Taxes 201: Law of Diminished Returns, a fable

The government of Elbonia is in trouble, they overspent on their budget to meet some short term emergency need, to meet that need, they raised their tax rates on the top 10% of the earning population. In that dire time of need, this move was successful, and the nation survived the crisis and came through stronger. Now the crisis is past, and the Elbonian gov...ernment has just collected a record amount of revenue, and it decides to spend it "on the people" expanding its offered services with free or nearly free medical care, boosts to local education institutions, new enforcement agencies and urban development projects. The move is very popular with the people, and there seems to be no immediate downside.

So the Elbonian government raises its taxes again, on businesses and the top earners in the nation, so that few of the middle class and none of the poor bear any longer, any cost of government programs. And so it expands itself again, offering even more services and promises, doing things that used to be done entirely by the individuals or local governments or private organizations. Unemployment rises a little bit, because the tax burden on the big spenders has made them cut back on demand. But making it worse, the rising unemployment means that the demand for relief from the Elbonian federal government has lead to another tax hike on the top earners.

Revenue increases again, but fewer businesses expand because they now lack the investment capital, and the expanded agencies of the Elbonian government have placed additional cost of operations for inspections and regulatory requirements have cut into their ability to hire, and extended the time it takes to get permission to build. The top earners in the Elbonian population have started to react to higher taxes by spending much less, and the new tax on luxury goods by the Elbonian state has lead to a much reduced demand, more of them now are going overseas to buy the same products at a much reduced cost. Employment rates continue to fall, generating demand for additional relief from states, who now have a reduced level of sales taxes coming into its coffers, so that state budgets are now in shambles with unfunded pensions and a beaurocracy that no longer has the same level of private industry taxes to sustain it. The people too, need relief...and the Elbonian government raises its taxes yet again...meeting at least for now, the great needs of its people, on the backs of the wealthiest part of the population.

But now the wealthy have caught on to the way they are being played. They no longer have an increased benefit to paying taxes, the tax laws do not protect them equally, and their money is simply being redistributed, increasingly often to expanding government labor, and less and less to the people it was originally meant to help. The services grow, but the private industry that supports it is taxed into stagnation since the movement of money that grows the economy has been bottlenecked through overregulation and excessive taxation.

So the response of the rich to sustain themselves is to spend less, and hide more. The tax revenue drops off that year, as individuals hide their assets to keep it from being siezed, the middle class, less able to hide its wealth, becomes a target instead of a goal for the people to aspire to join. Now everyone who has anything, is doing their best to hide it from the Elbonian IRS, which must spend more on enforcement and fight long battles to get money...revenue drops off that year...and the next...and the next...until total economic stagnation means that the rich do indeed get richer by doing business elsewhere, while the poor get poorer because they cannot do business anywhere.

Well, there's economic strife, the continuing wars in Iraq and Afghanistan, but what warms my heart is that pet ministries are growing.

http://www.laughinginpurgatory.com/2011/10/pet-ministeries-are-growing-world.html

Tweet.

Tweet.

Tweet.

Tweet.

Tweet.

Got his ass?

Great, so Libya is all fixed then. Glad to hear it.

In Down Under news, we now officially have a carbon tax, legislated but not to kick in till next year.

http://www.dailytelegraph.com.au/news/gillard-governments-carbon-tax-package-passes-through-the-house-of-representatives/story-e6freuy9-1226164526785

Apparently we're "leading the world". Wonderful. I thought having nearly no public debt, a reasonably sane entitlements regime, and a relatively free society was already leading the world. But it will all pay off when the US, China, and India adopt similar schemes!

Or when pigs fly. Which would be preferable.

Christ, what's with the sarcasm? Who in the world sold anything to you with rhetoric like "all fixed"?

Anyway, I want the son, Saif al-Islam. Ever since that horrible speech, I've been looking forward to the takedown.

I wish Crid would do stand-up. I just love him!

Kristen, Ltw needs to understand that sarcasm is precious... You can't just go squirting around the living room like that. You have to choose a target.

At 735pst, they're saying Muammar is gone. Some of them anyway. There is some doubt.

I've seen Uncle Muammar's recent picture.

It don't look so good for the ol' boy. Looked pretty dead to me.

Of course, it could have been a body-double...

