Junkie Nation New Ruskin College
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Lecture Notes: 09-30-04 Junkie Nation
It may have occurred to some since our last lecture (see Lecture Notes 09-25-04), that, if it is true that there is no such thing as “progressive taxation,” then is there never to be social justice? Is there no way to right the scales of inequity and alleviate human suffering? Is there nothing that can be done?
Well, of course dears, yes, there is much that can and ought to be done, but first answer why you think the place to have started was taxation? Of all the starting places why would you think we should begin with taxes?
Is it not because you want to take from the rich? Don’t you start your analysis with taxation because of social vengeance? ‘They have too much.’ ‘Capital is theft?’ Or, ‘Take from the rich and give to the poor.’ Robin Hood? You think: ‘The poor are poor because the rich have too much?’
However, once you have agreed to forgo wage and price controls, (and you should agree), then you have agreed to leave people with their property. Leaving people with their property, seeing as how there is inequality among their abilities, then you have agreed that there should be inequality of property. You will never be able to create equality among them, certainly not by taxation.
Now you have been deluded about the idea of “progressive taxation” for many reasons; because you believe in an objective structure of the world, because you have been lied to about these matters for generations, because of, what Ludwig von Mises called, the fallacy of the evenly rotating economy, for many reasons you have been mislead, but mainly you want to take from the rich and give to the poor because, more than wanting to help the poor, you want to hurt the rich.
But once again, I say, that if you do not impose wage and price controls, unless you take their property, your “progressive taxation” will simply be redistributed by the market.
The rich are rich, they have been moved to the front, because the consumers demand their products and services. As long as they are allowed to work out these relations among themselves, the rich will retain there position in front, in high demand, and every other supplier of goods and services will fill in to the rear with lesser and lesser demand for their goods and services. This is a law of the universe. If you try to interfere with it, and for example, try to place those in the rear in the front, they will be trampled by the people as they chase after the leaders whose goods and services they prefer.
You can not reverse this order with taxation, in the absence of wage and price controls, as every tax will simply be added on to all the other costs and redistributed to the consumers in the prices. For example the Value Added Tax (VAT) can be seen as the Progressive Income Tax one day later. On April 15 you assess the owner of a hotel his income tax. On April 16 the owner raises the rate on his hotel rooms by an amount to cover the tax. But this is the VAT tax. Indeed the VAT may be said to be more “fair” in that it is applied to every hotel room, i.e. even to hotels that otherwise would not be able to, for what ever reason, raise their rates. Under the Income Tax some hotel owners may not be able to raise their rates in response to the tax. However, on April 17 the VAT tax disappears in the whirl of the market as all costs are swept along and redistributed by the same market forces that move the rich to the front and drop the poor off in the rear.
This is why most economists shrug their shoulders when asked as to the “incidence of taxation” or which tax is more fair. It is not just that they are agnostic. It is true that the science of Economics imparts no special way of perceiving “fairness.” You would be better going to ask the inmates of a Seminary what is fair as ask an economist. Economics is the study of remunerative human action, meta questions of “fairness” are outside its scope. But the more important reason economist can not answer this question is that the economy is a dynamic process where Income Taxes, VAT taxes, all taxes are being swept up in the flurry of the market and disappear from sight in the prices.
In general the lower the taxes the better. The ancient Taoists would have appreciated this point. The less interference with the people and their choices the better. Less chance of being trampled. It is true that Dr. John Kenneth Galbraith has devoted his career to explaining all the ways the consumer’s choice is less than it appears but what ever freedom they have we are best leaving them with it such as it is.
Secondly, we can say that the more defuse the tax the better. Simply because there is uncertainty how the taxes will be redistributed, we should keep them small and apply them at as many points as possible so that if they do interfere from time to time with market activity, their impact will be the less. Instead of such a heavy reliance on the Income Tax we would do better to reduce that tax and supplement it with a VAT tax and Capital Tax. The Capital Tax would also be redistributed throughout the market, but it would allow us to lower our reliance on the Income Tax, and it would also stimulate the investment of capital into productive investments instead of conspicuous consumption, in as much as the tax would be owed whether the capital earned a return or not.
Now the point I want you to see is that taxation is the wrong place to look, if you are seeking social justice. Where is the right place?
Where the money is spent!
The only place you have control, (at least in principle), the only place where you can establish social justice is in the expenditures.
(In practice the elite monopolize the public expenditures for their own enrichment. For example the Golden Gate Bridge was supposed to advance development by connecting the growing San Francisco to Marin County. However the Bay Area elite then down zoned both counties turning the bridge into a $4 billion amusement ride. So the poor pay the most in taxes and prices and then the elite use the tax money to drive up prices even further. Social justice?)
And this is the most important point I want to leave you with: Where are most of the expenditures made? In the market!
It is in society, in the market, where you should establish social justice. That is where the people live. Don’t look at government. Government is a fraction of society. It is out there in society where you must act not in government.
