Friday, April 10, 2009

Tax Increases to End Revenue

Tax revenue is way down, because tax rates are way too high. Huge tax increases are about to make revenues go away.

Reason? Third grade concept:

0% Tax Rate = $0 Revenue
100% Tax Rate = $0 Revenue

Yes, amazingly, there is an optimum tax rate to raise maximum revenue, and it's very low. Any rate above very low decreases revenue. For some reason, this concept is lost upon socialists with no business experience. Gee, I can't imagine why.

The sad truth is that socialists aren't interested in raising revenue, they are interested in control. Prosperity is an affront to control.


  1. I know many people that used to think avoiding taxes was criminal. Now they are looking for any way possible to avoid paying them. Sign of the times.

  2. FDRAOA,

    I currently rent an apartment and would like to buy a home in a couple years. However, I expect high property taxes to remain a problem for years to come. It's becoming unaffordable in the northeast. This is what's happening in Hoboken, NJ:

    Read the comments below the article and you'll see that the politicians are already trying to make the increases not look as bad. So, what's your take? By owning a home is one just voluntarily exposing oneself to more outrageous taxing by the government?

    I'm afraid we are witnessing a transition that very few seem to understand.

    First Condition For Transition To Communism from Communist Manifesto

    1. Abolition of property in land and application of all rents of land to public purposes.

  3. You make a great point, I would not convert cash to assets right now, or even in the near future. Avoid debt at all cost, because the debt will remain denominated in yesterday's inflated dollars while the collateral against it drops in price.

    Renting is the way to go, but that won't be easy either - nothing is easy in a depression. Landlords will lose houses and have to boot paying tenants, insurance will eventually be worthless as most insurers go bust, and property taxes will skyrocket as no income flows to government.

    Governments are not rational actors, so they will greatly accelerate the depression by raising prices when prices should fall. Expect some to point to a quick doubling or tripling of property taxes as hyperinflation, but the truth is revenue will plummet, and more will lose their homes and jobs.

    When I pointed out that a decades-long depression was imminent in early 2007, I think most people thought they could avoid it. This depression will ravage almost everyone, and this is exactly how it happens: prices, while plummeting, quickly become hopelessly unaffordable as currency evaporates.

    Hyperdeflation puts prices out of reach much faster than hyperinflation. That is what you see here.

    Hyperinflation makes debtors wealthy since all debt is absolved, which is why it will never happen. It can't happen - no money.


The USA's political-economc system is best described as:

On Nov 2, 2010, I plan to vote (FOR or AGAINST) my incumbent congressman

Free Hit Counter