopping center leases and other master leases.
  1. Escalation of CVC Rate. It is strongly recommended that the CVC rate be increased substantially – even quarterly or semi-annually — if the property remains vacant for lengthy period. For example, the base CVC rate may be $X per square foot of rental space per month (or portion thereof) if the property remains vacant for more than Y months. However, the vacancy CVC rate should be increased to $2X per square foot after for example, 12 months, and $3X per square foot after, for example, 18 months. In the opinion of this author, the CVC rate should escalate routinely thereafter (a) so that it becomes more and more costly for the property owner to allow the property to remain vacant, and (b) so that the City will have more monies in a designated Downtown State Street account to be used to preserve and enhance Downtown State Street.


It is regrettable that there is a need for this article at all. It is regrettable  — but unsurprising — that transitioning from our historic retail and commercial shopping patterns to the newer Internet-based shopping models is difficult. But it is, and the adoption of a Contingent Vacancy Charge ordinance is simple, appropriate and necessary.

In quick summary:

1 –        Downtown State Street is critical to our community’s economic and social vitality.

2 –        Downtown State Street is and should be viewed as a community asset characterized by both public and private ownership.

3 –        Many supportive approaches can be taken, but no meaningful change will occur in Downtown State Street until most of the empty commercial and retail spaces are occupied and open for business.

4 –        The only effective means to generate Downtown State Street leasing is to directly motivate the property owners via a CVC because the dirty little secret that is well-known to property owners is that in SB there are interested and qualified tenants who would readily relocate to Downtown State Street as soon as the market rates are meaningfully lowered.

5 –        A carefully designed (and punitively escalating) CVC will either (a) motivate some property owners to lease their respective commercial and retail spaces or (b) provide ready funds for use by civic authorities to continue to enhance and preserve Downtown State Street.


Especially in the too cranky, too argumentative world in which we live, this author has long believed that most comments, ideas, suggestions, and even recommendations should also be preceded with the too rarely heard phrase “I could be wrong, but….”

This proposal is no different. This proposal for a commercial vacancy charge imposable by the City of Santa Barbara upon inadequately market-aggressive property owners is no exception. In other words, “I could be wrong, but”  — for the many reasons set forth in this article I believe a CVC is worth considering – both seriously and now. 



[i]    For several good summaries of the recent downturning of State Street see, for example, Noozhawk, October 26, 2018.

[ii]  Noozhawk citing Hayes Commercial Real Estate).

[iii]  For a fuller presentation and explanation of many of these ideas and items, see the fine reporting by Ms. Giana Magnoli, Noozhawk Managing Editor.

[iv]  Examples of ideas which focus (entirely or at least in part) upon filling retail storefront vacancies are the hiring economic development consultant; the possible formation of Economic Development Department; the retention of a retail recruiter; and the changing of planning codes to streamline the permit process for downtown commercial space.

[v]   The word “which” is used rather than “who” because, for a multitude of reasons, most commercial properties are held in trusts or by entities such as corporations, limited liability companies, or partnerships.

[vi] While it is beyond the scope of this article, it should be noted that some commentators may suggest that any form of vacancy-based charge, whether called a tax, fee, or charge, would be impermissible in California because under California’s Proposition 13, taxes based upon value of a property cannot exceed 1% of assessed value, without voter approval. However, this author would strongly suggest that the CVC here proposed is easily distinguishable from a Prop 13 tax. First, like building permit and a multitude of other city-imposed fees and charges, it is triggered by the landlord’s behavior. For example, the CVC here proposed is wholly avoidable by the landlord’s leasing of the Property. In fact, the entire basis and objective of the CVC is to not have to impose CVC revenues. Secondly, this is a special area tax which, at least as here proposed, would apply only for the unique circumstances and to the limited and defined area of the Downtown State Street corridor.

[vii]   The phrase “Downtown State Street” is used throughout this article, however a more precise phrasing for the application of the CVC may be the “Downtown State Street Corridor” since the Downtown State Street areas may be appropriately and more wisely defined to include, for example, three streets (i.e. Anacapa Street, State Street, and Chapala Street together with the included portions of the intersecting streets).

[viii] See, e.g. similar taxes which exist in France, Australia, and in some parts of the UK. In addition, Vancouver, BC imposes an “empty homes tax” equal to 1% of the assessed value of non-primary homes and rental units which have remained unoccupied for at least six months a year.

[ix] Calder, R.; Rosner, E.; and Brown, R., (March 30, 2018).

[x]  Editorial Board,, November 19, 2017.


