conservation of Euros

end of

Yup. And now they are talking about taxing services. Meaning what I cost my clients would then go up by x percent, or the cost of doing business in California would go up by x percent. Which will increase the exodus because the guy 50 miles east of here in Nevada doesn't have that cost. I sure hope that the 2/3rds rule will hold to avert such damage. Every business or person leaving the state will cause the net tax from that to drop to zero.

And "put people out of work."

Yup.

John

But some taxes require you to hire an army of bookkeepers and CPAs and attorneys just to figure out how much taxes you should pay. Luckily, all their fees are tax-deductable. This year, we will spend more on the droids than we will pay in taxes.

John

the

filing

Simple fix: don't tax income.

John

end of

Since we're increasingly a services economy, we should tax services and simultaneously reduce tax rates on stuff.

John

I see that as faintly odd. Taxing businesses for buying stuff to help run their business and new equipment doesn't really make any sense.

It does provide the odd interesting loophole. My supervisor at university tried a lawnmower as a company expense (ruled invalid). We tried company bicycles and that was accepted!

It is different to what I am used to and just as messy to implement. If anything you have the same nightmare scenario as UK fast food places where the price you pay depends on whether you take away or eat in VAT=0 or 17.5 respectively. I presume that noone bothers in the US like buying stuff from another state to evade state sales taxes.

It is relatively straightforward provided that you do not have too many different rates and/or wierd exemptions. Different to what you are used to - but I think an end user purchase/sales tax would be a lot cleaner.

Regards, Martin Brown

end of

Well, if that happens and they also hit consultants and contractors with it I may finally have to move to the island to drop my cost to clients back to where it was. Luckily in my line of work it doesn't matter where I reside. Selling a home in CA, that's a whole 'nother matter right now :-(

Moving the business to Montana and will make that problem go away :-)

Yup, I also pay a chunk of money to my CPA so my bases are covered and thing are all legit. I guess in technical terms that's called "compliance costs". And it doesn't move our country one iota farther in terms of technological leadership.

Yeah, but how do you deal with income that _has_ already been taxed but not spent yet because people saved it for their retirement? A flat VAT-type tax is the same as confiscating xx% percent of that. Not fair at all.

We are talking here of industrialised manufacture that was possibly two or more orders of magnitude more productive. All the profits went to the mill owners and their workers were left to starve on a subsistance level of pay because it was marginally better than being out of work.

The mill owners lived like Gods as did the iron masters. One of our local iron masters who was pretty benevolent for the time was an inflation adjusted multibillionaire in the early 1900's. He and his mate Andrew Carnegie paid to endow Middlesbrough public library.

Not all of them were miserly penny pinching scrouge type characters, but enough of them were to influence Engels and later Marx.

The same was true of industrialised machine based cotton mills powered by steam engine. The difference was they could prey on large numbers of starving unemployed penniless former handloom weavers. The profits were entirely for the mill owners and were immense whilst life expectancy for the workers housed in slums was poor at about 40.

It was even worse in the iron & steel industry just with a few notable exceptions they were quite happy to evaporate a few more employees if it made them extra profit. Fettlers were relatively well paid but died even younger than the already low average.

This wasn't about competition though it was about screwing the poor sods at the bottom of the pile into the ground knowing full well that they were individually powerless and a consumable item.

Regards, Martin Brown

Well, nobody actually implements it at the opamp level. We do not pay sales tax on anything that we buy "for resale", which isn't much of a hassle. It's mostly an honor system.

If

People make a great effort to buy out-of-state to avoid sales taxes. In theory, one should confess an ebay buy and voluntarily report it to the state, and pay sales tax. Nobody does, at least not individuals. Companies are subject to audit, and submit sales tax reports and checks anyhow, so most do keep the records properly. We collect sales tax on stuff we sell to end users in California, so we do send in reports and checks, and we include our own equipment purchases.

It won't happen, because it's too visible.

John

Yes, but it would also make my edgier employees go away too.

We could set up a manufacturing company in another state, or just subcontract manufacturing and some engineering there. Arizona sounds good, just to tweak the local idiots on the Board of Stupidvisors.

John

As I suggested, exempt basics, like food, reasonable rent, generic medicines. If people can afford a yacht, they can afford to pay sales tax on it.

John

I dunno, depends on whether they are the outdoors kind or not. Once a SW guys threw the question into the round: "What if we all packed it up and moved to Bozeman, Montana?". Some silence. Then one by one the guys uttered "Yeah", "Cool", "I'd come" and so on.

Check the tax situation first, all taxes including property taxes, cost of living, et cetera. AZ may not be the first contender then.

Then you also have to exempt cars, sofas, washing machines, dryers, blood pressure monitors, shoes, jeans, shirts, chain saws, firewood, TV sets of non-obscene size, stereos, telephones, everything at Home Depot, ...

Maybe they have some "boycott days" special deals.

Doubt it. There's actually emails going around suggesting to prefer AZ products and services, and boycott same from regions that turned hostile towards them. Got one early this morning. Even if only some quotes in there were true that would be rather sobering.

You've peddled this nonsense before. Unemployment in the US was around

When you last posted on this subject, you ignored the fact that unemployment got down to 9% at the start of of 1937, which did make nosense of the story you were trying to sell.

Some economists do better than others; classical monetarist economists still believe in the "perfect market", because it keeps the math tractable, and give answers that suit the rich, despite the fact that it's predictions have very little to do with reality.

Keynes did better, but he didn't have the tools and the information that today's "econophysicists" have at their command, and they don't do all that well either.

What intervention do you have in mind?

Governments did nothing in 1929. The New Deal wasn't enacted until

These things happen when belt-tightening is imposed from above.

Whatever the cuts are, they haven't had time to have any "serious effects on the economy" beyond inspiring a brief general strike, which seems to be more political theatre than any kind of serious power play.

-- Bill Sloman, Nijmegen

It's not exceptionally big or incompetent, nor - apparently - all that honest.

Not that this matters - the Greeks are going to have to balance their budget before the loan guaranties run out