[OT] Re: Mortgage

Michael Halcrow mike at halcrow.us
Mon Sep 19 16:38:22 MDT 2005

On Mon, Sep 19, 2005 at 03:21:38PM -0600, Sasha Pachev wrote:
> >This works fine, until the Prime Rate goes up. And then you are
> >screwed with a capital 'S'.
> I find it much more productive to fight the battle for financial
> security in the field of financial dispipline rather than in the
> field of income.  You pay an income tax in proportion to how much
> you make. Thus, for every gain there is a certain immediate
> loss. Two steps forward, one step back.  However, there is no tax on
> financial discipline.

I am horrified by this. I can think of few better ways to stagnate an
economy than to encourage this mentality. ``You are punished for
producing, so stop worrying so much about producing, and reduce your
demand for other peoples' production!'' Brilliant. Absolutely
brilliant. I'd love to see where that will get us before too long.

I am not blaming you, Sasha, for leaning this way; it's the tax system
that is mostly to blame at the moment. This problem can be most
effectively mitigated by reducing the size of government (and, hence,
taxes). This is a long-term battle (as soon as the libertarians make
some decent headway against the statists), and in the meantime, we can
make immediate short-term changes to address some of the aversion to
production, like FairTax.


It makes the true cost of government readily apparent in every
purchase you make (increasing pressure against the statist agenda,
which is partially hidden now by spreading out the taxes among a
plethora of collections), it consolidates all the myriad forms of
taxes down into one well-established collection mechanism (saving
untold billions in tax collection overhead), and it removes the morale
hit that we take when we get our paychecks and find a huge chunks
ripped right out from them before the cash ever hits our bank
accounts. Most importantly, people are not punished for producing. If
you choose to spend your extra cash on more expensive things, then you
pay extra taxes, else you keep your cash in investments, and that
money goes to build capital.

There are, of course, drawbacks to something like FairTax, but there
are some interesting ways to mitigate them.

Someday we'll look back on all this and plow into a parked car. 
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