Taxes are killing us!

[BornAgainPagan]

Unless folks wake up, and begin voting libertarian, rather than for the two incumbent political parties, this process will never end.

Yes, privatize all of our natural resources, that's the answer. If I can't own a river, that's an infringement on my individual liberty! Property ownership should be the standard by which we define liberty!

sigh

 

[dmspilot00]

Yes, privatize all of our natural resources, that's the answer. If I can't own a river, that's an infringement on my individual liberty! Property ownership should be the standard by which we define liberty!

Actually, unowned property is a principle economic problem, causing what is known as the tragedy of the commons, in which a resource which nobody owns is exploited until it is no good anymore.

Inflation is just a hidden tax that has managed to stay relatively low due to recession.

I am not sure what is causing your compassionate hostility toward inflation, but it is a fact of life and is not going away. Do you want low inflation, or low unemployment? You can only choose one. Luckily, the U.S. has, over the long run, had quite a low rate of inflation compared to the rest of the world.

 

[dispatchguy]

I believe taxes should be due the day after election day - I think Washington would look markedly different

 

[merikeyegro]

I am not sure what is causing your compassionate hostility toward inflation, but it is a fact of life and is not going away. Do you want low inflation, or low unemployment? You can only choose one.

Inflation is only inevitable in a debt-based, fiat money system. If the money supply is fixed, inflation does not exist. That's a fact, Jack. Supply and demand at its best. Any increase the money supply without an equal increase in demand (debt taken on by the gov't is money created out of thin air by the Fed) inflates the currency. Econ 101...

 

[Timebuilder]

I agree. However, then you're gonna have the people that spend the money instead of saving it for the "big" check at the end of the year. The end result will be increased taxes on those that are responsible and would actually follow through with it.

It sounds great on paper until you realize that people won't be responsible and actually pay when they're suppose to.

I have thought about that, the "responsibility factor."

If we decided to go that way, all of the tax money could be deposited into an escrow account. Miss two payments, and you're back on the old plan. End of the year, you write from that account to pay the tax. AND you got one year of interest, instead tof the government getting a free "loan" for the year.

Better to go with the consumption tax. That way, no one can say they are paying any more or any less than anyone else.

TB - "Most" of our spending has not come in the form of security spending. Medicare comes to mind ($535 billion). Also, pretty much every other spending program has increased at a high rate (greater than 5% per year). The last Bush budget sought to "limit" discretionary spending INCREASES at 4% for 2005. That's not very Republican. That's three times the rate of inflation which, incidentally, is the result of all this extra borrowed money being slapped onto the economy.

I was speaking of the "most" of our spending since 2000 that has been "discretionary." Medicare is an entrenched program, started decades ago as a socialist attempt to protect the aged, instead of making families step up to the bar and take responsibility, as had been done for thousands of years. Everyone else is dead? Not to worry. There are fraternal and religious organizations that handle that. The truly destitute were a rare thing, but we decided to go down this road to our peril.

Equally unwise was making Social Security, a program that started out in the red with the first recipient receiving more than she had paid in, into a method of supporting the disabled.

Any wonder why it is that every SS beneficiary will be supported by only TWO working people in the near future? Do you think we can tax enough Americans to do that and maintain a viable economy?

I have already resigned myself to not being able to live on the benefit I will receive by age 70, because that benefit will have to be reduced, means tested, and delayed beyond age 65.

It's another dirty little secret that no one will touch. The real hot potato in Washington.

For all of Bush's rhetoric, he has actually cut some first-responder money and inspection money. So, I wouldn't say that this is the only reason. A lot of that money was already there in the Coast Guard, FEMA, etc.

You mean he cut some Federal money, don't you? That's good. The money, the VAST majority of this kind of money, should never leave the states in the first place.

Less money to the feds.

More direct control at home.

Reasonable inflation instead of socialism. That's the choice on that one.

As far as the idea that "only the Dow is doing well right now," that simply is not true, according to economists. ALL of America has it's money in the market. As the market grows, so does our future.

And that's the fact, jack.