Don’t tell me how much government has budgeted for affordable housing. How much could that ever be? Look at the people! There, in that swirling dynamic market is where most of the money is being spent, not in your affordable housing programs.
For example, ask yourself what are you doing to block the entrepreneurs and capitalists from meeting the demand of the consumers?
And you say to me what? ‘Oh, but we need our zoning ordinances, our building codes, our school district boundaries, $20,000 sewer charges, 1 to 2 year delays in permits, litigation, architectural review boards, litigation, impact studies , litigation, etc. etc.’ (see paper no. 1948. Edward L. Glaeser and Joseph Gyourko The Impact of Zoning on Housing Affordabilityhttp://post.economics.harvard.edu/hier/2002papers/2002list.html )
But dear, whether your social justice? H-y-p-o-c-r-i-s-y?
You are liars.
You are not really concerned that in the Bay Area housing prices have been driven out of reach of the people. The rich, a faction of the rich, have colluded to use government to block capitalists from building housing. One faction manipulates the levers of power to prevent development, to prevent the market from satisfying the demands of the people for housing. Social justice? You do not really give a damn.
You are liars.
Barbara Simpson knows about the burglary, about the involvement of the KGO and KSFO employees use of the stolen notebook to harasse me. Bernie Ward also has made repeated references to it.
Yet see how the ‘Ol’ Static Factory’ (KSFO) a 5,000 watt station in the Bay Area is used by Barbara Simpson to do show after show about cattlemen. Cattlemen’s land rights. Did you know they were not allowed to open range their cattle? Land development rights. Mineral rights. Forestry. All of these subjects have been exhaustively covered by Barbara Simpson on a station that is difficult to pick up 10 miles from its transmitter.
Zoning? Down Zoning? Corrupt political power to reduce supply of housing? Housing prices and rents the highest in the nation? Housing crisis? Nielsen lowered the household count in the Bay Area by 83,000 households? Their market is shrinking, not their share, but the market itself, and still they will not cover the story. No, no couldn’t care less. Remunerative human action? You could not bribe the employees of KSFO to cover the housing crisis even though their rating would go up; that is how corrupt they are.
Bernie Ward will complain bitterly about the plight of the poor and homeless on KGO. Will recount how he has to “step over a homeless person to get into the donut shop,” but discuss how the liberal power elite of the Bay Area . . . . .
text continued at www.NewRuskinCollege.com
Lecture Notes: 09-30-04 Junkie Nation
It may have occurred to some since our last lecture (see Lecture Notes 09-25-04), that, if it is true that there is no such thing as “progressive taxation,” then is there never to be social justice? Is there no way to right the scales of inequity and alleviate human suffering? Is there nothing that can be done?
Well, of course dears, yes, there is much that can and ought to be done, but first answer why you think the place to have started was taxation? Of all the starting places why would you think we should begin with taxes?
Is it not because you want to take from the rich? Don’t you start your analysis with taxation because of social vengeance? ‘They have too much.’ ‘Capital is theft?’ Or, ‘Take from the rich and give to the poor.’ Robin Hood? You think: ‘The poor are poor because the rich have too much?’
However, once you have agreed to forgo wage and price controls, (and you should agree), then you have agreed to leave people with their property. Leaving people with their property, seeing as how there is inequality among their abilities, then you have agreed that there should be inequality of property. You will never be able to create equality among them, certainly not by taxation.
Now you have been deluded about the idea of “progressive taxation” for many reasons; because you believe in an objective structure of the world, because you have been lied to about these matters for generations, because of, what Ludwig von Mises called, the fallacy of the evenly rotating economy, for many reasons you have been mislead, but mainly you want to take from the rich and give to the poor because, more than wanting to help the poor, you want to hurt the rich.
But once again, I say, that if you do not impose wage and price controls, unless you take their property, your “progressive taxation” will simply be redistributed by the market.
The rich are rich, they have been moved to the front, because the consumers demand their products and services. As long as they are allowed to work out these relations among themselves, the rich will retain there position in front, in high demand, and every other supplier of goods and services will fill in to the rear with lesser and lesser demand for their goods and services. This is a law of the universe. If you try to interfere with it, and for example, try to place those in the rear in the front, they will be trampled by the people as they chase after the leaders whose goods and services they prefer.
You can not reverse this order with taxation, in the absence of wage and price controls, as every tax will simply be added on to all the other costs and redistributed to the consumers in the prices. For example the Value Added Tax (VAT) can be seen as the Progressive Income Tax one day later. On April 15 you assess the owner of a hotel his income tax. On April 16 the owner raises the rate on his hotel rooms by an amount to cover the tax. But this is the VAT tax. Indeed the VAT may be said to be more “fair” in that it is applied to every hotel room, i.e. even to hotels that otherwise would not be able to, for what ever reason, raise their rates. Under the Income Tax some hotel owners may not be able to raise their rates in response to the tax. However, on April 17 the VAT tax disappears in the whirl of the market as all costs are swept along and redistributed by the same market forces that move the rich to the front and drop the poor off in the rear.
