The 6 Pack Economist

Obama blessed be his name has decided that he will close the tax shelters used by corporations and individuals.  In other news new tax shelters have been opened in other places.  In thirty years they will clamp down on those shelters too.  Of course the first shelters would have been forgotten about and will be reopened.

Unfortunately for Obama blessed be his name did not get his memo that many of the people who put their money down in the shelters are the same people who put him in office.  Either that or his supporters got the memo a few weeks ago and have since switched to other forms of tax shelters.

I have a memo for them.  People hide their money in off shore accounts because the price to hide the tax is less then the tax to be paid.  A i thing happened to england back in the colonial days.  Although this was a tariff and not an income tax but the principle stands.  The short story is as follows.  The english government in trying to raise revenue for some bridge to nowhere or invasion, decided to increase the import taxes.  The taxes were so high that rich people would pay a smuggler money to avoid the taxes.  To combat the smugglers the english government hired police to watch the shore line for smugglers sneaking ashore.  For those who fell asleep during geography class the british isles have a rather long coast line.  So anyway the English government saw a net lose in tax revenue.  After they lowered the import tax to something reasonable, it no longer paid to avoid the tax.  Smugglers had to find meaningful work as tax collectors and the government saw more tax revenue.

What lesson can be learned from the above story.  Most likly not a goddamn thing, this is the internet after all.  But don’t make is so good to hide money and people won’t do it as often. 

On the bright side some spam engine just had something interesting to read.