The Fight To Take Our Money

Every day after the kids have left for school I open the door to my teenage daughter’s room. I know the awful mess that’s in there before I look… but I can’t help myself. I open the door. I look. I get annoyed. I close the door. Nothing changes.

I have the same experience every day with the New York Times. Every day I read it and every day something in there annoys me to no end.

My wife calls it masochism.

I call it watching the enemy.

Every Sunday in the Times there’s a column that different economists write. Sometimes it’s Mankiw. Other times Cohen or Shiller, to name a few.

Recently, it was Robert Frank, a professor of economics at Cornell. I’m sure he’s a bright guy, and he could be the nicest guy in the world, but his view of how to fix the economy is a perfect example of all that is wrong with the direction of the country!

Professor Frank wrote about how there are no painful choices to be made in the American economy.

He pointed out how we can quickly cure the lack of jobs by attacking the crumbling infrastructure of our great nation. This would immediately put to work the many thousands, if not millions, who used to work in construction. On this point I actually agree with him.

But then he gets to the hard part – how to pay for it. His recommendation is simply to borrow all we need because interest rates are so low. Yes this adds to the debt, but that’s OK he says… there’s a way to address that as well.

Taxes.

Lots of them. But only on stuff that he believes has “harmful side effects.” Among his examples are to tax traffic congestion (make everyone use a toll tag that charges people when the roads are crowded), tax heavy and large vehicles (although this is already done), and tax wasteful spending, like big weddings.

Yep, his example was the “wasteful” spending of $28,000 on the average U.S. wedding.

What makes me angry is the notion that Professor Frank, or anyone, gets to decide when my personal spending is “harmful” or “wasteful” and then gets to tax me accordingly.

This goes on all the time. In a free society, it makes no sense.

In the city of New York a pack of cigarettes costs $11.90. The cigarettes themselves actually only cost $5.85 per pack. The rest is taxes.

Cities and states pile taxes onto things like cigarettes and alcohol under the guise that these things are bad for you anyway.

Here’s a thought to consider: once taxing authorities had the ability to tax different goods and services at different rates, we were all in trouble. It’s just a matter of time before your city, county, state or federal government finds something YOU do to be harmful or wasteful… and then taxes you into oblivion.

There is no question we need to pay taxes.

I would just like to see governments large and small get out of the business of encouraging or discouraging activity through the tax code. If it’s bad, bring it up for a vote to make it illegal. Other than that, levy a three-tier modified flat tax and be done with it.

I guess Professor Frank doesn’t have young daughters. He probably finds kids “wasteful.” Dang it if I don’t agree with him again, but just a little.


Rodney

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Ahead of the Curve with Adam O’Dell

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Vice stocks are known for performing well in recessions. If frustrated people are motivated to drink and smoke when times are good… they certainly aren’t going to stop when times are bad… whatever the cost.

 

 

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You’re not going to believe what’s on the horizon…

The final bubble of the recent financial crisis is about to burst. When it pops – it could be as soon as November 2014 – millions of Americans will be financially devastated… But others will have the opportunity to get much richer.

This controversial video reveals how you can end up on the winning side of the coming carnage…

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Categories: Economy

About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.