Just Another Rant?

Haven’t posted for a while – just been so busy with work.  After being out of work for 10 months and then getting a job that works me 10+ hours a day 5-6 days a week, I’m definitely making up for it.  But it does mean that the blog (among other things) gets neglected.

AR But during this time, I have listened to the news and read posts from most of you.  And you know, thinking back over the past couple of months, we are still on the same topics.  Obummer is still on the campaign trail trying to sell us on the "new" government-run healthcare, the media is still trashing the TEA Party movement, the Republicans are in disarray (at least in my opinion), and anyone opposed to Obummer’s policies or actions is a racist.  Then there’s the international stage, of where the United States is rapidly becoming either a laughingstock or pariah, and is pissing off most of our traditional allies.  Last is a financial crisis of governmental deficit spending that I believe will be the end of this country if not corrected immediately.

Which tells me that we are all in a big steaming bowl of "not good" in a hand-basket on the express train to Hell…

Quite frankly, the political / government system of the United States has moved so far away from what the Founders of this country had envisioned I wonder if we will ever get it back.  The Founders knew that an informed and involved populace was necessary for the Republic to survive, thus the reason for the First Amendment right to Free Speech / Freedom of the Press.  However, that has been hijacked by a media that is interested more in ratings points and support of one side of an issue rather than fairly presenting all sides of an issue.

We have also seen the advent of the professional politician.  This creature dips into the public trough throughout their lives, voting benefits for themselves (healthcare and pensions) while supposedly serving the public’s interest.  This creature, in my opinion, couldn’t support themselves in any useful fashion if it wasn’t for politics.  It’s no wonder that the original Constitution required office holders and voters to be property owners and to receive no compensation for their service.  Serving in a public office was considered an honor and a privilege, not a career path.

Government is no longer a government "by the people for the people", but is now a government taking care of the people through social programs.  The recently passed health care legislation is only the last in a long line of government programs designed to "help" people.  I submit that while some people need help once in a while when some misfortune falls upon them, that task was not the responsibility of the government of the United States.  Instead, the government is to protect the rights of the population to "Life, Liberty and the pursuit of Happiness," and is not responsible for the success or failure of the individual in their "pursuit of Happiness."

But that is not the case, because what happens if you take away all incentive to improve oneself?  Take this excerpt from a post back in 2006:

…I got to know the mentality of many of these people. The bottom line is that they feel do not have a way out, and since they feel that they have no way out, they are thus entitled to the Welfare. Yes, training was available for them to improve their educational background, but if they went through the training and got a job, their benefits would be cut to a level below that they would be receiving from the Government. Thus, in general, they were better off just sitting around & not working. Some people did go out & try to work, but not very many.

Moreover, what incentive does anyone have to succeed?  I have heard that part of the Obummer tax plan would be to tax families or businesses earning more than $250,000 gross would be taxed at a higher rate.  Why aspire to a higher level of income if you are going to have your hard work taken away from you?

Worse yet, the details of the costs of the government health plan are starting to surface, and it really doesn’t look good.  In fact, it is a disaster of almost unimaginable proportions.  It’s so bad that talk of a national VAT (value added tax) is being kicked around.  Now if there is anything besides a national health care plan being a drain on an economy, it’s going to be a VAT.  For those of you who don’t know how a VAT works, here’s a definition (from Wikipedia):

Value added tax (VAT) avoids the cascade effect of sales tax by taxing only the value added at each stage of production. For this reason, throughout the world, VAT has been gaining favour over traditional sales taxes. In principle, VAT applies to all provisions of goods and services. VAT is assessed and collected on the value of goods or services that have been provided every time there is a transaction (sale/purchase). The seller charges VAT to the buyer, and the seller pays this VAT to the government. If, however, the purchaser is not an end user, but the goods or services purchased are costs to its business, the tax it has paid for such purchases can be deducted from the tax it charges to its customers. The government only receives the difference, in other words, it is paid tax on the gross margin of each transaction, by each participant in the sales chain.

