Beware: they are taking your money

HT – Wikipedia: Hieronymus Bosch: The Conjurer, 1475-1480. A pickpocket, in cahoots with the conjurer, is shown at far left.

No, not the dreaded foreigners from Eastern Europe and North Africa, though these are getting some fairly hefty sums through burglaries and robberies and picking pockets.

No, I’m talking about what the lapdog press calls “cash-strapped” governments. This is an observation already noted by one of my favorite bloggers – Simon Black, The Sovereign Man. To paraphrase, when governments get desperate for money, they will simply take it.

The U.S. has tried to take it from all of us by inflating our money supply, but that’s not working, so they are skimming thin slices from here and there – Social Security COLA no longer operating and Medicare “insurance payments” (extortion) going up; fines on businesses for not following some arcane regulation (extortion – pay or we’ll find more “violations”); increasing license fees and gas taxes…

Is there any connection to our deflation? Meaning that ordinary people have less money? Why, yes, Cosmo, there is!

Even the Swiss are getting into the game. Unfortunately for their governments, their people get to vote on practically everything. Plus, with just about 7 million or 8 million people and multiple layers of government, the elected officials and bureaucrats are closer to their people than in the U.S. So their taxes aren’t so extortionate… yet.

Swiss voters just turned down several local increases, even in the face of a well-funded and concerted campaign that included emotional blackmail: “We need this money for exerise halls and free-time activities for youth, programs for the elderly, etc.”

However, they do have the pernicious federal VAT – value added tax, or more worth tax – mehr wert steuer.

I remember back in the 1960s when Germany instituted this tax. We read about it in Time Magazine and the Intl Herald Tribune. The brilliant reporters and commentators, spoon-fed their ideas by think tanks and greedy US govt ministers, were saying, “We should do that. Look how rich Germany is getting. We have that nasty income tax and it’s just not doing the job.”

Rarely mentioned was that Germany was following theories of the Austrian school of economics and didn’t spend past their means. That’s the same with the Swiss.

Economics Lesson – it doesn’t matter how you take the money or what you call the taking mechanism. Fair tax (that’s a laugh), income tax, property tax, sales tax, transaction tax, VAT, whatever. It is how much you take and how you spend it that matters.

LESSON TO REFORMERS – forget the mechanism, focus on spending!


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
This entry was posted in Basics, Economy and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s