This is why most economists shrug their shoulders when asked as to the “incidence of taxation” or which tax is more fair. It is not just that they are agnostic. It is true that the science of Economics imparts no special way of perceiving “fairness.” You would be better going to ask the inmates of a Seminary what is fair as ask an economist. Economics is the study of remunerative human action, meta questions of “fairness” are outside its scope. But the more important reason economist can not answer this question is that the economy is a dynamic process where Income Taxes, VAT taxes, all taxes are being swept up in the flurry of the market and disappear from sight in the prices.
In general the lower the taxes the better. The ancient Taoists would have appreciated this point. The less interference with the people and their choices the better. Less chance of being trampled. It is true that Dr. John Kenneth Galbraith has devoted his career to explaining all the ways the consumer’s choice is less than it appears but what ever freedom they have we are best leaving them with it such as it is.
Secondly, we can say that the more defuse the tax the better. Simply because there is uncertainty how the taxes will be redistributed, we should keep them small and apply them at as many points as possible so that if they do interfere from time to time with market activity, their impact will be the less. Instead of such a heavy reliance on the Income Tax we would do better to reduce that tax and supplement it with a VAT tax and Capital Tax. The Capital Tax would also be redistributed throughout the market, but it would allow us to lower our reliance on the Income Tax, and it would also stimulate the investment of capital into productive investments instead of conspicuous consumption, in as much as the tax would be owed whether the capital earned a return or not.
Now the point I want you to see is that taxation is the wrong place to look, if you are seeking social justice. Where is the right place?
Where the money is spent!
The only place you have control, (at least in principle), the only place where you can establish social justice is in the expenditures.
(In practice the elite monopolize the public expenditures for their own enrichment. For example the Golden Gate Bridge was supposed to advance development by connecting the growing San Francisco to Marin County. However the Bay Area elite then down zoned both counties turning the bridge into a $4 billion amusement ride. So the poor pay the most in taxes and prices and then the elite use the tax money to drive up prices even further. Social justice?)
And this is the most important point I want to leave you with: Where are most of the expenditures made? In the market!
It is in society, in the market, where you should establish social justice. That is where the people live. Don’t look at government. Government is a fraction of society. It is out there in society where you must act not in government.
Don’t tell me how much government has budgeted for affordable housing. How much could that ever be? Look at the people! There, in that swirling dynamic market is where most of the money is being spent, not in your affordable housing programs.
For example, ask yourself what are you doing to block the entrepreneurs and capitalists from meeting the demand of the consumers?
And you say to me what? ‘Oh, but we need our zoning ordinances, our building codes, our school district boundaries, $20,000 sewer charges, 1 to 2 year delays in permits, litigation, architectural review boards, litigation, impact studies , litigation, etc. etc.’ (see paper no. 1948. Edward L. Glaeser and Joseph Gyourko The Impact of Zoning on Housing Affordabilityhttp://post.economics.harvard.edu/hier/2002papers/2002list.html )
But dear, whether your social justice? H-y-p-o-c-r-i-s-y?
You are liars.
You are not really concerned that in the Bay Area housing prices have been driven out of reach of the people. The rich, a faction of the rich, have colluded to use government to block capitalists from building housing. One faction manipulates the levers of power to prevent development, to prevent the market from satisfying the demands of the people for housing. Social justice? You do not really give a damn.
You are liars.
Barbara Simpson knows about the burglary, about the involvement of the KGO and KSFO employees use of the stolen notebook to harasse me. Bernie Ward also has made repeated references to it.
Yet see how the ‘Ol’ Static Factory’ (KSFO) a 5,000 watt station in the Bay Area is used by Barbara Simpson to do show after show about cattlemen. Cattlemen’s land rights. Did you know they were not allowed to open range their cattle? Land development rights. Mineral rights. Forestry. All of these subjects have been exhaustively covered by Barbara Simpson on a station that is difficult to pick up 10 miles from its transmitter.
Zoning? Down Zoning? Corrupt political power to reduce supply of housing? Housing prices and rents the highest in the nation? Housing crisis? Nielsen lowered the household count in the Bay Area by 83,000 households? Their market is shrinking, not their share, but the market itself, and still they will not cover the story. No, no couldn’t care less. Remunerative human action? You could not bribe the employees of KSFO to cover the housing crisis even though their rating would go up; that is how corrupt they are.
Bernie Ward will complain bitterly about the plight of the poor and homeless on KGO. Will recount how he has to “step over a homeless person to get into the donut shop,” but discuss how the liberal power elite of the Bay Area . . . . .
text continued at www.NewRuskinCollege.com
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