6,000 Pounds of Turkey and The Band’s “Last Waltz”

Posted by Mack W. Borgen November 13th, 2018

Blog No 86 

November 14, 2018 

6,000 Pounds of Turkey 

As my readers know, it is my belief that it is relevant, even important, to incorporate Americans’ words and events of humor, laughter, and “lightheartedness” into our teaching of history. Yogi Berra is rarely mentioned in the same sentence as Ronald Reagan. Johnny Carson had neither the import nor eloquence of JFK. And on and on. But they, too, were a grand part of our history, and those Americans who have shared their humor and good spirits should be remembered as well. 

Arguably, historians are just too often too serious. They are too thick in their thoughts. Maybe people would better embrace the study of history if just every now and then, we focused less upon the dusty dates of ancient battles and instead focused upon questions such as whether the Romans had a sense of humor. I don’t know. I have a sense that Huns were a snarly bunch, but the Romans? I just don’t know. The answer got lost in history.     

Thus, humor and fond recollections are an important part of a nation’s history. 

And in that spirit and in honor of our celebrations of Thanksgiving, possibly it is time to remember the famous concert, billed and commonly known as “The Last Waltz” at the Winterland Ballroom in San Francisco. It was held on Thanksgiving Day, November 25, 1976.

The following Memorable Words and commentary are excerpted from my book, Dead Serious and Lighthearted – The Memorable Words of Modern America – Volume I (1957-1976) (Pp. 363-364) (Footnotes omitted).

 concert scene

 “The examples of Jimi Hendrix, Janis Joplin, Jim Morrison …

brought home the dangers of the road”

. . .

“We needed …  to get out of the line of fire for a while. …

Self-destructiveness had become the power that ruled us.”

. . .

“6,000  pounds of turkey, … a thousand pounds of potatoes

and hundreds of gallons of gravy” 

November 25, 1976. Robbie Robertson, lead guitarist and primary songwriter for The Band, reflecting upon the group’s motivation for staging what was billed and known as “The Last Waltz” on this Thanksgiving Day, 1976. Some have referred to this event as one of the greatest concerts ever performed. The concert was even filmed by then-goateed, then-young, 34-year-old Martin Scorsese. In 1978, Scorsese released a documentary of the event, simply entitled The Last Waltz. The concert was to be The Band’s last performance for at least an indefinite period. The concert was hosted and promoted by Billy Graham and held at San Francisco’s Winterland Ballroom, the former skating rink that had become the forum for many of the great concerts of the late 1960s and 1970s. With the exception of Woodstock, the audacity of the event was unparalleled. Graham insisted that everyone in the audience be served Thanksgiving Dinner before the show― “Six thousand pounds of turkey, 200 of them! Three hundred pounds of Nova Scotia salmon, a thousand pounds of potatoes, hundreds of gallons of gravy, and 400 pounds of pumpkin pie!” were served. But it was the incredible list of performers that created “The (Sixties) Last Waltz.” For more than four hours, the amazed audience of 5,000 people watched one performer or group after another take the stage―The Band, Paul Butterfield, Muddy Waters, Eric Clapton, Neil Young, Joni Mitchell, Neil Diamond, Van Morrison, Bob Dylan, Ronnie Wood, Stephen Stills, Ringo Starr, The Staple Singers, and Emmylou Harris. There were even poetry readings by Lawrence Ferlinghetti and others interspersed between sets. Of course, the night ended with The Band playing The Weight, its greatest song ever (— and, for what it’s worth, one of this author’s favorite songs of all time). But there is no remotely precise date upon which the Rock ‘n’ Roll Era of The Sixties came to an end, and it comforting to all music-lovers that new voices and bands were constantly premiering such as Bruce Springsteen, who along with his E Street Band, had released Born to Run in 1975, just a year earlier. But for many younger Americans, the end of the Rock ‘n’ Roll Era of the Sixties came to an end in San Francisco. On this Thanksgiving Day. At the end of this concert – so appropriately named The Last Waltz.  

Dinner was served at 5:00.

The concert began at 9:00.

It lasted nearly six hours.

At around 2:30AM The Band left the stage.

And The Middle Years of Modern America came to a close. 

– – 

Have your own fun. Read and enjoy. 

Depending upon your age,

recollect and remember


read for the first time

what it was like,

oh, so many 42 years ago – in 1976. 

For your own copy of the three volumes of Dead Serious and Lighthearted – The Memorable Words of Modern America (1957-2015) and to see the new book sale specials  just go to www.mackwborgen/shop . 


A unique holiday gift for yourself or your loved ones. 

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