A few thoughts on taxing Savings, Consumption or Gambling?
Savers are taxed by government policies to assist banks to repair their balance sheets. This always happens after a financial crisis when most banks are bust but governments conspire to hide the facts. Prudent savers get hosed by low interest rates, especially retirees. Be in no doubt that this is a deliberate form of stealth taxation of the suckers (aka citizens). Is there a generous national savings system in the US for US citizens (only) that favours the prudent especially the retired, and run by the Treasury directly? I mean a scheme that anyone with savings would use because it is obviously better and safer than ANY private alternative for an initial (limited) sum. Buying a home is a form of saving for most. Is there a nationally available mortgage for well qualified borrowers with simple low fixed rates such as offered to public service employees in Europe? Why limit it to just public employees? Why not let underwater homeowners refinance into such a scheme? You know they are going to walk away anyway so hitting lenders whose losses are mostly government underwritten anyway. Seems to me at a macro level to be a bookkeeping exercise essentially, and would help re-balance the financial decks.
Spenders enjoy low prices on consumption because most goods are relatively cheaper in a credit induced recession (for a while). Meanwhile tax revenues slump but many talking heads are against the introduction of a national (Federal?) VAT, usually on the basis that it is regressive (or all taxes are evil stand of the plain dumb stupid fraternity:-) Be in no doubt that extreme tax increases are inevitable.
Meanwhile the Wall street gambling community continue to play with all the money in the world in an essentially unregulated casino called the Financial Services Industry. Calling this activity an “industry” is part of the scam, of course, like solid marble and stone foyers in banks are intended to reassure. In fact the only “assured” are the salaries and bonuses of the less than competent so called meritocracy (aka kleptocracy). A small tax (stamp duty) on derivatives trading (CDFs) would yield $bns per day for treasuries worldwide. They were invented primarily to evade taxation.
Expecting the completely dysfunctional US government to redress any of these matters is wishful thinking. Most European national governments get progressive (aka liberal) legislation enacted with far greater ease and speed than ever before despite the huge lumbering size of the European Union administration. Watching Obama struggle to make real progress does not bode well for global economic recovery. Serious fractures in the G20 plans are to be expected. Copenhagen was but a mild preview of national self interest and protectionism to come in the next decade.
New Years Eve, 2009
Loosely related articles Self-doubt tarnishes Brand America and Reviving Confidence in the American Economy – China, Investment and the Deficit Hawks and Will Americans Reclaim Our Nation in 2010 From the Thugs and Con Artists?