>> Of course, it could have been a body-double.

Where's Bob Dylan this morning?

Better be careful. He may have just been taken down from Quad-daffy to Tri-daffy.

"The Tennessee Department of Safety and Homeland Security on Tuesday partnered with the U.S. Department of Homeland Security’s Transportation Security Administration (TSA) and several other federal and state agencies for a safety enforcement and awareness operation on Tennessee’s interstates and two metropolitan-area bus stations. They are randomly inspecting vehicles on highways in Tennessee."

http://tennesseenewspress.com/2011/10/19/tsa-checkpoints-now-on-tn-highways/

Iowahawk tweet:

"Breaking: Gadhafi Dead; Elusive Dictator Shot at Grace Jones Garage Sale"

http://twitter.com/#!/iowahawkblog

Love him.

"I wish Crid would do stand-up. I just love him!"

Megadittos.

Or write a book, if for no other reason then to show Greg Gutfeld how things REALLY should be done.

Strong stomachs only.

"Where's Bob Dylan this morning?"

Heh, I was thinking Gene Simmons.

http://tinyurl.com/444hr3k

They got 'im alive! The shitpunk!

Now they say he's gone, killed by... Francois!

This afternoon I shall celebrate with a serving of potatoes in the French style.

(like this)

humor

A regular commenter makes the news...
http://www.austin360.com/watercooler/freelancer-heard-on-npr-stations-fired-for-protest-1924708.html

Next

I tried posting a link to a story about Lisa Simeone's firing from NPR, but the spam filter ate it.

WHAT?!

Who knew NPR even had ethics rules? Who knew NPR even had ethics?

Phooey... Clean house. Or better yet, sell the public broadcasting's spectrum space for whatever price Ebay will offer.

"...a relatively free society..."

Oh? What happened after the Port Moresby massacre?

I want to go on record supporting Zombie Uncle Muammar's attempt to regain the top spot in Libya.

?

What humor? He posts someone else's tweets, ad nauseum.

Yeah, but I'm heterosexual.

Patrick, don't be jealous. It is not all about you.

Late to today's free swim.

Item number 1

Something worth protesting, #OWS (if true), more germane to us than your student loans:

http://blogs.reuters.com/felix-salmon/2011/10/20/is-the-sec-colluding-with-banks-on-cdo-prosecutions/

Item number 2

How many people cheering Gadaffi's death today opposed our intervention in Libya without Obama getting congressional approval? I did. Can't say I don't feel some conflict. Another tactical success from tactics of dubious legality.

Chang: don't be bursting bubbles now!

"The Tennessee Department of Safety and Homeland Security on Tuesday partnered with the U.S. Department of Homeland Security’s Transportation Security Administration (TSA) and several other federal and state agencies for a safety enforcement and awareness operation on Tennessee’s interstates and two metropolitan-area bus stations." -- Melody at October 20, 2011 9:23 AM

Thank you for the alert. That is absolutely and totally stupid. And unconstitutional.

I want to institute this nationwide. The day that every trucker is subject to random search just for doing their job -- with the penalties for not being on time -- will be the day the TSA goes away.

Apparently cash is no longer legal tender in Louisiana, at least not for used goods! In the name of "security" all transactions (buying or selling)in used goods must be in check or electronic form, AND the personal information of seller or buyer, as well as a description of the goods must be recorded.

This will apply to garage sales, flea markets, Goodwill, etc, but there is an exemption for pawnbrokers. Note that this is an effort to stop the sale of stolen goods... why pawnbrokers get an exemption is beyond me.

Rather than hyperlink, I'll just post the URL, I don't want to get caught in Amy's spam filter! LOL!

Read it and weep:

http://www.outsidethebeltway.com/louisiana-makes-it-illegal-to-use-cash-to-buy-used-goods/

I don't know who annoys me more, the nanny-state liberals, or the security state conservatives (this particular case is from the latter). Both are enemies of freedom.

Wake up, Sheeple!! Can't you see?!? It's all of a piece....

If you pause it immediately, select 1008P HD, and give it a couple minutes to load, it's intense.

This is more of a personal rant...sorry.

What is it with places taking reservations and then not even being close to ready when you show up. A group of 8 of us had a reservation for 8pm last week. We turn up about about 7:50...it would be a few minutes... We finally got seated 8:45, drinks taken 9, food order 9:30...just ridicules.

