The 6 Pack Economist

I have a few random stories I looked and a little bit of how I feel about them.  Why because you people care what I think or you are just waiting for 5pm so you can go home and my website is as good as any.

Obama’s Eyes are bigger then his budget
I think the Blue Dog Democrates are starting to see what they signed up for when they ran in 2006.  Sure they were against the war in Iraq and started their career with rather admirable platform, unfortunately it was the rest of the stuff that goes along with running with a “D” behind your name that has scared them.  Combine that with most of the blue dogs being rather new to the game because they unseated republicans who had the seat for 8 years.    These same blue dogs are now starting to smarten up and realize that this budget is going to be a freaking disaster.  And they do not want to sign up for it.  Or all the long time democrates have gotten all the good pork projects.

New York and New Jersey will see less revenues
New York and it’s tag a long little brother New Jersey have decided that punishing the rich people for ever misdeed they want to attribute to them this week is more important than greater revenue for the state.  Raising taxes will lead to lower revenues.  Primarly because they will get the hell out of dodge.  Especially those in New Jersey or New York State.  New York City and Manhatten in particular have a certain intrinsic value.  Basicly a Manhatten address is worth about 50k a year.  But if you live in North Jersey you better like the color of rust and concrete while the rest of the state might be pretty, if you are moving anyway you mind as well go a little to the west and be done with it.

Who cares about taxes if you don’t pay them
This is a little unfair given the details of the tax problem.  It seems legit for the most part.  But it seems very hypocritical that the party of taxes is the same one that does not pay them.  The republicans tend to have trouble with airport toilets.  So democrates are hypocrites when they don’t pay taxes and republicans are hypocrites when they use their tax rebate for hooker.

Living in the northeast super city corridor (Washington DC to Boston Mass) I am used to reading about all the different taxes that get thrown around.  From Philadelphia city wage tax to 12 dollar cigarettes in New York City the region in very tax happy in general.  I am not against taxes.  I think we need them for many community based projects that the private sector simply won’t do or can’t do for a price people are willing to pay.  That being said I hate taxes that are counter productive, like Philadelphia wage tax, or just wasteful like cigarette taxes that go to programs that will be around after everyone finally quits smoking.

My personal and what has been historically accurate view is that government is the most wasteful organization to dump money into.  To list the sheer amount of waste that goes on is too much for a blog read by about 4 people.  Similar things happen in the private sector also but their (used to be at least) consequences to this, like losing your money.  Current bail-out excluded, government usually gets more money for failure then success.  In the government if you run your department more efficiently, thereby reducing your budget, you do not receive a bonus; instead you lose power as some other department takes your budget surplus. 

I have tried to sell the idea of taxes as the purchase price of government services for an area.  So instead of looking at taxes as something that is just taken from you, think of it as the purchase price for government services.  Perhaps if we looked at government more like we look at say Walmart, Target, or Best Buy perhaps we can reward those governments that give us the best bang for the buck. 

Let’s take Philadelphia wage taxes.  Back in the fifties or sixties (I can’t be bothered to look it up) they put this temporary tax on income to build something or other. Back then our economy was based around manufacturing and large labor forces.  So if you wanted access to large labor pools you had to be in the city.  The seventies and eighties changed the standard manufacturing economy (for better or worse).  What replaced it was a service oriented economy and smaller work forces.  Without the need for access to large labor forces companies moved out to the suburbs to avoid the wage taxes (not to mention the oppressive business taxes).

This brings me to the conclusion that when you offer less for the money you have to lower your prices.  This is what happened to Philadelphia, except that instead of lowering their prices to service more customers (residents and businesses) they kept them at the same high rate or only marginally lowered them. The large labor force offered by Philadelphia did not matter, nor did Philadelphia have name recognition like New York City (which is why New York City can run the tax system they do).  The mass exodus of highly paid people and service based businesses soon moved to the suburbs. This began to take its toll on the city. 

I have worked in Philadelphia many times both in the out skirts and center city region.  What I can honestly say is that I have no idea where the wage tax went.  Simple things were not done.  Trash is piled in corners on the streets, abandoned cars on major streets are ignored and just general disrepair is rampant.  Certain portions of the city were great like center city or old city, while other portions just needed general “take care of this crap” to be great.  Of course other areas would require a Marine escort, but we can pretend they are not there like the rest of city hall currently does.   This leads me to the fact that what I get by working in the city or god-forbid starting a business (even more frustrating) in the city is not worth the price paid to do it. 

I love to hear this.  It makes me feel all warm and fuzzy because someone doesn’t get it.  It’s like watching someone turn the screw the wrong way.  Of course there are far too many people who refuse to turn the screw the other way and I just get frustrated and walk away.

Tax the Rich is actually counter productive.  The first thing is that what the government considers rich is not really rich.  It’s well off but your still only about 4 months from poverty.  I was shocked to learn that I was considered rich.  I was like “wow my used car is actually a Bentley”.  Who knew?

Second point is that the truly rich are ones writing the tax laws.  They will ensure that they have a way out.  As the taxes go up for them and the incentive to hide income goes up so does the use of these income hiding techniques.  In the end they pay just about the same they paid before the taxes went up.  But the not-really rich get hammered.  The extra 500 bucks we have to pay does not pay to get a really good account who can hide your money.

Third the government gets little blip of extra income and quickly spend it.  The worst thing for a government to have is a lot of money.  It’s like extra heroin or crack.  It only feeds the addiction.  They will budget it and depend on it next year.

My final point is never try to screw someone who can screw you worse.  The truly rich can get the hell out of the way the on rushing train of taxes.  They can move to the Caribbean.  The not-really rich get hammered and start cutting costs.  Which means your job.

So your taxes are higher but you lost your job so maybe they are not higher. At least you feel good about sticking it to the rich guy.  I am sure he feels bad while sipping on his margarita. 

Just accept that the truly rich have more then you.  What you should be trying to figure out instead is how to get to where they are and not how to take it way from them.