Real Missteps in the System

I disagree with Mike Shedlock on this one. What seems like a good idea remains fraught with peril. A major rationale for spreading Taxes out over a wide base establishes that tax-paying cannot be gamed. Evasion of one type of taxation leads to deeper tax impact from other types of taxation. Case in Point: Without Property Taxes, many successful people would place their accumulated wealth in fancier, and more numerous, residences. Soon, you would find people living in Housing much too expensive for their Income, with a collapsed Resale market because of the Price they would be committed to demand by Mortgage and retention of wealth. People would be led to retain excessively large Housing at points where they could do with far less Space, and therefore the tendency would lead to superabundant construction with young people paying too much for their Housing. Property taxes do have an impact on the market, but much of that impact is beneficial. The Business escape from Taxation remains another aspect, considering that they make a huge draft upon Community Services–both their own, and their Employees; suggesting the Community taxpayers foot the full bill is not only unfair, but also impossible. The major reason for Tax Spread lies in the reduction of tax impact upon one segment of the Population. We do not need the Poor who contribute 60% or more of their Income in Life Support to be forced to pay 40% or more tax on those purchases; by the way, without Property Taxes and Income Taxes on the Poor, Government Services could not be provided; I won't even begin to discuss FICA taxes or their removal. The high Income Earners simply do not purchase or Spend to the degree necessary to tax those purchases at sufficient level. I once estimated that if all the Exemptions for the Poor granted exemption from high Sales or VAT taxes, then the remaining high Incomes would have to pay a Sales or VAT tax of around 320% to fund the current necessary tax revenues for Government services. It does not help that under similar circumstance for the Poor in Exemptions from taxation, that elimination of Income Taxes would raise Sales and VAT taxes to somewhere in the high 800s’ of percentage. Simple removal of Capital Gains taxation would put Us in the 200% range of Sales and VAT taxation. We spread out the Taxation so that everyone complains about taxation, but no one is actually incited to tax rebellion, though there is admittedly great amounts of tax evasion. Economists disagree with me, but Corporate tax evasion through purchased legislation has cost this Country about $12 trillion of national debt since 1963. The advantages granted to Corporations in like period meant only about one trillion dollars in GDP increase per year, over what was achieved in the Period. The actual Gain to GDP growth subtracting the lost tax revenues was probably less than $300 billion per year, or translated, loss of about 200,000 lifetime Jobs over the Period; check the Employment growth over the Period to see whether it would have made major difference. It can be clearly seen that loss of Tax venues can affect the entire economy in ways which no one wants, and quick assessments in the area of Tax placements are usually not Right. lgl