In many developing countries such as India, sales tax/VAT are key revenue sources as high unemployment and low per capita income render other income sources inadequate. However, there is strong opposition to this by many sub-national governments as it leads to an overall reduction in the revenue they collect as well as a loss of some autonomy.

Sales tax is normally charged on end users (consumers). The VAT mechanism means that the end-user tax is the same as it would be with a sales tax. The main difference is the extra accounting required by those in the middle of the supply chain; this disadvantage of VAT is balanced by application of the same tax to each member of the production chain regardless of its position in it and the position of its customers, reducing the effort required to check and certify their status. When the VAT system has few, if any, exemptions such as with GST in New Zealand, payment of VAT is even simpler.

A general economic idea is that if sales taxes exceed 10%, people start engaging in widespread tax evading activity (like buying over the Internet, pretending to be a business, buying at wholesale, buying products through an employer etc.) On the other hand, total VAT rates can rise above 10% without widespread evasion because of the novel collection mechanism. However, because of its particular mechanism of collection, VAT becomes quite easily the target of specific frauds like carousel fraud, which can be very expensive in terms of loss of tax incomes for states.

The bottom line is that you, the consumer, will pay more for your goods and services, and the government gets more money to waste after it takes its cut.  And the politicians from both parties wonder why the TEA parties are popular…

Our government must be taken away from the professional politicians and returned to the people that it is to represent and protect.  The Republican and Democratic political parties are more concerned with power than representing the people that elect their members to office.  We see this time and time again with the irresponsible behaviors exhibited by our elected officials.  The question is whether or not the People will wake up and take action in time to save this country.

3 thoughts on “Just Another Rant?

  1. It is impossible for any thinking person to disagree with your concluding paragraph, Tom. But what we are faced with here is an electorate, who for the past three decades was educated by socialists who have conspired to destroy our republic. By its nature, government is evil for it endeavors to protect itself over the interests of the people. However, if we agree that government is necessary, then so too is taxation an evil necessity. The question, therefore, is how we must structure this evil so that it does the least harm, and the most good. Progressive taxation is an affront to sanity. Excusing people from paying taxes, which is to say disenfranchise them, is insane and unfair. Everyone should pay something to belong to our union.

    That said, I would find the VAT acceptable if it replaces progressive income tax; VAT in addition to progressive income tax is not acceptable at all. You are correct that the morons who run our government have never quite understood that taxes reduce disposable income, curtail purchases, and reduce savings. The more government taxes me on the things I purchase, the less likely I am to purchase high cost goods and services. I may decide to hold off purchasing a new car, a new refrigerator, or a washer/dryer. The market is not destroyed, nor is government likely to collapse if one person decides to delay such purchases. But if everyone delays making these kinds of purchases, then unemployment increases, and so does the tax rate among those who still have a job and can afford to purchase goods.

    It is a never-ending cycle of corruption; the proof of this is that politicians want to discuss taxes (collecting revenue), but they do not want to talk about spending cuts. What is wrong with this picture? Shouldn’t we work to curtail spending before we decide that tax rates are inadequate? It is impossible for me not to remain disgusted with moronic politicians and the people who keep electing them.

  2. Quite frankly, the political / government system of the United States has moved so far away from what the Founders of this country had envisioned I wonder if we will ever get it back.

    Well, we won’t get it back as long as the media continues the Orwellian obfuscation and these politicians proliferate.

    We are in sad need of statesmen. Are there ANY on the horizon?

    In the past history of America, statesmen have come forth to “save” us. I’m really afraid that, this time, the cavalry will not come riding over the hill. Americans have become too soft and too soft-headed to appreciate what our Founders established; instead, Americans want the government to solve their problems. We see this sad trend on all levels in our political system — local, state, and federal.

  3. Mustang – The VAT by itself isn’t a bad idea. The problem is that the politicians will add it to all the other taxes we pay. Of course, cutting government is far from their minds, and the electorate has been conditioned to ignore their antics as long as the politicians fill the outstretched hands…

    AOW – I’m afraid that I do not see any statesmen nor leaders in the crop that the political parties are raising.

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