Less really is more!

Mies van der Rohe’s principal, Less is More, applies to more than architecture. The Japanese perfected this notion long before he thought it up. Their gardens, houses and cuisine all reflect this minimalist, pure approach. Not their apparel, though.

Of course, WW II changed all that . . . for a while.

But IFO today is referring to the property tax notice she just got in the mail. It is $870 LESS THAN last year! Why, when everyone knows property taxes are going up? Because she downsized in the interim. Her current abode is about half the size of the previous one.

As far as income taxes are concerned, you have to have less income to pay lower taxes. That is known as an economic disincentive. That is why CUTTING income taxes usually results in more income to the taxing authority – people have an incentive to earn more because they can keep more of what they earn. That is counter-intuitive to many people.

Read what is going on in some European countries – Spain, Greece, Italy, among others. VAT taxes and income taxes are going up in many of them. Their governments are always “surprised” or “disappointed” when there is less revenue than they expected. Geniuses!

Here’s how they think: “We are getting100 euros a year from VAT taxes now. If we raise the tax 10%, we should get 110 euros. Nooooo! Only 90 euros came in. How could that be???” Ans. People bought less because they couldn’t afford the higher price of the product.

This is how Democrats think, too. It’s only those pesky Republicans who stand in their way. Darn! But IFO’s readers already know this.

Investment lesson: if business taxes increase, you can expect shareholders to take a hit from the loss of income that results. So, if you have the patience, read the quarterly and annual reports of the companies you own stock in to see the discussion, if there is one, of how your companies are planning to deal with that eventuality. Usually found in Risk Factors.

Advertisements

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, Individual companies and tagged , , , , . Bookmark the permalink.

Leave a Reply

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

WordPress.com Logo

You are commenting using your WordPress.com 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 )

Google+ photo

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

Connecting to %s