 

[dmspilot00]

Inflation is only inevitable in a debt-based, fiat money system. If the money supply is fixed, inflation does not exist. That's a fact, Jack. Supply and demand at its best. Any increase the money supply without an equal increase in demand (debt taken on by the gov't is money created out of thin air by the Fed) inflates the currency. Econ 101...

It's not that simple, but regardless of the theory behind inflation, does it really matter? They should also have taught you the principle of neutrality of money as well. Your previous post implied that inflation was this evil, evil thing out to get everyone, when that is not the case. The average inflation rate in the U.S. over the past 50 to 70 years has been 3.5%, hardly something to worry about, especially when it is 20, 50, 100% in certain other countries.

As far as Social Security goes, yes, the system is going to be a complete economic disaster soon, especially when all of the baby boomers retire.

 

[merikeyegro]

Actually, it IS that simple. More money, same demand = less value per unit of money. Money IS neutral if it's not controlled by the government as legal tender. If we used gold or beer or wood, for instance, we can trade on the free market. The problem is that the money supply is controlled by two entities: the Federal Reserve System (a cartel of private banks with a common pool of cash & commodity reserves) and the federal government. The Fed supplies the loans based on nothing except a promise (that's what I call collateral) and the government spends the money. The government also forces everyone to accept the dollar, negating the free market. So, I would not say that money, in our case, is neutral. It is not true money. It is fiat currency, or currency in name and decree only.

Inflation takes away buying power. So, unless wages keep up with inflation, you lose. Since GWB has taken office, real wages have gone down while inflation has modestly increased. The dollar is worth about 5% less today than it was in 2000 while wages have either stagnated or dropped around 1-2% (I'll look this up later on www.bls.gov). That means a 7% loss in your purchasing power. This is the EXACT same thing as a tax - a 7% loss in real income. So, in essence, it is evil, if you don't like taxes. I don't mind taxes as long as I a) get something for them and b) know that I'm being taxed overtly. Inflation gets me nothing except for a discount on my high-interest loan.

That simple. If you can prove otherwise, I'll debate you on it and am wide open to suggestion. However, this is the best explanation I've read yet. Free market is interrupted...

 

[A Squared]

The other thing about inflation, if wages keep pace with inflation, it has the effect of pushing more and more people into higher income tax brackets, all else equal. This results in more taxes (in terms of real value) being collected from people who are not gaining any real increase in income.

 

[dmspilot00]

First you said that inflation is a result of an increase in the money supply, but then you said the dollar is not neutral. Neutrality of money is the principle that the price level is proportional to the money supply. Neutrality of money also says that the money supply does not affect any real variable, but only nominal variables. You can't agree with one principle and disagree with the other, because they're only different ways to say basically the same thing.

Changes in the money supply, and therefore changes in the price level, and therefore inflation have absolutely no affect whatsoever on real prices or real wages.

It is true that when the nominal wage does not increase at the same rate as inflation, this indicates that the real wage has gone down. This absolutely does NOT show a cause and effect relationship. Inflation does not cause the real wage to go down. Comparing the inflation rate to rate of change in the nominal wage only allows us to IDENTIFY the change in the real wage, but not to draw conclusions about why the real wage changed.

If there was zero inflation, then the economic forces that decreased the real wage would still exist. The price level and inflation do not matter (again, this is neutrality of money), if the real wage goes down, it has gone down, whether there is high, low, or zero inflation.

The real wage peaked in the 1970s and has been decreasing since then. Finding out why is a major issue in economics, but it has nothing to do with inflation.

A Squared does have a good point and something I never thought of.

 

[secks]

Make it a consumption tax. A straight 10%. Everyone pays. No consumption, no tax. A lot of consumption a lot of tax. The rich would therefore continue to pay the vast majority of taxes, and everyone could understand the method.

I can hear the American Bar Association crying now: what about these poor tax lawyers who make a living off our corrupt tax system?

In 1994, Mobil Oil Company's tax forms weighed 76 lb. and could be stacked 6 ft. tall. They employed over 50 full-time employees to figure out their taxes, at a cost of $10 million. I'll bet they didn't pay much in taxes, either.

 

[Timebuilder]

If you think that makes a lawyer cry, try the concept of personal responsibility.