US Budget for Dummies....

Or the horse may talk.

Liberals are so open-minded their brains fall out. ...Jim Thompson

Nonsense. ALL business taxes are paid by consumers.

I think this article does nat take into account that renters face more difficulty in finding and moving to a new apartment than a buyer of peaches choosing another source. After all, most renters pick their location close to work to minimize transportation costs and would rather cough up the extra 4% rent than face a move and all its costs. That's why the landlord would have an easier time to pass on the extra tax to their renters than grocers to their customers. Elasticity of demand is different in theses two examples and the writer of that article should know that.

To businesses taxes are just another cost that would eventually have to be passed on to the customers to stay profitable.

Correct. The only reason government puts the tax on the business is to hide it from the voter.

Well, internationally, if we devalue the dollar foreigners won't finance our deficit, something we depend on.

Locally, if dollars aren't reliable people won't bother earning them, and don't bother saving them either. There's no point. There's especially no point in working hard and delaying a gratification that dribbles away as fast as you work to earn it.

So, it totally removes the incentive to work and save, essential elements to producing a capital stock for investment. An unstable dollar hurts the little guys whose wealth starts accumulating as dollars in a savings account.

As a practical matter, here's the empirical evidence:

Small business hiring plans plunge to record low

James Arthur

Rents are up even without that, due to the on-going housing debacle crowding people into rentals.

And, median household income has been _dropping_, faster during the 'recovery' than during the recession. People are being squeezed on income on one end, and prices and taxes (one and the same, in different clothing) on the other.

I'm not naturally gloomy (and I'm actually not gloomy now either--I'm having a blast IRL), but we sure are doing some stupid stuff.

James Arthur

Obama's actively doing it. HE is discouraging investment, discouraging hard work, disparaging, dividing, upsetting, scaring, taxing, threatening, spending. I could spew a giant litany of examples, but if you don't see it, feel it, hear it every day, I don't really know what to say except that you're wayyy underestimating how he's affecting people.

The dollar's less strong than it was, say, 15 years ago and there's no end of people wanting to pay the Treasury for bonds. Not only that, but they pay effectively negative spreads now.

I am not talking hyperinflation but the "normal" kind. People will certainly work for dollars even in the double-digit inflation we had in the '80s.

There is a balance to be struck between deflation and inflation. Right now, little guys are hurt more by lower velocity of money than by any decline in the value of the dollar.

indeed, start ups are debt-heavy and generally benefit from inflation.

That has been shown by survey data to be primarily because of projections of poor top line. Poor top line is most likely a symptom of low velocity, which is most likely because of inadequate money supply.

This is the way in which land rents work. It has nothing to do with "liberal" or "conservatives"; it's just the facts.

Land is different.

No, elasticity of demand works out exactly the same. The point is about location.

I might agree but just saying so, without giving the reasons, is no argument.

The fact is the dollar, while pegged to gold, was already devalued, with respect to gold.

The dollar was fixed at $35 an ounce but gold traded higher on the open market (for example, gold is widely used in electronics). That meant you could exchange dollars for U.S. gold and sell that gold on the open market for a profit, reserve your principle to exchange for more U.S. gold and then sell again.

That clearly cannot be sustained indefinitely.

In 1971 gold was repriced to $38 per ounce, then again to $42 per ounce in 1973, but that wasn't enough either.

Nixon decided to 'end the game' in late 1973 when the dollar was decoupled from gold altogether. The price of gold then quickly shot up to $120 per ounce

This strongly suggests that 'the problem' was already existent rather than going off the gold standard 'causing' it.

It could be argued that 'the problem' is central banks and monetary policy itself because countries tend to 'print money', regardless of the 'gold standard', as a consequence of the 'monetary policy' (encourage employment, fund a war, or whatever) enabled by the central bank.

Setting aside who you think "Market Monetarists" are ("market monetarism" was coined in 2011), of course they don't and can, because that's the system they espouse.

So why is it called elasticity? Because it's the same?

Yeap. And then when some of the profits are paid out to share holders as dividends, the government collects another tax from that, too. What a racket!

Since I just explained the exact same thing what's the point of telling me it's 'possible'?

"Fractional reserve banking" IS debt.

Of course there is: start small and grow.

That's a rare bird indeed.

Tell me, when was the last time you heard of a country saying "we got a boat load of money but, by golly, we just aren't going to spend it?"

Not quite. The issue I think you may be referring to was the Fed raising interest rates to prop up the dollar, but that was to stem people converting their dollars to gold and depleting the gold reserve. Hardly a problem of 'too much gold'.

That's why FDR took the dollar off redeemability and prohibited private gold ownership.

What in the world does that mean?

Of course there's 'tension' but it isn't helped by government promoting it, and with cockeyed false 'economics' to boot.

Somehow you took a comment on the Great Depression and switcheroed it into the Sub-Prime crisis.

Problems with "overnight repo financing" was a symptom of, and contributory to, the problem but not 'the problem."

Don't be silly. All tax is eventually paid by the consumer.

The simple fact of the matter is rents, like all transactions, are done for profit (you buy food because not starving is 'worth more' [profit] than the cost of eating) and 'renting' is not the only means competing for the investment dollar.

There are essentially three outcomes to increasing taxes on 'rental property': either rental rates increase (to maintain profit), the value of the rent decreases (fewer 'improvements', less maintenance, etc), or people exit the rental market, till rates increase (restoring profitability).

'Rent control' necessarily leads to the latter two, since the first is what's 'controlled', and, if tight enough, devolve into a crisis of the third.

In all cases the renter pays in either higher rent, less value for his dollar (decrease in rental value) or shortages.

Of the 4 'cases' two allegedly put the tax 'on the landlord' and both are seriously flawed.

"lf tenants have many options ? like living in their parent's basement or taking on a third roommate ? then the tax burden will reside with landlords and not renters."

No, that simply drives landlords out of, or into other, business. Not to mention I'd love to see how they're going to pay a 'rental tax' on unrented property, because the now non existent renter is "living in their parent's basement."

So the actual result is the renter faces a downgrade, because he's stuck "living in their parent's basement," and the landlord isn't paying the tax on unrented property, a damn good incentive to get out of the business, so the 'purpose' of it is defeated.

Or, alternately, the landlord raises rents and simply caters to a 'high rent' clientele leaving the poorer renter permanently stuck "living in their parent's basement."

"If landlords do not have many options ? because of an unwillingness to dump properties on to the market in order to avoid the capital gains tax or because of an historic attachment to the property ? then the landlord will bear the tax."

No, the 'alternatives' (such as sell the property) existed before the tax and are already factored into profitability (including the 'capital gains tax' hit). Increasing rental taxes breaks the profitability analysis, and the 'unwillingness' because they aren't landlording for 'the fun of it'.

Now, if you want to 'bet' your rental rates on the landlord having some nostalgic "historic attachment to the property" then you're living in la-la land.