Taxing

Avedon questions the conventional wisdom that you can’t raise taxes in a economic downturn and wonders why we don’t tax unproductive money, like the over one trillion dollars corporations have ‘tucked in their mattresses’.

I won’t comment on that, but I will note that it would be nice if the Federal Reserve Banks started charging ‘fees’ on the excessive funds that member banks are hording, rather than paying interest. After all the member banks are starting to do this to their customers.

When Republicans talk about ‘cutting taxes’, they are only referring to income taxes, as if those were the only taxes anyone pays. Given that more than two-thirds of the GDP of the US is based on consumption, why is there no discussion of cutting sales taxes?

In Florida taxes on corporations were cut at the same time that ‘fees’ for things like vehicle registrations and driver’s licenses were doubled. Given the almost total lack of public transportation in the state, that was a nasty thing to do to people in minimum wage jobs who were already hurting from high gas prices. Obviously the money spent on the increased costs of driving in the state came directly out of the amount that consumers had to spend in stores.

The real problem with Republicans is that they never want to offset the costs of reduced taxes in the bad times. When times are good, they use that as an excuse to cut taxes even further. It doesn’t even enter their minds that you should use the increase in revenue during boom times to pay off debts and build up funds for the bad times that will follow.

The unemployment tax is a prime example of how little they understand about reality. The legislature passed a law that increases the unemployment tax during periods of high unemployment. They don’t understand that the tax should be high enough during the good times to cover the cost when things turn bad. They keep talking about ‘the family budget’, but their families apparently don’t ever bother to save anything for a ‘rainy day’. They create the account for the ledger, but they never put any money in it.

A government budget has almost nothing to do with the budget for a corporation or family, but if you are going to attempt the comparison you should at least use the budget of a well-run business or responsible family.