Last time - different place, different city in fact - over an hour wait past the reservation time.

Crid, are you?

Chang, yes, I'm insanely jealous. I just want read someone else's tweets all day and post them to a blog so people can tell me how witty I am. (I refuse to get a Twitter account. Twitter justifies the adage, "Just because you can do something, it doesn't mean you should.")

I am all about soliciting expressions of warmth from the visitors of this blog.

Every word I select, every letter I type when composing a comment has as its explicit purpose the envelopment of Amy's visitors in a cocooning miasma of patient nurturance and harmonious fellowship... Without regard to the various experiences, principles, opinions, or enthusiasms which might –in some lesser forum– divide us. Ask anyone! No other commenter does so much to make people feel comfortable in their own skin, confident in the righteousness of their own first impulses.

Frankly, though my steadfast comportment may be intimidating to you, I'm just a man... Flesh and blood. And I need to be loved. By total motherfucking strangers. So I figure that buttering people up, using trivial (and famously brief) jokes taken (with attribution!) from one of the Internet's most well-known outlets, will eventually cause folks to admire me in an intensely personal way. And then I'll be able to exploit them however I want. Molding their minds like putty in my hands, I'll expand my power base in subtle yet momentous ways, carving off ever-larger slices of mindshare and influence.

Let's just take, for example, Kristen, who offered the kindness seen above. Now, here's what I know about Kristin: First, her name is spelt either Kristen or Kristin, but not Criston. Second, I think she's a woman. Third, I think she's been on here for at least a year, maybe as many as five. Fourth, I don't think she's same Kristin as the one I worked with a few years ago, but every time the name scrolls by I'm reminded of a smokin' blond from back East. Fifth, while I have no idea what her system of beliefs is like, it's reasonable to assume that I've called her out on something silly that she's said over the years, and done it in a way that got under her skin. Sixth, I don't care what that thing was, because I'm right about everything all the time, and if she still wants to argue about it, my opinion has probably not changed too much.

Did you get that? Items 5 & 6 are important. I don't bother taking notes on people, because I'm not trying to flatter anybody. Comments are my understanding, not selected for purposes... Not hers and not mine. So I'm always fully armed.

What are you supposed to want from people here?

Three commenters have reached out over the years... Two lovely women and a superfreak-brilliant gentleman, each suggesting we meet for casual food. We did, and it was fine. Nobody ever sought or received investment in real estate ventures, or information about secret political projects, or anything beyond conversation and hail fellow well met.

This isn't for sex, money, admiration, Christmas cards or even a meager human connection in a world that doesn't care. All I want is enough thoughtful disagreement to hone insight. (Some folks aren't up to it.)

What do you want out of these people?

Sorry, started yawning at paragraph 3. Life's too short to be bored.

what patrick said. Your opinion of your self importance is awe inspring crid

Patrick:

Laaaame!

Naw, you guys want me on this blog... You NEED me on this blog. Obviously, I bring texture and meaning to your time on the internet. Life's too short for expressions of boredom which will never be heeded... Why not just read something of interesting?

Crid, to be perfectly honest with you, a few weeks ago, whenever it was, when I started seeing all these posts welcoming you back, my first thought was, "He was missing?"

However long you were absent -- I don't know (or care) -- I didn't happen to notice the world (or Amy's blog) was in imminent danger of coming to an end during that time. Or that the blog suffered in quality.

I don't usually notice you at all until I see post after post after post after post of someone else's tweets. If you're the favorite of many posters on here, fine. You just don't happen to be anywhere in my top ten. There are folks that I enjoy reading, others that I enjoy taunting. You just happen to be neither.

Paradox! You're too blasé to comment. Golly.

Ordinarily, I would be too blasé to comment, Crid. But I found myself annoyed by the consecutive tweets. Not excessively, but you did just enough to rouse me from my torpor. I wasn't in the mood for Spam and eggs. Sounds like Twitter fills your days and nights with laughter, love and fulfillment. Knock yourself out, I guess.

But perhaps you'll like this. It's Chapelle. Something about a gay chapter of the KKK. So perhaps it's the Gay-KK. Or KK-Gay. The Gay-Gay-Gay?

From "nausea" to "knock yourself out".